Regulatory Package 2008 (v1.

00) Manual

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1 Content
1 2 3 CONTENT ........................................................................................................................ 2 DOCUMENT HISTORY................................................................................................. 5 INTRODUCTION ............................................................................................................ 6 3.1 3.1.1 3.1.2 3.1.3 3.1.4 3.2 REQUIREMENTS OF FINANCIAL CONGLOMERATES ACT............................................... 6 Obligations of PPF resulting from the act ............................................................. 6 Terms ...................................................................................................................... 7 Technical information ............................................................................................ 7 Relevant Legal acts and Decrees ........................................................................... 8

FUNDAMENTAL PRINCIPLES OF CAPITAL ADEQUACY CALCULATION OF FINANCIAL CONGLOMERATE PPF ............................................................................................................ 10 3.2.1 3.2.2 General procedure of calculation of financial conglomerate capital adequacy . 10 Different methodology for different types of companies. ..................................... 11

3.2.3 Summary of capital adequacy calculation methodology according to Basel II for individually not-regulated companies .............................................................................. 12 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 3.3.10 3.3.11 3.4 SHORT CHARACTERISTICS OF TABLES IN THE REGULATORY PACKAGE ...................... 17 Cover Sheet .......................................................................................................... 17 Validations ........................................................................................................... 17 IFRS Accounts ...................................................................................................... 17 Elim Data ............................................................................................................. 17 Positions Data ...................................................................................................... 17 Shareholders......................................................................................................... 18 Adjustment ............................................................................................................ 18 Counterparty list .................................................................................................. 18 Other..................................................................................................................... 18 Group Transactions.......................................................................................... 18 Other Lists ........................................................................................................ 18

FILLING PROCESS ....................................................................................................... 19

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3.4.1 3.4.2 3.4.3 3.4.4 4

Annotation for filling ............................................................................................ 19 IFRS ...................................................................................................................... 19 Suggested process of filling Regulatory Package ................................................ 19 Sending of filled in Regulatory Package .............................................................. 20

INFORMATION FOR FILLING WORKSHEETS IN REGUL. PACKAGE ........ 21 4.1 4.2 4.3 4.4 4.5 4.5.1 4.6 4.7 4.7.1 4.7.2 4.8 4.9 4.9.1 4.9.2 4.9.3 4.10 4.11 COVER SHEET ........................................................................................................... 21 VALIDATIONS ............................................................................................................ 22 IFRS ACCOUNTS ....................................................................................................... 23 ELIMDATA (INTER-COMPANY BALANCES) ................................................................ 24 POSITIONS DATA ....................................................................................................... 25 Description of columns......................................................................................... 25 SHAREHOLDERS ........................................................................................................ 39 ADJUSTMENT............................................................................................................. 40 Description of tables in worksheet ....................................................................... 41 Description of columns for dividends and other forms of capital distibution ...... 41 COUNTERPARTYLIST (DATABASE OF COUNTERPARTIES) .......................................... 43 OTHER ....................................................................................................................... 44 Additional breakdown of individual capital items ............................................... 44 Additional information for Operational Risk Claim ............................................ 44 Other Additional Items ......................................................................................... 45 OTHER LISTS ............................................................................................................. 46 GROUP TRANSACTIONS ............................................................................................. 47 Description of categories of transactions ........................................................ 47 Examples of transaction classification to categories ....................................... 49 Description of columns..................................................................................... 49

4.11.1 4.11.2 4.11.3 4.12

SUMARIZEDDATA...................................................................................................... 52 Description of items it the report ..................................................................... 52

4.12.1

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ANNEX .................................................................................................................................... 57 4.13 IMPORTANT TERMS AND ABBREVIATIONS .................................................................. 57 Narrow Financial Conglomerate x Wide Financial Conglomerate................. 57 Fair value of underlying instrument................................................................. 57 Financial institution ......................................................................................... 57 Investment Firm................................................................................................ 57 2. Definition of the term Exposure ................................................................... 58

4.13.1 4.13.2 4.13.3 4.13.4 4.13.5

4.14 SPECIFICS FOR OTHER INDIVIDUALLY REGULATED COMPANIES (INSURANCE FIRMS, BANKS, INVESTMENT COMPANIES) ......................................................................................... 61 4.15
FOR COMPANIES OUTSIDE NARROW FINANCIAL CONGLOMERATE REPORT ONLY DATA FOR EXPOSURES REPORT. .................................................................................... 62

SPECIFICS

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2 Document history
Version 1.0 Date 7.3.2008 Author Kamil Franek Changes First version for 2008 package

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3 Introduction
3.1 Requirements of Financial Conglomerates Act
Regulatory Package is tool for a collection of data for the calculation of capital adequacy of companies within Narrow Financial Conglomerate PPF. This requirement results from the Financial Conglomerate Act in the Czech Republic (Num. 377/2005 Coll.) According to this act, PPF Group has to calculate a capital adequacy for all financial institutions within the group. It includes both individually regulated companies (banks, insurers, investment firms) and individually not regulated companies (consumer finance companies, holding companies)

3.1.1 Obligations of PPF resulting from the act

1. Reporting of a group structure and information about group members 2. Reporting of capital adequacy and solvency (quarterly) Tool for the data collection is Regulatory Package developed in MS Excel. Regulatory package was significantly changed because of new BASEL II methodology of calculation. Individually regulated companies use methodology of a capital adequacy calculation specific for their sector (insurers, banks, investment firms, fund management companies). Individually not regulated companies use the Czech methodology for banking institutions (BASEL II). Calculated capital adequacy of PPF Group is reported to regulator quarterly. Main prerequisite for filling the regulatory package is finished elimination of intercompany balances in Intranet Elimination Application and also finished final IFRS Consolidation package (applies mainly to individually non-regulated companies)! For individually regulated companies data from Consolidation Package are not imported.

3. Internal control system (planning of capital adequacy/solvency, internal limits, review of the impact of material transactions on the group capital adequacy) Collection of data for a capital adequacy planning is provided by Controlling & Budgeting department. Companies within the Narrow Financial Conglomerate have to send their budgets also in a regulatory structure (risk categories).

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For a data collection (incl. forecast and controlling reports) Budget Pack developed in MS Excel is used. The regulatory structure of data is an integral component of the budgeting process. On condition that it will be find out during the budgeting process that the consolidated capital adequacy will not be at required levels at budgeted periods, budgets of companies within conglomerate have to be revisited to meet required levels of the capital adequacy (decrease of assets risk, increase of capital, etc.). Department of Capital and Risk management constantly monitors if actual, forecasted and budgeted amount of regulatory capital meets the minimum requirements. If risk of not meeting the requirements is observed, it will submit note to management, together with proposals how to avoid it.

4. Reporting of significant credit exposures Data from Regulatory Package are also used for reporting significant exposures of PPF Group. Main reported categories are top exposures to counterparties, econ. related groups, sectors and countries.

5. Reporting of transactions within the Group It is relevant only for individually regulated companies (banks, investment firms, (re)insurers). These companies have to report 5 largest transactions made in every category (e.g. transactions with financial instruments, capital transactions and others). All companies will have to report also subordinated debts provided to companies within the group.

6. Publication of information on Internet All banks, insurers, investment firms have to publish information about financial conglomerate on their www pages quarterly (document has to be in a downloadable form). PDF document to be published will be assembled by the Department of Capital and Risk Management (C&RM) and will be sent to relevant companies. The relevant companies have to swiftly publish this document on their web pages.

3.1.2 Terms
All reports have to be submitted quarterly. For specific terms for delivery of regulatory packages see document Regulatory Info.

3.1.3 Technical information

Collection of current period data (quarterly)

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Currently provided through the Regulatory package in MS Excel.

Reporting of significant Credit Exposures Calculation based on Regulatory Package report in MS Excel.

Reporting of transactions within the Group Data collection is part of Regulatory package.

Planning & Budgeting (IFRS and regulatory structure) Capital adequacy budgeting is carried out through sheet Regul in Budget Pack.

3.1.4 Relevant Legal acts and Decrees

Primary Act No. 377/2005 Coll. on Financial conglomerates Decree of Ministry of Finance for Act No. 377/2005 Coll. (No 347/2006 Coll.) The act on financial conglomerate does not define the methodology of capital adequacy calculation, but it links to different acts and decrees.

Insurance companies (worldwide) and Re-insurance companies in the Czech Republic (insurers and re-insurers outside the Czech Republic calculates capital adequacy according to their local rules) Act No. 363/1999 Coll. on insurance Decree No. 303/2004 Coll. (includes methodology for solvency calculation)

Investment companies (Security firms) in Czech Republic (other security firm should use their individual methodology) Act No. 256/2004 Coll. regulation of Czech capital market Decree No. 262/2004 Coll. rules for the capital adequacy calculation for investment firms

Fund Management Companies Act No. 189/2004 Coll. on collective investing

Banks in the Czech Republic + other individually not regulated companies (banks outside the Czech Republic should use their own individual methodology)
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Act No. 21/1992 Coll on banks Decree No. 123/2007 Coll - (BASEL II)

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3.2

Fundamental principles of capital adequacy calculation of financial conglomerate PPF

Capital adequacy of the financial conglomerate is calculated only for companies within the Narrow Financial Conglomerate. That includes all financial institutions in the group. The Wider Financial Conglomerate represents whole PPF Group. The Financial Conglomerate Act and related decree do not define any methodology of the calculation of capital adequacy of particular companies, but it only links to different acts and decrees. Companies that are not individually regulated (e.g. consumer finance companies) calculate a capital adequacy according to the Czech regulation for banks (Basel II). The Act set rules how to add up individually calculated capital claims and regulatory capital to obtain the capital adequacy of the financial conglomerate.

3.2.1 General procedure of calculation of financial conglomerate capital adequacy

Each company calculates their individual capital claim (some companies also adjust capital claim for inter-company balances resulting from mutual financing). Each company within the financial conglomerate calculates its regulatory capital according to its individual methodology. It is important to do distinguish transferable regulatory capital and non-transferable regulator capital. Not transferable regulatory capital includes, for example, subordinated debt and other items. Nontransferable regulatory capital can be used only to cover companys own capital claims; it cannot, however, be transferred to cover capital claims of other companies that do not have sufficient regulatory capital. Calculation of difference between regulatory capital and capital claim and investment into companies within narrow financial conglomerate. This difference is called Regulatory capital surplus/deficit. It cannot be larger than transferable regulatory capital. Transferable surplus/deficit of regulatory capital should be at the most same as transferable regulatory capital multiplied by Share of companies from Narrow Financial Conglomerate on Capital. All transferable regulatory capital surpluses/deficits are summed across all companies within the narrow financial conglomerate. The financial conglomerate PPF meets capital adequacy if the sum from previous step is positive. Adjusted transferable surplus is calculated for comparison of transferable surplus/deficit with previous quarters and is adjusted from transactions without impact on Capital adequacy of the financial conglomerate PPF (e.g. paid or accepted dividends, increase of capital from shareholders, etc.).

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3.2.2 Different methodology for different types of companies

Insurers & reinsurers (in all countries) Fund management companies (PI) Banks an invest. firms (Exception: HCFB i treated as not regulated) Individually not regulated financial institutions (in all countries)

- local methodology - accounting standard required by local regulator - without elimination of intercompany balances

- local methodology - accounting standard required by local regulator - with elimination of intercompany balances (only capital claim for credit risk)

- methodology according to czech regulatory rules - IFRS - elimination of intercompany balances

Regulatory package

Poseidon DWH +B2 ENGINE (summarization of data + corrections)

Calculation of capital claim and regulatory capital for the financial conglomerate PPF and reports to regulator

The financial conglomerate PPF includes different types of financial institutions (banks, investment firms, insurance companies, fund management companies + other individually not regulated companies). Pursuant to a current methodology, calculation methodology and an accounting standard will be different for different types of companies.

nsurance companies Insurer calculates capital claims (required solvency) and regulatory capital (disposable solvency) according to local regulatory rules (in the accounting standard required by a local regulator). Insurance companies do not eliminate inter-company balances, but they only eliminate accepted subordinated debts (if there are any).In case that company fills in Regulatory package due to preliminary solvency version, it is necessary to send Regulatory package to C&RM again, when the solvency will be final.

Fund Management Company Pursuant to the Financial Conglomerate Act, Fund Management Companies calculate their capital claim and the regulatory capital according to the methodology defined by Act No. 189/2004 Coll. (On collective investing). Intercompany balances are not eliminated.

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Banks and investment firms These companies use the same methodology as for their individual reporting. They have also to adjust their credit risk capital claim for the intercompany balances within the narrow financial conglomerate. An accounting standard is the same as the standard required by a local regulator.

Individually not regulated companies (both in the Czech Republic and abroad) These companies calculate capital adequacy pursuant to the Czech methodology for banking institutions (Basel II). Since Czech regulatory reporting for banks is based on IFRS standard, data from Consolidation Packages will be used for the calculation. Because these companies do not calculate capital adequacy according to their individual rules, only input data will be required and capital claim and regulatory capital will be calculated by regulatory package. Intercompany balances are eliminated for the purpose of the capital claim calculation (only mutual financing). Department of Capital and Risk Management can, after consultation with particular individual regulated company, decide that selected companies will calculate capital adequacy according to Czech regulation even if it is regulated abroad.

3.2.3 Summary of capital adequacy calculation methodology according to Basel II for individually not-regulated companies
Assets
weight 0 Vha 0 weight 0,2 Vha 0.2 weight 0,5 Vha 0.5 weight 0,75 Vha 1 1 weight weight 1,5 weight 12,5 Risk weighted assets
Capital Claims

Balance sheet
*0.08
Credit Risk

Equity & Liabilities

Regulatory capital (transferable + not transerable)

Not regulatory capital

Market Risk Operational Risk

Off-Balance sheet
Off-balance sheet assets

* coefficient

Regulatory capital Regulatory capital contains most of accounting capital items. Exceptions are: some revaluation reserves, other reserves, not audited profits. What is more, regulatory capital includes also specific items for example subordinated debt meeting specific conditions.

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Transferable regulatory capital o Transferable regulatory capital contains most regulatory capital items already adjusted for deductible items. It does not include qualified subordinated debts and other specific items. o Transferable regulatory capital represents maximal amount of capital that can be transferred (for the purpose of capital adequacy calculation) to another company with deficit of regulatory capital.

Non-transferable regulatory capital o It includes mainly subordinated debts and other specific items.

Capital claim Capital claim - Credit risk o Calculation is depicted in the picture above. o First step is an identification of off-balance sheet items and their multiplication by coefficients (set by regulator for different off-balance sheet items). These multiplied positions are used in next steps. o The most important step in the calculation of a capital claim is at assigning of risk weights to different positions (from both balance sheet and off-balance sheet) which is done by Basel 2 engine. After this, positions are multiplied by assigned risk weight. Assigning of risk weight is based on specific algorithm set by regulator. o Subsequently, qualified guarantee and collaterals are taken into account. On condition that guarantee and collateral meet specific conditions, it can result in transfer of asset item in category with lower risk weight. o In the next step, all risk categories are multiplied by its risk weight and results are summed up to a figure representing risk weighted assets. o Risk weighted assets * 0,08 = Capital claim for credit risk Capital claim - Market risk o Capital claim market risk is calculated for currency and commodity risk. Capital claim Operational risk

Transferable surplus/deficit of regulatory capital:

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(1) + Regulatory capital (transferable + non-transferable) (2) - Capital claims (Credit risk, market risk, operational risk) (3) Investments into companies within Narrow finance conglomerate (4) = Regulatory Capital Surplus/Deficit

(5) Transferable surplus of regulatory capital is counted as follows: As minimum from Transferable capital and Capital surplus (step 4) multiplied by Share of companies from Narrow Finance Conglomerate on Capital.

Transferable surpluses/deficits are then summarized for all companies within the narrow financial conglomerate. If the value is > 0, financial conglomerate meets capital adequacy rule, if the value is < 0, financial conglomerate does not meet required capital level and it can result in penalties imposed by regulator.

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Share of companies from Financial Conglomerate on Capital Amount of capital not includable in regulatory capital Amount of regulatory capital according to individual regulation that cannot be included in reg. capital of fin. conglomerate Regulatory capital Transferable regulatory capital (+) Amount of capital includable in transferable regulatory capital (+) Issued Capital (-) Reserve for own shares (+) Share premium (+) Legal and statutory reserves (+) Other reserves includable in transferable regulatory capital (+) Prior years retained earnings (+) Profit attributable to equity holders includable in reg. capital (+) Profit attributable to equity holders (-) Reduction of not includable Items (+) Accepted dividend (or other distributed equity) companies within narrow financial conglomerate in case that Interim Profit is not includable (-) Negative revaluation of AFS equity instruments (-) Net profit from securitization included in retained earning or reserve fund (-/+) Profit/loss from revaluation of liabilities (-) Deductible Items (-) Deductible Items - not eliminated (+) Deductible Items - elimination (-) Capital created through intercomapny trades (-) Deductable Items from transferable and nontransferable capital sum (-) Deductable Items from transferable and non-transferable capital sum - not eliminated (+) Deductable Items from transferable and non-transferable capital sum - elimination (+/-) Other transferable regulatory capital adjustments Non-transferable regulatory capital (+) Qualified subordinated debts (+) Qualified subordinated debts - not eliminated (+) Qualified subordinated debts - elimination (+) Capital includable in Regulatory Non-transferable (+) Positive revaluation of AFS equity instruments (+) Capital includable in Regulatory Non-transferable (other) (-) Deductable Items from transferable and nontransferable capital sum (-) Deductable Items from transferable and nontransferable capital sum - not eliminated (+) Deductable Items from transferable and nontransferable capital sum - elimination (+) Other non-transferable regulatory capital (+) Surplus over expected cover of loss - IRB (-) Modification of non-transferable capital because of tier 2 and tier 3 limits (-) Non significant prudent adjustment up to subordinated debt B (+) Other non-transferable regulatory capital Capital claim (+) Capital claim A (Credit Risk) (+) Capital claim A (Credit Risk) - not elimination (-) Capital claim A (Credit Risk) - elimination (+) Capital claim B (Market risk) (+) Capital claim to operational risk (+) Other capital claims (+) Required solvency of insurers and reinsurers Investments in subsidiaries within Financial Conglomerate Surplus/(Deficit) of Regulatory Capital Idle not transferable reg. capital Transferable Surplus of Regulatory Capital multiplied by Conglomerate Share on Issued Capital Transferable Surplus/(Deficit) of Regulatory Capital after investment deduct.

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

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3.3

Short characteristics of tables in the Regulatory Package

Notice: This manual does not apply fully on banks, insurance companies, fund management companies, others individual regulated companies and companies outside Narrow Financial Conglomerate that report only exposures. To find out which parts of the manual are relevant for the mentioned companies - see appendix.

3.3.1 Cover Sheet

In this first worksheet of the Regulatory package, a reporting company needs to be chosen. It is important to fill this worksheet in as the first because a range of information required depends on the selected reporting company. Data requirements are different for banks, insurance companies, investment companies, fund management companies and other financial institutions. When Regulatory package is filled in, this worksheet is ready for print. Signed worksheet Cover Sheet has to be sent to C&RM.

3.3.2

Validations
Validations worksheet shows error status for every worksheet and also few other error statuses. All error statuses have to be OK before submitting the Regulatory Package to the Department of Capital and Risk Management.

3.3.3

IFRS Accounts
Input worksheet consists of a Balance Sheet and Off-Balance Sheet. Its purpose is to import BS and OffBS from consolidation package and compare it automatically with data filled in sheet Positions Data. All checks have to be OK.

3.3.4 ElimData
This worksheet Elimination is used for downloading of the data from ELIMINATION application developed by the Consolidation department. The process of downloading is similar to the downloading of an elimination of intercompany balances into the Consolidation Package, but different report have to be imported (Export all with Konglomert set as ANO). For individually regulated banks and investment companies elimination (credit risk) has to be calculated manually, automatic calculation is not longer possible. Eliminations under 10 MCZK could be excluded from this calculation.

3.3.5

Positions Data
This is the main sheet. You have to fill in your IFRS balance sheet and OffBS sheet. Assets and OffBS have to be broken down according to counterparty. For most row just information about classification ID, counterparty, currency and value have to be filled. However for specific positions, further details have to be disclosed. For example it is true for derivatives (even if fair value is zero), guarantees, securitization and subordinated debts.

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3.3.6 Shareholders
Shareholders (within the narrow Financial Conglomerate) of a reporting Company should be filled in this table.

3.3.7 Adjustment
Information from this worksheet is used for adjustments of transferable surplus for some items (Dividends, Investments changes, etc.) This worksheet Adjustment should contain paid or accepted dividends to/from companies within Narrow finance conglomerate, changes of Regulatory capital due to increase/decrease of capital from shareholders. Table E others should be filled only after consultation with Department of Capital and Risk Management. Please note that only flow during reporting period should be disclosed (this is change from last year methodology)

3.3.8 Counterparty list

Sheet contains database of most counterparties and their IDs, sector and country of domicile. If you are not able to find counterparty you need in this sheet, you can input new counterparty. If you find any discrepancy in this sheet from information you have available, please inform department of capital & risk management.

3.3.9 Other
This worksheet requires information about planned dividends, break down of other capital funds and other additional items.

3.3.10 Group Transactions

This worksheet is available only for individually regulated companies (banks, insurance companies, fund management companies). Worksheet should contain five most significant transactions with counterparties within the wider conglomerate for each category + all transactions with counterparties need to be verified. Only transactions that took place during given quarter are relevant. Only transactions over 1 MCZK (or equivalent in foreign currency) are relevant too.

3.3.11 Other Lists

Sheet contain list of companies within the group with additional categorization for each company that is needed for this report. You will find here also description of different IDs that are used in sheet Positions data

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3.4

Filling process
Notice: This manual does not apply fully on banks, insurance companies, fund management companies and others individual regulated companies. To find out which parts of the manual are relevant for the mentioned companies - see appendix

3.4.1 Annotation for filling

Throughout all worksheets in the regulatory package, a yellow colour represents cells that require user inputs. Be aware that during filling the package, cell required to be filled can change because of your previous fillings.

3.4.2 IFRS
All values in this regulatory Package have to be in compliance with Group IFRS/IAS accounting policies as stated in Group Accounting and Reporting Manual. However there are exceptions from this rule. Banks and inv. Firms in the Czech Republic, fund management companies and insurance companies have to use accounting standard required by their individual regulation rules.

3.4.3 Suggested process of filling Regulatory Package

1. The main prerequisite for filling in the Regulatory package: finished Consolidation
package + finished elimination of intercompany balances

2. Fill in required cells in CoverSheet worksheet 3. Load inter-company-Balances of narrow Conglomerate in ElimData worksheet.
4. In sheet IFRS_Accounts select path to the Consolidation Package for relevant period and by submitting the command button IMPORT DATA load relevant information.

5. Fill in required information in worksheet Shareholders

6. In worksheet PositionsData, break down IFRS assets accounts values according to counterparties and Item Classification.

7. In worksheet PositionsData fill in additional information for derivatives, guarantees, financial collaterals, securitization and subordinated debts. Then check if validation status of the sheet is OK

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8. Fill in worksheet OTHER

9. In worksheet Adjustment fill in accepted and paid dividends from/to companies within Narrow conglomerate, changes of Regulatory capital due to increase/decrease of capital from shareholders within Finance conglomerate.

10. Fill in operations in sheet GroupTransactions. This sheet is relevant (and can be seen by) only for individually regulated companies.

11. Check if status of all controls in Validations is OK. Before submitting package Department of Capital and Risk Management, all error statuses has to be OK. If error statuses are not OK and you are sure that you filled regulatory pack correctly, contact Department of Capital and Risk Management for solving this problem.

12. If you checked correctness of the data filled in the regulatory package, you can send it to Department of Capital and Risk Management. Notice: If the Consolidation Package changes after you submitted regulatory package you have to correct relevant information also in the Regulatory Package and send it again.

13. Before sending signed worksheet Info, please wait for confirmation that your RegPack is OK by Department of Capital and Risk Management.

14. After confirmation from C&RM department send also signed hard copy of CoverSheet

3.4.4 Sending of filled in Regulatory Package

All data send to konglomeraty@ppf.cz compressed and locked. Please use .zip or .rar compression and lock the file with password: ASTERIX_2008REGUL

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4 Information for filling worksheets in regul. package

4.1 Cover Sheet
Regulatory Package - CoverSheet
Company ID Company Name Contact Person Reporting Currency Functional Currency Period Date (End of Period) Relevant Manual Version RegPack Version Last Saved Check Number RegPack Validation Commentary/Notes by Reporting Company 10560 PPF Group N.V. CZK CZK 2007Q4 31.12.2007 RegPackManual2008_v1.00 2007Q4_v1.10 5.3.2008 15:08 112 616 ERROR

Commentary/Notes by PPF HQ

Select your company from the list and fill in contact person. Yellow area Commentary/Notes is intended for your comments that cannot be mentioned in relevant worksheets. It is important to fill in this worksheet as the first because a range of information required depends on the selected reporting company. Data requirements are different for banks, insurance companies, investment companies, fund management companies and other financial institutions. Check number in this worksheet has to match in electronic and printed version. When RegPack is finalized and last saved it is necessary to print worksheet CoverSheet and signed send to Department of Capital and Risk Management. Signatures in Statement of the company confirm accuracy and fullness of Regulatory Package in accordance to this manual.

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4.2

Validations
Validations worksheet shows error status for every worksheet and also few other error statuses. All error statuses have to be OK before submitting the Regulatory Package to the Department of Capital and Risk Management. ERROR status can be caused by the fact that some cells were not filled in although required or it can mean that some of the logical controls were breached. Further information about ERROR origin can be found in particular worksheet. All Checks have to show OK status before sending regulatory package as finished Department of Capital and Risk Management. However Error statuses and checks in regulatory package are not, of course, able to catch all mistakes that could possibly occur. They check just some of logical relations between values and filling of required cells. It means that OK error status does not mean that Regulatory Package is 100% correct. On the other hand, if error status is ERR and you are sure that data you filled in are correct, you should contact Department of Capital and Risk Management. Correctness of inputs is crucial, because data will be sent (after consolidation) to regulatory authorities.
Validations
Total RegPack Validation ERROR

Sheet IFRS Accounts Sheet Shareholders Sheet Other Sheet CounterpartyList Sheet Group Transactions Are VBA Macros enabled? Prudential Adjustments are not lower than debt AFS reserve Sheet PostitionsData Total Check Are new counterparties properly filled in (sheet CounterpartyList)? Check of using XX state (max 1% of Assets) Check of using 99999 sector (max 1 % of Assets)

OK ERROR OK OK OK OK OK OK OK OK OK

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4.3

IFRS Accounts
This worksheet contains data imported from Reporting package. It contains IFRS balance sheet, as well as Off-Balance Sheet.

IFRS Accounts Data

in CZK

Please check if data in this sheet (that are based on data in PositionsData) corresponds with your IFRS balance sheet value and OffBalance sheet items. In case you find the difference you have to correct them in PositionsData sheet. Data have to correspond also with data in elimination application.

Consolidation C:\Documents and Package (File path) Settings\franek\Plocha\CP2007Q4_V15.0_Kazakhstan amended 31.01.08.XLS

. . .

Reporting units used in ConsoPack BS Balance check Check on ConsoPack OK OK

IMPORT DATA
1 000 000

Data from PositionsData sheet (rounded) Account 1000000 1010000 1010201 1010202 1010203 1010204 1010205 1020000 1030000 1030200 1030210
1030211

Data from ConsoPack and Eliminations Elimination withi Narrow conglomerate 0 0 0 0 0 0 0 0 0 0 0

0

Account Description Assets Intangible assets Goodwill Software Other intangible assets Present value of future profits from portfolios acquired Customer lists and relationships Investments in subsidiaries, associates and joint ventures Financial assets Financial assets at fair value through profit and loss Financial assets held for trading
Debt securities held for trading

IFRS Value 0 0 0 0 0 0 0 0 0 0 0
0

Elimination within Narrow. Conglomerate 0 0 0 0 0 0 0 0 0 0 0

0

IFRS Value 0 0 0 0 0 0 0 0 0 0 0
0

Difference IFRS Value 0 0 0 0 0 0 0 0 0 0 0

0

Difference Elim 0 0 0 0 0 0 0 0 0 0 0
0

Check OK OK OK OK OK OK OK OK OK OK OK OK

You need to input path to relevant consolidation package. After clicking on command button with three dots, you have to select relevant consolidation package file. This file will be used for importing data into regulatory package. Command button IMPORT DATA serves for importing of data from consolidation package. Imported data are IFRS balance sheet items, Off-Balance sheet items, Income statement. You also have to fill in reporting units used in consolidation package.

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4.4

ElimData (Inter-company Balances)

Worksheet Elimination has similar function to worksheet with eliminations in Consolidation Package. There are two differences, though. The first difference is that for purposes of regulatory package, different is imported Export-all. The second difference is the group for which the inter-company balances are exported. You have to set Konglomerty to Ano. The other filter should be unfilled. Elimination of intercompany balances in the Elimination intranet application has to be finished. If any change is done afterwards, data have to be imported again into this sheet. There is significant change for regulated companies (bank, investment company) in SumarizedData list. Credit risk elimination has to be calculated manually, automatic calculation is not longer possible. Eliminations under 10 MCZK could be excluded from this calculation, because of insignificance. Process of importing data from elimination database to Regulatory package: 1. In Regulatory package select worksheet ElimData 2. In intranet application ICRA Relations open current period, choose your company, and then select Relations. 3. After export shows up in your internet browser, place arrow inside the table and click with your right mouse button. In menu that will appear choose Select All. 4. Copy selection into clipboard (you can use Ctrl + C or right mouse button and Copy) 5. Go back to your already opened regulatory package and select worksheet ElimData and click on Nahraj/Load command button. 6. Wait until regulatory package finish importing of data from clipboard. Notice: Do not forget to submit off-balance sheet inter-company balances into intranet application ICRA-Relations

Intercompany balances within narrow financial conglomerate

Nahraj / Load

Position

Relation ID

Comment

Counterparty

Amount

Adjustment amount

IFRS Amount

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4.5

Positions Data
This is the main sheet. You have to fill in your IFRS balance sheet and OffBS sheet. Assets and OffBS have to be also broken down according to counterparty. For most row just information about classification ID, counterparty, currency and value have to be filled. However for specific positions, further details have to be disclosed. For example: derivatives (even if fair value is zero), guarantees, securitization and subordinated debts. Following rules have to be met: Note that for any exposure to counterparties, when the total Exposure exceeds the predetermined minimal limit of 1 mil. CZK, Counterparty have to be assigned to this position (columns ISIN or Counterparty ID). If given counterparty is natural person, the limit is 10 mil. CZK If total Exposure to given counterparty doesnt exceed the minimal limit 1 mil. CZK, you can use special counterparty underlimit exposure (ID 2xxxx). It is also possible to use uderlimit exposure for items over 1 MCZK (10 MCZK natural person), but only for special cases (if it would be difficult to make out, impossible to find out etc. and if it simultaneously wouldnt have material impact on reporting) and always with approval from Capital and Risk management department.

MainDataTable (Assets, Equity, Liabilities)

in CZK

Sing convention: Assets (+), Liabilities (+), Equity (+), Loss(-), Profit (+)

Sheet Validation:

OK

Row Reporting ID Currency 1 2 3 4 5 6 7 8 9 10 11 12 CZK CZK CZK CZK CZK CZK CZK CZK CZK CZK CZK CZK

IFRS Account

ISIN (if relevant)

Counterparty ID

Item Currency

Item Value (IFRS)

Item Classif

Is in Value Adjustments Default? (If in default)

Prudential Filter Adjustment

Maturity Range

Does RW Of Provided accepted Credit subord. debt Protection N1 meets Default conditions?

Subordinated Debt Maturity

Sub Debt Mitigation Classif Interest Rate

Deriv Type

Securitization Classif

Info Mitigation Is Derivative Deriv Kind with Physical Delivery?

Info for Derivatives Underlying Asset Volatility Underlaying Exposure Value

Info for Securitizations Early Amortization Point Is Controlled Average Risk Condition1 Early Weight 8 met? Amortization? Is Security Originated Or Sponsored?

Row Id of Secured Item

Deriv Long Deriv Short Possition Possition

Deriv Nominal Value

Deriv Underlying Asset Fair Value

Option Option Option Delta Gama Vega

Investor Share

Originator Share

Trapping Point

Excess Spread

Highest RW

4.5.1 Description of columns

Only yellow cells have to be filled in 4.5.1.1 IFRS Account IFRS Account used in Consolidation package. This column will be used to check consistency of data with ConsoPack and elimination application.

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Individually regulated companies and companies that fill in limited Regulatory package just for exposures reporting can simply put 1110000 for investment in subsidiaries, 1000000 for assets and 8000000 or 9000000 for OffBS. 4.5.1.2 ISIN If certain position is security that has ISIN assigned, fill it in this column. When you do it, you do not need to fill in column counterparty ID 4.5.1.3 Counterparty ID ID of counterparty (e.g. Debtor, Issuer). List of available counterparties can be found in sheet counterparty list. This column can be left empty only for non-finance assets like intangible assets, inventories and accruals not related to financial instruments. 4.5.1.4 Item Currency Original currency in which position is denominated. (Example: For loan provided to counterparty in Russia that is denominated in USD, Item Currency = USD and Reporting Currency = RUB.) For items where currency does not make sense, e.g. investments into subsidiaries, inventories, intangible or tangible assets and so on, use functional currency (not reporting currency). If your companys accounting policy follows the day of settlement rule, it is necessary to enter FX spot trades, as derivatives with zero fair value, and all relevant information.

4.5.1.5 Item Value Value of given position in reporting currency. 4.5.1.6 Item Classif This column is used to get information about particular position is equity investment or debt security or other item. See following list for possible values. In most cases you will need just categories that are bolded, but make always sure that other classification are not relevant for give position.

ID 11 12 13 19 31 41 42 43

Description (can be related both to Balance sheet and Off-balance sheet) Equity investments - Private Equity Equity investments - Venture Capital Firms Equity investments - Unpaid capital of European Investment Fund Equity investments - Others Securitization Receivables or debt securities - Retail Exposures (Conditions) Receivables or debt securities - Covered Bonds (Conditions)

Receivables or debt securities - Minimal reserves/funds required by ECB

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(Conditions) Receivables or debt securities - Provided Subordinated Debt (Meeting Conditions) Receivables or debt securities - Other Others - Cash in hand Others - Gold bullion Others - Provided Credit Protection for exposure basket with n-th default trigger Others - Financial collection instruments (Finann nstroje v procesu inkasa) Others Other

44 49 51 52

53 54 59

Retail exposures ID 41 shall meet the following conditions: 1) the exposure shall be either to an individual person or persons, or to a small or medium sized entity 2) the exposure shall be one of a significant number of exposures with similar characteristics such that the risks associated with such lending are substantially reduced 3) the total amount owed to the credit institution and parent undertakings and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients, but excluding claims or contingent claims secured on residential real estate collateral, shall not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution shall take reasonable steps to acquire this knowledge. 4) Securities shall not be eligible for the retail exposure class.

4.5.1.7 Is in Default? Fill 1 if given security or receivable is due (whole or just part of it) more that 90 days after maturity. If you have two receivables to one counterparty and only one of them is in default, chose 1 just for the row that is in default and 0 for the other one. 4.5.1.8 Value Adjustments (If in default)? Needed only when you for items in default (when column Is in default = 1). This columns should contain specific Provision/ Provisions (OffBS) created for given item. When you add column Item Value and Value Adjustments you will obtain Gross value for given position.

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4.5.1.9 Prudential Filter Adjustment This column should contain following adjustment for accumulated profit/loss for: A) Debt instrument classified as Available for Sale (because AFS capital reserve for debt instruments is not allowed to be included in regulatory capital) B) Instruments reported as hedged through Fair Value hedging treatment In this column the opposite value should be filled adjustment for profit with (-), adjustment for loss with (+). 4.5.1.10 Maturity Range For most debt securities and receivables we will need also information about maturity. Following options are possible
ID Description 1 2 3 4 maturity < 3 months maturity > 3 months and < 1 year maturity > 1 year and < 5 years maturity > 5 years

4.5.1.11 RW Of Provided Credit Protection N1 Default Only Relevant for item with classification number 53 attached. Value is calculated as follows: n-1 best exposures (according to risk weight) are eliminated from exposure basket and risk weight of remaining exposures are add up (to max 1250 %) 4.5.1.12 Does accepted subordinated debt meet conditions? Relevant for accepted subordinated debts: - Choose A if subordinated debt meets conditions for subordinated debt A - chose B if subordinated debt meets conditions for subordinated debt B - Chose No if subordinated debt does not meet condition for A debt or B debt If you are not sure about this, contact department of Capital & Risk Management for guidance. See following boxes for detail information about meeting conditions for subordinated debt A and B.

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Conditions for subordinated debt A. (excerpt from legislation)

Subordinate debt A in capital on an individual basis Subordinated debt A may be in the form of a granted credit, loan or deposit, and in the case of a bank or investment firm, also in the form of an issued subordinated debt instrument. Subordinated debt A can be included in additional capital on an individual basis if the following criteria are met: a) the contract on subordinated debt A or the conditions of issue of the subordinated debt instrument contain a subordination clause pursuant to a special act13); b) the full sum of subordinated debt A has been transferred to the account of the liable entity. Subordinated debt A does not comprise own subordinated debt instruments acquired by the liable entity before their maturity. Subordinated debt A is not directly or indirectly financed by the liable entity; c) subordinated debt A is unsecured, d) subordinated debt A has a fixed maturity of not less than five years after the date of its transfer to the account of the liable member. The principal of subordinated debt A is payable in one lump sum. If the contract on subordinated debt A or the conditions of issue of the subordinated debt instrument contain a provision under which such debt may be repaid before the agreed maturity date, this right may be exercised no sooner than five years after the date of the transfer of the subordinated debt to the account of the liable entity; e) subordinated debt A may be repaid before the maturity date specified in letter d) provided that the intention to repay subordinated debt A has been communicated, with a documentation of its impacts on the liable entitys capital, to the Czech National Bank, and the Czech National Bank has not refused the early repayment within one month of the submission of the complete documentation or has not, within the aforesaid period, provided notification of an extension of the period by up to one month and in this extended period does not refuse the early repayment, f) the contract on subordinated debt A or the conditions of issue of the subordinated debt instrument contain an agreement by the counterparties that it shall not be permitted to offset the creditors receivables resulting from the subordinated debt against his obligations to the liable entity, g) receivables by virtue of subordinated debt A may not be accepted by the liable entity as collateral, and

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h) the intention to include subordinated debt A in additional capital, including the conditions of this debt and its amount, has been communicated and documented to the Czech National Bank, and the Czech National Bank has not refused this intention within one month of the submission of the complete documentation or has not, within the aforesaid period, provided notification of an extension of the period by up to one month and in this extended period does not refuse this intention.
The conditions of the contract on subordinated debt or the conditions of issue of the subordinated debt instrument relating to the criteria stated in paragraph 2 may only be changed if the intention to introduce changes is communicated to the Czech National Bank and the Czech National Bank has not refused this intention within one month of the submission of the complete documentation on the proposal for changes to the conditions of the contract on subordinated debt or the proposal for changes to the conditions of issue of the subordinated debt instrument or has not, within the aforesaid period, provided notification of an extension of the period by up to one month and in this extended period does not refuse this intention. If a change is made to the contract on subordinated debt or the conditions of issue of the subordinated debt instrument which is at variance with the first sentence, the subordinated debt may not be included in capital. Subordinated debt A included in additional capital shall be decreased by 20 % annually over the last five years prior to its maturity, unless stipulated otherwise. It shall start decreasing on the day following the end of the fifth year prior to its maturity, which means that in the last year prior to its maturity date, 20 % of the total debt shall be included. The part of subordinated debt A not included in additional capital may not be included in capital for the coverage of market risk. If the contract on subordinated debt A or the conditions of issue of the subordinated debt instrument contain a provision permitting the repayment of the debt before the agreed maturity date, the subordinated debt A included in additional capital shall be decreased over the last five years prior to the agreed maturity date only where the stepup rate of the subordinated debt A, if a call-option is not exercised, is not more than 1.5% p.a. If a step-up rate higher than 1.5% p.a. has been agreed, the subordinated debt A included in additional capital shall be decreased over the last five years prior to the date on which the call-option may first be exercised. In both such cases the subordinated debt A shall be decreased pursuant to paragraph 4.

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Conditions for subordinated debt B. (excerpt from legislation)

Subordinated debt B in capital on an individual basis Subordinated debt B may be in the form of a granted credit, loan or deposit, and in the case of a bank or investment firm, also in the form of an issued subordinated debt instrument. Subordinated debt B is deemed to be capital for the coverage of market risk, if the following criteria are met:

a) subordinated debt B must have a fixed maturity of not less than two years after the date of its transfer to the account of the liable entity. The principal of subordinated debt B shall be payable in one lump sum;

b) the principal, fees and interest of subordinated debt B may not be repaid, even within the maturity term, if such a payment would reduce capital adequacy or such a payment would mean a further decrease in capital on an individual basis, if capital adequacy is below the minimum level, and also if the criteria are met pursuant to Article 58, 2, a) to c) and e) to h) and Article 58, 3 for subordinated debt A.

4.5.1.13 Subordinated Debt Maturity Relevant both for accepted and provided subordinated debts. Fill in maturity of subordinated debt in date format. 4.5.1.14 Sub Debt Nominal Value Please enter nominal value only (without interests). 4.5.1.15 Sub Debt Interest Rate Relevant for provided and accepted subordinated debts. Fill in interest rate for particular subordinated debt (e.g. LIBOR + 2 % p.a., 4 % p.a.). 4.5.1.16 Mitigation Classif If item on give row is meant to secure/guarantee other item, chose type of mitigation. Leave empty if given item is not mitigation item (mitigation item = Item that mitigates risk of other item, e.g. accepted financial collateral). In most cases this will be relevant for off-balance sheet items (for example: accepted financial collateral). In case there are two or more forms of risk mitigation, it is necessary to select the most effective among them. This must be always discussed with Capital and Risk management department. Note that mitigation can be used only when maturity of given mitigation is the same or greater that maturity of secured instrument. If this condition is not met, mitigation is not relevant for this report and you should leave column Mitigation Classif empty.
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Available options:
Id 0 Description No Mitigation

100 On-balance sheet netting 211 Financial Collateral - Cash - REPO and Lend&Borrowing (conditions) Financial Collateral - Cash - exposures from Off-BS derivatives (no currency 212 mismatch) 213 Financial Collateral - Cash - other 221 Financial Collateral - Debt securities - REPO and Lend&Borrowing (conditions) Financial Collateral - Debt securities - exposures from Off-BS derivatives (no 222 currency mismatch) 223 Financial Collateral - Debt securities - other 230 Financial Collateral - Other 300 Unfunded Credit Protection 401 Credit Derivatives - meeting conditions 402 Credit Derivatives - Other 511 Residential property in EU (conditions are met) 512 Residential property in EU (conditions are not met) 513 Residential property outside EU 521 Commercial real estate (conditions are met) 522 Commercial real estate (conditions are not met)

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Residential property definition: 1. residential real estate which is, or will be, occupied or let by its owner, and which are owned directly or through a company established by the owner, if this involves real estate of personal investment companies, (a beneficial owner),
2. shares in Finnish residential housing companies operating in accordance with the Finnish Housing Company Act of 1991 or subsequent equivalent legislation, if the residential real estate is, or will be, occupied by the owner or leased for housing, or 3. leasing of residential real estate fully secured by this real estate, if the liable entity is the lessor and the lessee has the right of purchase.

Commercial property definition:

1. offices and other commercial premises on the territory of another Member State, 2. shares in Finnish housing companies operating in accordance with the Finnish housing Company Act of 1991 or subsequent equivalent legislation, or 3. offices and other commercial premise (when leasing) on the territory of another Member State which are fully secured by this real estate, if the liable entity is the lessor and the lessee has the right of purchase,

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Meeting conditions for preferential treatment for Residential property 1. the value of the real estate is not materially dependent on the obligors credit quality. This requirement shall not exclude situations where only macroeconomic factors influence the value of the real estate and payment by the obligor, 2. obligor risk is not materially dependent on the operations of the relevant real estate or project, but depends instead on the obligors ability to repay the debt from other sources. This means that repayment of the exposure is not materially dependent on cash flows coming from the real estate provided as protection, 3. the protection meets the conditions for the eligibility of credit mitigation techniques pursuant to Articles 102 to 107 and Annex 15, Part B Funded credit protection eligible only as part of the IRB Approach, 1. , b), and the conditions for considering the value of real estate pursuant to Annex 16, I., 4., a) of the Decree, 4. the value of the real estate materially exceeds the exposure amount. The condition under paragraph 2 does not have to be met for exposures secured by residential real estate on the territory of another Member State if this is not required by the competent authority of the Member State.

Meeting conditions for preferential treatment for Commercial property - Property is in EU state -the competent authority in the other Member State deems the offices and other commercial premises on its territory to be eligible security and the conditions that it stipulated for its eligibility have been met (for example commercial property in the Czech republic does not meet this condition).

4.5.1.17 Deriv Type Choose type of derivatives. Leave empty if given item is no derivative. Make sure that all derivatives that your company have are included, including derivatives with zero fair value! In case you have long settlement transactions take this operation also like derivate. Long Settlement Transactions mean transactions where a counterparty undertakes to deliver a security, a commodity, or a foreign exchange amount against cash, other financial instruments, or commodities, or vice versa, at a settlement or delivery date that is contractually specified as more than the lower of the market standard for this particular transaction and five business days after the date on which the credit institution enters into the transaction. For long settlement transactions use ID 50 Fixed term Operation.
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Id 0 10 20 30 40 50

Description No Derivative Call Option - long Call Option - short Put Option - long Put Option - short Fixed - term Operations

4.5.1.18 SecuritizationClassif If give item is securitization exposure, chose correct category for this securitization.
Id 0 Description Not Securitization Item

10 Originated revolving exposures with early amortization feature (meeting conditions) 21 Liquidity facilities - eligible for 0 % conversion factor 22 Liquidity facilities - others 30 Asset-backed commercial paper (ABCP) programme 41 Other securitization exposures - underlying portfolio known 42 Other securitization exposures - underlying portfolio not known

4.5.1.19 RowId of Secured Item If given item is mitigation item (column mitigation classif is not empty) you have to chose RowId of positions which is secured by mitigation item. Example: On row 01 position loan to textile company is filled in. On row 11 we have off balance sheet item accepted fin. collateral which is used to secure provided loan to textile company. In this case you will fill in column Row Id of Secured Item (row 11) with value 01.

4.5.1.20 Deriv Kind For derivatives, chose one of the following options:
Id 0 10 Description No Derivative interest swaps with variable interest in one currency

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20 30 40 50 60 70 80

interest others currency, including monetary gold equity precious metals, except for gold other commodities Total return and credit default SWAPs or - qualified underlying instruments Total return and credit default SWAPs - others

4.5.1.21 Is Derivative with Physical Delivery? Choice 1 should be entered in case of option or fixed term operation from which receivable for debt securities, drafts, stocks, deposit or loan result.(=it means that derivative will be settled physically). This choice is relevant only for Call Option long, Put option short and long positions resulting from fixed term contracts 4.5.1.22 Deriv Long Position Choose long position currency/commodity. 4.5.1.23 Deriv Short Position Enter identification of short position currency/commodity 4.5.1.24 Deriv Nominal Value Nominal value of derivative; please enter expressed in reporting currency. Special case of SWAP agreements with more than one settlement period (except interest rate and cross currency interest rate swaps) This type of swap is perceived as a row of forward agreements. Each such notional forward contract has to be filled in right residual maturity category. For example nominal value of SWAP agreement to buy 1 mil barrels of oil for 70 USD each quarter for 2 years has nominal value for our purposes of 560 mil. USD (70 mil USD * 8 quarters). This SWAP has to be break down according to residual maturity into two rows. (280 mil. in Up to 1 year category and 280 mil. in 2 to 5 years category) 4.5.1.25 Deriv Underlying Asset Fair Value Fair value of underlying asset 4.5.1.26 Option Delta Represents ratio of the change in the fair value of an option to the change in the fair value of the underlying instrument (the firs fair value derivative of an option based on the fair value of its underlying instrument).

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4.5.1.27 Option Gama Ratio of the change in an options delta to the change in the fair value of the underlying instrument (the second fair value derivative of an option base on the fair value of its underlying instrument). This field is relevant only for currency and commodity options. The value of gamma relates to whole row (in case that one row is summary of several identical options) 4.5.1.28 Option Vega Vega means the change in a fair value of an option per unit change in the volatility of the underlying instrument, i.e. the first partial derivative of an options fair value based on the volatility of its underlying instrument. This field is relevant only for currency and commodity options. The value of Vega relates to the whole row. 4.5.1.29 Underlying Asset Volatility Volatility of underlying instrument (standard deviation in % format) 4.5.1.30 Underlying Exposure Value Value of underlying exposures for given securitization 4.5.1.31 Investor Share 4.5.1.32 Originator Share 4.5.1.33 Trapping Point Trapping point of excess spread 4.5.1.34 Early Amortization Point 4.5.1.35 Average Risk Weight Weighted average of risk weights of portfolio of underlying assets (according to standardized approach) 4.5.1.36 Is Condition18 met? Choose "1" if all following conditions are met. A: retail exposures are securitized B: these exposures are not bounding and can be revoked without former notice C: early amortization is started when excess spread falls below certain level 4.5.1.37 Controlled Early Amortization? Is early amortization controlled? 4.5.1.38 Excess Spread 4.5.1.39 Is Security Originated Or Sponsored? Is Security Originated or Sponsored by reporting company?

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4.5.1.40 Highest RW? Highest risk weights in portfolio of underlying assets (according to standardized approach)

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4.6

Shareholders
Fill in shareholders that are members of narrow financial conglomerate and their share on capital.
Shareholders
in CYP Validation ERROR 0,00% 100,00%
Share %

Share of shareholders within Narrow Fin. Conglomerate on Capital Share of shareholders outside Narrow fin. Conglomerate on Capital Company name Comp Ident

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4.7
in UAH

Adjustment

Adjustments - Dividends and other changes in regulatory capital and investments for given quarter

Fill in Dividends or other changes of Regulatory capital and Investments. Only data for reporting quarter should be filled in.

A - Dividends or other form of capital distributions accepted from companies within Narrow conglomerate
ID Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Accepted from Comp ID Value (+) 0 Notes

B - Dividends or other form of capital distributions paid out to companies within Narrow conglomerate
ID Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Paid out to Comp ID Value (-) 0 Notes

C - Changes of regulatory capital due to increase/decrease of capital from shareholders

Company that has Investments (which causee the change in equity) in its books

ID Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Comp ID

Value (-) 0

Notes

Fill in only after consulting with departement of Capital and Risk Management

D - others
ID Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Company Comp ID Value (+) 0 Notes

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Data in this worksheet is needed for comparison of transferable surplus/deficit (real or planed) with other periods. Transferable surplus/deficit is adjusted from transactions without impact on Capital adequacy of the financial conglomerate PPF (e.g. paid or accepted dividends, increase of capital from shareholders, etc.). Into this worksheet, company should enter dividends (or other forms of capital distribution) paid out to companies or accepted from companies within Narrow finance conglomerate and changes of Regulatory capital due to increase/decrease of capital from shareholders within Finance conglomerate. Table D Others, is prepared only for specific operations which have to be consulted individually with Department of Capital and Risk Management.

4.7.1 Description of tables in worksheet

In table A - Dividends or other form of capital distributions accepted from companies within Narrow conglomerate fill in accepted dividends or other form of capital contribution received from company within narrow conglomerate in given quarter. In table B fill analogously paid dividends or other form of capital contribution. In table C fill in company (shareholder) within narrow conglomerate which made increase/decrease of capital in reporting company in given quarter. Table D Others, is prepared only for specific operations e.g. revenues from subsidiaries sells which have to be consulted individually with Department of Capital and Risk Management.

4.7.2 Description of columns for dividends and other forms of capital distribution
4.7.2.1 ID Leave unchanged 4.7.2.2 Ident Identification of counterparty filled in automatically based on your choice in column Counterparty 4.7.2.3 Accepted from: Choose counterparty of the operations from companies within the narrow conglomerate. 4.7.2.4 Paid out to: Choose counterparty of the operations from companies within the narrow conglomerate. 4.7.2.5 Company that has Investments (which cause the change in equity) in its books Parent company in case of increase/decrease of capital. 4.7.2.6 Value Choose the amount of the operation/transaction. Do not use rounding to hundreds or thousands as is common in other sheets of regulatory package.

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4.7.2.7 Notes Fill in short description of a given operation.

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4.8

CounterpartyList (Database of counterparties)

This database in worksheet CounterpartyList is intended for the unambiguous identification of counterparties. To order to ensure the uniform identification of counterparty within the PPF conglomerate the code and the name of counterparty need to be chosen from the database. In fact choose only the code (ID) during filling at the first the name is filled automatically. The worksheet contains the list of counterparties to them the Exposures have been reported. The company should ensure and continually check if all information and data about counterparties are correct and actual. It means if database includes correct name of counterparty (company), state of origin, sector or group. If you find any discrepancy or mistake, please contact C&RM immediately. The database is filled in by C&RM. The counterparties that occurred in the last report for the first time should be appended to database (with code) by C&RM for the next report. The worksheet CounterpartyList contains the rows also for new counterparties. The items Counterparty should be filled in, the items State code and Sector code should be chosen from the list. These new counterparties have ID in numerical order (New_xy). It is convenient to include the affiliation of the counterparty with a group of economically related persons if it is known by the company. Example: counterparty Komern banka a. s. group Socit Gnrale The data about new counterparty from this worksheet will be used by C&RM to insert the counterparty into Database of counterparties and to process the final report. Automatic filter in this sheet could facilitate searching of the company. It is possible to search according the sector, state etc.

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4.9

Other

This sheet is meant for additional information that was not addressed in previous sheets.

4.9.1 Additional breakdown of individual capital items

AFS Equity instruments revaluation reserve Active Market Instruments Fill in value of AFS reserve that is result of revaluation of equity instruments on condition that active market exists for these instruments. AFS Equity instruments revaluation reserve Not Active Market Instruments Fill in value of AFS reserve that is result of revaluation of equity instruments on condition that no active market exists for these instruments. AFS Debt Instruments revaluation reserve Fill in value of AFS reserve that is result of revaluation of debts instruments. Other AFS revaluation reserve Other AFS revaluation Other capital funds to be broken down includable in transferable regulatory capital Capital funds includable in transferable regulatory capital if they are not created for specific purpose and can be used to cover loss. Other capital funds to be broken down - Not includable regulatory capital Capital funds not includable in regulatory capital. For example fund created for specific purpose. Net profit from securitization of future income This item should include net profit from securitization in case that this profit is also included in reserve fund, retained earnings or other capital item. If you deduct net profit from securitization of future income from capital, it is necessary to deduct this amount from the value of underlying assets as well. Profit Or Loss From Revaluation of Liabilities This item should contain profit or loss from revaluation liabilities to real value. This is valid for profit/loss that is part of retained earnings after taxation or profit of current year after taxation.

4.9.2 Additional information for Operational Risk Claim

Irregular expenses and revenue Irregular expenses and revenue (these are excluded from calculation of operational risk capital claim) Specific Outsourcing expenses

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Value of expenses resulting from outsourcing certain activities to companies that are within PPF Group or within another financial group that is regulated in EU (mainly group around banks and investment companies). Other adjustments (e.g. insurance benefits) E.g. revenues from insurance benefits

4.9.3 Other Additional Items

Planned Dividends Outside Conglomerate Dividends that were not included in accounting books at the reporting date, but it is expected that they will be paid. (Decision of Board of Directors before general meeting of shareholders approve that) Fill in only amount planned to be paid to companies outside narrow financial conglomerate. Significant Prudent Adjustments For this item it is necessary to state negative adjustment of assets in case real value or evaluating model is being use. For this type of assets has to be taken into account these adjustments: Unearned credit spreads, close out costs, operational risks, early termination, investing and funding costs, future administrative costs and where relevant also model risk.

Less liquid positions which could arise from both market events and institution related situations e.g. concentrated positions and/or stale positions

Into significant prudent adjustments are included all items which exceed significant limit. Non-significant Prudent Adjustments Same as in significant prudent adjustments if it is below threshold of significance (level of significant is determined by reporting company) Surplus Over Expected Cover Of Loss Leave empty. It is prepared for potential future use of IRB calculation in chosen companies. Free delivery deduction Deduction for free deliveries, from five business days past the due date of the second contractual payment or delivery until the termination of the transaction, in the amount of the sum of the transferred value and the difference between the agreed settlement price and the current mark to market, if this is positive

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4.10 Other Lists

Sheet contain list of companies within then group with additional information for each company that is needed for this report and you will find also description of different IDs that are used in sheet Positions data.

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4.11 Group Transactions

This worksheet is available only for individually regulated companies (banks, insurance companies, fund management companies). Worksheet should contain five most significant transactions with counterparties within the wider conglomerate for each category + all transactions with regulated counterparties need to be verified. Verification is also necessary for off balance sheet transactions. Only transactions that took place during given quarter and over 1 MCZK (or equivalent in foreign currency) are relevant too. One Transaction represents all transactions in a given category with the same counterparty, regardless of transactions currency! As a result, one row (transaction) can represent more summarized transactions with the same counterparty in different currencies or different subject in the same category. Example: advisory service provided by company A in CZK and USD to company B and rent service provided company A to company B in EUR will be filled in as transactions with the same counterparty with the same number in 3 rows. It is just one transaction according to definition used in this sheet and you have to fill in another 4 transaction to meet limit of 5 top transaction. If counterparty is individually regulated company it is necessary to verify agreed currency, amount and subject of transaction! Contact information for verification is placed in worksheet GroupTrans. In specific case when counterparties refer different identification of transactions column Explanation of differences has to be filled in. When counterparty asks for verification of transaction it is necessary to fill in this transaction regardless if is in five most significant transactions for company or not. In this case number transactions 6 and more. Example: advisory service provided by company A to individually regulated company B match the condition of top 5 transactions in company A and for this reason company A asks company B for verification of this transaction. Company B fills in this transaction after verification too.

4.11.1 Description of categories of transactions

1. Transactions that result into capital share on companies within the wider financial conglomerate - mainly monetary or non-monetary investment into share capital, capital funds or reserve funds and also origination of subordinated receivable (it means that for purpose of this report subordinated debt is treated as part of capital). Only original transaction should be filled in e.g. increase of capital, acquisition of company, etc. Do not fill in e.g. shares sold outside conglomerate. 2. Transactions that are result of capital share on companies within the wider financial conglomerate - mainly transfer of profits or transfer of other equity item 3a. Trades of derivates with counterparties within the wider financial conglomerate - for derivates fill in nominal value only if trades were realized in reported period. Fill in only at date of conclusion, do not fill in settlement date and do not fill SPOT buys or sells in this category.
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3b. Loans, Deposits, Bonds and notes issued with counterparties within the wider financial conglomerate Mainly placed loans, deposits, bonds and notes issued with counterparties within the wider financial conglomerate. All these transactions have to be filled by both sides (counterparties) of the transaction. Revolving transactions (loans, time deposits, etc.) with maturity up to 3 months are accepted as set of analogical transactions. For this purpose, fill in these transactions in same row in end of period value of this loan or deposit. The same process is used for bank accounts. Revolving operations with maturity 3 months and more are accepted as separate transactions in every renewal. Redemption of debts or deposits should not be included. Business claims and interests should not be included in this category too. 3c. Trades of securities with counterparties within the wider financial conglomerate - trades of securities of third parties with counterparties within the wider financial conglomerate. 4. Off-balance sheet operations (within the wider financial conglomerate) - mainly insurance, re-insurance, guarantees, collateralization. In case of insurance and reinsurance transactions fill in value of secured amount (not insurance and reinsurance premium). In case that value of secured amount for insurance/reinsurance transaction cannot be determined, explain agreement in note column. Fill in transactions concluded in current period only. Do not fill in received insurance benefit. 5. Services provided to other companies within the wider financial conglomerate - mainly services in areas of risk management, liquidity management, trades settlement, asset management and consultancy services. Do not fill in interest income or costs. 6. Payments pursuant to breach of contract or law (within the wider financial conglomerate) 7. Payments not supported by contractual, statutory or another commitment or payments with expired legal claim or the payment on behalf of other company (within the wider financial conglomerate)

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4.11.2 Examples of transaction classification to categories

4.11.3 Description of columns

4.11.3.1 Operation number Fill in number of particular transaction in given category from 1 to 5. Company can fill in less than 5 transactions in category only when there were no such transactions at all or not over 1 MCZK (or equivalent in foreign currency) in a given period. Company has to fill in even more then 5 transactions if counterparty asks for verification of transaction which is not filled in top 5 operations yet. Companies that experienced more than 5 operations in a given period will fill in just the five most significant operations. One Transaction represents all transactions in a given category with the same counterparty regardless to agreed currency. As a result, one row can represent more summarized transactions with the same counterparty. 4.11.3.2 Ident Identification of counterparty filled in automatically based on your choice in column Counterparty. 4.11.3.3 Counterparty Choose counterparty of the transaction from companies within the wider conglomerate. 4.11.3.4 Agreed Currency Choose currency of the transaction. If more than one currency is relevant for one transaction(s), split it into several rows with the same number of transactions and the same counterparty. Except group 3a (SWAP operations), in this case it is necessary to fill in just value at the beginning (do not include it again in settlement day) 4.11.3.5 Amount (in agreed currency) Choose the amount of the transaction

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4.11.3.6 Amount in counterparty (in agreed currency) Fill in amount of transaction only if counterparty is individually regulated company. Fill in the same amount as in counterpartys evidence. Contact information is mentioned in this worksheet. 4.11.3.7 Difference Value of difference is automatically filled in, in case that filled in amounts are different. This difference has to be explained! 4.11.3.8 Short description/explanation of differences Short description of a given transaction. If difference is reported, use this column for explanation.

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Transactions within the wider financial conglomerate

in CZK

Contact information for approval of transaction with counterparty

Ident AU CPSK CPK CICU CP CPZ CPR HCFB LORO PI PMB PPFAM Counterparty Agrobank Ukraine esk poisovna Slovensko, a.s. CP - Kazachstan esk pojiovna - Ukraine - Life Insurance esk pojiovna a.s. esk pojiovna ZDRAV a.s. eskaja strachovaja kompanija (P Rusko) Home Credit Finance Bank o.o.o. OJSC Home Credit Bank Privat Invest PPF Banka, a.s. PPF Assets Management, a. s. Contact person Lesya Chabannaya Andrea Lenghartov Mira Aripova Ales Stank Jindika Hol Robert Novk Tatyana Khartchevnikova Natalya Beskrovnaya Ji Volk Valentina Tereschenko Jaroslava Draslarov Anna evkov Phone 00421 2 582 765 62 E-mail chabannaya@agrobank.com.ua andrea.lenghartova@cps.sk Maripova@homecredit.kz stancik@cpintl.cz jhola@cpoj.cz novak@zdravi.cz TKhartchevnikova@czins.ru Natalya.Beskrovnaya@homecredit.ru volak@ppf.cz valentina.tereschenko@pinvest-ua.com jdraslarova@ppfbanka.cz sevcikova@ppf.cz Main Error status OK

A - Five most significat transactions within the wider conglomerate in different categories (only current quarter)
Fill in "5" most significat transactions with counterparties within the wider conglomerate for each category (1 to 7). Fill Transactions only over 1 MCZK (or equivalent in other currency). Transactions with the same category and the same counterparty have to be treated as one. If an operation has more currencies, split it into several rows with the same operation number. Fill in all trancastions that counterparty filled in and required verification to company also. If company filled in transaction to regulated counterparty (company) it is neseccary to fill in amount in counterparty after verification and describe eventual differences. Please refer to manual for further information about different categories. 1. transactions that result into capital share on companies within the wider financial conglomerate Operation Number Company ID Counterparty Agreed currency Amount (in aggreed currency) Amount in Counterparty (in aggreed currency) RegulComp Difference 0 0 0 0 0 0 0 0 0 0 2. Transactions that are result of capital share on companies within the wider financial conglomerate Operation Number Company ID Counterparty Agreed currency Amount (in aggreed currency) Amount in Counterparty (in aggreed currency) Difference 0 0 0 0 0 0 0 0 0 0 3a. Trades of derivates with counterparties within the wider financial conglomerate Operation Number Company ID Counterparty Agreed currency Amount (in aggreed currency) Amount in Counterparty (in aggreed currency) Difference 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3b. Loans, Deposits, Bonds and notes issued with counterparties within the wider financial conglomerate Operation Number Company ID Counterparty Agreed currency Amount (in aggreed currency) Amount in Counterparty (in aggreed currency) Difference 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Short description/explanation of differences OK # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # Short description/explanation of differences OK # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # Short description/explanation of differences OK # # # # # # # # # # Short description/explanation of differences OK # # # # # # # # # #

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4.12 SumarizedData
This worksheet is available only for individually regulated companies. To find out some specifics see appendix (chapter 4.14).

4.12.1 Description of items it the report

Amount of capital not includable in regulatory capital This category contains items that (according to local regulatory rules for particular company) cannot be included in regulatory Amount of capital items includable in transferable regulatory capital Capital items that could be included in transferable regulatory capital (items below). But for example Other-specific-purpose reserves are non-includable and going to row Amount of capital includable in non-transferable regulatory capital. Issued Capital Amount of Issued Capital Reserves for own shares Amount of Reserves for own shares Share premium Amount of Share premium Legal and statutory reserves Amount of Legal and statutory reserves Other reserves includable in transferable regulatory capital Amount of other reserves which are non-purpose and includable in transferable regulatory capital (or disposable solvency) according to local regulator. Prior years retained earnings Amount of Prior years retained earnings Profit attributable to equity holders Amount of Profit attributable to equity holders Reduction of not includable Items

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This Item is relevant only for 1st, 2nd and 3rd quarter in amount of Profit attributable to equity holders and only for companies that cannot (according to individual rules) include interim profits in regulatory capital or for 4th quarter in amount of Planned dividends to be paid (Not included in accounting books) according to individual rules. Accepted dividend (or other distributed equity) from companies within narrow financial conglomerate in case that Interim Profit is not includable This Item is relevant only for 1st, 2nd and 3rd quarter, on condition that dividends (or other distributed equity) are not already included in Transferable regulatory capital. This item should be zero for insurance companies since they are required to recalculate solvency every quarter. This item is relevant mainly for banking institution that cannot (according to individual rules) include interim profits in regulatory capital. Amount of these dividends should be matched with row Total in table A in worksheet Adjustment. Filled in value has to be same or lower than interim profit (it means in reasons when company accepted dividends and reported loss). Negative revaluation of AFS equity instruments Amount contains negative revaluation of AFS equity instruments to real value. For accounting purposes these instruments are part of portfolio held with trading intent. Notice: This item has to be stated only if you use this item in your individual report. Net profit from securitization included in retained earnings or reserve fund This item should include net profit from securitization in case that this profit is also included in reserve fund or retained earnings. Notice: This item has to be stated only if you use this item in your individual report. Profit/loss from revaluation of liabilities This item should contain profit or loss from revaluation liabilities to real value. This is valid for profit/loss which is part of retained earnings after taxation or profit of current year after taxation. Notice: This item has to be stated only if you use this item in your individual report. Deductible Items from regulatory capital - not eliminated: Items that - according to individual regulation - have to be deducted from regulatory capital. Deductible Items from regulatory capital - elimination: Elimination of deductible items. Relevant only for non-insurance companies.

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Investments in subsidiaries within Conglomerate (Automatic input) This item inputs automatically from worksheet Subsidiaries. Investments into subsidiaries have to be deducted from regulatory capital to avoid double counting of capital of the financial conglomerate. Capital items created through inter-company trades This item will should stay empty. Deductable Items from transferable and non-transferable capital sum - not eliminated Deductable item from transferable and non-transferable capital contains: capital investments into insurance companies, reinsurance companies, insurance holding entities with mix activities and other financial institutions if they exceed 10 % issued capital. Sum of exposures from securitization with risk weight 1250 %. Surplus of significant prudent adjustment from real evaluation or evaluating model over subordinated debt B. Free delivery. Deductable Items from transferable and non-transferable capital sum elimination Capital investment into banks, insurance companies and other companies over 10 % issued capital within conglomerate. Other transferable regulatory capital items Leave blank Qualified subordinated debts not eliminated Subordinated debts that are included in a regulatory capital of relevant company according to individual capital adequacy rules. Qualified subordinated debts elimination This item should include subordinated debt provided by companies within the narrow financial conglomerate. Amount of capital items includable in non-transferable regulatory capital Capital items, that can be (according to individual regulatory rules for particular company) included in regulatory capital. (For example other capital funds for insurance companies in the Czech Republic) Positive revaluation of AFS equity instruments Positive difference from capital instrument real value revaluation. This is valid only for instrument traded on active market. For accounting purposes these instruments are part of portfolio held with trading intent.
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Capital includable in Regulatory Non-transferable (other)

Deductable Items from transferable and non-transferable capital sum - not eliminated Deductable item from transferable and non-transferable capital contains: capital investments into insurance companies, reinsurance companies, insurance holding entities with mix activities and other financial institutions if they exceed 10% issued capital. Sum of exposures from securitization with risk weight 1250 %. Surplus of significant prudent adjustment from real evaluation or evaluating model over subordinated debt B. Free delivery. Deductable Items from transferable and non-transferable capital sum elimination Capital investment into banks, insurance companies and other companies over 10 % issued capital within conglomerate. Surplus over expected cover of loss IRB Surplus over expected cover of loss origins in company that use IRB method to deal with credit risk. In this case the sum of exposures modification which are asset items together with exposures reserves which are off balance items are higher than sum of expected loss. Notice: This item has to be stated only if you use this item in your individual report. Non significant prudent adjustment up to subordinated debt B

Other non-transferable regulatory capital items This item contains all other adjustment of regulatory capital (on condition that individual regulatory rules allow that). For example regulatory capital adjustment resulting from non-zillmerization of reserves or including VBIF by insurance company. Capital claim - Credit Risk - without elimination This item is not relevant for insurance companies. Other companies will input capital claim on Credit Risk Capital claim - Credit Risk elimination This item is not relevant for insurance companies and is hidden for Banks and Investments firms. Other companies should input value of capital claim A, calculated for intercompany balances (only financial assets) with companies

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within the financial conglomerate. The file with this calculation should be attached to regulatory package. Capital claim - Market risk) This item is not relevant for insurance companies Capital claim to operational risk Input value of capital claim to operational risk if required by local regulator. Other capital claims of banking and investment sector This item is not relevant for insurance companies Other capital claims (insurance companies) This item should contain required solvency of insurance companies. Value should be the same as your individual solvency for both life and non-life insurance business. Insurers that do no calculate solvency quarterly will have to start doing it for the purpose of financial conglomerate regulation. Where calculation is based on period-change values for a year and using quarterly value would be inconsistent, the value will have to be annualized (multiplying by 4 in 1Q, by 2 in 2Q and by 3/2 in 3Q) (It is relevant mainly for items like Earned premiums, Incurred claims and others. ) NOTE: Items Number to compare with your individual equity and Number to compare with your individual regulatory capital / disposable solvency have to comply with report for your local regulator and local financial statements.

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Annex
4.13 Important terms and abbreviations

4.13.1 Narrow Financial Conglomerate x Wide Financial Conglomerate

Represent the financial institution in narrow financial conglomerate (wider) on which supplement capital claim rule apply. Members of narrow financial conglomerate are listed in CompList worksheet. Narrow Financial Conglomerate: Includes financial institutions from wide financial conglomerate. If a term Conglomerate is used in Regulatory Package or this manual without further information, we mean Narrow Financial Conglomerate. Wide Financial Conglomerate: Includes whole PPF Group (subsidiaries and associate companies)

4.13.2 Fair value of underlying instrument

Fair value of underlying instrument according to manual of IFRS accounting policies of PPF Group

4.13.3 Financial institution

Financial institution (For the purpose of this manual) is: Non-bank institutions providing some of the banking services.(leasing, loans,) (e.g. Investment Trust Management Comp., Pension Funds, insurance and reinsurance companies) Holding companies (holding shares on other companies) (e.g.., PPF Group, HC Holding)

4.13.4 Investment Firm

Investment firm (for the purpose of this manual) is a financial institution with whose systematic activity is the provision of main investment services to third parties. Such an institution has authorisation for its activities from the competent authority of the country in which it is base and is regulated at least to the extent required by Directive 96/6/EC So investment firm from countries without regulation similar to 96/6/EC Directive will obtain risk weight 1 (as any other company)

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4.13.5 2. Definition of the term Exposure

Exposure is defined as any one asset or off-balance-sheet item of the company within the financial conglomerate with relation to a counterparty or counterparties that are not included in this financial conglomerate. Exposure at the level of the financial conglomerate is calculated as a sum of Exposures originated in the companies within the financial conglomerate to a) another counterparty, b) a group of economically related counterparties The Exposure to a group of economically related counterparties is calculated as a sum of Exposures to counterparties included in the same group of economically related counterparties, c) a member state or third country The Exposure to a member state or third country is calculated as a sum of Exposures to counterparties that have the seat or place of residence in the same member state or third country d) an industry sector, The Exposure to an industry sector is calculated as a sum of Exposures to counterparties included in the same industry sector. The Exposures at the level of financial conglomerate are monitored in a value used in the accounting report of the company within the financial conglomerate, in which the Exposures have occurred. Guarantee and collaterals relating to the Exposure are not taken into account at the assessing of a value of the Exposure. The counterparty means a legal entity or a natural person outside or inside financial conglomerate. With respect to investments in financial instruments, the counterparty means the issuer, with respect to claims, the entity that is liable for the claim. The group of economically related counterparties is defined as two or several counterparties, To these counterparties occur exposures in the financial conglomerate and these counterparties have a group relationship (parent undertakings and subsidiaries) or they have an interdependency due to mutual business relations on the basis of which financial problems of one counterparty can cause repayment difficulties for another counterparty or counterparties within the group of connected counterparties. The industry sectors refer to the Industrial Classification of Economic Activities of the Czech Statistical Office.

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Examples of assets: Debt securities, shares and participations, mutual fund units, deposits, accrued income, current accounts, prepayments, claims for guarantees paid, claims resulting from assets transferred, reverse repo agreements, derivative contracts entered in the balance sheet (derivative contract has to be expressed only in a value equals exposure), loans receivables, receivables arising out of direct insurance operations, receivables arising out of reinsurance operations, tax state receivables (the counterparty have to be state in this case ), trade and other receivables, reinsurers share of insurance liabilities

Examples of off-balance sheet items: Overview of all off-BS accounts and their respective descriptions is to be found in following tables.

Account 8.01.01.10 8.01.01.20 8.01.01.30 8.01.01.40

Account Name Accepted guarantees Accepted loan Commitments Value of property received as a collateral Assets acquired on the basis of derivatives

Full Description Accepted guarantees Accepted loan Commitments Value of property received as a collateral assets acquired on the basis of derivatives (claims from deposits and credits from fixed term operations and the delta equivalent of claims from deposits and credits from options, claims for bonds, drafts and equities from fixed term operations and the delta equivalient of claims for bonds, drafts and equities from options), (including forward term deposits) (= derivatives with physical settlement not derivatives with financial settlement)

Account 9.01.00.00 9.01.01.01

Account Name Provided Loan commitments Provided undrawn loan commitments (revocable unconditionally)

9.01.01.02

Provided undrawn loan commitments (original maturity < 1 year)

Full Description Provided Loan commitments provided undrawn credit facilities, including guarantee commitments which are revocable unconditionally, at any time and without a notice period, or which allow the commitment to be cancelled due to a deterioration in the creditworthiness of the person that accepted the credit commitment without the liable entity being exposed to the risk of a penalty or loss. Retail exposures may be considered unconditionally revocable if legal regulations, in particular regulations protecting consumers, allow them to be cancelled to their full extent; or provided undrawn credit facilities, including commitments for guarantees with an original maturity of one year or less, which are not revocable unconditionally, at any time and without a notice period or which do not allow the commitment to be cancelled due to a deterioration in the creditworthiness of the person that accepted the credit commitment without the liable entity being exposed to the risk of a penalty or loss, or provided undrawn commitments to buy note issuance facilities (NIF) and provided undrawn commitments for revolving underwriting facilities (RUF), provided undrawn credit facilities, including commitments for guarantees with an original maturity of more than one year, which are not revocable unconditionally, at any time and without a notice period or which do not allow the commitment to be cancelled due to a deterioration in the creditworthiness of the person that accepted the credit commitment without the liable entity being exposed to the risk of a penalty or loss,

9.01.01.03

Provided undrawn commitments resulting from NIF and RUF

9.01.01.04

Provided undrawn loan commitments (original maturity > 1 year)

Account 9.02.00.00 9.02.01.01 9.02.01.02 9.02.01.03 9.02.01.04 9.02.01.05 9.02.01.06 9.02.01.07

Full Description Provided guarantees guarantees having the character of credit substitutes (payment guarantees) credit derivatives which for accounting purposes are regarded as provided guarantees, acceptance of drafts/bills, draft sureties and commitments stemming from draft acceptance of drafts/bills, draft sureties and commitments stemming from draft endorsements, endorsements, transactions with the possibility of retroactive recourse transactions with the possibility of retroactive recourse, in particular the assignment of a claim for consideration with recourse irrevocable stand-by letters of credit having the character of credit substitutes, irrevocable stand-by letters of credit having the character of credit substitutes, Account Name Provided guarantees guarantees having the character of credit substitutes (payment guarantees) credit derivatives regarded as provided guarantees, irrevocable stand-by letters of credit not having the character of credit substitutes, open and confirmed irrevocable documentary letters of credit secured by a security on goods, or letters of credit on which a pledge agreement has been concluded for the traded commodities irrevocable stand-by letters of credit not having the character of credit substitutes, open and confirmed irrevocable documentary letters of credit secured by a security on goods, or letters of credit on which a pledge agreement has been concluded for the traded commodities and other self-liquidating transactions,

9.02.01.08 9.02.01.09

provided and confirmed irrevocable documentary letters of credit, provided and confirmed irrevocable documentary letters of credit, provided safeguards and promises of compensation not having the character of provided safeguards and promises of compensation not having the character of credit credit substitutes (non-payment guarantees) substitutes (non-payment guarantees), in particular guarantees for a submitted offer, for the return of an advance payment, for the due performance of a contract, customs and tax safeguards,

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Account 9.03.00.00 9.03.01.01

Account Name Other off-balance sheet liabilities Assets sold on the basis of derivatives

9.03.01.02 9.03.02.01 9.03.02.02 9.03.02.03 9.03.02.04

Value of property provided as a collateral Other specific - full risk (not relevant now - for future use) Other specific - medium risk (not relevant now - for future use) Other specific - medium/low risk (not relevant now - for future use) Other specific - low risk (not relevant now - for future use)

Full Description Other off-balance sheet assets assets sold on the basis of derivatives (liability claims from deposits and credits from fixed term operations and the delta equivalent of liabilities from deposits and credits from options, liabilities for bonds, drafts and equities from fixed term operations and the delta equivalient of liabilities from bonds, drafts and equities from options), (including forward term deposits) Value of property provided as a collateral Other specific - full risk (not relevant now - for future use) Other specific - medium risk (not relevant now - for future use) Other specific - medium/low risk (not relevant now - for future use) Other specific - low risk (not relevant now - for future use)

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4.14

Specifics for other individually regulated companies (insurance firms, banks, investment companies)

Since individually regulated companies calculates their capital adequacy for their own regulator, there is not needed to input detailed data into Regulatory Package but just to fill individual capital adequacy into the regulatory structure in sheet SumarizedData Methodology of calculation and used accounting standard is the same as required by local regulator. Another important sheet to be filled in is PostitionsData. Data in sheet PositionsData have to comply with IFRS accounting standards. Only exception is when given company is not part of consolidation of PPF Group a so Consolidation package with IFRS values is not available (in this case local accounting standards can be used). Intercompany balances are not eliminated for insurance companies but other individually regulated companies have to eliminate capital claim for credit risk. Only financial assets should be eliminated for this purpose (do not eliminate e.g. intangible assets or deferred tax). Individually regulated companies have to fill in only below mentioned worksheets. When there is no further information for particular worksheets, the way of filling is the same like for other individually not regulated financial companies. In case that company fill in Regulatory package due to preliminary solvency version, it is necessary to send Regulatory package to C&RM again, when solvency will be final. Individually regulated companies have to attach file with calculation of Capital Claim Credit Risk elimination to Regulatory Pack. This file should contain the list of receivables, securities and other financial assets on companies within the narrow financial conglomerate (you can use intranet Elimination application to spot these intercompany balances. The File should also include the value of these receivables or securities and value of capital claim A resulting from particular items. CoverSheet Validations ElimData If the elimination within the group is insignificant (e.g. does not exceed 20 mil. CZK), it is not necessary to itemize it. PositionsData Number of required columns is limited (most of them are hidden) Shareholders Adjustment GroupTransactions Sumarized data Fill in only yellow coloured cells. See chapter 4.12. Values in this worksheet should be in accounting standards required by your individual regulatory rules. Counterparty list Other Lists

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4.15

Specifics for companies outside narrow financial conglomerate report only data for exposures report.

Companies that are nor financial companies or are not big enough to be included in narrow financial conglomerate are still part of reporting of group exposures. In 2007 and before there was a special report Exposures.xls for purpose of collection data for exposures reporting. From 2008 this report is merged with regulatory package. Companies that did filled only exposure report will have to fill limited sheet in regulatory package. Data structure is the same as before, only difference is additional classification of every exposure (equity, debt, other) In case that total sum of balance sheet assets does not exceed limit in equivalent of 50 mil. CZK, the company is non-significant and the Exposures report is not relevant. It is necessary to send balance sheet for given period to C&RM, to confirm this information. Types of counterparties: The first types are counterparties for that the total Exposure exceeds the Minimal limit of Exposure to the counterparty stated in the heading of the worksheet. The second types are counterparties for that the total Exposure doesnt exceed the Minimal limit of Exposure. In this case special counterparty underlimit exposure needs to be used. This so called underlimit exposure has ID number from 20000 and its also possible to choose them from the list as a common ID. Example: ID 20 000 Underlimit exposure (CZ, 65000) means that total exposure to the counterparty situated in Czech republic and sector 65000 doesn`t exceed the Minimal limit (1 mil. CZK). The Exposures have to be showed in the categorization according to the currency of denomination. The figures should be expressed in the accounting valuation and currency. Note: The limit has to be exceeded by the total Exposure, not by the Exposures according the currency of denomination.

Example: Exposures ING Bank EUR: 2 000 000 CZK, ING Bank USD: 9 000 000 CZK Total Exposure ING Bank: 11 000 000 CZK

The total Exposure exceeds the limit; the Exposures will be filled in broken down according to currencies of denomination.

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In order to identify the counterparty unambiguously in the further data processing it is necessary to choose the identification code and the name of the counterparty from delivered list of counterparties (the worksheet Counterparties list). In case of the absence of some counterparty in the database, the counterparty has to be filled in with identification code New_xy and also involved in the worksheet Counterparties list.

Insurance business line: The receivables arising out of direct insurance operations in a given state (amounts owed by policyholders with the seat in this state, amounts owed by intermediaries with the seat in this state) should be attached to the overall counterparty Underlimit exposure (e.g. Underlimit exposure (SK, 66000) for the Slovakia). (Note: The receivables arising out of reinsurance operations shouldnt be attached to this overall counterparty).

Consumer finance business line: The loan receivables in a given state (revolving loans, consumer loans, cash loans to clients with the seat in this state, balances due from retailers with the seat in this state) should be attached to the overall counterparty Underlimit exposure the name of state (e.g. Underlimit exposure (SK, 97000) for Slovakia ).

Underlimit exposure with higher limit 10 MCZK: This underlimit exposure was created especially for retail area, in a case you have big quantity of natural person exposures (loans, consumer loans, mortgages) under 10 MCZK please use also underlimit exposure. The rules for using underlimit exposures are similar to previous example.

Relevant sheets: CoverSheet Validations Positions Data Number of required columns is limited (most of them are hidden) Counterparty list Other Lists

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