AS A TRUSTED PARTNER - MNRB Holdings Berhad

Transcription

STANDING
ANNUAL REPORT 2015
STRONG
AS A TRUSTED PARTNER
STANDING
STRONG
A S A T RU S T ED PA RT NER
Amidst the challenges of an evolving global insurance landscape, the MNRB Group continues to stand strong as a trusted partner to
financial industries. Via the Group’s reinsurance, takaful and retakaful businesses in Malaysia, and abroad, we are steadfastly protecting
client investments and enabling economic growth. Being a knowledge company and a thought leader, we have devoted substantial
resources to understanding current and future risks by considering every number, statistic, segment and variable of every reinsurance,
takaful and retakaful activity that we undertake. As we venture forth into a highly challenging market environment, we will continue to
leverage on astute business strategies and enduring partnerships to deliver a robust performance. By balancing out our good economic
performance with responsible corporate practices, we are confident of delivering resilient and sustainable growth.
002
2 MNRB HOLDINGS
BERHAD
3
Corporate Profile
4
Corporate Milestones
5
Notice of 42nd Annual General Meeting
8
Statement Accompanying
Notice of Annual General Meeting
9
Corporate Information
10
Group Structure
11
Chairman’s Statement
19
Board of Directors
22
Directors’ Profile
26
Senior Management Team
28
Senior Management Team’s Profile
30
Five-Year Financial Highlights
32
Financial Calendar 2015
33
MNRB’s Growth
34
Investors’ Information
35
Sustainability Report
46
Event Highlights
48
Statement on Corporate Governance
59
Audit Committee Report
61
Statement on Risk Management and
Internal Control
64
Statement of Directors’ Responsibility
in Relation to the Financial Statements
65
Additional Compliance Information
066
66 MALAYSIAN
REINSURANCE BERHAD
67
Corporate Profile
68
69
74
75
77
Corporate Activities and Services
79
Malaysian Re’s Portfolio of Business
INSIDE
THIS
ANNUAL REPORT
080
for more information
Please scan the QR Code to
redirect to the official website:
www.mnrb.com.my
80 TAKAFUL IKHLAS
BERHAD
81
Corporate Profile
82
83
88
Profile of Shariah Committee Members
90
91
93
Takaful IKHLAS’ Portfolio of Business
094
94 MNRB RETAKAFUL
BERHAD
111
Financial Statements
237
Analysis of Shareholdings
240
List of Properties
95
Corporate Profile
• Proxy Form
96
97
104
104 MALAYSIAN RE
(DUBAI) LTD.
105
Corporate Profile
106
107
109
Senior Executive Officer’s Profile
110
110 MMIP SERVICES
SDN. BHD.
100
Profile of Shariah Committee Members
102
President & CEO’s Profile
110
Corporate Profile
103
MRT’s Portfolio of Business
110
A
RESILIENT
PARTNER
By remaining resilient amidst industry challenges and consistently delivering on our promises to our
partners, MNRB continues to explore new areas of growth opportunity. The strong foundations we have
laid and long-term partnerships we have fostered continue to hold us in good stead. As we build upon
these, we are extending our reach and opening up new avenues of opportunity.
CORPORATE
PROFILE
//MNRB HOLDINGS BERHAD
//ANNUAL REPORT 2015
MNRB HOLDINGS BERHAD
Authorised Capital of
RM500
RM213
million
Paid-up Capital of
million
Malaysian National
Reinsurance Berhad,
the country’s national reinsurer was set up in
1972 to limit the outflow of
reinsurance premiums overseas.
The Company commenced operations on 9 February 1973.
In 2005, as a result of a restructuring exercise
within the MNRB Group, the Company’s
reinsurance license, business and assets
were transferred to its subsidiary company,
Malaysian Reinsurance Berhad. Pursuant to the
restructuring, Malaysian National Reinsurance
Berhad became an investment holding company
and changed its name to MNRB Holdings
Berhad (MNRB). Today, MNRB is listed on the
Malaysian Bourse (Bursa Malaysia). Its market
capitalisation stood at RM803.26 million as at
31 July 2015.
The MNRB Group comprises leading wholesale
providers of reinsurance and retakaful as well
as a takaful operator. Its reinsurance subsidiary
stands tall among the top reinsurers in the
region, writing lines of general businesses
locally and abroad. In Malaysia, its takaful
operator vies with the leaders in the provision
of Islamic financial protection services based
on the takaful system.
CAPITAL STRUCTURE
The Company has an Authorised Capital
of RM500 million, divided into 500 million
ordinary shares of RM1.00 each and a
Paid-up Capital of RM213 million, divided into
213 million ordinary shares of RM1.00 each.
3
NRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB
OLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOL
NGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS
//MNRB HOLDINGS
ERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD
∙ MNRB BERHAD
HOLDINGS BERH
MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MN
OLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLD
ERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERH
4
CORPORATE
MILESTONES
2006
• MSSB was formed to oversee the administration of Malaysian
Motor Insurance Pool (MMIP), a pool established by the
insurance industry to provide insurance coverage for vehicle
owners who find difficulty in obtaining coverage.
2005
• The Group’s restructuring exercise was completed on
1 April 2005 and here on Malaysian National Reinsurance
Berhad became MNRB. The new holding company is an
investment holding company that focuses on business
expansion to broaden the Group’s income base and further
strengthen its financial position. The reinsurance business was
then transferred to a newly incorporated one hundred percent
(100%) subsidiary of MNRB, Malaysian Reinsurance Berhad
(Malaysian Re). The takaful business continues to be undertaken
by Takaful IKHLAS, a wholly owned subsidiary of MNRB.
Labuan Re became an associate company of Malaysian Re.
• MNRB obtained BNM’s approval to establish a retakaful
operation under the Takaful Act, 1984 to conduct both
General and Family Retakaful businesses. The wholly owned
subsidiary company of MNRB is known as MRT.
• MRDL, a wholly owned subsidiary of Malaysian Re was incorporated.
2004
• Commenced the restructuring exercise of the Group.
2006
• Malaysian Re was assigned a Financial Strength Rating (FSR)
of ‘A-’ (Excellent) and an Issuer Credit Rating (ICR) of ‘a-’ by
A.M. Best.
• Malaysian Re was assigned an ‘A-’ Insurer Financial Strength
(IFS) rating with Stable outlook by Fitch Ratings.
• Malaysian Re’s FSR of ‘A-’ (Excellent) and ICR of ‘a-’ was
reaffirmed by A.M. Best.
2007
• MNRB was granted the approval on certification to the new
ISO Standard, MS ISO 9001:2000.
• MRDL was officially launched on 18 March 2008.
• MRDL was wholly transferred from Malaysian Re to MNRB.
• Implementation of new levels of VC, Retrocession to the
industry ceased with effect from 1 January 2003.
2002
2000
—
2001
• MRT was officially launched on 11 August 2008.
• MRT was assigned an IFS rating of ‘BBB+’ with Stable outlook
by Fitch Ratings.
• Arrangement of terrorism insurance via the Malaysian
Terrorism Facility.
• Received approval in principle from BNM to set up a takaful operation.
• Awarded the MS ISO 9002:1994 certiication.
2008
• Injected additional RM1 million to the MNRB Scholarship Fund.
• IKHLAS Medic Assist Takaful (IMAT) won the “Most
Innovative Product Award” by KLIFF 2008.
• Launching of MNRB Scholarship Fund of RM1 million.
reaffirmed by A.M. Best.
• Malaysian National Reinsurance Berhad moved to its own
building, Bangunan Malaysian Re.
• Malaysian Re’s IFS rating of ‘A-’ with Stable outlook was
reaffirmed by Fitch Ratings.
• Implementation of new levels of VC, Retrocessions and other
market reinsurance arrangements.
• Appointed as Manager for the Malaysian Energy Risks Consortium.
1994
—
1996
• Launching of the Central Administration Bureau.
• Following are certification audit conducted by SIRIM,
Malaysian Re’s MS ISO 9001:2000 Quality Management
Systems certification was reaffirmed.
2009
• Implementation of Stage III – new levels of VC, Retrocessions
and other market reinsurance arrangements.
• Malaysian National Reinsurance Berhad was listed on the
Main Board of the Kuala Lumpur Stock Exchange (now known
as Bursa Malaysia Securities Berhad).
1991
—
1993
1988
—
1990
2010
• Malaysian-Re International Insurance (L) Ltd. (MIIL) was set
up as a wholly owned subsidiary.
• Increased level of retrocession from fifty percent (50%)
to fifty-five percent (55%) to shareholding companies of
Malaysian National Reinsurance Berhad.
• Takaful IKHLAS was named Best Takaful/Retakaful Provider by
Islamic Finance News Polls Awards 2010 (third consecutive year).
2011
• Began to organise Annual Golf Tournaments and Outward
Bound School for the insurance industry.
• Inspection Department
– To ensure companies’ adherence to the various Inter Company Agreements.
reaffirmed by A.M. Best, with Stable outlook for both
ratings.
• Malaysian Re’s IFS rating of ‘A’ was reaffirmed by Fitch
Ratings, with Stable outlook.
2012
• Rating Committee
– To determine special rate under the Fire Tariff for Fire
and Industrial All Risks Insurances.
1982
—
1984
1979
—
1981
2013
• Commenced reciprocal exchange with overseas companies.
• Commenced writing ten percent (10%) Quota Share of the
Miscellaneous Accidents and Motor businesses.
2014
• Began to offer Excess of Loss Treaties to local insurance
companies.
• Began to write Local Facultative business and non-reciprocal
inwards overseas business.
• MRT’s IFS rating of ‘BBB+’ was reaffirmed by Fitch Ratings,
with Stable outlook.
• Takaful IKHLAS won Malaysian Best Takaful Operator 2013 –
Global Banking & Finance Review.
• Malaysian National Reinsurance Berhad commenced
operations on 19 February 1973.
1973
—
1975
• Fitch Ratings reaffirmed Malaysian Re’s IFS rating of ‘A’ with
Stable outlook.
• Takaful IKHLAS was named “Best Takaful House” in the 2014
Islamic Finance Awards by Euromoney.
• Increased level of retrocessions from twenty-five percent
(25%) to thirty percent (30%) for Fire and Personal
Accident businesses.
• Voluntary Cessions (VC) to Malaysian National Reinsurance
Berhad commenced four (4) months later.
• A.M. Best revised Malaysian Re’s outlook to Positive
from Stable and reaffirmed the FSR of ‘A-’ (Excellent)
and ICR of ‘a-’.
• Retrocede part of the VC cessions to the local insurance
companies for their net account.
1976
—
1978
• Malaysian Re’s IFS rating of ‘A’ was reaffirmed by Fitch
Ratings, with Stable outlook.
• Takaful IKHLAS won the Best Takaful Provider – Euromoney
Islamic Finance Awards 2013.
• Perbadanan Nasional Berhad’s (PERNAS) fifty percent
(50%) share in Malaysian National Reinsurance Berhad was
transferred to Permodalan Nasional Berhad (PNB).
• Sponsored the 1st Kuala Lumpur Insurance Seminar, attended
by over four hundred (400) delegates.
• Takaful IKHLAS and MRT won the Best Islamic Takaful
Provider and Best Re-Takaful Provider awards, respectively,
at the Islamic Finance News (IFN) Service Providers Poll 2011
Awards held in Kuala Lumpur.
• Malaysian Re’s FSR of ‘A-’ (Excellent) and ICR of ‘a-’
was reaffirmed by A.M. Best, with Stable outlook
for both ratings.
• Published the 1st edition of the Malaysian Insurance Directory.
• Increased paid-up capital from RM5,200,002 to RM6,240,003.
• Takaful IKHLAS won the Best Islamic Takaful Provider at the
Euromoney Islamic Finance Awards 2012.
• Paid-up capital increased to RM8,216,004.
• Introduced Common Account Excess of Loss for
retrocessionaires.
• Takaful IKHLAS was awarded for its excellence in Branding by “The
BrandLaureate – SMEs Chapter Awards 2010” in the categories of
The Best Brands in Corporate Branding – Islamic Financial Protection
Services (second consecutive year) and The Best Brands in Product
Branding – Health Insurance Services (third consecutive year).
• Fitch Ratings upgraded Malaysian Re’s IFS rating from ‘A-’ to
‘A’ with Stable outlook.
Formation of the following:-
1985
—
1987
• IKHLAS Medical Assistance Takaful won “Best Takaful
Product” by International Takaful Awards 2010.
• Takaful IKHLAS was awarded The BrandLaureate – SMEs
Chapter Award 2010 (third consecutive year).
• Implementation of Stage 1 – new levels of VC, Retrocessions
• Technical Services Department
– To conduct fire surveys including advisory services on
risk management with the cost mostly borne by
Malaysian National Reinsurance Berhad.
• Takaful IKHLAS was named the “Best Takaful Provider” at
the Euromoney Islamic Finance Awards 2010 organised by
financial magazine, Euromoney.
• Takaful IKHLAS moved to its new corporate office, IKHLAS
Point, in Bangsar South, Kuala Lumpur.
• Implementation of Stage II – new levels of VC, Retrocessions
• Malaysian National Reinsurance Berhad and Malaysia National
Insurance Berhad (MNI) jointly hosted and organised the 13th
General Meeting of the Federation of Afro – Asian Insurers
and Reinsurers (F.A.I.R.) attended by over three hundred fifty
(350) international and local participants.
• Malaysian Re and Labuan Re jointly hosted and organised the 21st
F.A.I.R. Conference, attended by over six hundred (600) delegates
including leaders and experts in the insurance industry.
• Takaful IKHLAS won The BrandLaureate – SMEs Chapter
Award 2009, “Best Brands in Product Branding
– Consumer Healthcare Insurance” & The BrandLaureate
– SMEs Chapter Award 2009, Corporate Branding –
“Best Brands in Services – Islamic Protection Services”.
• Appointed as Manager of the Malaysian Aviation Pool.
• Appointed as the Administration Manager of MMIP.
• MRT’s IFS rating of ‘BBB+’ with Stable outlook was reaffirmed
by Fitch Ratings.
• Takaful IKHLAS won “Best Takaful/Retakaful Provider” for the
second time at the Islamic Finance News Polls Awards 2009.
• MIIL, now known as Labuan Re, ceased to be a wholly owned
subsidiary of Malaysian National Reinsurance Berhad with the
equity interest being diluted to twenty percent (20%).
• Implementation of automatic cessions on Facultative and
Treaty business.
• Malaysian Re’s MS ISO 9001:2000 Quality Management Systems
certification which was issued in 2003, was reaffirmed.
• Takaful IKHLAS won The BrandLaureate – SMEs Chapter Award 2008,
“Best Brands in Product Branding – Consumer Healthcare Insurance”.
• Launching of Malaysian National Reinsurance Berhad
Homepage (http://www.malaysian-re.com.my).
• Bank Negara Malaysia (BNM) appointed Malaysian National
Reinsurance Berhad to manage the Scheme for Insurance of
Large and Specialised Risks.
• MRT was awarded “The Most Outstanding Retakaful Operator
2008” at the KL Islamic Finance Forum 2008 (KLIFF 2008).
• Takaful IKHLAS was awarded “Best Takaful/Retakaful Provider
2008” by Islamic Finance News (IFN).
• Appointed as Account Manager for the Sihat Malaysia Scheme.
• Commencement of Overseas Facultative business.
1997
—
1999
• Malaysian Re’s IFS rating of ‘A-’ with Stable outlook was
reaffirmed by Fitch Ratings.
• MRT commenced operations in August 2007 as the first
Retakaful operator in Malaysia.
• BNM approved the registration of Takaful IKHLAS on
21 April 2003 and it commenced operations on 2 July 2003.
2003
• Malaysian Re won the prestigious Reinsurance Industry
Contribution Award given by the Asia Insurance Review and
the Review Magazine.
20
15
• Malaysian Re’s Financial Strength Rating of ‘A-’
(Excellent) and Issuer Credit Rating of ‘a-’ was
reaffirmed by A.M. Best, with Positive outlook for
both ratings.
• Malaysian Re’s Insurer Financial Strength rating of ‘A’
was reaffirmed by Fitch Ratings, with Stable outlook.
NOTICE OF 42
ANNUAL GENERAL MEETING
ND
NOTICE IS HEREBY GIVEN that the Forty-Second Annual General Meeting of the Company will be held at the Auditorium,
3rd Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur on Wednesday, 30 September 2015 at
2.00 p.m. for the following purposes:AS ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 March 2015 together with the Reports
of the Directors and Auditors thereon.
Please refer to
Explanatory Note (i)
2. To re-elect the following Directors retiring pursuant to Article 86 of the Company’s Articles of Association:(i) Yusoff Yaacob
(ii) Paisol Ahmad
(Ordinary Resolution 1)
3. To re-elect Hijah Arifakh Othman, retiring pursuant to Article 92 of the Company’s Articles of Association, as Director
of the Company.
4. To approve Directors’ fees amounting to RM804,000 for the financial year ended 31 March 2015 (2014: RM700,000).
5. To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix their remuneration.
6. Continuing in Office as Independent Non-Executive Director.
“THAT approval be and is hereby given to the following Directors who have served as Independent Non-Executive
Directors of the Company for a cumulative term of more than nine (9) years, to continue to serve as an Independent
Non-Executive Directors of the Company, in accordance with the Malaysian Code on Corporate Governance 2012.”
(i) Yusoff Yaacob
(ii) Megat Dziauddin Megat Mahmud
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following Ordinary Resolution:7. Re-appointment of a Director retiring in accordance with Section 129 of the Companies Act, 1965:
“THAT P. Raveenderen, retiring in accordance with Section 129 of the Companies Act, 1965 be and is hereby
re-appointed as Director of the Company to hold office until the conclusion of the next Annual General Meeting.”
8. To transact any other business which may properly be transacted at the Annual General Meeting.
By Order of the Board
NORAZMAN HASHIM (MIA 5817)
LENA ABD LATIF (LS 8766)
Company Secretaries
Kuala Lumpur
18 August 2015
5
NOTICE OF 42ND ANNUAL GENERAL MEETING (Cont’d)
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote in his behalf. A proxy
need not be a member of the Company.
2. A member may appoint not more than two (2) proxies to attend the meeting provided the member shall specify in each proxy the proportion of
the member’s shareholdings to be represented by each proxy and only one (1) proxy shall be entitled to vote on a show of hands.
3. Where a member is an exempt authorized nominee, which holds ordinary shares in the Company for multiple beneficial owners in one securities
account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each
omnibus account it holds.
4. An Instrument appointing a proxy(ies) shall be in writing, and in the case of an individual shall be signed by the appointer or by his attorney
duly authorized in writing, and in the case of a Corporation shall be either given under its common seal or signed on its behalf by its attorney or
an officer of the Corporation so authorized.
5. An Instrument appointing a proxy(ies) must be deposited at the office of the Share Registrar of the Company, Symphony Share Registrars
Sdn. Bhd., Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor, not less than forty-eight (48)
hours before the time set for the Annual General Meeting or any adjournment thereof.
6. Only members registered in the Record of Depositors as at 21 September 2015 shall be eligible to attend the AGM or appoint proxy(ies) to
attend and vote on his/her behalf.
7.Explanatory Notes
(i) Item 1 of the Agenda
This item on the Agenda is meant for discussion only. The provision of Section 169(1) of the Companies Act, 1965 requires that the Audited
Financial Statements be laid before the Company at its Annual General Meeting and do not require a formal approval of the shareholders.
As such, this Agenda item is not a business which requires a resolution to be put to vote by shareholders.
(ii) Ordinary Resolution 6 and 7 – Continuing in Office as Independent Non-Executive Director
The proposed Ordinary Resolutions 6 and 7 are to seek the shareholders’ approval to retain Yusoff Yaacob and Megat Dziauddin Megat
Mahmud who have served on the Board for a cumulative term of more than nine (9) years, as Independent Non-Executive Directors of
the Company. The Board has via the Nomination Committee, assessed the Independence of Yusoff Yaacob and Megat Dziauddin Megat
Mahmud and recommended them to continue to serve as Independent Non-Executive Directors based on the following justifications:-
Ordinary Resolution 6: Yusoff Yaacob
(a) Yusoff Yaacob has been an Independent Non-Executive Director for nine (9) years.
(b) Notwithstanding the long tenure, Yusoff Yaacob is considered to still fulfill the criteria under the definition of “Independent Director”
as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
(c) Yusoff Yaacob has performed his duties diligently and in the best interest of the Company without being subject to influence of the
management.
(d) Yusoff Yaacob has devoted sufficient time in attending Board meetings and has participated in Board discussions.
6
NOTICE OF 42ND ANNUAL GENERAL MEETING (Cont’d)
(e) Yusoff Yaacob who is the Chairman of the Risk Management Committee, has the relevant industry background and experience which
enables him to provide constructive advice, expertise and independent judgment.
(f) This assessment is based on the Directors’ Evaluation exercise that was performed yearly amongst Board members.
Ordinary Resolution 7: Megat Dziauddin Megat Mahmud
(a) Megat Dziauddin Megat Mahmud has been an Independent Non-Executive Director for nine (9) years.
(b) Notwithstanding the long tenure, Megat Dziauddin Megat Mahmud is considered to still fulfill the criteria under the definition of
“Independent Director” as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
(c) Megat Dziauddin Megat Mahmud has performed his duties diligently and in the best interest of the Company without being subject to
influence of the management.
(d) Megat Dziauddin Megat Mahmud has devoted sufficient time in attending Board meetings and has participated in board discussions.
(e) Megat Dziauddin Megat Mahmud who is the Chairman of the Audit Committee and Remuneration Committee, has the relevant
industry background and experience which enables him to provide constructive advice, expertise and independent judgment.
(f) This assessment is based on the Directors’ Evaluation exercise that was performed yearly amongst Board members.
(iii) Ordinary Resolution 8 – Re-appointment of Directors pursuant to Section 129 of the Companies Act, 1965
(a) P. Raveenderen, who is over the age of seventy (70) years, shall retire pursuant to Section 129 of the Companies Act, 1965 at the
conclusion of the forthcoming 42nd Annual General Meeting. The proposed re-appointment of P. Raveenderen will require a resolution
passed by a majority of not less than three-fourths (3/4) of members of the Company who are entitled to vote at the forthcoming
Annual General Meeting. The proposed resolution will enable P. Raveenderen, to hold office until the conclusion of the next
Annual General Meeting of the Company.
(b) Dato’ Syed Ariff Fadzillah Syed Awalluddin shall retire pursuant to Section 129 of the Companies Act, 1965 at the conclusion of the
forthcoming 42nd Annual General Meeting and does not wish to seek re-election.
7
STATEMENT ACCOMPANYING
NOTICE OF ANNUAL GENERAL MEETING
Pursuant to Paragraph 8.27(2) of the Bursa Malaysia Main Market Listing Requirements
Directors standing for re-election and re-appointment at the Forty-Second Annual General Meeting
The following are Directors retiring pursuant to Article 86 of the Company’s Articles of Association:1. Yusoff Yaacob
2. Paisol Ahmad
The following is the Director retiring pursuant to Article 92 of the Company’s Articles of Association – Retirement after appointment to fill casual
vacancy:1. Hijah Arifakh Othman
The following is the Director retiring pursuant to Section 129 of the Companies Act, 1965:Section 129 of the Companies Act, 1965
1. P. Raveenderen
The respective profile of the above Directors is set out in the Profile of Directors’ section of the Annual Report from pages 23 to 25.
8
CORPORATE
INFORMATION
Registered Office
Board of
Sharkawi Alis
NON-INDEPENDENT NON-EXECUTIVE CHAIRMAN
12th Floor, Bangunan Malaysian Re
No. 17, Lorong Dungun
Damansara Heights
50490 Kuala Lumpur
Tel : +603-2096 8000
Fax: +603-2096 7000
E-mail: [email protected]
Website: www.mnrb.com.my
Stock Exchange
Listing
Bursa Securities
– Main Market
Mohd Din Merican
President & Group Chief Executive Officer
Non-Independent Executive Director
Megat Dziauddin Megat Mahmud
Senior Independent Non-Executive Director
Company Secretaries
Norazman Hashim (MIA 5817)
Lena Abd Latif (LS 8766)
P. Raveenderen
Non-Independent Non-Executive Director
Dato’ Syed Ariff Fadzillah Syed Awalluddin
Independent Non-Executive Director
Yusoff Yaacob
Paisol Ahmad
Hijah Arifakh Othman
Share Registrar
Auditors
Symphony Share Registrars
Sdn. Bhd.
Ernst & Young
Level 23A, Menara Millenium
Jalan Damanlela
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
Tel : +603-7495 8000
Fax: +603-2095 5332
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Tel : +603-7841 8000
Fax: +603-7841 8008
Audit Committee
Megat Dziauddin Megat Mahmud (Chairman)
P. Raveenderen
Paisol Ahmad
Yusoff Yaacob
Nomination Committee
Dato’ Syed Ariff Fadzillah Syed Awalluddin (Chairman)
Sharkawi Alis
Yusoff Yaacob
Paisol Ahmad
Remuneration Committee
Yusoff Yaacob
Risk Management Committee
Yusoff Yaacob (Chairman)
P. Raveenderen
Investment Committee
Principal Bankers
Standard Chartered Bank
Malayan Banking Berhad
CIMB Bank Berhad
Hijah Arifakh Othman (Chairman)
Paisol Ahmad
Mohd Din Merican
9
GROUP
STRUCTURE
(13487-A)
Malaysian
Reinsurance Berhad
100%
*Labuan
Reinsurance (L) Ltd.
20%
Takaful Ikhlas
Berhad
100%
MNRB Retakaful
Berhad
100%
Malaysian Re
(Dubai) Ltd.
100%
MMIP Services
Sdn. Bhd.
100%
* Motordata Research
Consortium Sdn. Bhd.
40%
10
* Associate Company
CHAIRMAN’S
STATEMENT
SHARKAWI ALIS
Chairman
DEAR VALUED SHAREHOLDERS
11
CHAIRMAN’S STATEMENT (CONT’D)
A MIXED ECONOMIC ENVIRONMENT
The global economy expanded at a moderate pace in 2014, posting
real Gross Domestic Product (GDP) growth of 3.4%, the same level
registered in 2013. Economic divergence persisted with the developed
economies continuing to be the main pillar of growth. The US economy
grew 2.4% over the same period from the 2.2% growth recorded in the
previous year as its unemployment rate fell to 5.6%, the lowest level
since 2008. The Eurozone saw its GDP growing 0.8% after contracting
0.4% in 2013. Economic growth in the United Kingdom was also higher
at 2.9% compared to the 1.7% growth registered in the previous year.
However, there was still the lingering effect of the sovereign debt crisis
in the Eurozone, particularly in Greece, and this made the task quite
challenging for European policymakers. An uneven global growth path
was seen in the 0.1% GDP contraction in Japan despite steep policy easing
by the Bank of Japan (BoJ). Further to that, the International Monetary
Fund (IMF) reported that GDP among the emerging economies grew
at a slower rate of 4.6% in 2014 as compared to 5.0% in the previous
year. Economic growth in China decelerated further to 7.4% from 7.7%
previously as structural economic reforms continued to take place,
underscoring global economic divergence in the present cycle.
The significant correction in the price of oil is a concern within the
context of the Malaysian economy as the country is a net exporter of
crude oil, gas and petroleum products. The combined value of these
exports was RM163.1 billion in 2014, while government revenue from
this segment via petroleum tax, royalty and dividend income makes up
about RM63.0 billion or 24.5% of the total government revenue. Due
to the sharp correction in oil prices, the Government revised its budget
deficit-to-GDP estimate for 2015 upwards to 3.2% from its initial
estimate of 3.0% (with an oil price assumption of USD55.0 per barrel).
The revised estimate, however, was still more favourable than the 3.5%
deficit recorded in 2014.
Despite the negative development in global oil prices, the Malaysian
economy posted higher growth of 6.0% in 2014 (2013: 4.7%). This was
due to better-than-expected exports performance during the first half
of 2014 which cushioned the negative effect of the lower oil price to the
economy in general. Overseas shipments gained 8.3% in 1H2014 before
moderating in 2H2014 due to factors such as the economic slowdown
in Japan, China and the Eurozone, while lower commodity prices during
the second half of the year affected the value of exports. Additionally,
private consumption remained relatively robust with an annual growth
12
rate of 7.1% on the back of stable labour market conditions and this was
seen as a mitigating factor of the downside risk brought on by the decline
in global oil prices.
The end of Quantitative Easing (QE) in the US was followed by market
expectations of an interest rate hike by the US Federal Reserve. Such an
expectation triggered capital outflows from the emerging markets with
RM6.9 billion of foreign selling seen in the local stock market for the
whole of 2014. This also put downward pressure on emerging market
currencies and the ringgit was not spared as investors started to price
in USD-favourable interest rate differentials. Downward pressure on the
local currency raised concerns about additional costs among corporations
with forex exposure in their balance sheets. The challenging environment
also affected the primary equity capital market. There were only 14 new
listings on Bursa Malaysia Securities Berhad in comparison to 18 listings
in 2013. These initial public offerings (IPOs) collectively raised funds
amounting to RM5.9 billion, down 28.0% from the RM8.2 billion raised
in 2013. Meanwhile, the FBM KLCI hit an all-time high of 1,892.65 points
on 8 July 2014 but moderated to close the year at 1,761.3 points, 5.7%
lower than the preceding year-end’s 1,866.96 points.
MODERATE INDUSTRY GROWTH
Global general insurance premiums registered 2.5% real growth in 2014,
lower than the 3.1% growth in 2013. In the advanced economies, premium
growth slowed to 1.7% from 1.9% in the previous year and the same
outcome was observed among the emerging economies where premium
growth slowed from 8.2% in 2013 to 5.5% in 2014. For the takaful
industry, global gross takaful contributions for both general and family are
estimated to have grown by 15.6% in 2014 as compared to 15.0% in 2013
with Saudi Arabia and Malaysia as the largest takaful markets.
In 2014, natural disasters globally caused economic losses amounting
to USD132.0 billion; however, this was some 37.0% below the
10-year average of USD211.0 billion. Furthermore, the year’s disasters
caused insurance losses of USD39.0 billion, which was 38.0% below
the 10-year average of USD63.0 billion. These losses were the lowest
insured total loss since 2009, translating into the second consecutive
year of below-normal catastrophe losses. Notable disasters during the
year included major flooding incidents in India, Pakistan, China, and
Southeast Europe; billion-dollar convective thunderstorm events in the
US, France and Germany; as well as winter storms in Japan and the US.
In Malaysia, we had the East Coast floods that affected the states of
Kelantan, Terengganu and Pahang which caused widespread destruction
of property and belongings.
Developments in takaful are likely to accelerate in key domiciles such
as the key Gulf Cooperation Council (GCC) countries as well as highly
populated Muslim countries, such as Indonesia and Pakistan, where
takaful is gaining popularity. In Pakistan, for example, recent changes
to regulations allow conventional insurers to establish takaful windows,
which should spur growth in the country’s nascent takaful market.
Meanwhile, the concept of takaful and Islamic finance continues to gain
interest and we should expect more new entrants mainly from African
and Asian countries.
In Malaysia, the general insurance industry sustained a robust growth
trend, registering gross written premiums of RM16.9 billion, an increase
of 6.1% from 2013. The growth pace recorded was about identical to
the country’s economic growth of 6.0% seen over the same period.
The motor insurance segment which makes up about 47.0% of total
gross written premiums in the industry grew at a lower rate of 5.6%
(2013: 8.7%). The non-motor segment on the other hand saw premiums
growing at 6.6% in 2014 compared to the 5.4% growth recorded in the
previous year. In the general takaful segment, gross contributions rose
13.3% in 2014 to RM2.2 billion with major business classes registering
double-digit growth.
Meanwhile, the life insurance industry recorded healthy growth in
2014 with premiums from new business growing 9.6% to RM8.9 billion.
Investment-linked products were the main drivers of growth recording
an 18.0% increase in 2014 to RM3.9 billion as compared to RM3.3 billion
in 2013. The family takaful industry on the other hand saw contributions
from new business declining 2.9% to RM3.5 billion in 2014.
STEADFAST GROUP PERFORMANCE
The difficult global economic backdrop coupled with a few large
claims, including the East Coast floods, created a challenging business
environment for insurance and takaful operators in the country. Despite
this difficult operating environment, the MNRB Group posted revenue
of RM2.4 billion in FY2015, equivalent to FY2014’s revenue. Gross
written premiums and contributions amounted to RM2.2 billion. The
Group garnered total investment income amounting to RM199.5 million,
a 14.5% or RM25.3 million increase over the RM174.2 million recorded
in FY2014.
The Group’s net profit for FY2015 was RM139.1 million, a reduction of
10.8% from RM156.0 million, translating into Earnings Per Share (EPS)
of 65.3 sen as compared to 73.2 sen previously. This performance was
achieved despite the provisions that the Group had made for a few large
claims that impacted its reinsurance, takaful and retakaful subsidiaries,
including claims related to the East Coast floods towards the end of 2014.
13
PERFORMANCE OF KEY OPERATING SUBSIDIARIES
Malaysian Reinsurance Berhad (Malaysian Re)
Over the course of the financial year, Malaysian Re’s total gross premiums
remained stable at RM1.3 billion. Approximately 59.0% of Malaysian
Re’s total business volume was from the domestic market as compared
to 62.0% in the previous year, whilst the remaining 41.0% was generated
from its overseas business in comparison to 38.0% recorded previously.
Malaysian Re continues to draw closer to achieving its target of having
equal contributions in terms of gross premiums for both its local and
overseas portfolios for the financial year ending 31 March 2017.
Malaysian Re registered a profit before tax of RM196.0 million as
compared to RM213.1 million in the preceding year, a reduction of 8.0%.
This commendable performance was registered despite the large losses
reported during the year such as the recent East Coast Floods, strikes
and riots in Vietnam, and a major shipping disaster in Korea. Investment
income grew by RM7.1 million or 8.2% to RM92.7 million in FY2015 from
RM85.6 million previously. Malaysian Re recorded an overall profit after
tax of RM152.1 million in comparison to RM160.7 million previously.
Takaful Ikhlas Berhad (Takaful IKHLAS)
In FY2015, Takaful IKHLAS’s gross contributions increased by 7.3%
from RM769.6 million to RM826.0 million. The Family Takaful business
accounted for 66.8% of total gross contributions and grew by 1.1%
over the previous year. The General Takaful business accounted for the
remaining 33.2% and grew by 22.7% over the previous year.
The shareholder’s fund registered a profit before tax and zakat of
RM27.8 million, a growth of 33.3% as compared to RM20.9 million in the
preceding year.
The shareholder's fund recorded a net profit after tax and zakat of
RM19.4 million, a growth of 20.1% as compared to the preceding
year’s RM16.1 million. The favourable variance was partly due to higher
wakalah fee income from higher gross contributions and higher surplus
administrative charges from the General Takaful business.
The ongoing transformation of the business is already showing positive
results and we are optimistic that the performance will continue to
improve in the coming years.
MRT registered a higher loss of RM17.7 million in FY2015 as compared to
a loss of RM1.2 million in FY2014 mostly due to lower gross contributions
arising from business portfolio consolidation and an increase in provision
for claim liabilities of the General Retakaful fund.
MAINTAINING OUR STRONG SHOWING
Over the course of the financial year, Malaysian Re had its ratings
reaffirmed by the rating agencies, which is apt testament to the quality
of the Company’s business and the strength of its capital.
Fitch Ratings reaffirmed Malaysian Re’s Insurer Financial Strength Rating
(IFS) of 'A' with a stable outlook. The rating takes into consideration
Malaysian Re's healthy financial fundamentals, as demonstrated by its
sustained premium growth, consistently healthy financial performance,
solid market franchise in Malaysia, and highly liquid profile of its
investment portfolio. At the same time, A.M Best also reaffirmed
Malaysian Re’s IFS rating of ‘A-’ with a stable outlook. The ratings
considered Malaysian Re’s strong operating performance and excellent
risk-adjusted capitalisation.
GOVERNANCE AND RISK MANAGEMENT PRACTICES
MNRB Retakaful Berhad (MRT)
MRT saw its gross contribution for FY2015 reduced by 45.5% from
RM117.2 million to RM63.9 million. The General Retakaful business
accounted for 44.1% of the total business while the remaining 55.9%
was generated from the Family Retakaful business.
14
The Board remains committed to upholding high standards of corporate
governance throughout the Group. We strive to continuously improve
the effective application of the principles and best practices as laid
down by the Malaysian Code on Corporate Governance, the Corporate
Governance Guide as well as the Main Market Listing Requirement issued
by Bursa Malaysia Securities Berhad. MNRB’s policy is to implement
these principles and best practices as well as to uphold high standards
of business integrity in all activities undertaken by the Group. This shall
include a commitment to emulate good industry examples and to comply
with the respective guidelines and recommendations in the conduct of
the business activities of the Group.
The Board recognises that an effective risk management framework is
essential for the Group in our quest to achieve our corporate objectives,
especially with regard to our continued profitability and enhancement
of shareholder value in today’s rapidly changing market. Further details
of our Governance and Risk Management policies can be found in the
relevant sections of this Annual Report.
RESPONSIBLE CORPORATE PRACTICES
The Group continues to make good inroads by way of its corporate
responsibility (CR) efforts on the Workplace, Marketplace, Community
and Environment fronts. As a conscientious corporate citizen and a key
player in the reinsurance, takaful and retakaful sectors, we continue
to integrate responsible and sustainable practices into our total
business operations.
Our CR agenda sees us undertaking sustainable activities that focus on
education, knowledge and human capital development. This is helping to
ensure a continuous pool of talent in the Group and industry, as well as
the cultivation of dynamic insurance and takaful professionals. Through
these efforts, we are not only helping develop the local insurance and
takaful industry but are also contributing towards our nation’s growth.
In 2014, we continued to roll out the MNRB Scholarship Fund, which
aims to encourage and promote education in the fields of insurance and
takaful, actuarial science and risk management. Our community efforts
to date focus on equipping the younger generation to become leaders
of tomorrow through scholarship programmes, seminars, workshops,
study camps and sponsorships. All these initiatives are helping lay strong
foundations for the younger generation in order for them to attain
greater heights in the future.
Back in 2011, we created the Program Lestari Cemerlang MNRB, where
the MNRB Group adopted a school as part of our effort to enhance
the quality of education in rural areas. This programme, a two-year
partnership between the MNRB Group and its selected school, aims
to improve the academic achievements of students through extra
educational activities and the setting up of learning facilities. The
selected schools are typically secondary schools located in rural areas
and the programme has benefited 2,634 students to date.
As mentioned in last year’s Annual Report, on the professional front and
in line with our aim of strengthening the capabilities of the local industry,
Malaysian Re has developed a flood model for Malaysia which will allow
companies to perform data analytics and flood simulations. We have
called this model Re.Banjir. Companies that use the model will be able to
perform flood simulations, loss estimations and make informed decisions
on their business portfolio as well as their reinsurance programming. This
is the way we are contributing to the market and this shall benefit the
Malaysian insurance and takaful industry. The detail of these initiatives
and the Group’s other corporate responsibility efforts can be found in
the relevant section of this Annual Report.
15
NEW DEVELOPMENT – ESTABLISHMENT OF RETAKAFUL
DIVISION AT MALAYSIAN RE
On 22 April 2015, the Board of Directors of MNRB announced that
Malaysian Re had received approval from Bank Negara Malaysia (BNM)
to conduct general and family retakaful businesses under Section 10
of the Islamic Financial Services Act 2013 (IFSA) via the establishment
of a retakaful division. Malaysian Re plans to commence underwriting
its retakaful business once the operating license is granted by BNM.
Arising from this new development, MRT would focus on consolidating
and subsequently running-off its business until such time deemed
appropriate for it to surrender its operating license to BNM. Moving
forward, the retakaful business of the MNRB Group will be offered via
the Retakaful Division at Malaysian Re.
The establishment of Retakaful division would enable the business
to utilize the higher IFS ratings of ‘A’ (Fitch) and ‘A-’ (A.M. Best) from
Malaysian Re to gain access to business which otherwise would not have
been accessible due to the lower rating of ‘BBB+’ (Fitch) given to MRT in
the past. In addition, the growth in Retakaful business volume has not
been in tandem with the corresponding double digit growth in Takaful
business due to the nature of the Takaful portfolio which demands much
less Retakaful cover as compared to conventional reinsurance. Hence,
the lack of Retakaful volume makes having a full-fledged stand-alone
Retakaful operation difficult to sustain in the longer term. Despite the
lack of Retakaful volume currently, we do see the future potential of
the business albeit at a slower pace and we are in full support of the
Government’s efforts to make Malaysia as an International Islamic
Finance Marketplace.
This division shall leverage on the proven technical expertise, IT systems
and operations whereby combined resources would immediately provide
better economies of scale. It also creates more efficient, consistent
and cost-effective approach to the business. In terms of geographical
diversification strategy, Retakaful business will be able to reach into the
Middle East and North African (MENA) region through our subsidiary
Malaysian Re (Dubai) Ltd (MRDL) in Dubai.
Changes are also taking place in other jurisdictions. In China, the soon
to be introduced China Risk Oriented Solvency System (C-ROSS) aims
to link capital requirements closely to underwritten risks and promote
sound risk management practices across the industry. We have seen
a move to shift placements with onshore reinsurers or international
reinsurers with better ratings. Local insurer and reinsurers also have
started to ask offshore reinsurers to provide collateral for reinsurance
assets as this measure is also part of the C-ROSS regime. Regulatory
changes are also taking place in Indonesia where the regulator aims at
optimising reinsurance capacity within the country. This new regulation
will increase local retentions considerably from 10% to a minimum of
25% for all lines of business and would translate into lower market share
for international and offshore reinsurers. These developments require
Malaysian Re to re-strategise its approach into these markets.
Under the Financial Services Act 2013 (FSA), MNRB Holdings Berhad
(MNRB) has been designated as a Financial Holding Company (FHC)
with effect from 1 July 2015. Section 115 of the FSA provides for BNM
to specify standards on prudential matters to MNRB and its subsidiaries,
which include but not limited to capital adequacy, liquidity and corporate
governance while Section 116 of FSA provides BNM the power to issue
written directions to MNRB and its subsidiaries in relation to the Group’s
business affairs.
The effect of the implementation of the Goods and Services Tax (GST)
effective 1 April 2015 on the Insurance and Takaful industry is expected
to be manageable although the impact on product pricing has not yet
been seen. Life and Family products, with the exception of riders, are
exempted from GST. The Group has put in place proper infrastructure
and processes to handle GST compliance.
While the aforementioned key developments will pose challenges to
the MNRB Group, we have taken the necessary steps to ensure that we
are able to meet these challenges and at the same time meet regulatory
compliance. We will endeavour to be conscious of market developments
and be able to take advantage of business opportunities as they arise.
SHAREHOLDER VALUE CREATION
A CHALLENGING BUSINESS LANDSCAPE
Both fire and motor classes are currently governed by tariffs and plans
to gradually abolish the tariffs are expected to take place on a staggered
basis in 2016. Customers would then be charged premium/contribution
rates reflective of the risks. Insurers and Takaful operators are gearing
towards this market liberalisation and this is a move towards risk-based
pricing. Abolition of the tariff would also encourage more product
innovation and price differentiation, giving customers more choice
offerings based on price and risk factors. To this end, Takaful IKHLAS is
gearing itself towards its readiness to meet these challenges.
16
We have consistently maintained that capital preservation is a priority
for the MNRB Group and we continue to propagate the importance of
maintaining that principle. The need to further strengthen the capital
position of the Group is more significant now as MNRB carries the role
and responsibilities of a financial holding company which means MNRB
has to maintain a certain level of capital adequacy and liquidity.
Strengthening the capital position is part of the Group's strategy in
facing the challenging operating environment and dynamic regulatory
landscape ahead. Furthermore, increasing industry competitiveness
globally have seen more mergers and acquisitions taking place, resulting
in players with stronger capital base, larger international network and
wider expertise. As such, it is crucial to strengthen the capital so that
we can continue to support our subsidiaries to stay competitive in the
industry and hence sustaining the Group’s presence.
looking at an acceleration of growth to 3.8% the year after. The downside
risk to global growth is seen coming from China with the People’s Bank
of China surprising the market with a few unexpected monetary policy
easing to boost the economy.
Against this backdrop, the Board is not recommending the payment of
any dividend in respect of FY2015. Nevertheless, the Board remains
committed to provide better returns to your dedicated investment in the
forthcoming years.
On the domestic front, the Malaysian economy is anticipated to grow
between 4.5% and 5.0% with a central tendency forecast of 4.7%
in 2015, well within the Government’s GDP forecast of 4.5%–5.5%.
While domestic demand is key to anchoring the economy in this
challenging environment, household spending is likely to be affected
by the implementation of GST that came into effect on 1 April 2015.
The weakening of the local currency may provide a boost to Malaysia
export’s competitiveness but this view should also be balanced by
external developments given that economic forecasts across major
trading partners are not identical. With regard to the 11th Malaysia Plan,
the Government has highlighted that it remains committed to fiscal
consolidation and the budget deficit is expected to narrow to 0.6%
of GDP by the year 2020 which should be positive for the Malaysian
economy in the long-run. The downside risk to the ringgit remains as the
current account surplus is likely to narrow and the likelihood of policy
normalisation in the US would narrow any positive influence the ringgit
may have. The inflationary effect from GST implementation should be
partly offset by lower energy prices and BNM is forecasting headline
inflation to be in the 2.0%–3.0% range in 2015 (2014: 3.1%).
Looking back five years ago when the risk-based capital (RBC) framework
was first adopted, MNRB had taken a similar decision in favour of capital
preservation for our subsidiary, Malaysian Re. Now, the Board is pleased
to note that the decision has paid off as Malaysian Re has grown stronger
in terms of its capital base. The Board believes that MNRB is now at a
similar juncture and that the same prudent approach should be taken for
the Group’s corporate sustainability and until there is further clarity on
the operating environment.
LOOKING AHEAD
Divergence in growth should continue to be the case for the world’s
economies with the US economy expected to play a crucial role in
supporting global growth. The International Monetary Fund in July 2015
cut its 2015 global GDP forecast from 3.5% to 3.3% and the fund is
17
Although insurers in Asia-Pacific are likely to face deteriorating
economic conditions in 2015, growth prospects remain firm for life and
general insurance products. Rising real estate and financial asset values
are enabling insurers throughout the region to produce higher premium
volume from increased protection levels. Prospects for commercial lines
insurance remain strong, given the region’s elevated catastrophe risk,
the rise in infrastructure and home building across much of Asia-Pacific,
as well as a low insurance penetration rate. This should have a positive
impact on Malaysian Re as its overseas business averaged approximately
40% of its total revenue over the last two years. Nonetheless, the
volatile foreign exchange rate in the current environment is a risk factor
to Malaysian Re’s overseas operations.
Despite the slower GDP growth forecast, prospects for Malaysia’s
insurance and takaful sectors are expected to remain stable in 2015 even
as regulatory changes and market liberalisation set in. Ongoing premium
expansion, sound capital buffers and stable underwriting margins
will continue to support the risk profiles of most insurers and takaful
operators. The growth potential of the takaful segment is likely to remain
despite new regulations, supported by a growing range of products and
wider distribution coverage. Against this backdrop, Takaful IKHLAS shall
position itself to capitalise on any business opportunities.
Moving forward, the Board of Directors remains positive of the Group’s
prospects for the financial year and recognises the challenging operating
landscape that lies ahead.
three new Board members, Puan Hijah Arifakh Othman, Encik Mustaffa
Ahmad and Encik Md Adnan Md Zain. Puan Hijah Arifakh Othman was
appointed to the Board of MNRB, while Encik Mustaffa Ahmad and Encik
Md Adnan Md Zain were appointed to the Board of Malaysian Re with
effect from 1 June 2015. My heartfelt thanks also go to my colleagues
on the Board for their dedication, contributions and wise counsel. The
Group and its subsidiaries are indeed fortunate to have such committed
individuals to serve on the respective Boards and I certainly look forward
to their untiring support.
The Board would like to record our sincere gratitude to Encik Mohd
Sahimy Man, the former President & Chief Executive Officer (CEO)
of MRT whose contract expired on 30 September 2014 and to Encik
Hashim Harun, who retired as the President & CEO of Malaysian Re on
31 March 2015. We thank these gentlemen for their worthy contributions
and wish them every success in their future endeavours.
We would like to extend a warm welcome to Encik Ahmad Ruhaizad
Hashim who has been appointed as the new President & CEO of MRT on
2 January 2015 and Encik Zainudin Ishak who joined us on 1 April 2015
as the new President & CEO of Malaysian Re. We look forward to their
insights and leadership.
Last but not least, I wish to convey my utmost gratitude to our loyal
management team and employees who continue to work hard and
exhibit a spirit of excellence in all that they do. We have come thus far
because of the staunch commitment and resolute effort of our team and
I am confident they will continue to help us to attain greater heights.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I would like to express my heartfelt
gratitude to the many parties who have rendered us their worthy
support. We sincerely thank our valued shareholders for their unwavering
support and confidence in the MNRB Group. My deep gratitude goes
also to all our loyal customers, business partners, ceding companies and
intermediaries, as well as Bank Negara Malaysia and the insurance and
takaful associations, for their steadfast support and cooperation.
I would also like to thank YBhg. Datuk Mohd Khalil Dato’ Mohd Noor,
who retired from the Board on 1 June 2015 and YBhg. Dato’ Syed Ariff
Fadzillah Syed Awalluddin, who will not be seeking re-election at the
forthcoming Annual General Meeting. We sincerely thank them for their
guidance, dedication and worthy contributions to the Group during their
time on the Board. Please join me in extending a warm welcome to the
18
As the MNRB Group continues to make strong stride forward amidst a
challenging marketplace, we look to all our stakeholders to lend us their
continuous support as we leverage on all opportunities and overcome all
challenges to ensure a strong and sustainable future for all.
On behalf of the Board
Sharkawi Alis
Chairman
NRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB
GS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS
//MNRB
BERHAD
ERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD
∙ HOLDINGS
MNRB HOLDINGS
BERH
MNRB
HOLDINGS
BERHAD
OLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB
HOLDINGS
BERHAD
∙ MNRB HOLD
MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNR
RHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERH
RHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERHAD ∙ MNRB HOLDINGS BERH
board of
Directors
2015
19
BOARD OF
DIRECTORS
Paisol Ahmad
20
Dato’ Syed Ariff
Fadzillah Syed
Awalluddin
Megat Dziauddin
Megat Mahmud
Sharkawi Alis
BOARD OF DIRECTORS (CONT’D)
Mohd Din Merican
P. Raveenderen
Yusoff Yaacob
21
DIRECTORS’
PROFILE
10/10
Board meeting
attended
SHARKAWI ALIS
Non-Independent Non-Executive Chairman
SHARKAWI ALIS, aged sixty-eight (68), Malaysian. Non-Independent Non-Executive
Director since 7 January 2005 and was subsequently appointed as Non-Independent
Non-Executive Chairman on 3 September 2007. Member of the Nomination
Committee. He is a Barrister-at-Law from Middle Temple, London where he was
called in 1971. He served in the Malaysian Judicial and Legal Service in various
capacities for eleven (11) years before he was appointed as Group Legal Adviser of
Malaysia Mining Corporation Berhad in August 1982. In January 1997, he joined the
Securities Commission, Malaysia as Director of Market Supervision and subsequently
as Director of Corporate Resources Division till March 2003. Also Chairman of
Malaysian Re, Takaful IKHLAS, MRT, Labuan Re and MRDL, a Director of MIDF
Amanah Asset Management Berhad, Malaysian Industrial Development Finance
Berhad, MIDF Amanah Investment Bank Berhad, MIDF Property Berhad, Permodalan
Satok Berhad and Motordata Research Consortium Sdn. Bhd. Not related to any
Director and/or major shareholder of MNRB except by virtue of being a nominee
Director of PNB. Does not have any conflict of interest with MNRB and has never
been convicted for any offences within the past ten (10) years.
MOHD DIN MERICAN
10/10
Board meeting
attended
MOHD DIN MERICAN, aged fifty-three (53), Non-Independent Executive Director
with effect from 9 January 2012 and President & Group Chief Executive Officer
of the Company. Member of the Investment Committee. Obtained Bachelor of
Commerce (Honours) degree from Carleton University, Ottawa, Canada. He is an
Associate of The Malaysian Insurance Institute (AMII) since 1991. He has thirty
(30) years experience in the insurance industry and has held key management
positions in various insurance, insurance broking and reinsurance firms including
being the Principal Officer & General Manager of SCOR Switzerland Ltd, Labuan
Branch. Prior to joining MNRB, he was the Chief Executive Officer of Etiqa
Insurance Berhad. Formerly a member of the Management Committee of Persatuan
Insurans Am Malaysia, National Insurance Association of Malaysia and President
of Life Insurance Association of Malaysia. Also a Director of Malaysian Re, MRT,
Takaful IKHLAS, Labuan Re, MRDL and Motordata Research Consortium Sdn. Bhd.
Not related to any Director and/or major shareholder of MNRB. Does not have any
conflict of interest with MNRB and has never been convicted for any offences within
the past ten (10) years.
22
DIRECTORS’ PROFILE (CONT’D)
10/10
MEGAT DZIAUDDIN MEGAT
MAHMUD
Board meeting
attended
Senior Independent Non-Executive Director
MEGAT DZIAUDDIN MEGAT MAHMUD, aged sixty-nine (69), Malaysian.
Independent Non-Executive Director since 24 August 2006 and re-designated
as Senior Independent Non-Executive Director on 19 July 2011. Chairman of the
Remuneration Committee as well as the Audit Committee. Member of the Investment
Committee and the Nomination Committee. He obtained a Bachelor of Science
(Econs.) (Hons.) degree from the Queen’s University of Belfast, Northern Ireland and
is a Fellow of the Institute of Chartered Accountants in Ireland as well as a Chartered
Accountant with the Malaysian Institute of Accountants. He had served Golden Hope
Plantations Berhad as Group Director, Finance, Arab-Malaysian Merchant Bank, first
as General Manager – Operations and later as General Manager – Investment, Bank
Simpanan Nasional as Finance Manager and the Accountant-General’s Department
as Treasury Accountant. Also the Chairman of Alliance Islamic Bank Berhad and a
Director of Malaysian Re, MRT, Pernec Corporation Berhad, Alliance Financial
Group Berhad, Takaful IKHLAS and several other private limited companies. Not
related to any Director and/or shareholder of MNRB. Does not have any conflict
of interest with MNRB and has never been convicted for any offences within
the past ten (10) years.
10/10
Board meeting
attended
P. RAVEENDEREN
P. RAVEENDEREN, aged seventy (70), Malaysian. Appointed as a Director on
11 November 1993 and designated as an Independent Non-Executive Director on
1 September 2003. He was re-designated as a Non-Independent Non-Executive
Director on 19 July 2011. Member of the Audit Committee and the Risk Management
Committee. An Associate of The Chartered Insurance Institute as well as a Chartered
Insurer. He was the Chief Executive Officer of Royal Insurance (M) Sdn. Bhd. since
1985 until the Company merged with Sun Alliance Insurance (M) Sdn. Bhd. on
1 September 1999 when he assumed the position of Executive Director of the
merged Royal & Sun Alliance Insurance (M) Bhd. until his retirement on 31 August
2001. Also a Director of Malaysian Re. Not related to any Director and/or major
shareholder of MNRB. Does not have any conflict of interest with MNRB and has
never been convicted for any offences within the past ten (10) years.
23
10/10
DATO’ SYED ARIFF FADZILLAH
SYED AWALLUDDIN
Board meeting
attended
DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDIN, aged seventy-one (71),
Malaysian. Appointed as a Director on 31 January 2003 and re-designated as
an Independent Non-Executive Director on 28 October 2004. Chairman of the
Nomination Committee, member of the Audit Committee and the Remuneration
Committee. Graduated from the University of Malaya with a Bachelor of Arts degree,
then obtained a Diploma in International Relations from the University of Oslo, a
Diploma in Development Administration from the London School of Economics and
a Master’s in International Relations from the University of New York. Joined the
Government service in 1967 and was later posted abroad to serve in Canada, Libya
and the United Nations in New York and Indonesia. Was appointed as the Ambassador
to Fiji, Republic of Korea and Thailand until his retirement from Government Service
in 2001. Also the Chairman of Berjaya Auto Berhad, a Director of Malaysian Re, MRT,
EcoFirst Consolidated Bhd. and one (1) other private limited company. Not related
to any Director and/or major shareholder of MNRB. Does not have any conflict of
interest with MNRB and has never been convicted for any offences within the past
ten (10) years.
YUSOFF YAACOB
10/10
Board meeting
attended
Independent non-Executive Director
YUSOFF YAACOB, aged sixty-seven (67), Malaysian. Appointed as a Director on
10 November 2004 and re-designated as an Independent Non-Executive Director on
23 March 2006. Chairman of the Risk Management Committee, member of the Audit
Committee, the Remuneration Committee and the Nomination Committee. Obtained
a Diploma in Insurance Studies & Insurance Management from the University of
Nottingham, United Kingdom. A Chartered Insurance Practitioner and a Fellow of the
Chartered Insurance Institute, United Kingdom. Started his career as an Insurance
Trainee with Malaysia National Insurance Sdn. Bhd. in 1970 and held the position
of Marine Manager until 1979. Joined Petroliam Nasional Berhad (PETRONAS) in
1979 and was the General Manager (Insurance Division) until his retirement in 2003.
Also a Director of Malaysian Re. Not related to any Director and/or major shareholder
of MNRB. Does not have any conflict of interest with MNRB and has never been
convicted for any offences within the past ten (10) years.
24
10/10
PAISOL AHMAD
Board meeting
attended
non-Independent Non-Executive Director
PAISOL AHMAD, aged sixty-one (61), Malaysian. Non-Independent Non-Executive
Director since 11 April 2008. Member of the Audit Committee, the Investment
Committee and the Nomination Committee. Obtained a Diploma in Accountancy
from Universiti Teknologi MARA and thereafter became a Fellow of the Association of
Chartered Certified Accountants, United Kingdom. Also a Chartered Accountant with
the Malaysian Institute of Accountants, a Fellow of the Financial Services Institute of
Australasia and a Certified Financial Planner with the Financial Planning Association
of Malaysia. He was the Senior Accountant of Pernas Charter Management Sdn.
Bhd. He then held various positions in Amanah Saham Nasional Berhad before being
appointed as its Executive Director/Senior Vice President II. He was subsequently
transferred to PNB and is currently the Senior Vice President, Internal Assurance
Division. Also a Director of Takaful IKHLAS, KAF Investment Bank Berhad and two
(2) other private limited companies. Not related to any Director and/or shareholder
of MNRB except by virtue of being a Nominee Director and employee of PNB. Does
not have any conflict of interest with MNRB and has never been convicted for any
offences within the past ten (10) years.
N/A
Board meeting
attended
HIJAH ARIFAKH OTHMAN
HIJAH ARIFAKH OTHMAN, aged fifty-five (55), Malaysian. Non-Independent
Non-Executive Director since 1 June 2015. Chairman of the Investment Committee
and member of the Risk Management Committee. She obtained a Degree in
Mathematics and Computer Science from City University of London. She began her
career in Bank Negara Malaysia (BNM) in 1984 where she served in various divisions
including in senior positions as the Managers/Head of Fixed Income Portfolio
Management of the External Reserves and Assistant General Manager/Head of
Treasury of Danamodal from 1989 to 2000. She had served as the Director/Head
of Asian Fixed Income in Standard Chartered Bank Malaysia and subsequently also
served as the Executive Vice President/Head of Group Treasury Business in Malayan
Banking Berhad from 2006 to 2009. She was appointed as the Managing Director/
Chief Executive Officer of Hong Leong Islamic Bank from 2009 to 2011. She has been
a Director of KAF Investment Bank Berhad since 2012. Not related to any Director
and/or shareholder of MNRB except by virtue of being a Nominee Director of PNB.
Does not have any conflict of interest with MNRB and has never been convicted for
any offences within the past ten (10) years.
25
SENIOR
MANAGEMENT TEAM
The President &
Group Chief
Executive Officer,
MOHD DIN
MERICAN
leads the day-to-day
operations of
MNRB together
with the key management
staff which includes:
Mohd Din Merican
Norazman
Hashim
26
Ahkter
Abdul Manan
Azlan
A. Azizee
SENIOR MANAGEMENT TEAM (CONT’D)
Ahmad Ruhaizad
Hashim
Romie
Khalid
Sharmini
Perampalam
Lena Abd Latif
Raja zalman tuah
Raja izzaham
iszatul
mashani ishak
27
SENIOR MANAGEMENT
TEAM’S PROFILE
Norazman Hashim
EXECUTIVE VICE PRESIDENT &
GROUP CHIEF FINANCIAL OFFICER/ COMPANY SECRETARY
NORAZMAN HASHIM is the Executive Vice President & Group
Chief Financial Officer/Company Secretary of MNRB. He obtained his
Masters degree in Business Administration from the Cranfield School
of Management, United Kingdom in 1990. He is also a fellow member
of the Association of Chartered Certified Accountants (ACCA), United
Kingdom and a member of the Malaysian Institute of Accountants (MIA).
He joined the then Malaysian National Reinsurance Berhad in 1985 and
was appointed as its Financial Controller and Company Secretary in
1994. He was subsequently transferred to Malaysian Re in April 2005
and promoted to General Manager of the Corporate Services Division
in June 2005 where he oversaw the, Administration, Legal & Secretarial,
Corporate Communications, Human Capital Management and Finance
Departments. On 1 April 2008, he was transferred to MNRB where
he assumed his current position. Norazman Hashim is also a Director
of MSSB and the Company Secretary of Malaysian Re, MRT, MRDL and
Takaful IKHLAS.
Ahkter Abdul Manan
SENIOR VICE PRESIDENT & GROUP CHIEF INVESTMENT OFFICER
AHKTER ABDUL MANAN is the Senior Vice President & Group Chief
Investment Officer of MNRB. He graduated from the University of
Science, Malaysia with a Bachelor of Social Science (Honours) degree
majoring in Management with a minor in Economics. He is responsible
for the overall investment, property and administrative functions of the
MNRB Group.
He started his career in the Investment and Securities Department (IVS)
of Malaysian International Merchant Bankers Berhad (MIMB) in 1987
as an Investment Analyst. In 1991, he was promoted to Manager, Head
of IVS and in 1995 to Assistant General Manager. He was subsequently
promoted to General Manager of IVS in 1997. He was then seconded
to MIDF Aberdeen Asset Management Sdn. Bhd. (MIDF Aberdeen),
which he set up in 1998. In January 2001, he was appointed the
Chief Executive Officer and Executive Director of MIDF Aberdeen.
He joined Asia Unit Trust Berhad (AUTB) in September 2004 as Chief
Executive Officer following the transfer of the business of MIDF
Aberdeen to Amanah SSCM Asset Management Berhad. He left AUTB
in July 2007 to join MNRB on 17 July 2007. In total, he brings to the
Company more than twenty-seven (27) years of experience in the Asset
Management industry.
28
Azlan A. Azizee
SENIOR VICE PRESIDENT & GROUP CHIEF INFORMATION OFFICER
AZLAN A. AZIZEE is the Senior Vice President & Group Chief
Information Officer of MNRB. He graduated with a Bachelor of Science
in Computer Science from the University of Wisconsin, Green Bay,
USA in 1984 and received a Masters of Science in Information Systems
Technology from The George Washington University, Washington D.C.,
USA in 1986.
In 1987, he joined the then Malaysian National Reinsurance Berhad as an
IT Executive. He held positions of increasing responsibility in the ensuing
years at the Company and was involved in the implementation of IT
initiatives for the insurance industry. Having assumed his current position
on 1 April 2005, he is today responsible for directing the Company’s
information technology strategy, management and operations.
Ahmad Ruhaizad Hashim
SENIOR VICE PRESIDENT & GROUP CHIEF STRATEGY OFFICER
AHMAD RUHAIZAD HASHIM is the Senior Vice President & Group
Chief Strategy Officer of MNRB. He graduated in 1990 with a Bachelor
of Economics and Accounting from the University of Leeds, England.
He has been a member of the Malaysian Institute of Certified Public
Accountants (MICPA) since 1995 as well as a member of the Malaysian
Institute of Accountants (MIA).
He brings almost twenty-one (21) years of experience in corporate
management and advisory services to the table. His began his career in
1991 when he joined Arthur Andersen as an auditor. He served Arthur
Andersen for more than five (5) years until 1996 when he left to join
KUB Malaysia Berhad. He then re-joined Arthur Andersen in 1999
to head its Kuala Terengganu branch operation. In 2002, he joined
Putrajaya Holdings Sdn. Bhd. as the Head of the Corporate Planning
Department. He then joined MNRB on 2 January 2008. In addition to
his current role, he is also the President & CEO of MRT, a wholly owned
subsidiary of MNRB.
SENIOR MANAGEMENT TEAM PROFILE (CONT’D)
Romie Khalid
SENIOR VICE PRESIDENT & GROUP CHIEF INTERNAL AUDITOR
ROMIE KHALID is the Senior Vice President & Group Chief Internal
Auditor of MNRB. He graduated in 1996 with a Bachelor of Science
(Economics), majoring in Accounting & Finance from the London School
of Economics & Political Science.
He began his career as an auditor with Arthur Andersen in 1997, where
he served in the financial services group of the audit division. In 2003, he
joined the then Malaysian National Reinsurance Berhad as an Executive in
the Finance Department. He was then transferred to the Risk Management
Department in 2004 to take up the role as the Risk Management Officer
(RMO). On 1 April 2005, he was transferred to Malaysian Re where he
served as RMO to Malaysian Re. Subsequently, he was transferred back to
MNRB and assumed his current position on 7 August 2007.
Sharmini Perampalam
SENIOR VICE PRESIDENT & HEAD OF FINANCE
SHARMINI PERAMPALAM is the Senior Vice President & Head of Finance
of MNRB. She holds an Honours degree in Accountancy from Universiti
Putra Malaysia and is a member of the Malaysian Institute of Accountants.
She joined the then Malaysian National Reinsurance Berhad in 1995 as
an Internal Audit Executive and moved up the ranks to Manager before
being transferred to the Finance Department. She was promoted to her
current position as Senior Vice President & Head of Finance in 2011.
Having been with the MNRB Group for more than eighteen (18) years,
she brings to the table a wealth of experience from financial and audit
procedures to corporate and operations management.
LENA ABD LATIF
Senior Vice President & Head of Legal & Secretarial/
Company Secretary
LENA ABD LATIF is the Senior Vice President, Head of Legal &
Secretarial and the Company Secretary of MNRB. She holds a Bachelor
of Laws (Honours) degree from the International Islamic University,
Malaysia and has been called to the Malaysian Bar.
She has over twenty-one (21) years of working experience in both legal
practice and corporate firms. She was employed by Utusan Melayu
(Malaysia) Berhad as its legal advisor in 1991 and thereafter, as the
General Manager, Corporate Affairs/Group Company Secretary at
Land & General Berhad between 1993 and 2000. She joined the then
Malaysian National Reinsurance Berhad in 2003 as Manager, Legal &
Secretarial and was appointed as its Company Secretary in February
2004. She was promoted to her current position as Senior Vice President
& Head of Legal & Secretarial in 2011. She is also the Company Secretary
of Malaysian Re, MRT, Takaful IKHLAS and MSSB.
RAJA ZALMAN TUAH
Raja Izzaham
SENIOR VICE PRESIDENT & GROUP Chief RISK MANAGEMENT
AND COMPLIANCE OFFICER
RAJA ZALMAN TUAH Raja Izzaham is the Senior Vice President &
Group Chief Risk Management and Compliance Officer of MNRB. He is
a fellow member of the Association of Chartered Certified Accountants
(ACCA), United Kingdom and a member of the Malaysian Institute of
Accountants (MIA).
He joined MNRB in 2006 as an Executive in the Internal Audit
Department. He held positions of increasing responsibility in the ensuing
years at the Company before being promoted as the Deputy Group Chief
Internal Auditor in 2011. He assumed his current position on 9 October
2014 and has over fifteen (15) years of working experience.
ISZATUL MASHANI ISHAK
SENIOR VICE PRESIDENT & HEAD OF HUMAN CAPITAL MANAGEMENT
ISZATUL MASHANI ISHAK is the Senior Vice President & Head of
Human Capital Management, MNRB. She graduated in 1996 with a
degree in Information Technology from the University of Queensland,
Australia.
She began her career as an Analyst Programmer with Mayban Life
Assurance Berhad (now known as Etiqa Insurance Berhad). In 2006,
she decided on a career change and embarked on her Human Resource
journey as a Recruitment Specialist with Scicom (MSC) Berhad. As a
self-learner, she obtained more experience as a Human Resource
Generalist and a manager over the next few years with Accenture and
Labuan Financial Services Authority. Prior to joining MNRB, she was the
Section Head, Talent Management & Staff Engagement with RHB Banking
Group specialising predominantly in Performance Management, Talent
Development, Succession Planning and Employee Engagement. She joined
MNRB on 2 September 2014 as Vice President, Learning & Development
and was promoted to her current position on 1 January 2015.
29
FIVE-YEAR
FINANCIAL HIGHLIGHTS
2015
2014
2013
2012
2011
RM’000
RM’000
RM’000
RM’000
RM’000
2,383,957
2,381,378
2,293,382
1,870,326
1,463,262
Profit before zakat and tax
190,705
214,728
159,332
188,212
164,952
Profit after zakat and tax
139,148
155,986
112,665
89,369
122,942
Technical reserves
3,784,625
3,612,476
3,204,985
2,793,864
1,266,110
Total assets
6,476,711
6,136,097
5,642,265
5,048,449
4,467,967
Shareholders’ fund
1,349,474
1,223,469
1,131,944
1,058,488
998,715
213,070
213,070
213,070
213,070
213,070
65.3
73.2
52.9
41.9
57.7
6.3
5.7
5.3
5.0
4.7
Profit before zakat and tax to
Shareholders’ fund (%)
14.1
17.6
14.1
18.4
16.5
Profit after zakat and tax to
Shareholders’ fund (%)
10.3
12.8
10.0
13.8
12.3
Gross Dividends (%)
-
-
32.0
17.0
20.0
Net dividends per share (sen)
-
16.5
24.0
13.0
15.0
Revenue
Paid-up capital
Earnings per share (sen)
Net assets per share (RM)
30
FIVE-YEAR FINANCIAL HIGHLIGHTS (CONT’D)
2011:
1,463
2011:
165
2012:
1,870
2012:
188
2013:
2,293
2013:
159
2014:
2,381
2014:
215
2015:2,384
Revenue
(RM’000)
2015:191
Profit before
zakat and tax (RM’000)
2011:
4,468
2011:
999
2012:
5,048
2012:
1,058
2013:
5,642
2013:
1,132
2014:
6,136
2014:
1,223
2015:6,477
total assets
(RM’000)
2015:1,349
Shareholders’ fund
(RM’000)
2011:
57.7
2011:
4.7
2012:
41.9
2012:
5.0
2013:
52.9
2013:
5.3
2014:
73.2
2014:
5.7
2015:65.3
Earnings per share
(sen)
2015:6.3
Net assets per share
(rm)
31
FINANCIAL
CALENDAR 2015
4th Quarter Results
Announcement date
29 May 2015
4th Quarter Results
Reported as at
31 March 2015
2nd Quarter Results
Announcement date
27 November 2014
Reported as at
Announcement date
2nd Quarter Results
Notice of AGM
Reported as at
30 September 2014
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
2014
SEPT
AGM date
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
2015
NOV
DEC
2016
1st Quarter Results
Reported as at
30 June 2014
1st Quarter Results
Announcement date
28 August 2014
3rd Quarter Results
Reported as at
31 December 2014
3rd Quarter Results
Announcement date
17 February 2015
The 42nd Annual General Meeting
Date of Notice of AGM
18 August 2015
The 42nd Annual General Meeting
Annual General Meeting date
30 September 2015
32
OCT
MNRB’S
GROWTH
RM Million
7,000
6,500
Total Assets
Shareholders’ Fund
6,000
5,500
5,000
Year
Shareholders’ Fund
Total Assets
2002
506,313
1,329,716
2003
564,609
1,427,390
2004
617,010
1,476,021
2005
677,039
1,607,197
2006
747,803
1,772,311
2007
808,477
1,963,036
2008
893,919
2,576,247
2009
835,646
3,378,919
2010
892,513
3,845,983
2011
998,715
4,467,967
2012
1,058,488
5,048,449
2013
1,131,944
5,642,265
2014
1,223,469
6,136,097
2015
1,349,474
6,476,711
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
500
33
INVESTORS’
INFORMATION
MNRB HOLDINGS BERHAD – PERFORMANCE OF SHARE
1/4/14–31/3/15
1/4/13–31/3/14
1/4/12–31/3/13
1/4/11–31/3/12
1/4/10–31/3/11
3.58
3.72
2.94
2.62
2.63
Highest Price (RM)
4.9
4.24
3.39
3.42
3.04
Lowest Price (RM)
3.53
2.81
2.81
2.33
1.90
31,178
63,856
59,886
57,903
9,803
Gross Dividend Yield (%)
0.00
4.44
10.88
6.49
7.60
Price Earning Ratio (x)
5.48
5.08
5.56
6.25
14.21
Closing Price (RM)
Total Volume Traded (‘000)
Source: Bloomberg @ 20/5/2015
SHARE PRICES AND VOLUME TRADED (JANUARY 2013 – MARCH 2015)
Closing Price (RM)
Volume Traded (‘000)
12,500
5.00
11,500
10,500
4.50
9,500
8,500
4.00
7,500
6,500
3.50
5,500
4,500
3.00
3,500
2,500
2.50
1,500
500
Mar 15
Feb 15
Jan 15
Dec 14
Nov 14
Oct 14
Sep 14
Aug 14
Jul 14
Jun 14
May 14
Apr 14
Mar 14
Feb 14
Jan 14
Dec 13
Nov 13
Oct 13
Sep 13
Aug 13
Jul 13
Jun 13
May 13
Apr 13
Mar 13
Feb 13
Jan 13
2.00
Volume Traded (’000)
Closing Price (RM)
PERFORMANCE OF SHARES (JANUARY 2013 – MARCH 2015)
Closing Price (RM)
Kuala Lumpur Composite Index
34
Closing Price of MNRB Share (RM)
Kuala Lumpur Composite Index
Mar 15
Feb 15
Jan 15
Dec 14
Nov 14
Oct 14
Sep 14
Aug 14
Jul 14
Jun 14
May 14
Apr 14
Mar 14
Feb 14
1,600
Jan 14
2.00
Dec 13
1,650
Nov 13
2.50
Oct 13
1,700
Sep 13
3.00
Aug 13
1,750
Jul 13
3.50
Jun 13
1,800
May 13
4.00
Apr 13
1,850
Mar 13
4.50
Feb 13
1,900
Jan 13
5.00
SUSTAINABILITY
REPORT
(13487-A)
WORKPLACE
MARKETPLACE
COMMUNITY
ENVIRONMENT
OUR COMMITMENT TO SUSTAINABLE PRACTICES
Being a conscientious corporate citizen and
a key player in the reinsurance, takaful and
retakaful sectors, MNRB recognises the need
to go beyond mere profit. As such, we continue
to embed responsible and sustainable practices
into our total business operations within
the areas of the Workplace, Marketplace,
Community and Environment.
To this end, the Group undertakes sustainable
activities that focus on education, knowledge
building and human capital development. This
is to ensure a sustainable pool of talent in the
Group, the industry as well as the cultivation
of dynamic insurance and takaful professionals.
In this manner, we are not only helping develop
the local insurance and takaful industries but
also contributing towards our nation’s growth.
35
SUSTAINABILITY REPORT (CONT’D)
strengthening
our workplace
36
STRENGTHENING OUR WORKPLACE
As a key player in an industry that is
continuously evolving, MNRB has set its
sights on developing a solid pipeline of talent
and building a highly motivated workforce to
ensure we keep our competitive edge.
To this end, we continue to implement
sustainable workplace initiatives to further
strengthen the knowledge and the development
of our employees.
Training and Development Opportunities
To enhance the capabilities of our employees,
ensure they keep abreast of industry trends and
perform to the best of their abilities, we provide
them with a variety of training opportunities.
Through various training initiatives, we introduce
our employees to the fundamentals of the
Company’s business, the insurance and takaful
industries, the legal and regulatory environment,
as well as technical and soft skills training.
Our employees participate in workshops,
seminars and conferences, both locally and
overseas. All these initiatives help them to be the
best they can be, as well as bolstering their career
pathways and lending to their personal growth.
As part of the Group’s Top Talent Development
and Succession Planning Framework, several
customized in-house leadership programmes
were designed and developed.
Via the MNRB Leadership Enhancement
Programme (LEaP), 34 of our Senior
Management underwent over 20-learning days
spanning a period of 18 months and completed
the programme in June 2014. This programme
serves to strengthen the Group’s leadership team.
In addition, 47 of our Middle Management
completed the High Impact Group Leadership
(HIGH) programme in early 2014, designed
primarily to enhance personal and team
effectiveness.
For the past year, the MNRB Group had embarked
on Career Ladder. Its main purpose is to provide
a structured career and personal development
whilst climbing up one’s career ladder.
A skills competency matrix was developed for
each identified Job Family within the Group.
Varying degree of competencies for four job
levels consisting of Individual Contributor,
Functional Expert, Organisation Expert and
Industry Expert were mapped out depending on
their respective competency matrix. Individuals
The front-line managers’ programme also known
as Future Leader in You (FLY) was launched
in November 2014 and will develop over 60
potential future leaders throughout 2015. Both
programmes aim to enhance self-awareness and
confidence around one’s personal capabilities
and preferences in becoming a successful leader.
In continuation from the LEaP and HIGH
programs, leaders are being selected and sent to
relevant Leadership Development Programmes
conducted by top executive-education providers.
This type of learnings addresses specific
leadership competencies and will expose them
to best practices as well as provide them with
networking opportunities by accessing other
global leaders.
37
were then assessed according to their job family
and current professional level to determine their
competency gaps. Given these information,
Management and the individuals are able to
ascertain the development requirements.
The Career Ladder is still in its development
stage and has vast potential to enhance the
professional development of our employees in
a structured manner. It provides our employees
with the opportunity to be responsible and
take accountability of their development and
subsequently their professional career.
The Education Assistance Programme (EAP),
is a testament to the Group’s commitment
to strengthen our employees and to create
a continuous learning culture. This is also in
line with our aspirations in becoming a high
performing organization.
For Takaful IKHLAS’ agents, a variety of training
programmes continue to be rolled out to ensure
that our agents are of a high calibre, continue to
conduct themselves in a professional manner,
and have the necessary knowledge to serve our
customers effectively.
In addition, Takaful IKHLAS also implemented
a series of Shariah Compliance Activities (SCA)
comprising Shariah training and awareness
programmes for its agents and employees,
shariah research, risk management and audits.
An in-house training programme on Family
Takaful/Retakaful was organised by MNRB
in collaboration with our External Auditors.
38
Held in January 2015, the objective of the
programme was for the employees to have
better understanding of Family Takaful/
Retakaful business and increase their expertise,
particularly those handling Family Takaful/
Retakaful operations.
MNRB also observes mutual respect and
maintains a cordial relationship with the
National Union of Commercial Workers
to foster good employee relations in the
organisation. Such good rapport has allowed
relevant issues to be resolved amicably.
In addition to the above mentioned, MNRB,
in its efforts to gain the strength of its diverse
workforce, has also undertaken the following
initiatives:-
Employee Safety and Health Initiatives
•
Provides fair and equitable employment
terms regardless of gender, ethnicity or age;
•
Gives equal opportunities for career
advancement based on merit. This
is supported by a well-developed
performance appraisal system which is
link to rewards; and
•
Awarding representation of women in
management and senior management
positions.
We continue to implement a host of initiatives
throughout the length and breadth of the
organisation to keep our employees safe and
healthy and ensure they live a balanced lifestyle.
MNRB’s annual educational programme on
heart disease prevention, the Healthy Heart
Awareness Campaign, is a tie-up with the
Heart Foundation of Malaysia. This campaign
emphasises on the importance of preserving a
work-life balance and educates the employees
on all aspects of health especially pertaining
to the heart disease. This campaign comprises
of free health screening packages, health talks
and a bone health check to measure employees’
calcium intake and bone health.
elevating
the marketplace
39
ELEVATING THE MARKETPLACE
We are conscious of the responsibility we have
as a leading player in the reinsurance/takaful/
retakaful industries via our subsidiaries and
are committed to instilling a higher degree of
professionalism in the marketplace by helping
develop more industry professionals.
(13487-A)
At the same time, we are focused on enriching
the knowledge of underwriters to mitigate
exposure of their portfolios by according them
a flood risk analysis tool.
The Malaysian Flood Model (Re.Banjir)
Flooding is one of the most significant natural
perils in Malaysia in terms of frequency
and severity. Malaysian Re is committed to
developing a Malaysian flood risk analysis
tool, named Re.Banjir, for use by members of
Persatuan Insurans Am Malaysia (PIAM) and
the Malaysian Takaful Association (MTA).
Re.Banjir is based on a software developed
using the most detailed data and methodology
available. It includes rainfall and river gauge
data spanning many years. This data had been
processed and developed using state-of-the-art
hydrological solutions and programming tools.
Re.Banjir is able to simulate a range of potential
insurance losses from mild local flooding to floods
in excess of the 1-in-250-years return period.
Re.Banjir would allow Malaysian insurance and
takaful companies to estimate flood exposure
of their own portfolios. In addition, it would
also allow them to better understand the
effects of flooding on their portfolios, derive
the Probable Maximum Loss (PML) to their
portfolios for different return periods, quantify
the financial implications and enable them to
make informed decisions in relation to their
reinsurance programming.
Stage 1 of the Flood Model, which covers the
Klang Valley, was launched on 23 September
2013. Stage 2 of the Flood Model will cover
the whole of Peninsular Malaysia, while Stage 3
will cover Sabah & Sarawak. Stage 2, which was
initially expected to be completed in 2014, will
be launched in 2015 and the necessary work
for Stage 3 is expected to commence soon.
Market Training Programmes
Over the years, Malaysian Re and MRT have
implemented various training programmes on
insurance/reinsurance and takaful/retakaful for
staff of insurance/takaful companies to enhance
their professionalism within the industry. These
programmes serve as platforms for participants
to exchange ideas and update themselves with
the latest industry developments.
Malaysian Re annually conducts Technical
Courses in Fire Risk Assessment and Special/
Self Rating for underwriting and marketing
staff of insurance companies. At the end of
the training, these staff would be expected
to conduct risk surveys and determine fire
premium rates for certain types of risks.
In September 2014, the 2014 Programme for
Insurance Executive Development (PIED),
was organised for Malaysian Re’s domestic
and international clients in Kuala Lumpur. The
21st PIED covered four classes of insurance,
namely Fire, Marine Hull & Cargo, Engineering
and Liability. The programme was designed
for executives with at least two years’ working
experience in the insurance industry and who
were well versed with theoretical knowledge
of insurance in these four classes of insurance.
The programme adopted a highly interactive
approach, including illustrated case studies,
to enable the participants to appreciate the
practical application of what they have learnt.
In March 2015, the annual Cedants’ Seminar
was held by Malaysian Re in Ho Chi Minh City,
Vietnam. This seminar was specially tailored
to provide a technical and interactive session
for senior reinsurance officers in the insurance
industry to understand better the aspects
of “Run-off Management” and “Finance for
Reinsurance Underwriters.”
40
Enriching
Communities
41
ENRICHING COMMUNITIES
We believe in enriching the communities
around us to elevate lives and ensure a better
future for all. As such, our community efforts
focussed on equipping the younger generation
to become leaders of tomorrow through
scholarship programmes, seminars, workshops,
study camps and sponsorships. These efforts
are helping lay solid foundations for the
younger generation in order for them to attain
greater heights in the future.
MNRB Scholarship Programme
The MNRB Scholarship Programme is an
initiative to encourage and promote education
in the fields of Insurance/Takaful, Actuarial
Science and Risk Management. It also serves to
increase the pool of qualified and well-trained
professionals in the Malaysian insurance and
takaful industries.
The MNRB Scholarship Fund (the Fund) was
established in 1998 with an initial start-up fund
of RM1 million. Since its commencement, the
Fund has awarded a total of 389 scholarships
to deserving Malaysians to further their
undergraduate studies in both public and
private institutions of higher learning.
42
Since 2007, as part of our efforts and
commitment to develop young talent within
the insurance/takaful industry, MNRB via the
Fund had been collaborating with the Malaysian
Insurance Institute or MII to extend its
scholarship programme to working adults
within the insurance and takaful industries.
These scholarships are offered to staff of
insurance and takaful companies who are keen
to pursue professional insurance qualifications,
such as the Associateship of the MII (AMII) and
Diploma of the MII (DMII), on part-time basis.
Since the onset of our partnership with MII,
MNRB has offered a total of 191 scholarships.
The knowledge that our scholarships are helping
to produce more competent and qualified
professionals in the Malaysian insurance and
takaful industries shows our emphasis on
education and human capital development. It
reflects our unwavering commitment towards
the continuous growth of not only our people,
but also all those within the industry.
Program Lestari Cemerlang MNRB
Minggu Saham Amanah Malaysia (MSAM)
Petrosains Visit for Asnaf (Zakat recipients) Kids
The Program Lestari Cemerlang MNRB was
created in 2011 to show support to our local
education system. This programme is a twoyear partnership between MNRB Group and
its selected school with the aims of improving
the academic achievement through extra
educational activities and contribution of
learning facilities. The selected schools are
typically secondary schools located in rural
areas with the majority of students coming
from lower-income families.
MSAM event is one of the largest national
investment education events in Malaysia
organized by Permodalan Nasional Berhad
(PNB) with the objective to help educate
Malaysians on the importance of implementing
prudent ﬁnancial planning for the past 15 years.
A visit to Petrosains is an annual event
organised by Takaful IKHLAS for 30 asnaf
children between 7 to 12 years old for
them to experience science in the practical
way of learning. The children participate in
2 workshops at Petrosains during this visit and
at the end of the session, the Company hands
over school items and cash contribution to
assist them for the upcoming school term.
A total of RM60,000 is allocated for this 2-year
programme to cover various activities such as
additional tuition classes, motivational talks,
study camps and computer-aided learning
section in the school’s library. The MNRB Group
also contributed to the construction of the
school’s Drug Prevention Education Path (PPDa)
as well as to the upgrade of the school’s ‘surau’.
The MNRB Group has been a ﬁrm supporter
of MSAM activities and PNB’s initiative in
educating the Malaysian public on making
smart investments. The Group is also proud
to be in involved in MSAM activities and will
continue to support PNB’s noble cause.
In addition to this, MSAM is also an avenue for
the MNRB Group to share with the investors
and public, on its subsidiaries, businesses and
products. This helps to promote and enhance
MNRB’s image and presence as a public listed
company.
43
conserving
our environment
44
CONSERVING OUR ENVIRONMENT
Our sustainable efforts extend to undertaking
initiatives that seek to educate various target
audiences about environmental conservation
as well as mitigating the impact of our business
activities on the environment.
MNRB Ringgit-Savvy Programme
A supplement to the MSAM exhibition, the
MNRB Ringgit-Savvy Programme, which was
commenced in 2012, educates the primary and
secondary students on money management
and the importance of saving as well as
exposing the students on the creative thinking
process when undertaking investment and
wealth management activities.
MNRB invited the National Cultural Arts
Trainers to motivate students to be financially
savvy through environmental friendly activities.
The students were introduced to the concept
of recycling and taught to construct musical
instruments using recycled items.
Guest artistes were also invited to inspire and
share valuable tips on saving to the students.
Rehabilitation of the Raja Musa
Forest Reserve
As an effort to educate our employee on the
importance of conserving the environment,
MNRB participated in PIAM’s planting of
600 saplings on 1 hectare of the peat swamp
area under the Rehabilitation of the Raja
Musa Forest Reserve project. This initiative
has encouraged our employees to value the
environment and to protect it for the benefit of
our future generations to come.
This project is a collaboration with the Global
Environment Centre, an NGO active in addressing
environmental issue with tree planting at the peat
swamp forest as the main focus.
MOVING FORWARD
As MNRB continues to set its sights on growing
profitably in a responsible manner, we will continue
to ensure the delivery of impactful and tangible
sustainable activities in the areas of the Workplace,
Marketplace, Community and Environment.
Only then can we hope to truly create
sustainable value for the Group in a holistic
manner, reinforce our ties with all stakeholders
and stand out as a model for responsible
corporate behaviour.
45
EVENT
HIGHLIGHTS
TAKAFUL IKHLAS AGENCY
WORKFORCE FACILITATE
CUSTOMERS BUSINESS
TRANSACTIONS WITH
PLUG N PAY BY CIMB
8 APRIL 2014
Takaful IKHLAS provides Plug n Pay by CIMB
Bank (Plug n Pay) payment device facility to
Takaful IKHLAS agency workforce throughout
Malaysia in an effort to ease mobile payment
transactions with its customers.
TAKAFUL IKHLAS REGIONAL OFFICE IN KELANTAN
OPERATING FROM NEW PREMISES FOR THE
CONVENIENCE OF CUSTOMERS
19 APRIL 2014
After operating for 9 years in Kelantan, Takaful IKHLAS relocated to a new office. The Kelantan
Regional Office is the second asset bought by the Company subsequent to Sarawak Regional
Office in 2013. The ceremony was officiated by the Chairman of MNRB Group, Encik Sharkawi
bin Alis and attended by Takaful IKHLAS President & CEO, Ab Latiff Abu Bakar.
46
MINGGU SAHAM
AMANAH MALAYSIA 2014
1 9 –2 7 A P R I L 2 0 1 4
Both MNRB and its takaful subsidiary, Takaful
IKHLAS, supported Permodalan Nasional
Berhad’s (PNB) effort in educating Malaysians
on smart investment and prudent financial
management by being event partners at Minggu
Saham Amanah 2014 (MSAM 2014) held at Kota
Bharu, Kelantan. MNRB was once again one of
the ‘Rakan Utama’ and Takaful IKHLAS took on
the role as ‘Rakan Program Keagamaan’.
EVENT HIGHLIGHTS (CONT’D)
MNRB SCHOLARSHIP PRESENTATION
CEREMONY
4 JUNE 2014
MNRB awarded scholarships to thirty-four (34) students to pursue
their studies in various insurance-related courses under the MNRB
Scholarship Fund. En Mohd Din Merican, MNRB Holding’s President
& GCEO and also Member of the Board of Trustee of the MNRB
Scholarship Fund presented the scholarships at a ceremony held at
Bangunan Malaysian Re in Damansara Heights.
MNRB 41st ANNUAL GENERAL MEETING
18 SEPTEMBER 2014
At the Group’s 41st Annual General Meeting, shareholders were
informed that MNRB recorded total revenue of RM2.4 billion in
Financial Year Ended 31 March 2014 (FYE2014), as compared to
RM2.3 billion recorded in the preceding year. MNRB’s shareholders also
approved the declaration of a First and Final Single-Tier Dividend of
16.5% per ordinary share to be paid on 29 October 2014.
FITCH RATINGS AFFIRMS ‘A’ RATINGS OF
MALAYSIAN REINSURANCE BERHAD
29 OCTOBER 2014
Fitch Ratings affirmed Malaysian Reinsurance Berhad’s (Malaysian
Re) Insurer Financial Strength rating (IFS) at ‘A’. Fitch Ratings also
confirmed the Outlook is Stable. The affirmation reflects Malaysian
Re’s well-maintained healthy financial fundamentals and sustained
premium growth, coupled with strong capitalisation to support its
market franchise leadership in Malaysia.
A.M. BEST AFFIRMS MALAYSIAN RE’S
POSITIVE OUTLOOK
MALAYSIAN RE’S 24th ANNUAL GOLF
TOURNAMENT
2 SEPTEMBER 2014
Malaysian Re organised a friendly golf tournament for its clients and
business partners at Palm Garden Golf Club. 120 golfers participated
in this tournament.
12 DECEMBER 2014
A.M. Best Asia-Pacific Limited (A.M. Best) has affirmed Malaysian
Reinsurance Berhad’s (Malaysian Re) financial strength rating of A(Excellent) and the issuer credit rating of “a-”. A.M. Best also affirmed
that the outlooks for both ratings are positive.
47
STATEMENT ON
CORPORATE GOVERNANCE
•
The Malaysian Code on Corporate Governance 2012 (“the Code” or “MCCG 2012”); and
•
Bursa Malaysia Securities Berhad’s Main Market Listing Requirements (“Listing Requirements”).
MNRB’s policy is to implement these principles and best practices and to uphold high standards of business integrity in all activities undertaken by
the Group. This shall include a commitment to emulate good industry examples and to comply with guidelines and recommendations in the conduct
of business activities within the Group.
Set out below is a statement on how MNRB has applied the principles and complied with the Best Practices as prescribed under the MCCG 2012 and
the Listing Requirements during the financial year ended 31 March 2015.
BOARD OF DIRECTORS
BOARD COMPOSITION
The Board of MNRB is responsible for the proper stewardship of the
Group’s resources, the achievement of the Group’s objectives and good
corporate citizenship. It discharges this responsibility by complying with
all the relevant Acts and Regulations, including adopting the principles
and best practices of the MCCG 2012 and the Listing Requirements.
The Board comprises members with relevant expertise and experience
drawn from business, financial and technical fronts which strengthened
leadership and management.
The Board retains full and effective control over the Group’s affairs. This
includes the responsibility to determine the Group’s development and
overall strategic direction. Key matters such as the approval of quarterly
and annual results, major acquisitions and disposals, major capital
expenditures, budgets, business plans and succession planning for top
management, are reserved for the Board or its appointed committees
to deal with.
The meetings of the Board are chaired by the Non-Executive Chairman,
whose role is clearly separated from the role of the President & Group
Chief Executive Officer (“GCEO”), who ensures that Board policies and
decisions are implemented accordingly.
The Board currently comprises eight (8) members of whom seven
(7) members are Non-Executive Directors, including the Chairman.
Three (3) of these members are Independent Non-Executive Directors,
four (4) are Non-Independent Non-Executive Directors and one (1) is a
Non-Independent Executive Director (the GCEO).
As at the date of this report, the percentage of the Board composition
is as follows:Executive Director
(Also the GCEO)
1 out of 8
12.5%
Independent Non-Executive Directors
3 out of 8
37.5%
Non-Independent Non-Executive Directors
(including the Chairman)
4 out of 8
50%
By virtue of this composition, the Company is in compliance with
Paragraph 15.02 of the Listing Requirements which requires at least
two (2) directors or one-third (1/3) of the Board, whichever is the higher,
to be independent.
48
STATEMENT ON CORPORATE GOVERNANCE (CONT’D)
The Board takes cognizance of the recommendation to ensure that the
majority of its Directors are Independent Directors as well as to have
diversity in terms of gender, ethnicity and age in the Board.
The Board is committed to fulfilling the above but it faces constraints in
terms of the number of members that are to be on the Board. Under the
Company’s Articles of Association, the number of Directors shall not be
more than ten (10) and the Board currently comprises eight (8) Directors.
Notwithstanding this, the Board is making efforts to identify suitable
candidates who can assist in fulfilling the above recommendations.
The Board, following the resignation of Datuk Mohd Khalil Dato’ Mohd
Noor, Non-Independent Non-Executive Director, had appointed a lady
member on 1 June 2015 i.e. Hijah Arifakh Othman. This reflects the
Board's effort to observe the recommendations on diversity.
The Directors bring to the Board, a wide range of knowledge and
experience in relevant fields such as insurance and reinsurance,
accounting and finance, legal, economic, investment, international
business, banking and business operations. Therefore, all Directors have
the necessary depth to bring experience and judgment to bear on issues
of strategy, performance, resources and ethical standards. The Board
is of the opinion that its current composition and size constitute an
effective Board for the Company.
In accordance with the Listing Requirement, none of the members of the
Board holds more than five (5) directorships in listed companies.
The profiles of the Directors are provided on pages 22 to 25 of this
Annual Report.
BOARD CHARTER
The Board had formalised a Board Charter setting out the duties,
responsibilities and functions of the Board in accordance with the
principles of good corporate governance set by the regulatory
authorities. This Board Charter, if necessary, will be periodically
reviewed, to incorporate updates and enhancements to the existing
rules and regulations as and when necessary. The Board Charter is
available on the Company’s website at www.mnrb.com.my.
DIRECTORS’ CODE OF ETHICS
The Directors observe a code of ethics in accordance with the code of
conduct expected of Directors of a holding company of financial service
providers.
The Chairman is primarily responsible for the effective conduct and
workings of the Board. The Chairman leads the Board in the oversight
of the Management and in setting strategic business plans, goal and key
policies for the Group to ensure the sustainability of long-term returns.
STRATEGIES PROMOTING SUSTAINABILITY
The Board is committed to implementing responsible and sustainable
corporate practices. MNRB, as a conscientious corporate citizen,
has embraced good corporate responsibility practices in the areas of
stakeholder engagement, the community, workplace, marketplace
and environment. Every business decision the Group makes
pertaining to growth and profitability is consistent with its social and
environmental goals for sustainability. The corporate responsibility
initiatives undertaken by MNRB for the financial year ended
31 March 2015 are disclosed in the Sustainability Report of this Annual
Report. A summary of the Corporate Responsibility Activities is also
available on the Company’s website at www.mnrb.com.my.
DIRECTORS’ INDEPENDENCE AND INDEPENDENT
NON-EXECUTIVE DIRECTORS
The Independent Directors play a pivotal role in corporate
accountability and provide unbiased and independent views and
judgement in relation to the Board’s deliberation and decision-making
process. This is reflected in their membership of the various Board
Committees and attendance at meetings.
All the Independent Directors have demonstrated to the Board that
they have exercised impartial and independent judgment, protecting the
interests of the Group and the minority shareholders.
The Non-Executive Directors do not participate in the day-to-day
management of the Company and do not engage in any business dealing
or other relationships with the Company (other than in situations
permitted by the applicable regulations) in order that they remain truly
capable of exercising independent judgment and act in the best interests
of the Group and its shareholders. The Board is also satisfied that no
individual or group of individuals dominate the decision-making process
of the Board to ensure a balanced and objective consideration of issues,
thereby facilitating optimal decision-making.
49
DIRECTORS’ INDEPENDENCE POLICY
APPOINTMENTS TO THE BOARD
The Board has adopted a nine (9) years with maximum of twelve (12)
years policy for the tenure of Independent Non-Executive Directors,
which is implemented to ensure the continuous effective functioning
of the Board. Due to the nature of the Group’s businesses that are
considered specialised, the Board is of the view that the maximum
of twelve (12) years is reasonable considering there are significant
advantages to be gained from long-serving Directors who already
possess tremendous insight and knowledge of the Group’s/Company’s
business affairs.
The appointment of new Board members are considered and properly
evaluated by the Nomination Committee. Upon completing this process,
the Committee shall recommend the proposed appointment to the Board
for its deliberation and approval. In making these recommendations, the
Nomination Committee assesses the suitability of candidates, taking into
account the required mix of skills, knowledge, expertise and experience, as
well as professionalism, integrity including financial integrity, competencies
and other qualities, before recommending them to the Board for appointment.
The Board feels that the length of their service on the Board does not
in any way interfere with their exercise of independent judgment and
ability to act in the best interests of the Company.
In assessing independence, the Board evaluates the following criteria:•
The ability to challenge the assumptions, beliefs or viewpoints
of others with intelligent questioning, constructive and rigorous
debating, and dispassionate decision for the good of MNRB;
•
A willingness to stand-up and defend their own views, beliefs and
opinions for the ultimate good of MNRB; and
•
An understanding of MNRB’s business activities in order to
appropriately provide responses on the various strategic and
technical issues brought before the Board.
The Board considers that both Yusoff Yaacob and Megat Dziauddin
Megat Mahmud who had served as Independent Directors for more
than nine (9) years still meet the abovementioned criteria and that
their long tenure do not affect their assessment and responsibilities as
Independent Directors.
The Nomination Committee and Board will devote sufficient time to
review, deliberate and finalise the selection of Directors. In this aspect, the
Company Secretary will ensure that all the necessary information is obtained
and relevant legal and regulatory requirements are complied with. In this
aspect, the Board is also guided by the Group’s Fit and Proper Policy for Key
Responsible Persons.
The Nomination Committee conducts a yearly assessment on the suitability of
the present Directors under the abovementioned Fit and Proper Policy for Key
Responsible Persons. The fit and proper assessment for the Directors includes
self-declaration and vetting by the Company for the purpose of ensuring
that they are suitable to continue serving as Directors of the Company.
The following aspects would be considered by the Board in appointing/
reappointing Directors:•
Probity, personal integrity and reputation – the person must have key
qualities such as honesty, independence of mind, integrity, diligence
and fairness.
•
Competence and capability – the person must have the necessary skills,
ability and commitment to carry out the role.
•
Financial integrity – the person must manage their debts and financial
affairs prudently.
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
RE-APPOINTMENT AND RE-ELECTION OF DIRECTORS
In accordance with the best practices in corporate governance,
Megat Dziauddin Megat Mahmud continues to be the Senior Independent
Non-Executive Director of the Board to whom the concerns of shareholders
and stakeholders may be conveyed. Megat Dziauddin Megat Mahmud is
also the Chairman of the Audit Committee as well as the Remuneration
Committee.
He can be contacted at his email address at [email protected].
50
In accordance with Article 86 the Company’s Articles of Association,
one-third (1/3) of the Directors for the time being, or if their number
is not a multiple of three (3), then the number nearest to one-third
(1/3), shall retire from office at each Annual General Meeting (AGM).
All retiring Directors can offer themselves for re-election.
Directors who are appointed by the Board during the financial period
before the AGM are also required to retire from office and seek re-election
by the shareholders at the first opportunity after their appointment.
The Articles further provide that all Directors shall retire from office at
least once every three (3) years but shall be eligible for re-election.
ROLES AND RESPONSIBILITIES OF THE CHAIRMAN
AND GCEO
Pursuant to Section 129 of the Companies Act, 1965, the office of a
Director of over the age of seventy (70) years becomes vacant at every
AGM unless he is re-appointed by a resolution passed at such an AGM of
which no shorter notice than that required for the AGM has been given,
and the majority by which such resolution is passed is not less than
three-fourths (3/4) of all members present and voting at such an AGM.
The roles and responsibilities of the Chairman and the GCEO are separated
with a clear division of responsibilities as defined in the Board Charter.
At the 42nd AGM, two (2) Directors are due for re-election pursuant
to Article 86 and one (1) Director is due for re-election pursuant to
Article 92 of the Articles of Association. Two (2) Directors are due to
retire pursuant to Section 129 of the Companies Act, 1965. However,
one of them i.e. Dato’ Syed Ariff Fadzillah Syed Awalluddin, has
expressed his intention not to seek re-election.
This distinction is to provide better understanding and distribution of
jurisdictional responsibilities and accountabilities.
The Chairman leads the Board and is also responsible for its performance.
Together with the rest of the Board members, the Chairman sets the policy
framework and strategies to align the business activities driven by the
Senior Management Team with the Group’s vision and mission.
BOARD AND INDIVIDUAL DIRECTORS’ EFFECTIVENESS
The GCEO is mainly accountable for the day-to-day management to
ensure the smooth and effective running of the Group. He is also
responsible for the implementation of policies and Board decisions as
well as coordinating the development and implementation of business
corporate strategies.
The Board members undertake a formal and transparent process, upon
completion of every financial year, to assess the effectiveness of their
fellow directors, the Board as a whole and the performance of the
Executive Director.
The GCEO also ensures that the financial management practice is at
the highest level of integrity and transparency for the benefit of the
shareholders and the affairs of the Company be performed in an ethical
manner.
The Board and Individual Directors Evaluation is based on answers
to a detailed questionnaire. The evaluation form is distributed to all
Board members and covers topics which include, among others, the
responsibilities of the Board in relation to strategic plan, fiscal oversight,
risk management, Board composition and training needs.
Other areas which are assessed include the contribution of each and every
member of the Directors at meetings as well as meeting arrangements.
The Nomination Committee, having deliberated the findings of the
Board and Individual Directors Evaluation, will report to the Board the
results and highlight those matters that require further discussion and
direction by the Board.
The Board members’ directorship in companies other than the
Company and the Group, are well within the restriction of not more
than five (5) directorships in public listed companies as stated in the
Listing Requirements.
BOARD MEETINGS
The Board meeting dates for the ensuing financial year are scheduled in
advance before the end of the current financial year so that the Directors
are able to plan ahead and schedule these dates into their respective
meeting schedules.
The Board has scheduled meetings at least six (6) times a year, besides
the AGM. For the financial year ended 31 March 2015, the Board held
ten (10) meetings.
Technology and information technology are effectively used in Board
meetings and communications with the Board. Board meeting materials
are shared electronically and where required, Directors may participate
in meetings via video conference.
All Directors have complied with the requirement to attend at least fifty
percent (50%) of Board meetings held during the financial year ended
31 March 2015 pursuant to the Listing Requirements.
51
The details of attendance of the Directors at Board meetings held during
the financial year are as follows:-
Name of Director
No. of Meetings Percentage of
Attended
Attendance
The Board delegates the day-to-day management of the Company’s
business to the Senior Management Team, but reserves for its
consideration significant matters such as the following:•
Approval of financial results and quarterly announcements;
•
Material acquisition and disposals of assets;
•
Related party transactions of a material nature;
Sharkawi Alis
10/10
100%
Mohd Din Merican
10/10
100%
10/10
100%
P. Raveenderen
10/10
100%
•
Authority levels for core functions of the Company;
Dato’ Syed Ariff Fadzillah
Syed Awalluddin
10/10
100%
•
Yusoff Yaacob
10/10
100%
Corporate policies on investments (including the use of derivatives)
and risk management;
•
Outsourcing of core business functions;
•
Policies and Procedures;
•
Annual Budget; and
•
Capital Management Plan.
Datuk Mohd Khalil Dato’ Mohd Noor
8/10
80%
Paisol Ahmad
10/10
100%
-
-
(Appointed w.e.f. 1 June 2015)
At each scheduled Board meeting, there is a report on the six (6)
elements of responsibility of the Board under the MCCG 2012, namely:•
Reviewing/adoption of strategic and business plans for the Group;
•
Overseeing the conduct of the Group’s business to evaluate whether
the business is being properly managed;
•
Identifying principal risks and ensuring the implementation of
appropriate systems to manage the risks;
•
Succession planning, including appointing, training, fixing the
compensation of and where appropriate, replacing key management;
•
Developing and implementing an investor/shareholder relations
programme or communication policy for the Group; and
•
Reviewing the adequacy and integrity of the Group’s systems of
internal control and of management information.
There is also a financial and business review and discussion of the Group’s
quarterly performance including operating performance to date, against
the annual budget and business plan previously approved by the Board
for that year.
The respective Board Committee’s reports and recommendations are
also presented and discussed at Board meetings. All proceedings of
Board meetings are duly recorded in the minutes of each meeting and
signed minutes of each Board meeting are properly retained by the
Company Secretary.
52
DIRECTORS’ REMUNERATION
Remuneration Policy and Procedure
The Remuneration Committee recommends to the Board the appropriate
remuneration packages for the Directors as well as Executive Director and
the key senior officers in order to attract, motivate and retain the Directors,
Executive Director and the key senior officers of the necessary calibre and
quality as required by the Group. The Group’s remuneration policy is to
reward the Directors and the key senior officers competitively, taking into
account performance, market comparisons and competitive pressures in
the industry. Whilst not seeking to maintain a strict market position, the
Committee takes into account comparable roles in similar organisations
that may be the same in size, market sector or business complexity.
The Executive Director does not participate in any way in determining his
individual remuneration.
All Non-Executive Directors are paid Directors’ fees, which are
recommended by the Board and approved annually by the shareholders
at the AGM.
The details of the total remuneration of each Director of the Company
during the financial year ended 31 March 2015 are disclosed on
pages 154 and 155 of this Annual Report.
Indemnification of Directors and Officers
Directors and Officers are indemnified under a Directors’ and Officers’
Liability Insurance against any liability incurred by them in the discharge
of their duties while holding office as Directors and Officers of the
Company. The Directors and Officers shall not be indemnified where
there is any negligence, fraud, breach of duty or breach of trust proven
against them.
SUPPLY OF INFORMATION
The Company Secretary also serves notices to the Directors and all staff
on the closed periods for trading in MNRB shares, in accordance with
the black-out periods for dealing in the Company’s securities pursuant to
Chapter 14 of the Listing Requirements.
The Directors may, if necessary, obtain independent professional advice
from external consultants, at the Company’s expense.
Throughout their period in office, Directors are updated on the Group’s
business, the competitive and regulatory environments in which it
operates and other changes by way of written briefings and meetings
with the Senior Management staff.
All Directors have full and unrestricted access to all information
pertaining to the Group’s business affairs, whether as a full Board or in
their individual capacity, to enable them to discharge their duties.
CONFLICT OF INTEREST
Prior to Board meetings, every Director receives a notice of meeting,
the agenda and Board papers. Sufficient time is given to the Directors
to enable them to obtain further explanations, where necessary, so that
there will be full participation by Directors at the meeting. The Board
papers include the following:-
Directors are required to declare their respective shareholdings in the
Company and related companies and their interests in any contracts with
the Company or any of its related companies. Directors are also required
to declare their directorships in other companies and shall abstain from
any discussions and decision-making in relation to these companies.
•
Minutes of Board Committee meetings to keep the Board informed;
•
Reports by the various Board Committees on issues deliberated at
the respective Board Committee meetings;
DIRECTORS’ TRAINING
•
Financial Statements Report on the Group and subsidiaries’
performance; and
•
Compliance reports.
Proper guidelines have been given by the Board pertaining to the
content, presentation style and delivery of papers to the Board for each
Board meeting to ensure adequate information is disseminated to the
Directors.
All Directors have direct access to the members of the Senior
Management Team and the services of the Company Secretary to enable
them to discharge their duties effectively.
The Company Secretary attends and ensures that all Board meetings
are properly convened, and that accurate and proper record of the
proceedings and resolutions passed are taken and maintained in the
statutory register at the registered office of the Company. The Company
Secretary works closely with Management to ensure that there are
timely and appropriate information flows within and to the Board and
Board Committees, and between the Non-Executive Directors and
Management.
The Company acknowledges that continuous education is vital for
the Board members to gain insight into the regulatory updates and
market developments to enhance the Directors’ skills and knowledge in
discharging their responsibilities.
All new Directors are required to undergo an induction programme
whereby they receive information about the Group, the formal
statement of the Board’s role, the powers that have been delegated to
the Company’s Senior Management and Management committees as
well as the latest financial information about the Group. This is to enable
them to contribute effectively from the outset of their appointment.
With the repeal of Practice Note 15 on Continuing Education Programme
by Bursa Securities, the continuous training needs of the Directors are
now vested in the Board. During the financial year, all Directors attended
various seminars and programmes to strengthen their skills set and
knowledge in order to effectively discharge their responsibilities, as well
as to acquire sound understanding of current issues and developments in
the financial and business environment.
Pursuant to the requirements of Bursa Malaysia, a newly appointed
Director is required to attend the Mandatory Accreditation Programme
(“MAP”) and obtain a certificate from a programme organizer approved
by Bursa Malaysia. Hijah Arifakh Othman had attended MAP on
29 July 2015 and 30 July 2015.
53
The Company Secretary facilitates the organization of internal training
programmes and the Directors’ participation in external programmes.
The Company Secretary keeps a complete record of the training received
or attended by the Directors.
BOARD COMMITTEES
The following are some of the programmes and seminars attended by the
Board members during the financial year:-
•
Audit Committee;
•
Nomination Committee;
•
Remuneration Committee;
•
Risk Management Committee; and
•
Investment Committee.
•
•
•
Corporate Governance
- Great Companies Deserve Great Boards and Great Boards
Leading the Way for Highly Innovative Companies;
- Nominating Committee Programme;
- Recovery and Resolution Plan in Financial Institutions: Board
Leading the Way; and
- Lean Management System.
Reinsurance Business
- The Impact of Science and Technology on the Insurance Industry;
- Reinsurance Overview;
-20th Indonesian Rendezvous – Robust Indonesian Reinsurance
Company Forthcoming the Asean Economic Community;
- Overview of Compulsory Automobile Liability Insurance
(“CALI”) in Japan; and
- Detariffication and Actuarial Liabilities for General and Family
Takaful Business and Responsibilities of the Board on Actuarial
Matters.
Economics, Finance, Capital Market and Exchange
- Global Competitiveness and the Malaysian Experience;
- Islamic Corporate Banking: Products & Instruments; and
- Anti-Money Laundering and Anti-Terrorism Financing.
The Board has delegated specific responsibilities to five (5) Board
Committees, as follows:-
These Board Committees have their respective Terms of Reference,
which clearly define their duties and obligations in assisting and
supporting the Board. The ultimate responsibility for the final decision
on all matters lies with the entire Board.
Audit Committee
The Audit Committee comprises five (5) members of whom three (3) are
Independent Non-Executive Directors and two (2) are Non-Independent
Non-Executive Director. Two (2) members of the Committee are qualified
Accountants and members of the Malaysian Institute of Accountants.
•
Chairman (Senior Independent Non-Executive Director)
•
(Independent Non-Executive Director)
•
P. Raveenderen
(Non-Independent Non-Executive Director)
All Non-Executive Directors are paid Directors’ fees which have
been approved by the shareholders at the AGM based on the Board’s
recommendation.
•
Paisol Ahmad
The remuneration structure of Non-Executive Directors of the Company
is as follows:-
•
Yusoff Yaacob
•
Fees for duties as Director and as member of the various committees
of the Board as well as additional fees for undertaking responsibilities
as Chairman of the Board and the various Board Committees.
•
Meeting allowance for each meeting attended.
The Committee’s Terms of Reference include the review and deliberation
of the Financial Statements of the Company and the Group, findings
of the External and Internal Auditors, any related party transactions
and any conflict of interest situation within the Group, as well as
making recommendations to the Board pertaining to the appointment/
re-appointment of External Auditors.
DIRECTORS’ FEES
The fees for Non-Executive Directors are recommended by the Board
to the shareholders after deliberating the recommendations by the
Remuneration Committee. The meeting allowance for all Non-Executive
Directors is also determined by the Board.
54
In order to encourage a greater exchange of free and honest views and
opinions between the Audit Committee and External Auditors, meeting
between them, without the executive board member and the Senior
Management Team being present, was held during the year.
The Directors are able to devote full commitment to their roles and
responsibilities as Directors of the Company, as no directors hold more
than five directorships in other public listed companies.
The Committee met six (6) times during the financial year.
The Audit Committee’s duties, as spelt-out in the Audit Committee Report
on pages 59 and 60 of this Annual Report, include primarily, the duties as
spelt out in paragraph 15.12 of the Listing Requirements.
In accordance with prescribed Corporate Governance best practices,
the Nomination Committee undertook these key activities during the
financial year:-
The Committee met six (6) times during the financial year.
•
Assessed the performance of key Senior Management staff prior to
the renewal of their contracts;
•
Assessed and made recommendations on the re-election of
Directors retiring by rotation at the 42nd AGM;
•
Reviewed the results of the Annual Assessment on the Effectiveness
of the Board and the Individual Board members, including the
assessment on the independence of the Independent Directors;
The Nomination Committee comprises five (5) Non-Executive Directors,
the majority of whom are independent. The Committee is chaired by
an Independent Non-Executive Director in compliance with Paragraph
15.08A(1) of the Listing Requirements.
The members of the Committee are:•
Chairman (Independent Non-Executive Director)
•
Assessed the training needs of the Directors and ensured that the
necessary training was being provided by the Company;
•
Sharkawi Alis
•
•
Yusoff Yaacob
Assessed the Directors and key Senior Management compliance
with the fit and proper criteria approved by the Board which are
consistent with the Financial Services Act, 2013 and the Policy
Document on Fit and Proper Criteria;
•
•
Paisol Ahmad
Assessed and made recommendations on the appointment of new
Director; and
•
Training required by Board members.
•
(Senior Independent Non-Executive Director)
The Committee’s objectives are to establish a documented formal and
transparent procedure for the appointment of Directors and key senior
officers as well as to assess the effectiveness of Directors, the Board as
a whole and the various committees of the Board on an ongoing basis.
The Committee regularly reviews the profile of the required mix of skills
and attributes of the Directors and is satisfied that the Board has the
appropriate balance of expertise and ability to discharge its responsibilities.
All assessments and evaluations carried out by the Committee are properly
documented and kept by the Company Secretary.
The Committee, following its recent annual assessment review, is
satisfied that the size of the MNRB Board is optimum and that there is the
appropriate mix of knowledge, skills, attributes and core competencies in
the composition of the Board. The Committee is satisfied that all the
members of the Board are suitably qualified to hold their positions as
Directors of MNRB in view of their respective academic and professional
qualifications, experience, knowledge and personal qualities.
The Board has established a Remuneration Committee comprising
three (3) Non-Executive Directors.
Chairman (Senior Independent Non-Executive Director)
•
•
Yusoff Yaacob
55
The Committee’s primary objective is to establish a formal and transparent
procedure for developing a remuneration policy for Directors, Executive
Directors and key senior officers and to ensure that their compensation
is competitive and consistent with the Company’s culture, objectives
and strategies. Additionally, the Committee is also responsible for
recommending to the Board the specific remuneration packages for
Directors, Executive Directors and key senior officers to ensure that they
commensurate with the scope of responsibilities held, and as well as to
review and recommend changes to the Board whenever necessary.
The Board as a whole will determine the remuneration of the
Non-Executive Directors. Each individual Director will abstain from the
Board discussion and decision on his own remuneration.
Yusoff Yaacob
Chairman (Independent Non-Executive Director)
•
P. Raveenderen
•
The RMCB is responsible for:•
Reviewing and recommending risk management strategies, policies
and risk tolerance for the Board’s approval;
•
Reviewing and assessing the adequacy of risk management policies
and framework for identifying, measuring, monitoring and controlling
risks as well as the extent to which these are operating effectively;
•
Ensuring adequate infrastructure, resources and systems are in
place for effective risk management i.e. ensuring that the staff
responsible for implementing risk management systems perform
those duties independently of the Group’s risk taking activities; and
Reviewing the management’s periodic reports on risk exposure, risk
portfolio composition and risk management activities.
The Committee met seven (7) times during the financial year.
During the year, the Remuneration Committee had reviewed and
deliberated the following matters:•
The performance of the Balanced Scorecard/KPI for the bonus and
performance of staff for the financial year ended 31 March 2015;
•
The proposed Balanced Scorecard/KPI and linkages to annual
increment and bonus for financial year ending 31 March 2016;
•
The starting salaries for all new graduates joining the MNRB Group
of Companies;
•
•
The existing Anniversary Increment policy for new staff;
The Committee met four (4) times during the financial year.
•
Travel Guidelines for the MNRB Group;
•
Directors’ Fees and Directors’ meeting allowance; and
•
The Education Assistance Programme for staff to further study.
The Investment Committee, comprising two (2) Non-Independent
Non-Executive Directors, one (1) Independent Non-Executive Director
and one (1) Non-Independent Executive Director, examines strategic
investment proposals and makes decisions to optimise the Group’s
returns on its investment activities. The members of the Committee are:-
The Board believes that an effective Risk Management Framework is
essential for the Group in its quest to achieve its corporate objectives,
continued profitability and enhancement of shareholders’ value in
today’s rapidly changing market environment.
With this in mind, the Board had established a dedicated Board
Committee known as the Risk Management Committee of the Board
(“RMCB”) which oversees the implementation of an enterprise-wide risk
management framework. The Committee comprises three (3) members
and is chaired by an Independent Non-Executive Director.
•
Chairman (Non-Independent Non-Executive Director)
•
(Senior Independent Non-Executive Director)
•
Paisol Ahmad
•
Mohd Din Merican
(Non-Independent Executive Director)
The Committee met four (4) times during the financial year.
56
WHISTLEBLOWING
EFFECTIVE COMMUNICATION WITH SHAREHOLDERS
The Group is committed to carrying out its business in accordance with
the highest standards of professionalism, honesty, integrity and ethics.
Accordingly, the Group has established a Whistleblowing Policy with the
following objectives:-
The Group recognises the paramount importance of shareholder
communication as it is a key component to upholding the principles and
best practices of corporate governance for the Group.
•
To help develop a culture of accountability and integrity within the
Group;
•
To provide a safe and confidential avenue for all employees,
external parties and other stakeholders to raise concerns about any
misconduct;
•
To reassure whistleblowers that they will be protected from
detrimental action or unfair treatment for disclosing concerns in good
faith; and
•
To deter wrongdoing and promote standards of good corporate
practices.
This Policy governs the disclosures, reporting and investigation of
misconduct within the Group as well as the protection offered to the
persons making those disclosures (“whistleblowers”) from detrimental
action in accordance with Act 711, Whistleblower Protection Act, 2010.
It is the Group’s policy to encourage its employees and external
parties to disclose any misconduct, and to fully investigate reports and
disclosures of such misconduct, as well as to provide the whistleblower
protection in terms of confidentiality of information, and to safeguard
the whistleblower from any act of interference that may be detrimental
to the whistleblower. The Group assures whistleblowers that all reports
will be treated with strict confidentiality and upon verification of genuine
cases, prompt investigation will be carried out.
The official avenues for disclosure by the whistleblower are via any of the
following recipients:•
The Chairman;
•
The Chairman of the Audit Committee of MNRB Holdings Berhad; or
•
The GCEO.
The disclosure of misconduct or wrongdoing shall be made in writing via
email to [email protected]. The Policy and relevant form can be
accessed at the Company's website www.mnrb.com.my.
In maintaining the commitment to communicate effectively with
shareholders, the Group adopts the practice of comprehensive, timely
and continuing disclosure of information to its shareholders as well as to
the investing public. This practice of disclosure of information is not just
established to comply with the requirements of the Listing Requirements
pertaining to continuing disclosure, but to align with the best practices
as recommended in the Code with regard to strengthening engagement
and communication with shareholders.
The Group’s Annual Report is the main channel of communication
between the Group and its stakeholders. The Annual Report
communicates comprehensive information of the financial results and
activities undertaken by the Group. As a listed corporation, the contents
and disclosure requirements of the Annual Report are also governed by
the Listing Requirements.
The Company disseminates its Annual Report to its shareholders either
in hard copy or in CD-ROM media. All information to shareholders is
available electronically in the Company’s website (www.mnrb.com.my) as
soon as it is announced or published.
The AGM is the principal forum for dialogue with shareholders. The
Company’s AGM is normally well attended as it provides the shareholders
direct access to the Board as well as give them an opportunity to
participate effectively and to vote.
Notice of the AGM and the Annual Report are sent out to shareholders
at least twenty-one (21) days before the date of the meeting.
Besides the normal agenda for the AGM, the Chairman of the Group
presents a comprehensive and concise review of the Group’s financial
performance and the value created for shareholders. This review is
supported by the presentation of key points and key financial figures.
The Chairman also presents the progress and performance of the Group
in the Annual Report and provides opportunities for shareholders to raise
questions pertaining to the business activities of the Group. All Directors
are available to provide responses to questions from the shareholders
during this meeting.
Each item of Special Business included in the notice of the meeting
will be accompanied by an explanatory statement and/or Circular to
Shareholders to facilitate full understanding and evaluation of the issues
involved.
57
Apart from the abovementioned engagement with shareholders
through annual reports and general meetings, the Group also makes
announcements of its quarterly results and other announcements to
Bursa Malaysia to provide stakeholders with key information that affects
their decision-making, thus enhancing the level of transparency. To
promote wider publicity and dissemination of information that is made
public, the Group also issues press releases to the Media on all significant
corporate developments and business initiatives to keep the investment
community and all stakeholders updated on the progress and strategic
development of the business of the Group.
position and prospects. The Audit Committee assists the Board in
scrutinising information for disclosure to ensure accuracy, adequacy
and completeness. The Directors are responsible for ensuring that the
accounting records are kept properly and that the Group’s financial
statements are prepared in accordance with applicable approved
accounting standards in Malaysia. The Statement by Directors pursuant
to Section 169 of the Companies Act, 1965 is set out on page 116 of this
Annual Report.
Internal Control and Risk Management
POLL VOTING
Information on the Group’s internal control and risk management is
presented in the Group’s Statement on Risk Management and Internal
Control as set out on pages 61 to 63 of this Annual Report.
The Chairman, at the commencement of a general meeting, informs
shareholders of their right to vote by poll. This is in line with MNRB’s
Articles of Association.
Relationship with Auditors
Poll voting will be adopted if there is/are substantive resolution(s) to be
put forth for shareholders’ approval at the general meetings.
Polling slips are prepared in the event shareholders request for poll
voting on any resolution tabled at the general meeting.
Information on the role of the Audit Committee in relation to the External
Auditors may be found in the Audit Committee Report set out in pages
59 and 60. The Group has always maintained a close and transparent
relationship with its auditors in seeking professional advice and ensuring
compliance with the approved accounting standards.
Management’s Accountability
INVESTOR RELATIONS
As part of the initiatives in developing and implementing an investor
relations programme, regular briefings are held between the Group with
analysts and investors.
Presentations based on permissible disclosures are made to explain
the Group’s performance and major development programmes.
Price-sensitive information about the Group is however, not disclosed
at these briefings until after the prescribed announcement to Bursa
Securities has been made.
MNRB also maintains a website, which shareholders and the public
in general can access to gain information about the Group at
www.mnrb.com.my.
The Group has an organisational structure showing all reporting lines as
well as clearly documented job descriptions for all its Management and
Executive employees and formal performance appraisals are done on a
periodic basis.
Authority limits, as approved by the Board, are clearly established and
made available to all employees.
STATEMENT ON COMPLIANCE WITH THE BEST PRACTICES
OF THE CODE
The Group is committed to achieving high standards of corporate
governance and the highest level of integrity and ethical standards in
all its business dealings. The Board will continuously strive towards
adopting all the Principles and Best Practices as set out in the MCCG
2012, the CG Guide and the Listing Requirements.
ACCOUNTABILITY AND AUDIT
Financial Reporting
For financial reporting through interim quarterly reports to Bursa
Malaysia and the Annual Report to shareholders, the Directors
have a responsibility to present a fair assessment of the Group’s
58
This Statement on Corporate Governance is made in accordance with the
resolution of the Board of Directors dated 31 July 2015.
AUDIT COMMITTEE
REPORT
MEMBERS OF THE COMMITTEE
TERMS OF REFERENCE
Megat Dziauddin bin Megat Mahmud
(Chairman & Senior Independent Non-Executive Director)
The main duties of the Committee are:-
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin
Yusoff bin Yaacob
P. Raveenderen
Paisol Ahmad
1. To review and approve the annual audit plan, audit charter, budget,
scope of audit procedures, audit programmes and reports of
the internal auditors including actions taken on internal audit
recommendations;
2. To review the adequacy of the scope, functions, competency
and resources of the internal audit functions and that it has the
necessary authority to carry out its work;
3. To review annually with the external auditors, the audit plan and the
report including the coordination between the internal and external
auditors to prevent duplication of effort;
MEMBERSHIP
4. To review the quarterly results and year-end financial statements
before approval by the Board including the assistance given by the
Company’s officers to the auditors;
The Audit Committee shall be appointed by the Board and comprises at
least three (3) members of whom all members must be Non-Executive
Directors and the majority shall be Independent Directors. At least one
member of the Committee must be a member of the Malaysian Institute
of Accountants or eligible for membership.
5. To recommend to the Board the nomination of the external auditors
after evaluating their performance and to consider the auditors’
remuneration and any questions of resignation or dismissal;
The members of the Audit Committee must elect a Chairman among
themselves who is an Independent Director.
6. To review the external auditors’ management letter and
Management’s response thereto;
The term of office shall be reviewed no less than once in every two (2) years.
7. To review the disclosure statements in the annual report to be in
compliance with Bursa Malaysia requirements;
AUTHORITY
8. To review any related-party transactions and any conflict of interests
situation that may arise within the Group; and
The Committee is authorised by the Board to undertake any activity
within its terms of reference and must have unlimited access to all
information and documents relevant to its activities, to both the internal
and external auditors, as well as to all employees of the Group.
9. To review the allocation of options pursuant to the Company’s
Employees’ Share Option Scheme.
MEETINGS
It must be able to convene meetings with the external auditors, the
internal auditors or both, excluding the attendance of other directors
and employees of the listed issuer, whenever deemed necessary.
It must also have the authority to obtain independent legal or other
professional advice as it considers necessary.
A quorum shall consist of at least two-thirds of the members with
independent directors forming the majority.
A minimum of four meetings per year is planned. Additional meetings
may be called at any time if so requested by any committee member, the
Management, the internal or external auditors.
The Chairman of the Committee shall invite any person to be in
attendance to assist the committee in its deliberations.
59
AUDIT COMMITTEE REPORT (CONT’D)
The minutes of the meetings shall be circulated to the Board after
confirmation.
The Secretary to the Committee shall be the Company Secretary.
For the financial year under review, a total of 6 Audit Committee
Meetings were held. The details of attendance of the Audit Committee
members were as follows:Name of Audit
Committee member
A summary of its activities for the year is as follows:1. Conducted audits of the various business portfolios/departments of
the Group;
2. Conducted follow-up audits on the implementation of the Audit
Committees’ recommendations and Management’s actions taken to
improve on issues identified during the audits; and
6/6
ii.
6/6
iii. Yusoff Yaacob
6/6
iv. P. Raveenderen
6/6
v.
6/6
The main activities that took place during the meetings were:1. Reviewed the quarterly results and year-end financial statements
prior to approval by the Board;
2. Considered and recommended to the Board the nomination of the
external auditors for the financial year ended 31 March 2015;
3. Reviewed the external auditors’ audit plan for the year ended
31 March 2015;
4. Reviewed the external auditors’ management letter and
Management’s response thereto. Meetings without the presence
of the Management were also held with the external auditors.
5. Reviewed the disclosure statements in the annual report to be in
compliance with Bursa Malaysia requirements;
6. Considered and recommended to the Board the payment of final
dividends;
7. Reviewed the results of the internal audits carried out in the year
and the adequacy of actions taken by Management; and
8. Reviewed the Internal Audit Department’s annual audit plan for the
year ended 31 March 2015.
In respect of the Company’s Employees’ Share Option Scheme, there was
no allocation of options in the year for the Audit Committee to review.
60
The Internal Audit Department was set up in-house on January 2, 1991.
It is independent of the activities or operations of the operating units.
For the financial year ended March 31, 2015, the total costs incurred for
the Group Internal Audit function were RM2,413,000.
No. of Meetings
Attended
i.
Paisol Ahmad
INTERNAL AUDIT DEPARTMENT
3. Prepared annual audit plans and budget for the Audit Committees’
consideration.
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
RESPONSIBILITY
RISK MANAGEMENT AND INTERNAL CONTROL STRUCTURE
To further complement the enterprise risk management framework
of the Group, dedicated Management Committees known as
the Operational Risk Management Committee (“ORMC”) at the
operational level were also established to assist the RMCBs in
implementing the risk management framework and ensuring
inculcation of a proactive risk management culture on an
enterprise-wide basis. A Risk Management & Compliance Division
was formed to provide the infrastructure and carry out the risk
management process.
•
The Audit Committee (“AC”) complements the role of the Board
by providing an independent assessment of the adequacy and
reliability of the risk management process, and compliance with
the risk policies and regulatory guidelines. The AC is assisted by an
independent Internal Audit Department in performing its role.
•
The Group Chief Risk Management and Compliance Officer
(“GCRMCO”) oversees the risk governance across the Group. The
risk governance structure is aligned across the subsidiaries of the
Group through the adoption of the Enterprise Risk Management
Framework and structures in order to embed and enhance the risk
management & compliance culture.
•
The Group adopts the three lines of Defence model: Operating
Units, Management Oversight and Independent Assurance. Within
each entity, Heads of Divisions/Departments are responsible
for managing risks and system of internal controls within their
respective functions on day-to-day basis, as well as escalating
significant potential risks to the respective ORMC via the risk
management function. The risk management and compliance
function assumes overall responsibility for the implementation of the
Risk Management Framework and its continued application in the
respective entities. Internal Audit provides the AC with reasonable
independent assurance on the effectiveness and efficiency of the
Framework as part of Group’s system of internal controls.
The key features that the Board has established in reviewing the
adequacy and effectiveness of the risk management and internal control
system include the following:Enterprise Risk Management Framework
•
The Board of MNRB believes that an effective enterprise risk
management framework and strong internal control system is
essential to the Group in its quest to achieve its corporate objectives,
especially on the continued profitability and enhancement of
shareholders’ value in today’s rapidly changing market environment.
•
With this in mind, the Board had established dedicated Board
Committees known as the Risk Management Committee of the
Board (“RMCB”) at the holding company and each of its subsidiary
companies to oversee the implementation of an enterprise-wide risk
management framework in each company. As part of risk governance
process, Chairman of the respective RMCBs had provided their
confirmation to the Chairman of MNRB that the necessary risk
management framework had been put in place and it is operating
effectively to manage the risks of the company for the whole of the
financial year ended 31 March, 2015.
•
The Board acknowledges that it is responsible to oversee the
implementation of the Group’s risk management and internal control
system and for reviewing its effectiveness, adequacy and integrity.
It recognises that risk management is a continuous process, designed to
manage the risk of failure to achieve the Group’s business objectives.
In pursuing these objectives, internal control system can only provide
reasonable and not absolute assurance against material misstatement
or loss.
The Board has established a robust process for identifying, evaluating
and managing the significant risks faced by the Group (Enterprise
Risk Management Framework). These processes have been in place
for the whole of the financial year ended 31 March, 2015 and have
continued up to the date on which this Statement was approved. The
Board is confident that these processes provide reasonable assurance
on the effectiveness and efficiency of both the strategic, financial and
operational aspects of the Group. The process is regularly reviewed
by the Board and is guided by the Statement on Risk Management &
Internal Control: Guidelines for Directors of Listed Issuers.
Internal Audit Function
•
The internal audit function of the Company and its subsidiaries
(via outsourcing arrangements) is undertaken by the Internal Audit
Department at the holding company level. The department has
a functional reporting line to the respective ACs set up at each
company level.
•
The Internal Audit Department performs regular reviews of the
business processes of the Group in an effort to assess the adequacy
and effectiveness of internal controls and to highlight significant
risks impacting the Group.
61
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)
•
•
Where applicable, it provides recommendations to improve on
the effectiveness of risk management, control and governance
processes. Management will accordingly follow through and review
the resolution status of recommendations made. Audit reviews are
carried out on units that are identified on a risk-based approach,
in the context of the Group’s evolving business and its regulatory
environment, while also taking into consideration inputs of Senior
Management and the Board.
The AC meets on a scheduled basis to review matters identified
in reports prepared by Internal Audit, the External Auditors, and
Regulatory Authorities and further evaluates the effectiveness
and adequacy of the Group’s internal control system. The AC has
active oversight on Internal Audit’s independence, scope of work
and resources. It also reviews the scope of the annual audit plan and
frequency of the internal audit activities. The activities undertaken by
the AC during the year are highlighted in the Audit Committee Report.
•
Annual business plans are submitted to the Board for approval.
•
A detailed budgeting process has been implemented in the Group
where each department prepares a budget for the upcoming
financial year for the approval of the Board. The budget is monitored
and major variances are followed-up by the respective Management.
•
Shariah Committees have also been established at each of the
takaful and retakaful subsidiary companies to provide oversight on
Shariah related matters.
•
Every employee of the Group is contractually bound to observe
prescribed standards of business ethics in their conduct at work
and their relationships with external parties such as customers
and suppliers. The Group expects each employee to conduct him/
herself with integrity and objectivity and not to place him/herself
in a position of conflict of interest. The competence of personnel is
maintained through a structured recruitment process, a performance
measurement and rewarding system and a wide variety of training
and development programmes.
•
MNRB holds a 20% effective equity interest in its associated
company, Labuan Reinsurance (L) Limited (“Labuan Re”) through its
subsidiary, Malaysian Reinsurance Berhad and is represented on the
Board of Labuan Re by two (2) of its directors. It also has a 40%
effective equity interest in another associated company, Motordata
Research Consortium Sdn. Bhd. (“MRC”) and is similarly represented
on the Board of MRC by two (2) of its directors.
Other Key Elements of Internal Control
•
The Group has a well-defined organisational structure with clear
lines of responsibility and accountability.
•
The Board has also adopted communication policies to ensure that
all decisions made are communicated promptly to staff of all levels
within the Group and vice versa where feedbacks and suggestions
on improvements could be communicated to the Board and
Management.
•
The Underwriting Guidelines of the Reinsurance, Takaful and
Retakaful subsidiary companies have been put in place to manage
risks that are being underwritten.
•
•
•
Reinsurance and retrotakaful programs exist where there is a spread
of reinsurers with acceptable ratings from accredited agencies. The
securities of these reinsurers and retakaful companies are reviewed
on an annual basis.
Departmental manuals are available within the Group and these
set out policies and procedures for day-to-day operations and act
as guidance to employees on the necessary steps to be taken in a
given set of circumstances. The manuals enable tasks to be carried
out with minimal supervision. It also specifies relevant authority
limits to be complied with by each level of management within the
subsidiaries. There is an ongoing process in place currently to review
and update the manuals, where applicable.
The Group’s financial systems record all transactions to produce
performance reports that are submitted to the respective
Management within internally stipulated timelines.
62
Other Committees of the Board
Apart from the RMCB and the AC, other Board Committees have also
been established at both the Group and subsidiary levels to assist the
Board in performing its oversight function. They consist of the following:•
The Investment Committee, which is responsible for reviewing and
approving investment proposals, as well as monitoring the Group’s
investment portfolio to ensure conformity with overall business
objectives and statutory requirements.
•
The Nomination Committee, which is responsible to recommend
to the Board the appointment of directors, CEOs and Board
appointees. The Nomination Committee is also responsible for the
annual assessment of the effectiveness of the Board.
•
The Remuneration Committee, which is responsible to recommend
the appropriate remuneration for the directors, CEOs and Board
appointees.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)
Assurance from Management
The Board has also received full assurance from the President & Group
Chief Executive Officer (“GCEO”) and the Group Chief Financial Officer
(“GCFO”) that the Group’s risk management and internal control system
are operating adequately and effectively, in all material respects, based
on the risk management framework adopted by the Group. To facilitate
this process, the Group undertakes a risk assurance process to ensure
that the risk management and internal control system are adequate and
effective at all level of the organisation.
Review of the Statement by External Auditors
The external auditors have reviewed this Statement on Risk Management
and Internal Control for inclusion in the annual report for the financial
year ended 31 March 2015.
The external auditors conducted the review in accordance with the
“Recommended Practice Guide 5 (Revised): Guidance for Auditors on
Engagements to Report on the Statement on Risk Management and
Internal Control included in the Annual Report” (“RPG 5 (Revised)”)
issued by the Malaysian Institute of Accountants. The review has been
conducted to assess whether the Statement on Risk Management and
Internal Control is both supported by the documentation prepared by or
for the Directors and appropriately reflects the processes the Directors
had adopted in reviewing the adequacy and integrity of the system of
internal controls of the Group.
RPG 5 (Revised) does not require the external auditors to consider
whether the Directors’ Statement on Risk Management and Internal
Control covers all risks and controls, or to form an opinion on the
effectiveness of the Group’s risk and control procedures. RPG 5 (Revised)
also does not require the external auditors to consider whether the
processes described to deal with material internal control aspects of any
significant matters disclosed in the annual report will, in fact, mitigate
the risks identified or remedy the potential problems.
Based on their review, the external auditors have reported to the Board
that nothing had come to their attention that causes them to believe that
the Statement on Risk Management and Internal Control is inconsistent
with their understanding of the processes the Board has adopted in
the review of the adequacy and integrity of the risk management and
internal control of the Group.
63
STATEMENT OF DIRECTORS’ RESPONSIBILITY
IN RELATION TO THE FINANCIAL STATEMENTS MNRB HOLDINGS BERHAD
pursuant to paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
64
ADDITIONAL COMPLIANCE
INFORMATION
The information set out below is disclosed in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities):(1) Utilisations of proceeds raised from corporate proposal
There was no corporate proposal and proceeds raised by the Company during the financial year ended 31 March 2015.
(2) Share buy-back
There was no proposal by the Company to carry out a share buy-back during the financial year ended 31 March 2015.
(3)Options or convertible securities
No options or convertible securities were issued by the Company during the financial year ended 31 March 2015 and there are no options or
convertible securities outstanding and exercisable at the end of the financial year ended 31 March 2015.
(4) Depository receipt programme
The Company did not sponsor any depository receipt programme during the financial year ended 31 March 2015.
(5) Sanctions and/or penalties
There was no sanction and/or penalty imposed on the Company and its subsidiary companies, directors or management by the relevant
regulatory bodies during the financial year ended 31 March 2015.
(6)Non-audit fees
The amount of non-audit fees paid to external auditors by the Group and the Company for the financial year ended 31 March 2015 amounted
to RM116,180 and RM9,000 respectively.
(7) Variation in results
There were no significant variations between the audited results for the financial year ended 31 March 2015 and the unaudited results previously
announced.
There were no profit estimate, forecast or projection issued by the Company and its subsidiary companies during the financial year ended
31 March 2015.
(8) Profit guarantee
There was no profit guarantee given by the Company and its subsidiary companies during the financial year ended 31 March 2015.
(9)Material contracts
There were no material contracts entered into by the Company and its subsidiary companies involving directors’ and major shareholders’
interests, which subsisted at the end of the financial year ended 31 March 2015 or, if not then subsisting, entered into since the end of the
previous financial year.
(10)Recurrent related party transaction of revenue or trading nature
MNRB is not required to seek any mandate from its shareholders under Paragraph 10.09(2)(b), Part E of Chapter 10 of the Listing Requirements
of Bursa Securities as the recurrent related party transactions of a revenue or trading nature entered into by the MNRB Group qualified as
exempted transactions as defined under Paragraph 10.08(11)(e), Part E of Chapter 10 of the Listing Requirements of Bursa Securities.
65
A
STRATEGIC
PARTNER
Over the years, Malaysian Re has proven its worth as a strategic partner that is committed to strengthening local insurance
companies. Be it the development of a flood risk analysis tool for industry players or the roll out of training programmes for
staff of insurance companies, Malaysian Re continues to leverage on its strong fundamentals, experience and expertise as
well as proven record of accomplishment to elevate industry professionalism and standards.
CORPORATE
PROFILE
RM1
RM510
billion
Paid-up Capital of
million
Malaysian
Reinsurance Berhad,
(MALAYSIAN RE) is a
wholly owned subsidiary of
mnrb holdings berhad.
As the national reinsurer, Malaysian Re
continues to enhance the competitiveness and
efficiency of the local insurance companies
in an increasingly globalised marketplace
through its active involvement in leading and
underwriting their reinsurance needs.
CAPITAL STRUCTURE
The Company has an Authorised Capital of
RM1 billion, divided into 1 billion ordinary
shares of RM1.00 each and a Paid-up Capital
of RM510 million, divided into 510 million
ordinary shares of RM1.00 each.
Leveraging on its breadth and depth of
experience and expertise, strong fundamentals
and proven record of accomplishment,
Malaysian Re has grown in stature as an
international player having established a
strong market presence in Asia, the Middle
East and Africa.
67
CORPORATE
INFORMATION
Board of
Sharkawi Alis
Zainudin Ishak
Registered Office
Auditors
Damansara Heights
50490 Kuala Lumpur
Tel : +603-2096 8000
Fax: +603-2096 7000
Website: www.malaysian-re.com.my
Ernst & Young
Jalan Damanlela
Damansara Heights
50490 Kuala Lumpur
Tel : +603-7495 8000
Fax: +603-2095 5332
President & Chief Executive Officer
P. Raveenderen
Yusoff Yaacob
Mohd Din Merican
Mustaffa Ahmad
Md Adnan Md Zain
Audit Committee
P. Raveenderen
Sharkawi Alis
P. Raveenderen
Yusoff Yaacob
Mustaffa Ahmad
Yusoff Yaacob
Mohd Din Merican
Company Secretaries
Principal Bankers
CIMB Bank Berhad
68
Yusoff Yaacob (Chairman)
P. Raveenderen
Mohd Din Merican
Mustaffa Ahmad
Md Adnan Md Zain (Chairman)
Mohd Din Merican
Zainudin Ishak
DIRECTORS’
PROFILE
9/9
Board meeting
attended
SHARKAWI ALIS
SHARKAWI ALIS, aged sixty-eight (68), Malaysian. Non-Independent
Non-Executive Director since 31 March 2005 and was subsequently appointed as
Non-Independent Non-Executive Chairman on 3 September 2007. Member of the
Nomination Committee.
Other information on Sharkawi Alis is disclosed in the Directors’ Profile section of
MNRB on page 22 of this Annual Report.
ZAINUDIN ISHAK
N/A
Board meeting
attended
ZAINUDIN ISHAK, aged forty-eight (48), Malaysian. Non-Independent Executive
Director since 1 April 2015. Member of the Investment Committee. An Associate
member of Malaysian Insurance (AMII) since 1994. He started his career as
Executive at Trust International Insurance Sdn Bhd in 1989. He joined Commerce
Assurance Berhad (now CIMB Aviva Takaful Berhad) in 1994 and appointed CEO in
2006. In 2009, he then joined HSBC Amanah Takaful Berhad as Executive Director
& Chief Executive Officer. He served as Chairman of Malaysian Takaful Association
until early 2015. Also a Director of Malaysian Re (Dubai) Ltd., Financial Park (Labuan)
Sdn Bhd and MMIP Services Sdn Bhd.
69
P. RAVEENDEREN
9/9
Board meeting
attended
P. RAVEENDEREN, aged seventy (70), Malaysian. Independent Non-Executive
Director since 27 August 2004 and re-designated as Non-Independent
Non-Executive Director on 19 July 2011. Member of the Audit Committee, the Risk
Management Committee and the Nomination Committee.
Other information on P. Raveenderen is disclosed in the Directors’ Profile section of
9/9
Board meeting
attended
SYED AWALLUDDIN
Malaysian, Non-Independent Non-Executive Director since 27 August 2004 and
re-designated as Independent Non-Executive Director on 28 October 2004.
Chairman of the Nomination Committee. Member of the Audit Committee and the
Remuneration Committee.
Other information on Dato’ Syed Ariff Fadzillah Syed Awalluddin is disclosed in the
Directors’ Profile section of MNRB on page 24 of this Annual Report.
70
9/9
Board meeting
attended
YUSOFF YAACOB
YUSOFF YAACOB, aged sixty-seven (67), Malaysian. Non-Independent
Non-Executive Director since 31 March 2005 and re-designated as Independent
Non-Executive Director on 23 March 2006. Chairman of the Risk Management
Committee. Member of the Remuneration Committee and the Nomination
Committee.
Other information on Yusoff Yaacob is disclosed in the Directors’ Profile section of
MEGAT DZIAUDDIN
MEGAT MAHMUD
9/9
Board meeting
attended
Independent Non-Executive Director since 24 August 2006. Chairman of the
Remuneration Committee and the Audit Committee. Member of the Investment
Committee.
Other information on Megat Dziauddin Megat Mahmud is disclosed in the Directors’
Profile section of MNRB on page 23 of this Annual Report.
71
9/9
MOHD DIN MERICAN
Board meeting
attended
MOHD DIN MERICAN, aged fifty-three (53), Malaysian. Non-Independent
Non-Executive Director since 2 March 2012. Member of the Investment Committee,
the Risk Management Committee and the Remuneration Committee.
Other information on Mohd Din Merican is disclosed in the Directors’ Profile section
of MNRB on page 22 of this Annual Report.
N/A
Board meeting
attended
MUSTAFFA AHMAD
MUSTAFFA AHMAD, aged fifty-nine (59), Malaysian. Independent Non-Executive
Director since 1 June 2015. Member of the Risk Management Committee and
Nomination Committee. He graduated with a Bachelor of Science (Honours) degree
in Statistics from the Heriot-Watt University, Edinburgh, Scotland in 1978. He had
worked for several insurance companies since 1978 and then joined Malaysian
National Reinsurance Berhad as Senior Manager in 1989. He assumed various other
roles whilst he was in Malaysian National Reinsurance Berhad. Following the MNRB
Group restructuring exercise in 2005, he was transferred to Malaysian Re and was
appointed the Chief Operating Officer until 2010. He currently sits as Director
in two (2) other companies, MIDF Amanah Investment Bank Berhad and Amanah
International Finance Sdn Bhd.
72
DIRECTOR’S PROFILE (CONT’D)
N/A
Board meeting
attended
MD ADNAN MD ZAIN
MD ADNAN MD ZAIN, aged fifty-eight (58), Malaysian. Independent NonExecutive Director since 1 June 2015. Chairman of the Investment Committee. He
obtained a Bachelor of Economics degree from University Putra Malaysia and is a
Registered Financial Planner from Malaysian Financial Planning Council. He began
his career in the banking industry with Standard Chartered Bank in 1981 where he
served in various operations including senior positions as the Regional Manager
and the Head, Global Electronic Banking. He was appointed as the CEO of MCIS
Zurich Insurance Berhad in 2006 and was elected as President of Life Insurance
Association of Malaysia for (2) terms in 2009/2010 and 2010/2011. He was
the Chairman of Malaysian Life Reinsurance Berhad and currently a Director of
Malaysian Rating Corporation Berhad, Kuwait Finance House Berhad and Malaysian
Insurance Institute.
73
SENIOR
MANAGEMENT TEAM
Paul Ng Wooi Yip
Rajinder Mohan
MILI MOHD YUSOFF
ABDUL HALIM ANUAR SHARIF
Lua Tiong Aik
Tony Tan chee yew
Zainudin ishak
P resident & C E O
AHMAD NASARUDDIN
ISHAUDIN
74
SENIOR MANAGEMENT
TEAM’S PROFILE
PAUL NG WOOI YIP
Chief operating officer
PAUL NG WOOI YIP is the Chief Operating Officer. He graduated
with a Bachelor of Science (Hons) degree in Mechanical Engineering
from the University of Salford, Manchester, United Kingdom in 1984.
He began his career with the then Malaysian National Reinsurance
Berhad as a Risk Engineer in 1984. He was promoted to Assistant
General Manager in 1994. He was transferred to Malaysian Re on
1 April 2005 and assumed the position of Senior Vice President &
Chief Underwriter of International Treaties. He was promoted to the
position of Chief Operating Officer in June 2015.
RAJINDER MOHAN
Senior Vice President & Chief Underwriter of
Business Region 1
RAJINDER MOHAN is the Senior Vice President & Chief Underwriter
of Business Region 1. He is a Fellow member of the Chartered Insurance
Institute, United Kingdom (F.C.I.I.) and a Senior Associate member
of the Australian and New Zealand Institute of Insurance and Finance
(A.N.Z.I.I.F.). He started his career as an Executive with Guardian Royal
Exchange in New Zealand in February 1988 and subsequently joined the
then Malaysian National Reinsurance Berhad in November 1988 as an
Underwriting Executive. He was promoted to Assistant General Manager
for Business Unit 2 in April 2002. He was transferred to Malaysian Re on
1 April 2005 and assumed his present position on 1 June 2015.
MILI MOHD YUSOFF
Vice President & Head of Retakaful Division and
the Large & Specialised Risks (LSR) Department
MILI MOHD YUSOFF assumed the position as Vice President & Head of
Retakaful Division and the Large & Specialised Risks (LSR) Department
in June 2015. She obtained her Associateship of the Chartered Insurance
Institute from the London School of Insurance. Whilst in the UK, she
was attached to Gily Carvajal Brokers Pte Ltd where she received
training as a junior reinsurance broker. She subsequently returned to
Malaysia in 1987 and thereafter, spent a major part of her career in
insurance broking specialising in Oil & Gas, Marine and Specialised Risks
portfolios. She was the Risk and Insurance Manager for a major Dutch
oil company for a short stint before returning to the broking fraternity
in 2001. In her last broking assignment, she led her team to successfully
secure Malaysia’s first deepwater offshore construction project.
She was also the Client Manager for the country’s ‘Angkasawan
(Astronaut)’ insurance programme. A Fellow of the Chartered Insurance
Institute (by examination, 1994).
ABDUL HALIM ANUAR SHARIF
Vice President & Head of Market Services
ABDUL HALIM ANUAR SHARIF is the Vice President & Head
of Market Services. He graduated with a Bachelor of Science in
Mechanical Engineering in 1986 from South Dakota State University,
USA. He commenced his career with the Technical Services Department
of the then Malaysian National Reinsurance Berhad as Risk Engineer in
1987. He was transferred to Voluntary Cession Department in 1996,
Market Cession & Facultative Department in 1998, Marketing/
Underwriting – Business Unit 1 in 2002, Retrocessions/Claims/Pools
Department in 2003, transferred to Malaysian Re on 1 April 2005 and
Head of Market Pools Department in May 2010. He assumed his present
position in June 2015.
75
SENIOR MANAGEMENT TEAM’S PROFILE (CONT’D)
AHMAD NASARUDDIN
ISHAUDIN
TONY TAN Chee Yew
Vice President & Head of Actuarial Services
Vice President & Head of Claims Department
AHMAD NASARUDDIN ISHAUDIN is the Vice President & Head
of Claims Department. He has 23 years of working experience in the
insurance fraternity including takaful. He holds an engineering degree
in mechanical from University of Malaya in 1986 and has worked as
an engineer for Lembaga Letrik Negara at Tuanku Jaafar Power Plant,
Port Dickson. He is an Associate member of the Malaysian Institute
of Insurance. He started his long career in the insurance industry as a
loss adjuster. His working experience then expands as a reinsurance
facultative underwriter, general claims examiner and risk surveyor. He
has experience in all classes of general insurance, with specialisation in
fire and engineering. In 2008, he joined Takaful IKHLAS Berhad as a Risk
Surveyor and on 1 June 2015 he was transferred to Malaysian Re and
assumed his current position.
Lua Tiong Aik
Vice President & Head of Facultative Department
Lua Tiong Aik is the Vice President & Head of Facultative Department.
He graduated with a Bachelor of Engineering in Industrial Engineering
from the University of Melbourne, Australia in 1985. He commenced
his insurance career as a direct underwriter in 1990 and had since held
several underwriting and broking portfolios before joining Malaysian
Reinsurance Berhad as a treaty underwriter in his capacity as Vice
President of Business Unit 2 in October 2009. He assumed his current
position in June 2015.
76
TONY TAN is the Vice President & Head of Actuarial Services. He
graduated with a Bachelor of Science (Hons) degree in Mathematics,
Operational Research, Statistics and Economics from Warwick
University, UK, and holds a Master Degree in Actuarial Science from City
University, UK. He started his career as an actuarial analyst in a local
consulting firm and subsequently joined Malaysian Re in June 2010 to
start up the Actuarial Services Department. He assumed his present
position in January 2013.
CORPORATE ACTIVITIES
AND SERVICES
Malaysian Re has been actively involved in underwriting all classes of general reinsurance business from the Malaysian market. It has expanded its
business internationally and is actively underwriting business from the Asian, Middle East and Africa markets. Malaysian Re will continue to provide
prompt services and will ensure the existing products to be not only competitive but also meet the requirements of its customers.
MARKET SERVICES
Malaysian Re is currently involved in providing various services to the Malaysian insurance industry. The services amongst others include the following:A.MALAYSIAN MARKET POOLS
•
Malaysian Aviation Pool
Malaysian Re assumed the role as Manager of the Malaysian Aviation Pool (MAP) effective 1 October 1996. Currently, its membership
comprises six (6) local insurers and two (2) reinsurers with a total underwriting capacity of RM338 million. The underwriting of risks is by a
Committee, nominated by participating companies. The business written by MAP is primarily Malaysian risks and Malaysian interests abroad.
•
Malaysian Energy Risks Consortium
Malaysian Energy Risks Consortium (MERIC) was established in March 1995 with the objective to optimise national retention, promote
wider interest and develop underwriting skills in the specialised class of energy business. MERIC comprises eleven (11) local insurers
and two (2) reinsurers with Malaysian Re taking on the role of Secretariat. It has a capacity to underwrite up to a combined single limit of
RM50 million for upstream and downstream risks. The underwriting of risks is by a Committee, nominated by participating companies.
The primary portfolio of the business written by MERIC is Malaysian risks and Malaysian interests abroad.
B.
CENTRAL ADMINISTRATION BUREAU
Malaysian Re initiated the establishment of the Central Administration Bureau (CAB) in 1995 to manage the centralised computerised and
web-based system (CABFAC) for the administration and settlement of facultative reinsurance between CAB members i.e. insurers and
reinsurers operating in Malaysia. The elimination of reconciliation problems and the efficient settlement of balances and claims recovery
between members were the main drivers for the formation of CAB. The cost of development and operations of the system were then, and
still are, being jointly funded by its members. Following the success of the CABFAC system, the members of Persatuan Insurans Am Malaysia
(PIAM), in 2009 conceptualised the idea of developing a centralised coinsurance system (CABCO) which would function on the same operating
model as the CABFAC. The CABCO was formally launched in August 2011 to cater for the coinsurance business transactions between the
local insurers.
C.TECHNICAL SERVICES
Surveying and Advisory Services on Risk Management
Malaysian Re provides Property and Engineering Risk Survey services to the local insurance industry for the purpose of special rating,
underwriting and also loss estimation. Property Risk assessment and risk management services tailored to the insureds’ needs are also provided
through their insurers when requested.
77
CORPORATE ACTIVITIES AND SERVICES (CONT’D)
D.
SPECIAL RATING
Malaysian Re was appointed by PIAM to form a Rating Committee specifically for the purpose of determining special rates for Fire and
Industrial All Risks (IAR) insurances, for risks which qualify for special rating under the Fire Tariff. This Committee comprises not less than
six (6) qualified or experienced insurance underwriters or risk surveyors from among PIAM members of whom not more than three (3) shall
be from Malaysian Re. The Chairman of the Rating Committee shall be a representative from Malaysian Re. By virtue of this appointment,
Malaysian Re also acts as the Secretariat to this Committee as well as handles the day-to-day operations of all matters pertaining to special
rating applications.
E.INSPECTION
Malaysian Re was given the mandate by PIAM to form an Inspection Task Force to conduct inspections or carry out investigations on the
conduct and activities of its members in accordance with the terms and provisions of the various Inter-Company Agreements. With effect from
1 April 1992, the various Inter-Company Agreements had now been amalgamated into a single agreement called “Inter Company Agreement
On General Insurance Business (ICAGIB)”.
Thus, the Inspection Department has been entrusted to provide practical, reliable and timely inspection on the General Insurance Companies’
compliance with provisions embodied in the “ICAGIB” on matters pertaining to:a.
b.
c.
d.
Dealing with Agents;
Motor Tariff;
Fire Tariff; and
Bond Insurance.
F.
SIHAT MALAYSIA
The Sihat Malaysia Scheme, which was officially launched on 18 February 2000, was developed by the National Insurance Association of
Malaysia (NIAM). Members of NIAM subscribing to this Scheme provide a uniformed health insurance programme covering health care
including cashless admission to hospitals, medical treatments, surgery as well as emergency assistance to policy holders. Managed Care
Organisation has been appointed under the Scheme to provide specialised services to both the policy holders and NIAM members.
Malaysian Re was appointed as the Account Manager of the Scheme, which is currently being subscribed to by four (4) NIAM members.
G.MARKET TRAINING
Over the years, Malaysian Re has and will continue to organise various training courses and seminars on insurance/reinsurance related topics
in addition to market updates for staff of insurance companies to instil a higher degree of professionalism in the industry.
H.
SCHEME FOR INSURANCE OF LARGE & SPECIALISED RISKS
The Scheme for Insurance of Large & Specialised Risks (SILSR) was implemented on 1 January 1994 with Malaysian Re appointed as Scheme
Manager by Bank Negara Malaysia (BNM). The SILSR was formed with the primary objective of developing and enhancing the level of technical
expertise and professionalism within the Malaysian insurance fraternity. In addition to this, SILSR’s function is to facilitate the most favourable
cover at internationally competitive terms for the Malaysian risk owners. To this end, SILSR’s crucial role is to promote the optimum retention
of Malaysian risks with reinsurance placed to the best national advantage.
78
MALAYSIAN RE’S
PORTFOLIO OF BUSINESS
2015
2014
Class
RM’000
%
RM’000
%
Fire
538,176
41
558,542
41
Marine
222,587
17
226,842
17
Motor
226,334
17
214,282
16
Miscellaneous Accident
323,906
25
345,260
26
1,311,003
100
1,344,926
100
Total
25%
Motor
17%
Fire
41%
2015
26%
Fire
41%
2014
Motor
16%
Marine
17%
Marine
17%
79
A
PRINCIPLED
PARTNER
Takaful IKHLAS continues to cultivate sound partnerships through principled, caring and innovative means. Whether it
is through its ethical approach or customer-oriented service delivery, its agent-focussed training programmes, or host
of innovative programmes such as Malaysia’s first Diploma in Takaful and a host of Shariah-related courses, Takaful
IKHLAS continues to go all out to ensure its partners benefit in tangible ways from its efforts.
CORPORATE
PROFILE
TAKAFUL IKHLAS BERHAD
RM500
RM295
million
Paid-up Capital of
million
TAKAFUL IKHLAS Berhad
(Takaful IKHLAS) was incorporated on 18 September 2002 as
Takaful Ikhlas Sdn. Bhd.
and is a wholly owned subsidiary of MNRB Holdings Berhad.
Subsequently on 5 May 2014, it converted
its status to a public company and be known
as Takaful Ikhlas Berhad. The Company
is principally involved in the provision of
Islamic Financial protection services, based
on principles and rulings of Shariah. Takaful
IKHLAS has established a strong presence in
the provision of Islamic Financial protection
services based on the takaful system, which
places an emphasis on a spirit of cooperation
and joint responsibility among participants.
More than 2.0 million individuals and
corporations have placed their trust in the
Company and become its certificate holders
(participants). Takaful IKHLAS’ commitment
and adherence to Shariah values, coupled with
the application of cutting-edge technology in
conducting its business, have reinforced the
Company’s reputation for its ethical approach
and service delivery.
The Company offers individuals and commercial
enterprises a comprehensive range of Individual
Family, Group Family, General Retail and
Commercial Takaful products. Its distribution
channels comprise highly knowledgeable and
well-trained people that number more than
5,000 agents, brokers, financial institutions,
motor franchise holders, co-operatives and
Islamic bodies.
Takaful IKHLAS has 13 regional offices in Kuala
Lumpur, Kedah, Perak, Selangor, Putrajaya,
Negeri Sembilan, Melaka, Johor, Pahang,
Terengganu, Kelantan, Sabah and Sarawak.
Takaful Ikhlas Berhad is registered under Islamic
Financial Services Act 2013 and regulated by
Bank Negara Malaysia.
CAPITAL STRUCTURE
Takaful IKHLAS has an Authorised Capital
of RM500 million and a Paid-up Capital of
RM295 million.
81
CORPORATE
INFORMATION
Sharkawi Alis
Ab Latiff Abu Bakar
Dato’ Othman Hashim
Halim Haji Din
Paisol Ahmad
Yahaya Besah
Dr. Syed Musa Syed Jaafar Alhabshi
Mohd Din Merican
Auditors
Registered Office
Ernst & Young
9th Floor, IKHLAS Point
Tower 11A, Avenue 5, Bangsar South
No. 8, Jalan Kerinchi
59200 Kuala Lumpur
Tel : +603-2723 9999
Fax: +603-2723 9998
Jalan Damanlela
Damansara Heights
50490 Kuala Lumpur
Tel : +603-7495 8000
Fax: +603-2095 5332
Website: www.takaful-ikhlas.com.my
Principal Bankers
Maybank Islamic Berhad
Bank Islam Malaysia Berhad
CIMB Islamic Bank Berhad
82
Company Secretaries
Board of
Audit Committee
Halim Haji Din (Chairman)
Paisol Ahmad
Yahaya Besah
Shariah Committee
Prof. Dr. Ahmad Hidayat Buang (Chairman)
Datuk Haji Nik Moustpha Haji Nik Hassan
Dr. Muhammad Naim Omar
Dr. Mohamed Fairooz Abdul Khir
Dr. Syed Musa Syed Jaafar Alhabshi (Chairman)
Sharkawi Alis
Halim Haji Din
Mohd Din Merican
Yahaya Besah (Chairman)
Halim Haji Din
Paisol Ahmad
Mohd Din Merican
Dato’ Othman Hashim (Chairman)
Paisol Ahmad
Yahaya Besah
Mohd Din Merican
Paisol Ahmad (Chairman)
Halim Haji Din
Mohd Din Merican
Ab Latiff Abu Bakar
DIRECTORS’
PROFILE
9/9
Board meeting
attended
SHARKAWI ALIS
Non-Executive Chairman since 3 January 2008. Member of the Nomination
Committee.
AB LATIFF ABU BAKAR
9/9
Board meeting
attended
AB LATIFF ABU BAKAR, aged fifty-five (55), Malaysian. Non-Independent Executive
Director since 7 January 2013. Member of the Investment Committee. He graduated
with a Bachelor of Business Administration from the University of Portland, Oregon,
USA. He has more than twenty-two (22) years’ experience in insurance and Takaful
industry which began in 1989 when he joined Malaysian Assurance Alliance Bhd.
Since then he has held senior and key management positions in various Insurance
and Takaful companies including being an Acting Chief Operating Officer of
Takaful Nasional Sdn Bhd until June 2006. He was appointed as Executive Vice
President/Head of Agency at Etiqa Insurance & Takaful until September 2008.
In October 2008, he was appointed as Chief Executive Officer of Hong Leong Tokio
Marine Takaful (now known as Hong Leong MSIG Takaful) until April 2011. Prior to
joining Takaful IKHLAS, he was the Head of Takaful for Tokio Marine Asia Pte Ltd
until 6 January 2013.
83
9/9
DATO’ OTHMAN HASHIM
Board meeting
attended
DATO’ OTHMAN HASHIM, aged sixty-three (63), Malaysian. Independent
Non-Executive Director since 23 April 2003. Chairman of the Risk Management
Committee. Member of the Audit Committee, the Remuneration Committee and
the Nomination Committee. Graduated from the Royal Military College, Sungai Besi.
Obtained his Degree in Law from London and qualified as a Barrister-at-Law from
Council of Legal Education, London. He was among the first batch of lecturers to
teach Diploma in Law at the Mara Institute of Technology. In 1983, he set up his
partnership legal practice, Messrs. Othman Hashim, Chen & Co. In 1990, he moved
on and set up his own legal practice, Messrs. Othman Hashim & Co. He is also a
Director of Dynaura Trading Sdn. Bhd.
7/9
Board meeting
attended
HALIM HAJI DIN
HALIM HAJI DIN, aged sixty-nine (69), Malaysian. Independent Non-Executive Director since 24 July 2003.
Chairman of the Audit Committee. Member of the Nomination Committee, the Remuneration Committee
and the Investment Committee. Halim is a Chartered Accountant who spent more than thirty-two (32) years
working for multinational corporations and international consulting firms.
He accumulated eighteen (18) years of experience working in the Oil and Gas Industry – six (6) years of
which as a Board member of Caltex/Chevron, responsible for financial management before engaging in
the Consulting business. Prior to his appointment as a Board member of Caltex Malaysia, Halim served as
Regional Financial Advisor for Caltex Petroleum Corporation Dallas, Texas overseeing investment viability of
the Corporation’s Asian subsidiaries.
Halim also had extensive experience in corporate recovery when he worked for Ernst & Whinney, London,
United Kingdom in mid-1980s. He was appointed as Managing Partner of the Consulting Division of Ernst &
Young Malaysia from 1995. He later became the Country Advisor of Cap Gemini Ernst & Young Consulting
Malaysia when Cap Gemini of France merged with Ernst & Young Consulting. In 2003, he with two (2) partners
took over the consulting business of Cap Gemini Ernst & Young Malaysia through a MBO and rebranded it as
Innovation Associates, currently known as The IA Group, where he is currently the Chairman of the Group.
Halim was also a Council Member of the Malaysian Institute of Certified Public Accountants from 1994 to
2003. He also served as a Board Member of Employees Provident Fund (KWSP) for four (4) years from April
2009 till May 2013. Halim is also an independent member of the Board of Wah Seong Corporation Berhad,
BNP Paribas Malaysia Berhad, IGB REIT Management Sdn. Bhd, Kwasa Land Sdn. Bhd. and several other
private limited companies.
84
9/9
Board meeting
attended
PAISOL AHMAD
PAISOL AHMAD, aged sixty-one (61), Malaysian. Non-Independent Non-Executive
Director since 6 August 2008. Chairman of the Investment Committee and member
of the Audit Committee, the Risk Management Committee and the Remuneration
Committee.
Other information on Paisol Ahmad is disclosed in the Directors’ Profile section of
YAHAYA BESAH
9/9
Board meeting
attended
YAHAYA BESAH, aged sixty-three (63), Malaysian. Independent Non-Executive
Director since 20 August 2009. Chairman of the Remuneration Committee. Member
of the Audit Committee and the Risk Management Committee. He is also a Director
of MRT.
Graduated from Universiti Sains Malaysia with a Bachelor Degree in Social Science.
He was a Director at the Office of the Director General of Insurance, Federal Treasury
from 1975 until 1988. Joined BNM in 1988 and had served in various insurance
related departments throughout his length of service. He was the former Director in
the Insurance Supervision Division from 1995 until 1998 and also Director Internal
Audit of BNM from 1998 until 2005. His last position in BNM was Director Special
Projects (Deposit Insurance) before he retired in 2006.
85
9/9
DR. SYED MUSA SYED
JAAFAR ALHABSHI
Board meeting
attended
DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-five (55), Malaysian. Independent
Non-Executive Director since 20 August 2009. Chairman of the Nomination Committee.
Member of the Audit Committee, the Risk Management Committee, the Investment
Committee and the Shariah Committee. He is also a Director of MRT. He currently sits on
the Shariah Committees of Bank of Tokyo - Mitsubishi UFJ (Malaysia) Berhad and MRT.
Obtained a Diploma in Business Studies from Ngee Ann Polytechnic, Singapore in 1984,
a Bachelor of Business Administration (Hons.) Degree from the International Islamic
University Malaysia (IIUM) in 1989 and a Doctorate in Business Administration majoring in
Accounting and Finance from University of Strathclyde, Glasgow, United Kingdom in 1994.
He began his career with Coopers & Lybrand, Singapore as an Audit Assistant in 1984.
From 1989 until 1994, he joined IIUM as an Assistant Lecturer and upon completion of
his doctorate he became an Assistant Professor and held various academic administrative
positions in IIUM till 2000. He joined Universiti Tun Abdul Razak in 2000 as an Associate
Professor and became Head of Centre for Graduate Studies. He later served as Dean of
Faculty of Business in 2004. In 2006, he joined Amanie Business Solutions Sdn Bhd as a
Principal Consultant until 2009 and as a Fellow Consultant from 2010 to 2012. In 2009,
he resumed his academic career as Associate Professor with Universiti Tun Abdul Razak
and appointed Dean of Graduate School of Business in 2010. Since October 2012, he is
the Associate Professor of Institute of Islamic Banking and Finance (IIiBF). Currently, he is
Dean of IIiBF, IIUM.
9/9
Board meeting
attended
MOHD DIN MERICAN
the Risk Management Committee, the Nomination Committee and the Remuneration
Committee.
Other information on Mohd Din Merican is disclosed in the Directors’ Profile
section of MNRB on page 22 of this Annual Report.
86
9/9
Board meeting
attended
MEGAT DZIAUDDIN
MEGAT MAHMUD
Independent Non-Executive Director since 17 April 2012. Member of the Audit
Committee, the Investment Committee and the Remuneration Committee.
Other information on Megat Dziauddin Megat Mahmud is disclosed in the
87
PROFILE OF SHARIAH
COMMITTEE MEMBERS
PROF. DR. AHMAD
HIDAYAT BUANG
6/6
SHARIAH COMMITTEE CHAIRMAN
Shariah committee
meeting attended
PROF. DR. AHMAD HIDAYAT BUANG, aged fifty-three (53). Shariah Committee member
of Takaful IKHLAS since 26 December 2002 and appointed as Shariah Committee Chairman
with effect from 23 July 2013. Professor of the Academy of Islamic Studies at University of
Malaya. Previously, he was a Director for the Academy of Islamic Studies from October 2006
until February 2011. Holds a Bachelor in Shariah from the University of Malaya. Completed
his Master in Law and Doctorate from University of London (specialising in Islamic Contracts).
Former member of OCBC Al-Amin Bank Berhad and CIMB Islamic Bank Berhad’s Shariah Council.
A Shariah Committee member of Bank Islam Malaysia Berhad since 2011.
DR. MOHAMED FAIROOZ
ABDUL KHIR
5/6
SHARIAH COMMITTEE MEMBER
Shariah committee
meeting attended
DR. MOHAMED FAIROOZ ABDUL KHIR, aged thirty-nine (39). Shariah Committee member of
Takaful IKHLAS since 1 April 2014. Holds a B.A in Islamic Revealed Knowledge and Human Sciences
(Fiqh & Usul Fiqh) from IIUM in 2000. Obtained his M.A in Shariah from University of Malaya, Kuala
Lumpur, Malaysia in 2005 and completed his Ph.D in Islamic Finance from the same university in 2011.
He started his career with IIUM Centre for Foundation Studies since 2002 as a lecturer in the
Department of Islamic Revealed Knowledge and Human Sciences. After eight (8) years in service,
he resumed his career path as a Researcher at the International Shari’ah Research Academy
for Islamic Finance (ISRA). He is a member of the Shari’ah Committee for Maybank Islamic
Berhad since July 2013. He is also a member of the Shariah Committee for AGRO Bank since
August 2012. Actively involved in research works, writing books, and presentation of research papers
at various local and international conferences and forums. He had been conferred Excellence Award by
University of Malaya for early completion of his Ph.D study. Also a Shariah Committee member of MRT.
88
PROFILE OF SHARIAH COMMITTEE MEMBERS (CONT’D)
DR. MUHAMMAD
NAIM OMAR
5/6
SHARIAH COMMITTEE Member
Shariah committee
meeting attended
DR. MUHAMMAD NAIM OMAR, aged forty-seven (47). Shariah Committee member of Takaful
IKHLAS since 1 April 2009. He is an Assistant Professor of Islamic Law at Ahmad Ibrahim Kulliyyah
of Laws, International Islamic University of Malaysia and also OCBC Al-Amin Bank Berhad’s Shariah
Committee Member. Graduated with a degree in Shariah Law from Al-Azhar University in 1992.
In 1999, he received a Master degree from Cairo University in Shariah Law and later received his PhD
from the University of Wales, Lampeter, in 2006.
DATUK Haji NIK MOUSTPHA
HAJI NIK HASSAN
6/6
Shariah committee
meeting attended
DATUK HAJI NIK MOUSTPHA HAJI NIK HASSAN, aged sixty-two (62). Shariah Committee member
of Takaful IKHLAS since 26 December 2002. Currently he is the Director General, Institute of Islamic
Understanding Malaysia (IKIM) since August 2009. He studied Business and Economics at Ohio
University, United States of America. Prior to joining IKIM, he was the Dean of Kulliyyah Economics at
the International Islamic University of Malaysia. In 1989, he used to serve as visiting Scholar at Oxford
Centre for Islamic Studies, United Kingdom for one (1) academic year.
DR. SYED MUSA SYED
JAAFAR ALHABSHI
6/6
Shariah committee
meeting attended
DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-five (55), Shariah Committee member of
Takaful IKHLAS since 1 September 2012. Independent Non-Executive Director since 20 August 2009.
Other information on Dr. Syed Musa Syed Jaafar Alhabshi is disclosed in the Directors’ Profile section
of Takaful IKHLAS on page 86 of this Annual Report.
89
SENIOR
MANAGEMENT TEAM
Kau Kong Hoi
Nazrul Hisham
Abdul Hamid
Fauziah Md Hasan
Yushida Husin
Wan Rosli Shaharuddin
Wan Yaacob
Zarina Mohd Sahim
Ab latiff
Abu Bakar
P resident & C E O
90
SENIOR MANAGEMENT
TEAM’S PROFILE
Kau Kong Hoi
FAUZIAH MD HASAN
Senior vice President & Head of Actuarial Services
Senior Vice President & Chief Financial officer
Kau Kong Hoi is the Senior Vice President & Head of Actuarial Services.
Graduated with a Bachelor of Science in Actuarial Science from Universiti
Kebangsaan Malaysia and has obtained the Fellowship qualification from
the Society of Actuaries, USA (FSA) in 2008 and Malaysia (FASM) in
2011 respectively. He has more than 12 years of actuarial services and
financial reporting experiences in both conventional insurance business
and takaful business across major international and domestic insurers in
Asia Pacific countries.
FAUZIAH MD HASAN is the Senior Vice President & Chief Financial
Officer of Takaful IKHLAS. Graduated with a Bachelor of Accounting
from Universiti Kebangsaan Malaysia (UKM) and has over twenty
(20) years of working experience in various accounting and financial
management functions in both insurance and takaful industry. After
graduation, her career began at Ernst & Young as an Auditor. After three
(3) years, she joined Talasco Insurance Sdn. Bhd. (Talasco) as an Executive
and subsequently promoted to Assistant General Manager, Finance. Her
working experience with Talasco was for nine (9) years. Her career at
Takaful industry began when she joined Takaful Nasional Bhd (Takaful
Nasional) where she was there for six (6) years. She joined as a Manager,
Credit Control and subsequently promoted to Vice President, Corporate
Accounts. After the merger exercise between Takaful Nasional and
Maybank Takaful, she was responsible to oversee the Finance Department
of both entities. Prior to joining Takaful IKHLAS on 3 August 2008, she
was the Assistant General Manager, Finance at Syarikat Takaful Malaysia
Bhd. She joined Takaful IKHLAS as an Assistant Vice President, Finance &
Account. She was re-designated as Vice President and Head of Finance –
General on 1 February 2010 and subsequently appointed as Senior Vice
President & Chief Financial Officer effective 1 November 2013.
He joined Takaful Ikhlas on 17 November 2014. His main responsibility
is to certify the valuation of actuarial and other certificate liabilities in
accordance with the generally accepted actuarial principles and practices.
NAZRUL HISHAM ABDUL HAMID
Senior Vice President & Chief Business Operations Officer
NAZRUL HISHAM ABDUL HAMID is the Senior Vice President & Chief
Business Operations Officer. Graduated with a Degree in Accounting and
Finance from University of Hull, United Kingdom and Master of Business
and Administration from Mara University of Technology (UiTM). He is
also the Chartered member of Institute of Internal Auditors Malaysia
(IIAM) and has over twenty (20) years of extensive experience in various
industries and public listed companies holding senior managerial
positions.
His involvement in takaful industry started in June 2007, of which he
was appointed as the Chief Internal Auditor / Group General Manager
for Syarikat Takaful Malaysia Berhad. He was aggressively involved
in revamping the business process, internal control system and risk
management of the company. He was later appointed as the General
Manager of Operations responsible in managing the Underwriting,
Retakaful, Certificate Processing, Claims, Customer Service and Branch
Operations.
YUSHIDA HUSIN
Senior Vice President & Chief Corporate Services Officer
YUSHIDA HUSIN is the Senior Vice President & Chief Corporate
Services Officer of Takaful IKHLAS. Graduated with a Bachelor of Science
in Statistics Degree from the University of Illinois at Urbana-Champaign.
Before joining Takaful IKHLAS, she served six (6) years with a multinational consultancy firm Accenture (previously known as Andersen
Consulting) where she was involved in both local and international
business process re-engineering and system implementation projects
for insurance as well as other financial institutions in the Asian region.
She was one of the pioneer members involved in the formation of Takaful
IKHLAS. She joined Takaful IKHLAS in January 2003.
He joined Takaful IKHLAS on 9 June 2014.
91
SENIOR MANAGEMENT TEAM'S PROFILE (CONT’D)
WAN ROSLI SHAHARUDDIN
WAN YAACOB
ZARINA MOHD SAHIM
Senior Vice President & Head, General Operations
Senior Vice President & Head, AGENCY
WAN ROSLI SHAHARUDDIN WAN YAACOB is the Senior Vice
President & Head, Agency of Takaful IKHLAS. Graduated with a
Bachelor of Science (Business Administration) and Master of Business
Administration from the United States International University (USIU),
San Diego, United States of America, respectively. He has eighteen
(18) years experience in the insurance industry, having served in The
People’s Insurance Co. (M) Berhad (Technical Service Division), Malaysia
National Insurance Berhad (Total Quality Management Department) and
AMI Insurans Berhad (Internal Audit Department). Prior to his current
appointment, he served Bank Negara Malaysia and was attached to the
Insurance Examination Department. He was a Member of the PIAM
Motor Sub-Committee (2001–2002). He joined Takaful IKHLAS in
October 2002.
92
ZARINA MOHD SAHIM is the Senior Vice President & Head,
General Operations. Graduated with a Bachelor degree of Business
Administration (Insurance) from Mara University of Technology (UiTM)
and has over twenty-five (25) years of extensive experience in insurance
and takaful industry. Her career began at Malaysia National Insurance
Sdn Bhd after graduation where she spent five (5) years as an Executive,
Fire Department. In 1991, she joined Hong Leong Assurance Sdn Bhd as
an Executive, Fire Underwriting for Corporate Clients.
In 1994, her takaful experience started when she joined Syarikat Takaful
Malaysia Berhad for eighteen (18) years. Her last position was Head of
Operations – General Takaful where she was responsible in managing
the entire operations of General Takaful Division. Prior to joining
Takaful IKHLAS, she was at Hong Leong MISG Takaful for a few
months as Head of General Operations. She joined Takaful IKHLAS in
October 2012.
TAKAFUL IKHLAS’
(A) GENERAL TAKAFUL
Fire
Marine
Motor
Total
(B) FAMILY TAKAFUL
2015
Class
2014
2015
2014
RM’000
%
RM’000
%
Class
RM’000
%
RM’000
%
36,415
13
31,951
14
Individual
233,742
42
239,021
44
244
1
258
1
Mortgage
128,976
23
119,993
22
192,646
70
162,765
72
Group
138,160
25
158,402
29
45,859
16
29,328
13
Investment-Linked
53,077
10
30,545
5
275,164
100
224,302
100
553,955
100
547,961
100
Fire
13%
Marine
1%
16%
Motor
70%
Total
Individual
42%
Investment-Linked
10%
Group
25%
2015
2015
Mortgage
23%
Fire
14%
Marine
1%
13%
Motor
72%
Investment-Linked
5%
Individual
44%
Group
29%
2014
2014
Mortgage
22%
93
A
COMMITTED
PARTNER
MNRB Retakaful continues to commit to its diverse generations of stakeholders and acts as a second
layer of protection to takaful players. Through its Family and General retakaful businesses MNRB
Retakaful is helping Malaysia achieve its ambition of transforming into an international hub for the
development of Islamic financial services.
CORPORATE
PROFILE
MNRB RETAKAFUL BERHAD
RM500
RM102
million
Paid-up Capital of
million
MNRB Retakaful
Berhad (MRT),
a wholly owned subsidiary of
MNRB Holdings Berhad,
is involved in the Family and General retakaful businesses.
MRT was incorporated in December 2006 and
registered by Bank Negara Malaysia as the first
retakaful operator in Malaysia on 1 August 2007.
CAPITAL STRUCTURE
MRT has an Authorised Capital of RM500
million and a Paid-up Capital of RM102 million.
With the setting up of MRT, the MNRB Group
has entrenched itself as a significant player in
the global takaful industry and is helping to
promote Malaysia as a leading centre for the
development of the Islamic finance industry.
95
CORPORATE
INFORMATION
Sharkawi Alis
Yahaya Besah
Mohd Din Merican
Ahmad Ruhaizad Hashim
Registered Office
Auditors
Ernst & Young
Jalan Damanlela
Damansara Heights
50490 Kuala Lumpur
Tel : +603-7495 8000
Fax: +603-2095 5332
Damansara Heights
50490 Kuala Lumpur
Tel : +603 2096 7007
Fax: +603 2096 8007
Email: [email protected]
Website: www.mnrb-retakaful.com.my
Principal Bankers
CIMB Bank Berhad
96
Company Secretaries
Board of
Audit Committee
Yahaya Besah
Shariah Committee
Ir. Dr. Muhamad Fuad Abdullah (Chairman)
Assoc. Prof. Dr. Said Bouheraoua
Datuk Haji Nik Moustpha Haji Nik Hassan
Dr. Mohamed Fairooz Abdul Khir
Sharkawi Alis
Yahaya Besah
Mohd Din Merican
Yahaya Besah (Chairman)
Mohd Din Merican
Dr. Syed Musa Syed Jaafar Alhabshi (Chairman)
Yahaya Besah
Yahaya Besah
Mohd Din Merican
DIRECTORS’
PROFILE
8/8
Board meeting
attended
SHARKAWI ALIS
Non-Executive Chairman since 24 December 2007. Member of Nomination
Committee.
SYED AWALLUDDIN
8/8
Board meeting
attended
Malaysian, Independent Non-Executive Director since 6 August 2007. Chairman of
the Nomination Committee. Member of the Audit Committee, the Remuneration
Committee and the Risk Management Committee.
Other information on Dato’ Syed Ariff Fadzillah Syed Awalluddin is disclosed in the
97
MEGAT DZIAUDDIN
MEGAT MAHMUD
8/8
Board meeting
attended
Independent Non-Executive Director since 6 August 2007. Chairman of the
Audit Committee and the Investment Committee. Member of the Remuneration
Committee.
Other information on Megat Dziauddin Megat Mahmud is disclosed in the Directors’
Profile section of MNRB on page 23 of this Annual Report.
8/8
Board meeting
attended
YAHAYA BESAH
YAHAYA BESAH, aged sixty-three (63), Malaysian. Independent Non-Executive
Director since 4 July 2008. Chairman of the Risk Management Committee.
Member of the Audit Committee, the Investment Committee, the Nomination
Committee and the Remuneration Committee.
Other information on Yahaya Besah is disclosed in the Directors’ Profile section of
Takaful IKHLAS on page 85 of this Annual Report.
98
7/8
DR. SYED MUSA SYED
JAAFAR ALHABSHI
Board meeting
attended
DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-five (55), Malaysian.
Independent Non-Executive Director since 23 July 2008. Chairman of the
Remuneration Committee. Member of the Audit Committee, the Nomination
Committee and the Shariah Committee.
Other information on Dr. Syed Musa Syed Jaafar Alhabshi is disclosed in the Directors’
Profile section of Takaful IKHLAS on page 86 of this Annual Report.
MOHD DIN MERICAN
8/8
Board meeting
attended
the Risk Management Committee and the Nomination Committee.
99
PROFILE OF SHARIAH
COMMITTEE MEMBERS
IR. DR. MUHAMAD FUAD
ABDULLAH
SHARIAH COMMITTEE CHAIRMAN
6/6
Shariah committee
meeting attended
IR. DR. MUHAMAD FUAD ABDULLAH, aged sixty-two (62). Shariah Committee member
since 1 June 2011 and subsequently appointed as Chairman of Shariah Committee on
28 October 2011. Obtained his Bachelor Degree in Electrical Engineering from Southampton University
in 1977. In 1982, he obtained his Masters Degree in Electrical Engineering from the same university and
in 1994, obtained his Bachelor Degree in Shariah from Jordan University. In 1996, he completed his
Ph.D. in Muslim Civilisation from Aberdeen University in Scotland.
He is the Chairman of the Shariah Committee of MIDF Group of Companies in addition to
being a Shariah Advisory Committee member of BIMB Securities Sdn. Bhd. He is a registered
Shariah Adviser with the Securities Commission (SC) which qualifies him to advise on Shariahcompliant products and services regulated by the SC. He is a registered Shariah lawyer with
Majlis Agama Islam Perak since 2007 and was a member of the Board of Studies of the BA
(Fiqh and Usul Fiqh) Programme of the International Islamic University of Malaysia (IIUM) in 2007–
2010. He is a member of the Majlis Agama Islam Wilayah Persekutuan (MAIWP) and sits on the boards
of Malaysian Industrial Development Finance (MIDF) Berhad, MIDF Property Berhad, Mesiniaga
Berhad, Sime Darby Berhad, and Sime Darby Property Berhad. He also serves as a Board member of
Institut Kefahaman Islam Malaysia (IKIM).
ASSOC. PROF. DR. SAID
BOUHERAOUA
6/6
Shariah committee
meeting attended
ASSOC. PROF. DR. SAID BOUHERAOUA, aged forty-eight (48). Shariah Committee member of MRT
since 1 April 2011. Holds a Bachelor Degree in Fiqh and Usul Al-Fiqh from University of Algiers in 1991. In
1998, he obtained his Masters Degree from the International Islamic University of Malaysia (IIUM) and in
2002, he completed his Ph.D from the Department of Fiqh and Usul al-Fiqh of the same university.
He started his career with University Sains Islam Malaysia (USIM) as a Lecturer in 2003. After two (2)
years, he became an Assistant Professor Dr. & Associate Professor Dr. at the Ahmad Ibrahim Kulliyyah
of Laws in IIUM, from year 2004 to 2009. He then resumed his career path as a Senior Researcher at the
International Shari’ah Research Academy (ISRA) for Islamic Finance. He is also a member of the Shariah
Committee for Affin Islamic Bank since March 2008. He is also member of Shari’ah Committee of ISRA
Consultancy institute, since April 2011 and a registered Shariah Adviser with Securities Commission
Malaysia since March 2012.
Dr. Said is the editor-in-chief of ISRA International Journal of Islamic Finance. He has published four (4)
books, six (6) chapters in books and several articles in refereed journals. He has also presented several
papers in international conferences including the International Fiqh Academy of the OIC and Islamic Fiqh
Academy of Muslim World League. He developed the curricula in Islamic law for four (4) courses at IIUM
and conducted several training sessions in Islamic law Islamic banking and finance in Malaysia and abroad.
Prior to his achievements and contributions towards the industry, he had won the Lamya al-Faruqi Award
for Academic Excellence in 1999, organised by International Institute of Islamic Thought and IIUM.
100
PROFILE OF SHARIAH COMMITTEE MEMBERS (CONT’D)
DR. SYED MUSA SYED
JAAFAR ALHABSHI
6/6
Shariah committee
meeting attended
DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-five (55), Shariah Committee member of MRT
since 1 June 2011. Independent Non-Executive Director since 23 July 2008.
Other information on Dr. Syed Musa Syed Jaafar Alhabshi is disclosed in the Directors’ Profile section
of Takaful IKHLAS on page 86 of this Annual Report.
DATUK Haji NIK MOUSTPHA
HAJI NIK HASSAN
5/6
Shariah committee
meeting attended
DATUK HAJI NIK MOUSTPHA HAJI NIK HASSAN, aged sixty-two (62). Shariah Committee member
of MRT since 1 April 2012.
Other information on Datuk Haji Nik Moustpha Haji Nik Hassan is disclosed in the Shariah Committee
Member’s Profile section of Takaful IKHLAS on page 89 of this Annual Report.
DR. MOHAMED FAIROOZ
ABDUL KHIR
6/6
Shariah committee
meeting attended
DR. MOHAMED FAIROOZ ABDUL KHIR, aged thirty-nine (39). Shariah Committee member of MRT
since 1 April 2013.
Other information on Dr. Mohamed Fairooz Abdul Khir is disclosed in the Shariah Committee Member’s
Profile section of Takaful IKHLAS on page 88 of this Annual Report.
101
PRESIDENT & CEO’S
PROFILE
AHMAD RUHAIZAD HASHIM
President & CEO
AHMAD RUHAIZAD HASHIM is the President & CEO and also Senior Vice President & Group Chief
Strategy Officer of MNRB. He graduated in 1990 with a Bachelor of Economics and Accounting Degree
from the University of Leeds, England. He is a member of the Malaysian Institute of Certified Public
Accountants (MICPA) since 1995 as well as a member of the Malaysian Institute of Accountants. He
brings almost twenty-one (21) years of experience in corporate management and advisory services. His
career started in 1991 when he joined Arthur Andersen as an auditor. He served Arthur Andersen for
more than five (5) years until 1996 when he left to join KUB Malaysia Berhad. He then rejoined Arthur
Andersen in 1999 to head the Kuala Terengganu branch operation. In 2002, he joined Putrajaya Holdings
Sdn. Bhd. as the Head of the Corporate Planning Department. He joined MNRB on 2 January 2008.
Appointed as the President & CEO with effect from 1 January 2015.
102
MRT’S
(A) GENERAL RETAKAFUL
2015
Class
2014
RM’000
%
RM’000
%
14,882
53
42,301
66
Marine
3,836
14
8,332
13
Motor
4,478
16
5,372
8
4,956
17
8,074
13
28,152
100
64,079
100
Fire
Total
17%
Fire
53%
13%
Fire
66%
Motor
8%
Motor
16%
2015
2014
Marine
13%
Marine
14%
(B) FAMILY RETAKAFUL
2015
2014
RM’000
RM’000
35,711
53,071
103
A
NURTURING
PARTNER
Malaysian Re (Dubai) Ltd. or MRDL continues to make good headway in its role as a nurturing reinsurance
partner to clients in the Middle East and North Africa (MENA) region. Through the provision of high quality
reinsurance services and underwriting support to its clientele in the MENA region, MRDL is developing
solid relationships with them as well as paving the way for future growth in that part of the world.
CORPORATE
PROFILE
MALAYSIAN RE (DUBAI) LTD.
USD5
USD2
million
Paid-up Capital of
million
Malaysian Re (Dubai)
Limited (MRDL),
a wholly owned subsidiary of
MNRB Holdings Berhad,
was incorporated on 7 December 2006 in Dubai,
the United Arab Emirates.
Its office is situated within the strategic
Dubai International Financial Centre (DIFC)
and regulated by the Dubai Financial Services
Authority (DFSA).
MRDL is engaged in developing business for its
sister company, Malaysian Reinsurance Berhad
(Malaysian Re) in the Middle East and North
Africa (MENA) region. Its primary functions
are to develop relationships with clients around
the MENA region as well as provide services
and underwriting support to them. Its close
proximity to this target market gives MRDL an
edge when servicing its clients.
All businesses of MRDL are fully underwritten
by Malaysian Re, an ‘a-’ (Excellent) rated
company by A.M. Best and ‘A’ by Fitch Ratings.
MRDL will continue to expand its market
presence in the MENA region and is committed
to being at the forefront of the reinsurance
segment within the region.
CAPITAL STRUCTURE
MRDL has an authorised Capital of USD5
million and a Paid-up Capital of USD2 million.
105
CORPORATE
INFORMATION
Company Secretary
Board of
Senior Executive Officer
Zaini Abdul Aziz
Sharkawi Alis
Principal Banker
Zainudin Ishak
Precinct Building 1
DIFC Branch
Dubai, United Arab Emirates
Tel : +971 4 5083612
Fax: +971 4 4282502
Mohd Din Merican
Auditors
Moore Stephens Chartered
Accountants
106
Suite M5-A, Zalfa Building
Al Garhoud Area
P. O. Box 28817
Tel : +971 4 2820811
Fax: +971 4 2820812
Registered Office
Unit 101, Level 1
Gate Village 4, The Gate District
Dubai International Financial Centre
P. O. Box 506571
Tel : +971 4 3230388
Fax: +971 4 3230288
Website: www.malaysian-re.com.my
DIRECTORS’
PROFILE
2/2
Board meeting
attended
SHARKAWI ALIS
SHARKAWI ALIS, aged sixty-eight (68), Malaysian.
Non-Executive Chairman since 17 December 2007.
Non-Independent
N/A
ZAINUDIN ISHAK
Board meeting
attended
ZAINUDIN ISHAK, aged forty-eight (48),
Non-Executive Director since 23 April 2015.
Malaysian.
Non-Independent
Other information on Zainudin Ishak is disclosed in the Directors’ Profile section of
Malaysian Re on page 69 of this Annual Report.
107
MOHD DIN MERICAN
2/2
Board meeting
attended
Non-Executive Director since 5 February 2012.
108
SENIOR EXECUTIVE
OFFICER’S PROFILE
ZAINI ABDUL AZIZ
2/2
Board meeting
attended
Senior Executive Officer
ZAINI ABDUL AZIZ, is the Senior Executive Officer of MRDL. Prior to this, he served as
Vice President, International Treaties Department of Malaysian Re, a sister company of MRDL.
He has been with Malaysian Re for twenty (20) years, and comes to the role with extensive on the
ground client-facing experience. He joined Malaysian Re as a Risk Surveyor upon obtaining his Bachelor
of Business from Temple University, Philadelphia, in 1992. He has had a successful career with
Malaysian Re in various departments where he gained his knowledge and experience in many aspects
of reinsurance business.
109
CORPORATE
PROFILE
MALAYSIAN MOTOR
INSURANCE POOL (MMIP)
The Malaysian Motor
Insurance Pool (MMIP)
was collectively set up in 1992 by the local insurance companies
to provide motor insurance
to vehicle owners who are unable to obtain insurance protection for their vehicles.
Malaysian Re was then appointed as the Administration Manager for the pool.
MMIP Services Sdn. Bhd. (MSSB), a subsidiary of MNRB Holdings Berhad, was incorporated on 23 March 2006. Following its incorporation,
the duties and functions of the Administration Manager were transferred from Malaysian Re to MSSB on 12 April 2006.
The duties and functions of MSSB, include inter alia, dealing with the overall administrative and financial functions of the MMIP as well as Bodily
Injury claims administration.
CORPORATE
INFORMATION
Senior Vice President
Board of
S. Manogaran
Company Secretary
Zainudin Ishak
Auditors
DIRECTOR
Ernst & Young
Norazman Hashim
DIRECTOR
Principal Banker
CIMB Bank Berhad
110
Jalan Damanlela
Damansara Heights
50490 Kuala Lumpur
Tel : +603-7495 8000
Fax: +603-2095 5332
Registered Office
Damansara Heights
50490 Kuala Lumpur
Tel : +603 2096 8006
Fax: +603 2096 7006
FINANCIAL STATEMENTS
Directors’ Report
112
Statement by Directors
116
Statutory Declaration
116
Independent Auditors’ Report
117
Income Statements
119
Statements of Comprehensive Income
120
Statements of Financial Position
121
Statements of Changes in Equity
122
Statements of Cash Flows
123
Notes to the Financial Statements
125
FINANCIAL
STATEMENTS
DIRECTORS’
REPORT
Directors’ Report
The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the
financial year ended 31 March 2015.
Principal Activities
The Company is an investment holding company, principally engaged in the provision of management services to its subsidiaries.
The principal activities of the subsidiaries have been disclosed in Note 17 to the financial statements. There have been no significant changes in the
nature of the principal activities of the Group and of the Company during the financial year.
Results
Net profit for the year
Group
RM’000
Company
RM’000
139,148
11,539
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year were not substantially
affected by any item, transaction or event of a material and unusual nature.
Dividend
The amount of dividend paid by the Company since the end of the previous financial year was as follows:
RM’000
In respect of the financial year ended 31 March 2014:
First and final single-tier dividend of 16.5%, paid on 29 October 2014
The Directors do not recommend the payment of any dividend in respect of the current financial year.
112
35,156
DIRECTORS’ REPORT (CONT’D)
Directors
The names of the Directors of the Company in office since the date of the last report and at the date of this report are:
Sharkawi bin Alis
Mohd Din bin Merican
P. Raveenderen
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin
Yusoff bin Yaacob
Datuk Mohd Khalil bin Dato’ Mohd Noor (Resigned with effect from 1 June 2015)
Megat Dziauddin bin Megat Mahmud
Paisol bin Ahmad
Hijah Arifakh binti Othman (Appointed with effect from 1 June 2015)
In accordance with Article 86 of the Company’s Articles of Association, Yusoff bin Yaacob and Paisol bin Ahmad will be retiring by rotation at
the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. In accordance with Article 92 of the Company’s
Articles of Association, Hijah Arifakh binti Othman retires and, being eligible offers herself for re-election.
P. Raveenderen, who will be retiring pursuant to Section 129 of the Companies Act, 1965 at the forthcoming Annual General Meeting, offers himself
for re-appointment as Director in accordance with Section 129 of the said Act to hold office until the conclusion of the next Annual General Meeting
of the Company.
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin who will be also retiring pursuant to Section 129 of the Companies Act 1965 at the forthcoming
Annual General Meeting, had informed that he would not be seeking re-election.
Directors’ Benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party,
whereby the Directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than benefits included in the
aggregate amount of emoluments received or due and receivable by the Directors from the Company or the fixed salary and benefits receivable as
a full-time employee of the Company as disclosed in Notes 9, 10 and 32 to the financial statements or benefits receivable from related corporations)
by reason of a contract made by the Company 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’ Interests
According to the register of Directors’ shareholdings, the interest of Directors in office at the end of the financial year in shares of the Company
during the financial year are as follows:
Number of ordinary shares of RM1.00 each
As at
As at
1 April 2014
Acquired
Sold
31 March 2015
Direct Interests:
P. Raveenderen
Datuk Mohd Khalil bin Dato’ Mohd Noor
(Resigned with effect from 1 June 2015)
10,000
-
-
10,000
5,000
-
-
5,000
Other than as stated above, none of the Directors in office at the end of the financial year had any interest in shares of the Company or its related
corporations during the financial year.
113
Significant and Subsequent Events
The significant events during the financial year are as disclosed in Note 39 to the financial statements. The Board of the Company had on
22 April 2015, announced that the Company’s reinsurance subsidiary, Malaysian Re, had been granted an approval from Bank Negara Malaysia
(“BNM”), vide its letter dated 16 April 2015, to conduct General and Family retakaful business under Section 10 of the Islamic Financial Services Act,
2013 (“IFSA”) via the establishment of a retakaful division. Following this, the MNRB Group plans to undertake an internal restructuring exercise for
its retakaful business, the details of which will be announced at a later date.
Other Statutory Information
(a)
(b)
Before the income statements and statements of financial position of the Group and of the Company were made out, the Directors took
reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and
satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of
business had been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances which would render:
(i)
it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the
Company inadequate to any substantial extent; and
(ii)
the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c)
At the date of this report, the Directors are not aware of any circumstances which have arisen which would render adherence to the existing method
of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d)
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or in the financial statements of
the Group and of the Company which would render any amount stated in the financial statements misleading.
(e)
As at the date of this report, there does not exist:
(i)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of
any other person; or
(ii)
any contingent liability of the Group or of the Company which has arisen since the end of the financial year other than those arising in the
normal course of business of the Group and of the Company.
114
Other Statutory Information (CONT’D)
(f)
In the opinion of the Directors:
(i)
no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the
end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and
(ii)
no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of
this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which
this report is made.
For the purpose of paragraphs (e)(ii) and (f)(i) above, contingent or other liabilities do not include liabilities arising from reinsurance, takaful and retakaful
contracts underwritten in the ordinary course of business of the reinsurance, takaful and retakaful subsidiaries and associate companies.
Auditors
The retiring auditors, Messrs. Ernst & Young, have expressed their willingness to accept re-appointment.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 31 July 2015.
Sharkawi bin Alis Mohd Din bin Merican
Kuala Lumpur, Malaysia
115
STATEMENT BY
DIRECTORS
Pursuant to Section 169(15) of the Companies Act, 1965
We, Sharkawi bin Alis and Mohd Din bin Merican, being two of the Directors of MNRB Holdings Berhad, do hereby state that, in the opinion of
the Directors, the accompanying financial statements set out on pages 119 to 235 are drawn up in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia, so as to give a true and fair view
of the financial position of the Group and of the Company as at 31 March 2015 and of the results and the cash flows of the Group and of the Company
for the year then ended.
In the opinion of the Directors, the information set out in Note 41 and page 236 of the financial statements has been compiled in accordance with
the Guidance On Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements” issued by the Malaysian Institute of Accountants on 20 December 2010, and presented based on
the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 31 July 2015.
Sharkawi bin Alis
Mohd Din bin Merican
Statutory
declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Norazman bin Hashim, being the officer primarily responsible for the financial management of MNRB Holdings Berhad, do solemnly and sincerely
declare that the accompanying financial statements set out on pages 119 to 236 are in my opinion 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 Norazman bin Hashim
at Kuala Lumpur in Wilayah Persekutuan
on 31 July 2015
Before me,
116
)
)
)
)
Norazman bin Hashim
Independent auditors’
report
to the members of MNRB Holdings Berhad (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of MNRB Holdings Berhad, which comprise the statements of financial position as at 31 March 2015 of
the Group and of the Company, the income statements, the statements of comprehensive income, the statements of changes in equity and the
statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other
explanatory information, as set out on pages 119 to 235.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements 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 judgement, 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 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.
opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2015 and
of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 (“the Act”) in Malaysia, we also report the following:
(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we
have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b)
We have considered the financial statements and the auditors’ report of the subsidiary of which we have not acted as auditors, which are indicated
in Note 17 to the financial statements, being financial statements that have been included in the consolidated financial statements.
(c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are
in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received
satisfactory information and explanations required by us for those purposes.
(d)
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and, in respect of the subsidiaries
incorporated in Malaysia, did not include any comment required to be made under Section 174(3) of the Act.
117
independent auditors’ REPORT (CONT’D)
to the members of MNRB Holdings Berhad (Incorporated in Malaysia)
Other reporting responsibilities
The supplementary information set out in Note 41 on page 236 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not
part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on
Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities
Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities
Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive
of Bursa Malaysia Securities Berhad.
Other matters
This report is made solely to the members of the Company, 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.
Ernst & Young
AF: 0039
Chartered Accountants
31 July 2015
118
Dato’ Abdul Rauf bin Rashid
No. 2305/05/16(J)
Chartered Accountant
income
statements
for the year ended 31 march 2015
Note
Gross earned premiums/contributions
Premiums/contributions ceded to reinsurers/retakaful operators
4(a)
4(b)
Net earned premiums/contributions
Investment income
Net realised gains/(losses)
Net fair value (losses)/gains
Fee and commission income
Other operating revenue
5
6
7
8
Other revenue
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2,191,597
(244,266)
2,182,962
(199,524)
-
-
1,947,331
1,983,438
-
-
2014
RM’000
199,507
9,733
(5,839)
35,737
10,471
174,235
21,056
3,796
24,574
12,242
62,164
(85)
33,868
101
105,787
(763)
794
31,072
53
249,609
235,903
96,048
136,943
-
-
-
-
-
-
Gross claims and benefits paid
Claims ceded to reinsurers/retakaful operators
Gross change in contract liabilities
Change in contract liabilities ceded to reinsurers/
retakaful operators
(1,240,681)
154,687
(147,847)
Net claims and benefits
(1,269,971)
(1,281,256)
(435,399)
(209,555)
(18,123)
(7,680)
(10,764)
(13,265)
(451,224)
(195,411)
(17,916)
(5,154)
(18,637)
(13,992)
(36,866)
(18,123)
(30,330)
-
(35,898)
(17,916)
(32,474)
-
(694,786)
(702,334)
(85,319)
(86,288)
Fee and commission expense
Management expenses
Finance costs
Other operating expenses
Change in expense liabilities
Tax borne by participants
(36,130)
8
9
11
12
Other expenses
Share of results of associates
Operating profit before surplus attributable to takaful
participants, zakat and taxation
Surplus attributable to takaful participants
Operating profit before zakat and taxation
Zakat
Taxation
4,157
11,737
2,437
-
-
23(a)
236,340
(45,635)
238,188
(23,460)
10,729
-
50,655
-
12
190,705
(960)
(50,597)
214,728
(400)
(58,342)
10,729
810
50,655
(25,616)
139,148
155,986
11,539
25,039
65.3
73.2
Net profit for the year attributable to equity holders
of the Parent
Basic and diluted earnings per share attributable to equity
holders of the Parent (sen):
(1,064,335)
151,356
(380,014)
29
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
119
statements of
comprehensive income
Group
2015
RM’000
2014
RM’000
139,148
155,986
11,539
25,039
Effects of post-acquisition foreign exchange translation reserve on
investment in associate
9,689
5,160
-
-
Effects of foreign exchange translation reserve on investment in
subsidiary
1,101
369
-
-
Company
2015
RM’000
2014
RM’000
Other comprehensive income/(losses)
Other comprehensive income/(losses) to be reclassified to income
statement in subsequent periods:
Net gain/(loss) on Available-for-sale (“AFS”) financial assets:
Gain/(loss) on fair value changes
Realised (gains)/losses transferred to income statement (Note 6)
Deferred tax relating to net (gain)/loss on AFS financial assets
44,155
(7,378)
(3,389)
(50,487)
(13,626)
8,646
-
Other comprehensive (gains)/losses attributable to participants
(Note 23(b))
(27,120)
34,915
-
-
8,032
4,749
-
-
(770)
763
2
Other comprehensive income not to be reclassified to income
statement in subsequent periods:
Revaluation of land and buildings
Deferred tax relating to revaluation of land and buildings
Other comprehensive income attributable to participants (Note 23(c))
Total comprehensive income for the year
(937)
(141)
-
-
(2,140)
(2,909)
-
-
11,539
25,034
161,161
142,662
120
statements of
financial position
as at 31 march 2015
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
237,495
7,100
14,632
11,484
110,567
236,936
6,900
14,519
24,180
96,053
2,907
3,797
2,313
843,705
1,957
2,610
2,497
1,503
872,032
1,957
137,934
722,356
2,530,716
1,917,938
374,653
303,918
25,216
82,702
-
139,478
718,597
2,303,023
1,783,211
399,787
369,611
5,462
36,644
1,696
50
37,071
2,877
-
50
26,927
5,461
2,904
-
6,476,711
6,136,097
894,677
915,941
286,726
320,000
4,159,278
169,424
170,807
7,676
12,455
871
217,476
320,000
4,012,263
169,865
157,393
8,298
26,965
368
320,000
9,203
2,083
-
320,000
8,933
-
5,127,237
4,912,628
331,286
328,933
213,070
1,136,404
213,070
1,010,399
213,070
350,321
213,070
373,938
Total equity attributable to equity holders of the Parent
1,349,474
1,223,469
563,391
587,008
Total liabilities, participants’ funds and equity
6,476,711
6,136,097
894,677
915,941
Note
Assets
Property, plant and equipment
Investment properties
Intangible assets
Deferred tax assets
Investments in subsidiaries
Investments in associates
Financial assets:
Financial assets at fair value through profit or loss (“FVTPL”)
Held-to-maturity (“HTM”) investments
AFS financial assets
Loans and receivables (“LAR”)
Reinsurance/retakaful assets
Insurance/takaful receivables
Tax recoverable
Cash and bank balances
Non-current assets held for sale
13
14
15
16
17
18
19(a)
19(b)
19(c)
19(d)
20
21
22
Total assets
Liabilities and Participants’ funds
Participants’ funds
Borrowings
Insurance/takaful contract liabilities
Insurance/takaful payables
Other payables
Deferred tax liabilities
Provision for taxation
Provision for zakat
23
24
20
25
26
16
Total liabilities and participants’ funds
Equity
Share capital
Reserves
27
121
statements of
changes in equity
Share
capital
RM’000
Attributable to equity holders of the Company
Reserves
Non-distributable
Distributable
Foreign
exchange
translation
AFS Revaluation
Retained
Share
reserve
reserve
reserve
profits
premium
RM’000
RM’000
RM’000
RM’000
RM’000
Total
RM’000
Group
At 1 April 2013
Other comprehensive income/(loss)
for the year
Total comprehensive income/(loss)
for the year
Dividend paid during the year (Note 28)
Reclassification upon disposal of
property
213,070
-
105,051
-
16,728
-
8,472
-
30,660
-
757,963
155,986
-
-
5,529
(20,552)
1,699
-
-
-
5,529
-
(20,552)
-
1,699
-
-
-
-
At 31 March 2014
Other comprehensive income for
the year
Total comprehensive income for the year
213,070
-
105,051
-
22,257
-
(12,080)
-
-
-
10,790
10,790
-
At 31 March 2015
213,070
105,051
At 1 April 2013
Other comprehensive loss for the year
Total comprehensive (loss)/income
for the year
213,070
-
-
(115)
155,986
(51,137)
1,131,944
155,986
(13,324)
142,662
(51,137)
115
-
32,244
-
862,927
139,148
1,223,469
139,148
6,268
6,268
-
4,955
4,955
-
139,148
(35,156)
33,047
(5,812)
37,199
966,919
105,051
-
-
5
(5)
-
294,985
25,039
-
613,111
25,039
(5)
-
-
-
(5)
-
-
25,039
(51,137)
25,034
(51,137)
At 31 March 2014
Net profit and total comprehensive
income for the year
213,070
105,051
-
-
-
268,887
587,008
-
-
-
-
-
11,539
(35,156)
11,539
(35,156)
At 31 March 2015
213,070
105,051
-
-
-
245,270
563,391
22,013
161,161
(35,156)
1,349,474
Company
122
statements of
cash flows
Cash flows from operating activities
Profit before zakat and taxation
Adjustments for:
Net fair value losses/(gains) on financial assets at FVTPL
Impairment loss/(reversal of impairment loss) on AFS financial assets
(Reversal of impairment loss)/impairment loss on HTM investments
Reversal of impairment loss on properties
Impairment loss on other receivables
Impairment loss/(reversal of impairment loss) on insurance/
takaful receivables
Depreciation of property, plant and equipment
Amortisation of intangible assets
Fair value gains on investment properties
Net losses/(gains) on disposals of property, plant and equipment
(Decrease)/increase in gross premium and contribution liabilities
Impairment loss on investment in subsidiary
Interest/profit income
Dividend income
Rental income
Finance cost
Realised (gains)/losses on disposals of investments
Realised gains on disposals of non-current assets held for sale
Net amortisation of premiums on investments
Group
2015
RM’000
2014
RM’000
190,705
214,728
Company
2015
RM’000
10,729
-
2014
RM’000
50,655
4,266
2,043
(54)
(216)
32
(3,987)
1,229
139
(477)
425
(794)
-
6,947
8,310
3,950
(200)
81
(11,596)
(184,589)
(15,122)
(4,888)
18,123
(9,761)
(53)
3,579
(4,157)
(2,575)
10,726
3,352
(700)
(149)
20,651
(162,749)
(11,578)
(5,436)
17,916
(20,907)
3,315
(2,437)
441
75
85
30,327
(1,164)
(61,000)
18,123
-
955
552
32,469
(789)
(105,000)
17,916
763
-
61,486
(2,384)
(3,273)
Profit/(loss) from operations before changes in operating assets
and liabilities
Increase in placements with licensed financial institutions,
Islamic investment accounts and marketable securities
Net (purchase)/disposal of investments
Increase in staff loans
Decrease in insurance/takaful receivables
(Increase)/decrease in other receivables
Net change in balances with subsidiaries
Increase in gross claim and actuarial liabilities
Increase in expense liabilities
Increase in participants’ funds
Decrease/(increase) in reinsurance/retakaful assets
Decrease in insurance/takaful payables
Increase/(decrease) in other payables
Taxes and zakat (paid)/refunded
Interest/profit received
Dividends received
Rental received
(147,007)
(171,646)
(1,294)
58,746
(7,413)
147,847
10,764
45,635
25,134
(441)
13,414
(78,615)
172,406
24,118
4,175
(128,744)
(448,067)
(1,976)
37,023
(12,439)
380,014
18,637
23,459
(11,811)
(41,859)
40,418
(52,884)
162,327
11,536
4,534
(9,657)
(135)
388
(147)
(288)
7,544
1,129
61,000
-
(10,042)
453
(1,447)
280
1,312
(382)
2,514
764
81,000
-
Net cash generated from operating activities
103,223
41,654
57,450
71,179
7,400
123
statements of cash flows (CONT’D)
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
Cash flows from investing activities
Subscription of shares in subsidiary
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from disposal of intangible assets
Proceeds from disposal of non-current assets held for sale
Proceeds from disposal of property, plant and equipment
(2,413)
(3,503)
2
1,749
279
(6,438)
(4,682)
420
(2,000)
(1,094)
(1,375)
271
(1,359)
(810)
-
Net cash used in investing activities
(3,886)
(10,700)
(4,198)
(2,169)
Cash flows from financing activities
Profit paid
Dividend paid
(18,123)
(35,156)
(17,901)
(51,137)
(18,123)
(35,156)
(17,901)
(51,137)
Net cash used in financing activities
(53,279)
(69,038)
(53,279)
(69,038)
Net increase/(decrease) during the year
At beginning of the year
46,058
36,644
(38,084)
74,728
(27)
2,904
(28)
2,932
At end of the year
82,702
36,644
2,877
2,904
124
notes to the
financial statements
– 31 March 2015
1.Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia
Securities Berhad. The registered office of the Company is located at 12th Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara
Heights, 50490 Kuala Lumpur, Malaysia.
The Company is an investment holding company, principally engaged in the provision of management services to its subsidiaries.
The principal activities of the subsidiaries have been disclosed in Note 17 to the financial statements. There have been no significant changes in the
nature of the principal activities of the Group and of the Company during the financial year.
The number of employees in the Group and in the Company at the end of the financial year were 893 and 193 (2014: 862 and 196) respectively.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 31 July 2015.
2.Significant accounting policies
2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards
(“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost convention, unless otherwise stated
in the accounting policies. The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand
(RM’000) except when otherwise indicated.
2.2Accounting period
For the general reinsurance business, the Group adopts quarterly accounting periods ending on 31 March, 30 June, 30 September and
31 December, insofar as the underwriting income and outgo for Market Cessions business is concerned. This is to correspond with the ceding
companies’ accounting periods.
Underwriting income and outgo in respect of other business classes and all other income and expenditure are for the 12 months ended
31 March 2015.
2.3Subsidiaries, associates and basis of consolidation
(i)Subsidiaries
A subsidiary is an entity over which the Group has all the following:
(a) power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);
(b) exposure, or rights, to variable returns from its investment with the investee; and
(c) the ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the three elements of control.
125
notes to the financial statements (CONT’D)
– 31 March 2015
2.Significant accounting policies (cont’d)
2.3Subsidiaries, associates and basis of consolidation (cont’d)
(i)Subsidiaries (cont’d)
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has
less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing
whether it has power over an investee, including:
(a)
the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less any accumulated impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in the income
statement.
(ii)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date.
The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same
reporting date as the Company.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be
consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances,
transactions and unrealised gains or losses resulting from intragroup transactions are eliminated in full. Uniform accounting policies
are adopted in the consolidated financial statements for like transactions and events in similar circumstances.
Acquisitions of subsidiaries are accounted for using the acquisition method. The acquisition method of accounting involves allocating
the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of
acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given,
liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities represents goodwill. Any excess of the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities over the cost of acquisition is recognised immediately in the income statement.
(iii)Takaful and retakaful operations and funds
Under the concept of takaful/retakaful, individuals/cedants make contributions to a pool which is managed by a third party with the
overall aim of using the monies to aid fellow participants in times of need. Accordingly, the takaful and retakaful subsidiaries of the
Company manage the general and family takaful and retakaful funds in line with the principles of Wakalah (agency), which is the
main business model used by the takaful and retakaful subsidiaries. Under the Wakalah model, the takaful/retakaful operator is not a
participant in the fund but manages the funds (including the relevant assets and liabilities) towards the purpose outlined above.
In accordance with the IFSA 2013 and, previously, the Takaful Act 1984, the assets and liabilities of the takaful funds are segregated
from those of the takaful operator: a concept known as segregation of funds. However, in compliance with MFRS 10 Consolidated
Financial Statements, the assets, liabilities, income and expenses of the takaful and retakaful funds are consolidated with those of the
takaful and retakaful subsidiaries to represent the control possessed by the takaful/retakaful operator over the respective funds.
126
– 31 March 2015
2.3Subsidiaries, associates and basis of consolidation (cont’d)
(iii)Takaful and retakaful operations and funds (cont’d)
In preparing the Group financial statements, the balances and transactions of the shareholders’ funds of the takaful and retakaful
subsidiaries were amalgamated and combined with those of the takaful and retakaful funds respectively. Interfund balances, transactions
and unrealised gains or losses are eliminated in full during amalgamation and consolidation.
The takaful and retakaful funds of the takaful and retakaful subsidiaries are consolidated and amalgamated from the date of control and
continue to be consolidated until the date such control ceases which will occur when the takaful and retakaful subsidiaries’ licences to
manage takaful and retakaful businesses respectively are withdrawn or surrendered.
(iv)Associates
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in control or joint
control over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the
equity method, the investments in associates are carried in the consolidated statement of financial position at cost adjusted for postacquisition changes in the Group’s share of net assets of the associates. The Group’s share of the net profit or loss of the associates is
recognised in the consolidated income statement. Where there has been a change recognised directly in the equity of the associates,
the Group recognises its share of such changes.
In applying the equity method, unrealised gains and losses on transactions between the Group and the associates are eliminated to the
extent of the Group’s interest in the associates. After application of the equity method, the Group determines whether it is necessary to
recognise any additional impairment loss with respect to the Group’s net investments in the associates. The investments in associates
are accounted for using the equity method from the date the Group obtains significant influence until the date the Group ceases to
have significant influence over the associates or the investments become subsidiaries.
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s
share of the net fair value of the associates’ identifiable assets, liabilities and contingent liabilities over the cost of the investments is
excluded from the carrying amount of the investments and is instead included as income in the determination of the Group’s share of
the associates’ profit or loss in the period in which the investments are acquired.
When the Group’s share of losses in associates equal or exceed its interest in the associates, including any long-term interests that, in
substance, form part of the Group’s net investment in the associates, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associates.
The most recent available audited financial statements of the associates are used by the Group in applying the equity method. Where
the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is derived from
the last audited financial statements available and management financial statements to the end of the accounting period. Uniform
accounting polices are adopted for like transactions and events in similar circumstances.
In the Company’s separate financial statements, investments in associates are stated at cost less any accumulated impairment losses.
On disposal of such investments, the difference between net disposal proceeds and the carrying amount is included in the income
statement.
127
– 31 March 2015
2.4 General reinsurance, takaful and retakaful underwriting results
The general reinsurance, takaful and retakaful underwriting results are determined after taking into account premiums/contributions,
reinsurance/retakaful/retrotakaful costs, commissions, movements in premium/contribution liabilities, net claims incurred and wakalah fees.
The general takaful and retakaful funds are maintained in accordance with the IFSA 2013 and consist of AFS reserves and the accumulated
surplus/deficit in the funds. Any deficit will be made good by the shareholder’s fund via a loan or Qard.
In general takaful and retakaful funds, the surplus distributable to the participants is determined after deducting retakaful/retrotakaful costs,
movements in contribution liabilities, commissions, net claims incurred, wakalah fees, expenses, taxation and surplus administration charges.
The surplus may be distributed to the shareholder and participants in accordance with the terms and conditions of the respective contracts or
prescribed by the Shariah Committee.
(i)Premium and contribution recognition
Gross premiums/contributions are recognised in a financial period in respect of risks assumed during the particular financial period.
Gross premiums/contributions include premium/contribution income in relation to direct general business, inwards facultative
business, inwards proportional treaty reinsurance/retakaful and inwards non-proportional treaty reinsurance/retakaful.
Contributions from direct businesses are recognised as soon as the amount of contribution can be reliably measured in accordance
with the principles of Shariah. Contributions are recognised in a financial period in respect of risks assumed during that particular
financial period.
Inwards facultative premiums/contributions are recognised in the financial period in respect of the facultative risk assumed during the
particular financial period following individual risks’ inception dates.
Inwards proportional treaty premiums/contributions are recognised on the basis of periodic advices received from cedants given that
the periodic advices reflect the individual underlying risks being incepted and reinsured/covered at various inception dates of these
risks and contractually accounted for under the terms of the proportional reinsurance/retakaful treaty.
Premium/contribution income on inward non-proportional treaties, which cover losses occurring during a specified treaty period, are
recognised based on the contractual premiums/contributions already established at the start of the treaty period under the terms and
conditions of each contract.
(ii)Premium and contribution liabilities
Premium/contribution liabilities represent the future obligations on insurance/takaful contracts as represented by premiums/
contributions received for risks that have not yet expired. The movement in premium/contribution liabilities is released over the term
of the insurance/takaful contracts and recognised as earned premium/contribution income.
Premium/contribution liabilities are reported at the higher of the aggregate of the unearned premium reserves (“UPR”)/unearned
contribution reserves (“UCR”) respectively for all lines of business or the best estimate value of the unexpired risk reserves (“URR”) and
a provision of risk margin for adverse deviation (“PRAD”) calculated at 75% confidence level at the end of the financial year.
128
– 31 March 2015
2.4 General reinsurance, takaful and retakaful underwriting results (cont’d)
(ii)Premium and contribution liabilities (cont’d)
(a)Unexpired risk reserves
The URR is a prospective estimate of the expected future payments arising from future events insured or covered under policies
or contracts in force and expected to be incurred as at the end of the financial year and also includes allowance for expenses,
including overheads and costs of reinsurance/retakaful, expected to be incurred during the unexpired period in administering
these policies or contracts and settling the relevant claims, and shall allow for expected future premium/contribution refunds.
URR is estimated via an actuarial valuation performed by a qualified actuary, using a mathematical method of estimation similar
to incurred but not reported (“IBNR”) claims.
(b)Unearned premium and contribution reserves
The UPR/UCR represent the portion of the net premiums/contributions of insurance/takaful contracts written that relate to
the unexpired periods of the contracts at the end of the financial year. The UCR is calculated on net contribution income with a
further deduction for wakalah fee expenses to reflect the wakalah business principle. The methods of computation of UPR/UCR
are as follows:
-
For inwards proportional treaty reinsurance/retakaful business, UPR/UCR are computed on the 1/8th method commencing
from the quarter corresponding to the reporting quarter of the treaty statement;
-
For inwards non-proportional treaty reinsurance/retakaful business, UPR/UCR is computed at 1/2 of the last quarter
Minimum Deposit Premiums/Contributions received;
-
For inwards facultative reinsurance/retakaful business, UPR/UCR is computed on the 1/8th method commencing from the
date of inception;
-
Time apportionment method for all classes of general takaful business within Malaysia except Marine and Aviation Cargo;
and
-
25% method for Marine and Aviation Cargo.
(iii)Claim liabilities
The amount of outstanding claims is the best estimate value of claim liabilities, which include provision for claims reported, claims
incurred but not enough reserved (“IBNER”) and IBNR claims together with related expenses less recoveries to settle the present
obligation as well as a PRAD calculated at 75% confidence level at the end of the financial year. Liabilities for outstanding claims are
recognised when a claimable event occurs and/or as advised/notified. IBNER and IBNR claims are based on an actuarial valuation by a
qualified actuary, using a mathematical method of estimation based on, amongst others, actual claims development patterns.
129
– 31 March 2015
2.4 General reinsurance, takaful and retakaful underwriting results (cont’d)
(iv)Liability adequacy test
At each reporting date, the Group reviews all insurance/takaful contract liabilities to ensure that the carrying amount of the liabilities
is sufficient or adequate to cover the obligations of the Group, contractual or otherwise, with respect to insurance/takaful contracts
issued. In performing this review, the Group compares all contractual cash flows against the carrying value of insurance/takaful contract
liabilities. Any deficiency is recognised in the income statement.
The estimation of claim/benefit and premium/contribution liabilities performed at the reporting date is part of the liability adequacy
tests performed by the Group.
(v)Acquisition costs and commission expense
The acquisition costs and commission expenses, which are costs directly incurred in acquiring and renewing reinsurance/takaful/
retakaful business, are recognised as incurred and properly allocated to the periods in which it is probable they give rise to income.
2.5Family takaful and retakaful underwriting results
The family takaful and retakaful underwriting results are determined after taking into account contributions, retakaful/retrotakaful costs,
commissions, net benefits incurred and wakalah fees.
The family takaful and retakaful funds are maintained in accordance with the requirements of the IFSA 2013 and consist of AFS reserves
and the accumulated surplus/deficit in the funds. The family takaful and retakaful fund surplus/deficit is determined by an annual actuarial
valuation of the funds. Any actuarial deficit in the family takaful and retakaful funds will be made good by the shareholder’s fund via a loan or
Qard.
In family takaful and retakaful funds, the surplus distributable to the participants is determined after deducting retakaful/retrotakaful costs,
net benefits incurred, wakalah fees, expenses, taxation and surplus administration charges. The surplus may be distributed to the shareholder
and participants in accordance with the terms and conditions of the respective contracts or prescribed by the Shariah Committee.
(i)Contribution recognition
Takaful contribution is recognised as soon as the amount of contribution can be reliably measured in accordance with the principles of
Shariah. First year contribution is recognised on the assumption of risks and subsequent takaful contributions are recognised on due
dates. Takaful contributions outstanding at the reporting date is recognised as income for the period provided they are within the grace
period allowed for payment and there are sufficient funds available in the participants’ accounts to cover such contributions due.
Retakaful contributions are recognised in respect of risks assumed during a particular financial period. Inwards treaty retakaful
contributions are recognised on the basis of statements received from ceding companies.
130
– 31 March 2015
2.5Family takaful and retakaful underwriting results (cont’d)
(ii)Contract liabilities
Family takaful contract liabilities are recognised when contracts are in-force and contributions are charged. Liabilities of benefits
payable of the family retakaful fund are recognised as advised by ceding companies.
For a one year family contract or a one year extension to a family contract covering contingencies other than life or survival, the liability
for such family takaful contracts comprises contribution and claim liabilities with an appropriate allowance for PRAD from the expected
experience.
The family takaful contract liabilities are derecognised when the contracts expire, are discharged or are cancelled. At each reporting
date, an assessment is made of whether the recognised family takaful contract liabilities are adequate by performing a liability adequacy
test as disclosed in Note 2.5(iv).
Liabilities of family takaful business are determined in accordance with valuation guidelines for takaful operators issued by BNM.
All family takaful liabilities have been valued using a prospective actuarial valuation based on the sum of the present value of future
benefits and expenses less future gross considerations arising from the contracts, discounted at the appropriate risk discount rate.
This method is known as the gross contribution valuation method. In the case of a family contract where a part of, or the whole of, the
contributions are accumulated in a fund, the accumulated amount as declared to the participants are set as the liabilities. Zerorisation
is applied at contract level and no contract is treated as an asset under the valuation method adopted.
In respect of the family takaful and retakaful risk fund, the expected future cash flows of benefits are determined using best estimate
assumptions with an appropriate allowance for PRAD from expected experience such that an overall level of sufficiency of contract
reserves at a 75% confidence level is secured. In the case of investment-linked business, the fund value is treated as a liability.
Surpluses arising from the difference between the value of the family fund and the liabilities, including accumulated surplus, will be
distributed to the participants after deduction for surplus administration charges, as appropriate.
If the difference between the value of the family fund and the liabilities results in a deficit, the deficit is made good via a Qard from the
takaful subsidiary which will be repaid when the fund returns to a surplus position.
(iii)Creation/cancellation of units of family takaful fund
Amounts received for units created represent contributions paid by participants or unitholders as payment for new contracts or
subsequent payments to increase the amount of the contracts. Creation/cancellation of units are recognised in the financial statements
at the next valuation date, after the request to purchase/sell units are received from the participants or unitholders.
(iv)Liability adequacy test
At each reporting date, the Group reviews all insurance/takaful contract liabilities to ensure that the carrying amount of the liabilities
is sufficient or adequate to cover the obligations of the Group, contractual or otherwise, with respect to insurance/takaful contracts
issued. In performing this review, the Group compares all contractual cash flows against the carrying value of insurance/takaful contract
liabilities. Any deficiency is recognised in the income statement.
131
– 31 March 2015
2.6Shareholder’s fund of takaful and retakaful subsidiaries
(i)Commission expenses
Commission expenses, which are costs directly incurred in securing contributions on takaful contracts, are recognised as incurred and
properly allocated to the periods in which it is probable they give rise to income. Commission expenses are recognised in the income
statement at an agreed percentage for each contract underwritten. This is in accordance with the principles of Wakalah as approved by
the Shariah Committee and as agreed between the participants and the takaful subsidiary.
(ii)Expense liabilities
The expense liabilities of the shareholder’s fund consist of expense liabilities of the general takaful and retakaful funds and the family
takaful and retakaful funds which are based on estimations performed by qualified actuaries. The movement in expense liabilities is
released over the term of the takaful contracts and recognised in the income statement.
(a)Expense liabilities of general takaful and retakaful funds
The expense liabilities of the general takaful and retakaful funds are reported at the higher of the aggregate of the reserves for
unearned wakalah fees (“UWF”) and the best estimate value of the provision for unexpired expense reserves (“UER”) and a PRAD
at a 75% confidence level at the end of the financial year.
Unexpired expense reserves
The UER is determined based on the expected future expenses payable by the shareholder’s fund in managing the general takaful
and retakaful funds for the full contractual obligation of the takaful and retakaful contracts as at the end of the financial year,
less any expected cash flows from future wakalah fee income, and any other income due to the shareholder’s fund that can be
determined with reasonable certainty, calculated at 75% confidence level. The method used to value the UER is consistent with
the method used in estimating the URR as disclosed in Note 2.4(ii)(a).
Reserves for unearned wakalah fees
The UWF represent the portion of wakalah fee income allocated for management expenses of general takaful and retakaful
contracts that relate to the unexpired periods of contracts at the end of the financial year. The method used in computing UWF
is consistent with the calculation of UCR under Note 2.4(ii)(b).
(b)Expense liabilities of family retakaful and takaful fund
The valuation of expense liabilities in relation to contracts of the family retakaful and takaful fund is conducted separately by the
Appointed Actuaries. The method used to value expense liabilities is consistent with the method used to value retakaful liabilities of
the corresponding family retakaful/takaful contracts. In valuing the expense liabilities, the present value of expected future expenses
payable by the shareholder’s fund in managing the retakaful fund for the full contractual obligation of the retakaful/takaful contracts
less any expected cash flows from future wakalah fee income, and any other income due to the shareholder’s fund that can be
determined with reasonable certainty, are taken into consideration. The estimation includes a PRAD at a 75% confidence level.
(c)Liability adequacy test
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At each reporting date, the Group reviews the expense liabilities to ensure that the carrying amount is sufficient or adequate
to cover the obligations of the Group for all managed takaful contracts. In performing this review, the Group considers all
contractual cash flows and compares this against the carrying value of expense liabilities. Any deficiency is recognised in the
income statement.
– 31 March 2015
2.7Product classification
Financial risk is the risk of a possible future change in one or more of a specified interest/profit rate, financial instrument price, commodity
price, foreign exchange rate, index of price or rate, credit rating or credit index or other variable, provided in the case of a non-financial variable
that the variable is not specific to a party to the contract. Insurance/underwriting risk is the risk other than financial risk.
An insurance/takaful contract is a contract under which the reinsurance, takaful and retakaful subsidiaries have accepted significant insurance/
underwriting risk from another party by agreeing to compensate the party if a specified uncertain future event adversely affects the party. As
a general guideline, the reinsurance, takaful and retakaful subsidiaries determine whether significant insurance/underwriting risk has been
accepted by comparing claims/benefits payable on the occurrence of an insured event with claims/benefits payable if the event had not
occurred.
Conversely, investment contracts are those contracts that transfer financial risk with no significant insurance/underwriting risk.
Once a contract has been classified as an insurance/takaful contract, it remains an insurance/takaful contract for the remainder of its life-time,
even if the insurance/underwriting risk reduces significantly during the period, unless all rights and obligations expire or are extinguished.
2.8Reinsurance/retakaful
The reinsurance, takaful and retakaful subsidiaries cede insurance/underwriting risk in the normal course of business. Ceded reinsurance/
retakaful arrangements do not relieve the reinsurance, takaful and retakaful subsidiaries from their obligations to cedants/participants. For
both ceded and assumed reinsurance/retakaful, premiums/contributions and claims/benefits are presented on a gross basis.
Reinsurance/retakaful arrangements entered into by the reinsurance, takaful and retakaful subsidiaries that meet the classification
requirements of insurance/takaful contracts as described in Note 2.7 are accounted for as noted below. Arrangements that do not meet these
classification requirements are accounted for as financial assets.
Reinsurance/retakaful assets represent amounts recoverable from reinsurers/retakaful operators for insurance/takaful contract liabilities
which have yet to be settled at the reporting date. Amounts recoverable from reinsurers/retakaful operators are measured consistently with
the amounts associated with the underlying insurance/takaful contracts and the terms of the relevant reinsurance/retakaful arrangement.
At each reporting date, the reinsurance, takaful and retakaful subsidiaries assess whether objective evidence exists that reinsurance/
retakaful assets are impaired. Objective evidence of impairment for reinsurance/retakaful assets are similar to those noted for insurance/
takaful receivables. If any such evidence exists, the amount of the impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest/profit rate. The
impairment loss is recognised in the income statement. Reinsurance/retakaful assets are derecognised when the contractual rights expire or
are extinguished or when the contract is transferred to another party.
2.9Property, plant and equipment and depreciation
(i)Recognition and measurement
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, plant and equipment are stated
at cost less accumulated depreciation and any impairment losses, whilst properties are stated at revalued amounts less subsequent
accumulated depreciation and subsequent impairment losses. Cost includes expenditures that are directly attributable to the acquisition
of the asset.
In respect of freehold land and buildings, valuations are performed with sufficient frequency to ensure that the carrying amount does
not differ materially from the fair value of the freehold land and buildings at the reporting date.
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2.9Property, plant and equipment and depreciation (cont’d)
(i)Recognition and measurement (cont’d)
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve,
except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the income statement, in which
case the increase is recognised in the income statement. A revaluation deficit is recognised in the income statement, except to the
extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net
amount is restated to the revalued amount of the asset. On disposal of property, plant and equipment, the difference between net
proceeds and the carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that
item is taken directly to retained profits.
(ii)Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of
the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.
(iii)Depreciation
Freehold land has an unlimited useful life and therefore is not depreciated. Leased properties are depreciated over the shorter of the
lease term and their useful lives.
Work in progress is also not depreciated as it is not available for use. When work in progress is completed and the asset is available for
use, it is reclassified to the relevant category of property, plant and equipment and depreciation of the asset begins. During the period
in which the asset is not yet available for use, it is tested for impairment annually.
Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its
residual value over its estimated useful life, at the following annual rates:
Buildings
Computer equipment
Office equipment
Furniture and fittings
Motor vehicles
The residual values, useful lives and depreciation method are reviewed at the end of each financial year to ensure that the amount,
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future
economic benefits embodied in the items of property, plant and equipment.
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2% to 4%
10% to 33.3%
10% to 33.3%
10% to 15%
20%
– 31 March 2015
2.10Investment properties
Investment properties are properties which are held either to earn rental income and/or for capital appreciation. Such properties are measured
initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value.
Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent
valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being
valued.
Gains or losses arising from changes in the fair values of investment properties are recognised in the income statement in the year in which
they arise.
Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently
withdrawn from use and no future economic benefit is expected from the disposals. Any gains or losses on the retirement or disposal of an
investment property are recognised in the income statement in the year in which they arise.
Transfers are made to or from investment property only when there is a change in use. For a transfer from owner-occupied property to
investment property, any excess of the property’s carrying value over its fair value is accounted for as a revaluation surplus which is recognised
in other comprehensive income. Any deficit between the property’s carrying value and its fair value is recognised as an impairment loss in the
income statement. Subsequent to the date of change in use, the property is measured similar to other investment properties. Any revaluation
surplus previously recognised in other comprehensive income is transferred to the income statement only upon disposal of the property.
2.11Intangible assets
All intangible assets are initially recorded at cost. Subsequent to recognition, intangible assets are stated at cost less any accumulated
amortisation and any impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.
On disposal of intangible assets, the difference between net proceeds and the carrying amount is recognised in the income statement.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a
straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible
assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed
annually at the end of each reporting period.
Amortisation is charged to the income statement.
Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The useful life of an
intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.
(i)Software development in progress
Software development in progress represent development expenditure on software. Following the initial recognition of the
development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated impairment losses.
When development is complete and the asset is available for use, it is reclassified to computer software and amortisation of the asset
begins. It is amortised over the period of expected future use. During the period in which the asset is not yet available for use, it is tested
for impairment annually.
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2.11Intangible assets (cont’d)
(ii)Computer software and licences
The useful lives of computer software and licences are considered to be finite because computer software and licences are susceptible
to technological obsolescence.
The acquired computer software and licences are amortised using the straight-line method over their estimated useful lives not
exceeding 6 years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are
also reviewed annually at the end of each financial year.
2.12Financial assets
(i) Initial recognition and measurement
Financial assets are recognised in the statement of financial position when, and only when, the Group and the Company become a party
to the contractual provisions of the instrument.
A financial asset is recognised initially, at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are
directly attributable to the acquisition of the financial asset.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely
related to the economic characteristics and risks of the host contract and the host contract is not categorised at FVTPL. The host
contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with the policy applicable to the
nature of the host contract.
(ii)Classification and subsequent measurement
The Group and the Company determine the classification of its financial assets at initial recognition and this depends on the purpose for
which the investments were acquired or originated. The following classifications are used by the Group and the Company in categorising
its financial assets:
(a)Financial assets at FVTPL
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Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial
recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets
acquired principally for the purpose of selling in the near term.
Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Any gains or losses arising from changes in
fair value are recognised in the income statement. Net gains or net losses on financial assets at FVTPL do not include exchange
differences, interest and dividend income. Exchange differences and interest and dividend income on financial assets at FVTPL
are recognised in the appropriate categories of income and expenses in the income statement.
– 31 March 2015
2.12Financial assets (cont’d)
(ii)Classification and subsequent measurement (cont’d)
(b)HTM investments
Financial assets with fixed or determinable payments and fixed maturities are classified as HTM when the Group and the
Company have the positive intention and ability to hold the investments to maturity.
Subsequent to initial recognition, HTM investments are measured at amortised cost using the effective interest/yield method
less any accumulated impairment losses. Gains and losses are recognised in the income statement when the HTM investments
are derecognised or impaired, and through the amortisation process.
(c)Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest/yield method.
Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired, and
through the amortisation process.
(d)AFS financial assets
AFS financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding
categories.
After initial recognition, AFS financial assets are subsequently measured at fair value. Any gains or losses from changes in fair
value of the financial asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains
and losses on monetary instruments and interest/profit calculated using the effective interest/yield method are recognised in
the income statement. The cumulative gain or loss previously recognised is reclassified from other comprehensive income to the
income statement as a reclassification adjustment when the financial asset is derecognised. Interest/profit income calculated
using the effective interest/yield method is recognised in the income statement.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated
impairment losses.
(iii)Derecognition
A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or the Group and the
Company have transferred their rights to receive cash flows from the asset or have assumed an obligation to pay the received cash
flows in full. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in the
income statement.
(iv)Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.
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2.13Fair value measurement
The Group and the Company measure financial instruments, such as, financial assets at FVTPL, and non-financial assets such as investment
properties, at fair value at each reporting date. The fair values of financial instruments measured at amortised cost are disclosed in Notes 19
and 40.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either:
(i)
In the principal market for the asset or liability; or
(ii)
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group and the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account
a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - Inputs that are based on observable market data, either directly or indirectly; and
Level 3 - Inputs that are not based on observable market data.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting period. The fair value hierarchy of financial instruments is disclosed in Note 40.
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2.14Impairment of assets
(i)Financial assets
The Group and the Company assess at the end of each reporting period whether there is any objective evidence that a financial asset
or a group of financial assets is impaired.
(a)Financial assets carried at amortised cost
The Group and the Company first assess whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined
that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset
is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively
assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues
to be recognised are not included in a collective assessment of impairment. The impairment assessment is performed at the end
of each reporting period.
If there is objective evidence that an impairment loss on assets carried at amortised cost has been incurred, the amount of
the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows (excluding future expected credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate/yield. The carrying amount of the asset is reduced and the loss is recorded in the income statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal
of an impairment loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed
its amortised cost at the reversal date.
(b)AFS financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the
disappearance of an active trading market are considerations to determine whether there is objective evidence that investment
securities classified as AFS financial assets are impaired.
If an AFS financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and
amortisation) and its current fair value, less any impairment losses previously recognised in the income statement, is transferred
from equity to the income statement.
Impairment losses on AFS equity investments are not reversed in the income statement in subsequent periods. Increases in fair
value, if any, subsequent to impairment loss is recognised in other comprehensive income. For AFS debt investments, impairment
losses are subsequently reversed in the income statement if an increase in the fair value of the investment can be objectively
related to an event occurring after the recognition of the impairment loss in the income statement.
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2.14Impairment of assets (cont’d)
(ii)Non-financial assets
The carrying amounts of non-financial assets are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies
of the combination.
The recoverable amount of an asset or cash-generating unit 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 pre-tax 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 if the
carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash generating units are
allocated first to reduce the carrying amount of the other assets in the unit (or groups of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are
assessed at the end of each reporting period for any indications that the losses have decreased or no longer exist.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last
impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Reversals of impairment losses are credited to the income statement in the period in which the reversals are recognised.
2.15Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale
in its present condition subject only to terms that are usual and customary.
Immediately before classification as held for sale, the non-current assets are measured in accordance with applicable MFRSs. On initial
classification as held for sale, non-current assets are then measured at the lower of its carrying amount and fair value less costs to sell. Any
difference is included in the income statement. Non-current assets classified as held for sale are not depreciated.
2.16 Measurement and impairment of Qard
Any deficits in the takaful/retakaful funds are made good via a loan or Qard, granted by the shareholder’s funds to the takaful/retakaful funds.
The Qard is stated at cost less any impairment losses in the shareholder’s funds. In the takaful/retakaful funds, the Qard is stated at cost.
The Qard shall be repaid from future surpluses of the takaful/retakaful funds.
The Qard is tested for impairment on an annual basis via an assessment of the estimated surpluses or cash flows from the takaful/retakaful
funds to determine whether there is any objective evidence of impairment. If the Qard is impaired, an amount comprising the difference
between its cost and its recoverable amount, less any impairment loss previously recognised, is recognised in the income statement.
Impairment losses are subsequently reversed in the income statement if objective evidence exists that the Qard is no longer impaired.
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2.17Share capital and dividend expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified
as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.
2.18Cash and cash equivalents
Cash and cash equivalents include cash in hand and at banks, excluding fixed and call deposits with licensed financial institutions, which have
an insignificant risk of changes in value. The statement of cash flows has been prepared using the indirect method.
2.19Insurance and takaful receivables
Insurance/takaful receivables are amounts receivable under the contractual terms of an insurance/takaful contract. On initial recognition,
insurance/takaful receivables are measured at fair value based on the consideration receivable. Subsequent to initial recognition, insurance/
takaful receivables are measured at amortised cost, using the effective interest/yield method.
Insurance/takaful receivables are assessed at each reporting date for objective evidence of impairment. If any such evidence exists, the
amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows discounted at the insurance/takaful receivable’s original effective interest/yield rate. The impairment loss is recognised in the income
statement. The basis for recognition of such impairment loss is as described in Note 2.14(i)(a).
Insurance/takaful receivables are derecognised when the rights to receive cash flows from them have expired or when they have been
transferred and the Group has also substantially transferred all risks and rewards of ownership.
2.20Borrowings
All borrowings are classified as other financial liabilities and are recognised initially at fair value plus directly attributable transaction costs.
The profits payable are recognised as finance costs in the income statement in the period in which they are incurred.
After initial recognition, profit-bearing borrowings are subsequently measured at amortised cost using the effective profit rate method. Gains
and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective profit rate method.
2.21Leases
(i)Classification
A lease is recognised as a finance lease if it substantially transfers to the Group all the risks and rewards incidental to ownership. Leases
of land and buildings are classified as operating or finance leases in the same way as leases of other assets. The land and buildings
elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not
substantially transfer all risks and rewards are classified as operating leases, with the following exceptions:
(a)
Property held under operating leases that would otherwise meet the definition of an investment property is classified as an
investment property on a case-by-case basis and, if classified as investment property, is accounted for as if held under a finance
lease, as disclosed in Note 2.10; and
(b)
Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a
building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is
also clearly held under an operating lease.
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2.21Leases (cont’d)
(ii)Finance leases - the Group as lessee
Assets acquired by way of hire purchase or finance lease are stated at an amount equal to the lower of their fair value and the present
value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. The
corresponding liability is included in the statement of financial position as borrowings. In calculating the present value of the minimum
lease payments, the discount factor used is the interest/profit rate implicit in the lease, when it is impracticable to determine; otherwise,
the Group and the Company’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such
assets.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent
the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the income statement
over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for
each accounting period.
The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in
Note 2.9(iii).
(iii)Operating leases - the Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate
benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.
In the case of a lease of land and buildings, the minimum lease payments or the upfront payments made are allocated, whenever
necessary, between the land and the buildings elements in proportion to the relative fair values of leasehold interests in the land
element and buildings element of the lease at the inception of the lease. The up-front payments represent prepaid lease payments and
are amortised on a straight-line basis over the lease term.
(iv)Operating leases - the Group as lessor
Assets leased out under operating leases are presented in the statement of financial position according to the nature of the assets.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease, as disclosed in
Note 2.27(ii). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
asset and recognised on a straight-line basis over the lease term.
2.22Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial
liability.
Financial liabilities, within the scope of MFRS 139 Financial Instruments: Recognition and Measurement, are recognised in the statement of
financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.
Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.
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2.22Financial liabilities (cont’d)
(i)Financial liabilities at FVTPL
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at
FVTPL.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge
accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant
gains or losses recognised in the income statement. Net gains or losses on derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at FVTPL nor were there any financial liabilities held for
trading during and at the end of the financial year.
(ii)Other financial liabilities
The Group and the Company’s other financial liabilities include borrowings, insurance/takaful payables and other payables.
Insurance/takaful and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest/yield method.
For other financial liabilities, gains and losses are recognised in the income statement when the liabilities are derecognised, and through
the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by
another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in the income statement.
2.23Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are
reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the
amount of provision is the present value of the expenditure expected to be required to settle the obligation.
2.24Income tax
Income tax on profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in
respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the end of the financial year.
Deferred tax is provided for, using the liability method, on temporary differences at the end of the financial year 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, unused tax losses and unused tax
credits to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax
losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial recognition of
an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit
nor taxable profit.
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2.24Income tax (cont’d)
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on
tax rates that have been enacted or substantively enacted at the end of the financial year. Deferred tax is recognised in the income statement,
except when it arises from a transaction which is recognised directly in other comprehensive income, in which case the deferred tax is also
charged or credited directly in other comprehensive income.
2.25Employee benefits
(i)Short-term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are
rendered by employees of the Group. Short-term accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated balances. Short-term non-accumulating
compensated absences such as sick leave are recognised when the absences occur.
(ii)
Defined contribution plan
As required by law, the Group makes contributions to the national pension scheme, the Employees Provident Fund (“EPF”). The
Group also makes additional contributions to the EPF for eligible employees by reference to their length of service and earnings. Such
contributions are recognised as an expense in the income statement as incurred.
(iii)Employees’ terminal benefits
As required by law in the United Arab Emirates, the Group makes provision for terminal benefits for employees of its Dubai subsidiary,
based on the employees’ salaries and number of years of service. The terminal benefits are paid to the employees on termination or
completion of their terms of employment.
2.26Foreign currencies
(i)Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment
in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia
(“RM”), which is also the Company’s functional currency.
(ii)Foreign currency transactions
In preparing the financial statements, transactions in currencies other than the functional currency (“foreign currencies”) are recorded
in the functional currency using the exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items
denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items carried at fair
value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised
in income statement except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign
operations, which are recognised intially in other comprehensive income and accumulated under the foreign currency translation
reserve in equity. The foreign currency translation reserve is reclassified from equity to the income statement of the Group on disposal
of the foreign operation.
144
– 31 March 2015
2.26Foreign currencies (cont’d)
(ii)Foreign currency transactions (cont’d)
Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the income statement for
the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised
directly in other comprehensive income. Exchange differences arising from such non-monetary items are also recognised directly in
other comprehensive income.
(iii)Foreign operations
The results and financial position of foreign operations that have a functional currency different from the presentation currency of the
consolidated financial statements are translated into RM as follows:
(a)
Assets and liabilities for each statement of financial position presented are translated at the closing rate prevailing at the reporting date;
(b)
Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the
exchange rates at the dates of the transactions;
(c)
All resulting exchange differences are taken to the foreign currency translation reserve within equity; and
(d)
The results of an associate, Labuan Reinsurance (L) Limited, are translated at the closing rate prevailing at the reporting date
with respect to the carrying amount of the investment in associate, and at the exchange rate at the date of the transactions with
respect to the share of profits or losses. All resulting translation differences are included in the foreign exchange translation
reserve in shareholders’ equity.
2.27Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits flow to the Group and the Company and the revenue can
be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
(i)
Interest and profit income are recognised using the effective interest/yield method.
(ii)
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are
recognised as a reduction of rental income over the lease term on a straight-line basis.
(iii)
Dividend income is recognised when the right to receive payment is established.
(iv)
Management fees are recognised when services are rendered.
(v)
Wakalah fees are recognised as soon as the amount of contribution can be reliably measured in accordance with the principles of Shariah.
(vi)
Premiums/contributions are recognised in accordance with the policies stated in Note 2.4(i) and 2.5(i).
2.28Zakat
Zakat represents an obligatory amount payable by the takaful and retakaful subsidiaries to comply with the principles of Shariah. Zakat is
computed using the “net-asset” method at a rate of 2.5%, as approved by the Shariah Committee. Only the zakat that is attributable to the
individual and corporate Muslim shareholders of the holding company was provided for in the financial statements. The Zakat computation is
reviewed by the Shariah Committee. The Board has the discretion to pay additional quantum above the obligatory amount payable.
145
– 31 March 2015
2.29Changes in Accounting Policies
The accounting policies adopted by the Group and the Company are consistent with those of the previous financial year except for the
following:
Adoption of Amendments to MFRSs and Issues Committee (“IC”) Interpretation
At the beginning of the current financial year, the Group and the Company had adopted all Amendments to MFRSs and IC Interpretation
mandatory for annual periods beginning on or after 1 January 2014 as follows:
Description
Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities
Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities
Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets
Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting
IC Interpretation 21 Levies
Effective for annual periods
beginning on or after
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
The adoption of the above Amendments to MFRSs and IC Interpretation did not have any significant effect on the financial statements of the
Group and the Company.
2.30Standards issued but not yet effective
The standards and amendments to standards that are issued but not yet effective up to the date of issuance of the Group’s and the Company’s
financial statements are disclosed below. The Group and the Company intend to adopt these standards and amendments to standards, if
applicable, when they become effective:
Description
Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions
Annual Improvements to MFRS 2010 - 2012 Cycle
MFRS 14 Regulatory Deferral Accounts
Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
Amendments to MFRS 10, MFRS 12 and MFRS 128 Investment Entities: Applying the
Consolidation Exception
Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations
Amendments to MFRS 101 Disclosure Initiative
Amendments to MFRS 116 and MFRS 138 Clarification of Acceptable Methods of Depreciation
and Amortisation
Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants
Amendments to MFRS 127 Equity Method in Separate Financial Statements
MFRS 15 Revenue from Contracts with Customers
MFRS 9 Financial Instruments
146
Effective for annual periods
beginning on or after
1 July 2014
1 July 2014
1 July 2014
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
1 January 2018
– 31 March 2015
2.30Standards issued but not yet effective (cont’d)
The Directors expect that the adoption of the above standards and amendments to standards are not expected to have material impact on the
financial statements in the period of initial application except as discussed below:
MFRS 9 Financial Instruments (“MFRS 9”)
In November 2014, MASB issued the final version of MFRS 9 which reflects all phases of the financial instruments project and replaces MFRS
139 and all previous versions of MFRS 9. The standard introduces new requirements for classification and measurement, impairment and
hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective
application is required, but comparative information is not compulsory. The adoption of MFRS 9 will have an effect on the classification and
measurement of the Group’s financial assets, but no impact on the classification and measurement of the Group’s financial liabilities. The
Directors are in the process of assessing the financial implications for adopting the new standard.
3.Significant accounting estimates and judgements
The preparation of the Group and the Company’s financial statements requires management to make judgements, estimates and assumptions that
affect the reported amount of revenues, expenses, assets and liabilities at the reporting date. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.
3.1Critical judgement made in applying accounting policies
The following are the judgements made by management in the process of applying the Group’s accounting policies that have the most
significant effect on the amounts recognised in the financial statements. Judgements are continually evaluated and are based on historical
experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Classification between investment properties and property, plant and equipment
The Group has developed certain criteria based on MFRS 140 Investment Property in making judgement whether a property qualifies as an
investment property. Investment property is a property held to earn rentals and/or for capital appreciation. Some properties comprise a
portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or
services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group
would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an
insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an
individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.
Impairment of AFS financial assets
The Company reviews its debt securities classified as AFS financial assets at each reporting date to assess whether they are impaired. The
Company also records impairment charges on AFS equity investments when there has been a significant or prolonged decline in the fair value
below their cost.
The determination of what is “significant” or “prolonged” requires judgement. In making this judgement, the Company evaluates, among
other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost.
147
– 31 March 2015
3.Significant accounting estimates and judgements (cont’d)
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a)
Depreciation and amortisation
Depreciation and amortisation are based on management’s estimates of the future estimated average useful lives and residual values of
property, plant and equipment and intangible assets respectively. Estimates may change due to technological developments, expected
level of usage, competition, market conditions and other factors, and could impact the estimated average useful lives and the residual
values of these assets and correspondingly, may result in future changes in depreciation or amortisation expenses.
Accordingly, at the end of each reporting period, the residual values and estimated useful lives of property, plant and equipment and
intangible assets are assessed to determine that they continue to be consistent as disclosed in Notes 2.9(iii) and 2.11, respectively.
As at the reporting date, management has determined that the estimated useful lives and residual values of property, plant and
equipment and intangible assets of the Group and of the Company remain consistent.
(b)
General reinsurance, takaful and retakaful business
The principal uncertainty in the general reinsurance, takaful and retakaful business arises from the technical provisions which include
the estimation of premium/contribution and claim liabilities. Premium/contribution liabilities are recorded as the higher of UPR/UCR
and URR while claim liabilities mainly comprise provision for claims reported and IBNER and IBNR claims.
Generally, claim liabilities are determined based upon previous claims experience, existing knowledge of events, the terms and
conditions of the relevant policies and interpretation of circumstances. Particularly relevant is past experience with similar cases,
historical claims development trends, legislative changes, judicial decisions and economic conditions. It is certain that actual future
premium/contribution and claim liabilities will not exactly develop as projected and may vary from the projection.
The estimates of premium/contribution and claim liabilities are therefore sensitive to various factors and uncertainties. The
establishment of technical provisions is an inherently uncertain process and, as a consequence of this uncertainty, the eventual
settlement of premium/contribution and claim liabilities may vary from the initial estimates.
At each reporting date, the estimates of premium/contribution and claim liabilities are re-assessed for adequacy by an appointed
actuary and changes will be reflected as adjustments to these liabilities. The appointment of the actuary is approved by BNM.
(c)Family takaful and retakaful business
The estimation of the ultimate liability arising from claims made under the family takaful and retakaful businesses is a critical accounting
estimate. There are several sources of uncertainty that need to be considered in the estimation of the liabilities that the family takaful
and retakaful funds will ultimately be required to pay as claims/benefits.
For family takaful and retakaful contracts, estimates are made for future deaths, disabilities, maturities, investment returns, voluntary
terminations and expenses in accordance with contractual and regulatory requirements. The family takaful and retakaful funds base
the estimate of expected number of deaths on statutory mortality tables, adjusted where appropriate to reflect the funds’ unique risk
exposures. The estimated number of deaths determines the value of possible future benefits to be paid out, which will be factored into
ensuring sufficient cover by reserves, which in return is monitored against current and future contributions.
148
– 31 March 2015
3.2 Key sources of estimation uncertainty (cont’d)
(c)Family takaful and retakaful business (cont’d)
For those contracts that cover risks related to disability, estimates are made based on recent past experience and emerging trends.
However, epidemics as well as wide ranging changes to lifestyle, could result in significant changes to the expected future exposures.
All of these will give rise to estimation uncertainties of the projected ultimate liabilities of the family takaful and retakaful funds.
At each reporting date, these estimates are re-assessed for adequacy and changes will be reflected as adjustments to the liabilities by
an appointed actuary. The appoinment of the actuary is approved by BNM.
(d)Impairment of non-financial assets
Assets are tested for impairment when indications of potential impairment exist. Indicators of impairment which could trigger an
impairment review include evidence of obsolescence or physical damage, significant fall in market values, significant underperformance
relative to historical or projected future operating results, significant changes in the use of assets or the strategy of the business
and significant adverse industry or economic changes. Recoverable amounts of assets are based on management’s estimates and
assumptions of the net realisable value, cash flows arising from the future operating performance and revenue generating capacity
of the assets and CGUs, and future market conditions. Changes in circumstances may lead to changes in estimates and assumptions,
and result in changes to the recoverable amounts of assets and impairment losses needed. As at the reporting date, management has
determined that recognised cumulative impairment losses as at the reporting date are appropriate.
(e)Impairment of unquoted equity investments
The Group and the Company follows the guidance of the applicable MFRS in determining whether there is a decline other than
temporary in the fair value of its investment in unquoted corporations. This determination requires significant judgement. In making this
judgement, the Group and the Company evaluate the quantitative and qualitative factors affecting the market position of the investee
including the regulatory support it receives and its longer term business outlook and financial standing. Appropriate considerations are
given to the investee’s financial gestation period, financial projections, business prospects and the proprietary technology involved.
It is also recognised that an initial decline in fair value of investments in new start-up investee companies, which is deemed temporary,
may arise due to development and operational losses in the initial years. Based on an assessment performed at the reporting date, the
Board of Directors and Management of the Group and the Company are of the opinion that there is no further indication of impairment
of the Group and the Company’s investment in unquoted corporations at this juncture.
(f)Impairment of insurance/takaful receivables and reinsurance/retakaful assets
The Group reviews its insurance/takaful and reinsurance/retakaful assets on a regular basis to assess whether impairment losses should
be recognised in the income statement. In particular, judgement by management is required in the estimation of the amount and timing
of future cash flows when determining the level of impairment required. Such estimates are necessarily based on assumptions about
the probability of default and probable losses in the event of default, the value of the underlying security, and realisation costs.
These estimates are revisited by management on a frequent basis, at least once a year, to determine if certain assumptions continue to
be reasonable. As at the reporting date, the impairment losses recognised on insurance/takaful receivables and reinsurance/retakaful
assets reflect the expected recoverable amounts of these assets.
149
– 31 March 2015
3.2 Key sources of estimation uncertainty (cont’d)
(g)
Deferred tax
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences and unused tax losses can be utilised. Significant
management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing
and level of future taxable profits together with future tax planning strategies.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend
on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management
transactions. Judgement is also required in the interpretation and application of income tax legislation. These judgements and
assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations,
which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised
tax losses and unrecognised temporary differences.
The judgements and assumptions used in the estimation of deferred tax liabilities/assets are re-assessed at least once a year to
determine that they continue to be appropriate.
The total carrying value of recognised temporary differences of the Group and unrecognised temporary deductible differences are
disclosed in Note 16 to the financial statements.
As at the reporting date, recognised deferred tax assets represent a fair estimate of the Group’s deductible temporary differences and
deferred tax liabilities reflect a fair estimate of the Group’s taxable temporary differences.
150
– 31 March 2015
4.Net earned premiums/contributions
Group
2015
RM’000
(a) Gross earned premiums/contributions
Insurance and takaful contracts
Change in premium/contribution liabilities
(b)Premiums/contributions ceded to reinsurers and retakaful operators
Insurance and takaful contracts
Change in premium/contribution liabilities
2014
RM’000
2,180,001
11,596
2,203,613
(20,651)
2,191,597
2,182,962
(255,262)
10,996
(199,598)
74
(244,266)
(199,524)
1,947,331
1,983,438
5.Investment income
Group
2015
RM’000
Financial assets at FVTPL
Dividend income:
- quoted shares in Malaysia
- unit trust funds
HTM investments
Dividend income:
- unquoted shares in Malaysia
- unit and real estate investment trusts in Malaysia
Loans and receivables
Dividend income from institutional trust funds
Dividend income from subsidiaries
Rental income
Net amortisation of premiums on investments
Investment expenses
2014
RM’000
Company
2015
RM’000
2014
RM’000
176
4,410
171
4,256
-
-
28,507
29,023
-
-
93,590
65,660
-
-
9,554
82
-
5,578
156
6
-
-
62,492
900
4,888
(3,579)
(1,513)
68,066
1,411
5,436
(3,315)
(2,213)
199,507
174,235
1,164
61,000
-
789
105,000
(2)
62,164
105,787
151
– 31 March 2015
6.Net realised gains/(losses)
Group
2015
RM’000
Net realised (losses)/gains
Net realised (losses)/gains:
- Shariah approved unit trust funds
- Structured products
HTM investments
Realised gains
Quoted shares in Malaysia
Quoted shares outside Malaysia
Unquoted corporate debt securities
Shariah approved unit trust funds
Government investment issues
Unquoted Islamic private debt securities
Net realised gains/(losses)
Realised gains
2014
RM’000
Company
2015
RM’000
(81)
149
(471)
2,854
-
163
6,595
519
-
-
4
-
-
11,636
758
367
865
13,626
-
53
-
-
9,733
21,056
(85)
2014
RM’000
Company
2015
RM’000
7,643
(651)
(225)
611
7,378
(85)
2014
RM’000
-
(763)
(763)
(763)
7.Net fair value (losses)/gains
Group
2015
RM’000
Fair value gain on investment property (Note 14)
Net fair value (losses)/gains on financial assets at FVTPL
Reversal of impairment losses/(impairment losses) on
HTM investments
Reversal of impairment losses on properties
(Impairment losses)/reversal of impairment losses on
152
200
(4,266)
-
-
(139)
477
-
-
(2,043)
(1,229)
-
794
(5,839)
3,796
-
794
54
216
700
3,987
2014
RM’000
– 31 March 2015
8.Fee and commission income/(expense)
Group
2015
RM’000
Management fees
Commission income
Commission expense
Brokerage
9.
2014
RM’000
Company
2015
RM’000
2014
RM’000
4,449
31,288
3,530
21,044
33,868
-
31,072
-
35,737
24,574
33,868
31,072
(434,627)
(772)
(449,489)
(1,735)
(435,399)
(451,224)
Management expenses
Group
2015
RM’000
Staff costs:
Salaries, bonus and other related costs
Directors’ remuneration (Note 10)
Shariah Committee members’ remuneration
Pension costs - EPF
Social security costs
Retirement benefits
Short term accumulating compensated absences
Auditors’ remuneration:
Statutory auditors of the Group
- statutory audit
-audit-related
- other services
Component auditors of a foreign subsidiary
Depreciation of property, plant and equipment
Amortisation of intangible assets
Property, plant and equipment written off
Share of acquisition costs on quota share retakaful
Agency expenses
Marketing and promotional costs
Electronic data processing costs
Office rental
Professional and legal fees
Contributions and donations
Other management expenses
2014
RM’000
Company
2015
RM’000
2014
RM’000
88,368
9,181
249
12,076
489
577
255
81,540
8,407
256
11,178
462
714
142
22,317
4,179
2,983
110
317
16
22,145
3,480
2,804
111
120
15
111,195
102,699
29,922
28,675
811
65
115
30
8,310
3,950
623
945
6,360
15,519
17,748
4,188
6,679
610
32,407
815
59
158
29
10,726
3,352
589
6,209
14,267
7,550
3,937
8,312
820
35,889
73
5
9
441
75
770
1,623
971
2,977
73
5
9
955
552
855
1,237
331
20
3,186
209,555
195,411
36,866
35,898
153
– 31 March 2015
10.directors’ remuneration
Group
2015
Number of non-executive directors
12
Group
2015
RM’000
Executive directors:
Salaries and bonus
Pension costs - EPF
Allowances
Benefits-in-kind
Others
2014
12
2014
RM’000
Company
2015
7
Company
2015
RM’000
2014
7
2014
RM’000
3,805
623
1
255
184
67
3,854
655
1
12
108
-
1,648
280
1
255
57
-
1,485
253
1
12
60
-
4,935
4,630
2,241
1,811
2,729
677
24
2,421
560
31
804
167
24
700
125
31
3,430
3,012
995
856
810
130
1
83
55
726
118
1
59
72
810
130
1
83
55
726
118
1
59
72
1,079
976
1,079
976
Total directors’ remuneration
9,444
8,618
4,315
3,643
Total directors’ remuneration excluding benefits-in-kind
9,181
8,407
4,179
3,480
Non-executive directors:
Fees
Meeting allowances
Benefits-in-kind
Director of a subsidiary*:
Salaries and bonus
Pension costs - EPF
Other allowances
Benefits-in-kind
* Director of a subsidiary refers to management personnel who is employed by the holding company.
154
– 31 March 2015
10.directors’ remuneration (cont’d)
The number of non-executive directors of the Company whose total remuneration, borne by the Company and Group, during the financial year fell
within the following bands is analysed below.
Number of Directors
Group
2015
11.
2014
Company
2015
2014
Executive director:
RM1,800,001 to RM1,850,000
RM2,200,001 to RM2,250,000
1
1
-
1
1
-
RM100,001 to RM150,000
RM150,001 to RM200,000
RM200,001 to RM250,000
RM250,001 to RM300,000
RM300,001 to RM350,000
RM350,001 to RM400,000
RM400,001 to RM450,000
RM450,001 to RM500,000
3
1
1
2
3
1
1
1
1
-
5
2
-
7
-
other operating expenses
Group
2015
RM’000
Loss on foreign exchange
Impairment losses on insurance/takaful receivables
Impairment loss on other receivables
Impairment loss on investment in subsidiary
Sundry expenses
2014
RM’000
Company
2015
RM’000
2014
RM’000
6,947
32
701
86
425
4,643
3
30,327
-
3
32,469
2
7,680
5,154
30,330
32,474
155
– 31 March 2015
12.Taxation
Group
2015
RM’000
Malaysian income tax:
Tax expense for the year
(Over)/under provision in prior years(i)
Deferred tax:
Relating to origination and reversal of temporary differences
(Note 16)
2014
RM’000
Company
2015
RM’000
2014
RM’000
54,074
(10,180)
64,652
2,565
-
22,919
2,729
43,894
67,217
-
25,648
6,703
(8,875)
(810)
50,597
58,342
(810)
(32)
25,616
Domestic income tax for general business and shareholders’ fund is calculated at the Malaysian statutory tax rate of 25% (2014: 25%) of the
estimated assessable profit for the year. Income tax on the Group’s family takaful business is calculated at a preferential tax rate of 8% (2014: 8%).
Income tax on the Group’s offshore insurance/takaful business is calculated at a tax rate of 5% (2014: 5%) of the estimated assessable profit on
the Group’s offshore insurance/takaful business for the year. A reconciliation of income tax expenses applicable to profit before zakat and tax at the
statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
Profit before zakat and tax
190,705
214,728
10,729
50,655
Taxation at Malaysian statutory tax rate of 25%
Effects of different tax rate in respect of offshore insurance
Income not subject to tax(ii)
Expenses not deductible for tax purposes(ii)
Unutilised current year business loss carried forward
Deferred tax assets not recognised
(Over)/under provision of tax in prior year(i)
47,676
(3,541)
(41,300)
55,950
2,929
103
(10,180)
(1,040)
53,682
(3,392)
(10,052)
14,990
407
751
2,565
(609)
2,682
(16,060)
12,465
103
-
12,664
(2,282)
11,679
826
2,729
-
50,597
58,342
(810)
2014
RM’000
25,616
(i)
The tax expense from YA 2010 to YA 2014 of the takaful subsidiary, which represents the open tax periods on which the subsidiary is entitled
to claim tax refunds under the Income Tax Act 1967, had been revised and the resultant changes had been recognised as an overprovision of
tax in the current financial year. The details are as described in Note 39.
(ii)
Following the enactment of Finance (No. 2) Act 2014, effective from YA 2015, wakalah fee income received by the shareholder’s fund of the
takaful subsidiary from its family takaful fund is no longer subject to tax and accordingly, the commission and management expenses incurred
by the shareholder’s fund in connection with the management of the family takaful fund is also not deductible for tax purposes. Therefore,
the deferred tax assets previously recognised for the expenses liability and management expenses in connection with the family fakaful fund
were derecognised in the financial year.
156
– 31 March 2015
12.Taxation (cont’d)
Group
2015
RM’000
2014
RM’000
Current year’s provision
(Over)/under provision of tax expense in prior years
Deferred tax relating to origination and reversal of temporary differences
13,533
(1,313)
1,045
13,696
422
(126)
13,265
13,992
Capital
work-inprogress
RM’000
Total
RM’000
13.Property, plant and equipment
Group
Freehold
land
RM’000
Buildings
RM’000
Computer
equipment
RM’000
Furniture,
fittings
and office
equipment
RM’000
Motor
vehicles
RM’000
Cost
At 1 April 2013
Additions
Disposals
Reclassification
Revaluation surplus
Elimination of accumulated
depreciation on revaluation
Transfer to non-current assets
held for sale (Note 22)
30,660
1,600
196,971
1,923
(284)
90
3,149
-
(2,355)
-
-
-
-
(2,355)
-
(1,696)
-
-
-
-
(1,696)
At 31 March 2014
Additions
Disposals
Write-offs
Reclassification
Revaluation surplus
Adjustments
Transfer to intangible assets
32,260
1,740
197,798
8
(623)
6,292
13,369
304
(94)
(890)
-
-
(4,718)
-
(562)
At 31 March 2015
34,000
198,757
12,555
1,007
(193)
-
12,127
36,065
2,688
(54)
-
38,699
1,929
(502)
(1,627)
303
-
3,208
446
(409)
-
3,245
100
(670)
-
-
-
38,802
2,675
488
374
(90)
-
279,947
6,438
(940)
4,749
772
72
(303)
-
286,143
2,413
(1,266)
(3,140)
8,032
(247)
-
(4,718)
(247)
(562)
294
286,655
157
– 31 March 2015
13.Property, plant and equipment (cont’d)
Group (cont’d)
Freehold
land
RM’000
Buildings
RM’000
Computer
equipment
RM’000
Furniture,
fittings
and office
equipment
RM’000
Motor
vehicles
RM’000
Capital
work-inprogress
RM’000
Total
RM’000
Accumulated depreciation and
impairment loss
At 1 April 2013
Depreciation charge for the year
Disposals
Reversal of impairment losses
during the year
-
4,311
5,030
(16)
-
(2,355)
-
-
-
(477)
-
-
At 31 March 2014
Disposals
Write-offs
Reversal of impairment losses
during the year
At 31 March 2015
-
At 31 March 2015
At 31 March 2014
11,553
979
(192)
12,340
538
(96)
(890)
24,461
4,204
(53)
28,612
3,086
(501)
(1,627)
1,657
513
(408)
-
41,982
10,726
(669)
-
-
(2,355)
-
-
(477)
-
49,207
8,310
(906)
(2,517)
-
6,493
4,255
-
1,762
431
(309)
-
-
(4,718)
-
-
-
-
(4,718)
-
(216)
-
-
-
-
(216)
5,814
11,892
29,570
1,884
-
49,160
34,000
192,943
235
9,232
791
294
237,495
32,260
191,305
1,029
10,087
1,483
772
236,936
Net carrying amount
158
– 31 March 2015
Revaluation of freehold land and buildings
Freehold land and buildings in Malaysia have been revalued based on valuations performed by an accredited independent valuer having an
appropriate recognised professional qualification. The valuations are based on the income approach.
The income approach entails the determination of the probable gross annual rental the property is capable of producing and deducting therefrom
the outgoings to arrive at the annual net income.
Freehold buildings outside Malaysia have been revalued based on their value-in-use and a discount rate of 7% (2014: 7%) is applied, being the
prevailing rental yield in the country where the buildings are located. During the financial year, the impairment losses on two of the buildings outside
Malaysia were being reversed. The recoverable amount of these two buildings is RM2.963 million (2014: RM2.442 million).
If the freehold land and buildings were measured using the cost model, the carrying amounts would be as follows:
Freehold land
RM’000
Buildings
RM’000
Total
RM’000
Cost
At 1 April 2013
Additions
Disposals
Reclassification from capital work-in-progress
Transfer to non-current asset held for sale
15,886
-
175,246
1,923
(230)
90
(1,696)
191,132
1,923
(230)
90
(1,696)
At 31 March 2014
Additions
Write-offs
15,886
-
175,333
8
(623)
191,219
8
(623)
At 31 March 2015
15,886
174,718
190,604
Accumulated depreciation
At 1 April 2013
Disposals
Reversal of impairment losses during the year
-
26,589
4,554
(16)
(477)
26,589
4,554
(16)
(477)
At 31 March 2014
Reversal of impairment losses during the year
-
30,650
4,265
(216)
30,650
4,265
(216)
At 31 March 2015
-
34,699
34,699
At 31 March 2015
15,886
140,019
155,905
At 31 March 2014
15,886
144,683
160,569
Net carrying amount
159
– 31 March 2015
Company
Computer
equipment
RM’000
Furniture,
fittings
and office
equipment
RM’000
Motor
vehicles
RM’000
Total
RM’000
Cost
At 1 April 2013
Additions
Disposals
4,253
170
(103)
2,403
1,189
-
1,808
-
8,464
1,359
(103)
At 31 March 2014
Additions
Disposals
4,320
79
-
3,592
1,010
(149)
1,808
5
(596)
9,720
1,094
(745)
At 31 March 2015
4,399
4,453
1,217
At 1 April 2013
Charge for the year
Disposals
3,765
442
(103)
1,678
243
-
815
270
-
6,258
955
(103)
At 31 March 2014
Charge for the year
Disposals
4,104
193
-
1,921
71
(148)
1,085
177
(241)
7,110
441
(389)
At 31 March 2015
4,297
1,844
1,021
7,162
At 31 March 2015
102
2,609
196
2,907
At 31 March 2014
216
1,671
723
2,610
10,069
Accumulated depreciation
Net carrying amount
14.Investment property
Group
2015
RM’000
2014
RM’000
Fair value gain (Note 7)
6,900
200
6,200
700
At end of the year
7,100
6,900
160
– 31 March 2015
14.Investment property (cont’d)
The rental income and operating expenses in relation to the investment properties are as disclosed below:
Group
2015
RM’000
Rental Income
Operating Expenses
15.
2014
RM’000
300
(32)
257
(32)
268
225
Computer
software
and licences
RM’000
Total
RM’000
8,689
3,798
(714)
29,291
884
714
37,980
4,682
-
11,773
2,808
(2)
562
(7,049)
30,889
695
7,049
42,662
3,503
(2)
562
-
8,092
38,633
46,725
At 1 April 2013
Amortisation for the year
-
24,791
3,352
24,791
3,352
At 31 March 2014
-
28,143
3,950
28,143
3,950
At 31 March 2015
-
32,093
32,093
At 31 March 2015
8,092
6,540
14,632
At 31 March 2014
11,773
2,746
14,519
intangible assets
Group
Software
development
in progress
RM’000
Cost
At 1 April 2013
Additions
Reclassification
At 31 March 2014
Additions
Disposal
Transfer from property, plant and equipment
Reclassification
At 31 March 2015
Accumulated amortisation
Net carrying amount
161
– 31 March 2015
15.
intangible assets (cont’d)
Software
development
in progress
RM’000
Computer
software
and licences
RM’000
Total
RM’000
At 1 April 2013
Additions
1,837
210
6,584
600
8,421
810
At 31 March 2014
Additions
2,047
772
7,184
603
9,231
1,375
At 31 March 2015
2,819
7,787
10,606
At 1 April 2013
-
6,182
552
6,182
552
At 31 March 2014
-
6,734
75
6,734
75
At 31 March 2015
-
6,809
6,809
At 31 March 2015
2,819
978
3,797
At 31 March 2014
2,047
450
2,497
Company
Cost
Accumulated amortisation
Net carrying amount
16.
Deferred taxation
Group
2015
RM’000
At beginning of year
Recognised in:
Income statement (Note 12)
Participants’ fund
Other comprehensive income
At end of year
These comprise the following:
- Deferred tax assets
- Deferred tax liabilities
162
2014
RM’000
15,882
(1,624)
(6,703)
(3,744)
(1,627)
Company
2015
RM’000
2014
RM’000
1,503
1,469
8,875
3,236
5,395
810
-
32
2
3,808
15,882
2,313
1,503
11,484
(7,676)
24,180
(8,298)
2,313
-
1,902
(399)
3,808
15,882
2,313
1,503
– 31 March 2015
16. Deferred taxation (cont’d)
The components and movements of deferred tax assets/(liabilities) during the financial year are as follows:
Group
Provisions
and
payables
RM’000
Unabsorbed/
accelerated Impairment
capital
losses on
allowances receivables
RM’000
RM’000
Premium/ Impairment
Expense
losses on
liabilities investments
RM’000
RM’000
AFS Revaluation
financial of land and
assets
buildings
RM’000
RM’000
Others
RM’000
Total
RM’000
2,912
15,882
2015
At 1 April 2014
Recognised in:
Income statement
(Note 12)
Other comprehensive
income
3,211
(1,034)
(2,106)
-
1,559
-
1,175
(74)
9,814
(5,580)
(1,513)
1,544
355
-
5,524
(2,513)
(186)
(931)
542
(6,703)
(3,744)
-
-
-
-
-
(751)
-
1,105
525
1,101
2,721
1,899
2,135
(8,201)
2,523
3,808
At 1 April 2013
Recognised in:
Income statement
(Note 12)
Other comprehensive
income
2,190
(816)
846
2,638
1,376
(3,122)
(7,123)
2,387
(1,624)
1,021
-
(218)
-
329
7,176
-
168
-
3,363
(253)
728
(203)
8,875
3,236
-
-
-
5,283
112
At 31 March 2014
3,211
1,175
9,814
1,544
5,524
Unabsorbed Accelerated
capital
capital
allowances allowances
RM’000
RM’000
At 31 March 2015
(876)
(7,264)
(1,627)
2014
-
Company
(1,034)
-
5,395
(7,264)
2,912
15,882
Loans and
receivables
RM’000
AFS
financial
assets
RM’000
Others
RM’000
Total
RM’000
1,483
1,503
2015
At 1 April 2014
Recognised in:
415
(399)
4
-
272
539
-
-
At 31 March 2015
687
140
4
-
1,482
2,313
405
(401)
4
(2)
1,463
1,469
-
2
20
-
32
2
4
-
1,483
1,503
(1)
810
2014
At 1 April 2013
Recognised in:
Other comprehensive income
At 31 March 2014
10
415
2
(399)
163
– 31 March 2015
16.
Deferred taxation (cont’d)
Deferred tax assets have not been recognised in respect of the following items of the Company and its retakaful subsidiary as the probability of
recognition cannot be determined with certainty given the lack of assessable profits in current and prior years.
Group
2015
RM’000
Unutilised business losses
Other temporary differences:
- net contribution and expense liabilities
- net accretion of discounts
- financial assets
-others
21,040
1,315
(21)
157
125
22,616
2014
RM’000
Company
2015
RM’000
2014
RM’000
18,008
6,423
6,320
363
376
90
93
-
-
18,930
6,423
6,320
17.Investments in subsidiaries
Unquoted shares, at cost:
In Malaysia
Less: Impairment loss
Outside Malaysia
Company
2015
RM’000
2014
RM’000
907,000
(69,665)
905,000
(39,338)
837,335
6,370
865,662
6,370
843,705
872,032
Details of the subsidiaries are as follows:
Name of
subsidiaries
Country of
incorporation
Principal activities
Effective
ownership interest
2015
2014
%
%
Malaysian Reinsurance Berhad
Malaysia
Underwriting of all classes of general reinsurance business
100
100
Takaful Ikhlas Berhad (formerly
known as Takaful Ikhlas Sdn. Bhd.)
Malaysia
Management of family, general and investment-linked
takaful business
100
100
MNRB Retakaful Berhad
Malaysia
Management of family and general retakaful business
100
100
MMIP Services Sdn. Bhd.
Malaysia
Management of the Malaysian Motor Insurance Pool which
provides motor insurance to vehicle owners who are
unable to obtain insurance protection for their vehicles
100
100
100
100
Malaysian Re (Dubai) Ltd.*
Dubai, United Marketing and promotional activities and servicing of clients
Arab Emirates
on behalf of Malaysian Re
AmIslamic Cash 1
Malaysia
Investment in money market instruments and Sukuk
100
-
AmIslamic Cash 2
Malaysia
Investment in Shariah compliant money market instruments
100
-
* Audited by a firm of chartered accountants other than Messrs. Ernst & Young.
164
– 31 March 2015
17.Investments in subsidiaries (cont’d)
(a)Investment in retakaful subsidiary
The cumulative impairment loss of RM69,665,000 (2014: RM39,338,000) was made in respect of the retakaful subsidiary, which had
recorded a net loss in the prior years, mainly due to the losses incurred by the general and family retakaful funds.
On 31 March 2015, the Company increased its investment in its retakaful subsidiary by RM2 million via the issuance of 2,000,000 new
ordinary shares of RM1.00 each in the retakaful subsidiary at an issue price of RM1.00 per share, to meet regulatory capital requirements.
With the above subscription, the issued and paid-up capital of the retakaful subsidiary has increased from RM100 million to RM102 million,
comprising 102,000,000 ordinary shares of RM1.00 each.
(b)Investment in wholesale unit trust funds
There were no significant changes in the composition of the Group during the current financial year ended 31 March 2015 other than the
reinsurance and takaful subsidiaries’ acquisition of 100% interest in two wholesale unit trust funds.
During the financial year ended 31 March 2015, the Company’s reinsurance and takaful subsidiaries acquired all units in two wholesale unit
trust funds which are managed by an external fund manager. The principal activities of these funds are to invest in Shariah compliant money
market instruments and Sukuk. As at the reporting date, the Company’s subsidiaries have an effective direct interest of 100% in the funds.
The Company’s subsidiaries have assessed and determined that they have control over these two wholesale unit trust funds. Hence, these two
wholesale unit trust funds would need to be consolidated in full. In accordance with the exemption provisions under MFRS 10 Consolidated
Financial Statements, the financial statements of the funds are consolidated with the Group’s consolidated financial statements from the date
of control and continue to be consolidated until the date such control ceases.
18.Investments in associates
Group
2015
RM’000
Unquoted shares in Malaysia, at cost
Share of post-acquisition accumulated losses
Share of post-acquisition AFS reserve
Post-acquisition foreign exchange translation reserve*
Represented by share of net assets
77,615
(3,456)
1,660
34,748
77,615
(3,923)
992
21,369
110,567
96,053
110,567
96,053
Company
2015
RM’000
Unquoted shares in Malaysia, at cost
2014
RM’000
1,957
2014
RM’000
1,957
* This is in respect of retranslation of the cost of the investment in Labuan Re at the rate of exchange prevailing at the reporting date.
165
– 31 March 2015
18.Investments in associates (cont’d)
Details of the associates which are all incorporated in Malaysia are as follows:
Name of
associates
Year end
Principal activities
Proportion of ownership
interest and voting power
2015
2014
%
%
Held by the Company:
Motordata Research Consortium
Sdn. Bhd.
31 December Development and provision of a centralised motor parts
price database for the Malaysian insurance industry
40
40
31 December Underwriting of all classes of general reinsurance business
20
20
Held by Malaysian Re:
Labuan Reinsurance (L) Ltd
(“Labuan Re”)
The financial statements of the above associates are not co-terminous with those of the Group. For the purpose of applying the equity method of
accounting, the audited financial statements of the associates for the year ended 31 December 2014 and management financial statements to the
end of the accounting period of 31 March 2015 have been used.
The summarised financial information of the associates are as follows:
2015
RM’000
2014
RM’000
Assets and liabilities:
Current assets
Non-current assets
1,883,386
55,508
1,646,295
50,273
Total assets
1,938,894
1,696,568
Current liabilities
Non-current liabilities
336,059
1,057,867
222,223
999,676
Total liabilities
1,393,926
1,221,899
Equity
544,968
474,669
Results:
Revenue
Profit for the year
892,255
21,355
744,621
13,674
166
– 31 March 2015
19.Financial assets
The following table summarises the carrying values of financial assets of the Group and the Company:
Group
2015
RM’000
At carrying value:
HTM investments
Malaysian government securities
Debt securities
Equity securities
Unquoted shares
Institutional trust deposit
Real estate investment trusts
Fixed and call deposits
Uncallable negotiable Islamic deposits
Islamic investment accounts
Islamic repo placements
Other loans and receivables
2014
RM’000
Company
2015
RM’000
2014
RM’000
137,934
722,356
2,530,716
1,917,938
139,478
718,597
2,303,023
1,783,211
50
37,071
50
26,927
5,308,944
4,944,309
37,121
26,977
128,212
731,967
2,051,056
293,184
44,796
133,955
7,836
611,987
1,169,292
136,659
108,217
725,015
1,934,814
209,546
44,796
24,855
131,889
6,821
731,957
18,743
747,288
136,284
124,084
50
20,282
7,879
8,910
50
16,925
1,579
8,423
5,308,944
4,944,309
37,121
26,977
Group
2015
RM’000
2014
RM’000
3,951
28
133,955
7,527
62
131,889
137,934
139,478
(a)Financial assets at FVTPL
At fair value:
Warrants
167
– 31 March 2015
19.Financial assets (cont’d)
Group
2015
RM’000
2014
RM’000
78,734
100,030
543,592
78,936
95,344
544,317
722,356
718,597
77,817
100,578
537,841
75,558
95,167
529,137
716,236
699,862
2014
RM’000
Company
2015
RM’000
2014
RM’000
44,796
44,796
50
50
49,478
1,951,026
289,064
141
7,836
188,375
29,281
1,839,470
201,485
280
192
6,821
180,698
-
-
2,530,716
2,303,023
50
50
(b)HTM investments
At amortised cost/cost:
At fair value:
Group
2015
RM’000
(c)AFS financial assets
At cost:
Unquoted shares in Malaysia(i)
At fair value:
Warrants
168
– 31 March 2015
19.Financial assets (cont’d)
Group
2015
RM’000
Company
2015
RM’000
2014
RM’000
190,482
421,505
310,491
421,466
8,373
11,909
15,464
1,461
28,939
1,079,194
1,996
58,907
256
12,496
44,523
26,290
53,350
28,824
618,210
91,043
9,211
24,855
18,743
136,284
11,202
40,623
35,266
36,993
7,879
3,461
4,111
72
1,266
1,579
3,326
3,406
37
1,654
1,917,938
1,783,211
37,071
26,927
2014
RM’000
(d)Loans and receivables
At amortised cost/fair value:
Fixed and call deposits with licensed:
Commercial banks
Investment banks
Islamic investment accounts with licensed:
Co-operative bank
Islamic banks
Investment banks
Development bank
Building society
Secured staff loans
Amounts due from subsidiaries(ii)
Income due and accrued
Amount due from Insurance Pool accounts
Other receivables and deposits*
* Included in other receivables and deposits are monies recoverable from the Inland Revenue Board as detailed in Note 39.
(i)
The pertinent information of the investments in unquoted shares in Malaysia are as follows:
Group
2015
RM’000
- 27,500,000 ordinary shares of RM1.00 each of Financial Park (Labuan) Sdn. Bhd. (“FPL”),
representing an equity shareholding of 9%.
Less: Impairment loss
28,283
(4,759)
28,283
(4,759)
- 20,000,000 redeemable preference shares of RM1.00 each of FPL
23,524
20,569
23,524
20,569
44,093
44,093
410
293
410
293
44,796
44,796
- 410,000 ordinary shares of Malaysian Rating Corporation Berhad (“MARC”) of RM1.00 each,
representing an equity shareholding of 4%.
-Others
(ii)
2014
RM’000
These amounts are non-trade in nature, are unsecured, not subject to any interest/profit elements and repayable on demand.
169
– 31 March 2015
20.Insurance/takaful contract liabilities
2015
Reinsurance/
Gross
retakaful
RM’000
RM’000
Net
RM’000
2014
Reinsurance/
Gross
retakaful
RM’000
RM’000
Net
RM’000
General reinsurance/takaful/retakaful funds
(Note (a))
Family takaful/retakaful funds (Note (b))
Shareholder’s funds (Note (c))
2,184,154
1,921,784
53,340
(337,177)
(37,476)
-
1,846,977
1,884,308
53,340
2,145,644
1,824,043
42,576
(253,361)
(146,426)
-
1,892,283
1,677,617
42,576
Total
4,159,278
(374,653)
3,784,625
4,012,263
(399,787)
3,612,476
1,799,017
385,137
(293,867)
(43,310)
1,505,150
341,827
1,748,911
396,733
(221,047)
(32,314)
1,527,864
364,419
2,184,154
(337,177)
1,846,977
2,145,644
(253,361)
1,892,283
Claims incurred in the current
underwriting/accident year
Adjustment to claims incurred in prior
underwriting/accident years due to
changes in IBNR and PRAD
Movements in claims incurred in prior
underwriting/accident years
Claims paid during the year
1,748,911
(221,047)
1,527,864
1,671,998
(260,411)
1,411,587
278,715
(76,270)
202,445
284,345
(58,518)
225,827
(32,339)
23,092
20,138
18,789
776,126
(972,396)
(126,647)
107,005
(53,895)
131,639
566,622
(694,961)
At end of the year
1,799,017
(293,867)
1,505,150
1,748,911
(221,047)
1,527,864
396,733
(32,314)
364,419
376,082
(32,240)
343,842
1,614,319
(228,497)
1,385,822
1,633,307
(179,820)
1,453,487
(1,625,915)
217,501
(1,408,414)
(1,612,656)
179,746
(1,432,910)
(a) General reinsurance/takaful/retakaful funds
Claim liabilities (Note (i))
Premium/contribution liabilities (Note (ii))
(i)Claim liabilities
(9,247)
(1,349)
649,479
(865,391)
620,517
(826,600)
(ii)Premium/contribution liabilities
Premiums/contributions written in
the year
Premiums/contributions earned during
the year
At end of the year
170
385,137
(43,310)
341,827
396,733
(32,314)
364,419
– 31 March 2015
20.Insurance/takaful contract liabilities (cont’d)
2015
Reinsurance/
Gross
retakaful
RM’000
RM’000
Net
RM’000
2014
Reinsurance/
Gross
retakaful
RM’000
RM’000
Net
RM’000
(b)Family takaful/retakaful funds
Provision for claims reported by
contract holders
Participants’ Account (“PA”)
Participants’ Special Account (“PSA”)
Net asset value attributable to unitholders
70,619
1,540,257
190,140
120,768
(20,720)
(7,260)
(9,496)
-
49,899
1,532,997
180,644
120,768
37,148
1,488,985
179,232
118,678
(13,212)
(6,888)
(126,326)
-
23,936
1,482,097
52,906
118,678
1,921,784
(37,476)
1,884,308
1,824,043
(146,426)
1,677,617
Net earned contributions
Net creation of units
Liabilities paid for death, maturities,
surrenders, benefits and claims
Net cancellation of units
Benefits and claims experience variation
Fees deducted
Other revenue and expenses
Transfer to shareholder’s fund
(Decrease)/increase in reserve
1,824,043
530,416
23,539
(146,426)
(39,205)
-
1,677,617
491,211
23,539
1,520,942
528,624
19,337
(95,325)
(40,375)
-
1,425,617
488,249
19,337
At end of the year
1,921,784
(268,285)
(24,231)
33,471
(143,299)
2,782
(9,249)
(47,403)
47,682
(7,508)
107,981
(37,476)
(220,603)
(24,231)
25,963
(143,299)
2,782
(9,249)
60,578
1,884,308
(237,735)
(20,262)
(4,547)
(153,368)
12,757
(11,741)
170,036
1,824,043
19,717
(3,548)
(26,895)
(218,018)
(20,262)
(8,095)
(153,368)
12,757
(11,741)
143,141
(146,426)
1,677,617
2015
Gross/net
RM’000
2014
Gross/net
RM’000
(c)Shareholder’s funds
General takaful and retakaful funds:
- Wakalah fee received during the year
- Wakalah fee earned during the year
- Movement in provision for expense deficiency
Family takaful and retakaful funds:
- Movement in provision for UER
42,576
23,939
88,326
(79,141)
(5,160)
62,994
(62,567)
3,172
6,739
15,038
At end of the year
53,340
42,576
171
– 31 March 2015
21.Insurance/takaful receivables
Group
2015
RM’000
2014
RM’000
69,606
265,339
(31,027)
125,691
268,000
(24,080)
303,918
369,611
Offsetting insurance/takaful receivables and insurance/takaful payables
Gross amounts of recognised insurance/takaful receivables
Less: Gross amounts of recognised insurance/takaful payables set off in the statement of financial position
670,687
(335,742)
592,134
(198,443)
Net amounts of insurance/takaful receivables presented in the statement of financial position
334,945
393,691
Due contributions including agents’ balances
Amounts due from brokers and ceding companies
Less: Allowance for impairment
Included in amounts due from brokers and ceding companies is an amount of RM764,512 (2014: RM275,000) due from an associate, Labuan
Reinsurance (L) Ltd. The amount receivable is subject to settlement terms stipulated in the reinsurance contracts.
22.Non-current assets held for sale
Group
2015
RM’000
Freehold land and buildings:
Transfer from property, plant and equipment (Note 13)
Less: Disposal
At end of the year
The disposals of non-current assets held for sale were completed during the financial year.
172
1,696
(1,696)
-
2014
RM’000
1,696
1,696
– 31 March 2015
23.Participants’ funds
Participants’ funds comprise the following:
Accumulated surplus (Note (a))
AFS reserves (Note (b))
Revaluation surplus (Note (c))
(a)Accumulated surplus
Net surplus of the general and family takaful funds
Hibah paid and payable to participants
At end of the year
(b)AFS reserves
Net gain on fair value changes
Realised gain transferred to income statement
Deferred tax on fair value changes
Net change in AFS reserves attributable to participants
At end of the year
(c)Revaluation surplus
Recognised in other comprehensive income
Deferred tax on revaluation surplus
Net change in revaluation surplus attributable to participants
At end of the year
Group
2015
RM’000
2014
RM’000
260,459
217
26,050
220,469
(26,903)
23,910
286,726
217,476
220,469
45,635
(5,645)
205,142
23,460
(8,133)
260,459
220,469
(26,903)
34,032
(4,399)
(2,513)
27,120
8,012
(29,466)
(8,812)
3,363
(34,915)
217
(26,903)
23,910
2,326
(186)
2,140
21,001
3,162
(253)
2,909
26,050
23,910
173
– 31 March 2015
24.Borrowings
Islamic revolving credit facility (“RC-i Facility”)
Sukuk Mudharabah Programme
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
200,000
120,000
200,000
120,000
200,000
120,000
200,000
120,000
320,000
320,000
320,000
320,000
The salient terms and conditions of the borrowings of the Group and the Company are as follows:
(a)Islamic Revolving Credit Facility (“RC-i Facility”)
On 10 December 2012, the Company obtained an Islamic revolving credit facility (“RC-i Facility”) from Standard Chartered Saadiq Berhad,
amounting to RM200 million and denominated in Ringgit Malaysia. The RC-i Facility is unsecured and carries a floating profit rate that is
reviewed quarterly. This floating profit rate credit facility has a tenure of 5 years from the date it was obtained and is repayable on 10 December
2017. The profit rates for the financial year ended 31 March 2015 range from 5.45% to 5.85% per annum (2014: 5.45% to 5.71% per annum).
(b)Sukuk Mudharabah Programme
On 10 December 2012, the Company issued RM120 million of Sukuk under the Sukuk Mudharabah Programme to MIDF Amanah Investment
Bank Berhad. The issued Sukuk carries a fixed profit rate of 5.4% per annum with a tenure of 5 years and has a final redemption date on
10 December 2017.
25.Insurance/takaful payables
Group
2015
RM’000
2014
RM’000
108,528
60,896
113,310
56,555
169,424
169,865
Offsetting insurance/takaful receivables and insurance/takaful payables
Gross amounts of recognised insurance/takaful payables
Less: Gross amounts of recognised insurance/takaful receivables set off in the statement of financial position
505,166
(335,742)
368,308
(198,443)
Net amounts of insurance/takaful payables presented in the statement of financial position
169,424
169,865
Due to brokers and retrocessionaires
Due to agents, retakaful operators and brokers
Included in amounts due to brokers and retrocessionaires is an amount of RM6,321 (2014: RM9,000) due to an associate, Labuan Reinsurance (L) Ltd.
The amount payable is subject to settlement terms stipulated in the reinsurance contracts.
174
– 31 March 2015
26.Other payables
Group
2015
RM’000
Advance contributions
Deposit contributions
Outstanding commissions
Provisions
Amount due to subsidiaries
Sundry payables and accruals
2014
RM’000
Company
2015
RM’000
2014
RM’000
36,895
10,636
44,906
78,370
4,620
30,920
13,741
37,142
70,970
6,267
1,099
1,837
5,932
541
2,460
170,807
157,393
9,203
8,933
27.Share capital
Number of ordinary shares
of RM1.00 each
2015
2014
‘000
‘000
Amount
2015
RM’000
2014
RM’000
Authorised
500,000
500,000
500,000
500,000
Issued and fully paid:
At beginning and end of the year
213,070
213,070
213,070
213,070
Amount
2015
RM’000
2014
RM’000
28.Dividends
Net dividend per share
2015
2014
Sen
Sen
Recognised during the year:
Dividend paid in respect of the financial year ended 31 March 2013:
First and final dividend of 32% less 25% tax
-
51,137
-
24.0
Dividend paid in respect of the financial year ended 31 March 2014:
First and final single-tier dividend of 16.5%
35,156
-
16.5
-
35,156
51,137
16.5
24.0
The Directors do not recommend the payment of any dividend in respect of the current financial year.
175
– 31 March 2015
29.Earnings per share
The basic and diluted earnings per share (“EPS”) is calculated by dividing the net profit for the year by the number of ordinary shares in issue during
the year.
Group
2015
2014
Company
2015
2014
Net profit for the year (RM’000)
139,148
155,986
11,539
25,039
Number of ordinary shares in issue (‘000)
213,070
213,070
213,070
213,070
65.3
73.2
5.4
11.8
Basic and diluted EPS (sen)
30.Operating lease arrangements
(a)The Group as lessee
The Group has entered into non-cancellable operating lease agreements for the use of office premises. This lease is for a period of 5 years and
subject to review every 2 years. There are no restrictions placed upon the Group by entering into this lease.
The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the reporting date but not
recognised as liabilities, are as follows:
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
Future minimum rental payments:
Not later than 1 year
Later than 1 year and not later than 5 years
176
5,577
14,220
5,242
12,856
1,612
1,612
1,097
4,388
19,797
18,098
3,224
5,485
– 31 March 2015
30.Operating lease arrangements (CONT’D)
(b)The Group as lessor
The Group has entered into non-cancellable operating lease agreements on its portfolio of investment properties. These leases have remaining
non-cancellable lease terms of between 5 and 10 years. All leases include a clause to enable upward revision of the rental charge on an annual
basis based on prevailing market conditions and certain contracts include contingent rental arrangements computed based on sales achieved
by tenants.
The future minimum lease payments receivable under non-cancellable operating leases contracted for as at the reporting date but not
recognised as receivables, are as follows:
Group
2015
RM’000
2014
RM’000
Future minimum rental receipts:
Not later than 1 year
Later than 1 year and not later than 5 years
5,273
4,938
4,560
3,710
10,211
8,270
31.Commitments
The commitments of the Group and of the Company as at the financial year end are as follows:
Group
2015
RM’000
Authorised and contracted for:
- Property, plant and equipment
- Intangible assets*
Authorised but not contracted for:
- Property, plant and equipment
- Intangible assets*
2014
RM’000
Company
2015
RM’000
2014
RM’000
2,697
8,485
1,476
1,505
325
1,171
333
149
11,182
2,981
1,496
482
324
4,409
18,599
-
370
4,733
18,599
-
370
* Relating to purchases and enhancement of the reinsurance and takaful subsidiaries’ computer systems.
177
– 31 March 2015
32.Related party disclosures
For the purposes of these financial statements, parties are considered to be related to the Group and the Company if the Group and the Company
have the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions,
or vice versa, or where the Group and the Company and the party are subject to common control or common significant influence. Related parties
may be individuals or other entities.
Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities
of the Company either directly or indirectly. The key management personnel include all the Directors of the Group and the Company, and certain
members of senior management of the Group and the Company.
(a)The significant transactions with related parties are as follows:
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
Income/(expenses):
Transactions with subsidiaries:
Management fees received
Net dividend received
Rental paid
-
-
33,868
61,000
(1,623)
31,072
81,000
(1,237)
Transactions with takaful funds of a subsidiary:
Takaful contributions paid
-
-
(881)
(821)
Transactions with an associate, Labuan Reinsurance (L) Ltd:
Net reinsurance inwards
178
(229)
192
-
-
– 31 March 2015
32.Related party disclosures (cont’d)
(a)The significant transactions with related parties are as follows: (cont’d)
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been
established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.
Outstanding balances arising from the transactions above as at the reporting date have been disclosed in Notes 21 and 25 of the financial
statements as well as on the face of statements of financial position.
(b)The key management personnel compensations are as follows:
Group
2015
RM’000
2014
RM’000
Company
2015
RM’000
2014
RM’000
Fees
Meeting allowances
Benefits-in-kind
2,729
677
24
2,421
560
31
804
167
24
700
125
31
Executive directors:
Salaries and bonus
Pension costs - EPF
Allowances
Benefits-in-kind
Others
3,805
623
1
255
184
67
3,854
655
1
12
108
-
1,648
280
1
255
57
-
1,485
253
1
12
60
-
810
130
1
83
55
726
118
1
59
72
810
130
1
83
55
726
118
1
59
72
10,300
1,463
6
455
609
11,197
1,572
6
425
534
4,579
688
5
61
319
5,054
751
5
42
381
22,277
22,352
9,967
9,876
Director of a subsidiary:
Salaries and bonus
Pension costs - EPF
Other allowances
Benefits-in-kind
Other key management personnel’s remuneration:
Salaries and bonus
Pension costs - EPF
Allowances
Benefits-in-kind
179
– 31 March 2015
33.Segment information
Group
Investment
holding
RM’000
Reinsurance
business
RM’000
Takaful
operator
RM’000
Retakaful
operator
RM’000
Adjustments
and
eliminations Consolidated
RM’000
RM’000
2015
Results
Other revenue
Net claims
Other expenses(i)
Depreciation
Amortisation
Finance costs
1,164
94,884
(66,680)
(441)
(75)
(18,123)
(228)
1,213,056
83,614
44,119
(744,156)
(397,581)
(2,279)
(495)
4,385
683,640
94,466
31,579
(468,060)
(259,259)
(5,577)
(3,348)
-
51,516
5,345
884
(57,755)
(17,690)
(13)
(32)
-
(881)
(106,446)
76,807
-
1,947,331
184,589
65,020
(1,269,971)
(664,403)
(8,310)
(3,950)
(18,123)
4,157
Operating profit/(loss) before surplus
attributable to takaful participants,
zakat and taxation
10,501
-
200,663
-
73,441
(45,635)
(17,745)
-
(30,520)
-
236,340
(45,635)
Operating profit/(loss) before zakat
and taxation
10,501
200,663
27,806
(17,745)
(30,520)
190,705
(43,930)
(960)
(7,477)
11,311
156,733
19,369
(17,745)
(30,520)
789
136,154
(66,865)
(955)
(552)
(17,916)
(438)
1,237,520
79,308
31,458
(725,029)
(403,044)
(4,022)
(1,660)
2,875
645,839
77,145
48,032
(472,574)
(247,517)
(5,639)
(971)
-
100,900
5,507
1,816
(83,653)
(25,510)
(110)
(169)
-
(821)
(144,306)
72,596
-
1,983,438
162,749
73,154
(1,281,256)
(670,340)
(10,726)
(3,352)
(17,916)
2,437
Operating profit/(loss) before surplus
attributable to takaful participants,
zakat and taxation
50,217
-
217,406
-
44,315
(23,460)
(1,219)
-
(72,531)
-
238,188
(23,460)
Operating profit/(loss) before zakat
and taxation
Zakat
Taxation
50,217
(25,616)
217,406
(52,402)
20,855
(400)
(4,324)
(1,219)
-
(72,531)
24,000
214,728
(400)
(58,342)
Net profit/(loss) for the year
24,601
165,004
16,131
(1,219)
(48,531)
155,986
Zakat
Taxation
810
-
-
(960)
(50,597)
139,148
2014
Results
Other revenue
Net claims
Other expenses(i)
Depreciation
Amortisation
Finance costs
180
– 31 March 2015
33.Segment information (cont’d)
Adjustments
and
eliminations Consolidated
RM’000
RM’000
Investment
holding
RM’000
Reinsurance
business
RM’000
Takaful
operator
RM’000
Retakaful
operator
RM’000
892,720
1,957
3,024,712
75,658
3,103,548
-
194,865
-
(849,161)
32,412
6,366,684
110,027
894,677
3,100,370
3,103,548
194,865
(816,749)
6,476,711
320,000
11,285
1,739,442
118,730
286,726
2,276,856
217,514
142,980
19,695
(5,991)
286,726
320,000
4,159,278
361,233
331,285
1,858,172
2,781,096
162,675
(5,991)
5,127,237
Equities
Segment equities(i)
563,392
1,242,198
322,452
32,190
(810,758)
1,349,474
894,677
3,100,370
3,103,548
194,865
(816,749)
6,476,711
913,984
1,957
2,898,968
75,658
2,883,053
-
214,123
-
(870,084)
18,438
6,040,044
96,053
915,941
2,974,626
2,883,053
214,123
(851,646)
6,136,097
320,000
8,933
1,718,028
126,239
217,475
2,151,032
202,206
1
143,203
23,568
1,943
217,476
320,000
4,012,263
362,889
328,933
1,844,267
2,570,713
166,772
1,943
4,912,628
Equities
Segment equities(i)
587,008
1,130,359
312,340
47,351
(853,589)
1,223,469
915,941
2,974,626
2,883,053
214,123
(851,646)
6,136,097
Group (cont’d)
2015
Assets
Segment assets(i)
Segment liabilities
Borrowings
Insurance and takaful contract liabilities
Other liabilities
2014
Assets
Segment assets(i)
Segment liabilities
Borrowings
Insurance and takaful contract liabilities
Other liabilities
(i)
Included in segment assets is a Qard granted to the general and family retakaful funds by the shareholder’s fund of the retakaful subsidiary,
amounting to RM100.2 million (2014: RM96.3 million). Qard represents a loan to the general and family retakaful funds to make good any
underwriting deficit experienced during a financial period. These balances, including the impairment losses recognised thereon amounting to
RM88.1 million (2014: RM83.2 million), have been eliminated in full upon consolidation.
181
– 31 March 2015
34.Risk management framework
(a)Risk governance framework
The Group’s Risk Management Framework is designed to determine the level of risk acceptable to the Group relating to its core operations
by setting the appropriate Board approved limits for adherence by management after taking into account the risk parameters, the nature, the
size and the mix and complexity of business and operations. An enterprise risk management process is adopted to identify and evaluate key
business risks that may affect the organisation and to establish and implement an appropriate system of internal controls to manage these
risks while ensuring full and effective control over significant strategic, financial, organisational and compliance matters.
The Risk Management Framework aims to serve as a guide for the effective management of risk throughout the Group. The Framework is
intended to provide guidance to the Group in performing its risk management roles and responsibilities and ultimately aims to support the
achievement of the Group’s strategic and financial objectives.
The key objectives of the risk management framework are to:
(i)
(ii)
(iii)
(iv)
provide information on risk governance and accountabilities;
provide guidance on a standard approach to managing risks;
create a risk aware and compliance culture; and
enhance professionalism and increase profitability and value for shareholders.
In pursuit of the above objectives, it is the Group’s policy to implement good governance, risk management and compliance principles and
best practices, and to uphold high standards of business practices in all the activities undertaken by the Group.
The Risk Management Governance structure is as follows:
(i)
The Board had established a dedicated Board Committee known as the Risk Management Committee of the Board (“RMCB”) at MNRB
Holdings Berhad level to oversee the implementation of an enterprise-wide risk management framework. This is also replicated at each
of the subsidiary companies;
(ii)
The Board had established a dedicated Investment Committee at MNRB Holdings Berhad level to further oversee risk associated with
investments and assets allocation. This is also replicated at each of the subsidiary companies;
(iii) The Operational Risk Management Committee (“ORMC”) which comprises the President/Chief Executive Officer and senior
management, implements the risk management processes, provides assurance to the Board that the processes have been carried out
effectively and inculcates a risk management and compliance culture on an enterprise-wide basis;
(iv) The Group Chief Risk Management and Compliance Officer (“GCRMCO”) and Group Risk Management and Compliance Division
establish the infrastructure and facilitate the risk management and compliance process in the Company and across the subsidiaries
through the adoption of the Group’s risk management framework;
(v)
At the operational level, the implementation of risk management and compliance process in the day to day operations of the Group is
consistent with the risk management framework; and
(vi) The Line Managers of each department within the Group are responsible for using the various components of the risk management
framework as an integral part of the business processes and procedures.
182
– 31 March 2015
34.Risk management framework (cont’d)
(b)Capital management objectives, policies and approach
The Capital Management Plan (“CMP”) is designed and implemented at the subsidiary level to ensure an effective management of the
subsidiaries’ capital. The CMP is expected to maximise the Group’s value by optimising capital structure and enhancing capital efficiency.
Under the CMP, the subsidiaries measure and monitor their respective capital position mainly via the Capital Adequacy Ratio (“CAR”).
The CMP identifies certain trigger points of the CAR position and further describes a set of corrective action plans that will be implemented
towards maintaining an adequate level of capital. It is intended that capital will be utilised more efficiently in a controlled manner so that the
subsidiaries will be able to manage their capital position above the internal target.
Capital management objectives
The main objective of capital management is to monitor and maintain, at all times, an appropriate level of capital which is commensurate
with the subsidiaries’ business operations and the resultant risk profile. The key objective of the CMP is to trigger appropriate action plans to
be taken by the relevant Board and the management of the subsidiaries in the event of internal capital levels falling below the internal target
requirement. This includes remedial actions that must be undertaken by the subsidiaries’ Board and management to improve the capital
position.
Capital management policies
The key capital management policies are as follows:
(i)
Ensure the Group has adequate capital within a range that supports the stakeholders’ objectives; and
(ii)
Establish responsibility of the subsidiaries’ Board and management in developing an internal capital adequacy assessment process and
setting capital targets that are commensurate with its business operations and the resultant risk profile and control environment.
Approach to capital management
The reinsurance, retakaful and takaful subsidiaries conduct stress tests on its CAR in compliance with BNM/RH/GL 003-23: Guideline on
Stress Testing for Insurers and BNM/RH/GL 004-16: Guideline on Stress Testing for Takaful Operators. The impact of the adverse scenarios on the
capital position of the subsidiaries is assessed quarterly focusing on short to medium term views.
(c)Regulatory framework
The reinsurance, retakaful and takaful subsidiaries are required to comply with the Financial Services Act (“FSA”) 2013 and IFSA 2013,
respectively, which are administered by BNM. BNM is primarily interested in protecting the rights of policyholders and participants and
monitoring the subsidiaries closely to ensure prudent management of its business operations. At the same time, BNM is also interested in
ensuring that the subsidiaries actively manage the capital adequacy by taking into account the potential impact on the subsidiaries business
strategies, risk profile and the overall resilience of the Company.
In addition, the Company is required to comply with Bursa Malaysia Securities Berhad’s (“Bursa”) Risk Management and Internal Control
System, the Listing Requirements of Bursa, Guidelines issued by the Securities Commission and the Capital Markets and Services Act 2007 as
a result of its status as a listed company on the Main Market of Bursa Malaysia Securities Berhad.
183
– 31 March 2015
35.Underwriting risk
(a)
General reinsurance
(i)Nature of risk
The reinsurance subsidiary principally underwrites all classes of general reinsurance business. Risks under these contracts usually cover
a twelve month duration other than some long term contracts which may cover up to 3 years or more. For general reinsurance, the
most significant risks arise from adverse development of claims and catastrophic loss events. These risks vary significantly in relation to
economic conditions and territories from which the risks are underwritten.
The above risks are mitigated by diversification across a large portfolio of business to ensure a balanced mix and spread of business
as required by underwriting policies. Diversification through the implementation of underwriting strategies and claim management
policies reduces the volatility of risks and improves the overall portfolio experience, and also ensures that conservative estimates are
secured on its insurance contract liabilities are adequate.
The reinsurance subsidiary also manages its loss exposure through the use of retrocession programmes which are reviewed annually
by the ORMC and RMCB, and subsequently approved by the Board. Prudent standards are applied in the assessment of the security of
the Company’s key retrocessionaires. To manage its underwriting risk, the reinsurance subsidiary also complies with relevant guidelines
imposed by BNM in the underwriting of business.
(ii)Concentration of risk by type of business
The table below measures the concentration of contracts by liabilities exposure for the main classes of the business and by local and
overseas risks as follows:
Gross
RM’000
Retrocession
RM’000
Net
RM’000
2015
Fire
Motor
Marine
Miscellaneous
Local
Overseas
725,095
364,964
262,311
387,072
(70,780)
(14,607)
(52,448)
(58,842)
654,315
350,357
209,863
328,230
1,739,442
(196,677)
1,542,765
1,187,892
551,550
(186,920)
(9,757)
1,000,972
541,793
1,739,442
(196,677)
1,542,765
725,638
379,442
252,319
360,629
(19,954)
(35,930)
(56,767)
(37,564)
705,684
343,512
195,552
323,065
1,718,028
(150,215)
1,567,813
1,129,808
588,220
(137,117)
(13,098)
992,691
575,122
1,718,028
(150,215)
1,567,813
2014
Fire
Motor
Marine
Miscellaneous
Local
Overseas
184
– 31 March 2015
35.Underwriting risk (cont’d)
(a)
General reinsurance (cont’d)
(iii)Reserving risk
The reinsurance subsidiary’s claim liabilities, and consequently some of the inputs used in determining its premium liabilities, are
based upon claims experience, existing knowledge of the events, the terms and conditions of relevant policies and interpretation of
circumstances. Upon notification of a claim by its cedants, the reinsurance subsidiary sets aside reserves to meet the expected ultimate
loss arising from this claim. These claim reserves are updated periodically for further developments via advice from cedants.
At each reporting date, the reinsurance subsidiary performs a test on the adequacy of its liabilities via the services of an independent
qualified external actuary engaged for the purpose of ensuring that claim and premium liabilities are objectively assessed and adequately
provided for. Any such deficiency is recognised in the income statement.
(iv)Impact on liabilities, profit and equity
Key assumptions
Liabilities are determined based upon claims experience, existing knowledge of events, the terms and conditions of the relevant contracts
and interpretation of circumstances. Particularly relevant are past experiences with similar cases, historical claims development trends,
legislative changes, judicial decisions and economic conditions.
The inherent uncertainties in estimating liabilities arises from a variety of factors such as the range and quality of data available,
underlying assumptions made and random volatility of future experience.
Sensitivity analysis
As a general reinsurer, the insurance contract liabilities of the reinsurance subsidiary are sensitive to various key factors which are both
internal and external. External factors to which the reinsurance subsidiary is sensitive to include:
(i)
(ii)
(iii)
(iv)
Claims practices of ceding companies;
Frequency and severity of claims incurred by cedants;
Changes in premium rates in insurance and reinsurance markets; and
Legislative and regulatory changes.
The sensitivity analysis was applied to the ultimate loss ratio of the Company by increasing the said ratio of the most recent underwriting
year by 5%. The table below shows the impact on the Company’s gross and net claim liabilities, profit before tax and equity should the
ultimate loss ratio be increased by 5%:
Impact on gross
liabilities
RM’000
Impact on net
liabilities
RM’000
Impact on profit
before tax
RM’000
Impact
on equity*
RM’000
16,187
5,230
7,031
8,525
16,186
4,593
6,961
8,532
16,186
4,593
6,961
8,532
13,553
4,060
5,295
6,893
36,973
36,272
36,272
29,801
2015
Fire
Marine
Motor
Miscellaneous
185
– 31 March 2015
(a)
(iv)Impact on liabilities, profit and equity (cont’d)
Sensitivity analysis (cont’d)
Impact on gross
liabilities
RM’000
Impact on net
liabilities
RM’000
Impact on profit
before tax
RM’000
Impact
on equity*
RM’000
17,403
5,507
7,195
9,571
17,400
4,534
7,195
9,566
17,400
4,534
7,195
9,566
14,433
3,913
5,477
7,644
39,676
38,695
38,695
31,467
2014
Fire
Marine
Motor
Miscellaneous
* The impact on equity reflects the after tax impact.
This analysis assumes that other factors relevant, but not significant, to the valuation of claim liabilities remain constant.
(v)Claims development table
The following tables show the estimate of cumulative ultimate incurred claims, including both claims provisions and IBNR for each
successive underwriting year at each financial year end, along with cumulative claim payments to-date.
In setting provisions for claims, the reinsurance subsidiary relies on advice by its cedants and exercises discretion where the claim
may develop more adversely than advised. An estimate will be made in the absence of a reported figure or in the event the loss is still
preliminary and has not been fully assessed.
The estimates of the ultimate incurred claims are subject to a great deal of uncertainty in the early stages as claims are still being
intimated and developed, particularly so for large and catastrophic claims. These uncertainties reduce over time as the claims develop
and progress towards the ultimate cost.
Beginning 1 April 2009, the methodology used in the valuation of general reinsurance liabilities was changed. This change involved
a more granular segregation of the business of the Company into specific portfolios with the intention of achieving greater accuracy
in the estimation process. Accordingly, data pertaining to the gross general reinsurance liabilities prior to financial year ended
31 March 2009 was not available and hence only developments in gross general reinsurance liabilities for financial year ended
31 March 2009 onwards are disclosed.
The following tables have excluded the impact of specific large losses and other claims that management believes are not relevant for
purposes of establishing claims development trends.
186
– 31 March 2015
(a)
(v)Claims development table (cont’d)
Gross general reinsurance contract liabilities for 2015:
Underwriting year
Before
2007
2007
2008
2009
2010
2011
2012
2013
2014 Sub Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At the end of underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
408,945
448,593
464,785
457,881
555,322
544,131
538,486
Current estimate of booked
ultimate claims incurred (a)
538,250 563,819 625,900 666,201 833,626 626,374 680,370 392,353
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
53,719
224,029
333,537
379,990
403,432
517,164
521,617
526,247
81,664 72,602 45,707 65,738
304,808 457,413 322,956 439,662
489,316 650,735 461,369
569,484 758,933
617,380
-
50,329
-
Cumulative payments
to-date (b)
526,247 539,381 594,717 617,380 758,933 461,369 439,662
50,329
Expected claim liabilities
(a) - (b)
Other portfolios
Best estimate of claim liabilities
Claim handling expenses
Fund PRAD at 75% confidence
interval
Gross general reinsurance
claim liabilities
29,927
12,003
418,389
496,009
493,161
492,705
576,942
571,554
564,373
-
63,614
256,339
358,844
411,516
515,279
529,417
539,381
-
24,438
573,070
570,029
573,383
633,550
633,211
627,195
-
92,548
301,430
430,566
544,944
574,075
594,717
-
31,183
640,777
603,851
671,472
674,073
669,536
-
48,821
643,911 663,610 712,406 690,348
722,113 642,522 746,746
794,395 645,558
841,767
-
74,693 165,005 240,708 342,024
968,802
396,779
1,365,581
7,385
109,805
1,482,771
187
– 31 March 2015
(a)
Net general reinsurance contract liabilities for 2015:
Underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
317,442
418,288
439,019
441,390
437,100
519,346
515,127
514,038
513,842 545,705 598,548 626,008 819,497 601,338 666,931 388,589
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
52,635
219,484
324,757
368,751
390,048
497,241
501,625
506,000
70,948 72,009 45,218 65,738
291,065 451,089 319,123 435,537
471,728 642,608 454,603
545,602 748,462
578,564
-
50,328
-
Cumulative payments
to-date (b)
506,000 525,129 574,402 578,564 748,462 454,603 435,537
50,328
(a) - (b)
Other portfolios
interval
Less: Retrocession recoveries
Net general reinsurance
claim liabilities
188
Before
2007
2007
2008
2009
2010
2011
2012
2013
2014 Sub Total
24,990
7,842
496,557
480,442
476,158
479,882
546,688
546,771
546,212
-
62,609
251,249
350,613
402,025
501,521
515,394
525,129
-
20,576
537,097
546,681
549,676
593,617
597,410
599,731
-
91,038
296,382
415,719
526,099
554,187
574,402
-
24,146
579,366
557,852
626,114
627,273
628,890
-
47,444
556,166 631,329 706,648 685,728
707,118 624,620 731,426
779,122 617,389
827,433
-
71,035 146,735 231,394 338,261
912,423
306,713
1,219,136
7,385
97,673
(32,351)
1,291,843
– 31 March 2015
(a)
Gross general reinsurance contract liabilities for 2014:
Underwriting year
Before
2006
2006
2007
2008
2009
2010
2011
2012
2013 Sub Total
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
403,736
417,448
399,937
395,525
438,867
434,488
434,473 543,980 570,863 630,635 664,078 771,790 585,640 415,425
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
42,356
217,724
294,220
335,359
355,014
369,071
420,704
423,366
92,548 81,664 72,602 45,707
301,430 304,808 457,413 322,956
430,566 489,316 650,735
544,944 569,484
574,075
-
65,738
-
Cumulative payments
to-date (b)
423,366 521,617 529,417 574,075 569,484 650,735 322,956
65,738
(a) - (b)
Other portfolios
interval
Gross general reinsurance
claim liabilities
28,586
11,107
408,945
448,593
464,785
457,881
555,322
544,131
-
53,719
224,029
333,537
379,990
403,432
517,164
521,617
-
22,363
418,389
496,009
493,161
492,705
576,942
571,554
-
63,614
256,339
358,844
411,516
515,279
529,417
-
41,446
573,070
570,029
573,383
633,549
633,211
-
56,560
640,777 643,911 663,610 712,406
603,851 722,113 642,522
671,472 794,395
674,073
-
94,594 121,055 262,684 349,687
988,082
356,386
1,344,468
3,235
101,365
1,449,068
189
– 31 March 2015
(a)
Net general reinsurance contract liabilities for 2014:
Underwriting year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
305,287
328,514
366,752
371,474
350,446
344,994
384,365
381,387
381,373 515,006 546,114 594,882 619,691 755,835 566,362 412,402
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
40,581
194,490
257,795
288,807
307,552
320,957
369,377
371,930
91,038 70,948 72,009 45,218
296,382 291,065 451,089 319,122
415,719 471,728 642,608
526,099 545,602
554,187
-
65,738
-
Cumulative payments
to-date (b)
371,930 501,625 515,394 554,187 545,602 642,608 319,122
65,738
(a) - (b)
Other portfolios
interval
Less: Retrocession recoveries
Net general reinsurance
claim liabilities
190
Before
2006
2006
2007
2008
2009
2010
2011
2012
2013 Sub Total
22,853
9,443
317,442
418,288
439,019
441,390
437,100
522,621
515,127
-
52,635
219,484
324,757
368,751
390,048
497,241
501,625
-
13,381
496,557
480,442
476,158
479,882
551,447
546,771
-
62,609
251,249
350,613
402,025
501,521
515,394
-
30,720
537,097
546,681
549,676
598,507
597,410
-
40,695
579,366 556,166 631,329 706,648
557,852 707,118 624,620
626,114 779,122
627,273
-
74,089 113,227 247,240 346,664
898,312
330,354
1,228,666
3,235
89,394
(17,106)
1,304,189
– 31 March 2015
(b)
General takaful fund
(i)Nature of risk
The takaful subsidiary principally issues the following types of general takaful contract: motor, household and commercial fire, business
interruption, personal accident, and other miscellaneous commercial contracts. Risks under these contracts usually cover a twelvemonth duration other than long term fire which may be extended up to thirty years or more and Contractors All Risks and Erection All
Risks which may be extended up to five years including maintenance period. For general takaful contracts, the most significant risks
arise from accident frequency and severity of the accident. These risks vary significantly in relation to the location of risk, type of risk
covered and industry.
The above risks are mitigated by diversification across a large portfolio of business and careful selection of risks. The variability of risks
is designed to improve the portfolio experience by implementation of underwriting strategies and claim management policies which
attempt to minimise losses.
The takaful subsidiary also manages its loss exposure by the use of retakaful arrangements. The retakaful treaty arrangements are
reviewed annually by the RMCB and approved by the Board.
Stress Testing (“ST”) is performed on a quarterly basis and submitted to BNM on a half-yearly basis. The purpose of the ST is to test the
solvency of the general takaful fund under the various scenarios according to regulatory guidelines, simulating drastic changes in major
parameters such as new business volume and investment environment.
(ii)Reserving risk
The general takaful fund’s claim liabilities, and consequently some of the inputs used in determining its contribution liabilities, are
based upon claims experience, existing knowledge of the events, the terms and conditions of relevant certificates and interpretation of
circumstances. Upon notification of a claim, the takaful subsidiary sets aside case and technical reserves to meet the expected ultimate
loss arising from this claim. These claim reserves are updated periodically for further developments.
At each reporting date, the takaful subsidiary performs a valuation of liabilities that is certified by the Signing Actuary for the purpose
of ensuring that claim and contribution liabilities are objectively assessed and adequately provided for. Any deficiency is recognised in
the income statement.
191
– 31 March 2015
(b)
General takaful fund (cont’d)
(iii)Concentration of risk by type of contracts
The table below sets out the concentration of takaful contracts liabilities by classes of business:
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2015
Fire
Motor
Marine, Aviation & Transit
Miscellaneous
70,651
204,383
358
60,788
(20,093)
(78,217)
(174)
(13,149)
50,558
126,166
184
47,639
336,180
(111,633)
224,547
65,488
200,857
445
53,762
(13,476)
(55,696)
(224)
(10,893)
52,012
145,161
221
42,869
320,552
(80,289)
240,263
2014
Fire
Motor
Miscellaneous
All business of the general takaful fund is derived in Malaysia; accordingly, disclosure of concentration risk by geographical region is not
relevant to the general takaful fund.
Key assumptions
The principal assumption underlying the estimation of liabilities is that the takaful subsidiary’s future claims development will follow a
pattern similar to the historical trend experience.
Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future, for example, isolated
occurrence, changes in market factors such as public attitude to claims notification and reporting, economic conditions, as well as
internal factors such as portfolio mix, policy conditions and claims handling procedures. Judgement is further used to assess the extent
to which external factors, such as judicial decisions and government legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include delays in settlement.
192
– 31 March 2015
(b)
The general takaful claim liabilities are sensitive to the key assumptions shown below. It has not been possible to quantify the sensitivity
of certain assumptions such as legislative changes or uncertainty in the estimation process.
The analysis below is performed on possible movements in key assumptions with all other assumptions held constant, showing the
impact on gross and net liabilities, surplus before tax and general takaful fund. The correlation of assumptions will have a significant
effect in determining the ultimate claim liabilities, however, to demonstrate the impact due to changes in assumptions, only individual
factor is changed, while other assumptions are held constant. It should be noted that movements in these assumptions are non-linear.
The sensitivity analysis has been performed for the main classes of business which are Motor Act and Motor Others. Motor Act is
stressed using changes in claim severity; while Motor Others is tested by considering a stressed ultimate loss ratio level.
Impact
on surplus
before tax
RM’000
Impact
on general
takaful fund*
RM’000
Change in
assumption
of ultimate claims
ratio
Impact
on gross
liabilities
RM’000
Impact
on net
liabilities
RM’000
+10%
+10%
20,157
28,406
15,798
15,301
(15,798)
(15,301)
(11,849)
(11,476)
+10%
+10%
21,236
38,323
17,696
21,603
(17,696)
(21,603)
(13,272)
(16,202)
2015
Motor Act Average Severity
Motor Others Expected Loss Ratio
2014
Motor Act Average Severity
Motor Others Expected Loss Ratio
* The impact on general takaful fund reflects the after tax impact.
The method used in performing the sensitivity analysis is consistent with the prior year.
The following tables show the estimate of cumulative incurred claims, including both claims reported and IBNR (including IBNER) for
each successive accident year at each reporting date, together with cumulative payments to-date.
In setting provisions for claims, the takaful subsidiary gives consideration to the probability and magnitude of future experience at best
estimate level with a degree of caution in setting reserves when there is considerable uncertainty. In general, the uncertainty associated
with the ultimate claims experience for an accident year is greatest when the claim is at an early stage of development; hence the
provision for risk margin for adverse deviation is relatively higher than the provision for claims at a later development period. As the
claims develop and the ultimate cost of claims becomes more certain, the relative level of margin maintained should decrease.
193
– 31 March 2015
(b)
(iv)Claims development table (cont’d)
Gross general takaful contract liabilities for 2015:
Accident year
2008
RM’000
2009
RM’000
2010
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
2015
RM’000
At the end of accident year
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
50,997
51,290
51,483
51,708
50,301
50,507
50,166
50,035
100,090
93,740
89,887
86,452
82,702
80,849
80,259
-
125,472 144,938 150,396
142,627 146,833 140,864
134,623 137,705 132,409
128,689 129,564 125,201
122,290 126,078
122,147
-
108,384
106,221
97,322
-
141,258
125,098
-
176,570
-
Current estimate of cumulative
claims incurred
50,035
80,259
122,147
125,201
97,322
125,098
176,570
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
17,599
34,059
39,159
44,893
47,722
49,488
49,775
49,967
29,070
64,212
72,939
77,825
78,729
79,468
79,896
-
43,215
48,128
49,128
83,077
95,317
88,890
100,539 112,994 106,834
105,741 119,507 113,031
107,734 121,220
108,720
-
41,750
70,150
81,392
-
52,986
89,882
-
72,444
-
Cumulative payments to-date
49,967
79,896
108,720
121,220
113,031
81,392
89,882
72,444
68
363
13,427
4,858
12,170
15,930
35,216
104,126
Gross general takaful contract
liabilities:
Best Estimate of Claims
Liabilities (incl. Allocated
Loss Adjustment Expenses
“ALAE”)
Fund PRAD at 75%
Total
194
2011
RM’000
126,078
Total
RM’000
186,158
24,181
210,339
– 31 March 2015
(b)
Net general takaful contract liabilities for 2015:
Accident year
2008
RM’000
2009
RM’000
2010
RM’000
2011
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
2015
RM’000
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
47,452
47,361
47,903
47,484
45,894
45,091
44,591
44,410
83,588
81,492
78,446
76,773
72,883
71,266
70,735
-
114,632
119,456
124,071
120,563
114,108
114,400
-
134,955 139,773
131,893 126,239
125,246 119,387
117,605 111,481
114,720
-
77,046
74,561
66,794
-
89,101
80,459
-
104,072
-
claims incurred
44,410
70,735
114,400
114,720
111,481
66,794
80,459
104,072
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
16,968
32,665
37,569
41,845
43,721
44,519
44,223
44,353
27,670
40,682
44,669
46,245
56,446
79,471
88,779
81,802
64,216
94,614 103,862
96,453
69,165
99,156 109,008 100,801
69,505 100,448 110,484
70,071 101,372
70,386
-
29,182
49,605
55,605
-
35,402
58,337
-
45,182
-
44,353
70,386
101,372
110,484
100,801
55,605
58,337
45,182
57
349
13,028
4,236
10,680
11,189
22,122
58,890
Net general takaful contract
liabilities:
Liabilities (incl. ALAE)
Fund PRAD at 75%
Total
Total
RM’000
120,551
15,659
136,210
195
– 31 March 2015
(b)
Gross general takaful contract liabilities for 2014:
Accident year
2007
RM’000
2008
RM’000
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
36,388
36,179
35,120
33,672
33,695
32,743
32,433
32,212
50,997
51,290
51,483
51,708
50,301
50,507
50,166
-
claims incurred
32,212
50,166
80,849
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
13,366
25,083
27,784
30,245
31,292
31,975
32,280
32,163
Gross general takaful contract
liabilities:
Liabilities (incl. Allocated
Loss Adjustment Expenses
“ALAE”)
Fund PRAD at 75%
Total
196
2009
RM’000
2010
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
100,090 125,472 144,938 150,396
93,740 142,627 146,833 140,864
89,887 134,623 137,705 132,409
86,452 128,689 129,564
82,702 122,290
80,849
-
108,384
106,221
-
141,258
-
132,409
106,221
141,258
17,599
34,059
39,159
44,893
47,722
49,488
49,775
-
29,070
43,215
48,128
49,128
64,212
83,077
95,317
88,890
72,939 100,539 112,994 106,834
77,825 105,741 119,507
78,729 107,733
79,468
-
41,750
70,150
-
52,987
-
32,163
49,775
79,468
107,733
119,507
106,834
70,150
52,987
49
391
1,381
14,557
10,057
25,575
36,071
88,271
122,290
2011
RM’000
129,564
Total
RM’000
176,352
25,167
201,519
– 31 March 2015
(b)
Net general takaful contract liabilities for 2014:
Accident year
2007
RM’000
2008
RM’000
2009
RM’000
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
33,895
34,140
33,195
31,470
31,341
30,328
29,987
29,777
47,452
47,361
47,903
47,484
45,894
45,091
44,591
-
claims incurred
29,777
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Net general takaful contract
liabilities:
Liabilities (incl. ALAE)
Fund PRAD at 75%
Total
2010
RM’000
2011
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
83,588
81,492
78,446
76,773
72,883
71,267
-
114,632 134,955 139,773
119,456 131,893 126,239
124,071 125,246 119,387
120,563 117,605
114,108
-
77,046
74,561
-
89,101
-
44,591
71,267
114,108
117,605
119,387
74,561
89,101
11,984
23,420
26,016
28,197
29,089
29,631
29,847
29,730
16,968
32,665
37,569
41,845
43,721
44,519
44,223
-
27,670
40,682
44,669
56,446
79,471
88,779
64,216
94,614 103,862
69,165
99,156 109,008
69,505 100,447
70,071
-
46,245
81,802
96,453
-
29,182
49,605
-
35,402
-
29,730
44,223
70,071
100,447
109,008
96,453
49,605
35,402
47
368
1,196
13,661
8,597
22,934
24,956
53,699
Total
RM’000
125,458
22,136
147,594
197
– 31 March 2015
(c)Family takaful fund
(i)Nature of risk
The takaful subsidiary principally issues the following types of family takaful certificate: Ordinary Takaful Plans, Mortgage Takaful Plans,
Group Takaful Plans and Investment-linked Takaful Plans.
Family takaful underwriting risk exists from the anti-selection and adequacy of tabarru’ to meet future claims arising from family takaful
certificates. The risks arise when actual claims experience is different from the assumptions used in setting the prices for products and
establishing the technical provisions and liabilities for claims. Sources of risk include certificate lapses and certificate claims such as
mortality and morbidity and experience.
The takaful subsidiary utilises retakaful arrangement to manage the mortality and morbidity risks. Retakaful structures are set based on
the type of risks to be recovered.
The takaful subsidiary reviews the actual experience of mortality, morbidity, lapses and surrenders, as well as expenses to ensure that
appropriate policies, guidelines and limits put in place to manage these risks remain adequate and effective.
The family takaful funds are participating in nature. In the event of volatile investment climate and/or unusual claims experience, the
investment profit and surplus distribution to the participants may be reduced.
For investment-linked funds, the risk exposure for the participant’s risk fund is limited only to the underwriting aspect as all investment
risks are borne by the participants.
Stress Testing (“ST”) is performed on a quarterly basis and submitted to BNM on a half-yearly basis. The purpose of the ST is to test the
solvency of the family takaful fund under the various scenarios according to regulatory guidelines, simulating drastic changes in major
parameters such as new business volume, investment environment, mortality/morbidity patterns and lapse rates.
(ii)Concentration of risk by type of contracts
The table below shows the concentration of actuarial liabilities by type of contract:
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2015
Family takaful plans
Investment-linked takaful plans
Mortgage takaful plans
Group credit takaful plans
Others
198
708,684
21,880
649,960
219,846
101,257
(4,221)
(5,275)
-
704,463
16,605
649,960
219,846
101,257
1,701,627
(9,496)
1,692,131
– 31 March 2015
(c)Family takaful fund (cont’d)
(ii)Concentration of risk by type of contracts (cont’d)
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2014
Family takaful plans
Investment-linked takaful plans
Mortgage takaful plans
Group credit takaful plans
Others
735,055
23,624
501,924
284,220
89,511
(10,424)
(1,299)
(101,812)
(12,791)
-
724,631
22,325
400,112
271,429
89,511
1,634,334
(126,326)
1,508,008
All business of the family takaful fund is derived from participants in Malaysia; accordingly, disclosure of concentration risk by
geographical region is not relevant to the family takaful fund.
(iii) Key assumptions
Material judgement is required in determining the liabilities of the family takaful fund and in the selection of assumptions. Assumptions
used are based on past experience, current internal data, external market indices and benchmarks which reflect current observable
market prices and other published information. Assumptions and prudent estimates are determined at the date of valuation and no
credit is taken for possible beneficial effects of voluntary withdrawals. Assumptions are further evaluated on a continuous basis in order
to ensure realistic and reasonable valuations.
The key assumptions to which the estimation of liabilities is particularly sensitive are as follows:
Mortality and morbidity rates
Assumptions are based on mortality rates as set out in the Actuarial Certificate submitted to BNM. They reflect the historical local
experience and are adjusted, when appropriate, to reflect the participants’ own experience. Assumptions are differentiated by gender,
occupational class and product group.
An increase in rates will lead to a larger number of claims (as claims could occur sooner than anticipated), which will reduce the surplus
from the Risk Fund and subsequently reduce profits for the shareholders in terms of lower surplus administration charge income. To the
extent that mortality/morbidity is worse than that priced for, profitability of shareholder’s fund may be affected and may in a worst case
scenario, lead to possible Risk Fund deficit. This is mitigated with adequate retakaful arrangement as well as contract design (in some
circumstances) that builds in repricing mechanisms.
Discount rates
Family takaful liabilities of credit-related products (Mortgage Reducing Term Takaful (“MRTT”) and Group Credit Takaful (“GCT”)) are
determined as the sum of the discounted value of the expected benefits less the discounted value of the expected tabarru’ (risk charge)
that would be required to meet these future cash outflows. The valuation of liabilities will be discounted to valuation date using the
government investment issues zero coupon spot yields which are obtained from the Bond Pricing Agency Malaysia rates as prescribed
in the valuation guidelines.
A decrease in the discount rate will increase the value of the family takaful liabilities and therefore reduce profits for the shareholders
in terms of lower surplus administration charge income.
199
– 31 March 2015
(c)Family takaful fund (cont’d)
(iii) Key assumptions (cont’d)
The assumptions that have significant effects on the financial position and financial performance of the family takaful fund are listed
below:
Type of business
Mortality and morbidity rates
Credit related (MRTT and GCT)
Others
Base mortality1, adjusted for retakaful rates2
Base mortality1
2015
Discount rates
2014
Discount rates
4%
N/A
4%
N/A
These rates are obtained from the various industry mortality and morbidity experience tables that were used to determine the
contribution rates.
1
Retakaful rates are derived from the fund’s retakaful arrangements with respect to the MRTT and GCT business.
2
(iv)Sensitivity analysis
The analysis below is performed for reasonably possible movements in key assumptions with all other assumptions held constant,
showing the impact on gross and net liabilities, surplus before tax and family takaful fund. The correlations of assumptions will have a
significant effect in determining the ultimate family takaful liabilities but to demonstrate the impact due to changes in assumptions,
assumptions are changed on an individual basis. It should be noted that movements in these assumptions are non-linear. Sensitivity
information will also vary according to the current economic assumptions.
Change in
assumptions
%
Impact
on gross
liabilities
RM’000
Impact
on net
liabilities
RM’000
Impact
on profit
before tax
RM’000
Impact
on family
takaful fund*
RM’000
2015
Mortality/morbidity
Discount rates
+ 10%
+ 1%
87,579
(21,906)
82,703
(12,413)
(82,703)
12,413
(82,703)
12,413
+ 10%
+ 1%
43,773
(7,640)
3,979
(1,144)
(3,979)
1,144
(3,979)
1,144
2014
Mortality/morbidity
Discount rates
* The impact on the family takaful fund reflects the after tax impact which is presumed to be nil as the family takaful fund is taxed only on
investment income.
200
– 31 March 2015
(d)
General retakaful fund
During the financial year ended 31 March 2015, the Management has decided to undergo a consolidation exercise and to review its business
portfolio. This would include temporarily not writing and renewing the general business, as well as cleaning up the outstanding contributions
and claims balances. This decision was taken with a view to further strengthen the retakaful subsidiary’s capital position.
(i)Nature of risk
For general retakaful, the most significant risks arise from adverse development of the loss ratios and catastrophic loss events. These
risks vary significantly in relation to economic conditions and territories from which the risk originates.
The retakaful subsidiary also manages the general retakaful fund’s loss exposure via the use of retrotakaful arrangements. The
retrotakaful arrangements are reviewed annually by the RMCB and approved by the Board.
Stress testing is performed on a quarterly basis and submitted to BNM twice a year. The purpose of the stress testing is to test the
solvency of the general retakaful fund under various scenarios. These scenarios are based on regulatory guidelines and simulate drastic
changes in major parameters such as new business volume, claims experience and investment environment.
(ii)Reserving risk
The general retakaful fund’s claim liabilities, and consequently some of the inputs used in determining its contribution liabilities, are
based upon claims experience, existing knowledge of the events, the terms and conditions of relevant certificates and interpretation
of circumstances. Upon notification of a claim, the retakaful subsidiary sets aside case and technical reserves to meet the expected
ultimate loss arising from this claim. These claim reserves are updated periodically for further developments.
At each reporting date, the retakaful subsidiary performs a test on the adequacy of its liabilities via the services of an independent
qualified external actuary engaged for the purpose of ensuring that claim and premium liabilities are objectively assessed and adequately
provided for. Any such deficiency is recognised in the income statement.
(iii)Concentration of takaful contract liabilities
The table below sets out the concentration of takaful contract liabilities by class of business and by local and overseas:
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2015
Fire
Motor
Miscellaneous
Local
Overseas
40,193
25,813
5,490
37,036
(8,820)
(1)
80
(20,127)
31,373
25,812
5,570
16,909
108,532
(28,868)
79,664
75,855
32,677
(28,737)
(131)
47,118
32,546
108,532
(28,868)
79,664
201
– 31 March 2015
(d)
General retakaful fund (cont’d)
(iii)Concentration of takaful contract liabilities (cont’d)
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2014
Fire
Motor
Miscellaneous
Local
Overseas
49,801
20,879
4,286
32,098
(7,555)
(3)
(89)
(15,211)
42,246
20,876
4,197
16,887
107,064
(22,858)
84,206
83,553
23,511
(22,369)
(489)
61,184
23,022
107,064
(22,858)
84,206
Key assumptions
Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future, for example, isolated
occurrences, changes in market factors such as public attitude to claims notification and reporting, economic conditions, as well as
internal factors, such as portfolio mix, policy conditions and claims handling procedures. Judgement is further used to assess the extent
to which external factors, such as judicial decisions and government legislation affect the estimates.
Other key circumstances affecting the reliability of assumptions include variation in profit rates and delays in settlement.
202
– 31 March 2015
(d)
The general retakaful fund’s claim liabilities are sensitive to changes in the loss ratio especially in the event of large or catastrophic
claims. However, as the business is still relatively new, the amount of information available to conduct a sensitivity analysis is limited.
The sensitivity analysis was applied to the ultimate loss ratio of the general retakaful fund by increasing the said ratio by 5%. The
ultimate loss ratios of Fire and Marine, Aviation & Transit classes of business for the most recent underwriting year and the ultimate
loss ratios of Motor and Miscellaneous classes of business for all underwriting years were increased by 5%. The table below shows the
impact on the general retakaful fund’s gross and net claim liabilities, surplus before tax and general retakaful fund should the ultimate
loss ratio be increased by 5%:
Impact
on gross
liabilities
RM’000
Impact
on net
liabilities
RM’000
Impact
on surplus
before tax
RM’000
Impact
on general
retakaful fund*
RM’000
654
1,678
167
2,756
635
1,678
150
2,577
635
1,678
150
2,577
635
1,678
150
2,577
5,255
5,040
5,040
5,040
2,457
1,479
331
2,742
2,167
1,479
326
2,698
2,167
1,479
326
2,698
2,167
1,479
326
2,698
7,009
6,670
6,670
6,670
2015
Fire
Motor
Miscellaneous
2014
Fire
Motor
Miscellaneous
* The impact on the general retakaful fund reflects the after tax impact which is presumed to be nil based on the current tax position
of the fund.
This analysis assumes all other parameters are held constant.
203
– 31 March 2015
(d)
The following tables show the estimate of cumulative ultimate incurred claims, including both claims provisions and IBNR for each
successive underwriting year at each financial year end, along with cumulative claim payments to-date.
In setting provisions for claims, the Company relies on advice by the cedants and exercises discretion where the claim may develop
more adversely than advised. An estimate will be made in the absence of a reported figure or in the event the loss is still preliminary and
has not been fully assessed. The estimates of the ultimate incurred claims are subject to a great deal of uncertainty in the early stages
as claims are still being intimated and developed, particularly so for large and catastrophic claims. These uncertainties reduce over time
as the claims develop and progress towards the ultimate cost.
Gross general retakaful claim liabilities for 2015:
Underwriting year
2007
RM’000
2008
RM’000
2009
RM’000
2010
RM’000
2011
RM’000
2012
RM’000
2013
RM’000
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
9,441
11,149
8,983
8,826
17,641
18,864
28,583
30,340
-
21,520
18,780
19,282
19,143
-
27,915
35,220
41,994
47,230
-
9,284
33,682
36,964
42,744
-
15,171
56,646
57,574
-
42,843
32,126
-
19,642
-
8,826
30,340
19,138
47,140
42,508
56,615
30,265
14,283
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
(3,196)
7,045
8,036
6,005
6,186
8,030
8,220
8,360
(8,238)
4,950
14,171
16,391
20,578
24,807
27,548
-
(392)
8,483
12,669
14,145
14,923
16,528
-
(3,293)
13,468
25,419
30,745
39,120
-
1,506
11,500
21,355
27,968
-
2,524
14,017
23,897
-
676
11,191
-
135
-
Cumulative payments
to-date (b)
8,360
27,548
16,528
39,120
27,968
23,897
11,191
135
466
2,792
2,610
8,020
14,540
32,718
19,074
14,148
(a) - (b)
Other portfolios
interval
Gross general retakaful
claim liabilities
204
2014 Sub Total
RM’000 RM’000
94,368
981
95,349
10,558
105,907
– 31 March 2015
(d)
Net general retakaful claim liabilities for 2015:
Underwriting year
2007
RM’000
2008
RM’000
2009
RM’000
2010
RM’000
2011
RM’000
2012
RM’000
2013
RM’000
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
9,441
11,149
8,983
8,826
17,641
18,864
28,583
30,340
-
21,520
18,780
19,282
19,143
-
27,915
35,220
41,994
47,230
-
9,284
33,682
36,935
42,744
-
15,171
55,371
57,574
-
38,790
32,126
-
19,642
-
8,826
30,319
19,121
47,113
42,450
56,241
29,643
14,142
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
(3,196)
7,045
8,036
6,005
6,186
8,030
8,220
8,360
(8,238)
4,950
14,171
16,391
20,578
24,807
27,548
-
(392)
8,483
12,669
14,145
14,923
16,528
-
(3,293)
13,468
25,419
30,745
39,120
-
1,506
11,500
21,355
27,968
-
2,524
14,017
23,897
-
676
11,191
-
135
-
Cumulative payments
to-date (b)
8,360
27,548
16,528
39,120
27,968
23,897
11,191
135
466
2,771
2,593
7,993
14,482
32,344
18,452
14,006
(a) - (b)
Other portfolios
2014 Sub Total
RM’000 RM’000
93,107
870
interval
Less: Retrotakaful recoveries
93,977
8,025
(24,906)
Net general retakaful
claim liabilities
77,096
205
– 31 March 2015
(d)
Gross general retakaful claim liabilities for 2014:
Underwriting year
2007
RM’000
2008
RM’000
2009
RM’000
2010
RM’000
2011
RM’000
2012
RM’000
9,441
11,149
8,983
-
17,641
18,864
28,583
-
21,520
18,780
19,282
-
27,915
35,220
41,994
-
9,284
33,682
36,964
-
15,171
56,646
-
42,843
-
Current estimate of booked ultimate
claims incurred (a)
8,985
28,567
19,245
41,878
36,594
51,860
16,275
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
(3,196)
7,045
8,036
6,005
6,186
8,030
8,220
-
(8,238)
4,950
14,171
16,391
20,578
24,807
-
(392)
8,346
12,669
14,145
14,923
-
(3,293)
13,468
25,419
30,745
-
1,506
11,500
21,355
-
2,524
14,017
-
676
-
Cumulative payments to-date (b)
8,220
24,807
14,923
30,745
21,355
14,017
676
Expected claim liabilities (a) - (b)
765
3,760
4,322
11,133
15,239
37,843
15,599
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Other portfolios
206
2013 Sub Total
RM’000 RM’000
88,661
456
Fund PRAD at 75% confidence interval
89,117
9,207
Gross general retakaful claim liabilities
98,324
– 31 March 2015
(d)
Net general retakaful claim liabilities for 2014:
Underwriting year
2007
RM’000
2008
RM’000
2009
RM’000
2010
RM’000
2011
RM’000
2012
RM’000
9,441
11,149
8,983
-
17,641
18,864
28,583
-
21,520
18,780
19,282
-
27,915
35,220
41,994
-
9,284
33,682
36,935
-
15,171
55,371
-
38,790
-
Current estimate of booked ultimate
claims incurred (a)
8,985
28,567
19,245
41,877
36,574
51,062
15,982
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
(3,196)
7,045
8,036
6,005
6,186
8,030
8,220
-
(8,238)
4,950
14,171
16,391
20,578
24,807
-
(392)
8,346
12,669
14,145
14,923
-
(3,293)
13,468
25,419
30,745
-
1,506
11,500
21,355
-
2,524
14,017
-
676
-
Cumulative payments to-date (b)
8,220
24,807
14,923
30,745
21,355
14,017
676
Expected claim liabilities (a) - (b)
765
3,760
4,322
11,132
15,219
37,045
15,306
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Other portfolios
2013 Sub Total
RM’000 RM’000
87,549
449
Fund PRAD at 75% confidence interval
Less: Retrotakaful recoveries
87,998
7,350
(19,268)
Net general retakaful claim liabilities
76,080
207
– 31 March 2015
(e)Family retakaful fund
During the financial year ended 31 March 2015, the Management has decided to undergo a consolidation exercise and to review its business
portfolio. This would include temporarily not writing and renewing the family business, as well as cleaning up the outstanding contributions
and claims balances. This decision was taken with a view to further strengthen the retakaful subsidiary’s capital position.
(i)Nature of risk
The retakaful subsidiary principally underwrites the following types of family retakaful business: Individual Family Retakaful Plans,
Group Family Retakaful Plans, Individual Medical Retakaful Plans and Retakaful Individual Facultative.
Family retakaful underwriting risk relates to the pricing and loss ratios arising from family retakaful products. The risks arise when actual
claims experience is different from the assumptions used in setting the yearly renewable term fees for retakaful products. Deviations
in actual claims experience compared to the assumptions used may be due to deviations in actual mortality and morbidity experience.
The retakaful subsidiary utilises retrotakaful to manage mortality and morbidity risks.
The retakaful subsidiary reviews the actual experience of mortality and morbidity to ensure that appropriate policies, guidelines and
limits put in place to manage these risks remain adequate and appropriate.
Stress testing is performed on a quarterly basis and submitted to BNM on a half-yearly basis. The purpose of the stress testing is to
test the solvency of the family retakaful fund under various scenarios. These scenarios are based on regulatory guidelines and simulate
drastic changes in major parameters such as new business volume, investment environment and mortality/morbidity patterns.
(ii)Concentration of takaful contract liabilities
The table below sets out the concentration of retakaful contract liabilities by local and overseas treaties:
Gross
RM’000
Retakaful
RM’000
Net
RM’000
2015
Local
Overseas
26,706
2,064
(6,647)
(613)
20,059
1,451
28,770
(7,260)
21,510
32,417
1,466
(6,269)
(619)
26,148
847
33,883
(6,888)
26,995
2014
Local
Overseas
208
Business of the family retakaful fund is derived from Malaysian and overseas risks. Liabilities of the family retakaful fund are mainly
spread within Malaysia, Brunei and Indonesia.
– 31 March 2015
(e)Family retakaful fund (cont’d)
(iii)Impact on liabilities, profit and equity
Key assumptions
Material judgement is required in determining the liabilities and in the choice of assumptions. Assumptions in use are based on past
experience, current internal data, external market indices and benchmarks which reflect current observable market prices and other
published information. Assumptions and prudent estimates are determined at the date of valuation and no credit is taken for possible
beneficial effects of voluntary withdrawals. Assumptions are further evaluated on a continuous basis in order to ensure realistic and
reasonable valuations.
The estimation of liabilities is particularly sensitive to the assumption of loss ratios due to the nature of the pricing of family retakaful
products which are based on yearly renewable terms.
The family retakaful fund’s claim liabilities are sensitive to changes in loss ratios. However, as the business is still relatively new, the
amount of information available to conduct a sensitivity analysis is limited.
Due to limited information, the sensitivity analysis was applied to the ultimate loss ratio of the family retakaful fund by increasing the
said ratio by 20%. The table below shows the impact on the family retakaful fund’s gross and net liabilities, surplus before tax and family
retakaful fund should the ultimate loss ratio be increased by 20%:
Change in
assumptions
%
Impact
on gross
liabilities
RM’000
Impact
on net
liabilities
RM’000
Impact
on surplus
before tax
RM’000
Impact
on family
retakaful fund*
RM’000
2015
Loss ratio
Loss ratio
-20%
+20%
(18,145)
29,889
(18,145)
29,889
(18,145)
29,889
(18,145)
29,889
-20%
+20%
(20,248)
34,695
(20,248)
34,695
(20,248)
34,695
(20,248)
34,695
2014
Loss ratio
Loss ratio
* The impact on the family retakaful fund reflects the after tax impact which is presumed to be nil based on the current tax position
of the fund.
209
– 31 March 2015
36.Financial risk
Transactions in financial instruments may result in the Group and the Company assuming financial risks. These include credit risk, liquidity risk
and market risk. This note presents information about the Group’s and the Company’s exposure to each of the above risks and the Group’s and the
Company’s objectives, policies and processes for measuring and managing such risks.
The following tables summarise the financial assets and financial liabilities of the Group and the Company, and their carrying value and fair values,
which are considered by management in monitoring and managing of its financial risks.
2015
Carrying
value
RM’000
Fair
value
RM’000
2014
Carrying
value
RM’000
Fair
value
RM’000
Group
Financial and insurance assets
Financial assets at FVTPL (Note 19)
HTM investments (Note 19)
AFS financial assets (Note 19)
Loans and receivables* (Note 19)
Insurance/takaful receivables*
Financial and insurance liabilities
Borrowings
Insurance/takaful payables*
Other payables and provisions*
137,934
722,356
2,530,716
1,917,938
374,653
303,918
82,702
137,934
716,236
2,530,716
1,917,938
374,653
303,918
82,702
139,478
718,597
2,303,023
1,783,211
399,787
369,611
36,644
139,478
699,862
2,303,023
1,783,211
399,787
369,611
36,644
6,070,217
6,064,097
5,750,351
5,731,616
320,000
4,159,278
169,424
170,807
318,637
4,159,278
169,424
170,807
320,000
4,012,263
169,865
157,393
319,798
4,012,263
169,865
157,393
4,819,509
4,818,146
4,659,521
4,659,319
50
37,071
2,877
50
37,071
2,877
50
26,927
2,904
50
26,927
2,904
39,998
39,998
29,881
29,881
320,000
9,203
318,637
9,203
320,000
8,933
319,798
8,933
329,203
327,840
328,933
328,731
Company
Financial and insurance assets
AFS financial assets (Note 19)
Loans and receivables* (Note 19)
Financial and insurance liabilities
Borrowings
Other payables and provisions*
* The carrying values of these loans and receivables, insurance receivables, insurance payables and other payables and provisions approximate their
fair values due to their short term nature.
210
– 31 March 2015
36.Financial risk (cont’d)
(a)Credit Risk
Credit risk is the risk of financial loss resulting from the failure of counterparties to reinsurance, takaful, retakaful and investment transactions
to meet their contractual obligations.
Credit risk includes the following major elements:
(i)
An investment credit risk which is the risk of financial loss arising from a change in the value of an investment due to a rating downgrade,
default, or widening of credit spreads. Changes in credit spreads are largely driven by the different economic cycles and operating cycles
while the less liquid securities tend to be priced at a wider spread. The liquidity of the securities is directly determined by its bid-to-ask spread;
(ii)
A derivative counterparty risk which is the risk of financial loss arising from a derivative counterparty’s default, or the deterioration of
the derivative counterparty’s financial position. As at the reporting date, the Group does not transact in derivatives and is not exposed
to this risk; and
(iii) Reinsurance/retakaful counterparty risk which is the risk of financial loss arising from a default by the retrocessionaire/retakaful
operator, or the deterioration of the solvency position of the retrocessionaire/retakaful operator.
The Group is exposed to investment credit risk on its investment portfolio, primarily from investments in corporate bonds. A creditworthiness
assessment for new and existing investments is undertaken by the Group in accordance with the Investment Policy as approved by the
Investment Committee. In addition, the credit ratings of the bond portfolio are regularly monitored and any downgrade in credit ratings
will be evaluated to determine the required actions. As at the reporting date, the Group’s bond portfolio has no material exposure below
investment grade.
The Group is exposed to reinsurance/retakaful counterparty risks of three different types:
(i)
as a result of recoveries owing from the retrocessionaire/retakaful operators for claims;
(ii)
from amounts due from ceding companies; and
(iii)
as a result of reserves held by the reinsurers and/or retakaful operators which would have to be met by the reinsurance and/or retakaful
subsidiaries in the event of default.
Management of credit risk
In order to manage and mitigate credit risk, the following policies and procedures were set in place:
(i)
Investment policies prescribe the minimum credit rating for bonds that may be held. In addition, the policies are further aimed at
investing in a diverse portfolio of bonds in order to reduce the potential impact that may arise from individual companies defaulting;
(ii)
Counterparty limits are set for investments and cash deposits to ensure that there is no concentration of credit risk;
(iii) The Group’s investment portfolio is managed to ensure diversification and focuses on high quality investment grade fixed income
securities and equity with good fundamentals. For the financial year ended 31 March 2015, the credit rating of the Group’s fixed
income portfolio was dominated by securities rated AAA as determined by Rating Agency Malaysia (“RAM”) and/or Malaysian Rating
Corporation Berhad (“MARC”); and
(iv)
To mitigate reinsurance/retakaful counterparty risk, the Group will give due consideration to the credit quality of the reinsurer/retakaful
operator. To facilitate this process, a list of acceptable reinsurers/retakaful operators based on their rating is maintained within the
Group. The Group regularly reviews the financial security of its reinsurers/retakaful operators.
211
– 31 March 2015
(a)Credit Risk (cont’d)
Unearned premium and contribution reserves and reserves for unearned wakalah fees have been excluded from the analysis as they are not
contractual obligations.
The table below provides information regarding the credit risk exposures of the Group by classifying assets according to the credit ratings of
counterparties.
Credit exposure by credit rating for 2015:
BB to C
RM’000
Not
subject to
credit risk
RM’000
Not rated
RM’000
Total
RM’000
-
-
3,951
28
133,955
-
3,951
28
133,955
78,734
99,779
543,592
-
251
-
-
-
78,734
100,030
543,592
49,478
478,750
188,375
1,472,276
-
-
44,796
289,064
141
7,836
-
-
44,796
49,478
1,951,026
289,064
141
7,836
188,375
500
190,482
421,005
-
-
-
190,482
421,505
Government
guaranteed
RM’000
AAA
to BBB
RM’000
-
HTM investments
Unquoted shares in Malaysia
Warrants
Group
Warrants
Commercial banks
Investment banks
212
– 31 March 2015
Credit exposure by credit rating for 2015: (cont’d)
BB to C
RM’000
Not
subject to
credit risk
RM’000
Not rated
RM’000
Total
RM’000
28,939
489,526
1,996
43,312
256
-
-
294,632
-
295,036
15,595
12,496
44,523
28,939
1,079,194
1,996
58,907
256
12,496
44,523
-
199,406
74,390
79,329
67
69
-
-
26,290
53,350
131,870
229,459
3,373
26,290
53,350
331,343
303,918
82,702
1,439,208
3,000,917
387
774,403
811,992
6,026,907
-
-
-
50
-
50
500
8,373
11,409
-
-
-
8,373
11,909
-
7,879
2,974
2,877
-
-
3,461
1,137
72
1,266
-
7,879
3,461
4,111
72
1,266
2,877
500
33,512
-
50
5,936
39,998
Government
guaranteed
RM’000
AAA
to BBB
RM’000
-
Group (cont’d)
Loans and receivables (cont’d)
Islamic investment accounts with
licensed:
Co-operative bank
Islamic banks
Investment banks
Development bank
Building society
Secured staff loans
Amount due from Insurance Pool
accounts
Other receivables and deposits
Company
Commercial banks
Investment banks
Islamic investment accounts with licensed
Islamic banks
Secured staff loans
Amounts due from subsidiaries
213
– 31 March 2015
Credit exposure by credit rating for 2014:
BB to C
RM’000
Not
subject to
credit risk
RM’000
Not rated
RM’000
Total
RM’000
-
-
7,527
62
131,889
-
7,527
62
131,889
78,936
95,089
544,317
-
255
-
-
-
78,936
95,344
544,317
29,281
438,733
180,698
1,394,622
-
-
44,796
201,485
280
192
6,821
-
6,115
-
44,796
29,281
1,839,470
201,485
280
192
6,821
180,698
-
310,491
421,466
-
-
-
310,491
421,466
Government
guaranteed
RM’000
AAA
to BBB
RM’000
-
HTM investments
Warrants
Group
Warrants
Commercial banks
Investment banks
214
– 31 March 2015
Credit exposure by credit rating for 2014: (cont’d)
BB to C
RM’000
Not
subject to
credit risk
RM’000
Not rated
RM’000
Total
RM’000
28,824
510,581
71,606
9,211
18,743
98,110
-
-
-
107,629
19,437
24,855
38,174
11,202
40,623
28,824
618,210
91,043
9,211
24,855
18,743
136,284
11,202
40,623
-
600
240,746
56,363
31,324
1,219
214
-
-
35,266
36,393
125,508
313,034
5,320
35,266
36,993
367,473
369,611
36,644
1,367,054
3,192,687
1,688
393,052
763,556
5,718,037
-
-
-
50
-
50
-
15,464
1,461
-
-
-
15,464
1,461
-
1,579
2,159
2,904
-
-
3,326
1,247
37
1,654
-
1,579
3,326
3,406
37
1,654
2,904
-
23,567
-
50
6,264
29,881
Government
guaranteed
RM’000
AAA
to BBB
RM’000
-
Group (cont’d)
Islamic investment accounts with
licensed:
Co-operative bank
Islamic banks
Development bank
Building society
Secured staff loans
accounts
Company
Commercial banks
Investment banks
Islamic banks
Secured staff loans
215
– 31 March 2015
Movement of allowance for impairment losses on receivables
Individually
impaired
RM’000
Group
Collectively
impaired
RM’000
Total
RM’000
2015
(Reversal of impairment losses)/impairment losses for the year
16,722
(91)
7,358
7,038
24,080
6,947
At end of the year
16,631
14,396
31,027
2014
Reversal of impairment losses for the year
19,142
(2,420)
7,513
(155)
26,655
(2,575)
At end of the year
16,722
7,358
24,080
Liquidity risk is the risk that the Group will not have sufficient cash resources available to meet its payment obligations without incurring
material additional costs.
As part of its liquidity management strategy, the Group has in place a framework capable of measuring and reporting on:
(i)
(ii)
(iii)
(iv)
daily cash flows;
minimum liquidity holdings;
the composition and market values of company’s investment portfolios, including liquid holdings; and
the holding of liquid assets in the respective reinsurance, takaful and retakaful funds.
In order to manage the liquidity of the reinsurance/takaful/retakaful funds, the investment mandate requires that a certain proportion of the
fund is maintained as liquid assets. Accordingly, the Group is required to maintain a minimum holding of low risk assets between 10% and
15% and no maximum limit on its placements in fixed and call deposits.
Maturity Profiles
The table below summarises the maturity profile of the financial assets and liabilities of the Group based on remaining undiscounted
contractual obligations, including interest payable and receivable. For insurance and takaful contract liabilities and reinsurance and retakaful
assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognised insurance/takaful liabilities.
Unearned premium and contribution reserves and reserves for unearned wakalah fees have been excluded from the analysis as they are not
contractual obligations.
216
– 31 March 2015
(b)Liquidity Risk (cont’d)
Maturity profiles for 2015
Carrying
value
RM’000
Up to
1 year
RM’000
1-5
years
RM’000
Over
5 years
RM’000
No maturity
date
RM’000
Total
RM’000
Warrants
3,951
28
133,955
-
-
-
3,951
28
133,955
3,951
28
133,955
HTM investments
78,734
100,030
543,592
3,276
23,188
21,353
13,115
68,031
165,733
103,505
25,525
501,292
-
119,896
116,744
688,378
Warrants
44,796
49,478
1,951,026
289,064
141
7,836
188,375
1,674
256,897
13,078
42,608
940,052
61,296
9,944
1,368,624
195,288
44,796
289,064
141
7,837
-
44,796
54,226
2,565,573
289,064
141
7,837
269,662
190,482
421,505
192,971
416,629
6,582
-
-
192,971
423,211
28,939
1,079,194
1,996
58,907
256
12,496
44,523
28,967
789,806
1,997
59,059
260
6,976
44,523
5,520
-
-
294,632
-
28,967
1,084,438
1,997
59,059
260
12,496
44,523
26,290
53,350
331,343
303,918
82,702
26,290
53,350
132,260
303,810
82,702
145,388
108
-
40,333
-
13,362
-
26,290
53,350
331,343
303,918
82,702
6,026,907
2,459,066
1,448,433
2,244,511
787,766
6,939,776
Group
Commercial banks
Investment banks
Co-operative bank
Islamic banks
Investment banks
Development bank
Building society
Secured staff loans
accounts
Total financial and insurance assets
217
– 31 March 2015
Maturity profiles for 2015 (cont’d)
Carrying
value
RM’000
Up to
1 year
RM’000
1-5
years
RM’000
Over
5 years
RM’000
No maturity
date
RM’000
Borrowings
Other payables
(320,000)
(3,720,801)
(169,424)
(170,807)
(19,480)
(765,847)
(169,424)
(170,807)
(342,335)
(1,008,010)
-
(1,826,581)
-
(120,363)
-
(361,815)
(3,720,801)
(169,424)
(170,807)
Total financial and insurance liabilities
(4,381,032)
(1,125,558)
(1,350,345)
(1,826,581)
(120,363)
(4,422,847)
Total
RM’000
Group (cont’d)
Company
50
-
-
-
50
50
8,373
11,909
8,409
11,970
-
-
-
8,409
11,970
7,879
3,461
4,111
72
1,266
2,877
7,944
3,461
4,111
72
1,266
2,877
-
-
-
7,944
3,461
4,111
72
1,266
2,877
39,998
40,110
-
-
50
40,160
Borrowings
Other payables
(320,000)
(9,203)
(19,480)
(9,203)
(342,335)
-
-
-
(361,815)
(9,203)
Total financial liabilities
(329,203)
(28,683)
(342,335)
-
-
(371,018)
Commercial banks
Investment banks
Islamic banks
Secured staff loans
Total financial assets
218
– 31 March 2015
Maturity profiles for 2014
Carrying
value
RM’000
Up to
1 year
RM’000
1-5
years
RM’000
Over
5 years
RM’000
No maturity
date
RM’000
Total
RM’000
Warrants
7,527
62
131,889
-
-
-
7,527
62
131,889
7,527
62
131,889
HTM investments
78,936
95,344
544,317
3,276
3,994
21,356
13,115
91,199
179,090
106,983
26,416
507,454
-
123,374
121,609
707,900
Warrants
44,796
29,281
1,839,470
201,485
280
192
6,821
180,698
1,011
170,174
7,748
22,180
938,968
56,251
10,145
1,402,094
220,060
44,796
201,485
280
192
6,821
-
44,796
33,336
2,511,236
201,485
280
192
6,821
284,059
310,491
421,466
311,862
422,307
-
-
-
311,862
422,307
28,824
618,210
91,043
9,211
24,855
18,743
136,284
11,202
40,623
28,908
620,837
91,907
9,311
24,855
18,846
136,414
11,202
40,623
-
-
-
28,908
620,837
91,907
9,311
24,855
18,846
136,414
11,202
40,623
35,266
36,993
35,266
36,993
-
-
-
35,266
36,993
Group
Commercial banks
Investment banks
Co-operative bank
Islamic banks
Development bank
Building society
Secured staff loans
accounts
219
– 31 March 2015
Maturity profiles for 2014 (cont’d)
Carrying
value
RM’000
Up to
1 year
RM’000
1-5
years
RM’000
Over
5 years
RM’000
No maturity
date
RM’000
Total
RM’000
367,473
369,611
36,644
103,058
369,489
36,644
109,120
122
-
130,920
-
24,375
-
367,473
369,611
36,644
Total financial and insurance assets
5,718,037
2,506,081
1,410,045
2,404,072
417,427
6,737,625
Borrowings
Other payables
(320,000)
(3,572,954)
(169,865)
(157,393)
(17,900)
(746,267)
(169,865)
(157,393)
(361,815)
(895,347)
-
(1,664,149)
-
(267,191)
-
(379,715)
(3,572,954)
(169,865)
(157,393)
Total financial and insurance liabilities
(4,220,212)
(1,091,425)
(1,257,162)
(1,664,149)
(267,191)
(4,279,927)
Group (cont’d)
Company
50
-
-
-
50
50
15,464
1,461
15,464
1,461
-
-
-
15,464
1,461
1,579
3,326
3,406
37
1,654
2,904
1,579
3,326
3,406
37
1,654
2,904
-
-
-
1,579
3,326
3,406
37
1,654
2,904
29,881
29,831
-
-
50
29,881
Borrowings
Other payables
(320,000)
(8,933)
(17,900)
(8,933)
(361,815)
-
-
-
(379,715)
(8,933)
Total financial liabilities
(328,933)
(26,833)
(361,815)
-
-
(388,648)
Commercial banks
Investment banks
Islamic banks
Secured staff loans
Total financial assets
220
– 31 March 2015
(c)
Market Risk
Market risk is the risk of loss arising from a change in the values of, or the income from, assets. A risk of loss also arises from volatility in asset
prices, interest/profit rates, or exchange rates. Market risk includes the following elements:
(i)
Equity price risk which is the risk of fluctuations in the fair value or future cash flows of a financial instrument arising from stock market
dynamics impacting equity prices;
(ii)
Foreign exchange risk which is the risk of fluctuations in the fair value or future cash flows of a financial instrument arising from a
movement of or volatility in exchange rates; and
(iii) Interest/profit rate risk which is the risk of fluctuations in the fair value or future cash flows of a financial instrument arising from
variability in interest/profit rates.
Equity price risk
Equity price risk is the risk that the fair value of a financial instrument fluctuates because of changes in market prices (other than those arising
from interest rate/profit yield risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument
or its issuer or factors affecting similar financial instruments traded in the market.
The Group’s equity risk exposures relates to financial assets and financial liabilities whose values will fluctuate as a result of changes in market
prices.
The Group’s price risk policy requires it to manage such risks by setting and monitoring objectives and constraints on investments,
diversification plans, limits on investments in each sector, market and issuer, having regard also to such limits as stipulated by BNM for its
reinsurance, takaful and retakaful subsidiaries. The Group complied with such limits as stipulated by BNM during the financial year and has no
significant concentration of price risk.
The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact
on profit before tax and equity (inclusive of the impact on other comprehensive income). The correlation of variables have a significant effect in
determining the ultimate impact on price risk, but to demonstrate the impact due to changes in variables, changes in variables are considered
individually. It should be noted that movements in these variables are non-linear. The equities under the investment-linked fund were excluded
from the sensitivity analysis as the risks associated with the fluctuations in market prices of the equities are borne by the unitholders.
221
– 31 March 2015
(c)
Market Risk (cont’d)
Changes in
Impact on
market indices profit before tax
RM’000
Impact on
equity*
RM’000
2015
Group
Price
Price
+ 5%
- 5%
199
(1,273)
12,647
(12,647)
+ 5%
- 5%
380
(1,423)
9,285
(9,285)
2014
Group
Price
Price
Management is of the opinion that the Company is not subject to significant equity price risk and, hence, a sensitivity analysis has not been
performed.
Foreign exchange risk/currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to volatility in foreign exchange rates.
The Group’s business is conducted primarily in Malaysia and the Group’s functional and presentation currency is Malaysian Ringgit. As the
growth of business outside Malaysia increases, the Group’s main foreign exchange risk arises primarily from recognised assets and liabilities
resulting from reinsurance and retakaful transactions of the reinsurance and retakaful subsidiaries. These balances are expected to be
settled and realised on net basis within 12 months; accordingly, the impact arising from sensitivity in foreign exchange rates is deemed to be
manageable.
Interest/profit rate risk
The Group is exposed to interest/profit rate risk as follows: (i) fair values of fixed interest/profit-bearing assets would move inversely to
changes in interest/profit rates; and (ii) future cash flows of variable interest/profit-bearing assets would move in direct proportion to changes
in rates.
The earnings of the Group are affected by changes in market interest/profit rates due to the impact such changes have on interest/profit
income from cash and cash equivalents, including investments in fixed/Islamic deposits. The fixed income portfolio is inversely related to
profit rates and, hence, it is the source of portfolio volatility.
The Group manages its interest/profit rate risk by matching, where possible, the duration and profile of assets and liabilities to minimise the
impact of mismatches between the value of assets and liabilities from interest/profit rate movements.
The nature of the Group’s exposure to interest/profit rate risk and its objectives, policies and processes for managing interest/profit rate risk
have not changed significantly from the previous financial year.
222
– 31 March 2015
(c)
Market Risk (cont’d)
Interest/profit rate risk (cont’d)
A change of 25 basis points (“bp”) in interest/profit rates at the reporting date would have increased/(decreased) the value of the portfolio of
fixed-income investment by the amounts shown below.
Changes
in variable
Impact on
equity*
RM’000
2015
Group
Interest/profit rates
+25 bp
-25 bp
(30,714)
21,654
+25 bp
-25 bp
(26,420)
26,420
2014
Group
37.Other risks
(a)Property Risk
Property risk is the risk associated with the Group’s investment in property or real estate for own occupancy, investment or rental purpose.
The Operational Risk of the Group’s Property is detailed in operational manuals that describe the responsibilities in relation to management
of the properties to maintain quality and satisfied tenants.
The financial risk arising from a delinquent or loss of tenants are managed at the outset through careful selection of properties with high
tenancy including tenants with long term tenancies and a continuous maintenance and upgrade of facilities.
The Group has no significant exposure to property risk.
(b)Operational Risk
Operational risk is the risk of loss arising from process and system failure, human error, specific loss events or external events. When controls
fail to perform, operational risks can cause damage to the reputation of the Group, have legal or regulatory implications or can lead to
financial loss. The Group cannot expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring
and responding to potential risks, the Group is able to minimise risks to an acceptable level. Controls include effective segregation of duties,
effective access controls, authorisation and reconciliation procedures, continuous staff education and appropriate assessment processes,
including the use of internal audit.
223
– 31 March 2015
37.Other risks (cont’d)
(c)Shariah Risk
Shariah risk is defined as potential Shariah non-compliance that contributes to adverse reputation, financial losses and opportunity costs
resulting from ineffective governance, incompetent employees and improper transactional and operational execution. The Group mitigates
such risk by initiating, monitoring and responding to a robust Shariah control framework which includes the establishment of a Shariah
Committee, Shariah Department and/or Shariah Compliance Officer for monitoring and oversight purposes.
The framework is guided by the Shariah Governance Framework issued by BNM which is designed to meet the following objectives:
(i)
sets out the expectations of BNM on the Group’s Shariah governance structures, processes and arrangements to ensure that all its
operations and business activities are in accordance with Shariah;
(ii)
provides a comprehensive guidance to the Board, Shariah Committee and management of the Group in discharging its duties in matters
relating to Shariah; and
(iii)
outlines the functions relating to Shariah review, Shariah Audit, Shariah Risk management and Shariah research.
(d)Compliance Risk
Compliance risk is the risk arising from violations of, or non conformance with, business principles, internal policies and procedures, related
laws and rules and regulations governing the Group’s products, services and activities.
Consequently, the exposure to this risk can damage the Group’s reputation, lead to legal or regulatory sanctions and/or financial loss.
The Group has established a Compliance Division at the Group and subsidiary level to oversee and monitor all compliance aspects in observing
regulatory requirements. In this respect, it has developed internal policies and procedures to ensure compliance with all applicable laws and
guidelines issued by the regulatory authorities.
224
– 31 March 2015
38.Insurance, takaful and retakaful funds
(i)Consolidated income statement by fund
for the year ended 31 March 2015
Gross earned premiums/
contributions
Premiums/contributions ceded to
reinsurers/retakaful operators
Net earned premiums/
contributions
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
1,323,292
268,356
553,955
34,267
35,711
(23,984)
(96,352)
(39,205)
(10,913)
(7,549)
19,989
172,004
514,750
23,354
28,162
(3,995)
(110,236)
1,213,056
Investment income
Net realised gains
Net fair value gains/(losses)
167,126
2,648
4,668
315,953
9,864
12,712
865
(761)
26,563
950
81,851
6,068
(9,557)
-
3,456
112
(171)
495
264
Other revenue
500,259
40,329
78,362
4,156
Gross claims and benefit paid
Claims ceded to reinsurers/
retakaful operators
Change in contract liabilities ceded
to reinsurers/retakaful operators
(809,894)
(130,098)
(243,079)
53,392
(33,703)
48,788
(8,820)
46,049
(744,156)
Family Eliminations
retakaful
and
fund adjustments Consolidated
RM’000
RM’000
RM’000
905
40
(18)
425
81
2,191,597
(244,266)
1,947,331
(66,543)
(307,699)
(688)
199,507
9,733
(5,839)
35,737
10,471
1,433
(374,930)
249,609
(39,934)
(43,301)
25,625
57,121
(102,854)
12,356
(7,583)
8,655
5,113
(25,625)
-
20,204
(109,322)
6,567
(69,926)
(398,134)
(28,594)
372
(29,161)
(1,240,681)
154,687
(147,847)
-
(36,130)
-
(1,269,971)
225
– 31 March 2015
38.Insurance, takaful and retakaful funds (Cont’d)
(i)Consolidated income statement by fund (cont’d)
for the year ended 31 March 2015 (cont’d)
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
Family Eliminations
retakaful
and
RM’000
RM’000
RM’000
Management expenses
Finance costs
Changes in expense liabilities
(431,092)
(246,679)
(18,123)
(35,782)
(10,764)
-
(103,942)
(3,439)
(8,508)
(152,548)
(8,609)
(7,621)
(4,757)
(9,096)
(405)
-
(4,376)
-
265,655
49,172
36,128
-
(435,399)
(209,555)
(18,123)
(7,680)
(10,764)
(13,265)
Other expenses
(742,440)
(115,889)
(173,535)
(9,501)
(4,376)
350,955
(694,786)
Operating profit/(loss) before
surplus attributable to takaful
Surplus attributable to takaful
participants
-
-
-
226,719
26,518
21,443
(26,518)
(21,443)
-
-
(10,585)
-
-
(3,942)
-
4,157
4,157
(23,813)
236,340
2,326
(45,635)
zakat and taxation
Zakat
Taxation
226,719
(960)
(50,597)
-
-
(10,585)
-
(3,942)
-
(21,487)
-
190,705
(960)
(50,597)
attributable to equity holders
of the Parent
175,162
-
-
(10,585)
(3,942)
(21,487)
139,148
226
– 31 March 2015
for the year ended 31 March 2014
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
1,334,573
209,206
547,961
68,876
53,071
(30,725)
(68,259)
(40,375)
(14,433)
(6,614)
27,210
1,237,520
140,947
507,586
54,443
46,457
(3,515)
1,983,438
Investment income
Net realised gains
Net fair value gains/(losses)
203,709
5,257
665
296,874
12,697
11,035
1,559
27
15,181
2,506
66,420
13,904
4,119
101
(1,585)
3,196
281
(95)
1,158
118
476
55
2
26
(110,601)
(920)
(288,742)
(1,520)
174,235
21,056
3,796
24,574
12,242
Other revenue
519,202
30,308
82,959
4,658
559
(401,783)
235,903
Gross claims and benefit paid
Claims ceded to reinsurers/
retakaful operators
Change in contract liabilities ceded
to reinsurers/retakaful operators
(685,322)
(108,745)
(185,325)
(32,533)
(52,410)
-
(1,064,335)
97,925
(64,351)
31,679
(3,904)
14,767
(286,923)
2,035
(8,658)
4,950
(16,178)
-
151,356
(380,014)
(73,281)
16,183
49,694
17,735
1,406
-
11,737
(725,029)
(64,787)
(407,787)
(21,421)
(62,232)
-
Gross earned premiums/
contributions
Premiums/contributions ceded to
reinsurers/retakaful operators
Net earned premiums/
contributions
(97,053)
Family Eliminations
retakaful
and
RM’000
RM’000
RM’000
2,182,962
(199,524)
(1,281,256)
227
– 31 March 2015
for the year ended 31 March 2014 (cont’d)
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
Family Eliminations
retakaful
and
RM’000
RM’000
RM’000
Management expenses
Finance costs
Changes in expense liabilities
(436,966)
(233,465)
(17,916)
(86,458)
(18,637)
-
(73,632)
(2,290)
(425)
(7,172)
(165,109)
(7,157)
(6,894)
(23,111)
(622)
-
(6,135)
(9)
-
253,729
47,501
82,360
74
(451,224)
(195,411)
(17,916)
(5,154)
(18,637)
(13,992)
Other expenses
(793,442)
(83,519)
(179,160)
(23,733)
(6,144)
383,664
(702,334)
surplus attributable to takaful
Surplus attributable to takaful
participants
-
-
-
-
238,251
22,949
3,598
13,947
(22,949)
(3,598)
-
-
-
(21,360)
-
2,437
2,437
(19,197)
238,188
3,087
(23,460)
zakat and taxation
Zakat
Taxation
238,251
(400)
(82,342)
-
-
13,947
-
(21,360)
-
(16,110)
24,000
214,728
(400)
(58,342)
attributable to equity holders
of the Parent
155,509
-
-
13,947
(21,360)
7,890
155,986
228
– 31 March 2015
38.Insurance, takaful and retakaful funds (cont’d)
(ii)Consolidated statement of financial position by fund
as at 31 March 2015
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
Family Eliminations
retakaful
and
RM’000
RM’000
RM’000
Assets
Intangible assets
Deferred tax assets
Financial assets:
HTM investments
LAR
Tax recoverable
130,573
7,100
14,632
7,835
843,705
77,615
-
106,922
-
95
-
-
106,922
(106,922)
3,554
(843,705)
32,952
237,495
7,100
14,632
11,484
110,567
886
281,578
1,532,603
1,131,858
196,676
218,963
24,856
16,044
724
71,941
173,158
73,782
111,633
29,296
24,116
135,972
337,163
1,084,084
469,808
30,216
44,233
360
42,523
341
19,211
30,075
38,710
28,868
14,825
9
11
12,463
18,661
3,748
7,260
2,642
10
(307,865)
200,032
(6,041)
-
137,934
722,356
2,530,716
1,917,938
374,653
303,918
25,216
82,702
Total assets
4,484,924
484,650
2,251,281
132,134
44,795
(921,073)
6,476,711
Borrowings
Other payables
Provision for zakat
320,000
1,792,782
105,713
84,021
1,470
8,461
871
55,340
336,180
21,797
66,919
420
3,994
-
232,291
1,903,014
32,131
81,750
2,095
-
3,173
108,532
10,273
10,156
-
28,770
5,551
10,465
9
-
(4,078)
(10,000)
(6,041)
(82,504)
3,682
-
286,726
320,000
4,159,278
169,424
170,807
7,676
12,455
871
2,313,318
484,650
2,251,281
132,134
44,795
(98,941)
5,127,237
Equity
Share capital
Reserves
1,126,570
1,045,036
-
-
-
-
(913,500)
91,368
213,070
1,136,404
Total equity attributable to equity
holders of the Parent
2,171,606
-
-
-
-
(822,132)
1,349,474
Total liabilities, participants’ funds
and equity
4,484,924
484,650
2,251,281
132,134
44,795
(921,073)
6,476,711
229
– 31 March 2015
38.Insurance, takaful and retakaful funds (cont’d)
(ii)Consolidated statement of financial position by fund (cont’d)
as at 31 March 2014
General
reinsurance
and
shareholders’
fund
RM’000
General
takaful
fund
RM’000
Family
takaful
fund
RM’000
General
retakaful
fund
RM’000
Family Eliminations
retakaful
and
RM’000
RM’000
RM’000
Assets
Intangible assets
Deferred tax assets
Financial assets:
HTM investments
LAR
Tax recoverable
130,014
6,900
14,519
21,846
872,032
77,615
1,155
-
106,922
-
215
-
-
106,922
(106,922)
964
(872,032)
18,438
236,936
6,900
14,519
24,180
96,053
1,841
290,927
1,213,832
1,342,899
150,214
228,906
5,461
15,911
1,696
1,372
72,033
93,341
163,957
80,289
32,274
7,551
-
135,626
332,336
958,347
337,568
139,538
88,964
13,140
-
616
19,243
31,250
54,640
22,858
16,121
1
33
-
23
4,058
6,253
19,850
6,888
3,346
9
-
(135,703)
-
139,478
718,597
2,303,023
1,783,211
399,787
369,611
5,462
36,644
1,696
Total assets
4,374,613
451,972
2,112,441
144,977
40,427
(988,333)
6,136,097
Borrowings
Other payables
Provision for zakat
320,000
1,760,604
102,005
83,689
6,504
24,737
368
33,850
320,552
16,580
79,183
1,807
-
184,344
1,800,160
28,417
98,987
112
421
-
13,415
107,064
16,319
8,179
-
33,883
6,544
-
(14,133)
(10,000)
(112,645)
1,682
-
217,476
320,000
4,012,263
169,865
157,393
8,298
26,965
368
2,297,907
451,972
2,112,441
144,977
40,427
(135,096)
4,912,628
Equity
Share capital
Reserves
1,124,570
952,136
-
-
-
-
(911,500)
58,263
213,070
1,010,399
Total equity attributable to equity
holders of the Parent
2,076,706
-
-
-
-
(853,237)
1,223,469
Total liabilities, participants’ funds
and equity
4,374,613
451,972
2,112,441
144,977
40,427
(988,333)
6,136,097
230
– 31 March 2015
39.Significant events
The Company, in the previous financial year, had made disclosures on the notices of assessment and notices of additional assessment (i.e. Form J
and Form JA) for the years of assessment 2006, 2007, 2008 and 2009, issued by the Inland Revenue Board (“IRB”) to its wholly owned subsidiary
Takaful IKHLAS Berhad (“Takaful IKHLAS”), disallowing Family business’ commission expenses as deductions against the earning of wakalah fee
income. The additional tax payable by Takaful IKHLAS under the said notices was RM48,982,970. In addition, the IRB had also imposed a penalty of
RM22,042,336 as the tax returns by Takaful IKHLAS for those years were regarded as incorrect.
Takaful IKHLAS received a confirmation from the Ministry of Finance (“MOF”) subsequently, granting an exemption of tax on the wakalah fee income
of the shareholder’s fund received from the family takaful fund for the years of assessment 2004 to 2014.
With MOF’s above exemption, the total instalment payments made to date to the IRB which amounted to RM18,239,672 would be receivable
from the IRB. This amount has been reduced following the set off made against the tax payable for the previous year of assessment amounting
to RM7,323,348. Takaful IKHLAS is currently pursuing the recovery of the remaining balance from the IRB through the Special Commissioners of
Income Tax.
In addition to the amount receivable from IRB of RM10,916,324, the Takaful IKHLAS had revised the tax computations for years of assessment 2010
to 2014 based on the letter from MOF. This had resulted in tax recoverable of RM12,200,831 from the IRB which had been recognised in the current
financial year. Takaful IKHLAS is pursuing this matter with the IRB.
40.Fair values of assets
MFRS 7 Financial Instruments: Disclosures (“MFRS 7”) requires the classification of financial instruments measured 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. MFRS 13 Fair Value Measurement requires similar disclosure requirements as MFRS 7, but extended these requirements to include all
assets and liabilities measured and/or disclosed at fair value. The following levels of hierarchy are used for determining and disclosing the fair value
of the Group and of the Company’s assets:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs that are based on observable market data, either directly or indirectly
Level 3 - Inputs that are not based on observable market data
The fair values of the Group and Company’s assets are determined as follows:
(i)
The carrying amounts of financial assets and financial liabilities, such as loans and receivables, insurance/takaful receivables, cash and bank
balances, insurance/takaful payables and other payables, are reasonable approximation of their fair values due to the relatively short term
maturity of these balances;
(ii)
The fair values of quoted equities are based on quoted market prices as at the reporting date;
(iii) The fair values of Malaysian government securities, government investment issues and unquoted corporate debt securities are based on
indicative market prices from the Bond Pricing Agency of Malaysia (“BPAM”);
(iv)
The fair values of investments in mutual funds, unit trust funds and real estate investment trusts are valued based on the net asset values of
the underlying funds as at the reporting date; and
(v)
Freehold land and buildings and investment property have been revalued based on valuations performed by an accredited independent valuer
having an appropriate recognised professional qualification. The valuations are based on the income method. In arriving at the fair value of
the assets, the valuer had also taken into consideration the future developments in terms of infrastructure in the vicinity of the properties.
231
– 31 March 2015
40.Fair values of assets (cont’d)
Description of significant unobservable inputs:
Valuation
technique
Significant unobservable
inputs
Range
Office building
Income approach
Yield
Rental per square foot
6.0% to 6.25%
RM4.50
Shoplots
Income approach
Rental per square metre
RM2.00
Office building
Income approach
Yield
Rental per square foot
6.0% to 6.5%
RM4.50
Shoplots
Income approach
Rental per square metre
RM2.00
Income approach
Estimated haircut based on
projected performance
45%
2015
2014
A significant increase or decrease in the unobservable inputs used in the valuation would result in a correspondingly higher or lower fair value.
There have been no transfers between Level 1 and Level 2 during the financial year.
232
– 31 March 2015
As at the reporting date, the Group and the Company held the following assets that are measured and/or disclosed at fair value under Levels 1, 2
and 3 of the fair value hierarchy:
Group
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
-
-
34,000
192,943
34,000
192,943
-
-
226,943
226,943
-
-
7,100
7,100
3,951
28
133,955
-
-
3,951
28
133,955
137,934
-
-
137,934
289,064
141
7,836
-
49,478
1,951,026
188,375
-
49,478
1,951,026
289,064
141
7,836
188,375
297,041
2,188,879
-
2,485,920
-
77,817
100,578
537,841
-
77,817
100,578
537,841
-
716,236
-
716,236
2015
Assets measured at fair value:
(a) Property, plant and equipment
Freehold land
Buildings
(b) Investment property
(c) Financial assets at FVTPL
Warrants
(d) AFS financial assets
Warrants
Assets for which fair values are disclosed:
HTM investments
233
– 31 March 2015
Group (cont’d)
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
-
-
32,260
191,305
32,260
191,305
-
-
223,565
223,565
-
-
6,900
6,900
7,527
62
131,889
-
-
7,527
62
131,889
139,478
-
-
139,478
201,485
280
192
6,821
-
29,281
1,833,355
180,698
6,115
-
29,281
1,839,470
201,485
280
192
6,821
180,698
208,778
2,043,334
6,115
2,258,227
2014
Assets measured at fair value:
(a) Property, plant and equipment
Freehold land
Buildings
(b) Investment property
(c) Financial assets at FVTPL
Warrants
(d) AFS financial assets
Warrants
234
– 31 March 2015
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
-
75,558
95,167
529,137
-
75,558
95,167
529,137
-
699,862
-
699,862
Group
2015
RM’000
2014
RM’000
Unquoted corporate debt securities transferred from Level 2
Reversal of impairment loss
Fair value gain
Unquoted corporate debt securities transferred to Level 2
6,115
4,990
769
(11,874)
Group (cont’d)
2014
Assets for which fair values are disclosed:
HTM investments
Reconciliation of Level 3 fair value hierarchy
At end of year
-
6,115
6,115
235
– 31 March 2015
41.Supplementary information - breakdown of retained profits into realised and unrealised profits or losses
The breakdown of the retained profits of the Group and of the Company as at 31 March 2015 into realised and unrealised profits or losses is
presented in accordance with the directives issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and 20 December 2010 and prepared
in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
2014
RM’000
Company
2015
RM’000
2014
RM’000
997,424
4,913
890,944
11,450
245,270
-
267,385
1,502
1,002,337
(3,456)
902,394
(3,923)
245,270
-
268,887
-
Less: Consolidation adjustments
998,881
(31,962)
898,471
(35,544)
245,270
-
268,887
-
Total retained profits
966,919
862,927
245,270
268,887
Realised and unrealised profits of the Company and
its subsidiaries:
-Realised
-Unrealised
Share of accumulated losses from associated companies
236
Group
2015
RM’000
ANALYSIS OF SHAREHOLDINGS
AS AT 28 JULY 2015
SHARE CAPITAL
Authorised Capital : RM500,000,000 ordinary shares
Issued and Fully Paid-up Capital : 213,069,500 ordinary shares of RM1.00 each
No. of shareholders : 5,652
Class of Shares : RM1.00 ordinary shares
Voting Rights : 1 vote per ordinary share
ANALYSIS BY SIZE OF SHAREHOLDINGS
Share Capital
Size of Shareholdings
No. of Holders
Shareholders
Percentage of
Shareholders
No. of Shares
(%)
Less than 100
Percentage of
Share Capital
(%)
305
5.40
2,813
0.00
100 – 1,000
1,895
33.53
1,618,387
0.76
1,001 – 10,000
2,501
44.25
11,075,651
5.20
10,001 – 100,000
809
14.31
26,445,100
12.41
100,001 to less than 5% of issued shares
140
2.48
48,125,449
22.59
2
0.03
125,802,100
59.04
5,652
100.00
213,069,500
100.00
5% and above of issued shares
Total
LIST OF SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE) AS AT 28 JULY 2015
No.
Name of Substantial Shareholders
1
AMANAHRAYA TRUSTEES BERHAD
<SKIM AMANAH SAHAM BUMIPUTERA>
2
PERMODALAN NASIONAL BERHAD
Shareholdings
Percentage (%)
98,617,000
46.28
27,185,100
12.76
LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 28 JULY 2015
No.
Name of Shareholders
1
<SKIM AMANAH SAHAM BUMIPUTERA>
2
3
No. of Shares
Percentage (%)
98,617,000
46.28
PERMODALAN NASIONAL BERHAD
27,185,100
12.76
<AMANAH SAHAM MALAYSIA>
2,300,000
1.08
237
ANALYSIS OF SHAREHOLDINGS (CONT’D)
AS AT 28 JULY 2015
LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 28 JULY 2015 (CONT’D)
No.
4
JOHAN ENTERPRISE SDN. BHD.
5
No. of Shares
Percentage (%)
2,230,000
1.05
CITIGROUP NOMINEES (ASING) SDN BHD
<CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND>
1,702,600
0.80
6
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
<PLEDGED SECURITIES ACCOUNT FOR SHANMUGAM A/L THOPPALAN (8069535)>
1,694,800
0.80
7
HSBC NOMINEES (TEMPATAN) SDN BHD
<HSBC (M) TRUSTEE BHD FOR AMB ETHICAL TRUST FUND (4256)>
1,556,300
0.73
8
MAYBANK NOMINEES (ASING) SDN BHD
<EXEMPT AN FOR DBS BANK LIMITED (CLIENT A/C)>
1,545,000
0.73
9
HONG LEONG ASSURANCE BERHAD
<AS BENEFICIAL OWNER (S’HOLDERS NPAR)>
1,191,449
0.56
10
NEOH CHOO EE & COMPANY, SDN. BERHAD
1,080,000
0.51
11
<CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT
DIMENSIONS GROUP INC>
958,900
0.45
12
HSBC NOMINEES (TEMPATAN) SDN BHD
<HSBC (M) TRUSTEE BHD FOR PERTUBUHAN KESELAMATAN SOSIAL (UOB AMM6939-406)>
930,000
0.44
13
HSBC NOMINEES (ASING) SDN BHD
<EXEMPT AN FOR THE BANK OF NEW YORK MELLON (MELLON ACCT)>
875,900
0.41
14
CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
<CIMB COMMERCE TRUSTEE BERHAD-AMB SMALLCAP TRUST FUND>
850,300
0.40
15
PUBLIC NOMINEES (TEMPATAN) SDN BHD
<PLEDGED SECURITIES ACCOUNT FOR LIM HOCK FATT (E-SS2)>
850,000
0.40
16
<CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES>
811,400
0.38
17
THONG SU-F’NG
644,200
0.30
18
HSBC NOMINEES (ASING) SDN BHD
<TNTC FOR LSV EMERGING MARKETS SMALL CAP EQUITY FUND, LP>
629,900
0.30
19
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
<PLEDGED SECURITIES ACCOUNT FOR CHONG YIEW ON (6000006)>
626,600
0.29
20
AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD.
<UOB KAY HIAN PTE LTD FOR RAJ KUMAR A/L R GOPAL PILLAI (MARGIN)>
606,500
0.28
21
HLB NOMINEES (TEMPATAN) SDN BHD
<PLEDGED SECURITIES ACCOUNT FOR GOH CHU YONG>
602,500
0.28
22
NAHOORAMMAH A/P SITHAMPARAM PILLAY
580,000
0.27
238
ANALYSIS OF SHAREHOLDINGS (CONT’D)
AS AT 28 JULY 2015
LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 28 JULY 2015 (CONT’D)
No.
No. of Shares
23
CHUA HIN BEE
550,000
0.26
24
HONG LEONG ASSURANCE BERHAD
<AS BENEFICIAL OWNER (LIFE PAR)>
550,000
0.26
25
LEE KOK HAI
521,700
0.24
26
GAN KHO @ GAN HONG LEONG
513,000
0.24
27
MAYBANK NOMINEES (TEMPATAN) SDN BHD
<PLEDGED SECURITIES ACCOUNT FOR NG CHEE SIONG>
468,000
0.22
28
LEONG SOO HA @ LEONG CHOON YIN
451,000
0.21
29
HA SAU KIN
426,900
0.20
30
MENG HIN HOLDINGS SDN BHD
409,300
0.19
151,958,349.00
71.32
Total
Percentage (%)
INFORMATION ON DIRECTORS’ SHAREHOLDINGS AS AT 28 JULY 2015
No.
Name of Directors
Shareholdings
Percentage (%)
1
Sharkawi Alis
-
-
2
Mohd Din Merican
-
-
3
P. Raveenderen
10,000
0.00
4
-
-
5
Yusoff Yaacob
-
-
6
-
-
7
Paisol Ahmad
-
-
8
-
-
CATEGORY OF SHAREHOLDERS AS AT 28 JULY 2015
Type of Ownership
Government Agencies
Shareholders
Percentage (%)
Shareholdings
Percentage (%)
1
0.02
10
0.00
4,852
85.84
46,645,368
21.89
Companies
118
2.09
137,986,949
64.76
Nominees Company
681
12.05
28,437,173
13.35
5,652
100.00
213,069,500
100.00
Individual
Grand Total
239
LIST OF PROPERTIES
31 MARCH 2015
Net Book Value
as at 31/3/2015
(RM)
Date of
Revaluation
No. 15, Jalan Sri Hartamas 7
Taman Sri Hartamas
50480 Kuala Lumpur
14 July 1984
31 March 2015
1 unit of 4 storey
shophouse
Freehold/rented
out/31 years
1,600/6,150
3,500,000
No. 17, Jalan Sri Hartamas 7
Taman Sri Hartamas
50480 Kuala Lumpur
14 July 1984
31 March 2015
1 unit of 4 storey
shophouse
Freehold/rented
out/31 years
1,600/6,150
3,600,000
Address
Description of
Properties
Tenure/Existing Land Area (sq.ft.)
Use/Age of
Build-Up Area
Buildings
(sq.ft.)
Date of
Acquisition
Investment Properties
Total Investment Properties
7,100,000
Self Occupied Properties
Ikhlas Point, Tower 11
Avenue 5, Bangsar South
No. 8, Jln Kerinchi
59200 Kuala Lumpur
22 December 2008
10 March 2015
1 unit of
11 storey
intermediate
office building
Leasehold/
office premise/
rented out/
7 years
strata
37,562,000
Ikhlas Point, Tower 11A
Avenue 5, Bangsar South
No. 8, Jln Kerinchi
59200 Kuala Lumpur
19 November 2008
10 March 2015
1 unit of
10 storey corner
office building
Leasehold/
office premise/
occupied/
7 years
strata
66,560,000
Damansara Heights
50490 Kuala Lumpur
17 February 1995
31 March 2015
1 unit of 12 storey
building with 2
storey basement
car park
Freehold/
office premise/
rented out/
20 years
61,300/
366,409
115,300,000
Lot 528, Section 6
Kuching Town Land District
No. 11C, Jalan Kulas
93732 Kuching, Sarawak
7 September 2010
10 March 2015
4 Storey
intermediate
terraced
shophouse
Leasehold/
office premise/
occupied/5 years
Not applicable/
1,200
1,800,000
Manchester Tower
Apartment 2406, Dubai Marina
Dubai, UAE
28 July 2008
31 March 2014
1 unit of
apartment
Freehold/
occupied by staff/
7 years
Not applicable/
1,011
1,408,000
Apt. 507
Marina Diamond 5
Dubai Marina
Dubai, UAE
29 July 2008
31 March 2014
1 unit of
apartment
Freehold/
occupied by staff/
7 years
Not applicable/
1,084
1,555,000
Yansoon 4, Apartment 204
Burj Khalifa,
Dubai Downtown, UAE
30 September 2010
31 March 2014
1 unit of
apartment
Freehold/
occupied by staff/
5 years
Not applicable/
1,475
1,758,000
10 March 2015
3 storey
shophouse
Leasehold/
office premise/
occupied/2 years
Not applicable/
4,680
1,000,000
Pejabat Wilayah Kelantan
31 January 2013
PT 483, Jalan Jambatan Sultan Yahya
KB waterfront, Seksyen 17
15000 Kota Bahru, Kelantan
Total Self Occupied Properties
240
226,943,000
(13487-A)
Proxy Form
No. of Shares Held
I/We of being a member/members of MNRB HOLDINGS BERHAD hereby appoint of or failing him of as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at the Auditorium, 3rd Floor,
Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur on Wednesday, 30 September 2015 at 2.00 p.m. and
at any adjournment thereof, on the following resolutions referred to in the Notice of Annual General Meeting.
NO.
RESOLUTIONS
FOR
AGAINST
ORDINARY BUSINESS
1.
To re-elect Yusoff Yaacob, who retires pursuant to Article 86 of the Company’s Articles of Association
2.
To re-elect Paisol Ahmad, who retires pursuant to Article 86 of the Company’s Articles of Association
3.
To re-elect Hijah Arifakh Othman, who retires pursuant to Article 92 of the Company’s Articles
of Association
4.
To approve the payment of Directors’ fees
5.
To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors
to fix their remuneration
6.
To approve the continuing in office of Yusoff Yaacob as an Independent Non-Executive Director
7.
To approve the continuing in office of Megat Dziauddin Megat Mahmud as an Independent
Non-Executive Director
SPECIAL BUSINESS
8.
To re-appoint P. Raveenderen, who retires pursuant to Section 129 of the Companies Act, 1965
(Please indicate with a cross (X) in the space provided whether you wish your votes to be cast for or against the resolutions above. In the absence
of specific instructions, your proxy will vote or abstain as he/they may think fit.)
Dated day of 2015.
Signed
NOTE
A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote in his behalf. A proxy need not be a member
of the Company. A member may appoint not more than two (2) proxies to attend the meeting provided the member shall specify in each proxy the proportion of the
member’s shareholdings to be represented by each proxy and only one (1) proxy shall be entitled to vote on a show of hands. Where a member is an exempt authorised
nominee, who holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of
proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An instrument appointing a proxy(ies) shall be in writing, and
in the case of an individual shall be signed by the appointer or by his attorney duly authorised in writing, and in the case of a Corporation shall be either given under its
common seal or signed on its behalf by its attorney or an officer of the Corporation so authorised. An instrument appointing a proxy(ies) must be deposited at the office
of the Share Registrar of the Company, Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya,
Selangor, not less than forty-eight (48) hours before the time set for the Annual General Meeting or any adjournment thereof. Only members registered in the Record
of Depositors as at 21 September 2015 shall be eligible to attend the AGM or appoint proxy(ies) to attend and vote on his/her behalf.
1st FOLD
Please
affix Stamp
Symphony Share Registrars Sdn. Bhd.
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor
2nd FOLD
No. 17, Lorong Dungun, Damansara Heights
50490 Kuala Lumpur
Tel : (603) 2096 8000
Fax : (603) 2096 7000
Email : [email protected]
www.mnrb.com.my

AS A TRUSTED PARTNER - MNRB Holdings Berhad

Transcription

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