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Company No.

FOR THE FINANCIAL PERIOD FROM 24 OCTOBER 2011

REPORTS AND FINANCIAL STATEMENTS

(DATE OF INCORPORATION) TO 31 DECEMBER 2012

965488-H

NATIONAL BANK OF ABU DHABI MALAYSIA BERHAD(Incorporated in Malaysia)

1

Company No.

CONTENTS PAGE

DIRECTORS‟ REPORT 3

STATEMENT OF FINANCIAL POSITION 15

STATEMENT OF COMPREHENSIVE INCOME 16

STATEMENT OF CHANGES IN EQUITY 17

STATEMENT OF CASH FLOW 18

NOTES TO THE FINANCIAL STATEMENTS 19

STATEMENT BY DIRECTORS 56

STATUTORY DECLARATION 56

INDEPENDENT AUDITORS‟ REPORT 57


965488-H

NATIONAL BANK OF ABU DHABI MALAYSIA BERHAD(Incorporated in Malaysia)

REPORTS AND FINANCIAL STATEMENTS


2

PRINCIPAL ACTIVITIES

FINANCIAL RESULT

RM'000

Net loss for the financial period (5,337)

In accordance with Article 80 of the Bank's Articles of Association, all the existing directors will retire

at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

The Directors are pleased to submit their first report to the member together with the audited financial

statements of the Bank for the financial period ended 31 December 2012.

NATIONAL BANK OF ABU DHABI MALAYSIA BERHAD (965488-H)

(Incorporated in Malaysia)

DIRECTORS' REPORT

The principal activities of the Bank are banking and related financial services.

The Bank was incorporated on 24 October 2011 and commenced its operation on 2 July 2012.

DIVIDENDS

No dividend has been paid, declared or proposed since the date of incorporation. The Directors do not

recommend the payment of any dividend for the financial period ended 31 December 2012.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial period.

DIRECTORS

The Directors of the Bank who have held office since the date of incorporation and as at the date of this

report are as follows:

Michael Hardwick Tomalin (appointed on 12 April 2012)

Qamber Ali Qamber AlMulla (appointed on 12 April 2012)

Ernest Law Shee-Wing (appointed on 12 April 2012)

Datuk Nik Azman Mohd Zain (appointed on 12 April 2012)

Ahmad Nazim Abd Rahman (appointed on 12 April 2012)

Chew Sang Kok (First director, resigned on 13 April 2012)

Lim Kar Han (First director, resigned on 13 April 2012)

3



Number of ordinary shares of AED1.00 each

As at As at

24.10.2011 Purchased Sold 31.12.2012

National Bank of Abu Dhabi P.J.S.C.

Michael Hardwick Tomalin 105,172 36,810 - 141,982

Qamber Ali Qamber AlMulla 241,855 84,649 - 326,504

Number of employee share options

As at As at

24.10.2011 Granted Exercised 31.12.2012

National Bank of Abu Dhabi P.J.S.C.

Michael Hardwick Tomalin 768,750 - - 768,750

Qamber Ali Qamber AlMulla 500,000 - - 500,000

Ernest Law Shee-Wing 100,000 - - 100,000

DIRECTORS' BENEFITS

During and at the end of the financial period, no arrangements subsisted to which the Bank is a party,

being arrangements with the object or objects of enabling Directors of the Bank to acquire benefits by

means of the acquisition of shares in, or debentures of, the Bank or any other body corporate.

DIRECTORS' INTERESTS IN SHARES AND OPTIONS

According to the Register of Directors‟ Shareholdings kept by the Bank under Section 134 of the

Companies Act, 1965, the Directors holding office at the end of the financial year who had beneficial

interests in the ordinary shares / share options in the related corporations during the financial period are

as follows:

Since the date of incorporation, no Director of the Bank has received or become entitled to receive any

benefit (other than the directors' remuneration as disclosed in Note 18 to the financial statements) by

reason of a contract made by the Bank or a related corporation with the Director or with a firm of which

the Director is a member, or with a company in which the Director has a substantial financial interest.

DIRECTORS' REPORT (continued)

Other than as disclosed above, according to the Register of Directors‟ shareholdings, the Directors in

office at the end of the financial period did not hold any interest in shares and share options, of the

Bank and its related corporations during the financial period.

4



At the date of this report, the Directors are not aware of any circumstances which would render the

amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial

statements of the Bank inadequate to any substantial extent.

CURRENT ASSETS

Before the financial statements of the Bank were made out, the Directors took reasonable steps to

ascertain that any current assets, other than debts, which were unlikely to be realised in the ordinary

course of business, their value as shown in the accounting records of the Bank, had been written down

to an amount which they might be expected to realise.

At the date of this report, the Directors are not aware of any circumstances which would render the

values attributed to current assets in the financial statements of the Bank misleading.

VALUATION METHODS

At the date of this report, the Directors are not aware of any circumstances which have arisen which

render adherence to the existing methods of valuation of assets or liabilities in the Bank‟s financial

statements misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

(a) any charge on the assets of the Bank which has arisen since the end of the financial period which

secures the liability of any other person; or

(b) any contingent liability in respect of the Bank which has arisen since the end of the financial period

other than in the ordinary course of banking business.

No contingent or other liability of the Bank have become enforceable or is likely to become

enforceable, within the period of twelve months after the end of the financial period which, in the

opinion of the Directors, will or may substantially affect the ability of the Bank to meet its obligations

as and when they fall due.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Bank were made out, the Directors took reasonable steps to

ascertain that proper action had been taken in relation to the writing off of bad debts and the making of

allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and

that adequate allowance had been made for bad and doubtful debts.


5



HOLDING COMPANY

The holding company of the Bank is National Bank of Abu Dhabi PJSC, a licenced bank incorporated

in Abu Dhabi, United Arab Emirates. The ultimate parent company of the Bank is the Abu Dhabi

Investment Council, an entity owned by the Government of the Emirates of Abu Dhabi.

CHANGE OF CIRCUMSTANCES

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in

this report or the financial statements of the Bank which would render any amount stated in the

financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the Bank's operations during the financial period were not, in the opinion of the

Directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial period and the date of this report

any item, transaction or event of a material and unusual nature likely, to affect substantially the results

of the Bank‟s operations for the current financial period in which this report is made.

ISSUE OF SHARES AND DEBENTURES

Other than the issuance of shares of the Bank during the financial period as disclosed in Note 13, there

were no other issuance of shares and debentures during the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Bank during the financial year.


COMPLIANCE WITH BANK NEGARA MALAYSIA'S EXPECTATIONS ON FINANCIAL

REPORTING

In the preparation of the financial statements, the Directors have taken reasonable steps to ensure that

Bank Negara Malaysia‟s expectations on financial reporting have been complied with, including those

as set out in the Guidelines on Financial Reporting for Financial Institutions and the Guidelines on

Classification and Impairment Provisions for Loans/Financing.

6



BUSINESS REVIEW 2012

The Bank was incorporated on 24 October 2011 and commenced it banking operations on 2 July 2012.

For the first financial year ended 31 December 2012, the Bank recorded a net loss of RM5.34 million

which is mainly due to pre-operating expenses of RM3.66 million. As a newly established commercial

bank, the Bank's primary focus is building up its customer base, offering conventional banking products

such as loans, deposits, trade finance and foreign exchange.

BUSINESS OUTLOOK FOR 2013

The global economic slowdown in first half of 2012 seems to have stabilised, as the central banks

continued with monetary policy stimulus and easing in Q4 2012. Alongside improved global macro

economic outlook, global liquidity is expected to stay strong in 2013 due to central banks continued

easing monetary policy.

RATING BY EXTERNAL RATING AGENCY

The Bank is not rated by any external rating agency.

In Malaysia, economic growth in 2013 is expected to be policy-driven together with domestic demand

to continue being the driver on the back of targeted fiscal stimulus and the ETP. Inflation, however may

lead be higher due mainly on adjustments in subsidies, leading to a projected hike in the benchmark

interest rate in later year of 2013. 2013 will be a political year for Malaysia as the 13th general election

would take place in this year.

The Bank will continue to uphold its parent bank core value as one of the Top 50 Safest Bank in the

world in its business plan and developing banking business in Malaysia. The Bank will continue to

focus on expanding its corporate client locally and abroad offering assets and deposits products, trade

finance and services as well as foreign exchange. Banking on its parent bank strong network in Middle

East, the Bank will facilitate trade between Asian region and Middle East countries while achieving

sustainable profitability in 2013.


7

Directors Profiles

Michael Hardwick Tomalin - Chairman, Non-Independent Non-Executive Director

Age 65, British citizen. Holds Bachelor of Arts in Economics from Oxford University, United

Kingdom.

Mr Michael started his banking career with Barclays in 1969 in London. In 1972, he joined N M

Rothschild & Co in London as an Investment Manager responsible for the asset management of

several UK pension funds.

He rejoined Barclays in 1976 and continued with the organisation until 1999. He served as Head of

Planning for South African subsidiary (Johannesburg) in 1976 to 1977, Head of International Planning

(London) in 1977 to 1980. He was appointed Caribbean Director in 1980 based in Barbados and

responsible for Barclays Caribbean businesses including early offshore business in Cayman.

In 1982 to 1984, he was the Executive Director of Hong Kong merchant banking subsidiary and

during the period, he was also a Director of Barclays Asia Limited, Hong Kong.

In 1984 to 1985, he based in Wellington and appointed Chief Executive of Barclays New Zealand

Limited. In 1985 to 1990, he moved to Japan and became the Country Manager of Barclays Group in

Japan (Tokyo) as well as Chairman of Barclays Trust Bank, one of the first international bank- owned

asset management businesses in Japan.

In 1990, he responsible for its newly established Financial Institutions Group (London) and became

the Chief Executive. In early 1992 he was appointed Global Chief Executive of Barclays Private

Banking (London) and remained until he left Barclays in mid 1999.

In 1999, he left Barclays to join NBAD P.J.S.C. as its Chief Executive, which post he still holds

today. Currently NBAD P.J.S.C. is one of the largest banks in the Middle East (and rated the safest)

with assets of US$80 billion and profit of US$1 billion, employing 6,000 staff across 15 countries.

During his tenure, the Bank has grown over ten folds in profits, net worth and assets. NBAD is listed

in the Abu Dhabi stock exchange with a market capitalisation of US$9.2 billion.




8



Directors Profiles (continued)

Qamber Ali Qamber AlMulla - Non-Independent Non-Executive Director

Ernest Law Shee-Wing - Non-Independent Non-Executive Director

Age 52, United Arab Emirates. Holds Master of Business Administration of Strayer College, USA.

Mr Qamber is the Senior General Manager of International Banking Division of NBAD P.J.S.C. He is

an experienced international banker with more than 29 years of service with NBAD P.J.S.C. He

started his career with the Bank in 1983 and his tenure has seen him work in different areas within the

bank both in UAE and overseas as well as secondment to Abu Dhabi International Bank (Washington)

in 1990 to 1994. He later served various roles within NBAD as Area Manager of International

Banking Division (1994 - 1996), Deputy Head of the Division (1996 - 1998), Head of Division in

1998 and finally the Senior General Manager of the Division.

His current remit includes his participation in various key and strategic committees of NBAD PJSC as

well as serving as Member of Supervisory Board of Abu Dhabi International Bank, Board member of

NBAD Suisse, the private banking arm of NBAD PJSC in Switzerland, as Member of Management

Committee of Abu Dhabi Financial Services Company, the brokerage subsidiary in the UAE.

As Senior General Manager of the International Banking Division, he is involved in strategic

planning, control and management of the division as well as the Bank's overseas network spanning

over 12 countries.


Age 52, Hong Kong, People's Republic of China citizen. Holds Master of Business Administration,

International Management of Royal Melbourne Institute of Technology University, Australia.

He has over 26 years of banking experience spanning a whole spectrum of corporate banking,

financial institutions, capital markets and international banking business covering Asian region.

He started his career in 1980 as internal auditor until 1987. From 1988 to 1994, he served managerial

posts in treasury, marketing as well as correspondent banking of various financial institutions.

In 1994, he was appointed as the Chief Representative of National Westminister Bank, USA

("NatWest") to oversee NatWest business operations in the Asia Pacific region and he was appointed

to Regional Head of Trade Finance, NatWest, Hong Kong and served until 1997. He joined Baden-

Wurttembergische Bank AG as the Deputy General Manager of Hong Kong Branch to build up its

banking operations in Hong Kong and Asia.

9




Ernest Law Shee-Wing - Non-Independent Non-Executive Director (continued)

Datuk Nik Azman Mohd Zain - Independent Non-Executive Director

In 2002, he joined Beijing City Commercial Bank as Chief Senior Manager of International Banking.

He was made the Chief Representative of Banco Itau BBA S.A., Shanghai Office in October 2004 to

February 2008 overseeing the Bank's business in China. He was recruited by NBAD PJSC in July

2009 as Regional Manager - Hong Kong when at that time, he was attaching with National Australia

Bank, Hong Kong Office.


Age 62, Malaysia citizen. Holds Master of Business Administration, Long Island University, New

York and Bachelor of Science (Hons), University Malaya, Malaysia.

He started his career with Lever Brothers Malaysia (now Unilever) after his undergraduate study, as a

Management Trainee in The Technical Department of the Company. Post-MBA, he spent two years

with Exxon Production Malaysia (now Exxon Mobil) as a Financial Analyst in the Financial

Reporting Department of the Company. From Exxon, he joined SGV (now Deloitte) in 1978 as a

Assistant Consultant in the Firm‟s Management Consulting Division. He was made a Partner of the

Firm in 1982.

He became the Partner-in-Charge of Malaysia‟s Consulting operation in 1990 and in 2007 when

Deloitte Malaysia became a member of Deloitte SEA Cluster (comprising Malaysia, Singapore,

Thailand, Indonesia, Vietnam, Brunei, Philippines and Guam), He was chosen to head Consulting for

the Cluster.

He retired from Deloitte in June 2011.

He is a seasoned practitioner in consulting with some 35 years of experience serving a multitude of

private sector and public sector entities. He has helped clients develop business strategy and transform

operation, organisation and people in Malaysia and abroad.

In June 2009, he was conferred a Federal honour, the Panglima Jasa Negara by the DYMM Yang Di

Pertuan Agong which carries the title "Datuk".

10




Ahmad Nazim Abd Rahman - Independent Non-Executive Director

Age 37, Malaysia citizen. Holds LL.M. (Fulbright Scholar) of Georgetown University, Washington

DC and LL.B. (Hons), International Islamic University, Malaysia.

He started his career with Zaid Ibrahim & Co in 1999 in Corporate and Commercial Department. In

2000, he was awarded the Advocate & Solicitor of High Court of Malaya. He joined Securities

Commission (2001 - 2005) as Senior Associate in Issues and Investment Division where he reviewed

corporate finance proposals and formulated policy and regulatory frameworks for the development of

capital market industry in Malaysia.

He was posted to Norton Rose LLP, London in 2007 as Solicitor in Banking and Finance Department

where his main responsibility is legal counsel on capital market fund-raising, mergers and acquisitions

and corporate restructuring activities for UK, European and Middle East markets.

He returned to Malaysia in 2008 and was appointed as Chief Executive Officer of Exasquare

Corporation, Kuala Lumpur, a regional telecommunication group in Southeast Asia.

He currently holds directorship in UDA Holdings Berhad, Emergent Capital Sdn Bhd, Exasquare

Corporation Sdn Bhd and PT Exasquare Telkomindo, Jakarta, Indonesia.


11

Attendance at

Meeting

Qamber Ali Qamber AlMulla 5 out of 5

Ernest Law Shee-Wing 5 out of 5

Datuk Nik Azman Mohd Zain 5 out of 5

Ahmad Nazim Abd Rahman 5 out of 5

Non-Independent Non-Executive Director


Chairman/ Non-Independent Non-Executive

Director

STATEMENT OF CORPORATE GOVERNANCE

The Board of Directors recognises that good corporate governance is of critical importance and is an

invaluable tool in shaping and enhancing the performance of the Bank. The Bank is committed to quality

and transparent corporate governance to provide customers with greater access to finance, talent and

expertise, all of which nurture greater growth for us.

Roles and Responsibilities of the Board of Directors

The Board of Directors of National Bank of Abu Dhabi Malaysia Berhad is not involved in executive

decisions of National Bank of Abu Dhabi Berhad‟s day to day operations and will provide an oversight

function to the CEO and the Senior Management team to ensure that National Bank of Abu Dhabi

functions according to its charter and is in compliance adhering to all required regulatory requirements

and local laws.

The collective responsibility of the Bank's Board and Board Committees is to provide entrepreneurial

leadership to the Bank within a framework of prudent and effective controls which enable risk to be

assessed and managed. The responsibilities include: (i) strategic direction; (ii) scrutinising the

performance of management in meeting agreed objectives and accurate reporting of actual performance;

(iii) monitoring the integrity of the financial information and adequacy of internal controls and risk

management; (iv) setting the Bank‟s values and ethical standards; and (v) determining remuneration of

senior management.

Board Meetings and Supply of Information to the Board

The Chairman, aided by the CEO, strives to ensure that the Board is well informed about the Bank‟s

business, policies and material issues including all material developments. The Board met regularly

throughout the financial period ended 2012, holding five meetings. The Board papers contained all

information which the Chairman, aided by CEO, considered necessary and appropriate for the Board to

discharge its duties and responsibilities. In addition, between Board meetings, Board members received

all information necessary for the proper discharge of their responsibilities. The Board meets at least six

times a year.

Michael Hardwick Tomalin

Independent Non-Executive Director


5 out of 5

Composition of Board of Director Independent / Non Independent




Details of the Board meetings and individual attendance record are shown on the table below:

12




STATEMENT OF CORPORATE GOVERNANCE (continued)






Composition of Board Audit

CommitteeIndependent / Non Independent


Board Committees

The Board has four Board Committees to which it has delegated responsibilities as set out in the terms of

reference of each Committee. The Board ensures that directors with appropriate skills are aligned to the

tasks and responsibilities of each Board Committee.

Each committee has the appropriate balance of skills, experience, independence and knowledge to enable

the Committee to properly discharge its duties and responsibilities. The Committees and their primary

activities are:

Board Audit Committee. The Board Audit Committee is responsible for overseeing the integrity of the

financial statements, preparation of the consolidated accounts including changes to accounting policies

and practices and adherence to disclosure rules, overseeing relationship with external auditors, overseeing

internal audit, ensuring adequacy of financial controls, internal control and risk management frameworks

and oversight of the Bank‟s values and ethics. The Board Audit Committee meets at least once every

quarter and the Committee held two meetings in 2012.



Attendance at

meeting

Board Risk Management Committee. The Board Risk Management Committee sets and monitors the

Bank‟s risk strategy and policy guidelines, sets and monitors the Bank‟s credit, operational and market

risks and approves credits above management‟s delegated authorities. The Committee meets at least once

every quarter and the Committee held one meeting in 2012.

Composition of Board Risk

Management CommitteeIndependent / Non Independent

Attendance at

meeting



Chairman / Independent Non-Executive

Director


13




STATEMENT OF CORPORATE GOVERNANCE (continued)

Qamber Ali Qamber AlMulla

Ernest Law Shee-Wing

Ahmad Nazim Abd Rahman

Ernest Law Shee-Wing

Datuk Nik Azman Mohd Zain

Qamber Ali Qamber AlMulla Datuk Nik Azman Mohd Zain

Kuala Lumpur




AUDITORS

The auditors, KPMG, have expressed their willingness to continue in office.

In accordance with a resolution of the Board of Directors.

Michael Hardwick Tomalin Non-Independent Non-Executive Director

During the financial period ended 31 December 2012, both the Board Nomination and Remuneration

Committee have not convened any meetings yet.

Composition of Board Remuneration


Ahmad Nazim Abd Rahman Chairman / Independent Non-Executive

Director



Board Nominating Committee. The objective of Board Nominating Committee is to provide a formal

and transparent procedure for the appointment of directors and CEOs as well as assessment of

effectiveness of individual directors, board as a whole and performance of CEO and key senior

management officers.

Board Remuneration Committee. To provide a formal and transparent procedure for developing

remuneration policy for directors, CEOs and key senior management officers and ensuring that

compensation is competitive and consistent with the licensed institution‟s culture, objectives and strategy.

Composition of Board Nominating


Datuk Nik Azman Mohd Zain Chairman/ Independent Non-Executive Director

14



STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

31 December

2012

Note RM'000

ASSETS

Cash and short term funds 4 41,524

Held to maturity securities 5 265,419

Loans and advances 6 585

Other assets 7 957

Property and equipment 8 7,252

Intangible assets 9 1,240

TOTAL ASSETS 316,977

LIABILITIES

Deposits from customers 10 9,441

Deposits and placements of banks and other

financial institutions 11 589

Other liabilities 12 2,284

TOTAL LIABILITIES 12,314

EQUITY

Share capital 13 310,000

Accumulated losses (5,337)

TOTAL EQUITY ATTRIBUTABLE TO EQUITY

HOLDER OF THE BANK 304,663

TOTAL LIABILTIES AND EQUITY 316,977

COMMITMENTS AND CONTINGENCIES 22 2,080

The accompanying notes on pages 19 to 55 form an integral part of the financial statements.

15

Note 24.10.2011 to

31.12.2012

RM'000

Interest income 14 5,618

Interest expense 15 (79)

Net interest income 5,539

Other operating income 16 243

Net operating income 5,782

Other operating expenses 17 (10,953)

Operating losses (5,171)

Allowances for losses on loans and advances 19 -

Loss before tax expense (5,171)

Tax expense 20 (166)

Net loss for the financial period (5,337)

Other comprehensive income/expense -

Total comprehensive loss (5,337)






STATEMENT OF COMPREHENSIVE INCOME

16

Accumulated

Share capital losses Total

RM'000 RM'000 RM'000

At 24 October 2011 (Date of incorporation) * - *

Issue of shares# 310,000 - 310,000

Net loss for the financial period / comprehensive

loss - (5,337) (5,337)

At 31 December 2012 310,000 (5,337) 304,663




Non-distributable

# Issuances of 309,999,900 shares for cash consideration of RM1 each.

* On date of incorporation, 100 subscribers' shares were issued for cash consideration of RM1 each.


STATEMENT OF CHANGES IN EQUITY


17

STATEMENT OF CASH FLOWS


24.10.2011 to

31.12.2012

Note RM'000

Cash flows from operating activities

Loss before taxation (5,171)

Adjustment for non-cash items:

Depreciation of property and equipment 8 513

Amortisation of intangible assets 9 170

Short-term accumulated compensated absences 45

Operating loss before working capital changes (4,443)

Changes in working capital:

Increase in loans and advances (585)

Increase in other assets (957)

Increase in deposits from customer 9,441

589

Increase in other liabilities 2,239

Cash generated from operating activities 6,284

Income taxes paid (166)

Net cash generated from operating activities 6,118

Cash flows from investing activities

Net investment of held to maturity securities (265,419)

Purchase of property and equipment 8 (7,765)

Purchase of intangible assets 9 (1,410)

Net cash used in investing activities (274,594)

Cash flows from financing activities

Proceeds from issuance of shares# 310,000

Net cash generated from financing activities 310,000

Net change in cash and cash equivalents 41,524

Cash and cash equivalents at date of incorporation * -

Cash and cash equivalents at end of the period 41,524

Analysis of cash and cash equivalents

Cash and short term funds 4 41,524



* On date of incorporation, 100 subscribers' shares were issued for cash consideration of RM1

each.




Increase in deposits and placements of banks and other

financial institutions

18



NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

2. BASIS OF PREPARATION

FOR THE FINANCIAL PERIOD FROM 24 OCTOBER 2011 TO 31 DECEMBER 2012

National Bank of Abu Dhabi Malaysia Berhad ("The Bank") was incorporated on 24 October 2011 and

is principally engaged in banking and related financial services. The Bank commenced its operations

on 2 July 2012. The Bank is a company limited by shares, a licenced bank, incorporated and

domiciled in Malaysia. The principal place of business of the bank is located at Level 28, Menara

Maxis, Kuala Lumpur City Centre, 50088 Kuala Lumpur.

The Bank is a wholly-owned subsidiary of National Bank of Abu Dhabi PJSC ("Holding Company"), a

bank incorporated in Abu Dhabi, United Arab Emirates and listed on the Abu Dhabi Securities

Exchange. The ultimate parent company of the Bank is the Abu Dhabi Investment Council, an entity

owned by the Government of the Emirates of Abu Dhabi.

The financial statements of the Bank have been prepared in accordance with the Malaysia Financial

Reporting Standards („MFRS‟), International Financial Reporting Standards ("IFRS") and the

provisions of the Companies Act, 1965.

The financial statements of the Bank have been prepared under the historical cost convention, unless

otherwise indicated in the significant accounting policies.

In the preparation of the financial statements, the management is required to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported amounts

of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates

and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are

recognised in the financial statements in the period in which the estimate is revised and in any future

periods affected.

Significant areas of estimation, uncertainty and critical judgements, where applicable, used in applying

accounting policies that have significant effect in determining the amounts recognised in the financial

statements include the following:

(i) Fair value estimation of financial instruments

For financial instruments measured at fair value, where the fair values cannot be derived from active

markets, these fair values are determined using a variety of valuation techniques, including the use of

mathematical models. Whilst the Bank generally use widely recognised valuation models with market

observable inputs, judgement is required where market observable data are not available. Such

judgement normally incorporate assumptions that other market participants would use in their

valuations, including assumptions about interest rate yield curves, exchange rates, volatilities and

prepayment and default rates.

19





2. BASIS OF PREPARATION (continued)

FRSs/Interpretations

MFRS 10, Consolidated Financial Statements

MFRS 11, Joint Agreements

MFRS 12, Disclosure of Interests in Other Entities

MFRS 13, Fair Value Measurement

MFRS 119, Employee Benefits (2011)

MFRS 127, Separate Financial Statements (2011)

MFRS 128, Investments in Associates and Joint Ventures (2011)

1 January 2013

1 January 2013

1 January 2013

IC Interpretation 20, Stripping Costs in the Production Phase of a Surface

Mine

1 January 2013

1 January 2013

1 January 2013

1 January 2013

1 January 2013

The Bank has not applied the following accounting standards, amendments and interpretations that

have been issued by MASB but are not yet effective for the Bank:

Effective date

(iv) Deferred taxes

Deferred tax is recognised using the liability method on temporary differences arising between the

carrying amounts of asset and liabilities in the financial statements and the amount used for tax

purposes. Deferred tax assets are recognised for all unutilised tax losses to the extent that it is probable

that taxable profit will be available against which the tax losses can be utilised. Management

judgement is required to determine the amount of deferred tax assets that can be recognised, based

upon the likely timing and level of future taxable profits together with future tax planning strategies.

(ii) Impairment losses on loans, advances and receivables

For impaired loans, advances and receivables (“loan(s)”) which are individually assessed, judgement

by management is required in the estimation of the amount and timing of future cash flows in the

determination of impairment losses. In estimating these cash flows, judgements are made about the

realisable value of collateral pledged and the borrower‟s financial position. These estimations are

based on assumptions and the actual results may differ from this, hence resulting in changes to

impairment losses.

(iii) Income taxes

Significant management judgement is required in estimating the provision for income taxes, as there

may be differing interpretations of tax law for which the final outcome will not be established until a

later date. Liabilities for taxation are recognised based on estimates of whether additional taxes will be

payable. The estimation process may involve seeking the advise of experts, where appropriate. Where

the final liability for taxation assessed by the Inland Revenue Board is different from the amounts that

were initially recorded, these differences will affect the income tax expense and deferred tax

provisions in the period in which the estimate is revised or when the final tax liability is established.

20





2. BASIS OF PREPARATION (continued)

FRSs/Interpretations

MFRS 9, Financial Instruments (2009)

MFRS 9, Financial Instruments (2010)

Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory

Date of FRS 9 and Transition Disclosures

1 January 2015

Effective date

1 January 2013

Amendments to MFRS 10, Consolidated Financisal Statements: Transition

Guidance 1 January 2013

Amendments to MFRS 1, First-time Adoption of Financial Reporting

Standards (Annual Improvements - 2009-2011 Cycle) 1 January 2013

Amendments to MFRS 101, Presentation of Financial Statements (Annual

Improvements 2009-2011 Cycle) 1 January 2013

Amendments to MFRS 116, Property, Plant and Equipment (Annual

Improvements 2009-2011 Cycle) 1 January 2013

1 January 2013

1 January 2014

The Bank plans to apply the abovementioned standards, amendments and interpretations:

- from the annual period beginning 1 January 2013 for those standards, amendments or interpretations

that will be effective for the annual period beginning on or after 1 January 2013, except for MFRS

10, MFRS 11, MFRS 12, MFRS 127, MFRS 128 and IC Interpretation 20, as they are not

applicable to the Bank.

- from the annual period beginning 1 January 2014 and 1 January 2015 respectively for those

standards, amendments or interpretations that will be effective for the annual period beginning on or

after 1 January 2014 and 1 January 2015 respectively.

The adoption of MFRS 9 will result in a change in accounting policy. IC Interpretation 20 is not

expected to have any impact on the financial statements of the Bank as it is not relevant to the

operations of the Bank. The initial applications of the other standards, amendments and interpretations

are not expected to have any material impact on the financial statements of the Bank.

Amendments to MFRS 1, First-time Adoption of Financial Reporting

Standards - Government Loans

1 January 2015

1 January 2015

Amendments to MFRS 132, Financial Instruments: Presentation –

Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 132, Financial Instruments: Presentation (Annual

Improvements 2009 -2011 Cycle)

Amendments to MFRS 11, Joint Arrangements: Transition Guidance 1 January 2013

Amendments to MFRS 12, Disclosure of Interests in Other Entities:

Transition Guidance 1 January 2013

1 January 2013

Amendments to MFRS 134, Interim Financial Reporting (Annual

Improvements 2009 -2011 Cycle)

Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting

Financial Assets and Financial Liabilities 1 January 2013

21





3. SIGNIFICANT ACCOUNTING POLICIES

A

B CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash and bank balances, short term funds, deposits and

placements with financial institutions with original maturities of less than three months, which are

subject to insignificant risk of changes in fair value, and are used by the Bank in the management

of its short term commitments.

Cash and cash equivalents are carried at amortised cost in the statement of financial position.

The accounting policies set out below have been applied consistently during the financial period.

FOREIGN CURRENCY

i) Functional and presentation currency

The financial statements of the Bank are measured using the currency of the primary economic

environment in which the entity operates ("the functional currency"). The financial statements of

the Bank are presented in Ringgit Malaysia ("RM") which is also the Bank's functional currency.

Except as indicated, information presented in RM has been rounded to the nearest thousand.

ii) Foreign currency transactions

Transactions in foreign currencies are translated into functional currency using exchange rates

prevailing at the date of the transactions.

At each reporting date, monetary assets and liabilities denominated in foreign currencies are re-

translated to the functional currency at the rates prevailing on the reporting date. Non-monetary

assets and liabilities that are measured in terms of historical cost in a foreign currency are

translated using the exchange rate at the date of the initial transaction.

Non-monetary assets and liabilities measured at fair value in a foreign currency are translated at

exchange rate at the date when the fair value is determined.

The foreign currency gain of loss on monetary items is the difference between amortised cost in

the functional currency at the beginning of the period, adjusted for effective interest and payments

during the periods, and the amortised cost in foreign currency translated at the exchange rate at the

end of the period. Foreign currency differences arising on re-translation are recognised in the

comprehensive income statement.

22





3. SIGNIFICANT ACCOUNTING POLICIES (continued)

C FINANCIAL ASSETS AND LIABILITIES

(a)

(b)

(c)

Recognition

The Bank initially recognises loans and advances, customers‟ deposits on the date that they are

originated. All other financial assets and liabilities are initially recognised on the statement of

financial position when, the Bank becomes a party to the contractual provisions of the instrument.

All regular way purchases and sales of financial assets are recognised on the settlement date, i.e.

the date the asset is delivered to or received from the counterparty. Regular way purchases or sales

of financial assets are those that require delivery of assets within the time frame generally

established by regulation or convention in the market place.

Derecognition

The Bank derecognises a financial asset when the contractual rights to the cash flows from the

financial asset expire, or when it transfers the rights to receive the contractual cash flows on the

financial asset in a transaction in which substantially all the risks and rewards of ownership of the

financial asset are transferred.

The Bank derecognises a financial liability when its contractual obligations are discharged or

cancelled or expire. The Bank enters into transactions whereby it transfers assets recognised on its

statement of financial position, but retains either all or substantially all of the risks and rewards of

the transferred assets or a portion of them. In such transactions, the transferred assets are not

derecognised from the statement of financial position. Transfers of assets with retention of all or

substantially all risks and rewards include repurchase transactions.

The Bank also derecognises certain assets when it writes off balances pertaining to the assets

deemed to be uncollectible.

Classification

The Bank classifies financial assets into financial assets at fair value through profit or loss,

available-for-sale securities, loans and receivables and held-to-maturity securities. The

classification depends on the purpose for which the financial assets were required. Management

determines the classification of the financial assets at initial recognition, at the point when the

transactions are entered into.

23






(c) Classification (continued)

(i)

(ii)

(iii)

(iv)

(d)

Held-to-maturity

Held-to-maturity („HTM‟) are non-derivative financial assets with fixed or determinable

payments and fixed maturity and the Bank has the positive intention and ability to hold to

maturity. If the Bank were to sell other than an insignificant amount of HTM, the whole

category would be tainted and reclassified as available-for-sale.

Available-for-sale

Available-for-sale („AFS‟) financial assets are non-derivatives that are either designated in

this category or not classified in any of the other categories and are subsequently measured at

fair value, with unrealised gains and losses arising from changes in fair value recognised in

equity, net of income tax, until such securities are sold, collected or otherwise disposed of, or

until such securities are determined to be impaired.

Offsetting

Financial assets and liabilities are set off and the net amount presented in the statement of

financial position when, and only when, the Bank has a legal right to set off the amounts and

intend either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets may be designated at fair value through profit or loss when:

- the assets or liabilities are managed, evaluated and reported internally on a fair value basis;

or

- the designation eliminates or significantly reduces an accounting mismatch which

would otherwise arise.

Loans, advances and receivables

Loans, advances and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market and the Bank does not intend

to sell immediately on in the near term. The loans, advances and receivables are initially

carried at fair value (being the transaction price at inception) plus incremental direct

transaction cost and subsequently measured at amortised cost using the effective interest

yield method, net of individual and collective allowance for impairment.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A

financial asset is classified in this category if it is acquired or incurred principally for the

purpose of selling or repurchasing it in the near term. Derivatives are also categorised as held

for trading unless they are designated as hedges.

24






(e)

(f)

(g)

Fair value measurement

The determination of fair values of financial assets and liabilities is based on quoted market prices

or dealer quotations for financial instruments traded in active markets. A market is regarded as

active if quoted prices are readily and regularly available and represent actual and regularly

occurring market transactions on an arm‟s length basis. Quoted bid prices are used for financial

assets and quoted ask prices are used for financial liabilities.

For financial instruments not traded on an active market, fair value is determined based on recent

transactions, brokers‟ quotes or a widely recognised valuation technique.

Valuation techniques include using recent arm‟s length transactions between knowledgeable,

willing parties (if available), reference to the current fair value of other instruments that are

substantially the same, discounted cash flow analyses and option pricing models. The chosen

valuation technique makes maximum use of market inputs, relies as little as possible on estimates

specific to the Bank, incorporates all factors that market participants would consider in setting a

price, and is consistent with accepted economic methodologies for pricing financial instruments.

Inputs to valuation techniques reasonably represent market expectations and measures of the risk-

return factors inherent in the financial instrument.

The best evidence of the fair value of a financial instrument at initial recognition is the transaction

price, i.e., the fair value of the consideration given or received, unless the fair value of that

instrument is evidenced by comparison with other observable current market transactions in the

same instrument (i.e., without modification or repackaging) or based on a valuation technique

whose variables include only data from observable markets.

Identification and measurement of impairment

An assessment is made at each reporting date and periodically during the year to determine

whether there is any objective evidence that financial assets not carried at fair value through profit

or loss, are impaired. Financial assets are impaired when objective evidence indicates that a loss

event has occurred after the initial recognition of the asset and that the loss event has an impact on

the future cash flows of the asset that can be estimated reliably.

Amortised cost measurement

The amortised cost of a financial asset or liability is the amount at which the financial asset or

liability is measured at initial recognition, minus principal repayments, plus or minus the

cumulative amortisation using the effective interest method of any difference between the initial

amount recognised and the maturity amount, minus any reduction for impairment.

25






(g) Identification and measurement of impairment (continued)

(h)

All individually significant assets are assessed for specific impairment. All individually

significant assets found not to be specifically impaired are then collectively assessed for any

impairment that has been incurred but not yet identified. Assets that are not individually

significant are collectively assessed for impairment by grouping together financial assets with

Impairment losses on an unquoted equity instrument that is carried at cost because its fair value

cannot be reliably measured, is measured as the difference between the carrying amount of the

financial asset and the present value of estimated future cash flows discounted at the current

market rate of return for a similar financial asset. Such impairment losses shall not be reversed.

Objective evidence that financial assets (including equity securities) are impaired can include

significant financial difficulty of the borrower or issuer, default or delinquency by a borrower,

restructuring of a loan or advance by the Bank on terms that the Bank would not otherwise

consider, indications that a borrower or issuer will enter bankruptcy, the disappearance of an

active market for a security, or other observable data relating to a group of assets such as adverse

changes in the payment status of borrowers or issuers in the Bank, or economic conditions that

correlate with defaults in the Bank. In addition, for an investment in an equity security, a

significant or prolonged decline in its fair value below its cost is objective evidence of

impairment.

Other receivables

Other receivables are initially recognised at costs when the contractual right to receive cash or

another financial asset from another entity is established.

Impairment losses on financial assets carried at amortised cost are measured as the difference

between the carrying amount of the financial asset and the present value of estimated cash flows

discounted at the original effective interest rate. Impairment losses are recognised in the income

statement and reflected in an allowance account against such financial assets. When a subsequent

event causes the amount of impairment loss to decrease, the decrease in impairment loss is

reversed through the income statement.

Impairment losses on available for sale securities are recognised by transferring the difference

between the amortised acquisition cost and current fair value out of other comprehensive income

to the income statement. When a subsequent event causes the amount of impairment loss on

available for-sale debt security to decrease, the impairment loss is reversed through the income

statement.

26






(i)

D

(a)

(b)

3 to 5 years

1 to 10 years

3 years

4 years

Depreciation methods, useful lives and residual values are reassessed at every reporting date.

PROPERTY AND EQUIPMENT

Recognition and measurement

Property and equipment shown on the statement of financial position comprise assets used in

operations. Assets used in operations are those in the provision of services or for administrative

purposes. All items of property and equipment are measured at cost less accumulated depreciation

and impairment losses, if any. Capital projects in progress are initially recorded at cost, and upon

completion are transferred to the appropriate category of property and equipment and thereafter

depreciated.

Cost includes expenditures that are directly attributable to the acquisition of the asset. Purchased

software that is integral to the functionality of the related equipment is capitalised as part of that

equipment.

An item of property and equipment is derecognised upon disposal or when no future economic

benefits are expected from its use or disposal. Gains and losses on disposal of an item of property

and equipment are determined by comparing the net proceeds from disposal with the carrying

amount of property and equipment and are recognised within other operating income in the

income statement.

Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated

useful lives of all property and equipment. Capital work in progress are not depreciated.

- Computer equipment

- Furniture, fittings, safes and equipment

- Motor vehicles

- Renovation

Financial liabilities

Deposit from customers, deposit and placement of banks and other financial institutions are

initially recognised at their fair value plus transaction costs and subsequently measured at their

amortised cost using effective yield interest method. Other liabilities are measured initially and

subsequently at cost. Other liabilities are recognised when there is a contractual obligation to

deliver cash or another financial asset to another entity.

27






E

3 to 5 years

F

G

The amortisation method and the useful live for an intangible asset are reviewed at each reporting

date. The estimated useful lives for intangible asset are as follow :

IMPAIRMENT OF NON FINANCIAL ASSETS

The carrying amounts if the Bank's non financial assets (except for deferred tax asset) are

reviewed at each reporting date for indication of impairment. If any such indication exists then the

asset recoverable amount is estimated. The recoverable amount of an asset is the greater of its

value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash

flows are discounted to their present value using a discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset. An impairment loss is

recognised in the income statement to the extent that carrying values do not exceed the

recoverable amounts.

INTANGIBLE ASSETS

Intangible assets acquired separately are initially recognised at cost. Intangible assets are

subsequently carried at cost less accumulated amortisation and any accumulated impairment

losses. The intangible assets are amortised on a straight-line basis over the estimated useful lives

and assessed for impairment whenever there is an indication that the intangible asset may be

impaired.

TAX EXPENSE

Tax expense comprises current and deferred tax. Tax expense is calculated on the basis of

Malaysian tax law and is recognised in the income statement except to the extent that it relates to

items that are charged or credited in other comprehensive income or directly to equity. In such

cases, tax is charged or credited to other comprehensive income or to equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted

or substantially enacted at the reporting date, and any adjustment to tax payable in respect of prior

years.

- Software

28






G TAX EXPENSE (continued)

H

I

PROVISIONS

A provision is recognised when there is a present legal or constructive obligation where as a result

of past events, it is probable that an outflow of resources embodying economic benefits will be

required to settle a present obligation and the amount can be reliably estimated.

Provisions are reviewed at each reporting date and if it is no longer probable that an outflow of

resources embodying economic benefits will be required to settle the obligation, the provision is

reversed.

Where the effect of the value of money is material, provisions are determined by discounting the

expected future cash flows, at current pre-tax rate and, where appropriate, the risks specific to the

liability.

INTEREST INCOME AND EXPENSE

Interest income and expense are recognised in the comprehensive income statement using

effective yield interest method. The effective interest rate is the rate that exactly discounts the

estimated future cash flows through the expected life of the financial asset or liability to the

carrying amount of the financial asset or liability.

Deferred tax is recognised using the liability method, on temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the financial statements. In

principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred

tax assets are recognised for all deductible temporary differences and unutilised tax losses to the

extent that it is probable that taxable profit will be available against which the deductible

temporary differences and unutilised tax losses can be utilised. Deferred tax is not provided for

the initial recognition of assets and liabilities that at the time of transaction, affects neither

accounting nor taxable profit. Deferred tax relating to fair value re-measurement of financial

investments available-for-sale, which are recognised in other comprehensive income, is also

charged or credited directly to other comprehensive income, and is subsequently recognised in the

income statement when the deferred fair value gain or loss is recognised in the income statements.

Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to set

off under the taxation authority. Deferred tax is measured at the tax rates that are expected to be

applied to the temporary differences when they reverse, based on the laws that have been enacted

or substantially enacted by the reporting date.

29






I

J

-

-

-

K

(a)

(b)

income earned on the execution of a significant act is recognised as revenue when the act is

completed;

EMPLOYEE BENEFIT

Short-term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the

period in which the associated services are rendered by employees of the Bank. Short-term

accumulating compensated absences such as paid annual leave are recognised when services are

rendered by employees that increases their entitlement to future compensated absences, and short-

term non-accumulating compensated absences such as sick leave are recognised when the

absences occur.

Defined contribution plan

As required by law, companies in Malaysia make contributions to the state pension scheme, the

Employees Provident Fund (“EPF”) and the contributions are recognised as an expense in the

income statement as incurred.

INTEREST INCOME AND EXPENSE (continued)

The calculation of the effective interest rate includes all fees paid or received that are an integral

part of the effective interest rate. Transaction cost includes incremental costs that are directly

attributable to the acquisition or issue of a financial asset or liability.

FEE AND COMMISSION

The Bank earns fee and commission income from a diverse range of services provided to its

customers. The basis of accounting treatment of fees and commission depends on the purposes

for which the fees are collected and accordingly the revenue is recognised in consolidated income

statement. Fee and commission income is accounted for as follows:

income which forms an integral part of the effective interest rate of a financial instrument is

recognised as an adjustment to the effective interest rate and recorded in “Interest income”.

Fee and commission expense relates mainly to transaction and service fees which are expensed as

the services are received.

income earned from the provision of services is recognised as revenue as the services are

provided;

30


4. CASH AND SHORT TERM FUNDS

31 December

2012

RM'000

Cash and balances with banks and other

financial institutions 279

Money at call and deposit placements

maturing within three months 41,245

41,524

5. HELD TO MATURITY SECURITIES

31 December

2012

RM'000

Government securities & treasury bills:

Bank Negara Malaysia Monetary Notes 9,970

Money market instruments:

Negotiable instruments of deposit 255,449

265,419

6. LOANS AND ADVANCES

31 December

2012

RM'000

(i) By type

Bills receivables 585

Gross loans, advances and receivables 585

Less: Allowance for impaired loans and advances:

- collective assessment -

- individual assessment -

Total net loans and advances 585

(ii) The maturity structure of gross loans and advances are as follows:

Maturing within one year 585




31





6. LOANS AND ADVANCES (continued)

31 December

2012

RM'000

(iii) Gross loans, advances and receivables analysed by type of

customer are as follows:

Foreign entities 585

(iv) Gross loans, advances and receivables analysed by geographical

distribution are as follows:

Middle East 585

(v) Gross loans, advances and receivables analysed by interest rate

sensitivity are as follows:

Fixed rate 585

(vi) Gross loans, advances and receivables analysed by sectors are as

follows:

Finance, insurance and business services 585

(vii) Impaired loans - movements in impaired loans and advances are

as follows:

At 24 October 2011 (Date of incorporation) -

Impaired during the year -

Recoveries -

At 31 December -

Ratio of net impaired loans and advances to net loans and advances -

7. OTHER ASSETS

31 December

2012

RM'000

Interest receivables 3

Other receivables, deposits and prepayments 954

957

32





8. PROPERTY AND EQUIPMENT

Furniture,

fitting, safes Computer Motor Work in

and equipment equipment vehicles Renovation progress Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Cost

At incorporation date - - - - - -

Additions 2,072 2,636 684 2,268 105 7,765

At 31 December 2,072 2,636 684 2,268 105 7,765

Accumulated depreciation

At incorporation date - - - - - -

Charge for the period 71 290 76 76 - 513

At 31 December 71 290 76 76 - 513

Net book value

At 31 December 2,001 2,346 608 2,192 105 7,252

9. INTANGIBLE ASSETS

Computer

software Total

RM'000 RM'000

Cost

At incorporation date - -

Additions 1,410 1,410

At 31 December 1,410 1,410

Accumulated amortisation

At incorporation date - -

Charge for the period 170 170

At 31 December 170 170

Net book value

At 31 December 1,240 1,240

31 December 2012

31 December 2012

33





10. DEPOSITS FROM CUSTOMERS

31 December

2012

RM'000

a) By type of deposit

Demand deposits 473

Short-term deposits 8,968

9,441

b) By type of customer

Business enterprises 8,987

Foreign customers 454

9,441

c) The maturity structure of short-term deposits is as follow:

Due within six months 9,441

11. DEPOSITS AND PLACEMENTS OF BANKS AND

OTHER FINANCIAL INSTITUTIONS

31 December

2012

RM'000

Licensed banks 589

12. OTHER LIABILITIES

31 December

2012

RM'000

Interest payable 12

Other payable and accruals 981

Provisions for other operating expenses 1,291

2,284

34





13. SHARE CAPITAL

Number of

shares Amount

'000 RM'000

Authorised:

Ordinary shares of RM1 each

At incorporation/31 December 310,000 310,000

Issued and fully paid:

Ordinary shares of RM1 each

At incorporation* - -

Issues of shares# 310,000 310,000

At 31 December 310,000 310,000

14. INTEREST INCOME

24.10.2011 to

31.12.2012

RM'000

Balances with banks 4,131

Loans & advances 1

Securities held to maturity 1,486

5,618

15. INTEREST EXPENSE

24.10.2011 to

31.12.2012

RM'000

Deposits from banks -

Deposits from customer 79

79

31 December 2012

* On date of incorporation, 100 subscribers' shares were issued for cash consideration of RM1

each.


35





16. OTHER OPERATING INCOME

24.10.2011 to

31.12.2012

RM'000

Fee and commission income 4

Foreign exchange gains 238

Other income 1

243

17. OTHER OPERATING EXPENSES

24.10.2011 to

31.12.2012

RM'000

Personnel costs

- Salaries, allowances and bonuses 2,333

- Defined contribution plan 370

- Others 381

3,084

Establishment costs

- Rental of premises 861

- Lease rental 5

- Depreciation 513

- Amortisation of intangible assets 170

- Insurance 269

- Utilities 48

- Information technology expenses 257

- General repair and maintenance 16

- Written off of renovation cost 82

- Others 57

2,278

Administration and general expenses

- Advertising and publicity 402

- Communication expenses 390

- Legal and professional fees 44

- Pre-operating expenses 3,660

- Others 1,095

5,591

Total other operating expenses 10,953

36





17. OTHER OPERATING EXPENSES (continued)

24.10.2011 to

31.12.2012

RM'000

Include in other operating expenses are the following statutory disclosures:

Auditors' remuneration

- statutory audit fees 32

Depreciation 513

Provision of Directors remuneration (Note 18) 170

Written off of renovation cost 82

Rental of premises 861

18. CEO AND DIRECTOR'S REMUNERATION

24.10.2011 to

31.12.2012

RM'000

Non-Executive Directors

Fees

- Michael Hardwick Tomalin -

- Qamber Ali Qamber Al Mulla -

- Ernest Law Shee Wing -

- Ahmed Nazim bin Abd Rahman* 80

- Datuk Nik Azman bin Mohd Zain* 90

170

Chief Executive Officer - Leong See Meng

Salary 294

464

19. ALLOWANCES FOR LOSSES ON LOANS AND ADVANCES

24.10.2011 to

31.12.2012

RM'000

Individual assessment allowance -

Collective assessment allowance -

-

*The director fees are provided for on accrual basis and to be approved at the AGM.

37





20. TAX EXPENSE

24.10.2011 to

31.12.2012

RM'000

Malaysian income tax for current period 166

Tax expense 166

24.10.2011 to

31.12.2012

% RM'000

Loss before tax expense (5,171)

Income tax using Malaysian tax rate of 25% (25.0) (1,293)

Expenses not deductible for tax purposes 28.2 1,459

Tax expense for the period 3.2 166

21. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES

The related parties of, and their relationship with the Bank, are as follow:

Name of related parties Relationship

National Bank of Abu Dhabi, PJSC Holding company

Key management personnel

Income tax is calculated at the Malaysian statutory tax rate of 25% on the estimated chargeable

income for the year. The computation of deferred tax assets and liabilities is also based on the

statutory rate of 25%.

A reconciliation of income tax expense applicable to loss before tax expense at the statutory tax

rate to income tax expense at the effective income tax rate of the Bank as follows:

Key management personnel are defined as those persons having authority and responsibility for

planning, directing and controlling the activities of the Bank either directly or indirectly. The key

management personnel of the Bank comprises the Non–Executive Directors and Chief Executive

Officer of the Bank.

All related party transactions are conducted on normal commercial terms which are not more

favourable than those generally available to the public.

38





21. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (continued)

Significant related party transactions of the Bank:

Key

Holding management

company personnel

RM'000 RM'000

Expense

Management fee 532 -

Director fees - 170

CEO's remuneration - 294

532 464

Related party balances of the Bank:

31 December

Holding Company 2012

RM'000

Amount due from

Cash and bank balances 70

Amount due to

Deposits and placement of bank 589

Commitment and contingencies

Transaction related contingent liabilities 2,080

Credit exposures arising from transactions with connected parties

31 December

2012

RM'000

Aggregate value of outstanding credit exposures to connected parties 2,080

As a percentage of total credit exposure 78%

Percentage of outstanding credit exposures to connected parties which is

non-peprforming or in default 0%

Credit exposures with connected parties are to be disclosed as per BNM's revised "Guidelines on

Credit Transactions and Exposures with Connected Parties"

24.10.2011 to 31.12.2012

39





22. COMMITMENTS AND CONTINGENCIES

Credit Risk

Principal equivalent weighted

amount amount assets

RM'000 RM'000 RM'000

Credit-related exposures

Transaction related contingent items 2,080 1,040 208

23. OPERATING LEASES

31 December

2012

RM'000

Within one year 1,877

Between one to five years 2,941

4,818

24. CAPITAL COMMITMENTS

31 December

2012

RM'000

Capital expenditure:

Authorised and contracted for

- purchase of computer equipment & software 108

In the normal course of business, the Bank makes various commitments and incurs certain

contingent liabilities with legal recourse to its customers. No material losses are anticipated as a

result of these transactions.

The notional amounts of the commitments and contingencies are as follow:

31 December 2012

The credit equivalent and risk weighted amounts are computed using credit conversions factors and

risk weighting factors as per BNM guidelines. The credit conversion factors and risk weighting

rules were based on Basel II Standardised Approach under the Risk Weighted Capital Adequacy

Framework, "RWCAF".

The Bank lease a number of premises and office equipment under operating leases. The leases

typically run for initial period of 3 to 5 years, with an option to renew the leases. None of the leases

include contingent rentals. Total future minimum lease payments under these non-cancellable

operating leases are as follows:

40





25. CAPITAL ADEQUACY

(a)

31 December

2012

RM'000

Tier-1 capital

Paid-up share capital 310,000

Accumulated loss (5,337)

Total tier-1 capital / core capital / capital base 304,663

Capital Ratio

Core capital / Risk-weighted capital ratio 380.68%

The breakdown of risk-weighted assets by each major risk category is as follow:

Principal Risk-weighted

RM'000 RM'000

Credit risk 318,017 69,135

Operational risk - 10,841

Market risk - 56

Total risk-weighted assets 318,017 80,032

31 December 2012

The capital adequacy ratios of the Bank are computed in accordance with Bank Negara Malaysia's

Revised Risk-Weighted Capital Adequacy Framework: Standardised Approach for Credit and

Market Risk, and Basic Indicator Approach for Operational Risk (BASEL II).

The capital adequacy ratios of the Bank are as follow:

41





25. CAPITAL ADEQUACY (continued)

(b)

Risk-

Gross Net weighted Capital

exposure exposure assets requirement

RM'000 RM'000 RM'000 RM'000

Exposure class

i) Credit risk

On balance sheet exposure:

Sovereigns & central banks 9,981 9,981 - -

Banks, development financial

institutions & MDBs* 297,412 297,412 59,482 4,759

Other assets 9,584 9,584 9,445 756

Total on-balance sheet exposure 316,977 316,977 68,927 5,515

Off-balance sheet exposure:

Credit-related off-balance sheet exposure 1,040 1,040 208 17

Total credit risk 318,017 318,017 69,135 5,532

ii) Market risk

Foreign currency risk - net long position 56 4

iii) Operational risk 10,841 867

Total risk weighted assets and capital

requirement 80,032 6,403

* Multi-lateral Development Banks („MDBs‟)

The breakdown of risk-weighted assets („RWA‟) by exposures in each major risk category for the

current financial period are as follows:

31 December 2012

42





25. CAPITAL ADEQUACY (continued)

(c) The breakdown of credit risk exposures by risk weights for the current financial year are as follows:

Total exposure

Sovereigns Banks, after netting Total risk

and central MDBs Other and credit risk weighted

banks and FDIs Corporate assets mitigation assets

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

0% 9,981 - - 139 10,120 -

20% - 298,452 - - 298,452 59,690

50% - - - - - -

100% - - - 9,445 9,445 9,445

Total 9,981 298,452 - 9,584 318,017 69,135

Risk weighted asset

by exposure 0 59,690 - 9,445 69,135

Average risk weight 0.0% 20.0% 0.0% 98.5% 21.7%

The off-balance sheet exposures and their related counterparty credit risk of the Bank are as follows:

Credit Risk

Principal equivalent weighted

amount amount assets

RM'000 RM'000 RM'000

Transaction related contingent items 2,080 1,040 208

31 December 2012

Supervisory risk weights

<──Exposures after Netting and Credit Risk Mitigation─>

31 December 2012

43





26. FINANCIAL RISK MANAGEMENT

(a) Financial risk management

(b) Credit risk

The objectives of the Bank‟s financial risk management is to establish an integrated risk

management system which will help evaluate risk with reward and maximise income within

an acceptable risk level through risk identification, measurement, monitoring and

management.

The Board of Directors and the holding company approves the extent of the Bank‟s risk

appetite in the pursuit of agreed business strategies and objectives. The Board of Directors

also approves risk limits and regularly reviews major policies designed to control risk

within the Bank.

Credit risk is the risk that a customer or counterparty to a financial asset fails to meet its

contractual obligations and cause the Bank to incur a financial loss. It arises principally

from the Bank‟s loans and advances, HTM securities and certain other assets.

For risk management purposes, credit risk arising on trading securities is managed

independently, and reported as a component of market risk exposure.

The Bank uses an internal risk rating system to assess the credit quality of borrowers and

counterparties. Each exposure asset classes is assigned a rating. The risk rating system has

11 grades, further segregated into 24 notches. Grades 1-7 are performing, Grade 8 is Watch-

list and Grades 9 -11 are non – performing each with a rating description.

In addition, the Bank manages the credit exposure by obtaining security where appropriate

and limiting the duration of exposure. In certain cases, the Bank may also close out

transactions or assign them to other counterparties to mitigate credit risk. Credit risk in

respect of derivative financial instruments is limited to those with positive fair values.

Credit risk arising from other financial instruments are managed by assigning limits,

diversification of investment activities, limiting concentration of exposure to industry

sectors, geographical locations and counterparties.

44





26. FINANCIAL RISK MANAGEMENT (continued)

(b) Credit risk (continued)

Maximum exposure to credit risk

31 December

2012

RM'000

Cash and short term funds 41,524

Held to maturity securities 265,419

Loans and advances 585

Other assets (net of prepayment) 544

308,072

Commitments and contingencies 1,040

Total credit exposure 309,112

For financial assets recognised in the statement of financial position, the exposure to credit

risk equals their carrying amount in the statement of financial position. Risk concentrations

for commitments and contingencies are based on the credit equivalent balances in Note 22.

45







i)

Held to Loans Commitments

Cash and maturity and Other On-balance and

31 December 2012 short funds securities advances assets#

sheet total contingencies

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Finance, insurance and business services 41,524 265,419 585 544 308,072 1,040

41,524 265,419 585 544 308,072 1,040

Assets not subject to credit risk - - - 8,905 8,905 -

41,524 265,419 585 9,449 316,977 1,040

ii)

Held to Loans Commitments

Cash and maturity and Other On-balance and

31 December 2012 short funds securities advances assets sheet total contingencies

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Malaysia 41,454 265,419 - 544 307,417 1,040

Other 70 - 585 - 655 -

41,524 265,419 585 544 308,072 1,040

The following tables set out the credit risk concentrations by economic sector:

The following tables set out the credit risk concentrations by geographical sectors:

#Other assets include other assets, property and equipment as well as intangible assets as disclosed in the statement of financial

position.

46







31 December

2012

RM'000

Loans and advances are summarised as follows:

Neither past due nor impaired 585

Past due but not impaired -

Individually impaired -

Gross loans and advances 585

Less: Allowance for impaired loans and advances

- Individual assessment allowance -

- Collective assessment allowance -

Net loans and advances 585

Financial effects of collaterals

(a) Loans and advances neither past due nor impaired

BBB3 585

(b) Credit quality of financial assets

Cash and Held to

short term maturity

funds securities

RM'000 RM'000

AAA 128 255,449

A1 41,245 -

Unrated

- Bank Negara Malaysia 11 9,970

- Others 140 -

41,524 265,419

All financial assets other than loans and advances for the Group and the Bank were neither past

due nor impaired.

The tables below presents an analysis of financial assets other than loans and advances by rating

agency designation as at 31 December 2012, based on Rating Agency Malaysia ratings:

There are no collateral and other credit enhancements to mitigate credit risk on loans and advances.

The credit quality of the portfolio of loans and advances that were neither

past due nor impaired can be assessed as follows:

47






(c) Liquidity risk

The Bank defines its liquidity risk as the risk that the Bank will not have sufficient financial

resources (liquidity) to meet its obligations when they come due, or will have to do so at

excessive cost. The Bank is exposed to daily calls on its available cash resources, such as

from overnight deposits, current accounts, maturing deposits, loan draw-downs. The Bank‟s

liquidity risk principally arises due to mismatches in the timing of cash-flow and funding

concentration. The objective of the Liquidity management at the Bank therefore is to ensure

that the Bank has adequate liquidity at all times while meeting Bank Negara Malaysia's

regulatory requirements on liquidity risk.

The maturities of assets and liabilities and the ability to replace, at an acceptable cost,

interest-bearing liabilities as they mature are important factors in assessing the liquidity of

the Bank and its exposure to changes in interest rates and exchange rates.

The Bank has complied with the liquidity compliance requirement as agreed by Bank

Negara Malaysia under the first two time buckets for “up to 1 week” and “ more than 1

week to 1 month”.

48






(c) Liquidity risk (continued)

Within 1 week 1 to 3 3 to 6 6 to 12 Over

31 December 2012 1week to 1 month months months months 1 year Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Assets

Cash and short term funds 41,524 - - - - 41,524

Held to maturity securities - 200,629 59,818 4,972 - - 265,419

Loans and advances - - 585 - - - 585

Other assets 3 - - - - 954 957

Total assets 41,527 200,629 60,403 4,972 - 954 308,485

Liabilities

Deposits from customers 9,441 - - - - - 9,441

Deposits and placements of banks

and other financial institutions - - 589 - - - 589

Other liabilities 12 - - - - 2,272 2,284

Total liabilities 9,453 - 589 - - 2,272 12,314

Net liquidity gap 32,074 200,629 59,814 4,972 - (1,318) 296,171

The table below analyses assets and liabilities as at 31 December 2012 based on the remaining maturity is disclosed in accordance with the

requirements of BNM guidelines:

49






(c) Liquidity risk (continued)

Within 1 week 1 to 3 3 to 6 6 to 12 Over

31 December 2012 1week to 1 month months months months 1 year Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Liabilities

Deposits from customers 9,456 - - - - - 9,456


and other financial institutions - - 589 - - - 589

Other liabilities - - - - - 2,272 2,272

Total liabilities 9,456 - 589 - - 2,272 12,317

Commitments and contingencies - - 199 - - 1,881 2,080

The table below shows the undiscounted cash outflows of the Bank‟s financial liabilities by remaining contractual maturities on undiscounted

basis. The balances in the table below will not agree to the balances reported in the statements of financial position.

50






(d) i) Market risk

(d) ii) Foreign exchange risk

(d) iii) Interest rate risk

Market risk is the risk that the Bank‟s income and/or value of its financial instruments will

fluctuate adversely because of changes in market factors such as interest rates, foreign exchange

rates, equity, commodity and option prices.

Market risk at the Bank is managed as per Holding Company‟s “Group Market Risk Policy

Framework” approved by the ALCO of Holding Company. The framework provides specific

guidelines on roles and responsibilities of Market Risk, its Governance Structure, Market Risk

appetite statement and the limit structure. It spells out the market risk is identified, measured,

monitored, controlled and reported.

Interest rate risk arises from interest bearing financial instruments and reflects the possibility

that changes in interest rates will adversely affect the value of the financial instruments and the

related income. The Bank manages this risk principally through monitoring interest rate gaps on

a consolidated basis across various maturities and by managing the re-pricing profile of rate

sensitive assets and liabilities based on expected interest rate view. Overall interest rate risk

positions are managed by creating floating rate assets against floating rate liabilities and fixed

rate assets against fixed rate liabilities.

An increase or decrease by 25 basis points on the interest sensitive assets and interest sensitive

liabilities, the impact to the Bank‟s projected post tax profit for the year is positive correlated at

RM0.56 million.

Foreign exchange risk is the risk that arises as a result of movements in the relative value of

currencies. The Bank is exposed to foreign currency risk on transactions that are denominated in

currency other than its functional currency. The Bank minimises its exposure to foreign currency

risk through hedging and limiting the net open position of the foreign exchange portfolio.

The financial impact of 1% movement for each foreign currency exposure would result in a post-

tax profit/loss of RM139 to the Bank.

51






(d.) iii) Interest rate risk (continued)

Non- Effective

Up to 1 to 3 3 to 12 1 to 5 Over interest interest

31 December 2012 1 month months months years 5 years bearing Total rate

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 %

Assets

Cash and short term funds 41,245 - - - - 279 41,524 2.98

Held to maturity securities 200,628 64,791 - - - - 265,419 3.16

Loans and advances - 585 - - - - 585 3.31

Other assets^ - - - - - 9,449 9,449

Total assets 241,873 65,376 - - - 9,728 316,977

Liabilities

Deposits from customers 8,968 - - - - 473 9,441 2.94


and other financial institutions - 589 - - - - 589 0.31

Other liabilities - - - - - 2,284 2,284

Total liabilities 8,968 589 - - - 2,757 12,314

Equity - - - - - 304,663 304,663

Total liabilities & equity 8,968 589 - - - 307,420 316,977

Interest rate gap 232,905 64,787 - - - (297,692) -

^Other assets include other assets, property and equipment as well as intangible assets as disclosed in the statement of financial position.

<----------------------------Non-trading book-------------------------->

The table below summarise the Bank's financial instruments at carrying amounts, categorized by contractual re-pricing or maturity dates. As

interest rates and yield curves change over time the Bank may be exposed to a loss in earnings due to the effects of interest rates on the

structure of the balance sheet. Sensitivity to interest rates arises from mismatches in the repricing dates, cash flows and other characteristics

of the assets and their corresponding liability funding.

52






(e) Operational risk

27. FAIR VALUE OF FINANCIAL INSTRUMENTS

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes

associated with the Bank‟s processes, personnel, technology and infrastructure, and from external

factors other than credit, market and liquidity risks such as those arising from legal and

regulatory requirements and generally accepted standards of corporate behaviour. Operational

risks arise from all of the Bank‟s operations.

The Board of Directors has oversight responsibilities for operational risk management in the

Bank. These responsibilities are exercised through Operating Risk Managment Committee

("ORMC") with an established framework of policies and procedures to identify, assess, monitor,

control, manage and report risks. The ORMC employs clear internal policies and procedures to

reduce the likelihood of any operational losses. Where appropriate, risk is mitigated by way of

insurance. The framework also provides the interrelation with other risk categories.

Compliance with policies and procedures is supported by periodic reviews undertaken by the

Compliance Unit. The results of these reviews are discussed with the management of the

business unit to which they relate, with summaries submitted to the Audit Committee and senior

management of the Bank.

Determination of fair value and the fair value hierarchy

MFRS 7 Financial Instruments: Disclosures requires the classification of financial instruments

held at fair value according to a hierarchy that reflects the significance of inputs used in making

the measurements, in particular, whether the inputs used are observable or unobservable. The

following levels of hierarchy are used for determining and disclosing the fair value of financial

instruments:

Level 1 – quoted market prices: quoted prices (unadjusted) in active markets for identical

instruments;

Level 2 – valuation techniques based on observable inputs: inputs other than quoted prices

included within Level 1 that are observable for the instrument, whether directly (i.e. prices) or

indirectly (i.e. derived from prices), are used; and

Level 3 – valuation techniques using significant unobservable inputs: inputs used are not based

on observable market data and the unobservable inputs have a significant impact on the

instrument‟s valuation.

53





27. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

The fair values are based on the following methodologies and assumptions:

(a)

(b)

(c)

(d)

Financial instruments comprise financial assets, financial liabilities and off-balance sheet

financial instruments. Fair value is the amount at which a financial asset could be exchanged or a

financial liability settled, between knowledgeable and willing parties in an arm‟s length

transaction. The information presented herein represents the estimates of fair values as at the

statement of financial position date.

The total fair value of each financial instrument as at the reporting date was not materially

different from the total carrying amount as the financial instruments were predominantly short

term in tenure and issued at market rates, were considered to reasonably approximate their book

value.

Cash and short term funds

The carrying amount of cash and short term funds approximate fair value due to the relatively

short maturity of the financial instruments.

As at 31 December 2012, there is no item of financial assets and financial liabilities which were

measured at fair value.

Deposits and placements with/of banks and financial institutions

For deposits and placements with/of banks and financial institutions with maturities of less than a

year, the carrying amount is a reasonable estimate of fair value. For deposits and placements with

maturities one year and above, estimated fair value is based on discounted cash flows using

prevailing money market interest rates at which similar deposits and placements would be made

with financial institutions of similar credit risk and remaining period to maturity.

Held-to-maturity securities

The estimated fair value is generally based on quoted and observable market prices.

Loans and advances

For floating rate loans, the carrying amount is generally a reasonable estimate of fair value.

For fixed rate loans, the fair value is estimated by discounting the estimated future cash flows

using the prevailing market rates of loans with similar credit risks and maturities.

54





27. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

(e)

28. COMPARATIVES FIGURES

No comparative figures are reported as this is the first financial period of the Bank's operations.

Deposits from customers

The fair values of deposits payable on demand (demand and savings deposits), or deposits with

remaining maturity of less than one year are estimated to approximate their carrying amounts.

The fair values of deposits with remaining maturity of more than one year are estimated using

discounted cash flows based on market rates for similar deposits from customers.

55

SECTION 169(15) OF THE COMPANIES ACT, 1965

Qamber Ali Qamber AlMulla Datuk Nik Azman Mohd Zain

Kuala Lumpur

STATUTORY DECLARATION PURSUANT TO

SECTION 169(16) OF THE COMPANIES ACT, 1965

before me



STATEMENT BY DIRECTORS PURSUANT TO

I, Qamber Ali Qamber AlMulla, the officer primarily responsible for the financial management of

National Bank of Abu Dhabi Malaysia Berhad, do solemnly and sincerely declare that the financial

statements set out on pages 15 to 55 are, to the best of my knowledge and belief, correct and I make

this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions

of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed

in

This day of

We, Qamber Ali Qamber AlMulla and Datuk Nik Azman Mohd Zain, being two of the Directors of

National Bank of Abu Dhabi Malaysia Berhad, state that, in the opinion of the Directors, the financial

statements set out on pages 15 to 55 are drawn up so as to give a true and fair view of the state of

affairs of the Bank as at 31 December 2012 and of the results and cash flows of the Bank for the

financial period ended on that date and in accordance with the Malaysia Financial Reporting

Standards, International Financial Reporting Standards and the provisions of the Companies Act,

1965.

56

The Directors of the Bank are responsible for the preparation of these financial statements so

as to give a true and fair view in accordance with Malaysian Financial Reporting Standards,

International Financial Reporting Standards and the requirement of the Companies Act, 1965

in Malaysia. The Directors are also responsible for such internal control as the Directors

determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia.

Those standards require that we comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on our judgment,

including the assessment of risks of material misstatement of the financial statements,

whether due to fraud or error. In making those risk assessments, we consider internal control

relevant to the entity‟s preparation of the financial statements that give a true and fair view in

order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity‟s internal control. An

audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the Directors, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

Directors’ Responsibility for the Financial Statements

Independent auditors’ report to the members of National Bank Of Abu

(Company No. 965488-H)


Report on the Financial Statements

We have audited the financial statements of National Bank of Abu Dhabi Malaysia Berhad,

which comprise the Statement of Financial Position as at 31 December 2012 of the Bank,

and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement

of Cash Flow of the Bank for the financial period from 24 October 2011 to 31 December

2012, and a summary of significant accounting policies and other explanatory information, as

set out on pages 15 to 55.

Company No. 965488-H

Opinion

Other Matters

KPMG

Firm Number: AF 0758

Chartered Accountants

Petaling Jaya

Date: 27 May 2013

Chartered Accountant

In our opinion, the financial statements give a true and fair view of the financial position of

the Bank as at 31 December 2012 and of its financial performance and cash flows for the

financial period from 24 October 2011 to 31 December 2012 in accordance with Malaysian

Financial Reporting Standards, International Financial Reporting Standards and the

requirements of the Companies Act, 1965.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report

that in our opinion, the accounting and other records and the registers required by the Act to

be kept by the Bank have been properly kept in accordance with the provisions of the Act.

This report is made solely to the members of the Bank, as a body, in accordance with Section

174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume

responsibility to any other person for the content of this report.

Ahmad Nasri Abdul Wahab

Approval Number: 2919/03/14(J)

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