Resolution of the Board of the National Bank of the Kyrgyz Republic No. 25/5 of 27 June 2008 on the Regulation on Requirements for the Formation of Financial Statements of OJSC Eсobank Based on the Results of Operations Carried Out Within the Framework of the Pilot Project on the Introduction of Islamic Principles of Financing in the Kyrgyz Republic

Registered with the Ministry of Justice of the Kyrgyz Republic

14 July 2008. Registration number 73-08

Bishkek

of 27 June 2008 No. 25/5

RESOLUTION OF THE BOARD OF THE NATIONAL BANK

OF THE KYRGYZ REPUBLIC

On the Regulation "On Requirements for the Formation of Financial

Statements of OJSC "Ecobank" Based on the Results of Operations

Carried Out Within the Framework of the Pilot Project

on the Introduction of Islamic Principles of Financing

in the Kyrgyz Republic"

(published in the journal "Normative Acts of the National Bank

of the Kyrgyz Republic", No. 2008/9)

Having considered the draft Regulation "On Requirements for the Formation of Financial Statements of OJSC "Ecobank" Based on the Results of Operations Carried Out Within the Framework of the Pilot Project on the Introduction of Islamic Principles of Financing in the Kyrgyz Republic", guided by Articles 7 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", Article 58 of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic", Article 1 of the Law of the Kyrgyz Republic "On Accounting" and the Regulation "On the Implementation of Islamic Principles of Financing in the Kyrgyz Republic Within the Framework of the Pilot Project", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 October 2006 No. 32/2, registered with the Ministry of Justice of the Kyrgyz Republic on 30 November 2006 No. 120-06, the Board of the National Bank of the Kyrgyz Republic resolves:

1. To approve the Regulation "On Requirements for the Formation of Financial Statements of OJSC "Ecobank" Based on the Results of Operations Carried Out Within the Framework of the Pilot Project on the Introduction of Islamic Principles of Financing in the Kyrgyz Republic" (attached).

2. To send this resolution to the Steering Committee formed within the framework of the implementation of the Memorandum of Understanding between the Kyrgyz Republic, the Islamic Development Bank and OJSC "Ecobank" regarding the introduction of Islamic principles of banking and financing in the Kyrgyz Republic of 16 May 2006, ratified by Decree of the President of the Kyrgyz Republic "On the Pilot Project for the Introduction of Islamic Principles of Financing in the Kyrgyz Republic" of 12 July 2006 No. 373.

3. To the Supervision and Licensing Methodology Department, together with the Legal Department, to send this resolution in the established procedure for state registration to the Ministry of Justice of the Kyrgyz Republic.

4. This resolution enters into force after state registration with the Ministry of Justice of the Kyrgyz Republic and subsequent official publication.

5. After publication of the registered normative legal act, the Legal Department shall inform the Ministry of Justice of the Kyrgyz Republic of the source of publication (name of the publication, its number and date).

6. To assign control over the execution of this resolution to the Deputy Chairman of the National Bank of the Kyrgyz Republic Bokontaev K.K.

Chairman of the Board of the National

Bank of the Kyrgyz Republic M. Alapaev

Registered with the Ministry of Justice of the Kyrgyz Republic

14 July 2008. Registration number 73-08

Approved

by Resolution of the Board

of the National Bank

of the Kyrgyz Republic

of 27 June 2008 No. 25/5

REGULATION

on requirements for the formation of financial statements

of OJSC "Ecobank" based on the results of operations carried out

within the framework of the pilot project on the introduction

of Islamic principles of financing in the Kyrgyz Republic

1. General provisions

1.1. This Regulation has been developed within the framework of the implementation of the pilot project on the introduction of Islamic principles of financing in the Kyrgyz Republic.

1.2. This Regulation determines the composition, content and basic rules for the preparation of financial statements of the bank based on the results of operations carried out in accordance with the Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", "On Banks and Banking Activity in the Kyrgyz Republic", "On Accounting" and the Regulation "On the Implementation of Islamic Principles of Financing in the Kyrgyz Republic Within the Framework of the Pilot Project", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 October 2006 No. 32/2, registered with the Ministry of Justice of the Kyrgyz Republic on 30 November 2006, registration number 120-06.

1.3. The purpose of the financial statements is to present information on the financial position and financial results of the bank on operations carried out according to Islamic principles of financing, useful to a wide range of users in making economic decisions.

1.4. The bank must form and present additional (separate) financial statements on operations carried out according to Islamic principles of financing, in the form of an annex to the notes to the consolidated financial statements of the bank.

1.5. Financial statements based on the results of operations carried out according to Islamic principles of financing must comply with International Financial Reporting Standards (hereinafter - IFRS).

1.6. The accounting policy of the bank, approved by the Board of Directors of the bank, must include the Procedure for the formation of financial statements of the bank based on the results of operations carried out according to Islamic principles of financing.

2. General requirements for financial statements

based on the results of operations carried out

according to Islamic principles of financing

2.1. The additional (separate) financial statements of the bank based on the results of operations carried out according to Islamic principles of financing consist of the following components:

1) statement of financial position according to the accounting balance sheet;

2) profit and loss statement;

3) opinion of the Shariah Council of the bank;

4) accounting policy and notes (disclosures) to the financial statements.

3. Procedure and deadlines for submission and publication

of financial statements based on the results of operations

carried out according to Islamic principles of financing

3.1. Publication and submission of financial statements of the bank based on the results of operations carried out according to Islamic principles of financing, as part of the consolidated financial statements of the bank, shall be carried out in accordance with the requirements of Section 3 of the Regulation on requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 3 December 2003 No. 33/2 "On approval of the Regulation "On requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 29 December 2003, registration number 125-03.

3.2. In addition to the submission and publication of financial statements based on the results of operations carried out according to Islamic principles of financing, the bank must also submit:

• monthly balance sheet based on the results of operations carried out according to Islamic principles of financing, profit and loss statement based on the results of operations carried out according to Islamic principles of financing (monthly financial statements);

• quarterly balance sheet based on the results of operations carried out according to Islamic principles of financing, profit and loss statement based on the results of operations carried out according to Islamic principles of financing (quarterly financial statements).

Submission and publication of financial statements based on the results of operations carried out according to Islamic principles of financing on a monthly and quarterly basis shall be carried out in accordance with the requirements of Section 4 of the Regulation on requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 3 December 2003 No. 33/2 "On approval of the Regulation "On requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 29 December 2003, registration number 125-03.

4. Statement of financial position according to the accounting balance sheet

based on the results of operations carried out

according to Islamic principles of financing

4.1. The statement of financial position according to the accounting balance sheet based on the results of operations carried out according to Islamic principles of financing shall be formed in accordance with the requirements of Section 6 of the Regulation on requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 3 December 2003 No. 33/2 "On approval of the Regulation "On requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 29 December 2003, registration number 125-03.

5. Profit and loss statement based on the results

of operations carried out according to Islamic

principles of financing

5.1. The profit and loss statement based on the results of operations carried out according to Islamic principles of financing shall be formed in accordance with the requirements of Section 7 of the Regulation on requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 3 December 2003 No. 33/2 "On approval of the Regulation "On requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 29 December 2003, registration number 125-03.

6. Opinion of the Shariah Council

6.1. The opinion of the Shariah Council shall be formed according to Annex 1 to this Regulation and submitted as part of the annual financial statements.

7. Notes (disclosures) to the financial

statements of the bank based on the results of operations carried out

according to Islamic principles of financing

7.1. The notes (disclosures) to the financial statements based on the results of operations carried out according to Islamic principles of financing shall be formed in accordance with the requirements of Section 10 of the Regulation on requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic of 3 December 2003 No. 33/2 "On approval of the Regulation "On requirements for the formation of financial statements of commercial banks of the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 29 December 2003, registration number 125-03. In the event that the bank carries out operations according to Islamic principles of financing that affect the bank's capital, the bank must make the necessary disclosures in the notes.

Annex 1

to the Regulation on requirements

for the formation of financial statements

of OJSC "Ecobank" based on the results of operations

carried out within the framework of the implementation

of the pilot project on the introduction

of Islamic principles of financing

in the Kyrgyz Republic

OPINION

of the Shariah Council (sample)

We, (last name, first name, patronymic), ... (last name, first name, patronymic), ...., being members of the Shariah Council of the bank, on behalf of the members of the Shariah Council of the bank, hereby confirm that the operations of the divisions/branches carrying out operations according to Islamic principles of financing in ______ year were conducted in accordance with the principles of Sharia.

On behalf of the Shariah Council:

(last name, first name, patronymic) ______

(last name, first name, patronymic) ______

Bishkek

(date)