(a)the estimate resulting from the application of paragraph 2, minus whichever of the following is the lowest:
(a)the CSD's annual gross operational expenses shall consist of at least the following:
(b)the CSD's annual gross operational expenses shall be determined in accordance with one of the following:
1. 1. The capital requirements of a CSD for business risk shall be whichever of the following is higher:
((a))the estimate resulting from the application of paragraph 2, minus whichever of the following is the lowest:(i)the net income after tax of the last audited financial year;(ii)the expected net income after tax for the current financial year;(iii)the expected net income after tax for the most past financial year where audited results are not yet available;
((i))(i) the net income after tax of the last audited financial year;
((ii))(ii) the expected net income after tax for the current financial year;
((iii))(iii) the expected net income after tax for the previousmost past financial year where audited results are not yet available;
((b))(b) 25 % of the CSD's annual gross operational expenses referred to in paragraph 3.
2. 2. For the purposes of point (a) of paragraph 1, a CSD shall apply all of the following:
((a))(a) estimate the capital necessary to cover losses resulting from business risk on reasonably foreseeable adverse scenarios relevant to its business model;
((b))(b) document the assumptions and the methodologies used to estimate the expected losses referred to in point (a);
((c))(c) review and update the scenarios referred to in point (a) at least annually.
3. 3. For the calculation of a CSD's annual gross operational expenses, the following shall apply:
((a))the CSD's annual gross operational expenses shall consist of at least the following:(i)total personnel expenses including wages, salaries, bonuses and social costs;(ii)total general administrative expenses, and, in particular, marketing and representation expenses;(iii)insurance expenses;(iv)other employees' expenses and travelling;(v)real estate expenses;(vi)IT support expenses;(vii)telecommunications expenses;(viii)postage and data transfer expenses;(ix)external consultancy expenses;(x)tangible and intangible assets' depreciation and amortisation;(xi)impairment and disposal of fixed assets;
((i))(i) total personnel expenses including wages, salaries, bonuses and social costs;
((ii))(ii) total general administrative expenses, and, in particular, marketing and representation expenses;
((iii))(iii) insurance expenses;
((iv))(iv) other employees' expenses and travelling;
((v))(v) real estate expenses;
((vi))(vi) IT support expenses;
((vii))(vii) telecommunications expenses;
((viii))(viii) postage and data transfer expenses;
((ix))(ix) external consultancy expenses;
((x))(x) tangible and intangible assets' depreciation and amortisation;
((xi))(xi) impairment and disposal of fixed assets;
((b))(iii) generallythe CSD's annual gross operational expenses shall be determined in accordance with one of the following:(i)International Financial Reporting Standards (IFRS) adopted pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council(11);(ii)Council Directives 78/660/EEC(12), 83/349/EEC(13)and 86/635/EEC;(iii)generally accepted accounting principles of a third country determined to be equivalent to IFRS in accordance with Commission Regulation (EC) No 1569/2007 (^{5}) or1569/2007(14)or accounting standards of a third country the use of which is permitted in accordance with Article 4 of that Regulation;
((i))(i) International Financial Reporting Standards (IFRS) adopted pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council (^{2});Council(11);
((ii))(ii) Council Directives 78/660/EEC78/660/EEC(12), (^{3}), 83/349/EEC (^{4}) and83/349/EEC(13)and 86/635/EEC;
((iii))generally accepted accounting principles of a third country determined to be equivalent to IFRS in accordance with Commission Regulation (EC) No 1569/2007(14)or accounting standards of a third country the use of which is permitted in accordance with Article 4 of that Regulation;
((c))(c) the CSD may deduct tangible and intangible assets' depreciation and amortisation from annual gross operational expenses;
((d))(d) the CSD shall use the most recent audited information from their annual financial statement;
((e))(e) where the CSD has not completed business for one year from the date it starts its operations, it shall apply the gross operational expenses projected in its business plan.