Common use of Basis of preparation Clause in Contracts

Basis of preparation. (Continued) IC Interpretation 20 is not applicable to the Group and the Bank as it is not relevant to the Group's operations. Government Loans (Amendments to MFRS 1) has no financial impact to the Group and the Bank as the Group and the Bank do not hold any government grants or receive any government assistance. The adoption of all the other MFRSs and amendments to MFRSs did not have any financial impact to the Group and the Bank. With effect from 1 January 2013, the Group and the Bank have adopted the Bank Negara Malaysia's Capital Adequacy Framework (Capital Components and Basel II - Risk-weighted Assets) ("the Framework") issued on 28 November 2012. This Framework outlines the general requirements on regulatory capital adequacy ratios, the components of eligible regulatory capital as well as the levels of those ratios at which banking institutions are required to operate. The Framework has been developed based on internationally agreed standards on capital adequacy promulgated by the Basel Committee on Banking Supervision. Under the Framework, the minimum capital adequacy ratios are progressively increased from 1 January 2013 to 1 January 2019, and includes a phased introduction of a new capital conservation buffer of 2.5%. Additional capital requirements, including a new counter-cyclical buffer ranging from 0% to 2.5% will be detailed out at a later stage. On 28 June 2013, Bank Negara Malaysia issued policy documents on Financial Reporting and Financial Reporting for Islamic Banking Institutions (“Policy Documents”) to replace the Guidelines on Financial Reporting for Banking Institutions and Guidelines on Financial Reporting for Islamic Banking Institutions (BNM/GP8-i) respectively. The Policy Documents set minimum expectations for the application of the MFRSs and aim to ensure adequate disclosures in the financial statements of banking institutions. The Bank and the Domestic banking subsidiaries of the Group have adopted the Policy Documents with effect from 30 June 2013. There is no financial impact from the adoption of the Policy Documents. Since the adoption of the Policy Documents only affect disclosures in the financial statements, there is no impact on the financial results of the Group and the Bank. The following MFRSs and Amendments to MFRSs have been issued by the MASB but are not yet effective to the Group and the Bank: Effective for annual periods commencing on or after 1 January 2014 Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 132) Investment Entities (Amendments to MFRS 10, MFRS 12 and MFRS 127) Effective for annual periods commencing on or after 1 January 2015 MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7) MFRS 9 introduces significant changes in the way the Group accounts for financial instruments. Due to the complexity of this standard and its proposed changes, the financial effects of its adoption are still being assessed by the Group. The adoption of Amendments to MFRS 132 is not expected to have any financial impact to the Group and the Bank as the current practice for offsetting arrangements remained unchanged. The adoption of Amendments to MFRS 10, MFRS 12 and MFRS 127 is not expected to have any financial impact to the Group as the Bank is not an investment entity as defined in MFRS 10.

Basis of preparation. The unaudited interim financial statements for the 3rd quarter and nine months ended 30 September 2013 have been prepared under the historical cost convention except for the following assets and liabilities which are stated at fair values: financial assets held-for-trading, financial investments available-for-sale, derivative financial instruments and investment properties. The unaudited interim financial statements have been prepared in accordance with MFRS 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board (Continued“MASB”) and Chapter 9, Part K of the Listing Requirements of Bursa Malaysia Securities Berhad. The unaudited interim financial statements should be read in conjunction with the audited annual financial statements of the Group and the Bank for the financial year ended 31 December 2012. The explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group and the Bank since the year ended 31 December 2012. The unaudited interim financial statements incorporated those activities relating to the Islamic banking business which have been undertaken by the Group. Islamic banking business refers generally to the acceptance of deposits and granting of financing under the principles of Shariah. The significant accounting policies and methods of computation applied in the unaudited interim financial statements are consistent with those adopted in the most recent annual financial statements for the year ended 31 December 2012, except for the adoption of the following MFRSs, IC Interpretation and Amendments to MFRSs during the current financial period: MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interests in Other Entities MFRS 13 Fair Value Measurement MFRS 119 Employee Benefits (as amended by IASB in June 2011) MFRS 127 Separate Financial Statements (as amended by IASB in May 2011) MFRS 128 Investments in Associates and Joint Ventures (as amended by IASB in May 2011) MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004) MFRS 127 Consolidated and Separate Financial Statements (IAS 27 Consolidated and Separate Financial Statements revised by IASB in December 2003) IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine Government Loans (Amendments to MFRS 1) Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 7) Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to MFRS 10, MFRS 11 and MFRS 12) The adoption of MFRS 119 has affected the way in which the Group and the Bank account for employee benefits, in particular with respect to post-employment benefits under its defined benefit plan. The financial effects of the adoption of MFRS 119 are discussed in Note A31 Changes in Accounting Policies. IC Interpretation 20 is not applicable to the Group and the Bank as it is not relevant to the Group's operations. Government Loans (Amendments to MFRS 1) has no financial impact to the Group and the Bank as the Group and the Bank do not hold any government grants or receive any government assistance. The adoption of all the other MFRSs and amendments to MFRSs did not have any financial impact to the Group and the Bank. With effect from 1 January 2013, the Group and the Bank have adopted the Bank Negara Malaysia's Capital Adequacy Framework (Capital Components and Basel II - Risk-weighted Assets) ("the Framework") issued on 28 November 2012. This Framework outlines the general requirements on regulatory capital adequacy ratios, the components of eligible regulatory capital as well as the levels of those ratios at which banking institutions are required to operate. The Framework has been developed based on internationally agreed standards on capital adequacy promulgated by the Basel Committee on Banking Supervision. Under the Framework, the minimum capital adequacy ratios are progressively increased from 1 January 2013 to 1 January 2019, and includes a phased introduction of a new capital conservation buffer of 2.5%. Additional capital requirements, including a new counter-cyclical buffer ranging from 0% to 2.5% will be detailed out at a later stage. On 28 June 2013, Bank Negara Malaysia issued policy documents on Financial Reporting and Financial Reporting for Islamic Banking Institutions (“Policy Documents”) to replace the Guidelines on Financial Reporting for Banking Institutions and Guidelines on Financial Reporting for Islamic Banking Institutions (BNM/GP8-i) respectively. The Policy Documents set minimum expectations for the application of the MFRSs and aim to ensure adequate disclosures in the financial statements of banking institutions. The Bank and the Domestic domestic banking subsidiaries of the Group have adopted the Policy Documents with effect from 30 June 2013. There is no financial impact from the adoption of the Policy Documents. Since the adoption of the Policy Documents only affect disclosures in the financial statements, there is no impact on the financial results of the Group and the Bank. The following MFRSs and MFRSs, Amendments to MFRSs and IC Interpretation have been issued by the MASB but are not yet effective to the Group and the Bank: Effective for annual periods commencing on or after 1 January 2014 Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 132) Investment Entities (Amendments to MFRS 10, MFRS 12 and MFRS 127) Recoverable Amount Disclosures for Non-Financial Assets (Amendments to MFRS 136) Novation of Derivatives and Continuation of Hedge Accounting (Amendments to MFRS 139) IC Interpretation 21 Levies Effective for annual periods commencing on or after 1 January 2015 MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7) MFRS 9 introduces significant changes in the way the Group accounts for financial instruments. Due to the complexity of this standard and its proposed changes, the financial effects of its adoption are still being assessed by the Group. IC Interpretation 21 is not applicable to the Group and the Bank as it is not relevant to the Group's operations. The adoption of Amendments to MFRS 132 is not expected to have any financial impact to the Group and the Bank as the current practice for offsetting arrangements remained unchanged. The adoption of Amendments to MFRS 10, MFRS 12 and MFRS 127 is not expected to have any financial impact to the Group as the Bank is not an investment entity as defined in MFRS 10. The adoption of Amendments to MFRS 136 affects only disclosures in the financial statements and will not have any financial impact to the Group and the Bank. The amendments to MFRS 139 provide an exception from discontinuing hedge accounting in circumstances when a hedging instrument is required to be novated to a central counterparty as a result of laws or regulations. The adoption of this amendment is not expected to have any financial impact to the Group and the Bank.

Basis of preparation. The unaudited interim financial statements for the 2nd quarter and financial half year ended 30 June 2013 have been prepared under the historical cost convention except for the following assets and liabilities which are stated at fair values: financial assets held-for-trading, financial investments available-for-sale, derivative financial instruments and investment properties. The unaudited interim financial statements have been prepared in accordance with MFRS 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board (Continued“MASB”) IC Interpretation 20 is not applicable to and Chapter 9, Part K of the Listing Requirements of Bursa Malaysia Securities Berhad. The unaudited interim financial statements should be read in conjunction with the audited annual financial statements of the Group and the Bank as it is not relevant for the financial year ended 31 December 2012. The explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group and the Bank since the year ended 31 December 2012. The unaudited interim financial statements incorporated those activities relating to the Islamic banking business which have been undertaken by the Group's operations. Islamic banking business refers generally to the acceptance of deposits and granting of financing under the principles of Shariah. The significant accounting policies and methods of computation applied in the unaudited interim financial statements are consistent with those adopted in the most recent annual financial statements for the year ended 31 December 2012, except for the adoption of the following MFRSs, IC Interpretation and Amendments to MFRSs during the current financial period: MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interests in Other Entities MFRS 13 Fair Value Measurement MFRS 119 Employee Benefits (as amended by IASB in June 2011) MFRS 127 Separate Financial Statements (as amended by IASB in May 2011) MFRS 128 Investments in Associates and Joint Ventures (as amended by IASB in May 2011) MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004) MFRS 127 Consolidated and Separate Financial Statements (IAS 27 Consolidated and Separate Financial Statements revised by IASB in December 2003) IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine Government Loans (Amendments to MFRS 1) has no financial impact to the Group and the Bank as the Group and the Bank do not hold any government grants or receive any government assistance. The adoption of all the other MFRSs and amendments to MFRSs did not have any financial impact to the Group and the Bank. With effect from 1 January 2013, the Group and the Bank have adopted the Bank Negara Malaysia's Capital Adequacy Framework (Capital Components and Basel II Disclosures - Risk-weighted Assets) ("the Framework") issued on 28 November 2012. This Framework outlines the general requirements on regulatory capital adequacy ratios, the components of eligible regulatory capital as well as the levels of those ratios at which banking institutions are required to operate. The Framework has been developed based on internationally agreed standards on capital adequacy promulgated by the Basel Committee on Banking Supervision. Under the Framework, the minimum capital adequacy ratios are progressively increased from 1 January 2013 to 1 January 2019, and includes a phased introduction of a new capital conservation buffer of 2.5%. Additional capital requirements, including a new counter-cyclical buffer ranging from 0% to 2.5% will be detailed out at a later stage. On 28 June 2013, Bank Negara Malaysia issued policy documents on Financial Reporting and Financial Reporting for Islamic Banking Institutions (“Policy Documents”) to replace the Guidelines on Financial Reporting for Banking Institutions and Guidelines on Financial Reporting for Islamic Banking Institutions (BNM/GP8-i) respectively. The Policy Documents set minimum expectations for the application of the MFRSs and aim to ensure adequate disclosures in the financial statements of banking institutions. The Bank and the Domestic banking subsidiaries of the Group have adopted the Policy Documents with effect from 30 June 2013. There is no financial impact from the adoption of the Policy Documents. Since the adoption of the Policy Documents only affect disclosures in the financial statements, there is no impact on the financial results of the Group and the Bank. The following MFRSs and Amendments to MFRSs have been issued by the MASB but are not yet effective to the Group and the Bank: Effective for annual periods commencing on or after 1 January 2014 Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 1327) Investment Entities Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to MFRS 10, MFRS 12 11 and MFRS 12712) Effective for annual periods commencing on or after 1 January 2015 MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7) MFRS 9 introduces significant changes in the way the Group accounts for financial instruments. Due to the complexity of this standard and its proposed changes, the financial effects of its adoption are still being assessed by the Group. The adoption of Amendments to MFRS 132 is not expected to have any financial impact to 119 has affected the way in which the Group and the Bank as the current practice account for offsetting arrangements remained unchangedemployee benefits, in particular with respect to post-employment benefits under its defined benefit plan. The financial effects of the adoption of Amendments to MFRS 10, MFRS 12 and MFRS 127 is not expected to have any financial impact to the Group as the Bank is not an investment entity as defined 119 are discussed in MFRS 10Note A31 Changes in Accounting Policies.

Basis of preparation. (Continued) IC Interpretation 20 is not applicable to the Group and the Bank as it is not relevant to the Group's operations. Government Loans (Amendments to MFRS 1) has no financial impact to the Group and the Bank as the Group and the Bank do not hold any government grants or receive any government assistance. The adoption of all the other MFRSs and amendments to MFRSs did not have any financial impact to the Group and the Bank. With effect from 1 January 2013, the Group and the Bank have adopted the Bank Negara Malaysia's Capital Adequacy Framework (Capital Components and Basel II - Risk-weighted Assets) ("the Framework") issued on 28 November 2012. This Framework outlines the general requirements on regulatory capital adequacy ratios, the components of eligible regulatory capital as well as the levels of those ratios at which banking institutions are required to operate. The Framework has been developed based on internationally internationally-agreed standards on capital adequacy promulgated by the Basel Committee on Banking Supervision. Under the Framework, the minimum capital adequacy ratios are progressively increased from 1 January 2013 to 1 January 2019, and includes a phased introduction of a new capital conservation buffer of 2.5%. Additional capital requirements, including a new counter-cyclical buffer ranging from 0% to 2.5% will be detailed out at a later stage. On 28 June 2013, Bank Negara Malaysia issued policy documents on Financial Reporting and Financial Reporting for Islamic Banking Institutions (“Policy Documents”) to replace the Guidelines on Financial Reporting for Banking Institutions and Guidelines on Financial Reporting for Islamic Banking Institutions (BNM/GP8-i) respectively. The Policy Documents set minimum expectations for the application of the MFRSs and aim to ensure adequate disclosures in the financial statements of banking institutions. The Bank and the Domestic banking subsidiaries of the Group have adopted the Policy Documents with effect from 30 June 2013. There is no financial impact from the adoption of the Policy Documents. Since the adoption of the Policy Documents only affect disclosures in the financial statements, there is no impact on the financial results of the Group and the Bank. The following MFRSs and Amendments to MFRSs have been issued by the MASB but are not yet effective to the Group and the Bank: Effective for annual periods commencing on or after 1 January 2014 Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 132) Investment Entities (Amendments to MFRS 10, MFRS 12 and MFRS 127) Effective for annual periods commencing on or after 1 January 2015 MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7) MFRS 9 introduces significant changes in the way the Group accounts for financial instruments. Due to the complexity of this standard and its proposed changes, the financial effects of its adoption are still being assessed by the Group. The adoption of Amendments to MFRS 132 is not expected to have any financial impact to the Group and the Bank as the current practice for offsetting arrangements remained unchanged. The adoption of Amendments to MFRS 10, MFRS 12 and MFRS 127 is not expected to have any financial impact to the Group as the Bank is not an investment entity as defined in MFRS 10.

Basis of preparation. (Continued) IC Interpretation 20 is not applicable to the Group and the Bank as it is not relevant to the Group's operations. Government Loans (Amendments to MFRS 1) has no financial impact to the Group and the Bank as the Group and the Bank do not hold any government grants or receive any government assistance. The adoption of all the other MFRSs and amendments to MFRSs did not have any financial impact to the Group and the Bank. With effect from 1 January 2013, the Group and the Bank have adopted the Bank Negara Malaysia's Capital Adequacy Framework (Capital Components and Basel II - Risk-weighted Assets) ("the Framework") issued on 28 November 2012. This Framework outlines the general requirements on regulatory capital adequacy ratios, the components of eligible regulatory capital as well as the levels of those ratios at which banking institutions are required to operate. The Framework has been developed based on internationally agreed standards on capital adequacy promulgated by the Basel Committee on Banking Supervision. Under the Framework, the minimum capital adequacy ratios are progressively increased from 1 January 2013 to 1 January 2019, and includes a phased introduction of a new capital conservation buffer of 2.5%. Additional capital requirements, including a new counter-cyclical buffer ranging from 0% to 2.5% will be detailed out at a later stage. On 28 June 2013, Bank Negara Malaysia issued policy documents on Financial Reporting and Financial Reporting for Islamic Banking Institutions (“Policy Documents”) to replace the Guidelines on Financial Reporting for Banking Institutions and Guidelines on Financial Reporting for Islamic Banking Institutions (BNM/GP8-i) respectively. The Policy Documents set minimum expectations for the application of the MFRSs and aim to ensure adequate disclosures in the financial statements of banking institutions. The Bank and the Domestic banking subsidiaries of the Group have adopted the Policy Documents with effect from 30 June 2013. There is no financial impact from the adoption of the Policy Documents. Since the adoption of the Policy Documents only affect disclosures in the financial statements, there is no impact on the financial results of the Group and the Bank. The following MFRSs and Amendments to MFRSs IC Interpretations have been issued by the MASB but and are not yet effective effective: Effective for annual periods commencing on or after 1 July 2012 Presentation of Items of Other Comprehensive income (Amendments to MFRS 101) Effective for annual periods commencing on or after 1 January 2013 MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interests in Other Entities MFRS 13 Fair Value Measurement MFRS 119 Employee Benefits (as amended by IASB in June 2011) MFRS 127 Separate Financial Statements (as amended by IASB in May 2011) MFRS 128 Investments in Associates and Joint Ventures (as amended by IASB in May 2011) IC Interpretation 20 Stripping Costs in the Group Production Phase of a Surface Mine Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 7) MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004) Amendments to MFRSs contained in the Bankdocuments entitled "Annual Improvements 2009-2011 Cycle" Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to MFRS 10, MFRS 11 and MFRS 12) MFRS 127 Consolidated and Separate Financial Statements (IAS 27 Consolidated and Separate Financial Statements revised by IASB in December 2003) Effective for annual periods commencing on or after 1 January 2014 Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 132) Investment Entities (Amendments to MFRS 10, MFRS 12 and MFRS 127) Effective for annual periods commencing on or after 1 January 2015 MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7) MFRS 9 introduces significant changes in the way the Group accounts for financial instruments. Due to the complexity of this standard and its proposed changes, the financial effects of its adoption are still being assessed by the Group. The adoption of Amendments to MFRS 132 is IC Interpretation 20 will not expected to have any financial impact to the Group and the Bank as the current practice for offsetting arrangements remained unchanged. The adoption of Amendments to MFRS 10, MFRS 12 and MFRS 127 is not expected to have any financial impact to the Group as the Bank it is not an investment entity as defined relevant to the Group's operations. The financial effects of the above MFRSs and Amendments to MFRSs are still being assessed due to the complexity of these new MFRSs and Amendments to MFRSs, and their proposed changes. During the financial period, the Islamic banking subsidiary company of the Group adopted the Guidelines on Profit Equalisation Reserve issued by Bank Negara Malaysia, which addresses the management of displaced commercial risk by Islamic banking institutions. A discussion of the financial effects of adoption of these guidelines is provided in MFRS 10Note A30 Changes in Accounting Policies.