ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of April 20, 2018 No. 212

About approval of the list of legal entities whose core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships), rules of its forming and rules of creation of provisions (reserves)

According to Item 7 of article 250 of the Code of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" the Government of the Republic of Kazakhstan DECIDES:

1. Approve enclosed:

1) the list of legal entities whose core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships);

2) Rules of forming of the list of legal entities which core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships);

3) Rules of creation of provisions (reserves).

2. Declare invalid the order of the Government of the Republic of Kazakhstan of May 4, 2014 No. 445 "About approval of the list of legal entities whose core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected persons or to the third parties according to obligations of the interconnected persons (except assets and contingent obligations of credit partnerships), rules of its forming and rules of creation of provisions (reserves)" (SAPP of the Republic of Kazakhstan, 2014, No. 33, of the Art. 294).

3. This resolution becomes effective since January 1, 2018 and is subject to official publication.

Approved by the Order of the Government of the Republic of Kazakhstan of April 20, 2018, No. 212

The list of legal entities whose core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships)

1. Joint-stock company "Fund of development of entrepreneurship "Lady".

2. Development Bank of Kazakhstan joint-stock company.

Approved by the Order of the Government of the Republic of Kazakhstan of April 20, 2018 No. 212

Rules of forming of the list of legal entities which core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships)

These rules of forming of the list of legal entities which core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, the assets having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations, except for and the contingent obligations provided for benefit of the interconnected parties or to the third parties according to obligations of the interconnected parties (except assets and contingent obligations of credit partnerships) (further - Rules of forming of the list) are developed according to Item 7 of article 250 of the Code of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" (further - the Tax code) and establish procedure for forming of the list of legal entities, having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, contingent obligations.

1. The list of legal entities whose core activity is implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, having the right to expense amount deduction on creation of provisions (reserves) against doubtful and bad assets, (further - the list) is determined by the Government of the Republic of Kazakhstan.

2. The draft of the order of the Government of the Republic of Kazakhstan about approval of the list is introduced by authorized body in the sphere of tax policy according to the petition of national managing holding.

3. The petition of national managing holding goes to authorized body in the sphere of tax policy in any form with application of documents, confirming compliance of the legal entity to the requirements specified in Item 6 of these rules of forming of the list:

1) charter of the legal entity;

2) statements from the shareholder register (participants) of the legal entity (if the register of participants of economic partnership is kept by the single registrar).

4. The authorized body in the sphere of tax policy considers the petition within 30 calendar days from the date of its receipt with removal of one of the following motivated decisions:

1) about possibility of inclusion of the legal entity in the list;

2) about refusal in inclusion of the legal entity in the list.

The decision of authorized body in the sphere of tax policy goes in writing to national managing holding.

5. The bases for refusal in inclusion of the legal entity in the list are discrepancy of the legal entity to the requirements specified in Item 6 of these rules of forming of the list and/or non-presentation of the documents specified in Item 3 of these rules of forming of the list.

6. For inclusion in the list the legal entity shall conform to the following requirements:

1) hundred percent of voting shares (shares) of such legal entity belong to national managing holding;

2) core activities of the legal entity are implementation of loan transactions or the redemption of rights to claim;

3) the legal entity is not the taxpayer specified in Items 1, of the 5 and 6 article 250 of the Tax Code.

 

Approved by the Order of the Government of the Republic of Kazakhstan of April 20, 2018 No. 212

Rules of creation of provisions (reserves)

Chapter 1. General provisions

1. These rules of creation of provisions (reserves) (further - Rules) are developed according to the Code of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" (further - the Tax code) and determine procedure and conditions of classification of assets, contingent obligations and creation of provisions (reserves) against them.

2. The basic concepts used in these rules have the following values:

1) depreciated cost of financial asset - the amount in which the individual asset in case of initial recognition is estimated, minus payments on account of the main amount of debt, plus or minus the size of accumulated depreciation of the award or discount calculated with use of effective interest rate method, corrected taking into account provisions (reserves);

2) assets - requirements to all physical persons and legal entities, including to banks;

3) Bank - the bank which is national institute of development;

4) gross carrying amount of asset - depreciated cost of individual asset before adjustment at size of provisions (reserves);

5) date of initial recognition:

signature date of the agreement determining conditions of individual asset;

signature date of the supplementary agreement to the agreement therefore the Bank assumed liability on provision of new individual asset, without modification of the available individual assets;

signature date of the supplementary agreement to the agreement from which the modification/restructuring of individual asset attracting write-off old and recognition of new individual asset results;

6) default:

delay of payments (principal debt and/or remuneration) over 90 calendar days in Bank and/or other financial organizations on reporting date; and/or availability of expectations of Bank that the partner has no opportunity to make debt repayment before bank in full without provision to it preferential terms.

For the purposes of determination of default the Bank accepts the following situations as absence at the partner of possibility of debt repayment in full:

suspension of charge of remuneration on individual asset in connection with financial straits of the partner;

write-off of part and/or all outstanding amount of the partner which was caused by significant increase in credit risk from the date of initial recognition of the financial instrument;

sale of individual asset at a discount more than 5% of equity of Bank which reflects the suffered credit losses;

restructuring which leads to reduction of requirements to the partner, write-off/forgiveness of part and/or all loan amount, increase in term of loan, transfer of payment of principal debt, remuneration or the commissions for later period in connection with financial straits of the partner;

if the Bank filed a lawsuit the claim for recognition of the partner by the bankrupt according to the legislation of the Republic of Kazakhstan;

the appeal of the partner to court with the statement for recognition by his bankrupt according to the legislation of the Republic of Kazakhstan;

7) I will jam (credit) - implementation by the Organization, Bank of loan, leasing transactions;

8) investment loan (credit) - I will jam (credit), conforming to all following requirements:

the term of loan (credit) constitutes five and more years;

terms of the contract of loan (credit) establish prohibition on complete early repayment;

in case of partial repayment of loan (credit), partial repayment can be performed in the terms and procedure provided by the business plan of the borrower;

the loan (credit) is granted the legal entity according to its business plan providing realization of complex of the actions directed to creation, expansion and upgrade of production of goods, production and transport infrastructure;

9) individual asset - financial asset or contingent obligation, except for the loans issued to physical persons;

10) the partner - the borrower, the issuer, the co-borrower, the guarantor, financial institution and other debtors of Bank;

11) the low level of credit risk - the financial instruments having the international rating is not lower than the BBB-level on scale S&P or similar level on scale of Fitch or Moody "s;

12) credit risk - risk of emergence of expenses (losses) owing to non-execution or improper execution by the debtor (debtor) of obligations on asset and contingent obligation to the organization, in accordance with the terms of the agreement or existence of real threat of such non-execution (improper execution);

13) the Organization - national managing holding, and also the legal entity which core activities are implementation of loan transactions or the redemption of rights to claim and which hundred percent of voting shares (shares) belong to national managing holding, except for Bank;

14) portfolio of uniform loans (credits) - group of uniform loans (credits) included in one group according to internal regulations of the organization about procedure and conditions of classification of uniform loans (credits);

15) cash flows - receipt and disposal of money and their equivalents;

16) provisions (reserves) - provision under the expected and available credit losses on the financial assets considered on depreciated cost of financial asset and fair value through other comprehensive income, and also the estimative obligation concerning the expected credit losses on contingent obligations;

17) reasonable and confirmable information - information which is reasonably available as of reporting date without excessive costs or efforts, including information on last events, the current conditions and forecasts of future economic conditions;

18) restructuring of obligations - any change of procedure and the terms of the contract, for the purpose of the decision which are available or expected difficulties of the partner on servicing of obligations according to any of following cases:

change of the payment schedule under the agreement, including:

the subsequent provision or prolongation of grace period on payments under the agreement for repayment of principal debt and/or remuneration;

subsequent prolongation of term of the agreement;

delay of one or more payments under the agreement;

write-off or forgiveness of part of principal debt and (or) remuneration on individual asset;

capitalization of overdue payments on remuneration;

change (converting) of loan currency from one currency on another with capitalization/delay of overdue debt on remuneration;

provision of new loan for payment of overdue debt on the operating loan in Bank, including in other financial organizations;

increase in credit limit in the presence of overdue debt;

the decrease in rate of remuneration on loan connected with financial straits of the partner;

decrease in debt on loan as a result of debt repayment at the expense of the mortgage property of the partner transferred to Bank;

19) the project - complex of the actions financed by means of provision of loan (credit) by Bank and directed to creation new, expansion and updating of the existing productions including on acquisition of assets, blocks of shares (shares), property complexes; and/or stimulation of export of works (services) performed (rendered) residents of the Republic of Kazakhstan, and also export of products which are turned out in the territory of the Republic of Kazakhstan;

20) reclassification of asset (contingent obligation) - classification of earlier classified asset (contingent obligation) with corresponding change of the amount of provisions (reserves) against it towards increase or reduction by difference amount between earlier created amount of provisions (reserve) and the necessary amount of provisions (reserve) after carrying out reclassification;

21) providing cost - market (fair) assessment of providing at the moment taking into account possibility of its realization (sale) at the time of assessment;

22) contingent obligation - contingent obligations on provision of loans, unpaid letters of credit, the issued or confirmed guarantees;

23) financial straits:

the partner has overdue obligations to Bank on reporting date;

the partner has no overdue obligations, at the same time the Bank has information that the partner will allow violation of payment due dates according to the obligations without provision to it preferential terms under the agreement;

the partner is issuer of the securities registered at the exchange, and such securities undergo or cancellations of issue of securities, within the last 12 months, in connection with deterioration in financial condition underwent the procedure;

on the basis of the actual indicators, forecasts and assessment of financial condition of the partner the bank predicts that cash flows of the partner will be insufficient for covering of contractual commitments before Bank (including principal debt and remuneration);

24) POCI asset - the acquired or created financial asset (or assets) on which there was credit impairment at the time of initial recognition.

Chapter 2. Features of classification of assets and contingent obligations and forming of provisions (reserves) against doubtful and bad assets and contingent obligations of the organization

3. Provisions (reserves) are created in case of asset impairment and contingent obligations - in case of loss by asset and contingent obligation of cost owing to realization of credit risk.

4. Classification of asset and contingent obligation, their reflection in financial accounting of the organization do not change terms of the contract between the organization and his debtor (debtor), including do not influence the right of receipt of the main amount by the organization of the requirement (debt) and remuneration on it in full, and also penalties, penalty fee for violation by the debtor (debtor) of terms of the contract.

5. Classifications are subject assets and contingent obligations, except for requirements to the Government of the Republic of Kazakhstan, National Bank of the Republic of Kazakhstan and requirements for taxes and other obligatory payments in the budget.

6. These rules are not applied if the borrower (the debtor, the co-borrower) is person registered in the state with the preferential taxation determined according to the tax legislation, either dependent or affiliated in relation to person registered in the state with the preferential taxation.

7. Classification (reclassification) of assets, contingent obligations and forming of provisions (reserves) is performed in case of:

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