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This assessment is preliminary because not all transition work has been completed as at the time of this report. The actu-
al impact of adopting IFRS 9 on 1 January 2018 could change due to:
• Parallel runs have been done. However, the new systems and controls are still subject to improvement;
• testing and assessment of controls over its new IT systems and changes to its governance framework are still being
carried out;
• the accounting policies, assumptions, judgements and statistical models employed are subject to change until the
Group completes its first financial statements at the date of initial application.

The ECL could change within the range of +/-10% from the estimates provided in this initial assessment.

Governance
As part of the implementation of IFRS 9, we have designed and implemented new controls and governance procedures in
several areas that contribute to the calculation of expected credit losses. These include controls over credit risk data and
systems, expected credit loss models and calculation model, forecasts of future macroeconomic variables, design and
probability-weighting of future macroeconomic scenarios, and the determination of significant increases in credit risk. In-
ternal Audit Unit is responsible for the ongoing monitoring of the models. The Board through 2 of its standing committees
(Board Audit Committee and Board Credit Committee) have overall oversight over the IFRS 9 project for the Group.

IFRS 16 Leases (effective 1 January 2019)

IFRS 16 Leases (“IFRS 16”) eliminates the classification of leases as either operating leases or finance leases for a lessee,
and instead introduces a single lessee accounting model. Applying that model, a lessee is required to recognise: (a) assets
and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and (b) depreci-
ation of lease assets separately from interest on lease liabilities in the statement of comprehensive income. The require-
ments relating to the definition of a lease have been changed from those included in IAS 17. Guidance is provided on how
to determine short term leases as well as leases of low-value assets. The accounting requirements for lessors have largely
remained unchanged. New disclosures regarding leases are also introduced. The effective date of IFRS 16 is 1 January
2019, with an allowance for early adoption, provided the entity applies IFRS 15 Revenue from Contracts with Customers at
the same time. The group is in the process of assessing the impact. However, from preliminary assessment, the applica-
tion of this standard is not expected to result in material impact in the Group.

IFRS 15 – Revenue from contracts with customers. (with effective date of 1 January 2018)

The FASB and IASB issued their long awaited converged standard on revenue recognition on 29 May 2014. The Standard
outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers
to improve comparability within industries, across industries, and across capital markets with the exemption of interest
income. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and
timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of
goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or
services. The group is in the process of assessing the impact. From preliminary assessment, the application of this stan-
dard is not expected to result in material impact in the Group as revenue from financial instrument is out of scope of the
standard. As part of the going assessment, the Group is currently reviewing contracts with customers that may fall within
the scope of IFRS 15 to determine the extent to which fees and commission income will be affected by the implement of
the standard.

Amendments to IFRS 2 – Share-based Payment (with effective date of 1 January 2018)

The International Accounting Standards Board (IASB) has published final amendments to IFRS 2 ‘Share-based Payment’
on 20 December 2017 that clarify the classification and measurement of share-based payment transactions which
contains the following: (a) accounting for cash-settled share-based payment transactions that include a performance
condition; (b) classification of share-based payment transactions with net settlement features; and (c) the accounting
for modifications of share-based payment transactions from cash-settled to equity-settled. Based on the assessment
performed by the Group, this amendment will have no impact on the Group as the Group operates an equity settled share
based payment scheme.

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Annual Report & Accounts 2017