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A n n u a l R e p o r t

Towards Sustainable Growth

MNRB HOLDINGS BERHAD(13487-A)

Towards Sustainable GrowthIn the financial services industry, our reputation precedes us given our

proven track record as the National Reinsurer and growing presence as

an international player. Looking ahead, we are optimistic that with our

strategies firmly in place, MNRB Group is well positioned to achieving

sustainable growth.

Tuesday, 25 September 20123.00 p.m.

ANNUALGENERALMEETING

MNRB HOLDINGS BERHAD

4 Corporate Profile5 Corporate Milestones10 Notice of 39th Annual General

Meeting14 Statement Accompanying Notice

of Annual General Meeting15 Corporate Information16 Board of Directors18 Directors’ Profile21 Management Team22 Senior Management Team24 Senior Management Team’s Profile27 Group Structure28 Chairman’s Statement34 Corporate Social Responsibility43 Statement on Corporate

Governance51 Audit Committee Report53 Statement on Internal Control55 Statement of Directors’

Responsibility in Relation to theFinancial Statements

56 Statement on Risk Management58 Five-Year Financial Highlights59 Financial Calendar60 MNRB’s Growth61 Investors’ Information110 Calendar of Significant Events117 Financial Statements287 Additional Compliance Information288 Analysis of Shareholdings291 List of Properties• Proxy Form• Complaint Form of Bursa Malaysia

MALAYSIAN REINSURANCEBERHAD

64 Corporate Profile65 Corporate Information66 Directors’ Profile69 Management Team70 Senior Management Team72 Senior Management Team’s Profile73 Corporate Activities and Services75 Malaysian Re’s Portfolio of

Business

TAKAFUL IKHLASSDN. BHD.

78 Corporate Profile79 Corporate Information80 Directors’ Profile83 Shariah Committee Members’

Profile85 Management Team86 Senior Management Team88 Senior Management Team’s Profile90 Takaful IKHLAS’ Portfolio of

Business

MNRB RETAKAFULBERHAD

94 Corporate Profile95 Corporate Information96 Directors’ Profile98 Shariah Committee Members’

Profile100 Management Team101 MRT’s Portfolio of Business

MALAYSIAN RE (DUBAI)LTD.

104 Corporate Profile105 Corporate Information106 Directors’ Profile107 Senior Management Team’s Profile

MMIP SERVICES SDN. BHD.

108 Corporate Profile109 Corporate Information

39th

As a financially sound and stableGroup, we are well rooted to sustain our Group’s aim to

becoming a leading financial solutions provider.

MNRB Holdings Berhad

(MNRB) which is listed on the

Main Market of Bursa Malaysia

Securities Berhad (Bursa

Securities) 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.


4 MNRB

CORPORATEPROFILEIn early 1965, the Malaysian Government conceived the idea

of forming a national reinsurance company in order to curtail

the ever increasing outflow of reinsurance premium overseas.

A feasibility study on the formation of such company was

done in 1971 and on 30 December 1972, Malaysian National

Reinsurance Berhad was incorporated under the Companies

Act, 1965. It commenced operations on 19 February 1973.

Effective 1 April 2005, as part of the restructuring exercise of

the MNRB Group, the reinsurance business, reinsurance

license and reinsurance assets, up to a net amount of RM400

million, were transferred fromMalaysian National Reinsurance

Berhad to Malaysian Reinsurance Berhad (Malaysian Re).

Pursuant to the restructuring, Malaysian National Reinsurance

Berhad became an investment holding company and was

renamed MNRB Holdings Berhad (MNRB).

MNRB’s wholly-owned subsidiaries are Malaysian Re, a general reinsurance

company, Takaful Ikhlas Sdn. Bhd. (Takaful IKHLAS), a takaful operator, MNRB

Retakaful Berhad (MRT), a general and family retakaful operator and Malaysian Re

(Dubai) Ltd. (MRDL), a company incorporated in Dubai, UAE, to underwrite the

reinsurance business for Malaysian Re and to service Malaysian Re’s

business partners in the Middle East and North Africa (MENA)

regions. Another subsidiary company is MMIP Services Sdn.

Bhd. (MSSB), the manager of the Malaysian Motor

Insurance Pool (MMIP), a pool established by the local

insurance industry to provide insurance coverage for

vehicle owners who have difficulty in obtaining motor

insurance coverage.

In addition, Motordata Research

Consortium Sdn. Bhd. (MRC), a

company that manages database for

standard motor parts, prices and repairs,

is an associate company of MNRB whilst

Labuan Reinsurance (L) Ltd. (Labuan Re),

an offshore reinsurance company

incorporated in the Labuan International

Offshore Financial Centre (IOFC), is an

associate company of Malaysian Re.

Backed by a wealth of experience and

knowledge in the reinsurance, takaful

and retakaful businesses, sound financial

position and the strong support from its

substantial shareholders, namely,

Permodalan Nasional Berhad (PNB) and

the various unit trust schemes of PNB,

the MNRB Group will continue to grow as

a renowned corporation, both locally and

internationally.

5MNRB HOLDINGS BERHAD

CORPORATEMILESTONES

• Malaysian NationalReinsurance Berhadcommenced operationson 19 February 1973

• Voluntary Cessions (VC)to Malaysian NationalReinsurance Berhadcommenced four (4)months later

• Began to offer Excess ofLoss Treaties to localinsurance companies

• Began to write LocalFacultative businessand non-reciprocalinwards overseas business

• Retroceded part of theVC cessions to the localinsurance companies fortheir net account

• Sponsored the 1st KualaLumpur InsuranceSeminar, attended byover four-hundred (400)delegates

• Commenced writingten percent (10%)Quota Share of theMiscellaneous Accidentsand Motor businesses

• Increased level ofretrocessions fromtwenty-five percent(25%) to thirty percent(30%) for Fire andPersonal Accidentbusinesses

1973 -1975

1976 -1978

• Increased paid-upcapital from RM5,200,002to RM6,240,003

• Commenced reciprocalexchange with overseascompanies

• Perbadanan NasionalBerhad’s (PERNAS) fiftypercent (50%) share inMalaysian NationalReinsurance Berhadwas transferred to PNB

• Paid-up capital increasedto RM8,216,004

• Published the 1st editionof the MalaysianInsurance Directory

• Introduced CommonAccount Excess of Lossfor retrocessionaires

• Formation of thefollowing:* Technical Services

Department– to conduct firesurveys includingadvisory services onrisk managementwith the cost mostlyborne by MalaysianNational ReinsuranceBerhad

* Inspection Department– to ensurecompanies’adherenceto the various Inter-Company Agreements

1979 -1981

1982 -1984

1985 -1987

* Rating Committee– to determinespecial rate under theFire Tariff for Fire andIndustrial All RisksInsurances

• Increased level ofretrocession from fiftypercent (50%) to fifty-fivepercent (55%) toshareholding companiesof Malaysian NationalReinsurance Berhad

• Implementation of Stage1 – new levels of VC,Retrocessions and othermarket reinsurancearrangements

• Began to organise AnnualGolf Tournaments andOutward Bound Schoolfor the insurance industry

• Implementation ofautomatic cessions onFacultative and Treatybusiness

• Appointed as theAdministration Managerof Malaysian MotorInsurance Pool (MMIP)

• Malaysian-Re InternationalInsurance (L) Ltd. (MIIL)was set up as a wholly-owned subsidiary

• Implementation of StageII – new levels of VC,Retrocessions and othermarket reinsurancearrangements

1988 -1990

1991 -1993

MNRB

• Malaysian NationalReinsurance Berhad andMNI jointly hosted andorganised the 13thGeneral Meeting of theFederation of Afro – AsianInsurers and Reinsurers(F.A.I.R.) attended by overthree-hundred-fifty (350)international and localparticipants

• Bank Negara Malaysia(BNM) appointedMalaysian NationalReinsurance Berhad tomanage the Scheme forInsurance of Large andSpecialised Risks

• Appointed as Managerfor the Malaysian EnergyRisks Consortium

• Launching of the CentralAdministration Bureau

• Implementation of StageIII – new levels of VC,Retrocessions and othermarket reinsurancearrangements

• MIIL, now known asLabuan Reinsurance (L)Ltd. (Labuan Re), ceasedto be a wholly-ownedsubsidiary of MalaysianNational ReinsuranceBerhad with the equityinterest being diluted totwenty percent (20%)

• Appointed as Manager ofthe Malaysian AviationPool

1994 -1996

• Malaysian NationalReinsurance Berhad waslisted on the Main Boardof the Kuala LumpurStock Exchange (nowknown as Bursa MalaysiaSecurities Berhad)

• Commencement ofOverseas Facultativebusiness

• Launching of MalaysianNational ReinsuranceBerhad Homepage(http://www.malaysian-re.com.my)

• Launching of MNRBScholarship Fund of RM1million

• Malaysian NationalReinsurance Berhadmoved to its ownbuilding, BangunanMalaysian Re

• Implementation of newlevels of VC,Retrocessions and othermarket reinsurancearrangements

• Awarded the MS ISO9002:1994 certification

• Appointed as AccountManager for the SihatMalaysia Scheme

• Injected additional RM1million to the MNRBScholarship Fund

1997 -1999

2000 -2001

• Acquired anotherbuilding, Wisma KT (nowknown as BangunanTakaful IKHLAS), PetalingJaya, Selangor

• Arrangement of terrorisminsurance via theMalaysian TerrorismFacility

• Received approval inprinciple from BNM to setup a takaful operation

• BNM approved theregistration of TakafulIkhlas Sdn. Bhd. (TakafulIKHLAS) on 21 April 2003and it commencedoperations on 2 July 2003

• MNRB was granted theapproval on Certificationto the new ISO Standard,MS ISO 9001:2000

• Implementation ofnew levels of VC,Retrocession to theindustry ceased witheffect from 1 January2003

• Acquired anotherbuilding, Block A, PlazaDamansara, KualaLumpur

• Commenced therestructuring exercise ofthe Group

2002

2003

2004

Corporate Milestones

6


• The Group’s restructuringexercise was completedon 1 April 2005 andhereon MalaysianNational ReinsuranceBerhad became MNRBHoldings Berhad (MNRB).The new holdingcompany is aninvestment holdingcompany that focuses onbusiness expansion tobroaden the Group’sincome base and furtherstrengthen its financialposition. The reinsurancebusiness was thentransferred to a newlyincorporated one-hundredpercent (100%) subsidiaryof MNRB, MalaysianReinsurance Berhad(Malaysian Re). Thetakaful businesscontinues to beundertaken by Takaful

2005 IKHLAS, a wholly-ownedsubsidiary of MNRB.Labuan Re became anassociate company ofMalaysian Re

• MMIP Services Sdn. Bhd.(MSSB), was formed tooversee the administrationof Malaysian MotorInsurance Pool (MMIP), apool established by theinsurance industry toprovide insurancecoverage for vehicleowners who find difficultyin obtaining coverage

• MNRB obtained BNM’sapproval to establish aretakaful operation underthe Takaful Act, 1984 toconduct both generaland family retakafulbusinesses. The wholly-

2006

owned subsidiarycompany of MNRB isknown as MNRBRetakaful Berhad (MRT)

• Malaysian Re (Dubai) Ltd.(MRDL), a wholly-ownedsubsidiary of MalaysianRe was incorporated

• Malaysian Re won theprestigious ReinsuranceIndustry ContributionAward given by the AsiaInsurance Review and theReview Magazine

• Malaysian Re wasassigned a FinancialStrength Rating (FSR) of‘A-’ (Excellent) and anIssuer Credit Rating (ICR)of ‘a-’ by A.M. Best Co.

• Malaysian Re wasassigned an ‘A-’ InsurerFinancial Strength (IFS)rating with stable outlookby Fitch Ratings

7

8 MNRB

• Malaysian Re’s FSR of A-(Excellent) and ICR of ‘a-’was reaffirmed by A.M.Best Co.

• Malaysian Re’s IFS ratingof ‘A-’ with stable outlookwas reaffirmed by FitchRatings

• MRT commencedoperations in August2007 as the first retakafuloperator in Malaysia

• MRDL was officiallylaunched on 18 March2008

• MRDL was whollytransferred fromMalaysian Re to MNRB

• MNRB acquired ninepoint ninety-nine percent(9.99%) stake in

2007

2008

Principal InsuranceHoldings Limited (PIHL)(formerly known asBritish Islamic InsuranceHoldings Ltd.)

• MRT was officiallylaunched on 11 August2008

• MRT was assigned an IFSrating of ‘BBB+’ withstable outlook by FitchRatings

• MRT was awarded “TheMost OutstandingRetakaful Operator 2008”at the KL Islamic FinanceForum 2008 (KLIFF 2008)

• Malaysian Re’s MS ISO9001:2000 QualityManagement Systemscertification which wasissued in 2003, wasreaffirmed

• Takaful IKHLAS wasawarded “Best Takaful/Retakaful Provider 2008”by Islamic Finance News(IFN)

• Takaful IKHLAS won TheBrandLaureate – SMEsChapter Award 2008,“Best Brands in ProductBranding, ConsumerHealthcare Insurance”

• IKHLAS Medic AssistTakaful (IMAT) won the“Most Innovative ProductAward” by KLIFF 2008

• Malaysian Re’s FSR of‘A–’ (Excellent) and ICR of‘a-’ was reaffirmed byA.M. Best Co.

• Malaysian Re’s IFS ratingof ‘A-’ with stable outlookwas reaffirmed by FitchRatings

• Following a recertificationaudit conducted bySIRIM, Malaysian Re’sMS ISO 9001:2000Quality ManagementSystems certification wasreaffirmed

• MRT’s IFS rating of‘BBB+’ with stableoutlook was reaffirmed byFitch Ratings

• Malaysian Re and LabuanRe jointly hosted andorganised the 21stF.A.I.R. Conference,

2009

Corporate Milestones


attended by over six-hundred (600) delegatesincluding leaders andexperts in the insuranceindustry

• Takaful IKHLAS won“Best Takaful/RetakafulProvider” for the secondtime at the IslamicFinance News PollsAwards 2009

• Takaful IKHLAS won TheBrandLaureate – SMEsChapter Award 2009,“Best Brands in ProductBranding, ConsumerHealthcare Insurance” &The BrandLaureate –SMEs Chapter Award2009, Corporate Branding– “Best Brands inServices – IslamicProtection Services”

• Takaful IKHLAS wasnamed the “Best TakafulProvider” at theEuromoney IslamicFinance Awards 2010organised by financialmagazine, Euromoney

• IKHLAS MedicalAssistance Takaful won“Best Takaful Product”by International TakafulAwards 2010

• Takaful IKHLAS moved toits new corporate office,IKHLAS Point, in BangsarSouth, Kuala Lumpur

2010

• Takaful IKHLAS wasnamed Best Takafulproduct by TheInternational TakafulAwards 2010

• Takaful IKHLAS wasawarded TheBrandLaureate – SMEsChapter Award 2010(third consecutive year)

• Takaful IKHLAS wasnamed Best Takaful/Retakaful Provider byIslamic Finance NewsPolls Awards 2010 (thirdconsecutive year)

• Takaful IKHLAS wasawarded for its excellencein Branding by“BrandLaureate SMEsChapter Awards 2010” inthe categories of The BestBrands in CorporateBranding – Islamic FinancialProtection Services (secondconsecutive year) and TheBest Brands in ProductBranding – Health InsuranceServices (Third consecutiveyear)

• Fitch Ratings upgradedMalaysian Re’s InsurerFinancial Strength (IFS)from ‘A-’ to ‘A’ withStable outlook

2011 • Malaysian Re’s FinancialStrength Rating of ‘A-’(Excellent) and IssuerCredit Rating of ‘a-’ wasreaffirmed by A.M. BestCompany, with Stableoutlook for both ratings

• Malaysian Re’s InsurerFinancial Strength (IFS)rating of ‘A’ wasreaffirmed by FitchRatings, with Stableoutlook

• MRT’s IFS rating of‘BBB+’ was reaffirmed byFitch Ratings, with Stableoutlook

• Takaful IKHLAS and MRTwon the Best IslamicTakaful Provider and BestRe-Takaful Providerawards, respectively, atthe Islamic Finance News(IFN) Service ProvidersPoll 2011 Awards held inKuala Lumpur.

• Takaful IKHLAS won theBest Islamic TakafulProvider at the EuromoneyIslamic Finance Awards2011.

2012

10 MNRB

(Ordinary Resolution 1)








NOTICE IS HEREBY GIVEN that the Thirty-Ninth Annual General Meeting of the Company willbe held at the Auditorium, 3rd Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, DamansaraHeights, 50490 Kuala Lumpur on Tuesday, 25 September 2012 at 3.00 p.m. for the followingpurposes:

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 March 2012 and theReports of the Directors and Auditors thereon.

2. To approve the payment of a First and Final Dividend of seventeen percent (17%) per share lesstwenty-five percent (25%) income tax, for the financial year ended 31 March 2012.

3. To re-elect the following Directors, who retire by rotation pursuant to Article 86 of the Company’sArticles of Association:

(i) P. Raveenderen

(ii) Yusoff Yaacob

4. To re-elect Mohd Din Merican, who retires pursuant to Article 92 of the Company’s Articles ofAssociation, as Director of the Company.

5. To approve Directors’ remuneration amounting to RM695,700 for the year ended 31 March 2012(2011: RM685,000).

6. To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix theirremuneration.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following Ordinary Resolution:

7. Re-appointment of Director retiring in accordance with Section 129(6) of the CompaniesAct, 1965

“THAT Datuk Mohd Khalil Dato’ Mohd Noor, being over the age of seventy (70) years and retiringin accordance with Section 129(2) of the Companies Act, 1965, be and is hereby re-appointedas Director of the Company to hold office until the conclusion of the next Annual GeneralMeeting.”

NOTICE OF 39 ANNUALGENERAL MEETING

TH


To consider and if thought fit, to pass the following Special Resolution:

8. Proposed Amendments to the Articles of Association of the Company

“THAT the following alterations, modifications, additions and deletions to the Company’s Articles of Association be andhereby approved:

ArticleNo.

2.

76.

77.

Existing Article

Objection

No objection shall be raised to thequalification of any voter except at themeeting or adjourned meeting at whichthe vote objected to is given ortendered, and every vote notdisallowed at such meeting shall bevalid for all purposes.

Any such objections made in due timeshall be referred to the Chairman of themeeting, whose decision shall be finaland conclusive.

Appointment of proxies

A Member may appoint not more thantwo (2) proxies to attend at the samemeeting and only one (1) proxy shall beentitled to vote on a show of hands.Where a Member appoints two (2)proxies, the Member shall specify ineach proxy form the proportion of theMember’s shareholdings to berepresented by each proxy. Where aMember of the Company is anauthorised nominee as defined under

Amended Article

New provision to be inserted.

“Exempt authorised nominee”means an authorised nomineedefined under the CentralDepositories Act which is exemptedfrom compliance with the provisionsof subsection 25A(1) of the CentralDepositories Act.

Objection

There shall be no restriction as to thequalification of any voter or proxy.

Appointment of proxies

A Member may appoint not more thantwo (2) proxies to attend at the samemeeting and only one (1) proxy shall beentitled to vote on a show of hands.Where a Member appoints two (2)proxies, the Member shall specify ineach proxy form the proportion ofthe Member’s shareholdings to berepresented by each proxy.

Rationale

Pursuant to Paragraph 7.21(2) ofthe Listing Requirements

Pursuant to Paragraph 7.21A of theListing Requirements

Pursuant to Paragraph 7.21(1) ofthe Listing Requirements

12 MNRB

Notice Of 39 AnnualGeneral Meeting

th

(Special Resolution 1)

9. To transact any other business which may properly be transacted at the Annual General Meeting.

ArticleNo.

77.

78.

Existing Article

the Act, it may appoint at least one (1)proxy in respect of each securitiesaccount it holds with ordinary shares ofthe Company standing to the creditof the said securities account.

Deposit of instrument of proxy

The instrument appointing a proxy shallbe in writing (in the common or usualform) under the hand of the appointoror of his attorney duly authorised inwriting or, if the appointor is acorporation, either under Seal or underthe hand of an officer or attorney dulyauthorised. A proxy may but need notbe a Member of the Company and neednot be any of the persons prescribed bySection 149(1)(b) of the Act. Theinstrument appointing a proxy shall bedeemed to confer authority to demandor join in demanding a poll.

Amended Article

Where a Member of the Company isan exempt authorised nomineewhich holds ordinary shares in theCompany for multiple beneficialowners in one securities account(“omnibus account”), there is no limitto the number of proxies which theexempt authorised nominee mayappoint in respect of each omnibusaccount it holds.

Deposit of instrument of proxy

The instrument appointing a proxy shallbe in writing (in the common or usualform) under the hand of the appointoror of his attorney duly authorised inwriting or, if the appointor is acorporation, either under Seal or underthe hand of an officer or attorney dulyauthorised. A Member of theCompany entitled to attend and voteat a meeting of the Company, or at ameeting of any class of Members ofthe Company, shall be entitled toappoint any person as his proxy toattend and vote instead of theMember at the meeting. A proxyappointed to attend and vote at ameeting of the Company shall havethe same rights as the Member tospeak at the Meeting.

Rationale

Pursuant to Paragraph 7.21(1) ofthe Listing Requirements (cont’d)

Pursuant to Paragraph 7.21A of theListing Requirements


NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that subject to the approval of the shareholders at the Thirty-Ninth Annual General Meeting tobe held on 25 September 2012, a First and Final Dividend of seventeen percent (17%) less twenty-five percent (25%) income taxwill be paid on 26 October 2012 to the shareholders whose name appear in the Register of Depositors on 4 October 2012.

A Depositor shall qualify for entitlement only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 4 October 2012 in respect of ordinarytransfers.

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa MalaysiaSecurities Berhad.

By Order of the Board

NORAZMAN HASHIM (MIA 5817)

LENA ABD LATIF (LS 8766)

Company Secretaries

Kuala Lumpur3 September 2012

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 hisbehalf. A proxy need not be a member of the Company.

2. A member may appoint more than two (2) proxies to attend the meeting provided the member shall specify in each proxythe proportion of the member’s shareholdings to be represented by each proxy and only one (1) proxy shall be entitled tovote on a show of hands.

3. Where a member is an authorised nominee, it may appoint at least one (1) proxy in respect of each securities account it holds.

4. An Instrument appointing a proxy shall be in writing, and in the case of an individual shall be signed by the appointer or byhis attorney duly authorised in writing, and in the case of a Corporation shall be either given under its common seal or signedon its behalf by its attorney or an officer of the Corporation so authorised.

5. All proxies must be deposited at the office of the Share Registrar of the Company, Symphony Share Registrars Sdn. Bhd.,Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor, not lessthan 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 19 September 2012 shall be eligible to attend the AGM or appointproxy to attend and vote on his/her behalf.

7. Payment of First and Final Dividend

Pursuant to Section 8.26 of the Main Market Listing Requirements of Bursa Securities Malaysia Berhad the First and FinalDividend, if approved, will be paid no later than three (3) months from the shareholders’ approval.

13

14 MNRB

Statement AccompanyingNotice Of Annual General MeetingPursuant to Paragraph 8.27(2) of the Bursa Malaysia Main Market Listing Requirements

DIRECTORS STANDING FOR RE-ELECTION AND RE-APPOINTMENT AT THE THIRTY-NINTH ANNUALGENERAL MEETING

The following are Directors retiring pursuant to Article 86 and Article 92 of the Company’s Articles of Association:

Article 86 – Retirement by rotation:

• P. Raveenderen• Yusoff Yaacob

Article 92 – Retirement after appointment to fill casual vacancy

• Mohd Din Merican

The following is the Director retiring pursuant to Section 129 of the Companies Act, 1965:

Section 129(6) of the Companies Act, 1965

• Datuk Mohd Khalil Dato’ Mohd Noor

The respective profiles of the above Directors are set out in the Profile of Directors’ section of the Annual Report frompages 18 to 20.

The details of interest in the securities of the Company or its subsidiaries (if any) held by the said Directors are stated onpage 119 of the Director’s Report in this Annual Report.

8. Explanatory Notes on Special Business

(i) Ordinary Resolution 8 – Re-appointment of Directors pursuant to Section 129(6) of the Companies Act, 1965

The proposed Ordinary Resolution 8 is to seek shareholders’ approval for the re-appointment of a Director who is overthe age of seventy (70) years and retiring in accordance with Section 129(2) of the Act. If passed, it will enable theDirector to hold office until the next AGM of the Company.

(ii) Special Resolution 1 – Proposed Amendments to the Articles of Association of the Company

The Special Resolution 1, proposed under item 8 of the Agenda, if passed, will allow the Company to incorporate theamendments to the Company’s Articles of Association. The proposed amendments are to streamline the Company’sArticles of Association with the provisions of the Companies Act, 1965 and the Main Market Listing Requirements ofBursa Malaysia Securities Berhad.

Notice Of 39 AnnualGeneral Meeting

th


CORPORATEINFORMATION

BOARD OF DIRECTORS

SHARKAWI ALISNon-Independent Non-ExecutiveChairman

P. RAVEENDERENNon-Independent Non-ExecutiveDirector

DATO’ SYED ARIFF FADZILLAHSYED AWALLUDDINIndependent Non-Executive Director

YUSOFF YAACOBIndependent Non-Executive Director

DATUK MOHD KHALILDATO’ MOHD NOORNon-Independent Non-ExecutiveDirector

MEGAT DZIAUDDINMEGAT MAHMUDSenior Independent Non-ExecutiveDirector

PAISOL AHMADNon-Independent Non-ExecutiveDirector

MOHD DIN MERICANPresident &Group Chief Executive OfficerNon-Independent Executive Director(Appointed with effect from 9 January 2012)

COMPANY SECRETARIES

Norazman Hashim (MIA 5817)Lena Abd Latif (LS 8766)

AUDIT COMMITTEE

Megat Dziauddin Megat Mahmud(Chairman)

Dato’ Syed Ariff FadzillahSyed Awalluddin

P. RaveenderenPaisol AhmadYusoff Yaacob

NOMINATION COMMITTEE

Dato’ Syed Ariff FadzillahSyed Awalluddin (Chairman)

Sharkawi AlisYusoff Yaacob

REMUNERATION COMMITTEE

Megat Dziauddin Megat Mahmud(Chairman)

Dato’ Syed Ariff FadzillahSyed Awalluddin

Yusoff Yaacob

RISK MANAGEMENTCOMMITTEE

Yusoff Yaacob (Chairman)

P. RaveenderenDatuk Mohd Khalil Dato’ Mohd Noor

INVESTMENT COMMITTEE

Datuk Mohd Khalil Dato’ Mohd Noor(Chairman)

Megat Dziauddin Megat MahmudPaisol AhmadMohd Din Merican(Appointed with effect from 9 January 2012)

AUDITORS

Ernst & YoungLevel 23A, Menara MilleniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : +603-7495 8000Fax : +603-2095 5332

SHARE REGISTRAR

Symphony Share Registrars Sdn. Bhd.Level 6, Symphony HouseBlock D13, Pusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanTel : +603- 7841 8000Fax : +603-7841 8008

PRINCIPAL BANKERCIMB Bank Berhad

REGISTERED OFFICE

12th Floor, Bangunan Malaysian ReNo. 17, Lorong DungunDamansara Heights50490 Kuala LumpurTel : +603-2096 8000Fax : +603-2096 7000E-mail : [email protected] : www.mnrb.com.my

STOCK EXCHANGE LISTING

Bursa Securities– Main Market

15

BOARD OF DIRECTORS16 MNRB


Left to Right: Datuk Mohd Khalil Dato’ Mohd Noor, Paisol Ahmad,Megat Dziauddin Megat Mahmud, Sharkawi Alis, Mohd Din Merican,P. Raveenderen, Dato’ Syed Ariff Fadzillah Syed Awalluddin & Yusoff Yaacob

18 MNRB

SHARKAWI ALIS, aged sixty-five (65), Malaysian. Non-Independent Non-ExecutiveDirector since 7 January 2005 and was subsequently appointed as Non-IndependentNon-Executive Chairman on 3 September 2007. Member of the NominationCommittee. He is a Barrister-at-Law from Middle Temple, London where he was calledin 1971. He served in the Malaysian Judicial and Legal Service in various capacitiesfor eleven (11) years before he was appointed as Group Legal Adviser of MalaysianMining Corporation Berhad in August 1982. In January 1997, he joined the SecuritiesCommission, Malaysia as Director of Market Supervision and subsequently asDirector of Corporate Resources Division till March 2003. Also Chairman of MalaysianRe, Takaful IKHLAS, MRT, Labuan Re and MRDL, Director of MIDF Amanah AssetManagement Berhad, Malaysian Industrial Development Finance Berhad, MIDFAmanah Investment Bank Berhad, MIDF Property Berhad and MRC. Not related toany Directors and/or major shareholders of MNRB except by virtue of being anominee Director of PNB. Does not have any conflict of interest with MNRB and hasnever been convicted for any offences within the past ten (10) years. Attended all theten (10) Board Meetings held in the financial year.

P. RAVEENDEREN, aged sixty-seven (67), Malaysian. Appointed as a Director on11 November 1993 and designated as an Independent Non-Executive Director on1 September 2003. He was re-designated as Non-Independent Non-ExecutiveDirector on 19 July 2011. Member of the Audit Committee and the Risk ManagementCommittee. An Associate of The Chartered Insurance Institute as well as a CharteredInsurer. Was the Chief Executive Officer of Royal Insurance (M) Sdn. Bhd. since 1985until the Company merged with Sun Alliance Insurance (M) Sdn. Bhd. on 1 September1999 when he assumed the position of an Executive Director of the merged Royal &Sun Alliance Insurance (M) Bhd. until his retirement on 31 August 2001. Also a Directorof Malaysian Re. Not related to any Directors and/or major shareholders of MNRB.Does not have any conflict of interest with MNRB and has never been convicted forany offences within the past ten (10) years. Attended all the ten (10) Board Meetingsheld in the financial year.

DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDIN, aged sixty-nine (69),Malaysian. Independent Non-Executive Director since 31 January 2003. Chairman ofthe Nomination Committee, member of the Audit Committee and the RemunerationCommittee. Graduated from the University of Malaya with a Bachelor of Arts degree,then obtained a Diploma in International Relations from University of Oslo, Diplomain Development Administration from London School of Economics and MastersDegree in International Relations from University of New York. Joined the Governmentservice in 1967 and was later posted abroad to serve in Canada, Libya and the UnitedNations 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 a Director of Malaysian Re, MRT, EcoFirst Consolidated Bhd. and one (1) otherprivate limited company. Not related to any Directors and/or major shareholders ofMNRB. Does not have any conflict of interest with MNRB and has never beenconvicted for any offences within the past ten (10) years. Attended all the ten (10)Board Meetings held in the financial year.

DIRECTORS’PROFILE


YUSOFF YAACOB, aged sixty-four (64), Malaysian. Independent Non-ExecutiveDirector since 10 November 2004. Chairman of the Risk Management Committee,member of the Audit Committee, Remuneration Committee and the NominationCommittee. Obtained a Diploma in Insurance Studies & Insurance Management fromthe University of Nottingham, United Kingdom. A Chartered Insurance Practitionerand a Fellow of the Chartered Insurance Institute, United Kingdom. Started his careeras an Insurance Trainee with Malaysia National Insurance Sdn Bhd in 1970 and heldthe position of Marine Manager until 1979. Joined Petroliam Nasional Berhad(PETRONAS) in 1979 and was the General Manager (Insurance Division) until hisretirement in 2003. Also a Director of Malaysian Re. Not related to any Directorsand/or major shareholders of MNRB. Does not have any conflict of interest withMNRB and has never been convicted for any offences within the past ten (10) years.Attended all the ten (10) Board Meetings held in the financial year.

DATUK MOHD KHALIL DATO’ MOHD NOOR, aged seventy-one (71),Malaysian. Non-Independent Non-Executive Director since 14 December 2004.Chairman of the Investment Committee and member of the Risk ManagementCommittee. Graduated from the University of Malaya with a Bachelor of Arts degreeand then obtained a Diploma in Commercial Policy from GATT Training Institute inGeneva, Switzerland. Was the former Auditor-General of Malaysia from 1994 to 2000.Also the former Secretary of the Foreign Investment Committee, Deputy SecretaryGeneral of the Ministry of Trade and Industry and Secretary General of the Ministry ofWorks. Currently, Chairman of TIME Engineering Berhad, Director of IOI CorporationBerhad, Malaysian Re, MRT and Dagang Net Technologies Sdn. Bhd. Not related toany Directors and/or major shareholders of MNRB except by virtue of being anominee Director of PNB. Does not have any conflict of interest with MNRB and hasnever been convicted for any offences within the past ten (10) years. Attended all theten (10) Board Meetings held in the financial year.

MEGAT DZIAUDDIN MEGAT MAHMUD, aged sixty-six (66), Malaysian.Independent Non-Executive Director since 24 August 2006 and re-designated asSenior Independent Non-Executive Director on 19 July 2011. Chairman of theRemuneration Committee as well as the Audit Committee and member of theInvestment Committee. He holds a Bachelor of Science (Econs.) (Hons.) degree fromthe Queen’s University of Belfast, Northern Ireland and is a Fellow of the Institute ofChartered Accountants in Ireland as well as a Chartered Accountant with theMalaysian Institute of Accountants. He had served Golden Hope Plantations Berhadas Group Director, Finance, Arab-Malaysian Merchant Bank, first as General Manager– Operations and later as General Manager – Investment, Bank Simpanan Nasionalas Finance Manager and the Accountant-General’s Department as TreasuryAccountant. Also a Director of Malaysian Re, MRT, Pernec Corporation Bhd., AllianceFinancial Group Berhad, Alliance Bank Berhad, Alliance Investment Bank Berhad,Alliance Investment Management Berhad, Takaful IKHLAS and other several privatelimited companies. Not related to any Directors and/or shareholders of MNRB. Doesnot have any conflict of interest with MNRB and has never been convicted for anyoffences within the past ten (10) years. Attended all the ten (10) Board Meetings heldin the financial year.

20 MNRB

PAISOL AHMAD, aged fifty-eight (58), Malaysian. Non-Independent Non-ExecutiveDirector since 11 April 2008. Member of the Audit Committee and the InvestmentCommittee. Obtained Diploma in Accountancy from Universiti Teknologi MARA anda Fellow of the Association of Chartered Certified Accountants, United Kingdom. Alsoa Chartered Accountant with the Malaysian Institute of Accountants, a Fellow of theFinancial Services Institute of Australasia and a Certified Financial Planner with theFinancial Planning Association of Malaysia. Was the Senior Accountant of PernasCharter Management Sdn. Bhd.. Then held various positions in Amanah SahamNasional Berhad before being appointed as its Executive Director/Senior VicePresident II. Subsequently, being transferred to PNB and is currently the Senior VicePresident I of its Financial Management Audit & Risk Management Division. Also adirector of Takaful IKHLAS, KAF Investment Bank Berhad and two (2) other privatelimited companies. Not related to any Directors and/or shareholders of MNRB exceptby virtue of being a nominee director and employee of PNB. Does not have anyconflict of interest with MNRB and has never been convicted for any offences withinthe past ten (10) years. Attended all the ten (10) Board Meetings held in the financialyear.

MOHD DIN MERICAN, aged fifty (50), Malaysian. Non-Independent ExecutiveDirector with effect from 9 January 2012 and President & Group Chief ExecutiveOfficer of the Company. Member of the Investment Committee. Obtained Bachelor ofCommerce (Honours) degree from Carleton University, Ottawa, Canada. He is anAssociate Member of The Malaysian Insurance Institute since 1991. His more thantwenty-six (26) years experience in the insurance industry began in 1985 when hejoined one of Malaysia’s general insurance companies. Since then he has held keymanagement positions in various insurance, insurance broking and reinsurance firmsincluding being the Principal Officer & General Manager of SCOR Switzerland Ltd.,Labuan Branch. Prior to joining MNRB, he was the Chief Executive Officer of EtiqaInsurance Berhad until December 2011. Also a Director of Malaysian Re, MRT, TakafulIKHLAS, Labuan Re, MRDL and MRC. Not related to any Directors and/or majorshareholders of MNRB except by virtue of being a nominee Director of PNB. Does nothave any conflict of interest with MNRB and has never been convicted for anyoffences within the past ten (10) years. Attended one (1) Board Meeting held in thefinancial year.

Directors’ Profile


Mohd Din MericanBachelor of Commerce (Hons)

President &Group Chief Executive Officer

Datuk Ramlan Abdul RashidMA in Actuarial Science

Group Chief Operating Officer

Norazman HashimCA (M), FCCA, MBA

Executive Vice President& Group Chief Financial Officer/Company Secretary

SENIOR VICE PRESIDENTS

Ahkter Abdul MananB.Soc. Sc. (Hons)

Group Chief Investment Officer

Azlan A. AzizeeM.Sc.

Group Chief Information Officer

Ahmad Ruhaizad HashimCA (M), CPA, BA (Hons)

Group Chief Strategy Officer

Mohd Radzuan MohamedBachelor (Hons), Risk Management,AIRM, INSTERP

Group Chief Risk Management& Compliance Officer

Romie KhalidB.Sc.Economics (Hons)

Group Chief Internal Auditor

Lena Abd LatifLL.B (Hons)

Company Secretary/Head of Legal & Secretarial

Sharmini PerampalamCA (M), B.Acc. (Hons)

Head of Finance

Dr. Ali Azizan MohamadPHD

Head of Human Capital Management

VICE PRESIDENTS

Y.M. Raja Zalman Tuah Raja IzzahamCA (M), ACCA

Deputy Group Chief Internal Auditor

Nazzahatol Azura AzizB.Sc. in Management (Hons)

Corporate Services Division

Ekmarrudy OthmanB.Sc. (Hons) in Finance & Accounting

Head of Corporate Finance

Noorazimah TahirM.Sc. Corporate Communications

Head of Corporate Communications

Zulkifli Abdul RazakBA (Hons) Risk Management

Head of Property

Ahmad Refaei SaibonMBA (IT)

Information Communication Technology

Fuzaidah YusofCIPM

Human Capital Management

Rosmawati Abd AzidBBA (Hons) Finance, ISD, CTP

Human Capital Management

Ainul Roslina GhazaliB.Sc. in Business Administration

Head of Investment

Wan Murezani Wan MohamadBachelor of Economics

Head of Research

ASSISTANT VICE PRESIDENTS

Raihanah YahayaMBA (Finance)

Head of Administration

Noridora IbrahimDiploma in Business Studies

Head of Market Training

MANAGEMENTTEAM

21

SENIOR MANAGEMENTTEAM

4 7

1

68 10

2 3

115

9

22 MNRB


1. Mohd Din Merican2. Datuk Ramlan Abdul Rashid3. Norazman Hashim4. Ahkter Abdul Manan

5. Azlan A. Azizee6. Ahmad Ruhaizad Hashim7. Sharmini Perampalam8. Mohd Radzuan Mohamed

9. Romie Khalid10. Dr. Ali Azizan Mohamad11. Lena Abd Latif

MNRB24

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:

DATUK RAMLAN ABDUL RASHIDis the Group Chief Operating Officer of

MNRB since 1 April 2011. He joined

MNRB Retakaful Berhad in March 2010

as Executive Vice President & Deputy

CEO and has an extensive twenty-five

(25) years experience in the

insurance/takaful industry.

Prior to joining the Group, he was the

Chief Executive Officer/Executive

Director of a leading local composite

insurance company. He was also the

Vice President of Life Insurance

Association of Malaysia (LIAM) for

2006/2007, a Director of Malaysian

Insurance Institute as well as Malaysian

Life Reinsurance Group Berhad for

2006/2007 and a member of the

Management Committee of PIAM from

2002 to 2007.

Datuk Ramlan graduated with B.Sc

(Hons) in Mathematics from Universiti

Sains Malaysia (USM) in 1983 and

Master in Actuarial Science from Ball

State University, Indiana, United States

of America in 1985 under the

sponsorship of the Asia Foundation

Scholarship.

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 on 1 April 2005 and

promoted to General Manager to head

the Corporate Services Division,

comprising Administration, Legal &

Secretarial, Corporate Communications,

Human Capital Management and

Finance Departments in June 2005. He

was transferred to MNRB on 1 April 2008

and assumed his current position. He is

also a Director of MSSB and the

Company Secretary of Malaysian Re,

MRT, Takaful IKHLAS and MRDL.

AHKTER ABDUL MANAN is the

Senior Vice President & Group Chief

Investment Officer of MNRB. He

graduated from University Science of

Malaysia with a Bachelor of Social

Science (Honours) majoring in

Management. He is responsible for the

overall investment and property division

of 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. On 1 January 2001, he was

appointed as the Chief Executive Officer

and Executive Director of MIDF

Aberdeen. He joined Asia Unit Trust

Berhad (AUTB) on 1 September 2004 as

Chief Executive Officer following the

transfer of business of MIDF Aberdeen to

Amanah SSCM Asset Management

Berhad. He left AUTB on 16 July 2007

and joined MNRB on 17 July 2007. In

total, he brings along to the Company

more than twenty-four (24) years

experience in the fund management

industry.

SENIOR MANAGEMENTTEAM’S PROFILE


AZLAN A. AZIZEE is the Senior Vice

President & Group Chief Information

Officer of MNRB. He obtained his

Bachelor of Science degree in Computer

Science from the University of

Wisconsin, Green Bay, United States of

America and a Master of Science degree

in Information Systems Technology from

the George Washington University,

Washington D.C., United States of

America.

He joined the then Malaysian National

Reinsurance Berhad in 1987 and was

promoted to Assistant General Manager

in 1994. He assumed the current position

at MNRB on 1 April 2005.

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 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 (MIA).

He brings more than twenty (20) years

experience in corporate management

and advisory services. His career started

in 1991 when he joined Arthur Andersen

as an auditor where he served 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.

SHARMINI PERAMPALAM is the

Senior Vice President, Head of Finance

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 was

promoted to Assistant Manager on 1

April 1998.

She was promoted to Manager and then

transferred to the Finance Department on

1 July 2002. She was subsequently

transferred to Malaysian Re on 1 April

2005. In October 2005, she was

promoted to the position of Vice

President, Head of Finance. On 1 May

2008 when the Group implemented

shared services, she was transferred

back to MNRB. She was promoted to her

current position in 2011.

She has over nineteen (19) years of

working experience. Prior to joining

MNRB, Sharmini worked with Genting

Berhad and BDO Binder Tax KL.

MOHD RADZUANMOHAMED is the

Senior Vice President & Group Chief Risk

Management and Compliance Officer of

MNRB. He graduated in 1995 with a

Bachelor (Honours), Risk Management

from the Glasgow Caledonian University,

Scotland and BBA (Honours) Risk

Management and Insurance from UiTM

in 1994. He is a member of the Institute

of Risk Management, UK since 1996. His

career started in 1997 when he joined the

then Malaysian National Reinsurance

Berhad as a graduate trainee and

promoted to Assistant Manager of the

Technical Services department. He

served the then Malaysian National

Reinsurance Berhad for more than six (6)

years until 2003 when he decided to join

Takaful Nasional Sdn. Bhd. as Manager,

Risk Management Department and left in

2005.

He then joined Mayban Fortis Holdings

Berhad as an Assistant Vice President,

Risk Mitigation and Analytics,

Operational Risk Management. He later

joined Syarikat Takaful Malaysia Berhad

as an Assistant General Manager, Risk

Management Division from 2007 until

2010. He joined MNRB on 3 January

2011.

25

26 MNRB

Senior Management Team’s Profile

DR. ALI AZIZAN MOHAMAD is the

Senior Vice President & Head of Human

Capital Management of MNRB since

1 December 2011. He has more than

twenty (20) years experience in

Organisational Development, Human

Capital Management and Leadership

Development. He has been extensively

involved in the Design and Development

of Competency-Based HR Applications,

Leadership Development and Talent

Management. He has served as

feedback coach to Senior Executives in

both private and public sectors across

the Asia Region and have spent more

than ten (10) years in Senior

Management positions in Human

Resources in Telekom Malaysia Berhad

and Maybank. Prior to joining MNRB, he

was the Director of Programs,

International Centre for Leadership in

Finance (ICLIF).

A HR Professional and Leadership

Development Specialist by profession,

he graduated with degrees in Sciences

from Northern Illinois University,

University of Illinois and University of

Southern California and a PhD from

Universiti Kebangsaan Malaysia.

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 started 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, serving as

the Malaysian Re’s RMO. Subsequently

on 1 August 2007, he was transferred

back to MNRB and assumed his current

position on 7 August 2007.

LENA ABD LATIF is the Senior Vice

President, Head of Legal & Secretarial

and Company Secretary of MNRB. She

holds an honours Bachelor of Laws

degree from the International Islamic

University, Malaysia and has been called

to the Malaysian Bar. 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 subsequently transferred to

Malaysian Re on 1 April 2005. In October

2005, she was promoted as Vice

President, Head of Legal & Secretarial.

On 1 May 2008, when the Group

implemented shared services, she was

transferred back to MNRB. She was

promoted to her current position in 2011.

She has over twenty (20) years of

working experience in both legal practice

and corporate firms. She was employed

by Utusan Melayu (Malaysia) Bhd 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.


* Associate Company

GROUPSTRUCTURE

MMNNRRBB HHOOLLDDIINNGGSS BBEERRHHAADD

100%Malaysian Reinsurance Berhad

20%*Labuan Reinsurance (L) Ltd.

100%Takaful Ikhlas Sdn. Bhd.

100%MNRB Retakaful Berhad

100%Malaysian Re (Dubai) Ltd.

100%MMIP Services Sdn. Bhd.

40%*Motordata ResearchConsortium Sdn. Bhd.

28 MNRB

A CHALLENGING OPERATING ENVIRONMENT

The year in review was indeed a difficult year globally in light of the on-going Eurozonesovereign debt crisis coupled with the slower growth recovery in the United States.Global GDP growth declined to 3.9% in 2011 as compared to GDP growth of 5.3%in 2010, primarily a result of generally sluggish economic activity among thedeveloped countries. It was also a challenging year for capital markets worldwidegiven the sovereign debt crisis in the Eurozone. Insurers in this region faced the riskof potentially losing up to USD193 billion or the equivalent of 24% of shareholders’funds if the value of sovereign bonds issued by Greece, Ireland, Portugal, Spain andItaly dropped by 50%.

The Malaysian economy too was not spared from the global fallout. The domesticeconomy registered GDP growth of only 5.1% in 2011 in comparison to GDP growthof 7.2% in 2010. While the drop in global demand inadvertently resulted in lowerexports, domestic demand grew by 8.9% in 2011 on the back of supportive monetaryand fiscal policies, providing adequate buffers to the economy.

The increased risk aversion amongst the global investing community saw demandfor the US dollar rising at the expense of emerging market currencies. This led theUSD-RM exchange rate to increase by some 3.4% in 2011. Investor confidence in the

Profit Before Tax

08 09 10 11 12

126,214

164,

952

79,2

61

40,4

57

193,

955

Dear Valued Shareholders,

On behalf of the Board of Directors, it is my pleasure and privilege to present the Annual Report of MNRBHoldings Berhad for the financial year ended 31 March 2012.

I am pleased to report that the MNRB Group came through a volatile 2011 relatively unscathed despite theunexpected turn of events that affected the region’s reinsurance landscape. 2011 was a year that sawdevastating floods wreak havoc in Thailand making it the second most expensive regional catastrophe interms of economic and insurance loss. Despite this predicament, the Group performed admirably andremained profitable. Our performance to a large extent was attributable to the quality of our business andthe strength of our capital reserves. Going forward, we are in a much stronger position than before and arewell equipped to continue our journey towards sustainable growth.

Chairman’s


global stock and corporate bond marketsfell sharply towards the end of 2011 whilecorporate bond risk premiums widenedover the same period. The stock markets,however, experienced a late recoveryfollowing a series of stimulus injectionsby central banks globally which helped torestore investors’ confidence.

In Malaysia, a total of RM7.38 billion wasraised from twenty-eight (28) initial publicofferings (“IPOs”) in 2011 as comparedto over RM19.80 billion raised fromtwenty-nine (29) IPOs in 2010. Thecorporate debt capital market, however,was more active with a total issuancesize of RM69.56 billion in 2011 ascompared to some RM52.12 billionraised in 2010.

STEADFASTLY WITHSTANDINGADVERSITY

The onslaught of the devastating floodsin Thailand, the extent of which no onecould have envisaged, caused theinsurance industry losses in excess ofUSD16 billion. Overall, the massivelosses eroded the reserves of manyinsurers and reinsurers companiesforcing them to exit the Thai market.Reinsurers who suffered substantiallosses responded by limiting theirexposure to flood risk through variousmeasures. These ranged from imposingevent limits on proportional treaties, toplacing sub-limits for naturalcatastrophes, to totally excluding naturalcatastrophe covers. Due to the resultantscarcity of reinsurance capacity, the costof reinsurance protection significantlyincreased.

While the MNRB Group was not sparedthe effects of the floods in Thailand, wewere fortunate in that we were able tosteadfastly withstand severe losses bybeing able to draw on our adequatecapital reserves to mitigate the impact ofthe floods. Our focus on bolstering thestrong capital position of our subsidiariesover the preceding two years certainlyhelped us remain resilient. Additionally,our geographical spread in the regioncoupled with our diversified portfolio alsoenabled us to withstand the impact of thefloods on our bottom-line. Although weexperienced a small shortfall in revenuein the year under review, we are pleasedthat we withstood the challenges that theyear brought. Come the new financialyear, we remain poised to move forwardwith greater confidence.

Statement

30 MNRB

CREDIBLE GROUPPERFORMANCE

For the financial year ended 31 March2012 (“FY2012”), the Group registeredoperating revenue amounting to RM1.43billion, representing a 2.1% or RM31.4million reduction in operating revenue ascompared to the RM1.46 billion recordedin the preceding financial year or FY2011.This reduction in revenue was mainly dueto the lower gross premiumsunderwritten by our reinsurancesubsidiary, Malaysian ReinsuranceBerhad (“Malaysian Re”) which saw itsgross premiums reduced to RM1.15billion in FY2012 from RM1.17 billion inFY2011. The lower revenue was alsoattributable to lower wakalah fee incomefrom the Group’s takaful subsidiary,Takaful Ikhlas Sdn Bhd.

The Group garnered total investmentincome (including realised gains andlosses) of RM98.1 million in FY2012,representing a 1.8% or RM1.7 millionincrease from the RM96.4 milliongarnered in FY2011. The Group’s profitbefore zakat and taxation was alsoreduced by 23.5% or RM38.8 million toRM126.2 million in FY2012 fromRM165.0 million in FY2011. This came onthe back of provisions made for theThailand flood losses by Malaysian Reand our associate company, LabuanReinsurance (L) Ltd.

We are pleased to report that despite theyear’s challenges, we still managed toachieve a commendable performance byindustry standards. Overall, the Groupregistered a profit after tax of RM84.0million for the financial year ended 31 March 2012, a reduction of 31.7% orRM38.9 million in comparison to theRM122.9 million recorded in thepreceding year. At the same time, Groupearnings per share reduced by 18.3 senfrom 57.7 sen to 39.4 sen during the yearunder review.

MAINTAINING SHAREHOLDERVALUE

The Group’s capital preservation strategycontinues to pay dividends withMalaysian Re maintaining acommendable capital buffer as requiredunder the Risk Based Capital (“RBC”)Framework. As a result of our everstrengthening capital reserves at oursubsidiaries’ level coupled with thepositive financial performance of theMNRB Group for FY2012, the Board ofDirectors is recommending a first andfinal dividend of 17%, less 25% incometax. The total net dividend pay-out for theyear in review, amounting to RM27.2million is subject to shareholders’approval at the forthcoming AnnualGeneral Meeting.

COMMENDABLE PERFORMANCEBY SUBSIDIARIES

Malaysian Reinsurance Berhad(“Malaysian Re”)

Over the course of the financial year,Malaysian Re registered a total grosspremium totalling RM1.15 billion,representing a 2.2% or RM26.0 millionreduction as compared to the RM1.17billion registered in the previous year.This result was primarily attributed to thereduction of the Voluntary Cession or VCbusiness due to a drop in cessions levelfrom 4% to 2.5% for Motor and PersonalAccident, including Hospital and Surgicalclasses with effect from 1 January 2011.About 69% of Malaysian Re’s totalbusiness volume during the year wasfrom the domestic market, while theremaining 31% was generated fromoverseas business. The VC businessaccounted for 36% of the total businessvolume, while the remaining 64% wascontributed by non-VC businesses.

The Company’s net claims incurred ratiofor the year under review was 61.9% ascompared to 59.4% in the previous yeardue mainly to claims arising from theThailand flood losses. Investment income(including realised gains and losses)totalled RM98.1 million amidst thechallenging investment climate, a 1.8%or RM5.1 million decrease from RM96.3million previously.

Malaysian Re registered a profit beforetax of RM152.3 million, representing adecrease of 15.4% or RM27.6 million ascompared to profit before tax ofRM179.9 million registered in thepreceding year, while profit after taxcame in lower at RM113.0 million incomparison to RM140.9 millionpreviously. We are pleased to report thatMalaysian Re achieved a more thansatisfactory performance turning in areasonable profit, an acceptable claimsratio and minimal impact on its CapitalAdequacy Ratio or CAR.

Chairman’s Statement


Takaful IKHLAS Sdn Bhd (“Takaful IKHLAS”)

The year in review saw Takaful IKHLAS’gross contribution income decreasing by8.5% or RM64.7 million to RM695.4million from RM760.1 million previously.Family Takaful accounted for 66% of thetotal gross contribution with 28% fromthe General Takaful business and thebalance from investment-linkedproducts.

Takaful IKHLAS registered a lower profitbefore tax and zakat of RM13.5 million ascompared to RM14.1 million in thepreceding year, while it recorded profitafter tax and zakat of RM8.5 million,some 4.8% or RM0.43 million lower incomparison to RM8.9 million in thepreceding year. This was mainly due tohigher expenses and lower wakalah feeincome from Takaful funds.

In the last nine years, the Company hasestablished a strong presence inproviding Islamic protection services andtoday has eleven (11) branches, 1.8million certificate (policy) holders andapproximately 6,000 agents nationwideoffering both Family and General Takafulproducts.

MNRB Retakaful Berhad (“MRT”)

MRT experienced significant growth inthe year under review with its total grosscontribution increasing by 32.6% orRM27.4 million to RM84.1 million ascompared to RM56.7 million in theprevious year. Of this total, the GeneralRetakaful business accounted for 69% ofthe total volume while the remaining 31%was generated from Family Retakafulbusiness.

MRT registered a profit before tax ofRM3.0 million as compared to a loss ofRM9.5 million in the previous year. Thiswas mainly due to the lower provision for

impairment of qard of RM4.6 millionmade in the current year as compared toRM14.6 million in the previous year.

Malaysian Re Dubai Ltd (“MRDL”)

MRDL registered a higher gross premiumof RM60.8 million underwritten on behalfof Malaysian Re, as compared to theRM51.8 million recorded last year. Thisimproved performance reflects ourgrowing success in the Middle East andNorth African (“MENA”) markets, despitethe economic and political uncertaintiesin that region.

RECOGNISED FOR STRONGSHOWING

I am pleased to announce that ourreinsurance and retakaful subsidiariesmanaged to maintain their ratings in theaftermath of the floods in Thailand. Thisaugurs well for the quality of our businessas it reflects the confidence that ratingcompanies have in MNRB based on thestrength of our capital reserves.

Earlier in January 2012, A.M. Best Co.reaffirmed the financial strength rating ofMalaysian Re giving the Company an ‘A-(Excellent)’ rating and issuer credit ratingof ‘a–’, both with a stable outlook. Theratings reflect Malaysian Re’s adequatecapitalisation, the improving trend in itsunderwriting performance and theconsistently positive investment incomeit continues to generate.

In February 2012, Fitch Ratingsreaffirmed Malaysian Re’s InsurerFinancial Strength rating giving theCompany an ‘A’ with a stable outlook.This rating reflects the reinsurer'ssustained premium growth andconsistent robust financial performance.It also factors in the Company’s strongmarket franchise in Malaysia, as well asits continued sound capital positionrelative to its business profile. The “stable

Total Assets

08 09 10 11 12

2,57

6,24

7

4,46

7,96

7

3,84

5,98

3

3,37

8,91

9

5,196,065

31

outlook” reflects Fitch’s expectation thatMalaysian Re will maintain its soundfinancial fundamentals that are driven bya prudent and experienced managementteam which places heavy emphasis onbottom-line profitability as opposed topurely top-line growth.

In the same month, Fitch Ratingsaffirmed MRT’s Insurer Financial Strengthrating giving the Company a ‘BBB+’rating with stable outlook. MRT was alsolauded the Best Retakaful Provider at theIFN Awards Best Service Providers Poll2011 event.

Over the course of the financial year,Takaful IKHLAS was bestowed the titlesBest Takaful Provider at the EuromoneyIslamic Finance Awards 2012; BestTakaful Provider at the IFN Awards BestService Providers Poll 2011; and BestBrand in Takaful Insurance for a MedicalPlan via its IKHLAS Medic Assist Takafuloffering. The Company was also laudedBrand of the Year while its ChiefExecutive Officer was awarded the titleCEO of the Year at the Brand Laureate-SMEs Chapter Awards 2011, amongseveral other awards and accolades.

32 MNRB

GOOD CORPORATEGOVERNANCE AND SOUND RISK MANAGEMENT

MNRB’s Board of Directors is committedto upholding the tenets of integrity,transparency and accountability. To thisend, good corporate governancestandards and industry best practices arein place throughout our operations. Wesubscribe to and effectively apply theprinciples and best practices as laid asdown in the Malaysian Code onCorporate Governance, the CorporateGovernance Guide issued by BursaSecurities and Bursa Malaysia SecuritiesMain Market Listing Requirements.

The Board also recognises that aneffective risk management framework isessential if the Group is to achievecontinued profitability and enhanceshareholder value. As such, the Grouphas put in place an enterprise-wide riskmanagement framework that willeffectively ensure on-going identification,evaluation, management and reporting ofthe Group’s risks in compliance with the

Takaful Awards Night 2011 organised bythe Malaysian Takaful Association. Moredetails of MNRB’s CR efforts can befound in the relevant section of thisAnnual Report.

MOVING FORWARD

Looking ahead, the global economicoutlook remains uncertain and volatilealthough there are some signs of agradual upturn. Global GDP growth isforecast to slow to about 3.5% in 2012,from about 3.9% in 2011. The on-goingissues surrounding the sovereign debtcrisis in the Eurozone are expected todrag down the global growth trajectory.In Malaysia, growth is forecast atbetween 4% and 5%, supported bydomestic demand while theimplementation of the EconomicTransformation Plan (“ETP”) is expectedto sustain the momentum of privateinvestment.

On the industry front, given the naturaldisasters that have struck with suchdevastating force in Japan, New Zealand,Australia and Thailand, the lossespertaining to global property andcasualty insurance and reinsurance haveexceeded USD100 billion. This has notonly significantly impacted regionalinsurers but those across the globeresulting in increased premiums fornatural disasters in the affected countriesas well as countries which are prone tonatural disasters. We have also seeninsurance cover for natural disastersbeing drastically reduced in somecountries as well. Likewise, thoughreinsurance premiums have alsoincreased, this has benefited regionalreinsurers in terms of the higherpremiums collected and provided for areduction in cover for natural disasters intheir international books of business.

listing requirements. Over the course ofthe financial year, we instilled riskmanagement awareness throughcontinuous learning programmes;facilitated integration of risk managementinto our business processes; inculcateda sense of ownership as well asaccountability for risks, controls andmanagement actions among the relevantpersonnel; and built risk managementcapability across MNRB’s business units.Going forward, we will build upon thegood work done to date and continue toevolve the framework in line with theever-changing business environment.

RESPONSIBLE CORPORATEPRACTICES

The Group is committed to striking agood balance between a strong bottom-line and tangible social performance byundertaking effective corporateresponsibility (“CR”) practices in our day-to-day operations. In 2011, we continuedto make good inroads on several fronts.In the area of education, we continued toroll out the MNRB Scholarship Fundwhich provides scholarships to eligiblestudents enrolled in institutions of higherlearning both locally and abroad. We alsoembarked on initiatives to elevate thequality of education in rural areas with thelaunch of the MNRB Program LestariCemerlang, a two year programmeencompassing various aspects oflearning and education facilities. Thestudents of Sekolah MenengahKebangsaan Slim in Slim River, Perakbenefitted from these efforts.

In 2011, we also actively supportedseveral organisations such as the HeartFoundation of Malaysia, the NationalBlood Centre and Majlis Kanser Nasionalthrough various programmes andsponsorships. For its CR efforts, TakafulIKHLAS was bestowed an award forCorporate Social Responsibility at the

Chairman’s Statement

Shareholders’ Fund

08 09 10 11 12

893,

919

835,

646

892,

513 99

8,71

5

1,096,384

MNRB HOLDINGS BERHAD 33

Going forward, for the next twelve (12) totwenty-four (24) months at least,Malaysia’s life and non-life insurancesectors are expected to be stable,supported by sound operatingprofitability, steady market growth andmanageable exposure to investmentrisks. Amidst this backdrop, the Groupremains committed to ensuring itssubsidiaries are adequately capitalised tomeet all regulatory requirements andsupport business growth. As suchMNRB’s Board of Directors remainscautiously optimistic of our prospects forthe new financial year. While we will workhard to explore all opportunities andaddress all challenges, we will adopt aprudent and conservative approach in allthat we set out to do to ensureshareholder value creation remains a toppriority.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to extend my sincere appreciationto all our loyal customers, businesspartners, ceding companies andintermediaries, Bank Negara Malaysia, aswell as insurance and takafulassociations for their steadfast supportand cooperation. My sincere thanks alsogoes to all our shareholders for theircontinuing support, and confidence inMNRB. Your Board will continue to focusits efforts on creating enduringshareholder value.

The Board would also like to record ourheartfelt appreciation to Encik IsmailMahbob who retired as President andChief Executive Officer of MRT on 15 May 2012 for his dedicated service toMRT and the MNRB Group. Encik Ismailwas primarily responsible in thedevelopment of MRT since itcommenced operations in 2007. We wishhim all the best in his future endeavours.

My deep gratitude goes to my colleagueson the Board for their commitment,contributions and wise counsel. MNRB isindeed fortunate to have such committedindividuals to serve with us and I certainlylook forward to their continuous support.

Please join me in extending a warmwelcome to Encik Mohd Din Mericanwho joined us on 9 January 2012 as ournew President and Group ChiefExecutive Officer. We look forward to hisinvaluable insights and leadership.

Our achievements to date would nothave been possible but for thecommitment and hard work of all ourdedicated employees who haveconsistently risen to the task despite theyear’s many challenges. I am confidentthat they will continue to keep up thegood work as we endeavour to realisethe Group’s ambitions amidst achallenging operating environment.

As the MNRB Group continues itsjourney towards sustainable growth, wetrust that all our stakeholders willcontinue to lend us their steadfastsupport. We are confident that as wework hard to embrace all opportunitiesand overcome any challenges, we willachieve new heights of success.

On behalf of the Board

Sharkawi AlisChairman3 September 2012

ResponsibleAs a responsible corporate citizen, we havealways taken a pro-active approach insupporting the needs of communitiesthrough various corporate initiatives.

34 MNRB


INTRODUCTION

Corporate social responsibility is an essential component to MNRB Holdings’ businesses. We recognise that our successand sustainable growth are allfundamentally linked to the waywe conduct ourselves in dealingwith our stakeholders whichinclude our shareholders,employees, partners, clients,regulators and the Government.

Internally, we endeavour toinculcate a socially responsiblebehaviour and practices amongour employees which reflect howwe act as an organisation.Similarly, on a corporate level, we strive to operate in a fair and justifiable manner, ensuringproper governance andtransparency in all our businesses.

We view CSR as an investment ina strategic asset in the long-termand strive for a balancedapproach. The Group is committedto giving back to society and at thesame time achieving our businessobjectives. This is done throughour CSR strategies:

CORPORATE SOCIALRESPONSIBILITY

WORKPLACE

April – December 2011

Directors And Senior ManagementTraining

The MNRB Group is committed towardsdeveloping our human capital byproviding training and talks to enhanceknowledge and build new skills. For theyear 2011, the MNRB Group hasconducted sixteen (16) trainingprogrammes for its directors and seniormanagers that encompass technical andindustry knowledge.

1 June 2011

Takaful IKHLAS ProvidesBreastfeeding Corner

In consideration of the difficulty faced bybreastfeeding mothers to find privacy, aspecial corner, called Mummy’s Corner,was created as part of Takaful IKHLAS’sinitiative to encourage breastfeedingamong mothers.

16 – 18 September 2011

29th Annual Family Outing

The 2011 Annual Family Outing was heldat the Pullman Hotel in Kuching, Sarawakfrom 16 – 18 September 2011 for five-hundred-seventy (570) employees of theMNRB Group.

The outing kicked off with a “SarawakCuture Night” where employees enjoyeda cultural dance performance by thefamous dance group, Bung Bratak. Onthe second night, the theme changed to“P.Ramlee’s Night” where the dress codewas attuned to P.Ramlee’s fashion eraand the employees had a chance topresent their own performances.

1

2

36 MNRB

Corporate Social Responsibility

23 – 24 February 2012

Vitamins, vitamins, vitamins!

A booth was set up at the BangunanMalaysian Re lobby to sell vitamins andpharmaceutical products to MNRBGroup employees and the building’stenants, at a discounted price. It wasjointly organised with ChemicalCompany of Malaysia Berhad (CCM) withthe objective of encouraging theBangunan Malaysian Re community topay more attention to their health andkeep an adequate supply of thenecessary supplements.

29 February 2012

Blood Donation Drive

MNRB held its 9th “Blood DonationDrive” in support of the National BloodCentre’s (NBC) objective of increasingthe national blood supply to help patientssuffering from illnesses that includeanaemia, leukaemia, and haemophilia. Itis an initiative that focuses on the healthand general well-being of our employeesand the surrounding communities.

19 – 21 March 2012

Healthy Heart AwarenessCampaign

The three-day healthy heart campaignwas part of the MNRB Group’s initiativeto advocate a healthier lifestyle for itsemployees and create awareness on thetypes of heart disease, and the possiblerisk factors that could contribute to thisillness. The campaign is a joint-effort withthe Heart Foundation of Malaysia. MNRBalso contributed RM10,000 to thefoundation in recognition of theirdedication towards educating the publicon heart and circulatory diseases.

COMMUNITY ANDENVIRONMENT

20 April 2011

Minggu Saham Amanah Malaysia 2011

The MNRB Group participated in MingguSaham Amanah Malaysia (MSAM) 2011which was held at Kompleks SukanMajlis Bandaraya Ipoh, Perak. This is theGroup’s 12th consecutive year ofparticipation in such an event organisedby its parent company, PermodalanNasional Berhad (PNB). The Group’sinvolvement in MSAM is aimed atpromoting and advocating a betterunderstanding of investments that areavailable in Malaysia.

3

4

5

6


21 April 2011

Takaful IKHLAS ContributesWheel Chairs And NebulisersAmounting To RM20,000 To TwoHospitals In Ipoh

Takaful IKHLAS’ theme for MSAM 2011was “IKHLAS Untuk Komuniti1-Malaysia” that demonstrates theCompany’s seriousness in participatingin MSAM as part of its socialresponsibility. As such, in conjunctionwith the MSAM 2011 held in Ipoh, TakafulIKHLAS donated wheel chairs andnebuliser units amounting to RM20,000to two (2) hospitals.

23 April 2011

Special Ride For SpecialStudents 2011

The “Special Ride For Special Students2011” Programme was held on 23 April2011 at the Merdeka Square. As one ofthe sponsors for the programme, TakafulIKHLAS’ main objective of participating

was to help nurture a caring society andencourage a culture of giving. Moreimportantly, such activities which arepart of the Company’s corporate socialresponsibility has inspired IKHLAS staffparticularly IKHLAS Volunteers to spendtime with children from the IntegratedSpecial Education of SMK Yaacob Latif.A total of one-thousand (1,000) superbikers participated in the programme.

6 June 2011

MNRB Continues To Develop TheLocal Insurance Industry With AScholarship Programme

At a special Scholarship PresentationCeremony held at Bangunan MalaysianRe, MNRB awarded scholarships tothirty-five (35) students to pursue variousinsurance-related courses at local andinternational institutions. Of the thirty-five(35) recipients, eight (8) are full-timestudents who will pursue undergraduatestudies in Actuarial Science, RiskManagement and Insurance while theremaining twenty-seven (27) recipients

are local insurance and takafulpractitioners who will pursue the Diplomaof the Malaysian Insurance Institute(DMII) and the Associateship of theMalaysian Insurance Institute (AMII)certifications at the Malaysian InsuranceInstitute (MII) in Kuala Lumpur.

5 July 2011

Contribution To Hulu LangatLandslide Victims

MNRB Group and its wholly-ownedsubsidiary, Takaful IKHLAS, presented aninsurance policy (Takaful IKHLAS GroupPersonal Accident) worth RM30,000 perperson per year to the children of RumahAnak-Anak Yatim dan Anak Hidayah Al-Taqwa, Hulu Langat, for a span of fiveyears. They were victims of a landslidetragedy that happened in May 2011.This protection scheme was paid fromthe donations contributed by employeesof MNRB Group. In addition, TakafulIkhlas donated RM5,000 to rebuild thechildren’s home that was destroyed bythe landslide.

7

8

9

10

38 MNRB


9 July 2011

Takaful IKHLAS Contributes TwoUnits Of Desferal Pumps ToThalassemia Patients And NebulisersTo Kinabatangan Hospital

Takaful IKHLAS contributed two (2) unitsof desferal pumps for thalassemiapatients to Kinabatangan Hospital. Inaddition, the President & Chief ExecutiveOfficer of Takaful IKHLAS, Dato’ SyedMoheeb Syed Kamarulzaman, made apersonal contribution of six (6) units ofnebulisers to the hospital.

9 July 2011

Takaful IKHLAS Contributes AidsFor Pinangah Mosque Renovation InConjuction With Kembara CEO InSabah

Pinangah Mosque received a RM20,000contribution to undertake renovations,from Takaful IKHLAS. The presentationwas made by YB Datuk Bung MokhtarRadin, the Member of Parliament forKinabatangan and witnessed by thePresident & Chief Executive Officer ofTakaful IKHLAS, Dato’ Syed MoheebSyed Kamarulzaman.

24 July 2011

Kasih Ramadan 2011: TakafulIKHLAS Sponsored Food Pack

The programme themed “BantulahMereka Berbuka Puasa” or “Help ThemBreak Fast” involved a charity drive tocollect funds from the public to help thepoor. The aim of launching “KasihRamadan 2011” fund is to make it easyfor the public to come together inproviding donations to help the lessfortunate during Ramadhan.

A total of one-hundred-eighty (180) foodpacks were distributed to midgets, singlemothers, the poor and needy and alsoeligible staff of the Department ofMuseum who were shortlisted to receivesuch contribution. Takaful IKHLAS is thefirst corporate body to take the initiativeto participate in “Kasih Ramadan 2011”programme by sponsoring eighty (80)food packs to the needy.

6 August 2011

Ramadhan Programme: TitipanKasih With Harian Metro

Takaful IKHLAS sponsored the TitipanKasih Harian Metro programme whichwas held during the month of Ramadhan

through donations amounting toRM10,000 that were distributed toorphans, single mothers and the poor.The donation was handed over to HarianMetro’s Executive Editor (News) and theChairman of Titipan Kasih Harian Metro,Encik Othman Mamat at NSTP’s BalaiBerita.

The charity programme which began itsseries of adventure in Kampung SimpangPelangai, Bentong, Pahang on Saturdayfollowed by another in Batu 14 HuluLangat on 13 August, Kampung LBJ,Seremban, Negeri Sembilan on20 August ended at Tanjung Karang,Selangor on 24 August. For thisprogramme, the organiser and sponsorselected three-hundred-twenty (320)orphans, single mothers and poorfamilies to receive donations so as toenable them to prepare for Ramadan andcontinue with the preparation of Syawal.

Takaful IKHLAS further participated inTitipan Kasih programme in two (2) otherlocations i.e. Bentong and TanjungKarang.

11 13

14

12


11 August 2011

Ramadhan Contribution To Anak-Anak Nurul Qana’ah

During the blessed month of Ramadhan,the MNRB Group hosted an Iftar eventfor its employees and children from theRumah Nurul Qana’ah in Batu Caves.The charity home houses children, agedeighteen (18) and below, who are mostlyorphans or children of single parents.Dato’ Abu Hasan Din Al-Hafiz, also gavea talk titled “Tujuan Hidup Muslim” tocomplement the religious event.

11 August 2011

Bubur Lambuk: Ramadhan ProgrammeCollaboration project with Utusan Melayu (M) Berhad (Utusan Melayu)

The objective of the programme was tofoster closer ties with the staff membersof Utusan Malaysia and Takaful IKHLASregardless of race and religion, in linewith the 1Malaysia spirit.

Bubur lambuk was distributed to:

• Utusan Melayu staff in Bangi • Utusan Melayu staff in Jalan Chan

Sow Lin• Utusan Melayu staff in Menara

PGRM• Staff and patients of An Nur

Hospital and Al Zahrah Hospital inBangi

• Darul Izzah Welfare Home in Bangi• Old Folks Home in Cheras

12 August 2011

Takaful IKHLAS Contributes ZakatAnd Eidul Fitri Aids To Kg. KerinchiResidents

Out of concern in helping theunderprivileged, Takaful IKHLAS, as partof its Ramadhan programme, visitedeight (8) families in Kg. Kerinchi that arecategorised as poor and needy.

19 August 2011

Ramadhan Contribution For TheChildren Of Asrama Darul Falah(ASDAF)

The MNRB Group treated the children ofAsrama Darul Falah to a sumptuous bukapuasa feast as part of their Ramadhanactivity. MNRB also donated RM10,000to the charity home and gave “duit raya”to all children. The donation waspresented by the Group Chief OperatingOfficer, Datuk Ramlan Abdul Rashid tothe representative of ASDAF, PuanAthifah Najwani Haji Shahidan.

15

16 17

18

40 MNRB


20 August 2011

Takaful IKHLAS Breaks FastAnd Buys Raya Outfits ForUnderprivileged Children

Takaful IKHLAS brought cheer to thirty(30) underprivileged children in thePetaling Jaya district. The programmewas organised in collaboration with thePetaling Jaya branch of Selangor TitheBoard. Through this programme, thechildren, aged 3 to 15 years, were treatedto clothes and shoes at a shoppingcomplex in Bukit Tinggi, Klang, byTakaful IKHLAS and thereafter, to asumptuous iftar dinner treat.

21 August 2011

Kasih Syawal: Takaful IKHLASPartnership With Islamic ReliefMalaysia

To experience Eidul Fitri celebration withpeople in the rural areas, and lessfortunate, IRM in partnership with TakafulIKHLAS visited Kampung Seberang Jayain Kuala Sala, Kedah.

The humanitarian visit was led by IRMPresident, Zawahir Abdullah who wasaccompanied by a number of volunteersfrom Kedah and also the President &Chief Executive Officer of Takaful Ikhlas,Dato’ Syed Moheeb Syed Kamarulzaman.To relive the experience of Eidul Fitri withthe local community, the special programthemed “Kasih Syawal” gathered some400 villagers from different areas. Thevillages that participated in theprogramme were Kampung Kuala Sala,Kampung Sala Kecil, KampungPermatang Buluh, Kampung SungaiDedap, Kampung Kota Sarang Semutand other nearby villages.

23 August 2011

Takaful IKHLAS Builds FuneralManagement Room For Orang AsliHospital

Takaful IKHLAS recently built aRM10,000 Funeral Management Room inSurau Annur Batu 13, Gombak for theuse of Orang Asli DevelopmentDepartment (JAKOA) Hospital inGombak and the surrounding residentsof Batu 12, Gombak. At a specialpresentation ceremony, President & ChiefExecutive Officer of Takaful IKHLAS,Dato’ Syed Moheeb Syed Kamarulzamanalso distributed Eidul Fitri packs to allpatients and staff of the hospital.

19

20

21


7 November 2011

Takaful IKHLAS Organises MajlisKorban Perdana For Lembah PantaiResidents

Around one-thousand (1,000) residentsof Lembah Pantai were grateful to TakafulIKHLAS for organising the celebration ofAidiladha during the Majlis KorbanPerdana. The programme is part ofTakaful IKHLAS’ “IKHLAS UntukKomuniti” programme aimed to reachout to the needy.

The Minister Of Federal Territories AndUrban Wellbeing, YB Senator Dato’ RajaNong Chik Datuk Raja Zainal Abidinofficiated the ceremony and witnessed

26 August 2011

Family Of Eight Received ZakatContribution And Eidul Fitri Aid FromTakaful IKHLAS

The plead of a father who makes a livingby selling old boxes to support his familydrew the attention of Takaful IKHLASwho came to his aid. With a mere RM600monthly income, Abdul Aziz Muhamad,43, struggled to support his six (6)children besides paying for dailyexpenses and house rent. TakafulIKHLAS presented the zakat contributionand Eidul Fitri aid at Abdul Aziz’sresidence in Klang.

2 November 2011

Donate Blood, Save Lives

Blood supply required by the NationalBlood Centre (NBC) is at critical levelduring peak holidays and festiveseasons. Sufficient blood supply isrequired to cater for the country’s highneed. As such, Takaful IKHLASorganised a blood donation campaign incollaboration with NBC at The Sphere,Bangsar South. One-hundred (100)donors participated in the one-day event.

the hand-over of zakat contribution byTakaful IKHLAS to fifty (50) asnaf (zakatrecipients) from Lembah Pantai, and two(2) welfare bodies namely MalaysianChinese Muslim Association (MACMA)and Pertubuhan Kebajikan BaitulMakmur (PKBM). Each welfare bodyreceived a zakat contribution ofRM5,000.

Takaful IKHLAS contributed ten (10)cattle for korban (sacrifices) and ten (10)goats for aqiqah (sacrifices after the birthof a child) that were distributed toresidents of Kg. Kerinchi, Pantai Dalam.Besides the celebration at the HeadOffice level, the korban programme wasalso conducted at Takaful IKHLASregional offices throughout the countrywith at least one cattle allocated for eachbranch.

22 24

23

MNRB42


In order to achieve more comprehensiveimplementation and to ensure activeparticipation in the creation of a caringsociety and nurturing the culture ofgiving, similar programmes were alsoconducted at Takaful IKHLAS RegionalOffices throughout the country.

28 February 2012

Program Lestari CemerlangMNRB

The MNRB Group launched the ProgramLestari Cemerlang MNRB at the SekolahMenengah Kebangsaan Slim, Slim River,Perak as part of its aim in supporting theeducation system towards developing anation of global competitiveness andstrong human capital.

Officiating the launch was YB Dato’Zainol Fadzi Haji Paharudin, Perak StateCulture, Arts, Youth and Sports Excowho was representing YAB Dato’ SeriDiRaja Dr. Zambry Abdul Kadir, MentriBesar of Perak. Also present wereSharkawi Alis, MNRB Group Chairmanand Baharuddin Ishak, the Yang DipertuaPIBG of SMK Slim.

The two-year programme involving asponsorship worth RM60,000 will covervarious aspects of learning andeducation facilities to help students ofSMK Slim.

14 December 2011

Takaful IKHLAS SponsorsSchooling Paraphernalia For SixtyChildren

A total of sixty (60) children from differentschools and charity organisations aroundKuala Lumpur and Selangor receivedschooling paraphernalia sponsorshipfrom Takaful IKHLAS. The childrenbetween 7 to 16 years of age were takento buy their schooling paraphernalia atMydin shopping mall, Subang Jaya.

RM200 was allocated for each selectedchild to buy their schooling paraphernaliasuch as school uniform, bags and shoes.“IKHLAS Untuk Komuniti: Back toSchool” programme is one of ourcorporate social responsibility efforts inreaching out to the less fortunate. It is ourfervent belief through such contribution,children can concentrate on their studieswithout having to worry about schoolingparaphernalia. The selected schoolchildren consisted of orphans (asnaf)around Shah Alam under theadministration of Lembaga ZakatSelangor, children from PersatuanKebajikan Kanak-Kanak Istimewa Insanand Pusat Kebajikan Compassion HomeWelfare Centre.

25

26


STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors of MNRB is committed to maintaining high standards of corporate

governance and strives to continuously improve the effective application of the principles and best

practices as laid down in the Malaysian Code on Corporate Governance (Revised 2007), the

Corporate Governance Guide issued by Bursa Securities, the Bursa Malaysia Securities Berhad

Main Market Listing Requirements (Bursa Malaysia Main Market Listing Requirements) and the

Green Book published by the Putrajaya Committee on GLC High Performance (the Green Book).

MNRB’s policy is to implement all thoseprinciples and best practices and touphold high standards of businessintegrity in all activities undertaken by theGroup. This shall include a commitmentto emulate good industry examples andto comply with guidelines andrecommendations in the conduct ofbusiness activities within the Group.

Set out below is a statement on howMNRB has applied the principles andcomplied with the Best Practices asprescribed under the above Code onCorporate Governance, Bursa MalaysiaMain Market Listing Requirements andthe Green Book during the financial yearended 31 March 2012.

BOARD OF DIRECTORS

The Board of MNRB is responsible forthe proper stewardship of the Groupresources, the achievement of Group’sobjectives and good corporatecitizenship. It discharges thisresponsibility by complying with all therelevant Acts and Regulations, includingadopting the Principles and BestPractices of the above Code onCorporate Governance, Bursa MalaysiaMain Market Listing Requirements andthe Green Book.

The Board retains full and effectivecontrol over the Group’s affairs. Thisincludes the responsibility to determine

the Group’s development and overallstrategic direction. Key matters such asapproval of quarterly and annual results,major acquisitions and disposals, majorcapital expenditures, budgets, businessplans and succession planning for topmanagement are reserved for the Boardor its appointed committees to deal with.The Board comprises members with awide range of experience in relevantfields such as insurance and reinsurance,accounting, legal, economic, investment,international business, banking andbusiness operations. Therefore, allDirectors have the necessary depth tobring experience and judgment to bearon issues of strategy, performance,resources and ethical standards. Theprofiles of the Directors are provided onpages18 to 20 of this Annual Report.

Board Composition

Under the Company’s Articles ofAssociation, the number of Directorsshall not be less than two (2) or morethan ten (10).

The Board currently comprises eight (8)members of whom seven (7) membersare Non-Executive Directors, includingthe Chairman. Three (3) of thesemembers are independent. The newPresident & Group Chief ExecutiveOfficer (GCEO), Mohd Din Merican wasappointed effective 9 January 2012.

No individual or group of individualsdominate in the decision making processof the Board to enable a balanced andobjective consideration of issue, hencefacilitating optimal decision making. Byvirtue of this composition, the Companyhas thus, complied with Paragraph 15.02of the Bursa Malaysia Main MarketListing Requirements which requires atleast two (2) directors or one-third (1/3rd)of the Board, whichever is the higher, tobe independent.

The meetings of the Board are chaired bythe Non-Executive Chairman, whose roleis clearly separated from the role of theGCEO. The Chairman is primarilyresponsible for ensuring theeffectiveness and conduct of the Board,whilst the GCEO will ensure that Boardpolicies and decisions are implementedaccordingly.

The Board members are:

• Sharkawi AlisChairman (Non-Independent Non-Executive Director)

• P. Raveenderen (Non-Independent Non-Executive Director)

• Dato’ Syed Ariff Fadzillah Syed Awalluddin (Independent Non-Executive Director)

• Yusoff Yaacob(Independent Non-Executive Director)

44 MNRB

• Datuk Mohd Khalil Dato’ Mohd Noor(Non-Independent Non-Executive Director)

• Megat Dziauddin Megat Mahmud(Senior Independent Non-Executive Director)

• Paisol Ahmad (Non-Independent Non-Executive Director)

• Mohd Din Merican (Non-Independent Executive Director)(Appointed with effect from 9 January 2012)

CONFLICT OF INTEREST

Directors are required to declare theirrespective shareholdings in the Companyand related companies and their interestsin any contracts with the Company orany of its related companies. Directorsare also required to declare theirdirectorships in other companies andshall abstain from any discussions anddecision-making in relation to thesecompanies.

The Board members’ directorship incompanies other than the Company andthe Group, are well within the restrictionof not more than ten (10) directorships inpublic listed companies and not morethan fifteen (15) directorships in non-public listed companies as stated in theBursa Malaysia Main Market ListingRequirements.

BOARD MEETINGS

The Board has scheduled meetings at least six (6) times a year, besides the Annual General Meeting (AGM). For the year ended31 March 2012, the Board held ten (10) meetings.

The details of attendance of the Directors at Board meetings held during the financial year are as follows:

Name of Director No. of Meetings Attended Percentage of Attendance

Sharkawi Alis 10/10 100%P. Raveenderen 10/10 100%Dato’ Syed Ariff Fadzillah Syed Awalluddin 10/10 100%Yusoff Yaacob 10/10 100%Datuk Mohd Khalil Dato’ Mohd Noor 10/10 100%Megat Dziauddin Megat Mahmud 10/10 100%Paisol Ahmad 10/10 100%Mohd Din Merican 1/1 100%(Appointed with effect from 9 January 2012)

At each scheduled Board meeting, there is a report on the six (6) elements of responsibility of the Board under the Malaysian Codeon Corporate Governance, namely:

i) Reviewing/adoption of strategic and business plans for the Group;

ii) Overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed;

iii) Identifying principal risks and ensuring the implementation of appropriate systems to manage the risks;

iv) Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing keymanagement;

v) Developing and implementing an investor/shareholder relations programme or communication policy for the Group; and

vi) Reviewing the adequacy and integrity of the Group’s systems of internal control and of management information.

Statement On Corporate Governance


There is also a financial and businessreview and discussion of the Group’squarterly performance includingoperating performance to date, againstthe annual budget and business planpreviously approved by the Board for thatyear.

APPOINTMENTS TO THE BOARD

The appointment of new Board membersare considered and properly evaluated bythe Nomination Committee. Oncecompleted, the Committee shall thenrecommend the proposed appointmentto the Board for its deliberation andapproval. In making theserecommendations, the NominationCommittee assesses the suitability ofcandidates, taking into account therequired mix of skills, knowledge,expertise and experience,professionalism, integrity, competenciesand other qualities, beforerecommending them to the Board forappointment.

The Nomination Committee and Boardwill devote sufficient time to review,deliberate and finalise the selection ofdirectors.

In this aspect, the Company Secretarywill ensure that all appointments areproperly done and that the necessaryinformation was obtained and relevantlegal and regulatory requirements arecomplied with.

RE-ELECTION OF DIRECTORS

In accordance with the Company’sArticles of Association, one-third (1/3rd)of the Directors for the time being or iftheir number is not a multiple of three (3),then the number nearest to one-third(1/3rd), shall retire from office at eachAGM. All retiring Directors can offerthemselves for re-election.

Directors who are appointed by theBoard during the financial period beforethe AGM are also required to retire fromoffice and shall seek re-election by theshareholders at the first opportunity aftertheir appointment.

The Articles further provide that allDirectors shall retire from office at leastonce in every three (3) years but shall beeligible for re-election.

Pursuant to Section 129(2) of theCompanies Act, 1965, the office of aDirector of over the age of seventy (70)years becomes vacant at every AGMunless he is re-appointed by a resolutionpassed at such an AGM of which noshorter notice than that required for theAGM has been given and the majority bywhich such resolution is passed is notless than three-fourths of all memberspresent and voting at such an AGM.

One (1) Director is due for re-electionpursuant to Article 92 of the Articles ofAssociation of the Company and two (2)Directors are due for re-election pursuantto Article 86 of the Articles of Associationof the Company at the 39th AGM. One (1)Director is due to retire pursuant toSection 129 of the Companies Act, 1965.The Board does not fix a maximumtenure limit for Directors as the Board isof the view that there are significantadvantages to be gained from the long-serving Directors who possesstremendous insight and knowledge of theCompany’s affairs.

SUPPLY OF INFORMATION

All Directors have full and unrestrictedaccess to all information pertaining to theGroup’s business affairs, whether as a fullBoard or in their individual capacity, toenable them to discharge their duties.

Prior to Board meetings, every Directorreceives a notice of meeting, agenda andBoard papers. Sufficient time is given tothe Directors to enable them to obtainfurther explanations, where necessary, sothat the meeting will be well participated.

The Board papers include at least thefollowing:

• Minutes of the previous Boardmeeting and meetings of BoardCommittees

• Report on the performance of thesubsidiary companies

• Financial reports• Internal Audit reports• Compliance reports

Proper guidelines have been given by theBoard pertaining to the content,presentation style and delivery of papersto the Board for each Board meeting toensure adequate information bedisseminated to the Directors.

All Directors have direct access to themembers of the Senior Managementteam and the services of the CompanySecretary.

The Directors may, if necessary, obtainindependent professional advice fromexternal consultants, at the Company’sexpense.

Throughout their period in office,Directors are updated on the Group’sbusiness, the competitive and regulatoryenvironments in which it operates andother changes by way of written briefingsand meetings with senior executives.

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46 MNRB

DIRECTORS’ TRAINING

The Company acknowledges thatcontinuous education is vital for theBoard members to gain insight into theregulatory updates and managementstudies to enhance the Directors’ skillsand knowledge in discharging theirresponsibilities.

All new Directors are required to undergoan induction programme where theyreceive information about the Group, theformal statement of the Board’s role, thepowers that have been delegated to theCompany’s Senior Management andManagement committees and latestfinancial information about the Group.This is to enable them to contributeeffectively from the outset of theirappointment. All Directors have attendedthe Mandatory Accreditation Programmein accordance with the Bursa MalaysiaMain Market Listing Requirements.

With the repeal of Practice Note 15 onContinuing Education Programme byBursa Securities, the continuous trainingneeds of the Directors are now vested onthe Board.

During the financial year, all Directors hadattended various seminars andprogrammes to strengthen their skillssets and knowledge in order to effectivelydischarge their responsibilities, and toacquire sound understanding of currentissues and developments in the financialand business environment.

The Company Secretary facilitates theorganising of internal trainingprogrammes and the Directors’participation in external programmes.The Company Secretary will keep acomplete record of the trainings receivedor attended by the Directors.

The following are some of theprogrammes and seminars attended bythe Board members during the financialyear:

i) Bank Negara Malaysia’s FinancialInstitutions Directors Education(FIDE) Programme

ii) FIDE Elective Programme: TechnicalProgrammes – IT Government &Risk Management

iii) FIDE Elective Programme: BoardSpecialised Programmes – RiskManagement Committee

iv) ICAA – MICPA Forum: “ImprovingCorporate Governance in MalaysianCapital Markets – The Role of theAudit Committee”

v) “Scrutinising Financial StatementFrauds and Detection of Red Flagsfor Directors and Officers of PLC’sand Government RegulatoryAgencies”

vi) Whistle-Blowing Policy: Issues,Implementation & Best Practices

vii) “Actuarial Valuation of Family &General Insurance/Takaful Businessand Performance Management”

viii) Competition Act 2010: What itMeans for the Financial Industry

ix) Workshop on “Business PlanBeyond the NSW Business”

x) 17th Indonesia Rendezvous 2011“Catastrophe: Challenge for Lifeand Non-Life Insurance Industry –Learning and Sharing Experience of11 March 2011 Earthquake &Tsunami in Japan”

xi) 11th Singapore InternationalReinsurance Conference 2011“Asia’s Growth: Are We Capitalisingon it?”

BOARD COMMITTEES

The Board has delegated specificresponsibilities to five (5) BoardCommittees, as follows:

i) Audit Committeeii) Nomination Committeeiii) Remuneration Committeeiv) Risk Management Committeev) Investment Committee

These Committees have their respectiveTerms of Reference, which clearly definestheir duties and obligations in assistingand supporting the Board. The ultimateresponsibility for the final decision on allmatters lies with the entire Board.

1. Audit Committee

The Audit Committee comprisesfive (5) members of whom three (3)are Independent Non-ExecutiveDirectors and two (2) are Non-Independent Non-ExecutiveDirector. Two (2) members of theCommittee are qualifiedAccountants and members of theMalaysian Institute of Accountants.

The members of the Committee are:

• Megat Dziauddin Megat Mahmud Chairman(Senior Independent Non-ExecutiveDirector)

• Dato’ Syed Ariff FadzillahSyed Awalluddin(Independent Non-Executive Director)

• P. Raveenderen(Non-Independent Non-Executive Director)



• Paisol Ahmad(Non-Independent Non-Executive Director)


The Committee’s Terms ofReference include the review anddeliberation of the FinancialStatements of the Company and theGroup, findings of the External andInternal Auditors, any related partytransactions and any conflict ofinterest situation within the Groupas well as making recommendationto the Board on appointment/reappointment of External Auditors.

In order to encourage a greaterexchange of free and honest viewsand opinions between the AuditCommittee and External Auditors,meetings between them, withoutthe executive board member andthe management team beingpresent, were held twice during theyear.

The Audit Committee’s duties, asspelt-out in the Audit CommitteeReport on pages 51 to 52 of thisAnnual Report, include primarily, theduties as spelt out in paragraph15.12 of the Bursa Malaysia MainMarket Listing Requirements.

The Committee met seven (7) timesduring the financial year.

2. Nomination Committee

The Board had established aNomination Committee comprisingthree (3) Non-Executive Directors.


• Dato’ Syed Ariff Fadzillah Syed AwalluddinChairman(Independent Non-Executive Director)

• Sharkawi Alis(Non-Independent Non-Executive Director)


The Committee’s objectives are toestablish a documented formal andtransparent procedure for theappointment of Directors and keysenior officers and to assess theeffectiveness of Directors, the Boardas a whole and the variouscommittees of the Board on anongoing basis. The Committeeregularly reviews the profile of therequired mix of skills and attributesof the Directors and is satisfied thatthe Board has the appropriatebalance of expertise and ability todischarge its responsibilities. Allassessments and evaluationscarried out by the Committee areproperly documented by theCompany Secretary.

The Committee, upon its recentannual review, is satisfied that thesize of the MNRB Board is optimumand that there is appropriate mix ofknowledge, skills, attributes andcore competencies in thecomposition of the Board. TheCommittee is satisfied that all themembers of the Board are suitablyqualified to hold their positionsas Directors of MNRB in viewof their respective academicand professional qualifications,experience and qualities.Furthermore, all the Directors wereassessed as complying with thestandards for “fit and proper”

criteria, whilst the IndependentDirectors were also in compliancewith the definition of “IndependentDirectors” as per the BNM Guidelines on Corporate Governance for LicensedInstitutions (Revised BNM/GP1) and the Bursa Malaysia MainMarket Listing Requirements.

The Committee met three (3) timesduring the financial year.

3. Remuneration Committee

The Board had establisheda Remuneration Committeecomprising three (3) Non-ExecutiveDirectors.


• Megat Dziauddin Megat MahmudChairman(Senior Independent Non-ExecutiveDirector)

• Dato’ Syed Ariff FadzillahSyed Awalluddin(Independent Non-Executive Director)


The Committee’s primary objectiveis to establish a formal andtransparent procedure fordeveloping a remuneration policyfor Directors, Executive Directorsand key senior officers and ensuringthat their compensation iscompetitive and consistent with theCompany’s culture, objectives andstrategies. Additionally, theCommittee is also responsible forrecommending to the Board on thespecific remuneration packages forDirectors, Executive Directors andkey senior officers.

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48 MNRB

The Board as a whole will determinethe remuneration of the Non-Executive Directors. Each individualDirector will abstain from the Boarddecision on his own remuneration.

The Committee met five (5) timesduring the financial year.

4. Risk Management Committee

The Board believes that an effectiveRisk Management Framework isessential to the Group in its quest toachieve its corporate objectives,continued profitability andenhancement of shareholders’ valuein today’s rapidly changing marketenvironment.

With this in mind, the Board hadestablished a dedicated BoardCommittee known as the RiskManagement Committee of theBoard (RMCB) to develop andoversee the implementation of anenterprise-wide risk managementframework. The Committeecomprises three (3) members and ischaired by an Independent Non-Executive Director.


• Yusoff YaacobChairman(Independent Non-Executive Director)

• P. Raveenderen(Non-Independent Non-Executive Director)

• Datuk Mohd Khalil Dato’ Mohd Noor(Non-Independent Non-Executive Director)

The RMCB is responsible for:

i) reviewing and recommendingrisk management strategies,policies and risk tolerance forthe Board’s approval;

ii) reviewing and assessing theadequacy of risk managementpolicies and framework for identifying, measuring,monitoring and controllingrisks as well as the extent towhich these are operatingeffectively;

iii) ensuring adequate infrastructure,resources and systems are inplace for an effective riskmanagement i.e. ensuring thatthe staff responsible forimplementing risk managementsystems perform those dutiesindependently of the Group’srisk taking activities; and

iv) reviewing the management’speriodic reports on riskexposure, risk portfoliocomposition and riskmanagement activities.

The Committee met six (6) timesduring the financial year.

5. Investment Committee

Currently the InvestmentCommittee, comprising two (2)Non-Independent Non-ExecutiveDirector, one (1) Independent Non-Executive Director and one (1) Non-Independent Executive Director,examines strategic investmentproposals and makes decisions tooptimise the Group’s returns on itsinvestment activities.


• Datuk Mohd Khalil Dato’ Mohd NoorChairman(Non-Independent Non-ExecutiveDirector)

• Megat Dziauddin Megat Mahmud(Senior Independent Non-Executive Director)

• Paisol Ahmad(Non-Independent Non-Executive Director)

• Mohd Din Merican (Non-Independent Executive Director)(Appointed with effect from 9 January2012)

The Committee met four (4) timesduring the financial year.

DIRECTORS’ REMUNERATION

Remuneration Policy And Procedure

The Remuneration Committeerecommends to the Board theappropriate remuneration packages forthe Directors as well as ExecutiveDirector and the key senior officers inorder to attract, motivate and retain theDirectors, Executive Director and the keysenior officers of the necessary calibreand quality as required by the Group.The Group’s Remuneration policy is toreward the Executive Directors and thekey senior officers competitively, takinginto account performance, marketcomparisons and competitive pressuresin the industry. Whilst not seeking to maintain a strict market position, the Committee takes into accountcomparable roles in similar organisationsthat may be the same in size, marketsector or business complexity.



SHAREHOLDERS

Discussion Between The Group,Investors And Analysts

As part of the initiatives in developingand implementing an investor relationsprogram, regular briefings are heldbetween the Group with the analysts andinvestors.

Presentations based on permissibledisclosures are made to explain theGroup’s performance and majordevelopment programs. Price-sensitiveinformation about the Group is however,not disclosed in these briefings until afterthe prescribed announcement to BursaSecurities has been made.

MNRB also maintains a website whichshareholders and the public in generalcan access to gain information about theGroup at www.mnrb.com.my.

In addition, shareholders and the publiccan also convey their concernsand queries to the Senior IndependentNon-Executive Director, MegatDziauddin Megat Mahmud [email protected].

The Executive Director does not participate in any way in determining his individual remuneration.

All Non-Executive Directors are paid with Directors’ fees, which are determined by the Board and approved annually by theshareholders at the General Meeting.

The details of the total remuneration of each Director of the Company during the financial year ended 31 March 2012 are asfollows:

Executive Director Non-Executive Director TotalDirectors’ Remuneration RM RM RM

Fees – 695,700 695,700Salaries and other emoluments 176,599 – 176,599Benefits-in-kind – – –

Total 176,599 695,700 872,299

Number of DirectorsDirectors Remuneration Executive Director Non-Executive Director

Up to RM50,000 – –RM50,001 to RM100,000 – 6RM100,001 to RM150,000 – 1RM150,001 to RM200,000 1 –Above RM200,000 – –

Total 1 7

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50 MNRB

ANNUAL GENERAL MEETING(AGM)

The AGM is the principal forum fordialogue with shareholders. TheCompany’s AGM is normally wellattended as it provides the shareholdersdirect access to the Board as well asgiving them opportunity to participateeffectively and vote.

Notice of the AGM and annual reportsare sent out to shareholders at leasttwenty-one (21) days before the date ofthe meeting.

Besides the normal agenda for the AGM,the Board presents reports on theprogress and performance of the Groupin the annual report and providesopportunities for shareholders to raisequestions pertaining to the businessactivities of the Group. All Directors areavailable to provide responses toquestions from the shareholders duringthis meeting.

Each item of Special Business includedin the notice of the meeting will beaccompanied by an explanatorystatement and/or Circular toShareholders to facilitate fullunderstanding and evaluation of theissues involved.

ACCOUNTABILITY AND AUDIT

Financial Reporting

For financial reporting through interimquarterly reports to Bursa Securities andthe annual report to shareholders, theDirectors have a responsibility to presenta fair assessment of the Group’s positionand prospects. The Audit Committeeassists the Board in scrutinisinginformation for disclosure to ensure

accuracy, adequacy and completeness.The Directors are responsible forensuring that the accounting records areproperly kept and that the Group’sfinancial statements are prepared inaccordance with applicable approvedaccounting standards in Malaysia. TheStatement by Directors pursuant toSection 169 of the Companies Act, 1965is set out on page 122 of this AnnualReport.

Internal Control And RiskManagement

Information on the Group’s internalcontrol is presented in the Statement onInternal Control set out on page. TheGroup’s Statement on Risk Managementis also set out on pages 56 to 57 of thisAnnual Report.

Relationship With Auditors

Information on the role of the AuditCommittee in relation to the ExternalAuditors may be found in the AuditCommittee Report set out in pages toThe Group has always maintained aclose and transparent relationship withits auditors in seeking professionaladvice and ensuring compliance with theaccounting standards in Malaysia.

Management’s Accountability

The Group has an organisationalstructure showing all reporting lines aswell as clearly documented jobdescriptions for all its Management andExecutive employees and formalperformance appraisals are done on aperiodic basis.

Authority limits, as approved by theBoard, are clearly established and madeavailable to all employees.

None of the Directors and SeniorManagement staff of the Group have anyconflict of interest situations as referredto in Sections 54 and 55 of the InsuranceAct, 1996.

STATEMENT ON COMPLIANCEWITH THE BEST PRACTICES OFTHE CODE

The Group is committed to achievinghigh standards of corporate governanceand the highest level of integrity andethical standards in all its businessdealings. The Board considers that it hascomplied throughout the financial yearwith all the Principles and Best Practicesas set out in Part 2 of the MalaysianCode on Corporate Governance theCorporate Governance Guide issued byBursa Securities, the Bursa MalaysiaMain Market Listing Requirements andthe Green Book.

This Statement on CorporateGovernance is made in accordance withthe resolution of the Board of Directorsdated 24 July 2012.



MEMBERSHIP

The Audit Committee shall be appointedby the Board and comprises at leastthree (3) members of whom all membersmust be non-executive directors and themajority shall be independent directors.At least one member of the Committeemust be a member of the MalaysianInstitute of Accountants or eligible formembership.

The members of the Audit Committeemust elect a Chairman amongthemselves who is an independentdirector.

The term of office shall be reviewed noless than once in every two (2) years.

AUTHORITY

The Committee is authorised by theBoard to undertake any activity within itsterms of reference and must haveunlimited access to all information anddocuments relevant to its activities, toboth the internal and external auditors,as well as to all employees of the Group.

It must be able to convene meetings withthe external auditors, the internalauditors or both, excluding the

attendance of other directors andemployees of the listed issuer, wheneverdeemed necessary.

It must also have the authority to obtainindependent legal or other professionaladvice as it considers necessary.

TERMS OF REFERENCE

The main duties of the Committee are:

1. To review and approve the annualaudit plan, audit charter, budget,scope of audit procedures, auditprogrammes and reports of theinternal auditors including actionstaken on internal auditrecommendations;

2. To review the adequacy of thescope, functions, competency andresources of the internal auditfunctions and that it has thenecessary authority to carry out itswork;

3. To review annually with the externalauditors, the audit plan and thereport including the coordinationbetween the internal and externalauditors to prevent duplication ofeffort;

4. To review the quarterly results andyear-end financial statementsbefore approval by the Boardincluding the assistance given bythe Company’s officers to theauditors;

5. To recommend to the Board thenomination of the external auditorsafter evaluating their performanceand to consider the auditors’remuneration and any questions ofresignation or dismissal;

6. To review the externalauditors’ management letter andManagement’s response thereto;

7. To review the disclosure statementsin the annual report to be incompliance with Bursa Malaysiarequirements;

8. To review any related-partytransactions and any conflict ofinterests situation that may arisewithin the Group; and

9. To review the allocation of optionspursuant to the Company’sEmployees’ Share Option Scheme.

MEMBERS OF THE COMMITTEE

Megat Dziauddin Megat Mahmud Chairman & Senior Independent Non-Executive Director

Dato’ Syed Ariff Fadzillah Syed Awalluddin Independent Non-Executive Director

Yusoff Yaacob Independent Non-Executive Director(Appointed with effect from 19 July 2011)

P. Raveenderen Non-Independent Non-Executive Director

Paisol Ahmad Non-Independent Non-Executive Director

AUDIT COMMITTEE REPORT

52 MNRB

MEETINGS

A quorum shall consist of at least two-thirds (2/3) of the members withindependent directors forming themajority.

A minimum of four meetings per year isplanned. Additional meetings may becalled at any time if so requested by anycommittee member, the Management,the internal or external auditors.

The Chairman of the Committee shallinvite any person to be in attendance toassist the committee in its deliberations.

The minutes of the meetings shall be circulated to the Board afterconfirmation.

The Secretary to the Committee shall bethe Company Secretary.

For the financial year under review, a totalof seven (7) Audit Committee Meetingswere held. The details of attendance ofthe Audit Committee members were asfollows:

Name of No. ofAudit Committee meetingsmember attended

i. Megat Dziauddin 7/7Megat Mahmud

ii. Dato’ Syed Ariff 7/7Fadzillah Syed Awalluddin

iii. Yusoff Yaacob 3/3

iv. P. Raveenderen 7/7

v. Paisol Ahmad 7/7

The main activities that took place duringthe meetings were:

1. Reviewed the quarterly results andyear-end financial statements priorto approval by the Board;

2. Considered and recommended tothe Board the nomination of theexternal auditors for the financialyear ended 31 March 2012;

3. Reviewed the external auditors’audit plan for the year ended31 March 2012;

4. Reviewed the external auditors’management letter andManagement’s response thereto. Ameeting without the presence of theManagement was also held with theexternal auditors;

5. Reviewed the disclosure statementsin the annual report to be incompliance with Bursa Malaysiarequirements;

6. Considered and recommended tothe Board the payment of finaldividends;

7. Reviewed the results of the internalaudits carried out in the year andthe adequacy of actions taken byManagement; and

8. Reviewed the Internal AuditDepartment’s annual audit plan forthe year ended 31 March 2012.

In respect of the Company’s Employees’Share Option Scheme, there was noallocation of options in the year for theAudit Committee to review.

INTERNAL AUDIT DEPARTMENT

The Internal Audit Department was setup in-house on 2 January 1991. It isindependent of the activities oroperations of the operating units. For thefinancial year ended 31 March 2012, thetotal costs incurred for the Group InternalAudit function were RM2,186,000.

A summary of its activities for the year isas follows:

1. Conducted audits of the variousbusiness portfolios/departments ofthe Group;

2. Conducted follow-up audits on theimplementation of the AuditCommittees’ recommendations andManagement’s actions taken toimprove on issues identified duringthe audits; and

3. Prepared annual audit plans andbudget for the Audit Committees’consideration.

Audit Committee Report


KEY PROCESSES

The key processes that the Board hasestablished for review of the adequacyand integrity of the system of internalcontrols of the Group are as follows:

• The Group has a well-definedorganisational structure with clearlines of responsibility andaccountability.

• The Group’s Risk Managementpolicy, setting out the Board’sattitude toward risks and theprocesses to achieve the businessobjectives of the Group, is clearlydocumented in the Statement ofRisk Management as set out in thisAnnual Report.

• The Internal Audit Department of theGroup, which reports to the AuditCommittee, performs regularreviews of the business processes

of the Group in an effort to assessthe adequacy and effectiveness ofinternal controls and to highlightsignificant risks impacting theGroup and recommends furtherimprovement, where necessary.

• The Group holds a 20% effectiveequity interest in its associatedcompany, Labuan Reinsurance (L)Limited (“Labuan Re”) through itssubsidiary, Malaysian ReinsuranceBerhad and is represented on theBoard of Labuan Re by two (2) of itsdirectors. It also has a 40% effectiveequity interest in, anotherassociated company, MotordataResearch Consortium Sdn. Bhd.(“MRC”) and is similarly representedon the Board of MRC by two (2) ofits directors.

COMMITTEES OF THE BOARD

The Board has established Committeesof the Board at both the Group andsubsidiary levels with a view to assist andprovide added focus in discharging itsduties.

The Committees of MNRB HoldingsBerhad are:

• The Audit Committee, which isappointed by the Board comprisingfive (5) Non-Executive Directors.The Audit Committee reviews andconsiders both the internal andexternal auditors’ reports, and in theprocess gauges the effectivenessand adequacy of the system ofinternal controls. Where applicable,appropriate recommendations forimprovement are made to the Boardfor approval.

RESPONSIBILITY FOR INTERNAL CONTROL

The Board acknowledges that it is responsible for the Group’s system of internal control and for

reviewing its effectiveness, adequacy and integrity. It recognises that the review of the system of

internal control is a continuous process, designed to manage rather than eliminate the risk of

failure to achieve the Group’s business objectives. In pursuing these objectives, internal controls

can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has established processes for identifying, evaluating and managing the significant

risks faced by the Group. These processes have been in place for the whole of the financial year

ended 31 March 2012 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 financial and operational aspects of the Group.

STATEMENT ON INTERNAL CONTROL

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54 MNRB

• The Investment Committee, whichcomprises three (3) Non-ExecutiveDirectors and one (1) ExecutiveDirector, is responsible for reviewingand approving investmentproposals, as well as monitoring theGroup’s investment portfolio toensure conformity with overallbusiness objectives and statutoryrequirements.

• The Risk Management Committee,which comprises three (3) Non-Executive Directors, is responsiblefor the review and recommendationto the Board on the adoption ofappropriate risk managementstrategies and policies. It is alsoresponsible for the developmentand monitoring of the riskmanagement process for theGroup.

• The Nomination Committee, whichcomprises three (3) Non-ExecutiveDirectors, is responsible torecommend to the full Board theappointment of directors. TheNomination Committee is alsoresponsible for the annualassessment of the effectiveness ofthe Board.

• The Remuneration Committee,which comprises three (3) Non-Executive Directors, is responsibleto recommend the appropriateremuneration packages for thedirectors.

OTHER KEY ELEMENTS OFINTERNAL CONTROL

• The Board has also adoptedcommunication policies to ensurethat all decisions made arecommunicated promptly to staff ofall levels within the Group and viceversa where feedbacks and

suggestions on improvementscould be communicated to theBoard and Management.

• The Underwriting Guidelines of theReinsurance, Takaful and Retakafulsubsidiary companies have beenput in place to manage risks that arebeing underwritten.

• The Reinsurance programs existwhere there is a spread of reinsurerswith acceptable ratings fromaccredited agencies. The securitiesof reinsurers are reviewed on anannual basis.

• Departmental manuals are availablewithin the Group and these set outpolicies and procedures for day-to-day operations and act as guidanceto employees on the necessarysteps to be taken in a given set ofcircumstances. The manualsenable tasks to be carried out withminimal supervision. It alsospecifies relevant authority limits tobe complied with by each level ofmanagement within thesubsidiaries. In this respect, theReinsurance subsidiary hasobtained the ISO 9001:2008certification, while the TakafulOperator subsidiary has obtainedthe ISO 9001:2008 and MS1900:2005 certifications fromSIRIM.

• The Group’s financial systemsrecord all transactions to producemonthly and quarterly performancereports that allow the respectiveManagement to focus on key areasof concern.

• Annual business plans aresubmitted to the Board for approval.

• A detailed budgeting process hasbeen implemented in the Groupwhere each department prepares abudget for the upcoming financialyear for the approval of the Board.The budget is monitored and majorvariances are followed-up by therespective Management.

• Every employee of the Group iscontractually bound to observeprescribed standards of businessethics in the manner of conductingthemselves at work and theirrelationships with external partiessuch as customers and suppliers.The Group expects each employeeto conduct him/herself with integrityand objectivity and not to placehim/herself in a position of conflictof interest. The competence of staffpersonnel is maintained through astructured recruitment process, aperformance measurement andrewarding system and a widevariety of training and developmentprogrammes.

The Board believes that the system ofinternal controls of the Group is adequatefor its purposes and will adequatelysafeguard shareholders’ investments andthe Group’s assets. Reviews of the stateof internal controls are carried out on anon-going basis in accordance with“Statement on Internal Controls:Guidance for Directors of Public ListedCompanies”, to ensure continuedeffectiveness of the system and to furtherstrengthen it, where necessary.

This Statement is made in accordancewith a resolution of the Board of Directorsdated 24 July 2012.

Statement On Internal Control


The Directors are required to prepare financial statements, which give a true and fair view of the state of affairs of the Companyand the Group as at the end of each financial year and of their results and their cash flows for that year then ended.

The Directors consider that in preparing the financial statements,

• the Company and the Group have used appropriate accounting policies, which are consistently applied;

• reasonable and prudent judgements and estimates were made; and

• all applicable approved accounting standards in Malaysia have been followed.

The Directors are responsible for ensuring that the Company and the Group maintain accounting records that disclose withreasonable accuracy on the financial position of the Company and the Group, and which enable them to ensure that the financialstatements are drawn up in accordance with the requirements of the applicable approved Financial Reporting Standards issuedby the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets ofthe Company and the Group, in that context, to have proper regard to the establishment of appropriate systems of internal controlwith a view to prevent and detect fraud and other irregularities.

The Directors consider that they have pursued the actions necessary to meet their responsibilities as set out in this Statement.

This statement is made in accordance with the resolution of the Board of Directors dated 24 July 2012.

STATEMENT OF DIRECTORS’RESPONSIBILITY INRELATION TO THE

FINANCIAL STATEMENTSpursuant to paragraph 15.26(a) of the Main Market

Listing Requirements of Bursa Malaysia Securities Berhad

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56 MNRB

RISK MANAGEMENT FRAMEWORK

The Board of MNRB believes that an effective Risk Management Framework 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 develop and oversee the implementation of an enterprise-wide risk

management framework in each company. To further complement the risk management

framework of the Group, dedicated Management Committees known as the Operational Risk

Management Committee (“ORMC”) at the operational level of the respective subsidiaries were

also established to assist their respective RMCBs in ensuring a proactive risk management culture

on an enterprise-wide basis at the subsidiaries level and by extension, the Group-wide basis as

well.

RISK MANAGEMENT COMMITTEEOF THE BOARD (“RMCB”)

The Terms of Reference of the RMCBs atthe holding company and at theoperating subsidiaries are as set outbelow:

Objectives

The primary objective of the RMCBs is tooversee the Senior Management’sactivities in managing the key risk areasof the holding company and theoperating subsidiaries and to ensure thatthe risk management process is in placeand functioning effectively.

Composition Of The RMCB Of MNRB

The members of the RMCB wereappointed by the Board comprising atleast three (3) Non-Executive Directors.

The Chairman of the RMCB is anIndependent Non-Executive Directorappointed by the Board amongst themembers of the Committee.

The members of the Committee are asfollows:

• Yusoff Yaacob – Chairman

• P. Raveenderen• Datuk Mohd Khalil

Dato’ Mohd Noor

Committee’s Responsibilities

The RMCB is responsible for:

i) Reviewing and recommending riskmanagement strategies, policiesand risk tolerance for the Board’sapproval;

ii) Reviewing and assessing theadequacy of risk managementpolicies and framework foridentifying, measuring, monitoringand controlling risks as well as theextent to which these are operatingeffectively;

iii) Ensuring adequate infrastructure,resources and systems are in placefor an effective risk management i.e.ensuring that the staff responsiblefor implementing risk managementsystems perform those dutiesindependently of the subsidiaries’risk taking activities; and

iv) Reviewing the management’speriodic reports on risk exposure,risk portfolio composition and riskmanagement activities.

STATEMENT ON RISK MANAGEMENT


Committee Meeting

The RMCB holds regular meetings, at aminimum once every quarter and reportsregularly to the full Board.

Quorum

The quorum for RMCB meetings consistsof at least two (2) members, one of whomis an Independent Director.

Operational Risk ManagementCommittee (“ORMC”)

ORMCs were set up at each respectiveoperating subsidiaries and its membersconsist of key management personnel ofeach company.

The ORMCs’ key role is to assist theRMCB of each respective subsidiary inoverseeing the management ofoperational risks. In conjunction with theset-up of the ORMCs, Risk ManagementDepartment was also formed to improveoperational risk management and toprovide support to the respective ORMCin carrying out its functions.

In summary, the Board believes that riskmanagement is a collective responsibilitythroughout the entire organisation andthere must be clear accountabilityoutlined to ensure its success. As such,the risk management framework withinthe Group is structured on the followingbasis:

i) The Board is ultimately responsiblefor the management of risks. In thisrespect, the RMCB, on behalf of theBoard, oversees the effectiveimplementation of the riskmanagement process within theGroup, including the major areas ofrisk relating to underwriting,investments, credit and interestrates.

ii) The Audit Committee complementsthe role of the RMCB by providingan independent assessment of theadequacy and reliability of the riskmanagement process, andcompliance with the risk policiesand regulatory guidelines. The AuditCommittee is assisted by anindependent Internal AuditDepartment in performing its role.

iii) The ORMC provides the necessaryassistance to the RMCB inmanaging the risk managementprocess.

iv) The individual departments mustalso play its role by implementingthe risk management policies andensure that they are complied withon the day-to-day activities.

Key Initiatives Undertaken

The Group had put in place theenterprise risk management frameworkfor the effective and ongoingidentification, evaluation, managementand reporting of the Group’s risks incompliance with the ListingRequirements.

In line with the needs of the riskmanagement framework, the Group hadcompleted an enterprise-wide levelassessment of the Group’s current stateof risk profile, which includes thefollowing:

i) Identification of key risks that mayimpede the Group from achieving itsstrategic objective;

ii) Implementation of controls tomitigate these key risks; and

iii) Development of action plans tofurther reduce the risks.

The Group also ensures continuedapplication of risk management processbefore embarking on any majorproject/initiatives.

Further to the above, the Group hadundertaken various risk managementinitiatives during the financial year thatunderpins the following strategic riskmanagement objectives to complementthe enterprise-wide risk managementframework implementation namely:

i) Instill risk management awarenessthrough continuous learningprograms;

ii) Facilitate integration of riskmanagement into businessprocesses;

iii) Inculcate the ownership andaccountability for risks, controls andmanagement actions; and

iv) Building risk management capabilityacross business units.

With the enhanced risk managementframework in place, apart from having anestablished risk management culture,structure, process and infrastructure forthe management of risks, the Group isalso aspired to take the implementationof Enterprise-wide Risk Management tothe next level of sophistication in line withthe demands and complexities in today’sbusiness environment.

57

58 MNRB

2012 2011 2010 2009 2008RM’000 RM’000 RM’000 RM’000 RM’000

Operating revenue 1,431,892 1,463,262 1,341,798 1,173,819 978,555

Profit before zakat and tax 126,214 164,952 79,261 40,457 193,955

Profit after zakat and tax 84,015 122,942 50,713 26,288 170,441

Technical reserves 1,280,807 1,266,110 1,180,750 1,113,062 1,351,251

Total assets 5,196,065 4,467,967 3,845,983 3,378,919 2,576,247

Shareholders’ fund 1,096,384 998,715 892,513 835,646 893,919

Paid-up capital 213,070 213,070 213,070 213,070 212,523

Earnings per share (sen) 39.4 57.7 23.8 12.3 80.3

Net assets per share (RM) 5.15 4.69 4.19 3.92 4.21

Profit before zakat and tax to Shareholders’ fund (%) 11.51 16.5 8.9 4.8 21.7

Profit after zakat and tax to Shareholders’ fund (%) 7.66 12.3 5.7 3.1 19.1

Dividends (%) – 20.0 – 10.0 40.0

Net dividends per share (sen) – 15.0 – 7.5 29.4

FIVE-YEAR FINANCIAL HIGHLIGHTS


2010 2011Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept

Quarterly Results

1st Quarter Results 25 22

2nd Quarter Results 30

3rd Quarter Results 24

4th Quarter Results 31

AGM

Notice of AGM 26

AGM 23

2011 2012Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Quarterly Results

1st Quarter Results

2nd Quarter Results 24

3rd Quarter Results 24

4th Quarter Results 31

AGM

Notice of AGM 3

AGM 25

FINANCIALCALENDAR

60 MNRB

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

5,300

5,100

4,800

4,500

4,200

3,900

3,600

3,300

3,000

2,700

2,400

2,100

1,800

1,500

1,200

900

600

300

0

Total Assets Shareholders’ Fund

RMMillion

Year Shareholders’ Fund Total AssetsRM’000 RM’000

2001 460,092 1,257,161

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 1,096,384 5,196,065

MNRB’S GROWTH

2.50

2.70

2.90

3.10

3.30

3.50

3.70

3.90

Clo

sing

Pric

e (R

M)

Volu

me

Trad

ed

0

3,000

6,000

9,000

12,000

15,000

10-1

-29

10-2

-26

10-3

-31

10-4

-30

10-5

-31

10-6

-30

10-7

-30

10-8

-31

10-9

-30

10-1

0-29

10-1

1-30

10-1

2-31

11-1

-31

11-2

-28

11-3

-31

11-4

-29

11-5

-31

11-6

-30

11-7

-29

11-8

-31

11-9

-30

11-1

0-31

11-1

1-30

11-1

2-30

12-1

-31

12-2

-29

12-3

-30

10-1

-29

10-2

-26

10-3

-31

10-4

-30

10-5

-31

10-6

-30

10-7

-30

10-8

-31

10-9

-30

10-1

0-29

10-1

1-30

10-1

2-31

11-1

-31

11-2

-28

11-3

-31

11-4

-29

11-5

-31

11-6

-30

11-7

-29

11-8

-31

11-9

-30

11-1

0-31

11-1

1-30

11-1

2-30

12-1

-31

12-2

-29

12-3

-30

800

900

1000

1100

1200

1300

1400

1500

1600

2.5

2.6

2.7

2.8

2.9

3.0

3.1

3.2

3.3

3.4

3.5

Kua

la L

umpu

r C

ompo

site

Inde

x

Clo

sing

Pric

e (R

M)


MNRB HOLDINGS BERHAD – PERFORMANCE OF SHARE

1/4/11-31/3/12 1/4/10-31/3/11 1/4/09-31/3/10 1/4/08-31/3/09 1/4/07-31/3/08

Closing Price (RM) 2.62 2.63 3.04 2.75 4.56

Highest Price (RM) 3.42 3.04 3.39 4.92 5.8

Lowest Price (RM) 2.33 1.90 2.68 2.60 4.32

Total Volume Traded ('000) 57,903 9,803 14,614 12,254 28,508

Gross Dividend Yield (%) 6.49* 7.60 0 3.64 8.77

Price Earning Ratio (x) 6.65 14.21 13.45 25.7 5.68

Source: Bloomberg @ 24/07/2012* Proposed dividend

SHARE PRICES AND VOLUME TRADED (JANUARY 2010 – MARCH 2012)COUNTER: MNRB HOLDINGS BERHAD

Closing Price Volume Traded

PERFORMANCE OF SHARES (JANUARY 2010 – MARCH 2012)

Closing Price KLCI

INVESTORS’ INFORMATION

As a strong and established risk solutions provider, we are able to effectively

support local and regional market needs through years of

proven experience and sustained growth.

Malaysian Reinsurance Berhad

(Malaysian Re) which was

incorporated on 27 August 2004, 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. Malaysian Re is

principally involved in the

reinsurance business, both locally

and regionally.

MALAYSIAN REINSURANCE BERHADMALAYSIAN REINSURANCE

BERHAD

MALAYSIAN RE64

CORPORATEPROFILEMALAYSIAN REINSURANCE BERHAD (Malaysian Re) is a

wholly-owned subsidiary of MNRB Holdings Berhad. As part

of the restructuring exercise of the MNRB Group, the

reinsurance business, the reinsurance license and reinsurance

assets of MNRB were transferred to Malaysian Re on 1 April

2005. As the national reinsurer, Malaysian Re will continue to

pursue the same primary objective as that successfully

achieved by MNRB for almost forty (40) years, that is to reduce

the outflow of reinsurance premiums overseas. Malaysian Re

will also continue 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. The classes

of business underwritten can broadly be categorised under

Fire, Engineering, Motor, Marine, and Miscellaneous

Accidents. Leveraging on its breadth and depth of experience

and expertise, strong fundamentals and proven track record,

Malaysian Re has grown in stature as an international player

having established a strong market presence in Asia, the

Middle East, Africa and China.



BOARD OF DIRECTORS

SHARKAWI ALISNon-Independent Non-Executive Chairman

HASHIM HARUNPresident & Chief Executive OfficerNon-Independent Executive Director

P. RAVEENDERENNon-Independent Non-Executive Director

DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDINIndependent Non-Executive Director

YUSOFF YAACOBIndependent Non-Executive Director

DATUK MOHD KHALIL DATO’ MOHD NOORNon-Independent Non-Executive Director

MEGAT DZIAUDDIN MEGAT MAHMUDIndependent Non-Executive Director

MOHD DIN MERICANNon-Independent Non-ExecutiveDirector(Appointed with effect from 2 March 2012)

COMPANY SECRETARIES


AUDIT COMMITTEE

Megat Dziauddin Megat Mahmud (Chairman)

Dato’ Syed Ariff Fadzillah Syed Awalluddin

P. Raveenderen


Dato’ Syed Ariff FadzillahSyed Awalluddin (Chairman)

Sharkawi AlisP. RaveenderenYusoff YaacobDatuk Mohd Khalil Dato’ Mohd Noor




Yusoff YaacobMohd Din Merican(Appointed with effect from 29 May 2012)


Yusoff Yaacob (Chairman)

P. RaveenderenDatuk Mohd Khalil Dato’ Mohd NoorMohd Din Merican(Appointed with effect from 29 May 2012)


Datuk Mohd Khalil Dato’ Mohd Noor (Chairman)

Megat Dziauddin Megat MahmudHashim HarunMohd Din Merican(Appointed with effect from 29 May 2012)

AUDITORS


PRINCIPAL BANKERS

CIMB Bank BerhadMalayan Banking Berhad

REGISTERED OFFICE

12th Floor, Bangunan Malaysian ReNo. 17, Lorong DungunDamansara Heights50490 Kuala LumpurTel : +603-2096 8000Fax : +603-2096 7000E-mail : [email protected]: www.malaysian-re.com.my

MALAYSIAN RE66

SHARKAWI ALIS, aged sixty-five (65), Malaysian. Non-Independent Non-Executive Chairman since 3 September 2007. Member of the Nomination Committee.

Other information on Sharkawi Alis is disclosed in the Directors’ Profile section ofMNRB on page 18 of this Annual Report.

HASHIM HARUN, aged fifty-eight (58), Malaysian. Non-Independent ExecutiveDirector since 1 April 2008. Member of the Investment Committee. Currently, thePresident & Chief Executive Officer of Malaysian Re. He is the Chairman of MalaysianInsurance Institute (MII), a Director of MRDL, MMIP Services Sdn. Bhd., FinancialPark (Labuan) Sdn. Bhd. and Asian Institute of Finance (AIF). Obtained his Bachelorof Arts (Hons.) degree from the University of Malaya. He started his career at CreditCorporation (M) Berhad, a finance company, in 1977. He served in various capacitiesand was appointed as General Manager in 1988. In 1996, with the acquisition ofCredit Corporation (M) Berhad by the DRB Hicom Group, he was appointed as theGeneral Manager at one of its subsidiaries, Automotive Corporation (M) Sdn. Bhd.,assembler and distributor of Isuzu vehicles and the national truck, Hicom. In 1998, heserved on the Board of SEA Insurance Berhad (now UNI.Asia General InsuranceBerhad) and subsequently appointed as CEO in 1999. He served as a Director atUNI.Asia Capital Berhad and UNI.Asia Life Assurance Berhad from 1999 to 2008.Held the position of Chairman of Central Administration Bureau (CAB) from 2003 to2005. A Director of Malaysian Rating Corporation Berhad from 2005 to 2007.

P. RAVEENDEREN, aged sixty-seven (67), Malaysian. Independent Non-ExecutiveDirector since 27 August 2004 and re-designated as Non-Independent Non-ExecutiveDirector on 19 July 2011. Member of the Audit Committee, the Risk ManagementCommittee and the Nomination Committee.

Other information on P. Raveenderen is disclosed in the Directors’ Profile section ofMNRB on page 18 of this Annual Report.

DIRECTORS’PROFILE


DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDIN, aged sixty-nine (69),Malaysian. Independent Non-Executive Director since 27 August 2004. Chairman ofthe Nomination Committee and member of the Remuneration Committee and theAudit Committee.

Other information on Dato’ Syed Ariff Fadzillah Syed Awalluddin is disclosed in theDirectors’ Profile section of MNRB on page 18 of this Annual Report.

YUSOFF YAACOB, aged sixty-four (64), Malaysian. Independent Non-ExecutiveDirector since 31 March 2005. Chairman of the Risk Management Committee andmember of the Nomination Committee and the Remuneration Committee.

Other information on Yusoff Yaacob is disclosed in the Directors’ Profile section ofMNRB on page 19 of this Annual Report.

DATUK MOHD KHALIL DATO’ MOHD NOOR, aged seventy-one (71),Malaysian. Non-Independent Non-Executive Director since 31 March 2005. Chairmanof the Investment Committee and member of the Risk Management Committee andthe Nomination Committee.

Other information on Datuk Mohd Khalil Dato’ Mohd Noor is disclosed in theDirectors’ Profile section of MNRB on page 19 of this Annual Report.

MALAYSIAN RE68

MEGAT DZIAUDDIN MEGAT MAHMUD, aged sixty-six (66), Malaysian.Independent Non-Executive Director since 24 August 2006. Chairman of theRemuneration Committee, Chairman of the Audit Committee and member of theInvestment Committee.

Other information on Megat Dziauddin Megat Mahmud is disclosed in the Directors’Profile section of MNRB on page 19 of this Annual Report.

MOHD DIN MERICAN, aged fifty (50), Malaysian. Non-Independent Non-ExecutiveDirector since 2 March 2012. Member of the Investment Committee, the RiskManagement Committee and the Remuneration Committee.

Other information on Mohd Din Merican is disclosed in the Directors’ Profile sectionof MNRB on page 20 of this Annual Report.



MANAGEMENT TEAM

Hashim HarunBA (Hons)

President & Chief Executive Officer


Paul Ng Wooi YipB.Eng. (Hons) Mech.

Chief Underwriter, International Treaties

Rajinder MohanFCII, AIINZ

Chief Underwriter, Domestic Treaties

T. Sivapalan TharmapalanCII, ACII, AMII, B.Mech. Eng. (Hons)

Chief Underwriter, Facultative & Technical Support

Teoh Bee LanCA (M), B.Acc. (Hons)

Head of Reinsurance Administration/Claims

VICE PRESIDENTS

Mili Mohd YusoffFCII, ACII

Head of Central Administration Bureauand Large & Specialised Risks

Thiyaga Rajan KaliaperumalB.Eng. (Hons) Chem

Senior Underwriter, Facultative – Domestic/International

Abdul Halim Anuar SharifB.Sc. Mech. Eng.

Head of Market Pools

Musi KadimB.Eng. (Hons) Mech.

Head of Technical Servicesand Special Rating

Lua Tiong AikB.Eng. (Industrial)

Senior Underwriter, Domestic Treaties

Izaham IshakDIA

Voluntary Cessions/Autofac,Domestic Treaties

Rudy Andrew JeyarajAdvance Diploma in Maritime Transportation, DMII

Senior Underwriter, Facultative

Teh Chin FongBachelor of Economics (Hons)

Reinsurance Administration

ASSISTANT VICE PRESIDENTS

Fatimy Abdul RashidMBA

Head of Inspection

Tony Tan Chee YewM.Sc. Actuarial Sc.

Head of Actuarial Services

2

1

4

7

3

6

5

MALAYSIAN RE70

SENIOR MANAGEMENT TEAM

1. Hashim Harun2. Paul Ng Wooi Yip3. Rajinder Mohan4. T. Sivapalan

5. Teoh Bee Lan6. Mili Mohd Yusoff7. Abdul Halim Anuar Sharif


MALAYSIAN RE72

The President & Chief Executive Officer,HASHIM HARUN, leads the day-to-day operations of Malaysian Re togetherwith the key management staff whichincludes:

PAUL NG WOOI YIP is the Senior VicePresident & Chief Underwriter ofInternational Treaties Department. Hegraduated with a Bachelor of Science(Honours) degree in MechanicalEngineering from the University ofSalford, Manchester, United Kingdom in1984.

He began his career with the thenMalaysian National Reinsurance Berhadas a Risk Engineer in 1984. Working upthe ranks, he was promoted to AssistantGeneral Manager in 1994. He wastransferred to Malaysian Re on 1 April2005 and assumed his present positionin October 2005.

RAJINDER MOHAN is the Senior VicePresident & Chief Underwriter ofDomestic Treaties Department. He is aFellow member of the CharteredInsurance Institute, United Kingdom anda Senior Associate member of theAustralian and New Zealand Institute ofInsurance and Finance. He started hiscareer as an Executive with GuardianRoyal Exchange (New Zealand) inFebruary 1988 and subsequently joinedthe then Malaysian National ReinsuranceBerhad in November 1988 as anUnderwriting Executive.

He was promoted to Assistant GeneralManager for Business Unit 2 in April2002. He was transferred to MalaysianRe on 1 April 2005 and assumed hispresent position in October 2005.

T. SIVAPALAN is the Senior VicePresident & Chief Underwriter ofFacultative and Technical SupportDivision since 1 July 2010. He graduatedwith a Bachelor of MechanicalEngineering (Honours) from UniversityMalaya. He is also a Chartered Insurerand an Associate member of theChartered Insurance Institute (ACII) andMalaysian Insurance Institute (AMII). Hehas over twenty (20) years experience inthe insurance industry, both with foreignand local direct insurers as well as with aforeign reinsurance company.

He started his career in risk managementand moved on to underwriting,reinsurance, claims, marketing andsenior management. Throughout hiscareer, he served in a number of PIAMSub-Committees and is currently theChairman of the Rating Committee.

TEOH BEE LAN is the Senior VicePresident of Reinsurance AdministrationDivision (Claims and Retrocessions). Shegraduated from the University of Malayawith a Bachelor of Accounting (Hons)degree in 1984.

Her work experience started withexternal auditing. This was followed byinternal auditing and which was furthercomplemented in 1999 with a few yearsspent in the area of corporate planningand compliance. She assumed herpresent position in June 2002. She wastransferred to Malaysian Re on 1 April2005.

MILI MOHD YUSOFF is the VicePresident & Head of CentralAdministration Bureau (CAB) and Large& Specialised Risks (LSR) Department

since 1 December 2009. She was aPERNAS scholar and obtained herAssociateship of the Chartered InsuranceInstitute from the London School ofInsurance. Whilst in the UK, she wasattached to Gil Y Carvajal Brokers PteLtd where she received training as a junior reinsurance broker. Shesubsequently returned to Malaysia in1987 and thereafter, spent a major partof her career in insurance brokingspecialising in Oil & Gas, Marine andSpecialised Risks portfolios.

She was the Risk and Insurance Managerfor a major Dutch oil company for a shortstint before returning to the brokingfraternity in 2001. A Fellow of theChartered Insurance Institute (byexamination, 1994).

ABDUL HALIM ANUAR SHARIF isthe Vice President & Head of MarketPools. He graduated with a Bachelor ofScience in Mechanical Engineering in1986 from South Dakota State University,United States of America. Hecommenced his career with the TechnicalServices Department of the thenMalaysian National Reinsurance Berhadas Risk Engineer in 1987. He wastransferred to Voluntary CessionDepartment in 1996, Market Cession &Facultative Department in 1998,Marketing/Underwriting – Business Unit1 in 2002, Retrocessions/Claims/PoolsDepartment in 2003 and later transferredto Malaysian Re on 1 April 2005. Heassumed his present position in May 2010.



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, Africa and China 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 inproviding various services to theMalaysian insurance industry. Theservices amongst others, include thefollowing:

A) TECHNICAL SERVICES

Surveying and Advisory Serviceson Risk Management

Malaysian Re provides Propertyand Engineering Risk Surveyservices to the local insuranceindustry for the purpose of specialrating, underwriting and alsoloss estimation. Property Riskassessment and risk managementservices tailored to the insured’needs are also provided throughtheir insurers when requested.

B) CENTRAL ADMINISTRATIONBUREAU

Malaysian Re initiated theestablishment of the CentralAdministration Bureau (CAB) in1995 to manage the centralisedcomputerised system (CABFAC) forthe administration and settlement offacultative reinsurance betweenCAB members i.e. insurers andreinsurers operating in Malaysia.The elimination of reconciliationproblems and the efficientsettlement of balances and claimsrecovery between members werethe main drivers for the formation ofCAB. The cost of development andoperations of the system werejointly funded by its members andsince the launching of the web-based system in 2004, reinsurershave experienced a distinctenhancement in the overallperformance of the CAB system.Following the success of theCABFAC system, the members ofPersatuan Insurans Am Malaysia

(PIAM), in 2009, conceptualised theidea of developing a centralisedcoinsurance system (CABCO) whichwould function on the sameoperating model as the CABFAC.The CABCO was formally launchedin August 2011 to cater for thecoinsurance business transactionsbetween the local insurers.

C) INSPECTION

Malaysian Re was given themandate by PIAM to form anInspection Task Force to conductinspections or carry outinvestigations on the conduct andactivities of its members inaccordance with the terms andprovisions of the various Inter-Company Agreements. With effectfrom 1 April 1992, the various Inter-Company Agreements had nowbeen amalgamated into a singleagreement called “Inter-CompanyAgreement On General InsuranceBusiness” (ICAGIB).

D) MALAYSIAN MARKET POOLS

• Malaysian Aviation Pool

Malaysian Re assumed the roleas Manager of the MalaysianAviation Pool (MAP) effective1 October 1996. Currently, itsmembership comprises six (6)local insurers and four (4)reinsurers with a totalunderwriting capacity of RM338 million. The underwritingof risks is by a Committee,nominated by participatingcompanies. The business

CORPORATE ACTIVITIES AND SERVICES

MALAYSIAN RE74

E) MARKET TRAINING

Over the years, Malaysian Re hasand will continue to organise variouscourses/seminars on insurance andreinsurance subjects for staff ofinsurance companies to instil ahigher degree of professionalism inthe industry.

F) SCHEME FOR INSURANCE OFLARGE & SPECIALISED RISKS

The Scheme for Insurance of Large& Specialised Risks (SILSR) wasimplemented on 1 January 1994with Malaysian Re appointed asScheme Manager by BNM. It wasdesigned with the objective ofdeveloping and enhancing the levelof the Malaysian insuranceindustry’s technical expertise andprofessionalism. In line with thisobjective, SILSR aimed to promoteoptimum retention with reinsuranceplaced to the best nationaladvantage whilst facilitating themost favourable cover atinternationally competitive terms forthe Malaysian risk owners.

G) SIHAT MALAYSIA

The Sihat Malaysia Scheme, whichwas officially launched on 18February 2000, was developed bythe National Insurance Associationof Malaysia (NIAM). Members of

NIAM subscribing to this Schemeprovide a uniformed healthinsurance programme coveringhealth care including cashlessadmission to hospitals, medicaltreatments, surgery as well asemergency assistance to policyholders. Managed CareOrganisation has been appointedunder the Scheme to providespecialised services to both thepolicy holders and NIAM members.Malaysian Re was appointed as theAccount Manager of the Scheme,which is currently being subscribedto by six (6) NIAM members.

H) SPECIAL RATING

Malaysian Re was appointed byPIAM to form a Rating Committeespecifically for the purpose ofdetermining special rates for Fireand Industrial All Risks (IAR)Insurances, for risks which qualifyfor special rating under the FireTariff. This Committee comprisesnot less than six (6) qualified orexperienced fire insuranceunderwriters or risk surveyors fromamong PIAM members of whom notmore than three (3) shall be fromMalaysian Re. The Chairman of theRating Committee shall be arepresentative from Malaysian Re.By virtue of this appointment,Malaysian Re also acts as theSecretariat to this Committee aswell as handles the day-to-dayoperations of all matters pertainingto special rating applications.

Corporate Activities and Services

written by MAP is primarilyMalaysian risks and Malaysianinterests abroad.

• Malaysian Energy RisksConsortium

Malaysian Energy RisksConsortium (MERIC) wasestablished in March 1995 withthe objective to optimisenational retention, promotewider interest and developunderwriting skills in thespecialised class of energybusiness. MERIC comprisestwelve (12) local insurers andthree (3) reinsurers withMalaysian Re taking on the roleof Secretariat. It has a capacityto underwrite up to acombined single limit of RM 50million for upstream anddownstream risks. Theunderwriting of risks is by aCommittee, nominated byparticipating companies. Theprimary portfolio of thebusiness written by MERIC isMalaysian risks and Malaysianinterests abroad. However,recognising the need todevelop a broader spread ofrisks and premium base, theportfolio has been extended toinclude risks within Asia andPacific regions, Middle Eastand North Africa countries.

23%

24%

17%

36%


MALAYSIAN RE’SPORTFOLIO OF BUSINESS

2012

2011

16%

25%

21%

38%

Fire

Motor

Miscellaneous Accident

Marine

2012 2011CLASS RM’000 % RM’000 %

Fire 432,927 38 417,299 36

Motor 188,182 16 266,857 23

Miscellaneous Accidents 283,382 25 293,802 24

Marine 241,924 21 194,427 17

Total 1,146,415 100 1,172,385 100

Through sustainable growth, we have evolved to becoming

a progressive and dynamic Takaful provider.

Takaful Ikhlas Sdn. Bhd. (Takaful

IKHLAS) was incorporated on

18 September 2002 and has an

Authorised Capital of RM500 million

and a Paid-up Capital of RM295

million. Takaful IKHLAS is principally

involved in the provision of

Islamic financial protection

services, based on principles and

rulings of Shariah.

TAKAFUL IKHLAS SDN BHDTAKAFUL IKHLAS

SDN. BHD.

TAKAFUL IKHLAS78

CORPORATEPROFILETakaful Ikhlas Sdn. Bhd. (Takaful IKHLAS) was incorporated

on 18 September 2002 and is a wholly-owned subsidiary of

MNRB Holdings Berhad. Takaful IKHLAS has within the nine

years of its operations, established a strong presence in the

provision of Islamic financial protection services based on the

Takaful System, which stresses on a spirit of cooperation and

joint responsibility among participants. Takaful IKHLAS’

objective is to be the preferred provider of Islamic financial

protection services and towards this end will leave no stone

unturned to achieve this.

More than 1.8 million individuals and corporations have placed their trust in the

Company and become its certificate holders (participants). Takaful IKHLAS’

commitment and adherence to values that cherished, coupled with the application of

appropriate technology in conducting business have earned the Company a sound

reputation for its ethical approach and service delivery.

The Company offers individuals and commercial enterprises a comprehensive range

of Family, Group and General Takaful Plans and Riders, with more being planned in

the not too distant future. The distribution/service channels comprise highly

knowledgeable and well-trained people. These channels comprise more than five-

thousand (5,000) agency personnel, brokers, financial institutions, motor franchise

holders co-operatives and Islamic bodies.

Takaful IKHLAS has a customer service center at its Corporate Head office in Bangsar

South, Kuala Lumpur and also regional offices in Klang, Kota Bharu, Johor Bahru,

Sungai Petani, Kuching, Melaka, Kota Kinabalu, Kuantan, Ipoh, Kuala Terengganu

and Putrajaya.


BOARD OF DIRECTORS


DATO’ SYED MOHEEB SYED KAMARULZAMANPresident & Chief Executive OfficerNon-Independent Executive Director

DATO’ OTHMAN HASHIMIndependent Non-Executive Director

HALIM HAJI DINIndependent Non-Executive Director

PAISOL AHMADNon-IndependentNon-Executive Director

YAHAYA BESAHIndependent Non-Executive Director

DR. SYED MUSA SYED JAAFARALHABSHIIndependent Non-Executive Director

MOHD DIN MERICANNon-IndependentNon-Executive Director(Appointed with effect from 2 March 2012)

MEGAT DZIAUDDIN MEGAT MAHMUDIndependent Non-Executive Director(Appointed with effect from 17 April 2012)

COMPANY SECRETARIES


SHARIAH COMMITTEE

Dato’ Mohd Mokhtar Shafii (Chairman)

Datuk Nik Moustpha Haji Nik HassanProf. Dr. Ahmad Hidayat BuangAssoc. Prof. Dr. Shamsiah MohamadDr. Muhammad Naim Omar

AUDIT COMMITTEE

Halim Haji Din (Chairman)

Dato’ Othman HashimPaisol AhmadDr. Syed Musa Syed Jaafar AlhabshiYahaya BesahMegat Dziauddin Megat Mahmud(Appointed with effect from 30 May 2012)


Dr. Syed Musa Syed Jaafar Alhabshi (Chairman)

Sharkawi AlisHalim Haji DinDato’ Othman HashimMohd Din Merican(Appointed with effect from 30 May 2012)


Yahaya Besah (Chairman)

Dato’ Othman HashimHalim Haji DinPaisol AhmadMohd Din Merican(Appointed with effect from 30 May 2012)

Megat Dziauddin Megat Mahmud(Appointed with effect from 30 May 2012)


Dato’ Othman Hashim (Chairman)

Paisol AhmadDr. Syed Musa Syed Jaafar AlhabshiYahaya BesahMohd Din Merican(Appointed with effect from 30 May 2012)


Paisol Ahmad (Chairman)

Dato’ Syed Moheeb Syed Kamarulzaman

Dr. Syed Musa Syed Jaafar AlhabshiHalim Haji DinMohd Din Merican(Appointed with effect from 30 May 2012)

Megat Dziauddin Megat Mahmud(Appointed with effect from 30 May 2012)

AUDITORS


BANKERS

Maybank Islamic BerhadCIMB Islamic BerhadBank Islam Malaysia BerhadEONCAP Islamic Bank BerhadAmIslamic Bank Berhad

REGISTERED OFFICE

9th Floor, IKHLAS PointTower 11A, Avenue 5Bangsar SouthNo. 8, Jalan Kerinchi59200, Kuala LumpurTel : +603-2723 9999Fax : +603-2723 9998E-mail : [email protected] : www.takaful-ikhlas.com.my


TAKAFUL IKHLAS80

SHARKAWI ALIS, aged sixty-five (65), Malaysian. Non-Independent Non-ExecutiveDirector and Chairman of Takaful IKHLAS since 3 January 2008. Member of theNomination Committee.

Other information on Sharkawi Alis is disclosed in the Directors’ Profile section ofMNRB on page 18 of this Annual Report.

DATO’ SYED MOHEEB SYED KAMARULZAMAN, aged fifty-nine (59),Malaysian. Non-Independent Executive Director since 23 April 2003. Member of theInvestment Committee. He is also the President & Chief Executive Officer of TakafulIKHLAS for the past nine (9) years. He is a chartered insurance practitioner, anAssociate of the Malaysian Insurance Institute as well as a Practicing Member of theAssociation Of Chartered Islamic Finance Professionals (ACIFP).

Currently, he is Chairman of the Malaysian Takaful Association (MTA). He is also theChairman of Central Administration Bureau (CAB). He is the Board member of theAsian Institute Of Finance (AIF), the umbrella body of Malaysia’s finance industry'straining institutes, Board member of the Malaysian Insurance Institute (MII) and alsosits on its Executive Committee. In addition to this, he is also the Board member ofthe Islamic Banking & Finance Institute Malaysia (IBFIM), Board member of ISMInsurance Services Malaysia Bhd., providing statistical services to the insurance/takaful industry and Chairman of its Audit Committee. He was appointed as the Boardmember of The International Cooperative and Mutual Insurance Federation (ICMIF)and Chairman of its Takaful Network. He also sits on the Board of the FinanceMediation Bureau. He is a member of the Professional Development InternationalCentre of Education in Islamic Finance (INCEIF), a global university for IslamicFinance, Academic Quality Assurance Committee (AQAC) of INCEIF andAccreditation Committee of the Asian Institute of Finance.

DIRECTORS’PROFILE


DATO’ OTHMAN HASHIM, aged sixty (60). Malaysian. Independent Non-Executive Director since 23 April 2003. Chairman of the Risk ManagementCommittee. Member of the Audit Committee, the Remuneration Committee and theNomination Committee. Graduated from the Royal Military College, Sungai Besi.Obtained his Degree in Law from London and qualified as a Barrister-at-Law fromCouncil of Legal Education, London. He was among the first batch of lecturers toteach Diploma in Law at the Mara Institute of Technology. In 1983, he set up hispartnership legal practice, Messrs. Othman Hashim, Chen & Co. In 1990, he movedon and set up his own legal practice, Messrs. Othman Hashim & Co. He is also aDirector of Dynaura Trading Sdn. Bhd.

HALIM HAJI DIN, sixty-six (66), Malaysian. Independent Non-Executive Directorsince 11 July 2003. Chairman of the Audit Committee. Member of the NominationCommittee, the Remuneration Committee and the Investment Committee. He is aChartered Accountant who spent more than thirty (30) years working for multinationalcorporations and international consulting firms. He accumulated eighteen (18) yearsof experience working in the Oil and Gas Industry – six (6) years of which as a Boardmember of Caltex/Chevron, responsible for financial management before engaging inthe consulting business. He was the Managing Partner of the Consulting Division ofErnst & Young Malaysia. He later became the Vice President of Cap Gemini Ernst &Young Consulting when Cap Gemini of France merged with Ernst & Young Consulting.In 2003, he, together with two (2) partners took over the consulting business of CapGemini Ernst & Young, Malaysia and rebranded it as Innovation Associates where heis currently the Group Managing Director. He is also an independent member of theBoard of Wah Seong Corporation Berhad and Kris Assets Holdings Berhad.

PAISOL AHMAD, aged fifty-eight (58), Malaysian. Non-Independent Non-Executive Director of Takaful IKHLAS since 6 August 2008. Chairman of theInvestment Committee. Member of the Audit Committee, Remuneration Committeeand the Risk Management Committee. Also the Director of MNRB.

Other information on Paisol Ahmad is disclosed in the Directors’ Profile section ofMNRB on page 20 of this Annual Report.

YAHAYA BESAH, aged sixty-one (61), Malaysian. Independent Non-ExecutiveDirector since 20 August 2009. Chairman of the Remuneration Committee. Memberof the Audit Committee and the Risk Management Committee. He is also the Directorof 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 Treasuryfrom 1975 to 1988. Joined BNM in 1988 and had served in various insurance relateddepartments throughout his length of service. He was the former Director in theInsurance Supervision Division from 1995 until 1998 and also Director Internal Auditof BNM from 1998 until 2005. His last position in BNM was Director Special Projects(Deposit Insurance) before he retired in 2006.

TAKAFUL IKHLAS82

DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-two (52), Malaysian.Independent Non-Executive Director since 20 August 2009. Chairman of theNomination Committee. Member of the Audit Committee, the Risk ManagementCommittee and the Investment Committee. He is also the Director of MRT.

Obtained a Diploma in Business Studies from Ngee Ann Polytechnic, Singapore in1984, a Bachelor of Business Administration (Hons.) Degree from the InternationalIslamic University Malaysia (IIUM) in 1989 and a Doctorate in Business Administrationmajoring in Accounting and Finance from University of Strathclyde, Glasgow, UnitedKingdom in 1994.

He began his career with Coopers & Lybrand, Singapore as an Audit Assistant in1984. From 1989 until 1994, he joined IIUM as an Assistant Lecturer and continuedhis profession as an academician and held various positions in various departments.He joined Universiti Tun Abdul Razak in 2000 and was Head of Centre for GraduateStudies in 2001. He served as Dean of Faculty of Business in 2005 and is currentlyAssociate Professor and Dean of Graduate School of Business. In 2006, he joinedAmanie Business Solutions Sdn. Bhd. and is currently attached as a fellow Consultantwith the company. He currently sits on the Shariah Committees of EONCAP IslamicBank Berhad and MRT.

MOHD DIN MERICAN, aged fifty (50), Malaysian. Non-Independent Non-Executive Director since 2 March 2012. Member of the Investment Committee,the Risk Management Committee, the Nomination Committee and the RemunerationCommittee.

Other information on Mohd Din Merican is disclosed in the Directors’ Profile sectionof MNRB on page 20 of this Annual Report.

MEGAT DZIAUDDIN MEGAT MAHMUD, aged sixty-six (66), Malaysian.Independent Non-Executive Director since 17 April 2012. Member of the AuditCommittee, the Investment Committee and the Remuneration Committee.

Other information on Megat Dziauddin Megat Mahmud is disclosed in the Diretors’Profile section of MNRB on page 19 of this Annual Report.



SHARIAH COMMITTEEMEMBERS’ PROFILE

DATO' MOHD. MOKHTAR SHAFII, aged seventy (70). Chairman of TakafulIKHLAS’ Shariah Committee since 26 December 2002. Holds a Master of Art (1976)and Bachelor of Art (Honors) (1972) from the University of Malaya. Started his careerin 1975 as a lecturer with the University of Malaya. In 1984, he was appointed as theAssociate Professor (Dean) of the International Islamic University of Malaysia. In 1997,he was appointed as the Deputy Rector of Institut Pengajian Ilmu-Ilmu Islam followingwhich, he became Senior Vice President of Kolej Dar Al-Hikmah in 2002, a positionwhich he continues to hold until 2007. Also a Shariah Council member for MARCBerhad, and previously for Bank Kerjasama Rakyat Malaysia, Lembaga Tabung Hajiand Jabatan Kemajuan Islam Malaysia (JAKIM). Editor for Matla’al Badrain waMajma’ Al Bahrain Vol. 2, Selangor Religious Department publication. Currently he isalso a member of Selangor and Pahang Fatwa Council. In addition, he is also themember of the Majlis Ugama Islam dan Adat Resam Melayu Negeri Pahang andChairman of Shariah Advisory of Lembaga Zakat Selangor.

DATUK NIK MOUSTPHA HAJI NIK HASSAN, aged fifty-nine (59). ShariahCommittee member of Takaful IKHLAS since 26 December 2002. Director General ofIslamic Understanding Malaysia (IKIM). Holds a Bachelor of Business Administration(1977) and Master of Economics (1978) from the University of Ohio, United States ofAmerica. Prior to joining IKIM, he was the Dean of Kulliyyah Economics and,subsequently, Dean of Kulliyyah Post Graduate Studies at the International IslamicUniversity of Malaysia.

PROF. DR. AHMAD HIDAYAT BUANG, aged fifty (50). Shariah Committeemember of Takaful IKHLAS since 26 December 2002. Professor of the Academy ofIslamic Studies at University of Malaya. Previously, he was a Director for the Academyof Islamic Studies from October 2007 until January 2011. Holds a Bachelor in Shariahfrom the University of Malaya. Completed his Master in Law and Doctorate fromUniversity of London (specialising in Islamic Contracts). Former member of OCBCBank Berhad and CIMB Shariah Council.

TAKAFUL IKHLAS84

ASSOC. PROF. DR. SHAMSIAH MOHAMAD, aged forty-five (45). ShariahCommittee member of Takaful IKHLAS since 1 April 2009. She is an AssociateProfessor at the Department of Fiqh and Usul, Academy of Islamic Studies ofUniversity of Malaya. Currently, she is a member of Shariah Committee of theStandard Chartered Saadiq Berhad, a member of the Shariah Advisory Council ofSecurities Commission Malaysia and, Shariah Advisory Council of Bursa Malaysia.Besides that, she is also a member of Shariah Research Panel of Jabatan KemajuanIslam Malaysia (JAKIM) and a member of Shariah Advisory Council of Association ofIslamic Banking Institutions Malaysia (AIBIM). Both of her degree and Master are fromthe University of Malaya. She received her PhD from the University of Jordan. Herexpertise is in ‘Fiqh Muamalat’.

DR. MUHAMMAD NAIM OMAR, aged forty-four (44). Shariah Committeemember of Takaful IKHLAS since 1 April 2009. He is an Assistant Professor of IslamicLaw at Ahmad Ibrahim Kulliyyah of Laws, International Islamic University of Malaysiaand also OCBC Al Amin Shariah Committee Member. Graduated with a degree inShariah Law from Al-Azhar University in 1992. In 1999, he received a Master degreefrom Cairo University in Shariah Law and later received his PhD from the Universityof Wales, Lampeter, in 2006.

Shariah Committee Member’s Profile

MANAGEMENT TEAM


Dato’ Syed Moheeb Syed KamarulzamanAMII

President & Chief Executive Officer

Wan Mohd Fadzlullah Wan AbdullahB.Sc. Computer Science (Hons.)

Executive Vice President, Business Operations

Muhammad Jamalul Alam Mohd Isa @ Jefferey Zain Fellow – Society of Actuaries, Master of BusinessAdministration (Finance), B.Sc. Actuarial Science

Appointed Actuary


Zainurin JulaihiCA(M), MIBM, Master of Business Administration

Chief Financial Officer

Saiful Bahri SaroniM.Sc. ASA

Corporate & General Business

Wan Rosli Shaharuddin Wan YaacobMaster of Business Administration in Management

Family Agency Business Development

Kenny Ong Chun EngBachelor in Computer Science

New Market Business Development & Medical/Health

Rozhan YusofBachelor of Economics, ASA

Family Operations

Yushida HusinB.Sc. Statistics

Corporate Services

VICE PRESIDENTS

Muzni MohamadBachelor of Corporate Administrations

Human Resource Management

Zulkepli Shariff AbdullahB.Sc. Liberal Arts & Science

Risk Management

Wan Jemizan W. DeramanBachelor of Islamic Studies

Shariah Compliance

Raymond Wong Chee SiangBachelor of IT

Information Systems & Services

Raihan Abd RahimMaster of Business Administration

Customer Relationship Management

Ismail BasarBachelor of Public Administration

IKHLAS Academy

7 5

1

6 3 4 8

2

9

SENIOR MANAGEMENTTEAM

TAKAFUL IKHLAS86

1. Dato’ Syed Moheeb SyedKamarulzaman

2. Wan Mohd Fadzlullah WanAbdullah

3. Muhammad Jamalul Alam MohdIsa @ Jeffery Zain

4. Zainurin Julaihi5. Saiful Bahri Saroni

6. Wan Rosli Shaharuddin WanYaacob

7. Kenny Ong Chun Eng8. Rozhan Yusof9. Yushida Husin


TAKAFUL IKHLAS88

The President & Chief Executive Officer,

DATO’ SYED MOHEEB SYEDKAMARULZAMAN, leads the day-to-

day operations of Takaful IKHLAS

together with the key management staff

which includes:

WAN MOHD FADZLULLAH WANABDULLAH is the Executive Vice

President, Business Operations of

Takaful IKHLAS. He graduated from

Universiti Sains Malaysia with a Bachelor

of Science majoring in Computer

Science. Prior to his current

appointment, he was the Assistant

General Manager responsible for

business development with Amal

Assurance Bhd. (now known as CIMB

Aviva Assurance Berhad) for two (2)

years. He started his career with Aetna

Universal Insurance Bhd. (now known as

ING) and spent fifteen (15) years with the

Company, serving in various capacities

such as Agency Trainer, Life Claims

Executive, Branch Manager, Regional

Branch Manager, Regional Sales

Manager, Assistant Vice President in

General Division and ending his career

with ING in 2000 as Vice President of

Bumi Marketing Division and Regional

Vice President of Life Division. He joined

Takaful IKHLAS in September 2002.

MUHAMMAD JAMALUL ALAMMOHD ISA @ JEFFERY ZAIN is the

Appointed Actuary of Takaful IKHLAS

since October 2009. Graduated with a

Bachelor of Science in Actuarial Science

and later with a MBA in Finance, both

from St John’s University, New York,

United States of America. He has over

nineteen (19) years of practical

experience in the insurance and financial

services industry and is a Fellow of the

Society of Actuaries. He served a stint

with BNM’s Insurance Regulation

Department before joining Malaysian

National Insurance Berhad where he

stayed for six (6) years. He then joined

IPP Advisors Sdn. Bhd., a financial

planning firm as Executive Director. After

a brief stint as Research Fellow at the

National University of Malaysia where he

supervised and delivered the Actuarial

Science Degree course for

undergraduates, he joined ASH

Resources Sdn. Bhd., a freelance

management consulting firm, where he

carried out contractual actuarial

consulting work for numerous major

insurance corporations, both

conventional and takaful.

ZAINURIN JULAIHI is the Senior Vice

President & Chief Financial Officer of

Takaful IKHLAS. He obtained his Master

in Business Administration from UiTM.

He is a member of the MIA and Member

of the Institute of Bankers Malaysia

(MIBM). Prior to his current appointment,

he was the Vice President, Policy and

Control with Bumiputra Commerce

Finance Berhad. He joined Takaful

IKHLAS in September 2004.

SAIFUL BAHRI SARONI is the Senior

Vice President, Corporate & General

Business of Takaful IKHLAS. He

graduated with a Master and Bachelor of

Science from University of Iowa (1988

and 1986). In addition, he has been the

Associate Member of the Society of

Actuaries (ASA) since 1985. He has

eighteen (18) years of experience in the

insurance industry, six (6) years in the

conventional insurance and twelve (12)

years in the Takaful industry. He joined

Takaful IKHLAS in September 2002.



WAN ROSLI SHAHARUDDIN WANYAACOB is the Senior Vice President,

Family Agency Business Development of

Takaful IKHLAS. Graduated with a

Bachelor of Science (Business

Administration) and Master in 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 BNM

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.

KENNY ONG CHUN ENG is the

Senior Vice President, New Market

Business Development & Medical/Health

Division. Graduated with a Bachelor

Degree (Hons) in Computer Science from

the University of Manchester, United

Kingdom. His career began as an Analyst

with ICC Consultant Centre, which

provided strategic consulting to

Directors, CEOs and Top Management of

various medium and large corporations.

In 2000, he was appointed as a Principal

Consultant and Head of Decision

Support Systems of ICC before he joined

CNI Holdings Berhad in 2003, a public

listed consumer goods group as Senior

Manager – Strategy, Marketing &

Development. There he was involved in

Group Strategic Planning, Business

Development & Market Research,

Succession Planning & Talent

Management, Human Resource

Management, Information &

Communications Technology and

Training & Development. In 2009, he was

made Country Manager for CNI

Singapore and CNI Brunei as well as

being the Vice President, Group Strategy

& Development Division for CNI Holdings

Bhd. He joined Takaful IKHLAS in June

2011.

ROZHAN YUSOF is the Senior Vice

President, Family Operations of Takaful

IKHLAS. Graduated with a Bachelor of

Economics (1986) from Macquarie

University, Australia and is an Associate

of the Society of Actuaries, United States

of America. He started his career with

MCIS Berhad (now known as MCIS

ZURICH Insurance Berhad) in 1986 and

has served in various capacities such as

Manager New Business, Senior Manager,

Actuarial and Senior Manager, Annuity

and Investment-Linked. Prior to his

current appointment, he was the Senior

Vice President, Actuarial and Research of

Tahan Insurance Malaysia Berhad. He

joined Takaful IKHLAS in June 2004.

YUSHIDA HUSIN is the Senior Vice

President, Corporate Services 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

multi-national 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

also involved in several government

initiatives by the Economic Planning Unit

and Malaysia Administrative and

Modernisation Planning Unit (MAMPU).

She was one of the pioneer members

involved in the formation of Takaful

IKHLAS. She joined Takaful IKHLAS in

January 2003.

TAKAFUL IKHLAS

2012

2011

71%

2%

12% 15%

79%

10%10%

Fire

Motor

Marine


TAKAFUL IKHLAS’PORTFOLIO OF BUSINESS(A) GENERAL TAKAFUL

2012 2011CLASS RM’000 % RM’000 %

Fire 29,260 15 23,172 10

Motor 137,967 71 177,564 79

Marine 2,668 2 872 1

Miscellaneous 23,838 12 22,588 10

Total 193,733 100 224,196 100

90

1%

20%

33%

9%

38%


2012

2011

19%

27%

9%

45%

Individual

Mortgage

Group

Investment-Linked

(B) FAMILY TAKAFUL

2012 2011CLASS RM’000 % RM’000 %

Individual 226,602 45 201,450 38

Mortgage 95,094 19 105,553 20

Group 136,754 27 179,527 33

Investment-Linked 43,186 9 49,381 9

Total 501,636 100 535,911 100

91

Through experience and expertise, we helpnurture and grow the retakafulindustry.

MNRB Retakaful Berhad (MRT)

was incorporated in December 2006

and has an Authorised Capital of

RM500 million, a Paid-up Capital of

RM100 million. MRT plays a key

role in promoting Malaysia as

a leading centre for the

development of the Islamic

finance industry.

MNRB RETAKAFUL BERHADMNRB RETAKAFUL BERHAD

MNRB RETAKAFUL94

CORPORATEPROFILEMNRB Retakaful Berhad (MRT), a wholly-owned subsidiary

of MNRB Holdings Berhad, was registered as the first

Retakaful Operator in Malaysia by Bank Negara Malaysia on

1 August 2007. The setting up of MRT is another effort by the

MNRB Group as a significant player in the global takaful

industry and to assist in promoting Malaysia as a leading

centre for the development of the Islamic finance industry.

MRT is involved in family and general retakaful business.


BOARD OF DIRECTORS


ISMAIL MAHBOBPresident & Chief Executive OfficerNon-Independent Executive Director(Retired with effect from 16 May 2012)

DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDINIndependent Non-Executive Director

MEGAT DZIAUDDIN MEGAT MAHMUDIndependent Non-Executive Director

DATUK MOHD KHALIL DATO’ MOHD NOORNon-Independent Non-Executive Director

YAHAYA BESAHIndependent Non-Executive Director

DR. SYED MUSA SYED JAAFAR ALHABSHIIndependent Non-Executive Director

MOHD DIN MERICANNon-Independent Non-Executive Director(Appointed with effect from 2 March 2012)

COMPANY SECRETARIES


AUDIT COMMITTEE



Yahaya BesahDr. Syed Musa Syed Jaafar Alhabshi

SHARIAH COMMITTEE

Ir. Dr. Muhamad Fuad Abdullah (Chairman)

Prof. Dr. Mohamad Sado Al-JarfAssoc. Prof. Dr. Said BouheraouaDr. Syed Musa Syed Jaafar AlhabshiDatuk Nik Moustpha Haji Nik Hassan(Appointed with effect from 1 April 2012)


Dato’ Syed Ariff Fadzillah Syed Awalluddin (Chairman)

Sharkawi AlisDatuk Mohd Khalil Dato’ Mohd NoorDr. Syed Musa Syed Jaafar AlhabshiMohd Din Merican(Appointed with effect from 29 May 2012)


Yahaya Besah (Chairman)


Datuk Mohd Khalil Dato’ Mohd NoorMohd Din Merican(Appointed with effect from 29 May 2012)


Dr. Syed Musa Syed Jaafar Alhabshi (Chairman)

Megat Dziauddin Megat MahmudDato’ Syed Ariff Fadzillah

Syed AwalluddinYahaya Besah


Datuk Mohd Khalil Dato’ Mohd Noor (Chairman)

Megat Dziauddin Megat MahmudIsmail Mahbob(Retired with effect from 16 May 2012)

Mohd Din Merican(Appointed with effect from 29 May 2012)

AUDITORS

Ernst & YoungLevel 23A, Menara MilleniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur, MalaysiaTel : +603 7495 8000Fax : +603 2098 5332

PRINCIPAL BANKER

CIMB Islamic Berhad

REGISTERED OFFICE

9th Floor, Bangunan Malaysian ReNo.17, Lorong DungunDamansara Heights50490 Kuala Lumpur, MalaysiaTel : +603 2096 7007Fax : +603 2096 8007Email : [email protected] : www.mnrb-retakaful.com.my


MNRB RETAKAFUL96

SHARKAWI ALIS, aged sixty-five (65), Malaysian. Non-Independent Non-

Executive Chairman of MRT since 24 December 2007. Member of the Nomination

Committee.

Other information on Sharkawi Alis is disclosed in the Directors’ Profile section of

MNRB on page 18 of this Annual Report.

DATO’ SYED ARIFF FADZILLAH SYED AWALLUDDIN, aged sixty-nine (69),

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

Directors’ Profile section of MNRB on page 18 of this Annual Report.

MEGAT DZIAUDDIN MEGAT MAHMUD, aged sixty-six (66), Malaysian.

Independent Non-Executive Director since 6 August 2007. Chairman of the Audit

Committee and member of the Remuneration Committee and Investment Committee.

Other information on Megat Dziauddin Megat Mahmud is disclosed in the Directors’

Profile section of MNRB on page 19 of this Annual Report.

DIRECTORS’PROFILE


DATUK MOHD KHALIL DATO’ MOHD NOOR, aged seventy-one (71),

Malaysian. Non-Independent Non-Executive Director since 21 March 2008. Chairman

of the Investment Committee. Member of the Nomination Committee and the Risk

Management Committee.

Other information on Datuk Mohd Khalil Dato’ Mohd Noor is disclosed in the

Directors’ Profile section of MNRB on page 19 of this Annual Report.

YAHAYA BESAH, aged sixty-one (61), Malaysian. Independent Non-Executive

Director since 4 July 2008. Chairman of the Risk Management Committee. Member

of the Audit Committee and the Remuneration Committee.

Other information on Yahaya Besah is disclosed in the Directors’ Profile section of

Takaful IKHLAS on page 81 of this Annual Report.

DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-two (52), Malaysian.

Independent Non-Executive Director since 23 July 2008. Chairman of the

Remuneration Committee. Member of the Audit, Nomination Committee and Shariah

Committee.

Other information on Dr. Syed Musa Syed Jaafar Alhabshi is disclosed in the

Directors’ Profile section of Takaful IKHLAS on page 82 of this Annual Report.

MOHD DIN MERICAN, aged fifty (50), Malaysian. Non-Independent Non-Executive

Director since 2 March 2012. Member of the Investment Committee, the Risk

Management Committee and the Nomination Committee.

Other information on Mohd Din Merican is disclosed in the Directors’ Profile section

of MNRB on page 20 of this Annual Report.

MNRB RETAKAFUL98

SHARIAH COMMITTEEMEMBERS’ PROFILE

IR. DR. MUHAMAD FUAD ABDULLAH, aged fifty-nine (59). Shariah Committeemember of MRT since 1 June 2011. Obtained his Bachelor Degree in ElectricalEngineering from Southampton University in 1977. In 1982, he obtained his MastersDegree in Electrical Engineering from the same university and in 1994, obtained hissecond Bachelor Degree in Shariah from Jordan University. In 1996, he completed hisPh.D in Muslim Civilisation from Aberdeen University in Scotland.

He started his career with Jabatan Kerja Raya Malaysia as an Electrical Engineer in1977. He then joined Uniphone Sdn. Bhd. as an engineering logistics manager from1983 to 1992 after which he became an academic staff member of UniversitiKebangsaan Malaysia (UKM). He left UKM in 1996 for a short stint with Kolej Uniti ofNegeri Sembilan before becoming a Director in an engineering consultancy firm Five-H Associates Sdn. Bhd. until he left as its Managing Director in 2006. He is currentlythe sole proprietor of Muhamad Fuad Consulting.

He has been quite active in the activities of the Board of Engineers Malaysia (BEM)as well as the Institution of Engineers Malaysia (IEM) of which he is a Fellow member(FIEM), beside being a registered Shariah Lawyer in Perak. He has been the Chairmanof the Shariah Committee of the MIDF Group of Companies since 2005 and a memberof the Shariah Advisory Board for Halal (Labuan) Foundation since 2010. By virtue ofbeing a Certified Shariah Individual with the Securities Commission Malaysia, he hasbeen appointed as the Designated Shariah Officer as well as a member of the ShariahAdvisory Committee of BIMB Securities Sdn. Bhd. since July 2011. As of 1 February2012, he has been appointed by the Yang di-Pertuan Agong to be a member of MajlisAgama Islam Wilayah Persekutuan (MAIWP). He has written and presented severalpapers on various topics related to Islam, Islamic economics and engineering ethics.

PROF. DR. MOHAMMAD SADO ALJARF, aged fifty-four (54). ShariahCommittee member of MRT since 1 August 2007. Holds a B.A in Islamic Shariah (Fiqh& Usul Fiqh) from King Abdul Aziz University, Makkah, Saudi Arabia in 1978. Obtainedhis M.A in Islamic Economics from Umm Al-Qura University, Makkah, Saudi Arabia in1983 and completed his Ph.D in Islamic Economics from the same university in 1989.

He started his career with Umm Al-Qura University since 1988 as an AssistantProfessor in the Department of Islamic Economics. Prior to his current appointmentas a Professor in the Department of Islamic Economics, he was an AssociateProfessor in the Umm Al-Qura University until 2001. His areas of expertise areInsurance, Micro & Macro Economics, Money, Financing & Banking and E-business.Actively involved in writing books, articles and speaks for various internationalconferences and symposiums.

He is currently the Professor of Islamic Economics at the Faculty of Islamic Shariah,Umm Al-Qura University in Makkah, Saudi Arabia.


ASSOC. PROF. DR. SAID BOUHERAOUA, aged forty-five (45). ShariahCommittee member of MRT since 1 April 2011. Holds a Bachelor Degree in Fiqh andUsul Al-Fiqh from University of Algiers in 1991. In 1998, he obtained his MastersDegree from the International Islamic University of Malaysia (IIUM) and in 2002, hecompleted his Ph.D from the Department of Fiqh and Usul al-Fiqh of the sameuniversity.

He started his career with University Sains Islam Malaysia (USIM) as a Lecturer in2003. After two (2) years, he became an Assistant Professor Dr. & Associate ProfessorDr. at the Ahmad Ibrahim Kulliyyah of Laws in IIUM, from year 2004 to 2009. He thenresumed his career path as a Senior Researcher at the International Shari’ah ResearchAcademy for Islamic Finance. He is also a member of the Shari’ah Committee forAffin Islamic Bank since March 2008.

He has written several books as well as contributes for chapters in books and articles.Prior to his achievements and contributions towards the industry, he had won theLamya al-Faruqi Award for Academic Excellence in 1999, organised by InternationalInstitute of Islamic Thought & International Islamic University Malaysia.

DR. SYED MUSA SYED JAAFAR ALHABSHI, aged fifty-two (52). ShariahCommittee member of MRT since 1 June 2011. Independent Non-Executive Directorsince 23 July 2008.

Other information on Dr. Syed Musa Syed Jaafar Alhabshi is disclosed in theDirectors’ Profile section of Takaful IKHLAS on page 82 of this Annual Report.

DATUK NIK MOUSTPHA HAJI NIK HASSAN, aged fifty-nine (59). ShariahCommittee member of MRT since 1 April 2012.

Other information on Datuk Nik Moustpha Haji Nik Hassan is disclosed in the ShariahCommittee Member’s Profile section of Takaful IKHLAS on page 83 of this AnnualReport.

MNRB RETAKAFUL100

MANAGEMENT TEAMASSISTANT VICE PRESIDENTS

Zaharan Abdul Aziz

MBA (Finance), CFP CERT TM

Corporate Services and

Risk Management & Compliance

Abdul Aziz Hasan

ACII (UK), AMII

Underwriter, Treaty Retakaful (General)

Shahril Jefry Jaafar

B.Eng. (Electrical Engineering)

Underwriter, Facultative Retakaful (General)

Huszaidey Thamby Hussain

MBA (Business and Management), BA (Hons.) Arts

Underwriter, Family Retakaful

9%

16%

9%

66%

9%

14%

17%

60%


(B) FAMILY

2012 2011CLASS RM’000 % RM’000 %

Gross Contribution 26,000 – 12,897 –

2012

2011

MRT’S PORTFOLIO OF BUSINESS

Fire

Motor


Marine

(A) GENERAL

2012 2011CLASS RM’000 % RM’000 %

Fire 35,130 60 28,763 66

Motor 4,982 9 4,021 9

Miscellaneous Accidents 7,892 14 7,063 16

Marine 10,095 17 3,925 9

Total 58,099 100 43,772 100

Our commitment to become a renownedinternationa l risk solutions providerhas motivated us to succesfully spread our wings far and wide.

Malaysian Re (Dubai) Ltd. (MRDL)

was incorporated in December 2006

and has an Authorised Capital of

USD5 million, a Paid-up Capital of

USD2 million. MRDL is principally

involved in growing Malaysia Re’s

business in the Middle East and

North Africa (MENA).

MALAYSIAN RE (DUBAI) LTDMALAYSIAN RE (DUBAI) LTD

MALAYSIAN RE (DUBAI) LTD.104

CORPORATEPROFILEMalaysian Re (Dubai) Ltd. (MRDL), a wholly-owned

subsidiary of MNRB Holdings Berhad, was incorporated on

7 December 2006. MRDL is licensed under the laws of the

Dubai International Financial Centre (DIFC) and regulated by

the Dubai Financial Services Authority (DFSA).

Since its inception, MRDL has been focusing on developing Malaysian Re’s business

in the Middle East and North Africa (MENA) region. It functions primarily to develop

relationships with clients in these regions, provide servicing and underwriting support

for them. All reinsurance businesses of MRDL would be fully underwritten by

Malaysian Re, an ‘A-’ (Excellent) rated company by A.M. Best Co. and ‘A’ by Fitch

Ratings.

MRDL will continue to expand its market presence in the MENA region and is

committed in being at the forefront of strong leadership in the region.


BOARD OF DIRECTORS

SHARKAWI ALISNon-IndependentNon-Executive Chairman

HASHIM HARUNNon-IndependentNon-Executive Director

MOHD DIN MERICANNon-IndependentNon-Executive Director(Appointed with effect from 5 February 2012)

COMPANY SECRETARY

Norazman Hashim (MIA 5817)

AUDITORS

Moore StephensChartered AccountantsSuite M5-A, Zalfa BuildingAl Garhoud AreaP. O. Box 28817Dubai, United Arab EmiratesTel : +971 4 2820811Fax : +971 4 2820812

PRINCIPAL BANKER

Standard Chartered BankPrecinct Building 1DIFC BranchDubai, United Arab EmiratesTel : +971 4 508 3043Fax : +971 4 4282 502

REGISTERED OFFICE

Unit 101, Level 1Gate Village 4, The Gate DistrictDubai International Financial CentreP. O. Box 506571Dubai, United Arab EmiratesTel : +971 4 3230388Fax : +971 4 3230288Website : www.malaysian-re.com.my


MALAYSIAN RE (DUBAI) LTD.106

SHARKAWI ALIS, aged sixty-five (65), Malaysian. Non-Independent Non-

Executive Chairman since 17 December 2007.

Other information on Sharkawi Alis is disclosed in the Directors’ Profile section of

MNRB on page 18 of this Annual Report.

MOHD DIN MERICAN, aged fifty (50), Malaysian. Non-Independent Non-Executive

Director since 5 February 2012.

Other information on Mohd Din Merican is disclosed in the Director’s Profile section

of the MNRB on page 20 of this Annual Report.

HASHIM HARUN, aged fifty-eight (58), Malaysian. Non-Independent

Non-Executive Director since 29 June 2010.

Other information on Hashim Harun is disclosed in the Directors’ Profile section of

Malaysian Re on page 66 of this Annual Report.

DIRECTORS’PROFILE

ZAINI ABDUL AZIZ is the Senior Executive Officer of

Malaysian Re (Dubai) Ltd. (MRDL). Prior to this, he served as

Vice President, International Treaties Department of

Malaysian Reinsurance Berhad (Malaysian Re), a sister

company of MRDL. He has been with Malaysian Re for

almost 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 the many aspects of reinsurance business.

AVINASH ANANT BAGUL joined MRDL in June 2008 as

Vice President & Senior Underwriter. He graduated with a

Bachelor of Science (Chemistry) Degree from the University

of Mumbai and holds a Diploma from Insurance Institute of

India. He started his career in the Reinsurance Department

of General Insurance Corporation (GIC) of India in 1988 and

rose to Senior Manager cadre before joining MRDL. During

his twenty (20) years with the Reinsurance Department of

GIC, he handled various portfolios including Treaty and

Facultative Business of Indian Domestic Companies as well

as Foreign Inward Business from the advanced European

Market.



MMIP SERVICES108

CORPORATEPROFILEThe Malaysian Motor Insurance Pool (MMIP), established in1992 by insurance companies registered under the InsuranceAct 1996, was formed to provide motor insurance to vehicleowners who are unable to obtain insurance protection for theirvehicles. Malaysian Re was appointed as the AdministrationManager for the pool.

MMIP Services Sdn. Bhd. (MSSB), a subsidiary of MNRBHoldings Berhad, was incorporated on 23 March 2006.Following the incorporation, the duties and functions of theAdministration Manager were transferred from Malaysian Reto MSSB on 12 April 2006.

The duties and functions of MSSB, include inter alia, dealingwith the administration, accounts, investment of the Poolsfund and Bodily Injury claims settlements.


BOARD OF DIRECTORS

HASHIM HARUNDirector

NORAZMAN HASHIMDirector

COMPANY SECRETARY

Lena Abd Latif (LS 8766)

AUDITORS

Ernst & YoungLevel 23A, Menara MilleniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : +603 7495 8000Fax : +603 2095 5332

PRINCIPAL BANKER

CIMB Bank Berhad

REGISTERED OFFICE

6th Floor, Bangunan Malaysian ReNo. 17, Lorong DungunDamansara Heights50490 Kuala LumpurTel : +603-2096 8006Fax : +603-2096 7006


110 MNRB

CALENDAR OFSIGNIFICANT EVENTS31 March 2011

Anuar Mohd Hassan Retires AsMNRB President & Group CEO

Anuar Mohd Hassan retired as MNRBPresident & Group CEO, effective 31 March 2011, after successfullyleading the company for thirty-one (31)years. Anuar who is a Chartered Insurerand an Associate Member of theMalaysian Insurance Institute since 1996,attended and completed the AdvancedManagement Programme (AMP)conducted by the Harvard BusinessSchool in 2004.

Anuar has more than thirty (30) years ofexperience in the insurance industry.

20 April 2011

Minggu Saham Amanah Malaysia2011 In Ipoh, Perak

In conjunction with Minggu SahamAmanah Malaysia 2011 (MSAM 11),organised by Permodalan NasionalBerhad (PNB) held at the SportsComplex Ipoh City Council, Perak from20 to 26 April, the MNRB Group & itssubsidiary, Takaful IKHLAS, once againcontinued its involvement in the 13thconsecutive year, for MNRB, and for the8th year, for Takaful IKHLAS.

As a partner for Rakan ProgramKeagamaan MSAM 2011, TakafulIKHLAS was directly involved in everyreligious activity organised at MSAM2011 in Ipoh such as “Forum Perdana,Al-Hidayah Program, Al-KuliyahProgram” and “Pertandingan MengejaJawi Peringkat Sekolah-Sekolah NegeriPerak”.

20 April 2011

“IKHLAS Rumah Impianku” Campaign Launch

Takaful IKHLAS launched “IKHLASRumah Impianku” Campaign inconjunction with the opening of MingguSaham Amanah 2011 in Ipoh, Perak. Thecampaign was officiated by YAB Dato'Seri Mohd Najib Tun Abdul Razak, thePrime Minister of Malaysia.

This campaign was held specifically forcivil servants who chose Takaful IKHLASas the takaful protection provider for theirhousing loans approved by the HousingLoan Division between 1 April 2011 and30 September 2011. IKHLAS RumahImpianku Campaign is a partnershipbetween Takaful IKHLAS and Anjung SeriMagazine. This smart partnershipprovides an opportunity for Anjung Seri’sinterior design experts to participate inthe Bonanza Draw winner’s dreamhouse.

24 April 2011

Takaful IKHLAS Signs MoU WithKoperasi Pekerja-Pekerja BandarayaIpoh Berhad

Takaful IKHLAS signed a Memorandumof Understanding with Koperasi Pekerja-pekerja Bandaraya Ipoh Berhad. Thesigning ceremony was held at the TakafulIKHLAS Minggu Saham Malaysia 2011exhibition area. The two protectionschemes, “The Group Credit TakafulPlan” and “The Group TakafulComprehensive Scheme – Flexi EB”, willassist borrowers in the event of death,permanent disability, partial permanentdisability and provide for hospitalisationallowance, funeral benefits, criticalillnesses and savings.

6 May 2012

Awareness Before Changes(ABC) Programme

Takaful IKHLAS in collaboration withC-Salt conducted a programme entitledAwareness Before Changes (ABC). Thefirst ABC programme was conducted in2010. The programme’s objective was tohelp participants realise the importanceof awareness before making changes.The course was conducted over fivesessions at ABC Camp in Janda Baik,Pahang by Colonel Izzaiddin. Two-hundred-sixty (260) participants attendedthe 4-day, 3-night programme. Theactivities conducted include the GreatRace Run, a Workshop and Tazkirah.

25 May 2011

Takaful IKHLAS Receives MalaysiaBusiness Awards 2011

Takaful IKHLAS was honoured by theKuala Lumpur Malay Chamber ofCommerce under the Merit IndustrialAward category for the insurance sectorin conjunction with the “MalaysiaBusiness Awards 2011” held at BerjayaTimes Square Hotel. The award waspresented by YB Senator Dato’ SeriSharizat Jalil, the then Minister ofWomen, Family and CommunityDevelopment to Takaful IKHLAS’President & CEO, Dato’ Syed MoheebSyed Kamaruzzaman.

1

2

3


31 May 2011

MNRB Analysts’ Briefing

MNRB announced its unaudited resultsfor the financial year ended 31 March2011 at an Analysts’ Briefing held at itsHead Office. The Group recorded a 8.8%improvement in revenue, fromRM1,345.2 million in the preceding yearto RM1,463.0 million.

Chairing the Group’s Analysts Briefing,Datuk Ramlan Abdul Rashid, GroupChief Operating Officer of MNRB saidthat the higher revenue was a result of anincrease in the gross premium written bythe Group’s reinsurance subsidiary andan increase in the wakalah fees earnedby the Group’s takaful and retakafuloperator.

1 June 2011

Alliance Islamic Bank PartnersWith Takaful IKHLAS and FWUMalaysia To Provide CustomisedTakaful Products

Alliance Islamic Bank launched theAlliance Family Takaful Investment-Linked Plan, a Shariah-compliant familytakaful investment-linked product. Thisproduct launch is a tripartitecollaboration between Alliance IslamicBank Berhad, Takaful IKHLAS, a generaland life takaful provider, and FWUMalaysia, a subsidiary of German-basedfinancial services provider, FWU Group.

29 June 2011

Fitch Upgrades ‘A’ IFS Rating ToMalaysian Re With Outlook Stable

Fitch Ratings upgraded Malaysian Re’sInsurer Financial Strength (IFS) to ‘A’ from‘A-’. Fitch Ratings also confirmed thatthe outlook remains stable.

The upgrade bears testament as to the Company’s resilient financialperformance for the financial year ended31 March 2011 and continued efforts tode-risk its balance sheet. It is also areflection of Malaysian Re’s dominantposition in the Malaysian market andsound capital position.

4 5

22 July 2011

Takaful IKHLAS And Al-MadinahInternational University CollaborateFor Accreditation Of TrainingProgrammes

Takaful IKHLAS and Al-MadinahInternational University signed aMemorandum of Understanding tofacilitate the certificate accreditation oftraining programmes for representatives,staff and participants who attendtrainings. The agreement was signed bythe President & Chief Executive Officer ofTakaful IKHLAS, Dato’ Syed MoheebSyed Kamarulzaman, and ProfDr. Mohammad Khalifa Al-Tamimi, Rectorof Al-Madinah International University.

The collaboration between professionalacademicians and takaful practitionerswill help ensure quality-trainingprogrammes from various aspects,including modules, frameworks andcontents.

27 July 2011

1,100 Agents Celebrate TakafulIKHLAS Agency Awards Night

Takaful IKHLAS held the 7th TakafulIKHLAS Agency Awards Night at SunwayResort Hotel & Spa, Bandar Sunway. Itwas attended by more than one-thousand-one-hundred (1,100) agents.

The highlight of the evening was thegrand recognition ceremony to honourthe outstanding achievements of TakafulIKHLAS agents for the 2010/2011financial year. Takaful IKHLAS has morethan six-thousand (6,000) agents whopromote the Company’s plans.

112 MNRB

8 July 2011

Takaful IKHLAS Entertains MembersOf The Media And Business PartnersIn Sabah

Takaful IKHLAS entertained members ofthe media and its business partners at anappreciation event at Sutera HarbourHotel, Kota Kinabalu. The event was alsoattended by YB Dato’ Seri Haji Nasir Tun Haji Sakaran, Minister in the Chief Minister’s Department, SahibusSamahah Datuk Haji Ahmad Alawi HajiAdnan, the State Mufti of Sabah, Dato’Syed Moheeb Syed Kamarulzaman, thePresident & Chief Executive Officer ofTakaful IKHLAS and its seniormanagement.

Calendar of Significant Events

76


The Hong Kong and ShenzhenConvention, held from 25 to 28 June2011, was attended by seven TakafulIKHLAS’ representatives and theirfamilies. The Bandung Convention – anannual convention destination – was heldfrom 13 to 16 May 2011.

19 August 2011

Iftar With The MNRB Family

The MNRB Group organised a “MajlisBerbuka Puasa bersama Kakitangan danKeluarga MNRB” which was held atBangunan Malaysian Re, Kuala Lumpur.The buka puasa was followed byMaghrib prayers, dinner and Terawihprayers. A mini bazaar was also set up incollaboration with Rumah Titian Kaseh(RTK) to raise funds for the orphanage.The bazaar attracted businesses likeAeisha Shop, Trendy Muslimah andA.N.D Collections, offering all kinds ofproducts to prepare the Muslims for theSyawal celebration.

1 September 2011

Investment-Linked Programme

Investment-linked is an importantproduct designed by Takaful IKHLAS.Hence, Akademi IKHLAS together withJabatan Pembangunan PerniagaanAgensi Takaful Keluarga organised atraining course on Investment-Linkedentitled “Investment-Linked BasicCourse”. This programme was open toall agencies wishing to marketInvestment-linked products – Premier orCapital. As at February 2012, fifty-nine(59) participants have attended thecourse, which was held throughoutMalaysia including Sabah and Sarawak.

27 July 2011

Foreign Convention

The Convention of Umrah ZiarahAmman, Jordan was held from 27 July to8 August 2011 comprising a total offorty-five (45) agents including familymembers. The trip was made moremeaningful following the attendance ofthe President & Chief Executive Officer,Dato’ Syed Moheeb SyedKamaruzzaman, who also performed theumrah. The Spain Convention which washeld from 8 to 13 June 2011 attractedtwenty-seven (27) agents. They alsovisited popular tourist attraction sitessuch as the historical Cordova andGranada and the scenic city of Madrid.The most memorable experience was theopportunity to view the splendour of thebeautiful Al-Hambra Palace.

8

9

113

MNRB


14 September 2011

MNRB’s “Rumah Terbuka &Syawal Nan Ceria”

To celebrate the joyous month of Syawal,MNRB organised a “Rumah Terbuka &Syawal Nan Ceria” as a treat foremployees and business partners atDewan Perdana Felda. Guests weretreated to the festive Syawal musicperformed by The Royal OrdnanceUnplugged. This annual event isorganised to foster good relationship andbuild camaraderie among the Group’semployees and its business partners.

23 September 2011

MNRB 38th Annual GeneralMeeting

At its 38th Annual General Meeting,shareholders were informed that MNRBrecorded a total revenue of RM1.46billion, as compared with RM1.34 billionin the preceding year.

MNRB’s shareholders also approved thedeclaration of a First and Final dividendof twenty percent (20%) less twenty-fivepercent (25%) tax to be paid on 19 October 2011.

24 November 2011

Takaful IKHLAS, MAA TakafulAnd Fosmec Sign Takaful CoverageMoU For Foreign Students InMalaysia

Takaful IKHLAS together with MAATakaful Berhad (MAA Takaful) andFOSMEC Sdn. Bhd. (FOSMEC) signed a “FOREIGN STUDENT TAKAFULCOVERAGE” Memorandum ofUnderstanding. The agreement wassigned by Dato' Syed Moheeb SyedKamarulzaman, President & ChiefExecutive Officer of Takaful IKHLAS,Salim Majid Zain, Chief Executive Officerof MAA Takaful and Datuk Wira Dr. HajiBahari Datuk Haji Abu Mansor, Chairmanof FOSMEC. The event was witnessedby Habib Zam Zam Haji Ab. Latif, Headof Senior Deputy Director, Department ofStudent Development Affairs, Ministry ofHigher Education.

9 January 2012

Mohd Din Merican Appointed AsMNRB President & GCEO

MNRB announced the appointment ofMohd Din Merican as the President &Group Chief Executive Officer (GCEO),replacing Anuar Mohd Hassan, theformer President & GCEO of MNRB.

Mohd Din Merican had previously servedas the Chief Executive Officer of EtiqaInsurance Berhad. He brings with himtwenty-six (26) years of invaluableindustry experience to the MNRB Group.

11

10

114

12 13


12 January 2012

Takaful IKHLAS WinsBrandlaureate Award

The President & Chief Executive Officerof Takaful IKHLAS, Dato’ Syed MoheebSyed Kamarulzaman, was honoured as“CEO of The Year” at The BrandLaureate– SMEs Chapter Awards 2011 by theAsia Pacific Brands Foundation (APBF) ata grand presentation ceremony held atthe Sunway Resort & Spa Hotel.

At the event, Takaful IKHLAS also wontwo key awards, one of which was theBrand of the Year award.

In addition, Takaful IKHLAS won the“Product Branding – The Best Brand –Health Insurance Service”, through itsIKHLAS Medic Assist Takaful (IMAT)product for the fourth consecutive year.

26 January 2012

A.M. Best Reaffirms Ratings OfMalaysian Re

A.M. Best Co. reaffirmed Malaysian ReFinancial Strength Rating of ‘A-’(Excellent) and an Issuer Credit Rating of‘a-’. A.M. Best also confirmed theoutlook for both ratings as Stable.

8 February 2012

Fitch Ratings Reaffirms ‘A’ RatingsOf Malaysian Re

Fitch Ratings reaffirmed Malaysian ReInsurer Financial Strength rating (IFS) at‘A’. Fitch Ratings also confirmed that theoutlook remains stable.

The affirmation reflects Malaysian Re’ssustained premium growth, consistentfinancial performance, strong marketfranchise in Malaysia, as well as itscontinued sound capital position relativeto its business profile.

14

116 MNRB


14 February 2012

Basic Agency ManagementCourse (BAMC)

The BAMC 3-day/2-night Course washeld at Genting View Resort, Pahang,and attended by twenty-three (23)Takaful IKHLAS’ agents. The objective ofthe course was to train the agents inidentifying the leadership qualitiesrequired by an Agency Head to managea successful agency and enhance theirknowledge in managing a systematicand successful agency.

The participants were taught to acquireknowledge as to how an Agency Headshould be capable of fostering the spiritof teamwork in the agency. In addition,the participants were also taught how toapply the methods or skills they learnedto manage their own respectiveagencies.

20 February 2012

Takaful IKHLAS And MNRBRetakaful Win In Top Islamic FinanceAwards

Takaful IKHLAS and MRT won the BestIslamic Takaful Provider and Bestre-Takaful Provider awards, respectively,at the Islamic Finance News (IFN) ServiceProviders Poll 2011 Awards held atShangri-La Hotel, Kuala Lumpur.

The awards are a glowing tribute of theindustry’s confidence in both companies’sound business strategy and prudentmanagement. The awards by the IFNService Providers Poll 2011 is the fourthfor TAKAFUL IKHLAS and the first forMRT.

20 February 2012

Takaful Ikhlas Win Best TakafulProvider

TAKAFUL IKHLAS won the Best TakafulProvider at the Euromoney IslamicFinance Awards 2011.

24 February 2012

Fitch Ratings Reaffirms ‘BBB+’Rating Of MNRB Retakaful Berhad(MRT)

Fitch Ratings reaffirmed MRT InsurerFinancial Strength (IFS) rating of ‘BBB+’.Fitch Ratings also confirmed that theoutlook remains stable.

The rating takes into considerationMRT’s sound capitalisation relative to business growth and prudentmanagement.

16

15

118 Directors' Report122 Statement by Directors122 Statutory Declaration123 Independent Auditors' Report125 Income Statements126 Statements of Comprehensive Income127 Statements of Financial Position129 Statements of Changes in Equity130 Statements of Cash Flows132 Notes to the Financial Statements

FINANCIALSTATEMENTS

118 MNRB

The directors have pleasure in presenting their report together with the audited Snancial statements of the Group and ofthe Company for the Snancial year ended 31 March 2012.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries have been disclosed in Note 18 to the Snancial statements. There have beenno signiScant changes in the nature of the principal activities of the Group and of the Company during the Snancial year.

RESULTS

Group CompanyRM’000 RM’000

Net proSt for the year 84,015 30,588

There were no material transfers to or from reserves or provisions during the Snancial year other than as disclosed in theSnancial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the Snancial yearwere not substantially affected by any item, transaction or event of a material and unusual nature other than the effectsarising from the recognition of impairment loss at the Group level on Qard to the general retakaful fund of the Company’sretakaful subsidiary as disclosed in Note 11 to the Snancial statements.

DIVIDENDS

The amount of dividends paid by the Company since the end of the previous Snancial year was as follows:

RM’000

In respect of the Snancial year ended 31 March 2011:First and Snal dividend of 20% tax (less 25% tax), paid on 19 October 2011 31,960

At the forthcoming Annual General Meeting, a Srst and Snal dividend in respect of the current Snancial year ended31 March 2012 of 17% less 25% tax based on the issued and paid-up share capital of 213,069,500 ordinary shares atthe date of this report, amounting to a total dividend of RM27,166,361, will be proposed for shareholders’ approval. TheSnancial statements for the current Snancial year do not reTect this proposed dividend. Such dividend, if approved by theshareholders, will be accounted for in the shareholders’ equity as an appropriation of retained proSts in the next Snancialyear ending 31 March 2013.

DIRECTORS

The names of the directors of the Company in ofSce since the date of the last report and at the date of this report are:

Sharkawi bin AlisMohd Din bin Merican (appointed on 9 January 2012)P. RaveenderenY. Bhg. Dato’ Syed Ariff Fadzillah bin Syed AwalluddinYusoff bin YaacobY. Bhg. Datuk Mohd. Khalil bin Dato’ Mohd. NoorMegat Dziauddin bin Megat MahmudPaisol bin Ahmad

DIRECTOR’S REPORT


DIRECTORS (CONT’D)

In accordance with Article 86 of the Articles of Association of the Company, P. Raveenderen and Yusoff bin Yaacob retireby rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

In accordance with Article 92 of the Articles of Association of the Company, Mohd Din bin Merican retires and, beingeligible, offers himself for re-election.

Y. Bhg. Datuk Mohd. Khalil bin Dato’ Mohd. Noor retires pursuant to Section 129 of the Companies Act, 1965 and aresolution is being proposed for his re-appointment as director under the provision of Section 129(6) of the said Act tohold ofSce until the next Annual General Meeting of the Company.

DIRECTORS’ BENEFITS

Neither at the end of the Snancial year, nor at any time during that year, did there subsist any arrangement to which theCompany was a party, whereby the directors might acquire beneSts by means of acquisition of shares in the Company orany other body corporate.

Since the end of the previous Snancial year, no director has received or become entitled to receive a beneSt (other thanbeneSts included in the aggregate amount of emoluments received or due and receivable by the directors or the Sxedsalary and beneSts receivable as a full-time employee of the Company as shown in Notes 9, 10 and 39 to the Snancialstatements) by reason of a contract made by the Company with any director or with a Srm of which the director is amember, or with a company in which the director has a substantial Snancial interest.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in ofSce at the end of the Snancial year inshares in the Company during the Snancial year were as follows:

Number of ordinary shares of RM1.00 each1 April 31 March

2011 Acquired Sold 2012

Direct Interest:P. Raveenderen 10,000 – – 10,000Y. Bhg. Datuk Mohd. Khalil bin Dato’ Mohd. Noor 5,000 – – 5,000

Other than as stated above, none of the directors in ofSce at the end of the Snancial year had any interest in shares inthe Company or in its related corporations during the Snancial year.

SIGNIFICANT AND SUBSEQUENT EVENTS

The signiScant events during and the subsequent event after the Snancial year end are as disclosed in Note 40 to theSnancial statements.

120 MNRB

OTHER STATUTORY INFORMATION

(a) Before the income statements and statements of Snancial position of the Group and of the Company were madeout, 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 ofprovision for doubtful debts, and had satisSed themselves that all known bad debts had been written off andthat 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 recordsin the ordinary course of business had been written down to an amount which they might be expected so torealise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off as bad debts or the amount of the provision for doubtful debts in the Snancialstatements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the Snancial statements of the Group and of the Companymisleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading orinappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report orin the Snancial statements of the Group and of the Company which would render any amount stated in the Snancialstatements 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 Snancial yearwhich 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 Snancial year.

(f) In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within theperiod of twelve months after the end of the Snancial year which will or may affect the ability of the Group orof 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 theSnancial year and the date of this report which is likely to affect substantially the results of the operations ofthe Group or of the Company for the Snancial 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 arisingfrom reinsurance, takaful and retakaful contracts underwritten in the ordinary course of business of the reinsurance,takaful and retakaful subsidiaries.

(g) Before the income statement and statement of Snancial position of the reinsurance subsidiary were made out, theDirectors took reasonable steps to ascertain that there was adequate provision for its insurance liabilities inaccordance with the valuation methods prescribed under Part D of the Risk-based Capital (“RBC”) Framework forinsurers issued by Bank Negara Malaysia (“BNM”).

Director’s Report


AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in ofSce.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 July 2012.

Sharkawi bin Alis Mohd Din bin Merican

Kuala Lumpur, Malaysia

122 MNRB

We, Sharkawi bin Alis and Mohd Din bin Merican, being two of the directors of MNRB Holdings Berhad, do hereby statethat, in the opinion of the directors, the accompanying Snancial statements set out on pages 125 to 286 are drawn up inaccordance with the Companies Act, 1965 and Financial Reporting Standards in Malaysia, so as to give a true and fairview of the Snancial position of the Group and of the Company as at 31 March 2012 and of the results and the cashTows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 July 2012.

Sharkawi bin Alis Mohd Din bin Merican

Kuala Lumpur, Malaysia

STATUTORY DECLARATIONPursuant to Section 169(16) of the Companies Act, 1965

I, Norazman bin Hashim, being the ofScer primarily responsible for the Snancial management of MNRB Holdings Berhad,do solemnly and sincerely declare that the accompanying Snancial statements set out on pages 125 to 286 are in myopinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of theprovisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed Norazman bin Hashim )at Kuala Lumpur in Wilayah Persekutuan )on 24 July 2012 ) Norazman bin Hashim

Before me,

Ramalingam S. Pillay, PPN W432Commisioner For Oaths

STATEMENT BY DIRECTORSPursuant to Section 169(15) of the Companies Act, 1965


Report on the financial statements

We have audited the Snancial statements of MNRB Holdings Berhad, which comprise the statements of Snancial position asat 31 March 2012 of the Group and of the Company, and the income statements, the statements of comprehensive income,the statements of changes in equity and the statements of cash Tows of the Group and of the Company for the year thenended, and a summary of signiScant accounting policies and other explanatory notes, as set out on pages 125 to 285.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of Snancial statements that give a true and fair view inaccordance with the Companies Act, 1965 and Financial Reporting Standards in Malaysia and for such internal control asthe directors determine are necessary to enable the preparation of Snancial statements that are free from materialmisstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these Snancial statements based on our audit. We conducted our audit inaccordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the Snancial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Snancialstatements. The procedures selected depend on our judgment, including the assessment of risks of material misstatementof the Snancial statements, whether due to fraud or error. In making those risk assessments, we consider internal controlrelevant to the entity’s preparation of Snancial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the Snancial statements.

We believe that the audit evidence we have obtained is sufScient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion, the Snancial statements have been properly drawn up in accordance with the Companies Act, 1965 andFinancial Reporting Standards in Malaysia, so as to give a true and fair view of the Snancial position of the Group and ofthe Company as at 31 March 2012 and of their Snancial performance and cash Tows for the year then ended.

INDEPENDENT AUDITORS’ REPORTto the members of MNRB Holdings Berhad

124 MNRB

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act, 1965 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 Companyand its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisionsof the Act.

(b) We have considered the Snancial statements and the auditors’ report of the subsidiary of which we have not actedas auditors, which is indicated in Note 18 to the Snancial statements, being Snancial statements that have beenincluded in the consolidated Snancial statements.

(c) We are satisSed that the Snancial statements of the subsidiaries that have been consolidated with the Snancialstatements of the Company are in form and content appropriate and proper for the purposes of the preparation ofthe consolidated Snancial statements and we have received satisfactory information and explanations required by usfor those purposes.

(d) The auditors’ reports on the Snancial statements of the subsidiaries were not subject to any qualiScation and inrespect of the subsidiaries incorporated in Malaysia, did not include any comment required to be made underSection 174(3) of the Act.

Reporting responsibilities

The supplementary information set out in Note 48 on page 286 is disclosed to meet the requirement of Bursa MalaysiaSecurities Berhad and is not part of the Snancial statements. The directors are responsible for the preparation of thesupplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised andUnrealised ProSts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad ListingRequirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa MalaysiaSecurities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance withthe 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 theCompanies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for thecontent of this report.

Ernst & Young Gloria Goh Ewe GimAF: 0039 No. 1685/04/13(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia24 July 2012

Independent Auditors’ Reportto the members of MNRB Holdings Berhad


Group CompanyNote 2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Operating revenue 3 1,431,892 1,463,262 80,299 37,262

Gross earned premiums 4 1,178,499 1,151,889 – –Premiums ceded to reinsurers 4 (206,053) (125,949) – –

Net earned premiums 4 972,446 1,025,940 – –

Investment income 5 88,176 71,041 51,086 15,299Realised gains and losses 6 9,951 25,311 (7) –Fair value gains and losses 7 (1,301) 15,990 (356) 227Fee and commission income 8 225,193 235,568 29,213 21,963Other operating revenue 7,304 1,630 237 95

Other revenue 329,323 349,540 80,173 37,584

Gross claims paid 21(a) (610,705) (596,618) – –Claims ceded to reinsurers 21(a) 39,547 40,188 – –Gross change in contract liabilities 21(a) (258,221) (58,289) – –Change in contract liabilities ceded toreinsurers 21(a) 227,893 5,176 – –

Net claims (601,486) (609,543) – –

Fee and commission expense 8 (371,760) (401,941) – –Management expenses 9 (153,807) (172,747) (24,605) (34,687)Finance cost (12,169) (7,125) (14,544) (9,500)Other operating expenses 11 (6,223) (26,050) (4) (7,005)

Other expenses (543,959) (607,863) (39,153) (51,192)

Share of results of associates (30,110) 6,878 – –

Profit/(loss) before zakat and tax 126,214 164,952 41,020 (13,608)Zakat (400) (372) – –Taxation 12 (41,799) (41,638) (10,432) (1,185)

Net profit/(loss) for the year attributableto equity holders of the Company 84,015 122,942 30,588 (14,793)

Basic and diluted earnings per share attributableto equity holders of the Company (sen): 36 39.4 57.7 – –

The accompanying accounting policies and explanatory notes form an integral part of the Snancial statements.

INCOME STATEMENTSfor the year ended 31 March 2012

126 MNRB

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Net profit/(loss) for the year 84,015 122,942 30,588 (14,793)

Other comprehensive income/ (loss):

Effects of post acquisition foreign exchangetranslation reserve on investment in associate 1,263 (7,413) – –

Effects of foreign exchange translationreserve for a foreign subsidiary 27 (380) – –

Revaluation of land and building 35,666 3,184 – –

Net gain/(loss) on Available-for-sale (“AFS”) Snancial assets:Gain/(loss) on fair value changes 19,820 7,228 186 (1,650))Realised gain transferred to income statement (9,395) (24,136) – –Deferred tax relating to net gain/(loss) on AFSSnancial assets (1,767) 4,777 (47) –

Total comprehensive income/(loss) for the year 129,629 106,202 30,727 (16,443)


STATEMENTS OF COMPREHENSIVE INCOMEfor the year ended 31 March 2012



RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and equipment 13 135,989 101,887 1,558 1,469Investment properties 14 5,600 28,600 – –Intangible assets 16 13,969 12,969 2,074 1,231Deferred tax 17 5,109 5,474 1,844 3,098Investment in subsidiaries 18 – – 904,501 794,501Investment in associates 19 86,382 117,542 1,957 1,957Financial assets at fair valuethrough proSt or loss 20(a) 17,953 14,912 – –

Held-to-maturity investments 20(b) 337,597 329,758 5,059 6,967AFS Snancial assets 20(c) 951,979 736,632 1,173 2,602Loans and receivables 20(d) 1,016,498 1,034,574 23,127 10,759Reinsurance assets 21(a) 357,636 146,597 – –Insurance receivables 22 150,100 138,173 – –Tax recoverable 3,508 11,476 11,679 8,379Cash and bank balances 2,760 9,483 11 75Non-current assets held for sale 23 56,601 34,173 – –

Total general reinsurance businessand shareholders’ fund assets 3,141,681 2,722,250 952,983 831,038

General takaful fund assets 46 345,285 350,198 – –Family takaful fund assets 46 1,606,924 1,301,690 – –General retakaful fund assets 46 89,302 76,853 – –Family retakaful fund assets 46 12,873 16,976 – –

Total assets 5,196,065 4,467,967 952,983 831,038

Liabilities

Islamic medium term notes 24 150,000 150,000 200,000 200,000Short term revolving credit facility 25 120,000 – 120,000 –Insurance and takaful contract liabilities 21 1,638,443 1,412,707 – –Insurance and takaful payables 26 88,110 65,394 – –Other payables 27 48,354 94,860 17,104 13,926Provision for zakat 390 574 – –

Total general reinsurance businessand shareholders’ fund liabilities 2,045,297 1,723,535 337,104 213,926


STATEMENTS OF FINANCIAL POSITIONas at 31 March 2012

128 MNRB


RM’000 RM’000 RM’000 RM’000

Liabilities (cont’d)

General takaful fund liabilities 46 336,189 339,706 – –Family takaful fund liabilities 46 1,359,775 1,109,886 – –General retakaful fund liabilities 46 89,302 76,783 – –Family retakaful fund liabilities 46 11,571 15,630 – –

Total liabilities 3,842,134 3,265,540 337,104 213,926

Equity

Share capital 28 213,070 213,070 213,070 213,070Reserves 883,314 785,645 402,809 404,042

Total equity attributable toequity holders of the Company 1,096,384 998,715 615,879 617,112

Takaful and retakaful funds

General takaful fund 46 9,096 10,492 – –Family takaful fund 46 247,149 191,804 – –General retakaful fund 46 – 70 – –Family retakaful fund 46 1,302 1,346 – –

Total takaful and retakaful funds 257,547 203,712 – –

Total liabilities, equity, takafuland retakaful funds 5,196,065 4,467,967 952,983 831,038


Statements of Financial Positionas at 31 March 2012


<–––––––––––––––– Attributable to equity holders of the company ––––––––––––––––><––––––––––––––––––––– Reserves ––––––––––––––––––––––><–––––––––––– Non–distributable ––––––––––––> Distributable

Foreignexchange Avalaible-

Share Share translation for-sale Revaluation Retainedcapital premium reserve reserve reserve profits Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Group

At 1 April 2010 213,070 105,051 22,901 23,287 – 528,204 892,513Total comprehensive incomefor the year – – (7,793) (12,131) 3,184 122,942 106,202

At 31 March 2011 213,070 105,051 15,108 11,156 3,184 651,146 998,715Total comprehensive incomefor the year – – 1,290 8,658 35,666 84,015 129,629

Dividend paid during the year(Note 35) – – – – – (31,960) (31,960)

At 31 March 2012 213,070 105,051 16,398 19,814 38,850 703,201 1,096,384

Company

At 1 April 2010 213,070 105,051 – 1,650 – 313,784 633,555Total comprehensive incomefor the year – – – (1,650) – (14,793) (16,443)

At 31 March 2011 213,070 105,051 – – – 298,991 617,112Total comprehensive incomefor the year – – – 139 – 30,588 30,727

Dividend paid during the year(Note 35) – – – – – (31,960) (31,960)

At 31 March 2012 213,070 105,051 – 139 – 297,619 615,879


STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 March 2012

130 MNRB

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

ProSt/(loss) before zakat and tax 126,214 164,952 41,020 (13,608)Adjustments for:Net fair value gains/(loss) on Snancial assets at FVTPL 53 (580) – –Impairment loss/(reversal of impairment loss)on AFS Snancial assets 469 (10,609) 356 (227)

Reversal of impairment loss on HTM investments (265) – – –Impairment loss on Qard 4,599 14,633 – –Impairment loss on property 1,465 328 – –(Reversal of)/impairment loss on insurancereceivables and reinsurance assets (3,484) 2,224 – –

Impairment loss on investment in subsidiary – – – 6,869Depreciation of property, plant and equipment 7,830 8,735 812 678Amortisation of intangible assets 2,904 3,077 189 241Amortisation of prepaid land lease payments – 55 – –Property, plant and equipment written off 60 855 11 –Loss on fair value adjustments of investmentproperties – 2,317 – –

(Gain)/loss on disposal of property, plant and equipment (62) – 7 (1)(Decrease)/Increase in premium and contribution liabilities (49,067) 61,811 – –(Decrease)/Increase in expense liabilities (401) 520 – –

Interest/proSt income (121,777) (92,557) (751) (247)Dividend income (9,776) (8,385) (50,337) (15,052)Rental income (11,992) (10,723) – –Finance cost 12,169 7,125 14,544 9,500Gain on disposal of investments (21,804) (36,214) – –Net accretion of discounts on investments (357) (1,989) – –Balance carried forward (63,222) 105,575 5,851 (11,847)Balance brought forward (63,222) 105,575 5,851 (11,847)Share of losses/proSts of associates 30,110 (6,878) – –Results of general takaful fund 12,943 5,872 – –Results of family takaful fund 252,616 241,285 – –Results of general retakaful fund (2,161) (14,369) – –Results of family retakaful fund (90) 374 – –

ProSt/(loss) from operations before changesin operating assets and liabilities 230,196 331,859 5,851 (11,847)

(Increase)/decrease in placements with licensedSnancial institutions, Islamic investment accountsand marketable securities (134,843) 1,567 (11,691) 9,018

Purchase of other investments (786,228) (850,946) – (1,650)Proceeds from disposal of investments 406,113 500,703 3,165 2,402Decrease in staff loans 1,391 2,074 – –Increase in insurance and takaful receivables (59,412) (37,164) – –Decrease/(increase) in other receivables (60,716) (34,940) (244) 697Net change in balances with subsidiaries – – 6,921 (802)Increase in claims liabilities 309,598 271,213 – –Increase in participants’ funds (224,093) (181,025) – –Increase in insurance and takaful payables 65,112 2,517 – –(Decrease)/increase in other payables (72,174) 41,742 (3,821) 645

(203,624) 47,600 181 (1,537)


STATEMENTS OF CASH FLOWSfor the year ended 31 March 2012


Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities (cont’d)

Taxes and zakat paid (36,860) (32,098) (23) (42)Interest/proSt received 86,790 100,441 716 244Hibah (received)/paid to participants – (1) – –Dividend received 38,570 10,331 37,517 11,719Rental received 7,491 6,797 – –

Net cash (used in)generated from operating activities (107,633) 133,070 38,391 10,384

Cash flows from investing activities

Subscription of shares in subsidiaries – – (110,000) –Purchase of property, plant and equipment (8,356) (9,132) (1,391) (397)Purchase of intangible assets (3,904) (2,945) (1,032) (561)Purchase of investment properties (310) (1,008) – –Proceeds from disposal of property,plant and equipment 629 22 472 1

Net cash used in investing activities (11,941) (13,063) (111,951) (957)

Cash flow from financing activities

Proceeds from short term revolving credit facility 120,000 – 120,000 –Interest paid on Islamic Medium Term Notes (7,125) (7,125) (9,500) (9,500)Interest paid on short term revolving credit facility (5,044) – (5,044) –Dividends paid (31,960) – (31,960) –

Net cash from (used in) Snancing activities 75,871 (7,125) 73,496 (9,500)

Cash and bank balances

Net (decrease)/increase during the year (43,703) 112,882 (64) (73)Effects of changes in foreign exchange rate – (380) – –At beginning of year 121,701 9,199 75 148

At end of year 77,998 121,701 11 75

Cash and cash equivalents comprise:

Cash and bank balances of:Shareholders’ fund and general reinsurance business 2,760 9,483 11 75General takaful fund 22,212 47,511 – –Family takaful fund 53,008 64,512 – –General retakaful fund 9 14 – –Family retakaful fund 9 181 – –

77,998 121,701 11 75

Note: There are no usage restrictions placed on the cash and bank balances of the Group and of the Company.


Statements of Cash Flowsfor the year ended 31 March 2012

132 MNRB

1. CORPORATE INFORMATION

MNRB Holdings Berhad (“The Company”) is a public limited liability company, incorporated and domiciled inMalaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered ofSce of theCompany is located at 12th Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara Heights, 50490Kuala Lumpur, Malaysia.

The principal activities of the Company are investment holding and provision of management services to itssubsidiaries.

The principal activities of the subsidiaries have been disclosed in Note 18 to the Snancial statements. There havebeen no signiScant changes in the nature of the principal activities of the Group and of the Company during theSnancial year.

The number of employees in the Group and in the Company at the end of the Snancial year were 814 and 189(2011: 788 and 172) respectively.

The Snancial statements were authorised for issue by the Board of Directors in accordance with a resolution of thedirectors on 24 July 2012.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The Snancial statements of the Group and of the Company have been prepared under the historical costconvention, unless otherwise stated in the accounting policies. The Snancial statements comply with theCompanies Act, 1965 and Financial Reporting Standards (“FRSs”) in Malaysia.

The Snancial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearestthousand (RM’000) except when otherwise indicated.

2.2 Accounting 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 Cessionsbusiness 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 arefor the 12 months ended 31 March 2012.

2.3 Subsidiaries and basis of consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the Snancial and operating policiesso as to obtain beneSts from their activities.

In the Company’s separate Snancial statements, investments in subsidiaries are stated at cost lessimpairment losses. On disposal of such investments, the difference between net disposal proceeds andtheir carrying amounts is included in the income statement.

NOTES TO THE FINANCIAL STATEMENTS– 31 March 2012


2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 Subsidiaries and basis of consolidation (cont’d)

(ii) Basis of consolidation

The consolidated Snancial statements comprise the Snancial statements of the Company and itssubsidiaries as at the reporting date. The Snancial statements of the subsidiaries used in the preparation ofthe consolidated Snancial 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 obtainscontrol, and continue to be consolidated until the date that such control ceases. In preparing theconsolidated Snancial statements, intragroup balances, transactions and unrealised gains or losses resultingfrom intragroup transactions are eliminated in full. Uniform accounting policies are adopted in theconsolidated Snancial statements for like transactions and events in similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method ofaccounting involves allocating the cost of the acquisition to the fair value of the assets acquired andliabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition ismeasured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilitiesincurred 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 identiSableassets, liabilities and contingent liabilities represents goodwill. Any excess of the Group’s interest in thenet fair value of the identiSable assets, liabilities and contingent liabilities over the cost of acquisition isrecognised immediately in the income statement.

(iii) Associates

Associates are entities in which the Group has signiScant inTuence and that is neither a subsidiary nor aninterest in a joint venture. SigniScant inTuence is the power to participate in the Snancial and operatingpolicy decisions of the investee but not in control or joint control over those policies.

Investments in associates are accounted for in the consolidated Snancial statements using the equitymethod of accounting. Under the equity method, the investment in associate is carried in the consolidatedstatement of Snancial position at cost adjusted for post-acquisition changes in the Group’s share of netassets of the associate. The Group’s share of the net proSt or loss of the associate is recognised in theconsolidated income statement. Where there has been a change recognised directly in the equity of theassociate, the Group recognises its share of such changes.

In applying the equity method, unrealised gains and losses on transactions between the Group and theassociate are eliminated to the extent of the Group’s interest in the associate. After application of theequity method, the Group determines whether it is necessary to recognise any additional impairment losswith respect to the Group’s net investment in the associate. The associate is equity accounted for fromthe date the Group obtains signiScant inTuence until the date the Group ceases to have signiScantinTuence over the associates.

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 associate’s identiSable assets, liabilities andcontingent liabilities over the cost of the investment is excluded from the carrying amount of theinvestment and is instead included as income in the determination of the Group’s share of the associate’sproSt or loss in the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, includingany long–term interests that, in substance, form part of the Group’s net investment in the associates, theGroup does not recognise further losses, unless it has incurred obligations or made payments on behalf ofthe associates.

134 MNRB


2.3 Subsidiaries and basis of consolidation (cont’d)

(iii) Associates (cont’d)

The most recent available audited Snancial statements of the associates are used by the Group in applyingthe equity method. Where the dates of the audited Snancial statements used are not coterminous withthose of the Group, the share of results is arrived at from the last audited Snancial statements availableand management Snancial statements to the end of the accounting period. Uniform accounting polices areadopted for like transactions and events in similar circumstances.

In the Company’s separate Snancial statements, investments in associates are stated at cost less anyaccumulated impairment losses.

On disposal of such investments, the difference between net disposal proceeds and the carrying amount isincluded in the income statement.

2.4 General reinsurance underwriting results

The general reinsurance underwriting results are determined for each class of business after taking into accountpremiums, movements in premium liabilities and claims liabilities and acquisition costs.

(i) Premium recognition

Gross premiums are recognised in a Snancial period in respect of risks assumed during the particularSnancial period. Gross premium income include premium income in relation to inwards facultative business,inwards proportional treaty reinsurance and inwards non-proportional treaty reinsurance.

Inwards facultative reinsurance premiums are recognised in the Snancial period in respect of the facultativerisk assumed during the particular Snancial period, as in the case of direct policies, following individualrisks’ inception dates.

Inwards proportional treaty reinsurance premiums are recognised on the basis of periodic advices receivedfrom cedants given that the periodic advices reTect the individual underlying risks being incepted andreinsured at various inception dates of these risks and contractually accounted for under the terms of theproportional reinsurance treaty.

Premium income on inward non-proportional treaties, which cover losses occurring during a speciSed treatyperiod, are recognised based on the contractual premiums already established at the start of the treatyperiod under the terms and conditions of each contract.

(ii) Premium liabilities

Premium liabilities represent the reinsurance subsidiary’s future obligations on insurance contracts asrepresented by premiums received for risks that have not yet expired. The movement in premium liabilitiesis released over the term of the insurance contracts and is recognised as premium income.

Premium liabilities are reported at the higher of the aggregate of the unearned premium reserves (“UPR”)for all lines of business or the best estimate value of the reinsurance subsidiary’s unexpired risk reserves(“URR”) at the end of the Snancial year and a provision of risk margin for adverse deviation (“PRAD”)calculated at 75% conSdence level at the overall reinsurance subsidiary’s level.

Notes to the Financial Statements– 31 March 2012



2.4 General reinsurance underwriting results (cont’d)

(ii) Premium liabilities (cont’d)

(a) Unexpired risk reserves

The URR is a prospective estimate of the expected future payments arising from future events insuredunder policies in force as at the end of the Snancial year and also includes allowance for expenses,including overheads and cost of reinsurance, expected to be incurred during the unexpired period inadministering these policies and settling the relevant claims, and expected future premium refunds.

URR is estimated via an actuarial valuation performed by a qualiSed actuary, using a mathematicalmethod of estimation similar to incurred but not reported claims (“IBNR”).

(b) Unearned premium reserves

The UPR represent the portion of the net premiums of reinsurance policies written that relate to theunexpired periods of the policies at the end of the Snancial period. The methods of computation ofUPR are as follows:

– For inward proportional treaty business, UPR is computed on the 1/8th method commencing fromthe quarter corresponding to the reporting quarter of the treaty statement;

– For inward non proportional treaty business, UPR is computed at 1/2 of the last quarter MinimumDeposit Premiums received; and

– For inward facultative policies, UPR is computed on the 1/8th method commencing from the dateof inception.

(iii) Claims liabilities

The amount of outstanding claims is the best estimate value of claim liabilities, which include provision forclaims reported, claims incurred but not enough reserved (“IBNER”), claims incurred but not reported(“IBNR”) together with related expenses less recoveries to settle the present obligation at the end of theSnancial year as well as a PRAD calculated at 75% conSdence level at the overall Company level.Liabilities for outstanding claims are recognised as advised by the ceding companies. IBNER and IBNRclaims are based on an actuarial valuation by a qualiSed actuary, using a mathematical method ofestimation based on, amongst others, actual claims development pattern.

(iv) Liability adequacy test

At each reporting date, the Group reviews all insurance contract liabilities to ensure that the carryingamount of the liabilities is sufScient or adequate to cover the obligations of the Group, contractual orotherwise, with respect to insurance contracts issued. In performing this review, the Group compares allcontractual cash Tows against the carrying value of insurance contract liabilities. Any deSciency isrecognised in the income statement.

The estimation of claim and premium liabilities performed at reporting date is part of the liability adequacytests performed by the Group. Based on this, all insurance contract liabilities as at the reporting date aredeemed to be adequate.

136 MNRB


2.4 General reinsurance underwriting results (cont’d)

(v) Acquisition cost

The cost of acquiring and renewing reinsurance business net of income derived from ceding reinsurancepremiums is recognised as incurred and properly allocated to the periods in which it is probable they giverise to income.

2.5 General takaful fund

The general takaful fund is maintained in accordance with the Takaful Act, 1984 and consists of AFS reservesand the accumulated surplus/deScit in the fund. Underwriting deScit will be made good by the shareholder’sfund via a loan or Qard.

Surplus distributable to the participants is determined after deducting retakaful costs, commissions, changes intakaful contract liabilities, wakalah fees, expenses and taxation. The surplus may be distributed to theshareholder and participants in accordance with the terms and conditions of the respective contracts.

General takaful revenue consists of gross takaful contributions and investment income. Revenue is accountedfor on an accrual basis as approved by the takaful subsidiary’s Shariah Committee. Unrealised income isdeferred and receipts in advance are treated as liabilities in the statement of Snancial position.

(i) Takaful contribution income

Contribution from direct and facultative inwards are recognised as soon as the amount of contribution canbe reliably measured in accordance with the principles of Shariah. Contributions are recognised in aSnancial period in respect of risks assumed during that particular Snancial period. Inward treaty retakafulcontributions are recognised on the basis of periodic advices received from ceding takaful operators.

(ii) Takaful contribution liabilities

Contribution liabilities represent the general takaful fund’s future obligations on takaful contracts asrepresented by contributions received for risks that have not yet expired. The movement in contributionliabilities is released over the terms of the takaful contracts and recognised as contribution.

Prior to 1 April 2011, contribution liabilities are reported at the higher of the aggregate of the unearnedcontribution reserves (“UCR”) for all lines of business or the best estimate value of the takaful fund’sunexpired risk reserves (“URR”) at the end of the reporting period and a provision of risk margin foradverse deviation (“PRAD”) calculated at 70% conSdence level at the overall takaful subsidiary’s level.

Effective 1 April 2011, the PRAD level is increased to 75% conSdence level calculated at the overall takafulsubsidiary’s level.

(a) Unearned contribution reserves

The Unearned Contribution Reserves (“UCR”) represent the portion of net contribution income oftakaful contracts written that relate to the unexpired periods of the contracts at the end of thereporting period. The UCR is calculated on net contribution income with a further deduction forWakalah fee expenses to reTect the Wakalah business principle. In determining the UCR at the end ofthe Snancial year, the method that most accurately reTects the actual unearned contribution is used asfollows:




2.5 General takaful fund (cont’d)

(ii) Takaful contribution liabilities (cont’d)

(a) Unearned contribution reserves (cont’d)

– Time apportionment method for all classes of general takaful business within Malaysia exceptMarine and Aviation cargo; and

– 25% method for Marine and Aviation Cargo.

(b) Unexpired risk reserves

URR is a prospective estimate of the expected future payments arising from future events expected tobe incurred as at the end of the Snancial year and also includes cost of retakaful, expected to beincurred during the unexpired period in administering these certiScates and settling the relevant claims,and expected future return contributions.

In estimating the best estimate URR, the resulting loss ratio based on best estimate claims incurredbut not reported is applied to the corresponding UCR as the prospective assessment of the amountthat needs to be set aside in order to provide for claims and allocated claim costs that will result outof unexpired future periods of cover. In order to arrive at 75% level of conSdence of the URR, theresulting loss ratio based on the IBNR plus PRAD at 75% level of conSdence is applied to thecorresponding UCR for each line of business.

(iii) Claims liabilities

Claims and settlement costs that are incurred during the Snancial year are recognised when a claimableevent occurs and/or the takaful subsidiary is notiSed. The amount of outstanding claims is the bestestimate of the expenditure required together with related expenses less recoveries to settle the obligationat the end of the Snancial year.

Prior to 1 April 2011, claims liabilities are valued at the best estimate which include provision for claimsreported, claims incurred but not enough reserved (“IBNER”) and claims incurred but not reported togetherwith related claims handling costs and reduction for the expected value of salvage and other recoveries.

Effective 1 April 2011, the PRAD level is increased to 75% conSdence level calculated at the overall takafulsubsidiary’s level.

Delays can be experienced in the notiScation and settlement of certain types of claims, therefore, theultimate cost of these claims cannot be known with certainty at the end of the Snancial year.

The liability is calculated by a qualiSed actuary at the end of the Snancial year using a range of standardactuarial claim projection techniques based on empirical data and current assumptions that may include amargin for adverse deviation. The liability is not discounted for the time value of money. No provision forequalisation or catastrophe reserves is recognised. The liabilities are derecognised when the certiScatesexpires, are discharged or are cancelled.

138 MNRB


2.5 General takaful fund (cont’d)


At each reporting date, the Group reviews all general takaful contract liabilities to ensure that the carryingamount of the liabilities is sufScient or adequate to cover the obligations of the Group, contractual orotherwise, with respect to general takaful contract issued. In performing this review, the Group comparesall contractual cash Tows against the carrying value of general takaful contract liabilities. Any deSciency isrecognised in the income statement.

The estimation of claim and contribution liabilities performed at reporting date is part of the liabilityadequacy tests performed by the Group. Based on this, all general takaful contract liabilities as at thereporting date are deemed to be adequate.

(v) Commission earned

Commission earned net of expense paid from retakaful in the course of ceding/accepting contributionsto/from retakaful operators are recognised in the income statement, as incurred and properly allocated tothe periods in which it is probable they give rise to income. This is in accordance with the principles ofWakalah as approved by the Shariah Committee and as agreed between the participants and the takafulsubsidiary.

2.6 Family takaful fund

The family takaful fund is maintained in accordance with the requirements of the Takaful Act, 1984 and includesthe amount attributable to participants.

The family takaful fund surplus/deScit is determined by an annual actuarial valuation of the family takaful fund.Any actuarial deScit in the family takaful fund will be made good by the shareholders’ fund via a loan or Qard.Surplus distributable to the participants is determined after deducting beneSts paid and payable, retakaful,provisions, reserves, wakalah fees, taxation and surplus administration charges transferred to the shareholders’fund. The surplus may be distributed to the shareholder and participants in accordance with the terms andconditions prescribed by the Shariah Committee of the takaful subsidiary.

Family takaful revenue consists of gross takaful contributions and investment income. Revenue is accounted foron an accrual basis and as approved by the takaful subsidiary’s Shariah Committee. Unrealised income isdeferred and receipts in advance are treated as liabilities on the statement of Snancial position.

(i) Takaful contribution income

Takaful contribution is recognised as soon as the amount of contribution can be reliably measured inaccordance with the principles of Shariah. First takaful contribution is recognised on assumption of risksand subsequent takaful contributions are recognised on due dates. Takaful contributions outstanding atbalance sheet date is recognised as income for the period provided they are within the grace periodallowed for payment and there are sufScient funds available in the participants’ accounts to cover suchcontributions due.

(ii) Provision for outstanding claims

Claims and settlement costs that are incurred during the Snancial year are recognised when a claimableevent occurs and/or the takaful subsidiary is notiSed.




2.6 Family takaful fund (cont’d)

(ii) Provision for outstanding claims (cont’d)

Claims and provisions for claims arising on family takaful contract, including settlement costs, areaccounted for using the case basis method, and for this purpose, the beneSts payable under a takafulcertiScate are recognised as follows:

(a) maturity or other certiScate beneSt payments due on speciSed dates are treated as claims payable ondue dates; and

(b) death, surrender and other beneSts without due dates are treated as claims payable on receipt ofintimation of death of the certiScate holder or occurrence of contingency covered.

(iii) Creation/cancellation of units

Amounts received for units created represent contributions paid by participants/unitholders as payment fornew contracts or subsequent payments to increase the amount of the contracts. Creation/cancellation ofunits are recognised in the Snancial statements at the next valuation date, after the request to purchase/sellunits are received from the unitholders.

(iv) Investments of the investment-linked funds

All investments of the investment-linked funds are stated at closing market prices or indicative marketprices as at Snancial year end.

Any increase or decrease in value of investments is taken into the investment linked funds incomestatement.

(v) Family takaful contract liabilities

Family takaful contract liabilities are recognised when contract are in-force and contributions are charged.

These liabilities, with the exception of Mortgage Term Takaful and Group Credit contracts, are measuredusing the unexpired reserve of the gross monthly tabarru’ (risk charges). For Mortgage Term Takaful andGroup Credit contracts, the liability is determined by the Net Contribution Valuation method using thestatutory mortality table adjusted for retakaful arrangements and discounted at the appropriate risk discountrate.

In the case of family contracts with a duration of one year, covering contingencies other than death orsurvival, such as the group health & surgical contracts, the liability for such family takaful contractscomprises the provision for unearned contributions and expired risks, as well as claims outstanding, whichincludes an estimate of the incurred claims that have not yet been reported to the takaful subsidiary.

The family contract liabilities are derecognised when the contract expires, is discharged or is cancelled. Ateach reporting date, an assessment is made of whether the recognised family takaful contract liabilities areadequate by using an existing liability adequacy test.

Surplus arising from the difference between the value of the family fund and the liabilities, if any, will bedistributed in equal proportion to the participants and the contingency (special) fund after deducting thetakaful subsidiary’s surplus administration charge.

140 MNRB


2.6 Family takaful fund (cont’d)

(v) Family takaful contract liabilities (cont’d)

If the difference between the value of the family fund and the liabilities results in a deScit, the takafulsubsidiary will arrange a Qard (a loan) which will be repaid when the fund returns to a surplus position. Animpairment test may be conducted to a Qard which has not been repaid within a speciSc period of time.

(vi) Liability adequacy test

At each reporting date, the Group reviews family all takaful contract liabilities to ensure that the carryingamount of the liabilities is sufScient or adequate to cover the obligations of the Group, contractual orotherwise, with respect to family takaful contract issued. In performing this review, the Group compares allcontractual cash Tows against the carrying value of family takaful contract liabilities. Any deSciency isrecognised in the income statement.

The annual actuarial valuation of the family takaful contract liabilities performed at reporting date is part ofthe liability adequacy tests performed by the Group. Based on this, all family takaful contract liabilities asat the reporting date are deemed to be adequate.

2.7 Shareholder’s fund of takaful subsidiary

(i) Commission expenses

Commission expenses, which are costs directly incurred in securing contributions on takaful contracts, arerecognised as incurred and properly allocated to the periods in which it is probable they give rise toincome. Commission expenses are borne by the shareholder’s fund in the shareholder’s fund incomestatement at an agreed percentage for each certiScate underwritten. This is in accordance with theprinciples of Wakalah as approved by the Shariah Committee and as agreed between the participants andthe takaful subsidiary.

(ii) Expense liabilities

The expense liabilities of the shareholder’s fund consist of expense liabilities of the general takaful fundand the family takaful fund which are based on estimations performed by a qualiSed actuary. Themovement in expense liabilities is released over the term of the takaful contracts and recognised aswakalah fees.

(a) Expense liabilities of general takaful fund

The expense liabilities of the general takaful fund are reported at the higher of the aggregate of thereserve for unearned wakalah fees (“UWF”) or the best estimate value of the provision for unexpiredexpense reserve (“UER”) at the end of the Snancial year.

Reserve for unearned wakalah fees

The UWF represents the portion of wakalah fee income allocated for management expenses of generaltakaful contracts that relate to the unexpired periods of contracts at the end of the reporting period.The method used in computing UWF is consistent with the calculation of UCR under Note 2.5(ii)(a). Indetermining the UWF at the end of the Snancial year, 70% of the wakalah fee income is recognised inthe Snancial year in which the contracts are issued. The remaining 30% of the wakalah fee income istransferred to the UWF and is recognised in the following Snancial year.




2.7 Shareholder’s fund of takaful subsidiary (cont’d)

(ii) Expense liabilities (cont’d)

(a) Expense liabilities of general takaful fund (cont’d)

Unexpired expense reserve

The UER is determined based on the expected future expenses payable by the shareholder’s fund inmanaging the general takaful fund for the full contractual obligation of the takaful contracts as at theend of the Snancial year, less any expected cash Tows from future wakalah fee income, and any otherincome due to the shareholder’s fund that can be determined with reasonable certainty, calculated at70% conSdence level at the overall takaful subsidiary level. The method used to value the UER isconsistent with the method used in estimating the URR as disclosed in Note 2.5(ii)(b).

Effective 1 April 2011, the PRAD level is increased to 75% conSdence level calculated at the overalltakaful subsidiary’s level.

(b) Expense liabilities of family takaful fund

The UER is determined based on the expected future expenses payable by the shareholder’s fund inmanaging the family takaful fund for the full contractual obligation of the takaful contracts as at theend of the Snancial year, less any expected cash Tows from future wakalah fee income, and any otherincome due to the shareholder’s fund that can be determined with reasonable certainty. The methodused to value expense liabilities shall be consistent with the method used to value takaful liabilities ofthe corresponding family takaful contract.

Liability Adequacy Test

At each Snancial year end, the takaful subsidiary reviews the expense liabilities of the shareholder’sfund to ensure that the carrying amount is sufScient or adequate to cover the obligations of theshareholder’s fund for all managed takaful contracts. In performing this review, the takaful subsidiaryconsiders all contractual cashTows and compares this against the carrying value of expense liabilities.Any deSciency is recognised in the income statement.

2.8 General retakaful fund

The general retakaful fund is maintained in accordance with the Takaful Act, 1984 and consists of AFS reservesand the accumulated surplus/deScit in the fund. Any underwriting deScit will be made good by the shareholder’sfund via a loan or Qard.

Surplus distributable to the participants is determined after deducting retrotakaful costs, commissions,contribution liabilities, net claims incurred, wakalah fees, expenses and taxation. The surplus may be distributedto the shareholder and participants in accordance with the terms and conditions of the respective contracts.

Revenue of the general retakaful fund consists of gross retakaful contributions and investment income.Unrealised income is deferred and receipts in advance are treated as liabilities in the statement of Snancialposition.

(i) Retakaful contribution income

Contributions are recognised in respect of risks assumed during a particular Snancial period. Inward treatyretakaful contributions are recognised on the basis of statements received from ceding companies.

142 MNRB


2.8 General retakaful fund (cont’d)

(i) Retakaful contribution income (cont’d)

Inwards facultative retakaful contributions are recognised in the Snancial period in respect of the facultativerisk assumed during the particular Snancial period, as in the case of direct policies, following individualrisks’ inception dates.

Inwards proportional treaty retakaful contributions are recognised on the basis of periodic advices receivedfrom cedants given that the periodic advices reTect the individual underlying risks being incepted andreinsured at various inception dates of these risks and contractually accounted for under the terms of theproportional retakaful treaty.

Contribution income on inward non-proportional treaties, which cover losses occurring during a speciSedtreaty period, are recognised based on the contractual contributions already established at the start of thetreaty period under the terms and conditions of each contract.

(ii) Contribution liabilities

Contribution liabilities represent the general retakaful fund’s future obligations on takaful contracts asrepresented by contributions received for risks that have not yet expired. The movement in contributionliabilities is released over the term of the takaful contracts and recognised as contribution.

Contribution liabilities are reported at the higher of the aggregate of the unearned contribution reserves(“UCR”) for all lines of business or the best estimate value of the retakaful fund’s unexpired risk reserves(“URR”) at the end of the reporting period.

(a) Unexpired risk reserves

The URR is a prospective estimate of the expected future payments arising from future events insuredunder contracts in force as at the end of the reporting period and also includes allowance forexpenses, including overheads and cost of retakaful, expected to be incurred during the unexpiredperiod in administering these contracts and settling the relevant claims, and expected futurecontribution refunds. The URR is estimated via an actuarial valuation performed by a qualiSed actuary,using a mathematical method of estimation similar to incurred but not reported (“IBNR”) claims.

(b) Unearned contribution reserves

The UCR represent the portion of the net contribution of retakaful business written that relate to theunexpired periods of the contracts at the end of the reporting period.

In determining the UCR as at the reporting date, the method that most accurately reTects the actualliability is used. UCR is computed using the 1/8th method, applied to contributions with a deductionfor actual wakalah fee.

(iii) Claim liabilities

Liabilities for outstanding claims are recognised as advised by ceding companies. The amount ofoutstanding claims is the best estimate of the expenditure required together with related expenses lessrecoveries to settle the obligation at the end of the reporting period.

Provision is also made for the cost of claims together with related expenses incurred but not reported(“IBNR”) at the end of the reporting period based on estimations performed by a qualiSed actuary.




2.8 General retakaful fund (cont’d)


At each reporting date, the retakaful subsidiary reviews all general takaful contract liabilities to ensure thatthe carrying amount of the liabilities is sufScient or adequate to cover the obligations of the fund,contractual or otherwise, with respect to general takaful contract issued. In performing this review, theretakaful subsidiary compares all contractual cash Tows against the carrying value of general takafulcontract liabilities. Any deSciency is recognised in the income statement.

The estimation of claim and contribution liabilities performed at reporting date is part of the liabilityadequacy tests performed by the retakaful subsidiary. Based on this, all general takaful contract liabilitiesas at the reporting date are deemed to be adequate.

(v) Commission expenses

Commission expenses, which are costs directly incurred in securing contributions on retakaful business, arerecognised as incurred and properly allocated to the periods in which it is probable they give rise toincome.

Commission expenses are borne by the general retakaful fund in the general retakaful income statement atan agreed percentage of the gross contribution.

2.9 Family retakaful fund

The family retakaful fund is maintained in accordance with the requirements of the Takaful Act, 1984 andconsists of AFS reserves and the accumulated surplus/deScit in the fund.

The family retakaful fund surplus/deScit is determined by an annual actuarial valuation of the family retakafulfund. Any actuarial deScit in the family retakaful fund will be made good by the shareholder’s fund via a loan orQard. Surplus distributable to the participants is determined after deducting beneSts paid and payable,retrotakaful, provisions, reserves, commissions, wakalah fee, taxation and any surplus administration chargestransferred to the shareholder’s fund. The surplus may be distributed to the shareholder and participants inaccordance with the terms and conditions of the respective contracts.

Revenue of the family retakaful fund consists of gross retakaful contributions and investment income. Unrealisedincome is deferred and receipts in advance are treated as liabilities in the statement of Snancial position.

(i) Retakaful contribution income

Contributions are recognised in respect of risks assumed during a particular Snancial period. Inward treatyretakaful contributions are recognised on the basis of statements received from ceding companies.

(ii) Benefits payable and actuarial liabilities

Liabilities for beneSts payable are recognised as advised by ceding companies. The actuarial liabilities ofthe family retakaful fund is the best estimate of the expenditure required together with related expensesless recoveries to settle the obligation at the end of the Snancial year. The valuation of the actuarialliabilities is performed by a qualiSed actuary.

144 MNRB


2.9 Family retakaful fund (cont’d)

(iii) Liability adequacy test

At each reporting date, the retakaful subsidiary reviews all family takaful contract liabilities to ensure thatthe carrying amount of the liabilities is sufScient or adequate to cover the obligations of the fund,contractual or otherwise, with respect to family takaful contract issued. In performing this review, theretakaful subsidiary compares all contractual cash Tows against the carrying value of family takaful contractliabilities. Any deSciency is recognised in the income statement.

The estimation of actuarial liabilities performed at reporting date is part of the liability adequacy testsperformed by the retakaful subsidiary. Based on this, all family takaful contract liabilities as at the reportingdate are deemed to be adequate.

(iv) Commission expenses

Commission expenses, which are costs directly incurred in securing contributions on retakaful business, arerecognised as incurred and properly allocated to the periods in which it is probable they give rise toincome.

Commission expenses are borne by the family retakaful fund in the family retakaful income statement at anagreed percentage of the gross contribution.

2.10 Shareholder’s fund of retakaful subsidiary

Expense liabilities

The expense liabilities of the shareholder’s fund consists of expense liabilities of the general retakaful fund andthe family retakaful fund which are based on estimations performed by a qualiSed actuary. The movement inexpense liabilities is released over the term of the retakaful contracts and recognised as wakalah fees.

(i) Expense liabilities of general retakaful fund

The expense liabilities of the general retakaful fund are reported at the higher of the aggregate of thereserve for unearned wakalah fees (“UWF”) or the best estimate value of the unexpired expense reserves(“UER”) at the end of the reporting period.

(a) Reserve for unearned wakalah fees

The UWF represents the portion of wakalah fee income allocated for expenses expected to beincurred in managing general retakaful contracts that relate to the unexpired periods of the contractsat the end of the reporting period. In determining the UWF, the method used is consistent with themethods used in the calculation of the UCR of the general retakaful fund as disclosed in Note2.8(ii)(b).

(b) Unexpired expense risk

The UER is determined based on the expected future expenses payable by the shareholder’s fund inmanaging the general retakaful fund for the full contractual obligation of unexpired retakaful contractsas at the end of the reporting period. The method used to value the UER is consistent with themethod used in estimating the URR as disclosed in Note 2.8(ii)(a).




2.10 Shareholder’s fund of retakaful subsidiary (cont’d)

(ii) Expense liabilities of family retakaful fund

The valuation of expense liabilities in relation to contracts of the family retakaful fund is conductedseparately by the Appointed Actuary in the shareholder’s fund. The method used to value expense liabilitiesis consistent with the method used to value retakaful liabilities of the corresponding family retakafulcertiScate. In valuing the expense liabilities, the present value of expected future expenses payable by theshareholder’s fund in managing the retakaful fund for the full contractual obligation of the retakafulcertiScate less any expected cash Tows from future wakalah fee income, and any other income due to theshareholder’s fund that can be determined with reasonable certainty, are taken into consideration.

(iii) Liability adequacy test

At each Snancial year end, the retakaful subsidiary reviews the expense liabilities of the shareholder’s fundto ensure that the carrying amount is sufScient or adequate to cover the obligations of the shareholder’sfund for all managed retakaful contracts. In performing this review, the retakaful subsidiary considers allcontractual cashTows and compares this against the carrying value of expense liabilities. Any deSciency isrecognised in the income statement.

2.11 Product classification

Financial risk is the risk of a possible future change in one or more of a speciSed interest/proSt rate, Snancialinstrument price, commodity price, foreign exchange rate, index of price or rate, credit rating or credit index orother variable, provided in the case of a non-Snancial variable that the variable is not speciSc to a party to thecontract. Insurance/underwriting risk is the risk other than Snancial risk.

An insurance/takaful contract is a contract under which the reinsurance, takaful and retakaful subsidiaries haveaccepted signiScant insurance/underwriting risk from another party by agreeing to compensate the party if aspeciSed uncertain future event adversely affects the party. As a general guideline, the reinsurance, takaful andretakaful subsidiaries determine whether signiScant insurance/underwriting risk has been accepted by comparingclaims/beneSts paid on the occurrence of an insured event with claims/beneSts payable if the event had notoccurred.

Conversely, investment contracts are those contracts that transfer Snancial risk with no signiScantinsurance/underwriting risk.

Once a contract has been classiSed as an insurance/takaful contract, it remains an insurance/takaful contractfor the remainder of its life-time, even if the insurance/underwriting risk reduces signiScantly during the period,unless all rights and obligations are extinguished or expire.

Based on the deSnition above and the product classiScation review performed by the Group, all contractsissued during the year, fall under the classiScation of insurance/takaful contracts as at the reporting date.

2.12 Reinsurance/retakaful

The reinsurance, takaful and retakaful subsidiaries cede insurance/underwriting risk in the normal course ofbusiness for all its business. Ceded reinsurance/retakaful arrangements do not relieve the reinsurance, takafuland retakaful subsidiaries from their obligations to cedants/participants. For both ceded and assumedreinsurance/retakaful, premiums/contributions and claims/beneSts are presented on a gross basis.

146 MNRB


2.12 Reinsurance/retakaful (cont’d)

Reinsurance/retakaful arrangements entered into by the reinsurance, takaful and retakaful subsidiaries that meetthe classiScation requirements of insurance/takaful contracts as described in Note 2.11 are accounted for asnoted below. Arrangements that do not meet these classiScation requirements are accounted for as Snancialassets. As at the reporting date, all reinsurance/retakaful arrangements entered into by the reinsurance, takafuland retakaful subsidiary during the year met the classiScation requirements of insurance/takaful contracts.

Reinsurance/retakaful assets represent amounts recoverable from reinsurers/retakaful operators forinsurance/takaful contract liabilities which have yet to be settled at the reporting date. Amounts recoverablefrom reinsurers/retakaful operators are measured consistently with the amounts associated with the underlyinginsurance/takaful contracts and the terms of the relevant reinsurance/retakaful arrangement.

At each reporting date, the reinsurance, takaful and retakaful subsidiaries assess whether objective evidenceexists that reinsurance/retakaful assets are impaired. Objective evidence of impairment for reinsurance/retakafulassets are similar to those noted for insurance/takaful receivables. If any such evidence exists, the amount ofthe impairment loss is measured as the difference between the asset’s carrying amount and the present valueof estimated future cash Tows discounted at the Snancial asset’s original effective interest rate. The impairmentloss is recognised in the income statement.

Reinsurance/retakaful assets are derecognised when the contractual rights are extinguished or expire or whenthe contract is transferred to another party.

2.13 Property, plant and equipment and depreciation

(i) Recognition and measurement

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, plantand equipment are stated at cost less accumulated depreciation and impairment losses, whilst propertiesare stated at revalued amount less subsequent accumulated depreciation and subsequent impairmentlosses. Cost includes expenditures that are directly attributable to the acquisition of the asset.

On disposal of property, plant and equipment, the difference between net proceeds and the carryingamount is recognised in the income statement and the unutilised portion of the revaluation surplus on thatitem is taken directly to retained proSts.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amountof the item if it is probable that the future economic beneSts embodied within the part will Tow to theGroup and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant andequipment are recognised in the income statement as incurred.

(iii) Depreciation

Freehold land has an unlimited useful life and therefore is not depreciated. Leased properties aredepreciated over the shorter of the lease term and their useful lives.




2.13 Property, plant and equipment and depreciation (cont’d)

(iii) Depreciation (cont’d)

Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off thecost of each asset to its residual value over its estimated useful life, at the following annual rates:

Buildings 2%Computer equipment 20% to 33.3%OfSce equipment 5% to 15%Furniture and Sttings 3.3% to 15%Motor vehicles 20%SigniScant parts of buildings 5% to 20%

The residual values, useful life and depreciation method are reviewed at the end of each reporting periodto ensure that the amount, method and period of depreciation are consistent with previous estimates andthe expected pattern of consumption of the future economic beneSts embodied in the items of property,plant and equipment.

2.14 Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or forboth. Such properties are measured initially at cost, including transaction costs. Subsequent to initialrecognition, investment properties are stated at fair value.

Fair value is arrived at by reference to market evidence of transaction prices for similar properties and isperformed by registered independent valuers having an appropriate recognised professional qualiScation andrecent experience in the location and category of the properties being valued.

Gains and losses arising from changes in the fair values of investment properties are recognised in the incomestatement in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investmentproperty is permanently withdrawn from use and no future economic beneSt is expected from its disposal. Anygains or losses on the retirement or disposal of an investment property are recognised in the income statementin 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 fromowner-occupied property to investment property, any excess of the property’s carrying value over its fair value isaccounted for as a revaluation surplus which is recognised in other comprehensive income. Any deScit betweenthe property’s carrying value and its fair value is recognised as an impairment loss in income statement.Subsequent to the date of change in use, the property is measured similar to other investment property. Anyrevaluation surplus previously recognised in other comprehensive income is transferred to income statement onlyupon disposal of property.

2.15 Intangible assets

All intangible assets are initially recorded at cost. Subsequent to recognition, intangible assets are stated at costless accumulated amortisation and impairment losses. Cost includes expenditures that are directly attributable tothe acquisition of the asset.

On disposal of intangible assets, the difference between net proceeds and the carrying amount is recognised inthe income statement.

148 MNRB


2.15 Intangible assets (cont’d)

The useful lives of intangible assets are assessed to be either Snite or indeSnite. Intangible assets with Snitelives are amortised on a straight line basis over the estimated economic useful lives and assessed forimpairment whenever there is an indication that the intangible asset may be impaired. The amortisation periodand the amortisation method for an intangible asset with a Snite useful life are reviewed annually at the end ofeach reporting period. Amortisation is charged to the income statement.

Intangible assets with indeSnite useful lives are not amortised but tested for impairment annually or morefrequently if events or changes in circumstances indicate that the carrying value may be impaired eitherindividually or at the cash-generating unit level. The useful life of an intangible asset with an indeSnite life isalso reviewed annually to determine whether the useful life assessment continues to be supportable.

(i) Software development in progress

Software development in progress are tested for impairment annually and represent developmentexpenditure on software. Following the initial recognition of the development expenditure, the cost model isapplied requiring the asset to be carried at cost less any accumulated impairment losses. Amortisation ofthe asset begins when development is complete and the asset is available for use. It is amortised over theperiod of expected future use. During the period in which the asset is not yet in use, it is tested forimpairment annually.

(ii) Computer software and licences

The useful lives of computer software and licenses are considered to be Snite because computer softwareand licenses are susceptible to technological obsolescence.

The acquired computer software and licenses are amortised using the straight line method over theirestimated useful lives not exceeding 6 years. Impairment is assessed whenever there is indication ofimpairment and the amortisation period and method are also reviewed annually at the end of eachreporting period.

2.16 Financial assets

(i) Initial recognition and measurement

Financial assets are recognised in the Snancial statements when, and only when, the Group and theCompany becomes a party to the contractual provisions of the instrument.

A Snancial asset is recognised initially, at its fair value plus, in the case of a Snancial asset not at fair valuethrough proSt or loss, transaction costs that are directly attributable to the acquisition of the Snancial asset.

An embedded derivative is recognised separately from the host contract and accounted for as a derivativeif, and only if, it is not closely related to the economic characteristics and risks of the host contract andthe host contract is not categorised at fair value through proSt or loss. The host contract, in the event anembedded derivative is recognised separately, is accounted for in accordance with the policy applicable tothe nature of the host contract.




2.16 Financial assets (cont’d)

(ii) Classification and subsequent measurement

The Group and the Company determine the classiScation of its Snancial assets at initial recognition andthis depends on the purpose for which the investments were acquired or originated. The followingclassiScations are used by the Group and the Company in categorising its Snancial assets:

(a) Financial assets at FVTPL

Financial assets are classiSed as Snancial assets at FVTPL if they are held for trading or aredesignated as such upon initial recognition. Financial assets held for trading are derivatives (includingseparated embedded derivatives) or Snancial assets acquired principally for the purpose of selling inthe near term.

Subsequent to initial recognition, Snancial assets at FVTPL are measured at fair value. Any gains orlosses arising from changes in fair value are recognised in the income statement. Net gains or netlosses on FVTPL do not include exchange differences, interest and dividend income. Exchangedifferences, interest and dividend income on FVTPL are recognised in the income statement as part ofinvestment income.

(b) HTM investments

Financial assets with Sxed or determinable payments and Sxed maturity are classiSed as HTM whenthe Group and the Company has the positive intention and ability to hold the investments to maturity.

Subsequent to initial recognition, HTM investments are measured at amortised cost using the effectiveinterest/yield method. Gains and losses are recognised in the income statement when the HTMinvestments are derecognised or impaired, and through the amortisation process.

(c) Loans and receivables

Financial assets with Sxed or determinable payments that are not quoted in an active market areclassiSed as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using theeffective interest/yield method. Gains and losses are recognised in the income statement when theloans and receivables are derecognised or impaired, and through the amortisation process.

(d) AFS financial assets

AFS Snancial assets are Snancial assets that are designated as available for sale or are not classiSedin any of the three preceding categories.

After initial recognition, AFS Snancial assets are measured at fair value. Any gains or losses fromchanges in fair value of the Snancial asset are recognised in other comprehensive income, except thatimpairment losses, foreign exchange gains and losses on monetary instruments and interest calculatedusing the effective interest/yield method are recognised in the income statement. The cumulative gainor loss previously recognised is reclassiSed from other comprehensive income to the income statementas a reclassiScation adjustment when the Snancial asset is derecognised. Interest/proSt incomecalculated 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 costless accumulated impairment losses.

150 MNRB


2.16 Financial assets (cont’d)

(iii) Derecognition

A Snancial asset is derecognised when the contractual right to receive cash Tows from the asset hasexpired. On derecognition of a Snancial asset in its entirety, the difference between the carrying amountand the sum of the consideration received and any cumulative gain or loss that had been recognised inother comprehensive income is recognised in the income statement.

2.17 Fair value of financial instruments

The fair value of Snancial assets that are actively traded in organised Snancial markets is determined byreference to quoted market bid prices for assets and offer prices for liabilities, at the close of business at theend of each reporting period.

The fair value of investments in unit and real estate investment trusts is determined by reference to publishedbid prices.

For Snancial assets where an active market may not exist, the fair value is determined by using valuationtechniques. Such techniques include using recent arm’s length transactions, reference to the current marketvalue of another asset which is substantially the same, discounted cash Tow analysis and/or option pricingmodels making maximum use of market inputs and relying as little as possible on entity-speciSc inputs. Fordiscounted cash Tow techniques, estimated future cash Tows are based on management’s best estimates andthe discount rate used is a market related rate for a similar asset. Certain Snancial assets are valued usingpricing models that consider, among other factors, contractual and market prices, co-relation, time value ofmoney, credit risk, yield curve volatility factors and/or prepayment rates of the underlying positions. The use ofdifferent pricing models and assumptions could produce materially different estimates of fair values.

The fair value of Toating rate and over-night deposits with Snancial institutions is their carrying value. Thecarrying value is the cost of the deposit/placement and accrued interest/proSt. The fair value of Sxedinterest/proSt/yield-bearing deposits is estimated using discounted cash Tow techniques. Expected cash Towsare discounted at current market rates for similar instruments at the reporting date.

If the fair value of a Snancial asset cannot be measured reliably, the asset is measured at cost, being the fairvalue of the consideration paid for the acquisition of the asset. All transaction costs directly attributable to theacquisition are also included in the cost of the Snancial asset.

2.18 Impairment of assets

(a) Financial assets

The Group and the Company assess at the end of each reporting period whether there is any objectiveevidence that a Snancial asset or a group of Snancial assets is impaired.

(i) Financial assets carried at amortised cost

The Group and the Company Srst assess whether objective evidence of impairment exists individuallyfor Snancial assets that are individually signiScant, and individually or collectively for Snancial assetsthat are not individually signiScant. If it is determined that no objective evidence of impairment existsfor an individually assessed Snancial asset, whether signiScant or not, the asset is included in a groupof Snancial assets with similar credit risk characteristics and that group of Snancial assets iscollectively assessed for impairment. Assets that are individually assessed for impairment and forwhich an impairment loss is or continues to be recognised are not included in a collective assessmentof impairment. The impairment assessment is performed at the end of each reporting period.




2.18 Impairment of assets (cont’d)

(a) Financial assets (cont’d)

(i) Financial assets carried at amortised cost (cont’d)

If there is objective evidence that an impairment loss on assets carried at amortised cost has beenincurred, the amount of the impairment loss is measured as the difference between the asset’scarrying amount and the present value of estimated future cash Tows (excluding future expected creditlosses that have not been incurred) discounted at the Snancial asset’s original effective interestrate/yield. The carrying amount of the asset is reduced and the loss is recorded in the incomestatement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can berelated objectively to an event occurring after the impairment was recognised, the previouslyrecognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognisedin the income statement, to the extent that the carrying value of the asset does not exceed itsamortised cost at the reversal date.

(ii) AFS financial assets

SigniScant or prolonged decline in fair value below cost, signiScant Snancial difSculties of the issuer orobligor, and the disappearance of an active trading market are considerations to determine whetherthere is objective evidence that investment securities classiSed as AFS Snancial assets are impaired.

If an AFS Snancial asset is impaired, an amount comprising the difference between its cost (net of anyprincipal payment and amortisation) and its current fair value, less any impairment loss previouslyrecognised in the income statement, is transferred from other comprehensive income to the incomestatement.

Impairment losses on AFS equity investments are not reversed in the income statement in subsequentperiods. Increase in fair value, if any, subsequent to impairment loss is recognised in othercomprehensive income. For AFS debt investments, impairment losses are subsequently reversed in theincome statement if an increase in the fair value of the investment can be objectively related to anevent occurring after the recognition of the impairment loss in the income statement.

(b) Non-financial assets

The carrying amounts of assets are reviewed at the end of each reporting period to determine whetherthere is any indication of impairment. If any such indication exists, then the asset’s recoverable amount isestimated. For the purpose of impairment testing, assets are grouped together into the smallest group ofassets that generates cash inTows from continuing use that are largely independent of the cash inTows ofother assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a businesscombination, for the purpose of impairment testing, is allocated to cash-generating units that are expectedto beneSt 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 fairvalue less costs to sell. In assessing value in use, the estimated future cash Tows are discounted to theirpresent value using a pre-tax discount rate that reTects current market assessments of the time value ofmoney and the risks speciSc to the asset. An impairment loss is recognised if the carrying amount of anasset or its cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in the income statement. Impairment losses recognised in respect ofcash generating units are allocated Srst to reduce the carrying amount of the other assets in the unit(groups of units) on a pro rata basis.

152 MNRB


2.18 Impairment of assets (cont’d)

(b) Non-financial assets (cont’d)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment lossesrecognised in prior periods are assessed at the end of each reporting period for any indications that theloss has decreased or no longer exists.

An impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount since the last impairment loss was recognised. An impairment loss is reversed only tothe extent that the asset’s carrying amount does not exceed the carrying amount that would have beendetermined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals ofimpairment losses are credited to the income statement in the year in which the reversals are recognised.

2.19 Non-current assets held for sale

Non-current assets are classiSed as held for sale if their carrying amount will be recovered principally through asale transaction rather than through continuing use. This condition is regarded as met only when the sale ishighly probable and the asset is available for immediate sale in its present condition subject only to terms thatare usual and customary.

Immediately before classiScation as held for sale, the non-current assets are measured in accordance withapplicable FRSs. On initial classiScation as held for sale, non-current assets are then measured at the lower ofits carrying amount and fair value less costs to sell. Any difference is included in the income statement. Non-current assets classiSed as held for sale are not depreciated.

2.20 Measurement and impairment of Qard

Any deScits arising in the takaful/retakaful funds are made good via a loan, or Qard, granted by theshareholder’s funds to the takaful/retakaful funds. The Qard is stated at cost less any impairment losses at theshareholder’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 orcashTows from the takaful/retakaful funds to determine whether there is objective evidence of impairment. If theQard is impaired, an amount comprising the difference between its cost and its recoverable amount, less anyimpairment loss previously recognised, is recognised in the income statement.

Impairment losses are subsequently reversed in the income statement if objective evidence exists that the Qardis no longer impaired.

2.21 Share capital and dividend expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Company afterdeducting all of its liabilities.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.Ordinary shares are classiSed as equity. Dividends on ordinary shares are recognised in equity in the period inwhich they are declared.




2.22 Cash and cash equivalents

Cash and cash equivalents include cash in hand and at banks, excluding Sxed and call deposits with licensedSnancial institutions, which have an insigniScant risk of changes in value. The statement of cash Tows has beenprepared using the indirect method.

2.23 Insurance and takaful receivables

Insurance/takaful receivables are amounts receivable under the contractual terms of an insurance/takafulcontract. On initial recognition, insurance/takaful receivables are measured at fair value based on theconsideration receivable. Subsequent to initial recognition, insurance/takaful receivables are measured atamortised cost, using the effective yield method.

Insurance/takaful receivables are assessed at each reporting date for objective evidence of impairment. If anysuch evidence exists, the amount of impairment loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash Tows discounted at the insurance/takaful receivable’soriginal effective yield rate. The impairment loss is recognised in the income statement. The basis forrecognition of such impairment loss is as described in Note 2.18(a)(i).

Insurance/takaful receivables are derecognised when the rights to receive cash Tows from them have expired orwhen they have been transferred and the Group has also transferred substantially all risks and rewards ofownership.

2.24 Islamic medium terms notes (“IMTN”)

IMTN are recognised at the amount of proceeds received less directly attributable transaction costs. The IMTNare classiSed as Snancial liabilities in the statement of Snancial position and the proSts payable are recognisedas Snance costs in the income statement in the period in which they are incurred.

2.25 Leases

(i) Classification

A lease is recognised as a Snance lease if it transfers substantially to the Group all the risks and rewardsincidental to ownership. Leases of land and buildings are classiSed as operating or Snance leases in thesame way as leases of other assets. The land and buildings elements of a lease of land and buildings areconsidered separately for the purposes of lease classiScation. All leases that do not transfer substantiallyall the risks and rewards are classiSed as operating leases, with the following exceptions:

– Property held under operating leases that would otherwise meet the deSnition of an investmentproperty is classiSed as an investment property on a case-by-case basis and, if classiSed asinvestment property, is accounted for as if held under a Snance lease, as disclosed in Note 2.14; and

– Land held for own use under an operating lease, the fair value of which cannot be measuredseparately from the fair value of a building situated thereon at the inception of the lease, is accountedfor as being held under a Snance lease, unless the building is also clearly held under an operatinglease.

154 MNRB


2.25 Leases (cont’d)

(ii) Finance Leases – the group as lessee

Assets acquired by way of hire purchase or Snance leases are stated at an amount equal to the lower oftheir fair values and the present value of the minimum lease payments at the inception of the leases, lessaccumulated depreciation and impairment losses. The corresponding liability is included in the statement ofSnancial position as borrowings. In calculating the present value of the minimum lease payments, thediscount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise,the Group and the Company’s incremental borrowing rate is used. Any initial direct costs are also addedto the carrying amount of such assets.

Lease payments are apportioned between the Snance costs and the reduction of the outstanding liability.Finance costs, which represent the difference between the total leasing commitments and the fair value ofthe assets acquired, are recognised in the income statement over the term of the relevant lease so as toproduce a constant periodic rate of charge on the remaining balance of the obligations for each accountingperiod.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant andequipment as described in Note 2.13(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 therelevant lease. The aggregate beneSt of incentives provided by the lessor is recognised as a reduction ofrental 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 up-front payments madeare allocated, whenever necessary, between the land and the buildings elements in proportion to therelative fair values of leasehold interests in the land element and buildings element of the lease at theinception of the lease. The up-front payment represents prepaid lease payments and are amortised on astraight-line basis over the lease term.

(iv) Operating Leases – the group as lessor

Assets leased out under operating leases are presented on the statement of Snancial position according tothe nature of the assets. Rental income from operating leases is recognised on a straight-line basis overthe term of the relevant lease, as disclosed in Note 2.31(ii). Initial direct costs incurred in negotiating andarranging an operating lease are added to the carrying amount of the leased asset and recognised on astraight-line basis over the lease term.

2.26 Financial liabilities

Financial liabilities are classiSed according to the substance of the contractual arrangements entered into andthe deSnitions of a Snancial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statement of Snancial position when, andonly when, the Group and the Company become a party to the contractual provisions of the Snancialinstrument. Financial liabilities are classiSed as either Snancial liabilities at FVTPL or other Snancial liabilities.

(a) Financial liabilities at FVTPL

Financial liabilities at FVTPL include Snancial liabilities held for trading and Snancial liabilities designatedupon initial recognition as at FVTPL.




2.26 Financial liabilities (cont’d)

(a) Financial liabilities at FVTPL (cont’d)

Financial liabilities held for trading include derivatives entered into by the Group and the Company that donot meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value andsubsequently 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 Snancial liabilities as at FVTPL nor were there anySnancial liabilities held for trading.

(b) Other financial liabilities

The Group and the Company’s other Snancial liabilities include insurance/takaful payables and otherpayables.

Insurance/takaful and other payables are recognised initially at fair value plus directly attributabletransaction costs and subsequently measured at amortised cost using the effective interest/yield method.

For other Snancial liabilities, gains and losses are recognised in the income statement when the liabilitiesare derecognised, and through the amortisation process.

A Snancial liability is derecognised when the obligation under the liability is extinguished. When an existingSnancial liability is replaced by another from the same lender on substantially different terms, or the terms of anexisting liability are substantially modiSed, such an exchange or modiScation is treated as a derecognition of theoriginal liability and the recognition of a new liability, and the difference in the respective carrying amounts isrecognised in the income statement.

2.27 Provisions for liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past eventand it is probable that an outTow of resources embodying economic beneSts will be required to settle theobligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting dateand adjusted to reTect the current best estimate. Where the effect of the time value of money is material, theamount of provision is the present value of the expenditure expected to be required to settle the obligation.

2.28 Income tax

Income tax on proSt or loss for the year comprises current and deferred tax. Current tax is the expectedamount of income taxes payable in respect of the taxable proSt for the year and is measured using the taxrates that have been enacted at the end of the reporting period.

Deferred tax is provided for, using the liability method, on temporary differences at the end of the reportingperiod between the tax bases of assets and liabilities and their carrying amounts in the Snancial statements. Inprinciple, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent thatit is probable that taxable proSt will be available against which the deductible temporary differences, unused taxlosses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arisesfrom the initial recognition of an asset or liability in a transaction which is not a business combination and atthe time of the transaction, affects neither accounting proSt nor taxable proSt.

156 MNRB


2.28 Income tax (cont’d)

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability is settled, based on tax rates that have been enacted or substantively enacted at the end of theSnancial year. Deferred tax is recognised in the income statement, except when it arises from a transactionwhich is recognised directly in other comprehensive income, in which case the deferred tax is also charged orcredited directly in other comprehensive income.

2.29 Employee benefits

(i) Short-term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year inwhich the associated services are rendered by employees of the Group. Short-term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered byemployees that increase their entitlement to future compensated balances. Short-term non-accumulatingcompensated 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 EmployeesProvident Fund (“EPF”). The Group also makes additional contributions to the EPF for eligible employeesby reference to their length of service and earnings. Such contributions are recognised as an expense inthe income statement as incurred.

(iii) Employees’ terminal benefits

As required by law in the United Arab Emirates, the Group makes provision for terminal beneSts foremployees of its Dubai subsidiary, based on the employees’ salaries and number of years of service. Theterminal beneSts are paid to the employees on termination or completion of their terms of employment.

2.30 Foreign currencies

(i) Functional and presentation currency

The individual Snancial statements of each entity in the Group are measured using the currency of theprimary economic environment in which the entity operates (“the functional currency”). The consolidatedSnancial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functionalcurrency.

(ii) Foreign currency transactions

In preparing the Snancial statements, transactions in currencies other than the functional currency (“foreigncurrencies”) are recorded in the functional currency using the exchange rates prevailing at the dates of thetransactions. At each reporting date, monetary items denominated in foreign currencies are retranslated atthe rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated inforeign 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.




2.30 Foreign currencies (cont’d)

(ii) Foreign currency transactions (cont’d)

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetaryitems, are included in the income statement for the period except for exchange differences arising onmonetary items that form part of the Company’s net investment in foreign operations. Exchange differencesarising on monetary items that form part of the Company’s net investment in foreign operations, where thatmonetary item is denominated in either the functional currency of the reporting entity or the foreignoperation, are initially taken directly to the foreign currency translation reserve within equity until thedisposal of the foreign operations, at which time they are recognised in the income statement. Exchangedifferences arising on monetary items that form part of the Company’s net investment in foreign operations,where that monetary item is denominated in a currency other than the functional currency of the Companyor the foreign operation, are recognised in the income statement for the period. Exchange differencesarising on monetary items that form part of the Company’s net investment in foreign operations, regardlessof the currency of the monetary item, are recognised in the income statement.

Exchange differences arising on the retranslation of non-monetary items carried at fair value are included inthe income statement for the period except for the differences arising on the retranslation of non-monetaryitems 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 othercomprehensive income.

(iii) Foreign operations

The results and Snancial position of foreign operations that have a functional currency different from thepresentation currency (RM) of the consolidated Snancial statements are translated into RM as follows:

– Assets and liabilities for each statement of Snancial position presented are translated at the closingrate prevailing at the reporting date;

– Income and expenses for each income statement are translated at average exchange rates for theyear, which approximates the exchange rates at the dates of the transactions;

– All resulting exchange differences are taken to the foreign currency translation reserve within equity;and

– The results of an associate, Labuan Reinsurance (L) Limited, are translated at the closing rateprevailing at the reporting date with respect to the carrying amount of investments in associate, and atthe exchange rate at the date of the transactions with respect to the share of proSts or losses. Allresulting translation differences are included in the foreign exchange translation reserve inshareholders’ equity.

2.31 Other revenue recognition

Revenue is recognised to the extent that it is probable that the economic beneSts Tow to the Group and theCompany and the revenue can be reliably measured. Revenue is measured at the fair value of considerationreceived or receivable.

(i) Interest and proSt 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 ofincentives provided to lessees are recognised as a reduction of rental income over the lease term on astraight-line basis.

158 MNRB


2.31 Other revenue recognition (cont’d)

(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 inaccordance with the principles of Shariah.

2.32 Zakat

This represents an obligatory amount payable by the takaful and retakaful subsidiaries to comply with theprinciples of Shariah. Zakat for the takaful subsidiary is computed using the “net-asset” method, whilst zakat forthe retakaful subsidiary is computed based on 2.5% of proSt before tax, as approved by the respective ShariahCommittee. Only the zakat that is attributable to the individual Muslim shareholders of the holding company wasprovided for in the Snancial statements. The zakat computation is reviewed by the Shariah Committee. TheBoard has the discretion to pay additional zakat above the obligatory amount payable.

2.33 Changes in Accounting Policies

The accounting policies adopted by the Group and the Company are consistent with those of the previousSnancial year except for the following:

(i) Adoption of Amendments to FRS, Issues Committee (“IC”) Interpretations and Technical Release(“TR”)

At the beginning of the current Snancial year, the Group and the Company had adopted all Amendments toFRS, IC Interpretations and TR mandatory for Snancial periods beginning on or after 1 January 2011 asfollows:

Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters andAdditional Exemptions for First-time AdoptersAmendments to FRS 2 Group Cash-settled Share-based Payment TransactionsAmendments to FRS 5 Non-current Assets Held for Sale and Discontinued OperationsAmendments to FRS 7 Improving Disclosures about Financial InstrumentsIC Interpretation 4 Determining whether an Arrangement contains a LeaseIC Interpretation 12 Service Concession ArrangementsIC Interpretation 16 Hedges of a Net Investment in a Foreign OperationIC Interpretation 17 Distribution of Non-cash Assets to OwnersIC Interpretation 18 Transfers of Assets from CustomersAmendments to FRSs contained in the document entitled Improvements to FRSs (2010)TR i-4 Shariah Compliant Sale Contracts

The adoption of the above FRSs, Amendments to FRS and IC Interpretations did not have any signiScanteffect on the Snancial performance and position of the Group and the Company except as discussedbelow:

Amendments to FRS 7 Improving Disclosures about Financial Instruments

Disclosures on fair value and liquidity have been enhanced upon the adoption of this amendment. Inparticular, Snancial instruments measured at fair value are disclosed by class in a three-level fair valuemeasurement hierarchy, with speciSc disclosures related to transfers between levels in the hierarchy anddetailed disclosures on level three of the fair value hierarchy. Certain disclosures on liquidity are alsomodiSed. The adoption of this amendment resulted in additional disclosures relating to fair value ofSnancial instruments for the Group and the Company. It did not result in any Snancial impact to the Groupand the Company.




2.33 Changes in Accounting Policies

(ii) Change from cost model to revaluation model for self-occupied properties

At the beginning of the current Snancial year, the Group had changed from the cost model to therevaluation model in respect of its self-occupied properties. Management believes that this change betterreTects the value of self-occupied properties of the Group. In accordance with FRS 116 Property, Plant andEquipment, this change in accounting policy has been adjusted prospectively to the carrying value of theself-occupied properties and the asset revaluation reserve. The impact of this change and the effects onthe statement of Snancial position, the income statement and the statement of comprehensive income havebeen disclosed in Note 13 to the Snancial statements.

2.34 Changes in Accounting Framework

On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approvedaccounting framework, the Malaysian Financial Reporting Standards (MFRS Framework).

The Group and the Company will be required to prepare Snancial statements using the MFRS Framework in itsSrst MFRS Snancial statements for the Snancial year ending 31 March 2013. In presenting its Srst MFRSSnancial statements, the Group and the Company may be required to restate the comparative Snancialstatements to amounts reTecting the application of the MFRS Framework. The majority of the adjustments (ifany) required on transition will be made, retrospectively, against opening retained proSts.

Nevertheless, the adoption of the MFRS Framework is not expected to have any signiScant impact on theSnancial statements of the Group and the Company.

2.35 Significant accounting estimates and judgements

The preparation of the Group and the Company’s Snancial statements requires management to makejudgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets andliabilities at the reporting date. However, uncertainty about these assumptions and estimates could result inoutcomes that could require a material adjustment to the carrying amount of the asset or liability affected in thefuture.

(i) Critical judgment made in applying accounting policies

The following is the judgement made by management in the process of applying the Group’s accountingpolicies that have the most signiScant effect on the amount recognised in the Snancial statements.Judgements are continually evaluated and are based on historical experiences and other factors, includingexpectations 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 FRS 140 in making judgement whether a propertyqualiSes as an investment property. Investment property is a property held to earn rentals or for capitalappreciation or both. Some properties comprise a portion that is held to earn rentals or for capitalappreciation and another portion that is held for use in the production or supply of goods or services orfor administrative purposes. If these portions could be sold separately (or leased out separately under aSnance lease), the Group would account for the portions separately. If the portions could not be soldseparately, the property is an investment property only if an insigniScant portion is held for use in theproduction or supply of goods or services or for administrative purposes. Judgement is made on anindividual property basis to determine whether ancillary services are so signiScant that a property does notqualify as investment property.

160 MNRB


2.35 Significant accounting estimates and judgements (cont’d)

(ii) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reportingdate, that have a signiScant risk of causing a material adjustment to the carrying amounts of assets andliabilities within the next Snancial year are discussed below.

(a) Depreciation and amortisation

Depreciation and amortisation is based on management’s estimates of the future estimated averageuseful lives and residual values of property, plant and equipment and intangible assets. Estimates maychange due to technological developments, expected level of usage, competition, market conditionsand other factors, and could impact the estimated average useful lives and the residual values ofthese assets.

This may result in future changes in the estimated useful lives and in the depreciation or amortisationexpenses. Accordingly, at the end of each reporting period, the residual values and estimated usefullives of property, plant and equipment and intangible assets are assessed to determine that theycontinue to be consistent as disclosed in Notes 2.13(iii) and 2.15, respectively.

As at the reporting date, management has determined that the estimated useful lives of property, plantand equipment and intangible assets of the Group and of the Company remain consistent and thereare no residual values.

(b) General reinsurance business

The principal uncertainty in the general reinsurance business arises from the technical provisions whichinclude the provisions of premium and claim liabilities. Premium liabilities are recorded as the higher ofUPR or URR while claim liabilities mainly comprise provision for claims reported, IBNER and IBNR.

Generally, claim liabilities are determined based upon previous claims experience, existing knowledgeof 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 premiumand claim liabilities will not exactly develop as projected and may vary from the reinsurancesubsidiary’s projection.

The estimates of premium and claim liabilities are therefore sensitive to various factors anduncertainties. The establishment of technical provisions is an inherently uncertain process and, as aconsequence of this uncertainty, the eventual settlement of premium and claim liabilities may vary fromthe initial estimates.

At each reporting date, the estimates of premium and claim liabilities are re-assessed for adequacy byan appointed actuary and changes will be reTected as adjustments to these liabilities. Theappointment of the actuary is approved by BNM.

(c) General takaful and retakaful business

The principal uncertainty in the general takaful and retakaful businesses arise from the technicalprovisions which include the contribution liabilities and claims liabilities.

There may be signiScant reporting lags between the occurrence of an insured event and the actualtime of event. Following the identiScation and notiScation of an insured loss, there may still beuncertainty as to the magnitude of the claim.





(ii) Key sources of estimation uncertainty (cont’d)

(c) General takaful and retakaful business (cont’d)

Generally, claim liabilities on reported claims or case reserves are estimated based upon historicalclaims experience, existing knowledge of events, the terms and conditions of the relevant policies andinterpretation of circumstances. Particularly relevant is past experience of similar cases, historicalclaims development trends, legislative changes, judicial decisions and economic conditions. It iscertain that Snal claim liabilities may vary from current projection. The uncertainty is also inherent inthe projected contribution liabilities as it is correlated to the projected claim liabilities.

The estimates of contribution and claim liabilities are therefore sensitive to various factors anduncertainties. The establishment of technical provisions is an inherently uncertain process and, as aconsequence of this uncertainty, the eventual settlement of contribution and claim liabilities may varyfrom the initial estimates. At the end of each reporting period, the estimates are re-assessed foradequacy by an appointed actuary and changes will be reTected as adjustments to these liabilities.The appointment of the actuary is approved by BNM.

(d) Family takaful and retakaful business

The estimation of the ultimate liability arising from claims made under the family takaful and retakafulbusinesses is a critical accounting estimate. There are several sources of uncertainty that need to beconsidered in the estimation of the liabilities that the family takaful and retakaful funds will ultimatelybe required to pay as claims.

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 regulatoryrequirements. The Family takaful and retakaful funds base the estimate of expected number of deathson statutory mortality tables, adjusted where appropriate to reTect the funds’ unique risk exposures.The estimated number of deaths determines the value of possible future beneSts to be paid out,which will be factored into ensuring sufScient cover by reserves, which in return is monitored againstcurrent and future contributions.

For those contracts that cover risks related to disability, estimates are made based on recent pastexperience and emerging trends. However epidemics, as well as wide ranging changes to life style,could result in signiScant changes to the expected future exposures.

All of this will give rise to estimation uncertainties of projected ultimate liability of the family takafuland retakaful funds.

At each reporting date, these estimates are reassessed for adequacy and changes will be reTected asadjustments to the liability.

(e) Impairment of non-financial assets

Assets are tested for impairment when indications of potential impairment exist. Indicators ofimpairment which could trigger an impairment review include evidence of obsolescence or physicaldamage, signiScant fall in market values, signiScant underperformance relative to historical or projectedfuture operating results, signiScant changes in the use of assets or the strategy of the business,signiScant adverse industry or economic changes. Recoverable amounts of assets are based onmanagement’s estimates and assumptions of the net realisable value, cash Tows arising from thefuture operating performance and revenue generating capacity of the assets and CGUs, and futuremarket conditions. Changes in circumstances may lead to changes in estimates and assumptions, andresult in changes to the recoverable amounts of assets and impairment losses needed.

162 MNRB




(e) Impairment of non-financial assets (cont’d)

It is also recognised that an initial decline in fair value of investments in new start-up investeecompanies, which is deemed temporary, may arise due to development and operational losses in theinitial years. Based on an assessment performed at the reporting date, the Board of Directors andManagement of the Company are of the opinion that there is no further indication of impairment in theCompany’s investment in unquoted corporations at this juncture.

(f) Impairment of unquoted equity investments

The Group and the Company follows the guidance of the applicable FRS in Malaysia in determiningwhether there is a decline other than temporary in the fair value of its investment in unquotedcorporations. This determination requires signiScant judgement. In making this judgement, the Groupand the Company evaluate the quantitative and qualitative factors affecting the market position of theinvestee including the regulatory support it receives and its longer term business outlook and Snancialstanding. Appropriate considerations are given to the investee’s Snancial gestation period, Snancialprojections, business prospects and the proprietary technology involved.

(g) Impairment of insurance/takaful receivables and reinsurance/retakaful assets

The Group reviews its insurance and takaful receivables on a regular basis to assess whether anallowance for impairment should be recorded in the income statement. In particular, judgement bymanagement is required in the estimation of the amount and timing of future cash Tows whendetermining the level of impairment required. Such estimates are necessarily based on assumptionsabout the probability of default and probable losses in the event of default, the value of the underlyingsecurity, and realisation costs.

These estimates are revisited by management on a frequent basis, at least once a year, to determineif certain assumptions continue to be reasonable. As at the reporting date, the impairment lossesrecognised on insurance/takaful receivables and reinsurance/retakaful assets reTect the expectedrecoverable values of these assets.

(h) Deferred tax

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable thattaxable proSt will be available against which the losses can be utilised. SigniScant managementjudgement is required to determine the amount of deferred tax assets that can be recognised, basedon the likely timing and level of future taxable proSts together with future tax planning strategies.

Assumptions about generation of future taxable proSts depend on management’s estimates of futurecash Tows. These depends on estimates of future production and sales volume, operating costs,capital expenditure, dividends and other capital management transactions. Judgement is also requiredabout application of income tax legislation. These judgements and assumptions are subject to risksand 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 statement of Snancial positionand the amount of unrecognised tax losses and unrecognised temporary differences.






(h) Deferred tax (cont’d)

The judgements and assumptions used in the estimates of deferred tax liabilities/assets are reassessedat least once a year to determine that they continue to be appropriate.

As at the reporting date, the total carrying value of recognised temporary differences arising from AFSreserves, UPR, allowance for doubtful debts, net amortisation of premium on investments and otheritems of the Group was RM5,109,000 (2011: RM5,474,000).

The total carrying value of unrecognised temporary deductible differences of the retakaful subsidiaryare disclosed in Note 17 to the Snancial statements.

Management is of the view that recognised deferred tax assets represent a fair estimate of theGroup’s deductible temporary differences.

3. OPERATING REVENUE

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

General reinsurance andshareholders’ funds

Gross premiums 1,146,415 1,172,385 – –Investment income (Note 5) 88,176 71,041 51,086 15,299Management fees 3,275 2,742 29,213 21,963Wakalah fees:General takaful fund 48,398 56,157 – –Family takaful fund 135,628 150,378 – –General retakaful fund 6,958 9,365 – –Family retakaful fund 3,042 1,194 – –

1,431,892 1,463,262 80,299 37,262

Group2012 2011

RM’000 RM’000

General takaful fund

Gross contributions 193,734 224,196Investment income (Note 5) 10,782 8,560

204,516 232,756

164 MNRB

3. OPERATING REVENUE (CONT’D)

Group2012 2011

RM’000 RM’000

Family takaful fund

Gross contributions 465,617 494,213Investment income of family takaful fund (Note 5) 41,198 31,121Investment income of Investment-linked fund (Note 34) 707 516

507,522 525,850

General retakaful fund

Gross contributions 58,099 43,772Investment income (Note 5) 1,223 761

59,322 44,533

Family retakaful fund

Gross contributions 26,000 12,897Investment income (Note 5) 487 446

26,487 13,343

4. NET EARNED PREMIUMS AND CONTRIBUTIONS

Group2012 2011

RM’000 RM’000

General reinsurance and shareholders’ funds

(a) Gross earned premiums

Insurance contracts 1,146,415 1,172,385Change in premium liabilities 32,084 (20,496)

1,178,499 1,151,889

(b) Premiums ceded to reinsurers

Insurance contracts (189,199) (114,718)Change in premium liabilities (16,854) (11,231)

(206,053) (125,949)

Net Earned Premiums 972,446 1,025,940



4. NET EARNED PREMIUMS AND CONTRIBUTIONS (CONT’D)

GroupGeneral takaful fund General retakaful fund2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

General takaful and retakaful funds

(a) Gross earned contribution

Takaful contracts 193,734 224,196 58,099 43,772Change in contribution liabilities 15,580 (13,670) 1,338 (4,203)

209,314 210,526 59,437 39,569

(b) Contributions ceded

Takaful contracts (40,130) (22,398) (10,874) (6,898)Change in contribution liabilities 16,679 (10,151) 240 (2,060)

(23,451) (32,549) (10,634) (8,958)

Net Earned Contribution 185,863 177,977 48,803 30,611

5. INVESTMENT INCOME

<–––––––––––––––––––––––––––– Group ––––––––––––––––––––––––––––> CompanyGeneral

reinsurance and General Family General Familyshareholders’ takaful takaful retakaful retakaful Shareholders’

fund fund fund fund fund fundRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2012

Financial assets at FVTPLDividend income– quoted shares in Malaysia 148 32 94 4 2 –– unit and property trusts 191 – – – – –

HTM investmentsInterest/proSt income 12,323 2,835 9,247 211 121 122

AFS financial assetsInterest/proSt income 32,545 4,539 14,312 409 165 –Dividend income:– quoted shares in Malaysia 4,770 647 1,536 36 21 17– unquoted shares in Malaysia 410 – – – – –– unit trusts in Malaysia – 244 366 – – –

166 MNRB

5. INVESTMENT INCOME (CONT’D)

<––––––––––––––––––––––––––– Group –––––––––––––––––––––––––––––> CompanyGeneral



2012

Loans and receivablesInterest/proSt income 30,129 2,605 11,560 582 194 629Dividend income oninstitutional trusts 334 – 941 – – –

Dividend income from subsidiaries – – – – – 50,000Dividend income from associate – – – – – 320Rental income 7,361 – 4,631 – – –Net accretion of discounts/(amortisation of premiums)on investments (29) (120) 541 (19) (16) –

Investment expenses (6) – (2,030) – – (2)

88,176 10,782 41,198 1,223 487 51,086

2011

Financial assets at FVTPLInterest/proSt income 2,527 – – – – –Dividend income– quoted shares in Malaysia 16 21 74 – – –

HTM investmentsInterest/proSt income 10,961 1,928 7,996 135 95 123

AFS financial assetsInterest/proSt income 24,912 2,559 10,503 225 83 –Dividend income:– quoted shares in Malaysia 4,533 853 1,455 28 27 –– quoted shares outside Malaysia 81 – – – – –– unquoted shares in Malaysia 82 – – – – –– unit trusts in Malaysia – – 263 – – –

Loans and receivablesInterest/proSt income 19,879 3,183 6,958 362 251 124Dividend income oninstitutional trusts 318 – 634 – – –

Dividend income from subsidiaries – – – – – 14,842Dividend income from associate – – – – – 210Rental income 6,857 – 3,866 – – –Net accretion of discounts/(amortisation of premiums)on investments 878 16 1,094 11 (10) –

Investment expenses (3) – (1,722) – – –

71,041 8,560 31,121 761 446 15,299



6. REALISED GAINS AND LOSSES

<––––––––––––––––––––––––––– Group ––––––––––––––––––––––––––––> CompanyGeneral



2012

Property, plant and equipmentRealised gains 69 – – – – –Realised losses (7) – – – – (7)

Financial assets at FVTPLRealised gains on quotedshares in Malaysia 495 103 222 18 5 –

HTM investmentsRealised loss (1) – – – – –

AFS financial assetsRealised gains/(losses):Quoted shares in Malaysia 7,205 1,796 4,722 113 75 –Unquoted corporate debtsecurities 1,808 – – – – –

Shariah approved unit trust funds – (142) (213) – – –Unquoted Islamic private debtsecurities 382 823 4,393 – – –

9,951 2,580 9,124 131 80 (7)

<–––––––––––––––––––––––––––––––– Group –––––––––––––––––––––––––––––––––>General

reinsurance and General Family General Familyshareholders’ takaful takaful retakaful retakaful

fund fund fund fund fundRM’000 RM’000 RM’000 RM’000 RM’000

2011

Financial assets at FVTPLRealised gains on quotedshares in Malaysia 1,175 290 617 11 9

AFS financial assetsRealised gains:Quoted shares in Malaysia 24,045 2,416 3,481 113 114Unquoted corporate debtsecurities 91 – – – –

Shariah approved unit trust funds – – 931 – –Unquoted Islamic private debtsecurities – – 3,044 – –

25,311 2,706 8,073 124 123

168 MNRB

7. FAIR VALUE GAINS AND LOSSES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Investment properties (Note 14) – 5,173 – –Financial assets at FVTPL 261 536 – –Reversal of impairment of HTM investments 265 – – –Impairment of self-occupied properties (1,465) (328) – –(Impairment)/reversal of impairment of AFSSnancial assets (362) 10,609 (356) 227

(1,301) 15,990 (356) 227

Group2012 2011

RM’000 RM’000


Financial assets at FVTPL (133) (19)

Family takaful fund

Fair value loss on investment properties (Note 14) – (7,490)Financial assets at FVTPL (182) 61Impairment of AFS Snancial assets (107) –

(289) (7,429)


Financial assets at FVTPL 1 1


Financial assets at FVTPL – 1



8. FEE AND COMMISSION

2012 2011RM’000 RM’000

Group


Fee and commission incomeManagement fees 3,275 2,742Commission income 12,622 8,205Wakalah fee income 194,026 217,094Investment fee 4,596 3,104Surplus administration charges 10,674 4,423

225,193 235,568

Fee and commission expenseCommission expense (370,148) (400,719)Brokerage (1,612) (1,222)

(371,760) (401,941)


Fee and commission incomeCommission income 7,278 3,938

Fee and commission expenseWakalah fee expense (48,398) (56,157)Surplus administration charges (6,088) –

(54,486) (56,157)

Family takaful fund

Fee and commission incomeCommission income 70 21

Fee and commission expenseWakalah fee expense (135,628) (150,378)Investment fee (4,313) (2,376)Surplus administration charges (4,575) (4,378)

(144,516) (157,132)


Fee and commission incomeCommission income 1,120 977

170 MNRB

8. FEE AND COMMISSION (CONT’D)

2012 2011RM’000 RM’000

Group (cont’d)

General retakaful fund (cont’d)

Fee and commission expenseCommission expense (13,835) (9,998)Wakalah fee expense (6,958) (9,365)Investment fee expense – (443)

(20,793) (19,806)


Fee and commission incomeCommission income 108 103

Fee and commission expenseCommission expense (5) (9)Wakalah fee expense (3,042) (1,194)Investment fee expense (283) (285)Surplus administration charges (12) (45)

(3,342) (1,533)

Company

Fee and commission incomeManagement fee 29,213 21,963

9. MANAGEMENT EXPENSES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Staff costs:Salaries, bonus and other related costs 69,876 72,540 13,248 18,705Directors’ remuneration (Note 10) 6,676 10,102 2,082 4,098Pension costs – EPF 10,112 13,293 1,579 2,904Social security costs 427 163 100 92



9. MANAGEMENT EXPENSES (CONT’D)

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

General reinsurance andshareholders’ funds (cont’d)

Retirement beneSts 320 7,576 151 3,914Short term accumulatingcompensated absences (252) 127 13 (29)

87,159 103,801 17,173 29,684

Auditors’ remuneration:– statutory audit 444 406 39 29– other services 99 137 9 19Depreciation of property, plant and equipment 7,830 8,735 812 678Amortisation of intangible assets 2,904 3,077 189 241Amortisation of prepaid land lease payments – 55 – –Property, plant and equipment written off 60 855 11 –Insurance/takaful levies and taxes 2,532 4,189 – –Share of acquisition costs on

quota share retakaful 2,877 4,367 – –Agency expenses 5,538 5,962 – –Marketing and promotional costs 11,105 10,867 461 229Electronic data processing costs 4,104 3,420 – –OfSce rental 8,225 8,162 1,149 1,004Professional and legal fees 6,964 1,968 847 345Contributions and donations 1,151 39 4 1Other management expenses 12,815 16,707 3,911 2,457

153,807 172,747 24,605 34,687

10. DIRECTORS’ REMUNERATION

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Non-executive directors:

Fees 2,042 2,322 696 685Allowances 528 566 160 131

2,570 2,888 856 816

172 MNRB

10. DIRECTORS’ REMUNERATION (CONT’D)

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

General reinsurance andshareholders’ funds (cont’d)

Executive directors:

Salaries and bonus 2,667 4,185 151 1,560Pension costs – EPF 390 730 26 312Retirement beneSts – 60 – 60BeneSts-in-kind 199 395 – 79

3,256 5,370 177 2,011

Directors of another subsidiary: *

Salaries and bonus 795 1,505 795 877Pension costs – EPF 129 284 129 168Social security costs 1 1 1 1Allowances 124 449 124 304BeneSts-in-kind 49 97 49 46

1,098 2,336 1,098 1,396

Total directors’ remuneration 6,924 10,594 2,131 4,223

Total directors’ remunerationexcluding beneSts-in-kind 6,676 10,102 2,082 4,098

* The directors of another subsidiary refer to management personnel, who are employed by the holding companyand reinsurance subsidiary, respectively.

11. OTHER OPERATING EXPENSES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Loss on foreign exchange 1,484 9,367 4 136Impairment loss on investment in subsidiary – – – 6,869Impairment loss on Qard to generalretakaful fund 4,599 14,633 – –

Increase in expense liabilities – 520 – –Sundry expenses 140 1,530 – –

6,223 26,050 4 7,005



12. TAXATION

(a) General reinsurance and shareholders’ funds

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Income tax:Malaysian income tax 39,075 33,214 9,225 946Under/(over) provision in prior years 4,126 (1,212) – –

43,201 32,002 9,225 946

Deferred tax:Relating to origination and reversalof temporary differences (1,402) 9,636 1,207 239

41,799 41,638 10,432 1,185

Domestic income tax for general business and shareholders’ fund is calculated at the Malaysian statutory taxrate of 25% (2011: 25%) of the estimated assessable proSt for the year. Income tax on the Group’s offshoreinsurance/takaful business is calculated at a tax rate of 5% (2011: 5%) of the estimated assessable proSt onthe Group’s offshore insurance/takaful business for the year. A reconciliation of income tax expenses applicableto proSt before zakat and tax at the statutory income tax rate to income tax expense at the effective incometax rate of the Group and of the Company are as follows:

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

ProSt/(loss) before zakat and tax 126,214 164,952 41,020 (13,608)

Taxation at Malaysian statutorytax rate of 25% 31,554 41,238 10,255 (3,402)

Effects of different tax rate inrespect of offshore insurance (3,887) (7,920) – –

Income not subject to tax (2,572) (7,819) (1,030) –Expenses not deductible for tax purposes 7,606 7,585 – 4,348Transfer from deferred taxation (787) 9,636 1,207 239Utilisation of current year lossesof the general retakaful fund (791) – – –

Utilisation of brought forwardunabsorbed business loss (1,032) – – –

Deferred tax assets not recognised 54 60 – –Under/(over) provision of taxexpense in prior years 4,126 (1,212) – –

Under provision of deferredtax expense in prior years – 70 – –

Share of results of associates 7,528 – – –

Tax expense for the year 41,799 41,638 10,432 1,185

174 MNRB

12. TAXATION (CONT’D)

(b) General takaful fundGroup

2012 2011RM’000 RM’000

Income tax:Malaysian income tax 2,477 474(Over)/under provision of tax in previous years (417) 146

2,060 620

Deferred tax:Relating to origination and reversal of temporary differences 210 807

2,270 1,427

Domestic income tax of the general takaful fund is calculated at the Malaysian statutory tax rate of 25% (2011:25%) of the estimated assessable proSt for the year. A reconciliation of income tax expense applicable tosurplus/(deScit) before taxation at the statutory income tax rate to income tax expense at the effective incometax rate of the funds are as follows:

Group2012 2011

RM’000 RM’000

Surplus before taxation 12,943 5,872

Taxation at Malaysian statutory tax rate of 25% 3,236 1,468Income not subject to tax (223) (182)Expenses not deductible for tax purposes – 216Utilisation of capital allowances (319) (279)(Over)/under provision of deferred tax in prior years (7) 58(Over)/under provision of tax expense in prior years (417) 146

Tax expense for the year 2,270 1,427

(c) Family takaful fund

Income tax:Malaysian income tax 4,146 2,830Under provision of tax in previous years – 497

4,146 3,327Deferred tax:Relating to origination and reversal of temporary differences (108) (344)

4,038 2,983




(c) Family takaful fund (cont’d)

Domestic income tax of the family takaful fund is calculated at the preferential tax rate of 8% (2011: 8%) oftaxable investment income for the year. A reconciliation of income tax expense applicable to surplus beforetaxation at the statutory income tax rate to income tax expense at the effective income tax rate of the fundsare as follows:

Group2012 2011

RM’000 RM’000


Taxation at tax rate of 8% 20,209 19,303Income not subject to tax (16,075) (16,755)Expenses not deductible for tax purposes 40 –Utilisation of capital allowances allocatedfrom the Shareholder’s fund (136) (193)

Under provision of deferred tax in prior years – 131Under provision of tax expense in prior years – 497

Tax expense for the year 4,038 2,983

(d) General retakaful fund

Income tax:Malaysian income tax – –

Domestic income tax of the general retakaful fund is calculated at the Malaysian statutory tax rate of 25%(2011: 25%) of the estimated assessable proSt for the year. A reconciliation of income tax expense applicable todeScit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate ofthe funds are as follows:

Group2012 2011

RM’000 RM’000

DeScit before taxation (2,161) (14,369)

Taxation at Malaysian statutory tax rate of 25% (541) (3,592)Income not subject to tax (629) (479)Expenses not deductible for tax purposes 239 345Deferred tax assets not recognised 158 294Unutilised current year business loss carried forward – 1,828Utilisation of current year business loss of General retakaful funds 773 1,604

Tax expense for the year – –

176 MNRB


(e) Family retakaful fundGroup

2012 2011RM’000 RM’000

Income tax:Malaysian income tax – –

Domestic income tax of the family retakaful fund is calculated at the Malaysian statutory tax rate of 25% (2011:25%) of the estimated assessable proSt for the year. A reconciliation of income tax expense applicable tosurplus before taxation at the statutory income tax rate to income tax expense at the effective income tax rateof the funds are as follows:

Group2012 2011

RM’000 RM’000

(DeScit)/surplus before taxation (90) 374

Taxation at Malaysian statutory tax rate of 25% (23) 94Income not subject to tax (2) –Expenses not deductible for tax purposes 15 8Deferred tax assets not recognised (8) –Utilisation of current year business loss of Family retakaful funds/General retakaful funds 18 (102)

Tax expense for the year – –

13. PROPERTY, PLANT AND EQUIPMENT


Furniture,fittings

Freehold Computer and office Motorland Buildings equipment equipment vehicles Total

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At 1 April 2010 15,886 97,901 9,979 32,407 3,250 159,423Additions – 2,766 897 4,989 480 9,132Disposals – – (227) – – (227)Revaluation surplus – 3,184 – – – 3,184Transfer to investment properties(Note 14) – (18,034) – – – (18,034)

Elimination of accumulateddepreciation on revaluation – (4,514) – – – (4,514)

Write-offs – – (1,017) (3,700) – (4,717)ReclassiScations – – 1,042 (1,042) – –

At 31 March 2011 15,886 81,303 10,674 32,654 3,730 144,247Additions – 3,745 1,395 2,453 763 8,356Disposals – – – – (1,141) (1,141)Revaluation surplus 14,774 20,892 – – – 35,666Elimination of accumulateddepreciation on revaluation – (15,254) – – – (15,254)

Write-offs – – (3) (59) – (62)

At 31 March 2012 30,660 90,686 12,066 35,048 3,352 171,812



13. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

General reinsurance and shareholders’ funds (cont’d)

Furniture,fittings

Freehold Computer and office Motorland Buildings equipment equipment vehicles Total

Group (cont’d) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciationand impairment loss

At 1 April 2010 – 14,662 8,284 17,628 1,326 41,900Depreciation charge for the year – 3,124 1,487 3,528 596 8,735Disposals – – (227) – – (227)Elimination of accumulateddepreciation on revaluation – (4,514) – – – (4,514)

Write-offs – – (1,015) (2,847) – (3,862)Impairment loss for the year – 328 – – – 328

At 31 March 2011 – 13,600 8,529 18,309 1,922 42,360Depreciation charge for the year – 2,486 1,698 3,093 553 7,830Disposals – – – – (576) (576)Elimination of accumulateddepreciation on revaluation – (15,254) – – – (15,254)

Write-offs – – (1) (1) – (2)Impairment loss for the year – 1,465 – – – 1,465

At 31 March 2012 – 2,297 10,226 21,401 1,899 35,823

Net Carrying Amount

At 31 March 2012 30,660 88,389 1,840 13,647 1,453 135,989

At 31 March 2011 15,886 58,462 2,145 14,345 1,808 101,887

Revaluation of freehold land and buildings

Freehold land and buildings have been revalued effective 1 March 2012 based on valuations performed by anaccredited independent valuer having an appropriate recognised professional qualiScation. The valuations are basedon the investment and comparison method.

The investment method entails the determination of the probable gross annual rental the property is capable ofproducing and deducting therefrom the outgoings to arrive at the annual net income.

The comparison method entails critical analyses of recent evidence of values of comparable properties in theneighbourhood and making adjustments for differences.

178 MNRB


Revaluation of freehold land and buildings (cont’d)

If the freehold land and buildings were measured using the cost model, the carrying amounts would be as follows:

Freeholdland Buildings Total

RM’000 RM’000 RM’000

2012

Cost

At 1 April 2011 15,886 81,302 97,188Additions – 3,745 3,745

At 31 March 2012 15,886 85,047 100,933

Accumulated depreciation

At 1 April 2011 – 13,600 13,600Charge for the year – 2,490 2,490

At 31 March 2012 – 16,090 16,090

Net carrying amount

At 31 March 2012 15,886 68,957 84,843

The estimates of the extent to which each of the line items in the statement of Snancial position and the incomestatement for the Snancial year ended 31 March 2012 are higher or lower than it would have been had the costmodel been applied in the current year are summarised below:

Increase/(decrease)

RM'000

Effects on Statement of Financial Position

AssetsProperty, plant and equipment (34,205)

EquityRetained proSts 1,461Revaluation reserve (35,666)

Revaluation of freehold land and buildings (cont'd.)(decrease)

Effects on Income Statement

Management expenses:Depreciation 4

Taxation (1)

Effects on Statement of Comprehensive Income

Revaluation of land and buildings (35,666)




Revaluation of freehold land and buildings (cont’d)

Furniture,fittings

Computer and office Motorequipment equipment vehicles Total

Company RM’000 RM’000 RM’000 RM’000

Cost

At 1 April 2010 3,345 1,782 1,331 6,458Additions 329 68 – 397Disposals (227) – – (227)

At 31 March 2011 3,447 1,850 1,331 6,628Additions 775 20 596 1,391Disposals – – (796) (796)Written off – (11) – (11)

At 31 March 2012 4,222 1,859 1,131 7,212

Accumulated depreciation

At 1 April 2010 2,908 1,502 298 4,708Charge for the year 323 89 266 678Disposals (227) – – (227)

At 31 March 2011 3,004 1,591 564 5,159Charge for the year 530 52 230 812Disposals – – (317) (317)

At 31 March 2012 3,534 1,643 477 5,654

Net carrying amount

At 31 March 2012 688 216 654 1,558

At 31 March 2011 443 259 767 1,469

14. INVESTMENT PROPERTIES

Group2012 2011

RM’000 RM’000General reinsurance and shareholders’ funds

At fair value:

At beginning of the year 28,600 34,600Fair value gains recognised in income statement (Note 7) – 5,173Transfer from property, plant and equipment (Note 13) – 18,034Transfer from prepaid land lease payments (Note 15) – 4,966Transfer to non-current asset held for sale (Note 23) (23,000) (34,173)

At end of the year 5,600 28,600

180 MNRB

14. INVESTMENT PROPERTIES (CONT’D)

Group2012 2011

RM’000 RM’000Family takaful fund

At fair value:

At beginning of the year 103,518 110,000Additions 310 1,008Fair value loss recognised in income statement (Note 7) – (7,490)


These properties are carried at their fair values in accordance with the accounting policy disclosed in Note 2.14.

15. PREPAID LAND LEASE PAYMENTS

Group2012 2011

RM’000 RM’000


Long term leasehold land:

At beginning of year – 5,021Amortisation for the year – (55)Transfer to investment properties (Note 14) – (4,966)

At end of year – –

16. INTANGIBLE ASSETS


Software Computerdevelopment software

in andprogress licenses Total

Group RM’000 RM’000 RM’000

Cost

At 1 April 2010 3,477 25,390 28,867Additions 1,583 1,362 2,945ReclassiScation (392) 392 –

At 31 March 2011 4,668 27,144 31,812Additions 3,053 851 3,904ReclassiScation (7) 7 –

At 31 March 2012 7,714 28,002 35,716



16. INTANGIBLE ASSETS (CONT’D)

General reinsurance and shareholders’ funds (cont’d)

Software Computerdevelopment software

in andprogress licenses Total


Accumulated amortisation

At 1 April 2010 – 15,766 15,766Amortisation for the year – 3,077 3,077

At 31 March 2011 – 18,843 18,843Amortisation for the year – 2,904 2,904

At 31 March 2012 – 21,747 21,747

Net carrying amount

At 31 March 2012 7,714 6,255 13,969

At 31 March 2011 4,668 8,301 12,969

Company

Cost

At 1 April 2010 527 5,786 6,313Additions 373 188 561

At 31 March 2011 900 5,974 6,874Additions 672 360 1,032

At 31 March 2012 1,572 6,334 7,906

Accumulated amortisation

At 1 April 2010 – 5,402 5,402Amortisation for the year – 241 241

At 31 March 2011 – 5,643 5,643Amortisation for the year – 189 189

At 31 March 2012 – 5,832 5,832

Net carrying amount

At 31 March 2012 1,572 502 2,074

At 31 March 2011 900 331 1,231

182 MNRB

17. DEFERRED TAX

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


At beginning of year 5,474 10,333 3,098 3,337Recognised in income statement 1,402 (9,636) (1,207) (239)Recognised in other comprehensive income (1,767) 4,777 (47) –

At end of year 5,109 5,474 1,844 3,098

Presented after appropriate offsettingas follows:– Deferred tax assets 9,858 11,335 2,258 3,511– Deferred tax liabilities (4,749) (5,861) (414) (413)

5,109 5,474 1,844 3,098

Group2012 2011

RM’000 RM’000


At beginning of year 1,571 2,342Recognised in income statement (210) (807)Recognised in general takaful fund (Note 30) 9 36

At end of year (Note 46) 1,370 1,571

Family takaful fund

At beginning of year (2,135) (2,304)Recognised in income statement 108 344Recognised in family takaful fund (Note 31) (328) (175)

At end of year (Note 46) (2,355) (2,135)


At beginning of year (23) (4)Recognised in general retakaful fund (Note 32) (28) (19)

At end of year (Note 46) (51) (23)


At beginning of year (9) (4)Recognised in family retakaful fund (Note 33) (16) (5)

At end of year (Note 46) (25) (9)



17. DEFERRED TAX (CONT’D)

Deferred tax assets have not been recognised in respect of the following items of the retakaful subsidiary as theprobability of recognition cannot be determined with certainly given the recent history of losses recorded.

Group2012 2011

RM’000 RM’000Shareholder’s fund

Temporary differences:– net accretion of discounts 18 14– impairment of investments 11 –– provisions 113 161– Snancial assets 19 40

161 215


Unutilised business losses 6,624 7,656Temporary differences:– net accretion of discounts (2) 1– contribution liabilities 63 102– impairment loss on takaful receivables 270 386– Snancial assets (1) (1)

6,954 8,144


Temporary differences:– net amortisation of premiums 5 3– impairment loss on takaful receivables 10 5– Snancial assets – (1)

15 7

The components and movements of deferred tax assets/(liabilities) during the Snancial year are as follows:


Unabsorbed Property, Impairmentcapital plant and Premium losses on Financial

allowances equipment Receivables liabilities investments assets Others TotalGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2012

At 1 April 2011 594 (3,461) 3,203 17 3,720 (2,400) 3,801 5,474Recognised in:Income statement – 2,041 106 542 (668) 838 (1,457) 1,402Other comprehensiveincome – – – – – (1,767) – (1,767)

At 31 March 2012 594 (1,420) 3,309 559 3,052 (3,329) 2,344 5,109

184 MNRB


The components and movements of deferred tax assets/(liabilities) during the Snancial year are as follows (cont’d):


Unabsorbed Property, Impairmentcapital plant and Premium losses on Financial

allowances equipment Receivables liabilities investments assets Others TotalGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2011

At 1 April 2010 441 (4,663) 4,322 5,338 7,183 (7,038) 4,750 10,333Recognised in:Income statement 153 1,202 (1,119) (5,321) (3,463) (139) (949) (9,636)Other comprehensiveincome – – – – – 4,777 – 4,777

At 31 March 2011 594 (3,461) 3,203 17 3,720 (2,400) 3,801 5,474

Company

2012

At 1 April 2011 594 (413) 52 218 – 2,647 3,098Recognised in:Income statement – 46 (48) 89 – (1,294) (1,207)Other comprehensive income – – – – (47) – (47)

At 31 March 2012 594 (367) 4 307 (47) 1,353 1,844

2011

At 1 April 2010 441 (271) – – – 3,167 3,337Recognised in income statement 153 (142) 52 218 – (520) (239)

At 31 March 2011 594 (413) 52 218 – 2,647 3,098

General takaful fundFinancial

Receivables assets TotalGroup RM’000 RM’000 RM’000

2012

April 2011 1,135 436 1,571Recognised in:Income statement 534 (744) (210)Other comprehensive income – 9 9

At 31 March 2012 1,669 (299) 1,370

2011

At 1 April 2010 1,947 395 2,342Recognised in:Income statement (812) 5 (807)Other comprehensive income – 36 36

At 31 March 2011 1,135 436 1,571




The components and movements of deferred tax assets/(liabilities) during the Snancial year are as follows (cont’d):

Family takaful fund

FinancialReceivables assets Total


2012

At 1 April 2011 (1,204) (931) (2,135)Recognised in:Income statement – 108 108Other comprehensive income – (328) (328)

At 31 March 2012 (1,204) (1,151) (2,355)

2011

At 1 April 2010 (1,803) (501) (2,304)Recognised in:Income statement 599 (255) 344Other comprehensive income – (175) (175)

At 31 March 2011 (1,204) (931) (2,135)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assetsagainst current tax liabilities and when the deferred income taxes relate to the same Sscal authority.

18. INVESTMENT IN SUBSIDIARIES

Company2012 2011

RM’000 RM’000Shareholders’ fund

Unquoted shares, at cost:In Malaysia 905,000 795,000Less: Impairment loss (6,869) (6,869)

898,131 788,131Outside Malaysia 6,370 6,370

904,501 794,501

186 MNRB

18. INVESTMENT IN SUBSIDIARIES (CONT’D)

Details of the subsidiaries are as follows:

Name of Country of EffectiveSubsidiaries Incorporation Principal Activities Ownership Interest

2012 2011% %

Malaysian Reinsurance Malaysia Underwriting of all classes of 100 100Berhad general reinsurance business

Takaful Ikhlas Sdn. Bhd. Malaysia Management of family, general and 100 100takaful investment-linked business

MNRB Retakaful Berhad Malaysia Management of family and general 100 100retakaful business

MMIP Services Sdn. Bhd. Malaysia Managing the Malaysian Motor 100 100Insurance Pool to provide motorinsurance to vehicle owners whoare unable to obtain insuranceprotections for their vehicles

Malaysian Re (Dubai) Ltd.* Dubai, Marketing and promotional activities 100 100United Arab and servicing of clients on behalfEmirates of Malaysian Re

* Audited by a Srm of chartered accountants other than Ernst & Young.

The impairment loss of RM6,869,000 was made in respect of retakaful subsidiary, which has recorded a net loss inthe previous year, due mainly to the impairment of Qard provided to the general retakaful fund. The impairment lossalso resulted in the total shareholder’s equity of the retakful subsidiary being lower than issued and paid-up sharecapital.

19. INVESTMENT IN ASSOCIATES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Unquoted shares in Malaysia, at cost 77,615 77,615 1,957 1,957Share of post acquisition retained proSts (7,615) 24,808 – –Post acquisition foreign exchangetranslation reserve * 16,382 15,119 – –

86,382 117,542 1,957 1,957

Represented by:Share of net assets 86,382 117,542 1,957 1,957



19. INVESTMENT IN ASSOCIATES (CONT’D)

Details of the associates which are all incorporated in Malaysia are as follows:

Name of Proportion ofassociates Year end Principal activities ownership interest

and voting power2012 2011

% %Held by the Company:

Motordata Research 31 December Development and provision of 40 40Consortium Sdn. Bhd. a centralised motor parts price

database for the Malaysianinsurance industry

Held by Malaysian Re:

Labuan Reinsurance (L) Ltd. 31 December Underwriting of all classes of 20 20(“Labuan Re”) general reinsurance business in

the Federal Territory of Labuan

* This is in respect of retranslation of the cost of the investment in Labuan Re at the rate of exchange prevailingat the reporting date.

The Snancial statements of the above associates are not co-terminous with those of the Group. For the purpose ofapplying the equity method of accounting, the audited Snancial statements of the associates for the year ended31 December 2011 and management Snancial statements to the end of the accounting period of 31 March 2012have been used.

The summarised Snancial information of the associates are as follows:

2012 2011RM’000 RM’000

Assets and liabilities:

Current assets 1,783,150 1,481,973Non-current assets 52,050 36,965

Total assets 1,835,200 1,518,938

Current liabilities 231,806 24,213Non-current liabilities 1,144,462 907,387

Total liabilities 1,376,268 931,600

Results:

Revenue 855,669 773,901(Loss)/proSt for the year (148,079) 32,671

188 MNRB

20. FINANCIAL ASSETS

The following table summarises the carrying values of Snancial assets of the Group and the Company:


reinsurance and General Family General Familyshareholders’ takaful takaful retakaful retakaful Shareholder’s


2012

At carrying value:

Malaysian government securities 49,187 – – – – –Government investment issues 160,467 48,990 185,970 9,004 3,000 –Islamic BNM monetary notes – – – 1,988 – –Debt securities 822,967 21,321 53,287 15,143 4,397 5,059Equity securities 130,801 5,824 44,209 142 169 1,173Institutional trust deposit 61,440 – 19,493 – – –Shariah approved unit trust funds – 7,968 11,952 – – –Structured products 12,296 – – – – –Fixed and call deposits 563,343 – – – – 15,664Islamic investment accounts 242,613 65,093 365,538 32,401 872 3,909Islamic repo placements 2,000 – 6,649 – – –Units held in investment-linked fund 10,000 – – – – –Other loans and receivables 137,330 5,325 10,487 798 121 3,554

2,2192,444 154,521 697,585 59,476 8,559 29,359

2011

At carrying value:

Malaysian government securities 100,414 – – – – –Government investment issues 87,653 50,940 163,241 4,004 3,007 –Islamic BNM monetary notes 4,996 – – – – –Debt securities 764,400 106,933 328,174 6,369 4,349 6,967Equity securities 111,820 9,757 17,820 70 35 2,602Institutional trust deposit 58,595 – 18,592 – – –Shariah approved unit trust funds – 5,888 8,585 – – –Structured products 12,019 – – – – –Fixed and call deposits 560,810 – – – – 4,069Islamic investment accounts 230,444 50,826 150,869 10,562 7,706 3,813Islamic repo placements 12,668 5,814 113,967 – – –Units held in investment-linked fund 10,000 – – – – –Other loans and receivables 162,057 3,809 18,861 34,531 118 2,877

2,115,876 233,967 820,109 55,536 15,215 20,328

All equity and debt securities held by the Group's takaful and retakaful subsidiaries are Shariah-compliant.

All Snancial instruments classiSed as Snancial assets at FVTPL are held for trading with the exception of structuredproducts, which were designated as Snancial assets at FVTPL on initial recognition.



20. FINANCIAL ASSETS (CONT’D)

<––––––––––––––––––––––––– Group –––––––––––––––––––––––––>General

reinsurance and General Family Generalshareholders’ takaful takaful retakaful

fund fund fund fundRM’000 RM’000 RM’000 RM’000

2012


At fair value:

Quoted shares in Malaysia 5,648 1,040 2,346 38Structured products 12,296 – – –Warrants 9 9 9 –

17,953 1,049 2,355 38




(b) HTM investments

At amortised cost/cost:

Islamic BNM monetary notes – – – 1,988 – –Malaysian government securities 49,187 – – – – –Unquoted debt securities:Government guaranteed 64,042 18,322 36,249 – – –Secured 25,759 – – – 701 5,059Unsecured 2,274 2,999 17,038 – – –

Government investment issues 160,467 48,990 185,970 9,004 3,000 –Commercial papers 35,868 – – – – –

337,597 70,311 239,257 11,491 3,701 5,059

190 MNRB





2012 (cont’d)

(b) HTM investments (cont’d)

At fair value:

Islamic BNM monetary notes – – – 1,988 – –Malaysian government securities 49,856 – – – – –Unquoted corporate debtsecurities:Government guaranteed 65,039 18,643 36,803 – – –Secured 28,432 – – – 713 5,059Unsecured – 3,022 17,489 – – –


341,688 72,107 243,293 11,642 3,713 5,059

(c) AFS financial assets

At cost:

Unquoted shares in Malaysia (i) 45,003 – – – – 500

At fair value:

Unquoted debt securities:Government guaranteed 29,566 – 57,338 – – –Secured 695,024 – – 14,644 3,696 –Unsecured 102,017 99,563 329,922 – – –

Golf club memberships 228 – – – – 50Quoted shares in Malaysia 79,911 4,764 41,796 104 169 623Quoted shares outside Malaysia 224 – – – – –Warrants 6 11 58 – – –Shariah approved unit trust funds – 7,968 11,952 – – –

951,979 112,306 441,066 14,748 3,865 1,173







2012 (cont’d)

(d) Loans and receivables

At amortised cost/cost/fair value:

Fixed and call deposits withlicensed:Commercial banks 132,546 – – – – 8,266Investment banks 430,797 – – – – 7,398

Islamic investment accountswith licensed:Co-operative bank 42,897 – – 18,447 – –Islamic banks 147,374 36,835 246,456 13,954 872 3,909Investment banks 10,412 2,384 27,631 – – –Development bank 36,099 25,874 91,454 – – –Building society 5,831 – – – – –

Institutional trust deposit 61,440 – 19,493 – – –Islamic repo placements 2,000 – 6,649 – – –Units held in investment-linkedfund 10,000 – – – – –

Secured staff loans 11,227 – – – – 2,309Qard given to General retakafulfund (ii) (iii) 33,702 – – – – –

Due from (iv):General takaful fund 7,806 – – – – –Family takaful fund 13,818 963 – – – –General retakaful fund 3,322 – – – – –Family retakaful fund 3,871 – – – – –Subsidiaries – – – – – 537Holding company – – 1,212 – – –

Income due and accrued 18,526 2,324 8,190 432 100 381Due from insurance Poolaccounts 19,969 – – – – –

Other receivables and deposits 24,861 2,038 1,085 366 21 327

1,016,498 70,418 402,167 33,199 993 23,127

192 MNRB


<–––––––––––––––––––––––––––––– Group ––––––––––––––––––––––––––––––>General

reinsurance and General Family General Familyshareholders’ takaful takaful retakaful retakaful


2011


At fair value:

Quoted Shariah approved equitiesin Malaysia 2,878 1,090 1,817 70 35

Structured products 12,019 – – – –Warrants 15 15 15 – –

14,912 1,105 1,832 70 35




(b) HTM investments

At amortised cost/cost:

Islamic BNM monetary notes 4,996 – – – – –Malaysian government securities 100,414 – – – – –Unquoted debt securities:Government guaranteed 80,067 14,324 24,103 – – –Secured 37,719 – – – 701 6,967Unsecured 1,383 2,004 25,043 – – –


329,758 67,268 212,387 4,004 3,708 6,967







2011 (cont’d)

(b) HTM investments (cont’d)

At fair value:

Islamic BNM monetary notes 4,996 – – – – –Malaysian government securities 100,842 – – – – –Unquoted debt securities:Government guaranteed 80,689 14,383 24,164 – – –Secured 38,115 – – – 704 6,967Unsecured 1,495 2,036 25,542 – – –


331,767 67,940 213,818 4,062 3,711 6,967

(c) AFS financial assets

At cost:

Unquoted shares in Malaysia (i) 46,152 – – – – 1,649

At fair value:

Unquoted debt securities:Government guaranteed – – 21,106 – – –Secured 571,948 – – – – –Unsecured 55,757 90,605 257,922 – – –

Islamic private debt securities – – – 6,369 3,648 –Golf club memberships 228 – – – – 50Quoted shares in Malaysia 62,206 8,652 15,988 – – 903Quoted shares outside Malaysia 341 – – – – –Shariah approved unittrust funds – 5,888 8,585 – – –

736,632 105,145 303,601 6,369 3,648 2,602

194 MNRB





2011 (cont’d)

(d) Loans and receivables

At amortised cost/cost/fair value:

Fixed and call depositswith licensed:Commercial banks 129,776 – – – – 3,069Investment banks 431,034 – – – – 1,000

Islamic investment accountswith licensed:Co-operative bank 81,451 – – – 3,618 –Islamic banks 127,252 32,249 90,006 10,562 4,088 3,813Investment banks – – 1,507 – – –Development bank 13,472 18,577 59,356 – – –Building society 8,269 – – – – –

Institutional trust deposit 58,595 – 18,592 – – –Islamic repo placements 12,668 5,814 113,967 – – –Units held in investment-linkedfund 10,000 – – – – –

Secured staff loans 12,618 – – – – 2,334Qard given to (ii) (iii):General takaful fund 12,043 – – – – –General retakaful fund * 36,295 – – – – –

Due from (iv):General takaful fund 2,739 – 12,971 – – –Family takaful fund 29,110 – – – – –Family retakaful fund 11,120 – – – – –Shareholder’s fund – – – 34,343 – –Subsidiaries – – – – – 459Holding company – – 5,247 – – –

Income due and accrued 16,213 2,160 199 188 118 26Due from insurance Poolaccounts 19,971 – – – – –

Other receivables and deposits 21,948 1,649 1,297 – – 58

1,034,574 60,449 303,142 45,093 7,824 10,759




(d) Loans and receivables (cont’d)

(i) The pertinent information of the investments in unquoted shares in Malaysia are as follows:

2012 2011RM’000 RM’000

– 27,500,000 ordinary shares of RM1.00 each of Financial Park (Labuan)Sdn. Bhd. (“FPL”), representing an equity shareholding of 9%. 28,283 28,283Less: Impairment loss (4,759) (4,759)

23,524 23,52420,000,000 redeemable preference shares of RM1.00 each of FPL 20,569 20,569

44,093 44,093

– 410,000 ordinary shares of Malaysian Rating Corporation Berhad(“MARC”) of RM1.00 each, representing an equity shareholding of 4%. 410 410

44,503 44,503

(ii) Qard represents a loan to the general takaful and general retakaful funds to make good any underwritingdeScit experienced during a Snancial period. The amount is unsecured, not subject to any proSt elementsand has no Sxed terms of repayment. The management expects to recover the balance from the futureproSts of general takaful and general retakaful funds.

(iii) The impairment loss on Qard given to the general retakaful fund amounting to RM4.6 million (2011: RM14.6million) was made during the current Snancial year on account of continued underwriting losses beingexperienced. The impaired amount represents the balance that is expected not to be recoverable, based onfuture business projections of the general retakaful fund, by the directors of the Company.

(iv) These amounts are non-trade in nature, are unsecured, not subject to any interest/proSt elements andrepayable on demand.

21. INSURANCE/TAKAFUL CONTRACT LIABILITIES


2012 2011Gross Reinsurance Net Gross Reinsurance Net

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Claim liabilities (i) 1,389,660 (356,094) 1,033,566 1,131,439 (128,201) 1,003,238Premium liabilities (ii) 228,554 (1,542) 227,012 260,638 (18,396) 242,242Expense liabilities (iii) 20,229 – 20,229 20,630 – 20,630

1,638,443 (357,636) 1,280,807 1,412,707 (146,597) 1,266,110

196 MNRB

21. INSURANCE/TAKAFUL CONTRACT LIABILITIES (CONT’D)

(a) General reinsurance and shareholders’ funds (cont’d)


RM’000 RM’000 RM’000 RM’000 RM’000 RM’0000

(i) Claim liabilitiesAt beginning of the year 1,131,439 (128,201) 1,003,238 1,073,150 (123,025) 950,125Adjustment to claimsincurred:– Outstanding reserves

for currentunderwriting year 345,077 (202,175) 142,902 140,486 (26,973) 113,513

– Movements inoutstandingreserve from priorunderwriting years 433,457 (32,764) 400,693 514,534 (19,441) 495,093

– Movement in IBNRand PRAD 90,392 (32,501) 57,891 (113) 1,050 937

– Claims paid duringthe year (610,705) 39,547 (571,158) (596,618) 40,188 (556,430)

At end of the year 1,389,660 (356,094) 1,033,566 1,131,439 (128,201) 1,003,238

(ii) Premium liabilitiesAt beginning of the year 260,638 (18,396) 242,242 240,142 (29,627) 210,515Premiums written inthe year 1,146,415 (189,199) 957,216 1,172,385 (114,718) 1,057,667

Premiums earned duringthe year (1,178,499) 206,053 (972,446) (1,151,889) 125,949 (1,025,940)

At end of the year 228,554 (1,542) 227,012 260,638 (18,396) 242,242

2012 2011Gross/net Gross/net

RM’000 RM’000

(iii) Expense liabilities

At beginning of the year 20,630 20,110General takaful and retakaful funds:– Wakalah fee received during the year 55,356 64,328– Wakalah fee earned during the year (56,515) (62,967)– Movement in provision for expense deSciency 108 1,630

Family takaful and retakaful funds:– Movement in provision for UER 650 (2,471)





(b) General takaful fund


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Provision for claims reportedby certiScateholders 126,489 (14,627) 111,862 116,482 (23,418) 93,064

Provision for IBNR 72,573 (7,945) 64,628 66,597 (7,789) 58,808Provision for PRAD 11,607 (964) 10,643 10,033 (1,203) 8,830

Claim Liabilities (i) 210,669 (23,536) 187,133 193,112 (32,410) 160,702Contribution liabilities (ii) 83,041 (18,620) 64,421 98,621 (1,941) 96,680

293,710 (42,156) 251,554 291,733 (34,351) 257,382

The movement of claim liabilities and contribution liabilities of general takaful fund are presented as follows:

2012 2011Gross Retakaful Net Gross Retakaful Net

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

(i) Claim liabilities of generaltakaful fund

At beginning of year 193,112 (32,410) 160,702 143,303 (17,577) 125,726Claims incurred in thecurrent accident year 170,127 (12,465) 157,662 172,075 (23,637) 148,438

Adjustment to claimsincurred in prior accidentyears due to changesin assumptions:Change in PRAD 1,576 240 1,816 (3,655) 250 (3,405)Change in ExpectedUltimate Loss Ratio (38,690) 3,837 (34,853) (17,330) 741 (16,589)

Movements in claimsincurred in prior accidentyears 6,793 7,057 13,850 3,155 818 3,973

Claims paid duringthe year (122,249) 10,205 (112,044) (104,436) 6,995 (97,441)

At end of year 210,669 (23,536) 187,133 193,112 (32,410) 160,702

(ii) Contribution liabilities ofgeneral takaful fund

At beginning of year 98,621 (1,941) 96,680 84,951 (12,092) 72,859Contribution written inthe year 193,734 (40,131) 153,603 224,196 (22,398) 201,798

Contribution earnedduring the year (209,314) 23,452 (185,862) (210,526) 32,549 (177,977)

At end of year 83,041 (18,620) 64,421 98,621 (1,941) 96,680

198 MNRB



RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Provision for claims reportedby contract holders 36,440 (10,840) 25,600 33,668 (24,395) 9,273

Participants’ Account (“PA”) 1,122,399 (90,988) 1,031,411 916,867 (91,770) 825,097Participants’ Special Account(“PSA”) 62,494 (13,856) 48,638 52,077 (21,218) 30,859

1,221,333 (115,684) 1,105,649 1,002,612 (137,383) 865,229

The movement of claim liabilities of family takaful fund liabilities are presented as follows:

At beginning of year 1,002,612 (137,383) 865,229 802,900 (105,811) 697,089Increase in PA reserve 205,532 782 206,314 233,121 (31,755) 201,366Decrease in participants’risk fund (174,421) 58,436 (115,985) (251,900) 64,781 (187,119)

Contributions received 465,617 (48,302) 417,315 494,213 (44,403) 449,810Liabilities paid for death,maturities, surrenders,beneSts and claims (131,688) (2,772) (134,460) (117,867) (3,655) (121,522)

BeneSts and claimsexperience variation 2,772 13,555 16,327 3,655 (16,540) (12,885)

Fees deducted (144,516) – (144,516) (157,132) – (157,132)Transfer to shareholder’s fund (4,575) – (4,575) (4,378) – (4,378)

At end of year 1,221,333 (115,684) 1,105,649 1,002,612 (137,383) 865,229






RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Claim liabilities (i) 64,270 (5,758) 58,512 54,582 (6,837) 47,745Contribution liabilities (ii) 17,590 (771) 16,819 18,928 (531) 18,397

81,860 (6,529) 75,331 73,510 (7,368) 66,142

(i) Claim liabilitiesAt beginning of the year 54,582 (6,837) 47,745 42,254 (8,772) 33,482Adjustment to claimsincurred in prior accidentyears due to changes inassumptions:– Movements in

outstanding reserves 27,620 (2,302) 25,318 20,941 1,219 22,160– Movement in IBNR 7,058 348 7,406 4,023 (143) 3,880– Claims paid during

the year (24,990) 3,033 (21,957) (12,636) 859 (11,777)

At end of the year 64,270 (5,758) 58,512 54,582 (6,837) 47,745

(ii) Contribution liabilities

At beginning of the year 18,928 (531) 18,397 14,725 (2,591) 12,134Contributions writtenin the year 58,099 (10,874) 47,225 43,772 (6,898) 36,874

Contributions earnedduring the year (59,437) 10,634 (48,803) (39,569) 8,958 (30,611)

At end of the year 17,590 (771) 16,819 18,928 (531) 18,397

(e) Family retakaful fund

Takaful contract liabilities

At beginning of the year 2,494 (656) 1,838 1,778 (661) 1,117Increase in actuarial reserve 22,648 (3,636) 19,012 11,752 (4,258) 7,494BeneSts paid during the year (19,788) 2,428 (17,360) (11,036) 4,263 (6,773)

At end of the year 5,354 (1,864) 3,490 2,494 (656) 1,838

200 MNRB

22 INSURANCE AND TAKAFUL RECEIVABLES

Group2012 2011

RM’000 RM’000


Amount due from brokers and ceding companies 154,398 143,993Less: Allowance for impairment (4,298) (5,820)

150,100 138,173

Included in amount due from brokers and ceding companies is an amount of RM862,000 (2011: RM551,000) duefrom an associate, Labuan Reinsurance (L) Ltd. The amount receivable is subject to settlement terms stipulated inthe reinsurance contracts.

Group2012 2011

RM’000 RM’000


Contributions receivables 26,860 33,525Due from agents, retakaful operators and brokers 5,121 7,328Less: Allowance for impairment (6,518) (8,055)

25,463 32,798

Family takaful fund

Contributions receivables 132,242 84,788Less: Allowance for impairment (1,860) (882)

130,382 83,906


Due from ceding companies and brokers 24,363 15,474Less: Allowance for impairment (1,082) (1,545)

23,281 13,929


Due from ceding companies and brokers 2,478 942Less: Allowance for impairment (41) (22)

2,437 920



23. NON–CURRENT ASSETS HELD FOR SALE

Group2012 2011

RM’000 RM’000


Freehold land and buildings:At beginning of the year 34,173 –Transfer from investment properties (Note 14) 23,000 34,173Less: Cost to sell (572) –


(i) On 31 October 2011, the Group’s reinsurance subsidiary had entered into a sale and purchase agreement todispose of an investment property, a Sve storey commercial building in Kuala Lumpur; and

(ii) On 30 November 2011, the Group’s reinsurance subsidiary had entered into a sale and purchase agreement todispose of an investment property, a six storey factory/ofSce building and a leasehold land in Petaling Jaya.

The completion of the sale and purchase agreements are subject to the full settlement of the purchaseconsideration. As at 31 March 2012, the above mentioned investment properties are presented separately in thestatement of Snancial position as “Non-current assets held for sale”.

Subsequent to 31 March 2012, the purchase considerations for the two investment properties have been receivedand the sale had been completed.

24. ISLAMIC MEDIUM TERM NOTES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

At amortised cost:

RM200.0 million IMTN due in 2012 150,000 150,000 200,000 200,000

2012 2011RM’000 RM’000

IMTN held by subsidiaries:Malaysian Reinsurance Berhad 40,000 40,000MNRB Retakaful Berhad 10,000 10,000

50,000 50,000

202 MNRB

24. ISLAMIC MEDIUM TERM NOTES (CONT’D)

Upon obtaining the approval of the Securities Commission on 21 September 2007, the Company issued RM200.0million in nominal value of Islamic Medium Term Notes (“IMTN”) under an IMTN Programme on 10 December 2007.

The IMTN Programme was issued under the Islamic Snancing principle of Musyarakah and has a tenure of 5 yearsfrom the date of Srst issuance. The tenure of the IMTN is for a period of more than 1 year up to 5 years as theCompany may elect, provided that the IMTN mature prior to the expiry of the IMTN Programme. The IMTN areunsecured and carry a proSt rate of 4.75% per annum. ProSt is payable semi-annually in arrears from the date ofissue of the IMTN with the last proSt payment on the maturity date of the IMTN. The IMTN’s Snal repayment date ison 10 December 2012.

At 31 March 2012, the subsidiaries, Malaysian Reinsurance Berhad and MNRB Retakaful Berhad had invested in atotal of RM50.0 million nominal value of the Company’s IMTN.

25. SHORT TERM REVOLVING CREDIT FACILITY

Company2012

RM’000

At amortised cost:

RM120.0 million short term revolving credit facility 120,000

On 6 April 2011, the Company was granted a short-term revolving credit facility for the purpose of meeting workingcapital requirements. The short term revolving credit facility is denominated in Ringgit Malaysia, is unsecured andcarries a Sxed interest of 4.25% per annum. The said facility is repayable on 6 April 2012, twelve months from itsSrst drawdown date.

On 6 April 2012, the Company and the Snancier had mutually agreed to extend the repayment date of the facility to10 December 2012. The extended repayment date coincides with the Snal repayment date of the Company’s IMTN.The aligned maturity dates are expected to provide a more integrated approach towards the Company’s future debtrepayment plan for both the facility and the IMTN. Upon the extension of time, the facility now carries a Sxedinterest rate of 4.50% per annum whilst other terms remains.

26. INSURANCE AND TAKAFUL PAYABLES

Group2012 2011

RM’000 RM’000


Due to brokers and retrocessionaires 72,532 51,896Due to agents, retakaful operators and brokers 15,578 13,498

88,110 65,394

Included in amount due to brokers and retrocessionaires is an amount of RM1,639,000 (2011: RM183,000) due to anassociate, Labuan Reinsurance (L) Ltd. The amount payable is subject to settlement terms stipulated in thereinsurance contracts.



26. INSURANCE AND TAKAFUL PAYABLES (CONT’D)

Group2012 2011

RM’000 RM’000


Due to agents and retakaful operators 13,827 7,932

Family takaful fund






27. OTHER PAYABLES

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Due to general retakaful fund – 34,343 – –Outstanding commissions 6,888 15,457 – –Provisions 21,098 34,077 5,371 10,562Amount due to subsidiaries – – 6,999 –Sundry payables and accruals 20,368 10,983 4,734 3,364

48,354 94,860 17,104 13,926

204 MNRB

27. OTHER PAYABLES (CONT’D)

The amount due to subsidiaries are non-trade in nature, unsecured, not subject to any proSt/interest elements andhave no Sxed terms of repayment.

Group2012 2011

RM’000 RM’000


Advance contributions 2,593 4,871Amount due to shareholder’s fund * 7,806 2,739Amount due to family takaful fund – 12,971Other accruals and payables 15,676 18,896

26,075 39,477

Family takaful fund

Deposit contributions 33,452 30,572Amount due to shareholder’s fund 13,413 29,110Amount due to general takaful fund 963 –Other accruals and payables 11,352 7,837

59,180 67,519


Amount due to shareholder’s fund 3,322 –


Amount due to shareholder’s fund 3,871 11,120

* The Qard from shareholder’s fund, amounts due to shareholders’ fund, general takaful fund and family takafulfund are non-trade in nature, unsecured, not subject to any proSt elements and are repayable upon demand.

28. SHARE CAPITAL

Number of ordinaryshares of RM1.00 each Amount

2012 2011 2012 2011RM’000 RM’000 RM’000 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



29. RETAINED PROFITS

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance withthe Finance Act, 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax ondividends paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in thehands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances.

Companies also have an irrevocable option to disregard their accumulated tax credits under Section 108 of theIncome Tax Act, 1967 (“Section 108 balance”) and opt to pay dividends under the single tier system. The change inthe tax legislation also provides for the Section 108 balance to be locked-in as at 31 December 2007 in accordancewith Section 39 of the Finance Act, 2007.

The Company did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during thetransitional period, the Company may utilise the credits in the Section 108 balance as at 31 December 2007 todistribute cash dividend payments to ordinary shareholders as deSned under the Finance Act 2007. The Companyalso has tax exempt income available for distribution of approximately RM60,588,000 (2012: RM60,461,000) as at31 March 2012. As at 31 March 2012, the Company’s Section 108 balance amounting to RM148,862,000, aresufScient to pay franked dividends out of its entire retained earnings.

30. GENERAL TAKAFUL FUND

Group2012 2011

RM’000 RM’000

Accumulated deficitAt beginning of the year (2,889) (7,333)Net surplus of the general takaful fund 10,673 4,445Hibah (proSt) paid to participants during the year – (1)

At end of the year 7,784 (2,889)

QardAt beginning of the year 12,043 12,043Decrease in Qard (12,043) –

At end of the year – 12,043

AFS reservesAt beginning of the year 1,338 1,482Net gain on fair value changes 2,442 2,236Realised gain transferred to income statement (2,477) (2,416)Deferred tax on fair value changes 9 36


General takaful fund at end of the yearAccumulated surplus/(deScit) 7,784 (2,889)Qard – 12,043AFS reserves 1,312 1,338

9,096 10,492

206 MNRB

31. FAMILY TAKAFUL FUND

Group2012 2011

RM’000 RM’000Accumulated surplusAt beginning of the year 94,387 37,074Net surplus of the family takaful fund 248,578 238,302Transfer to special fund – (698)Increase in reserves (224,093) (180,291)


AFS reservesAt beginning of the year 7,962 6,113Net gain on fair value changes 13,090 9,480Realised gain transferred to income statement (8,902) (7,456)Deferred tax on fair value changes (328) (175)


Family takaful fund at end of the yearAccumulated surplus 118,872 94,387AFS reserves 11,822 7,962

130,694 102,349

32. GENERAL RETAKAFUL FUNDGroup

2012 2011RM’000 RM’000

Accumulated deficitAt beginning of the year (50,926) (36,557)Net deScit of the general retakaful fund (2,161) (14,369)

At end of the year (53,087) (50,926)

QardAt beginning of the year 50,926 38,190Increase in Qard 2,007 12,736


AFS reservesAt beginning of the year 70 12Net gain on fair value changes 225 190Realised gain transferred to income statement (113) (113)Deferred tax on fair value changes (28) (19)

At end of the year 154 70

General retakaful fund at end of the yearAccumulated deScit (53,087) (50,926)Qard 52,933 50,926AFS reserves 154 70

– 70

Qard is a loan provided by the shareholder’s fund to make good the current year underwriting deScit experienced bythe general retakaful fund.



33. FAMILY RETAKAFUL FUND

Group2012 2011

RM’000 RM’000

Accumulated surplusAt beginning of the year 1,317 943(DeScit)/surplus of the family retakaful fund (90) 374


AFS reservesAt beginning of the year 29 12Net gain on fair value changes 137 136Realised gain transferred to income statement (75) (114)Deferred tax on fair value changes (16) (5)

At end of the year 75 29

Family retakaful fund at end of the yearAccumulated surplus 1,227 1,317AFS reserves 75 29

1,302 1,346

34. INVESTMENT-LINKED FUND

(a) Income statement2012 2011

RM’000 RM’000

IncomeInvestment income (Note (c)) 707 516Realised gains and losses (Note (d)) 336 4,660Fair value (losses)/gains on Snancial assets at FVTPL 1,461 3,342

2,504 8,518

OutgoOther operating expenses (1,214) (931)

(1,214) (931)

Deficit of income over outgo before tax 1,290 7,587

Taxation (Note (e)) (460) (614)

Excess of income over outgo after tax 830 6,973

208 MNRB

34. INVESTMENT-LINKED FUND (CONT’D)

(b) Statement of financial position2012 2011

RM’000 RM’000

AssetsFinancial instruments (Note (f)):Financial assets at FVTPL 116,068 86,950Loans and receivables 528 3,213Deferred tax assets (Note (g)) 8 2

Cash and bank balances 2,573 1,244

Total Investment-linked business assets 119,177 91,409

LiabilitiesTax payable 438 508Deferred tax liabilities 488 365Other payables (Note (h)) 1,796 1,081

Total Investment-linked business liabilities 2,722 1,954

Net Assets Value (“NAV”) of Funds 116,455 89,455

Unitholders’ fund 116,455 89,455

(c) Investment income

Financial assets at FVTPL:ProSt income 149 217Dividend income on quoted shares in Malaysia 173 175

Loans and receivables:ProSt income 386 124

Investment expenses (1) –

707 516

(d) Realised gains and losses

Financial assets at FVTPL:Unquoted unsecured Islamic private debt securities 55 44Quoted shares in Malaysia (727) 227Shariah approved unit trust funds 1,008 4,389

336 4,660




(e) Taxation

2012 2011RM’000 RM’000

Current year’s provision 343 346Deferred tax relating to origination and reversal of temporary differences 117 268

Tax expense for the year 460 614

Investment-linked business is taxed at the preferential tax rate of 8% of taxable investment income for theperiod.

A reconciliation of income tax expense applicable to surplus before taxation at the statutory income tax rate toincome tax expense at the effective income tax rate of the fund is as follows:

2012 2011RM’000 RM’000


Taxation at Malaysian statutory tax rate of 8% 103 607Expenses not deductible for tax purposes 357 7

Tax expense for the year 460 614

(f) Financial assets/investments

(i) Financial assets at FVTPL

At fair value:

Unquoted Islamic private debt securities:Government guaranteed – 251Unsecured – 4,236

Government investment issues – 698Quoted Shariah approved equities in Malaysia – 8,751Shariah approved unit trust funds 116,068 73,014

116,068 86,950

(ii) Loans and receivables

At cost:

Islamic repo placements 456 3,237Income due and accrued 72 (24)

528 3,213

210 MNRB


(f) Financial assets/investments (cont’d)

(iii) Fair values of financial instruments

FRS 7 Financial Instruments: Disclosures requires the classiScation of Snancial instruments held at fair valueaccording to a hierarchy that reTects the signiScance of inputs used in making the measurements, inparticular, whether the inputs used are observable or unobservable. As at the reporting date, all theSnancial assets held by the fund that are measured at fair value are determined based on unadjustedquoted prices in active markets.

(g) Deferred tax

2012 2011RM’000 RM’000

At beginning of the year (363) (95)Deferred tax liability arising from unrealised gains on investments (117) (268)

(480) (363)

The net deferred tax liabilities shown in the statement of Snancial position has been determined afterappropriate offsetting as follows:

2012 2011RM’000 RM’000

Deferred tax assets 8 2Deferred tax liabilities (488) (365)

(480) (363)

(h) Other payables

Amount due to shareholder’s fund * 405 –Amount due to family takaful fund * 1,033 852Other accruals and payables 358 229

1,796 1,081

* The amounts due to shareholder’s fund and family takaful fund are non-trade in nature, unsecured, notsubject to any proSt elements and has no Sxed terms of repayment.




(i) Unitholders’ fund

2012 2011RM’000 RM’000

Unitholders’ capital 122,946 86,928Undistributed (deScit)/surplus (6,491) 2,527

116,455 89,455

At beginning of the year 89,455 46,871Net creation of units 36,019 41,699Net cancellation of units (9,849) (6,088)Excess of income over outgo after tax 830 6,973


35. DIVIDENDS

Net dividend per share Amount2012 2011 2012 2011

Group and Company Sen Sen RM’000 RM’000

Dividend recognised as distributionto ordinary equity holders of the Company:Dividend in respect of the Snancial yearended 31 March 2011:Final dividend of 20% less 25% tax * 15.0 – 31,960 –

* At the forthcoming Annual General Meeting, a Srst and Snal dividend in respect of the current Snancial yearended 31 March 2012 of 17% less 25% tax based on the issued and paid-up share capital of 213,069,500ordinary shares at the date of this report, amounting to a total dividend of RM27,166,361, will be proposed forshareholders’ approval. The Snancial statements for the current Snancial year do not reTect this proposeddividend. Such dividend, if approved by the shareholders, will be accounted for in the shareholders’ equity asan appropriation of retained proSts in the next Snancial year ending 31 March 2013.

36. EARNINGS PER SHARE

The basic and diluted earnings per share (EPS) is calculated by dividing the net proSt for the year by the number ofordinary shares in issue during the year.

Group2012 2011

Net proSt for the year (RM’000) 84,015 122,942

Number of ordinary shares in issue (’000) 213,070 213,070

Basic and diluted EPS/(LPS) (sen) 39.4 57.7

212 MNRB

37. OPERATING LEASE ARRANGEMENTS

(a) The Group as lessee

The Group has entered into non-cancellable operating lease agreements for the use of ofSce premises. Thislease is for a period of 5 years and subject to review every 2 years. There are no restrictions placed upon theGroup by entering into this lease.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at thereporting date but not recognised as liabilities, are as follows:

Group2012 2011

RM’000 RM’000

Future minimum rental payments:

Not later than 1 year 9,391 9,157Later than 1 year and not later than 5 years 33,422 33,033

42,813 42,190

(b) The Group as lessor

The Group has entered into non-cancellable operating lease agreements on its portfolio of investmentproperties. These leases have remaining non-cancellable lease terms of between 5 and 10 years. All leasesinclude a clause to enable upward revision of the rental charge on an annual basis based on prevailing marketconditions and certain contracts include contingent rental arrangements computed based on sales achieved bytenants.

The future minimum lease payments receivable under non-cancellable operating leases contracted for as at thereporting date but not recognised as receivables, are as follows:

Group2012 2011

RM’000 RM’000

Future minimum rental receipts:

Not later than 1 year 10,128 12,242Later than 1 year and not later than 5 years 17,326 23,120

27,454 35,362

38. COMMITMENTS

The commitments of the Group and of the Company as at the Snancial year-end are as follows:


Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Authorised and contracted for:– software development costs 1,094 3,904 – –– rooftop constructions 2,077 5,800 – –

3,171 9,704 – –



38. COMMITMENTS (CONT’D)

Family takaful fundGroup

2012 2011RM’000 RM’000

Authorised and contracted for:– outstanding payment on ofSce building, payable within 12 months 233 543

39. RELATED PARTY DISCLOSURE

For the purposes of these Snancial statements, parties are considered to be related to the Group and the Companyif the Group and the Company have the ability, directly or indirectly, to control the party or exercise signiScantinTuence over the party in making Snancial and operating decisions, or vice versa, or where the Group and theCompany and the party are subject to common control or common signiScant inTuence. Related parties may beindividuals or other entities.

Key management personnel are deSned as those persons having authority and responsibility for planning, directingand controlling the activities of the Company either directly or indirectly. The key management personnel include allthe Directors of the Group and the Company, and certain members of senior management of the Group and theCompany.

(a) The significant transactions with related parties are as follows:

Group Company2012 2011 2012 2011

Income/(expenses): RM’000 RM’000 RM’000 RM’000

Transactions with subsidiaries:Management fees received – – 29,213 21,963Net dividend received – – 37,500 11,508Rental paid – – (1,104) (1,004)ProSt on IMTN payable – – (2,375) (2,375)

Transactions with takaful funds of a subsidiary:Takaful contributions paid (321) (476) – –Net reinsurance inwards 14,896 – – –Rental expenses (5,238) (5,295) – –Wakalah fee 184,026 206,535 – –Investment fee 4,313 2,376 – –Surplus administration charges 10,663 4,378 – –

Transactions with retakaful fundsof a subsidiary:Net reinsurance inwards 2,267 492 – –Net reinsurance outwards (507) (5,019) – –Wakalah fee 10,000 10,559 – –Investment fee 283 728 – –Surplus administration charges 12 45 – –

Transactions with an associate,Labuan Reinsurance (L) Ltd:Net reinsurance inwards 1,742 1,421 – –Net reinsurance outwards (135) (715) – –Rental received 839 746 – –

Transactions with an associate,Motordata Research Consortium Sdn Bhd:Net dividend received – – 320 210

214 MNRB

39. RELATED PARTY DISCLOSURE (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 ofbusiness and have been established on terms and conditions that are not materially different from thoseobtainable in transactions with unrelated parties.

Outstanding balances arising from the transactions above as at 31 March have been disclosed in Notes 22 and26 of the Snancial statements as well as on the face of statements of Snancial position.

(b) The key management personnel compensations are as follows:

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000


Non-executive directors’ fees 2,042 2,322 696 685Non-executive directors’ allowances 528 566 160 131Executive directors and directors ofanother subsidiary’s remuneration:Salaries and bonus 3,462 5,690 946 2,437Pension costs – EPF 519 1,014 155 480Social security cost 1 1 1 1Retirement beneSts – 60 – 60Allowances 124 449 124 304BeneSts-in-kind 248 492 49 125

Other key management personnel’sremuneration:Salary and bonus 10,304 9,502 4,109 2,856Pension costs – EPF 1,644 1,640 687 519Social security cost 7 4 6 2Allowances 1,131 2,257 650 822BeneSts-in-kind 451 365 115 92

20,461 24,362 7,698 8,514

40. SIGNIFICANT AND SUBSEQUENT EVENTS

The signiScant events that occurred during the Snancial year are as follows:

(a) On 6 April 2011, the Company was granted a short-term revolving credit facility for the purpose of meetingworking capital requirements. The short term revolving credit facility is denominated in Ringgit Malaysia, isunsecured and carries a Sxed interest of 4.25% per annum. The said facility is repayable on 6 April 2012,twelve months from its Srst drawdown date.

(b) During the current Snancial year ended 31 March 2012, MNRB increased its investment in its reinsurance andtakaful subsidiaries, Malaysian Reinsurance Berhad (“Malaysian Re”) and Takaful Ikhlas Sendirian Berhad(“Takaful Ikhlas”) respectively, as follows:

(i) MNRB’s investment in Malaysian Re was increased by RM10 million, via the issuance of 10 million newordinary shares of RM1.00 each at par for cash. As a result, the issued and paid-up share capital ofMalaysian Re was increased from RM500 million to RM510 million; and



40. SIGNIFICANT AND SUBSEQUENT EVENTS (CONT’D)

The signiScant events that occurred during the Snancial year are as follows: (cont’d)

(ii) MNRB’s investment in Takaful Ikhlas was increased by RM100 million, via the issuance of 100 million newordinary shares of RM1.00 each at par for cash. As a result, the issued and paid-up share capital ofTakaful Ikhlas was increased from RM195 million to RM295 million.

The new ordinary shares issued by Malaysian Re and Takaful Ikhlas rank pari passu with the ordinary shares ofthe two subsidiaries in existence as at the issue date above

The event that occurred subsequent to the Snancial year end is as follow:

On 6 April 2012, the Company and its Snancier had mutually agreed to extend the repayment date of the facility to10 December 2012. The extended repayment date coincides with the Snal repayment date of the Company’s IMTN.The aligned maturity dates are expected to provide a more integrated approach towards the Company’s future debtrepayment plan for both the facility and the IMTN. Upon the extension, the facility now carries a Sxed interest rate of4.50% per annum whilst other terms were maintained.

41. SEGMENT INFORMATION

Investment Reinsurance Takaful RetakafulHolding Business Operator Operator Elimination Consolidated

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2012

RevenueExternal 766 1,224,688 194,059 12,379 – 1,431,892Inter-segment 79,533 8,813 – 475 (88,821) –

80,299 1,233,501 194,059 12,854 (88,821) 1,431,892

ResultsNet earned premiums – 972,446 – – – 972,446Interest/proSt income 751 64,581 9,339 2,701 (2,375) 74,997Other revenue 79,422 50,496 200,577 13,552 (89,721) 254,326Net claims – (601,486) – – – (601,486)Other expenses (23,608) (330,002) (191,690) (13,165) 37,409 (521,056)Depreciation (812) (3,274) (3,649) (95) – (7,830)Amortisation (189) (1,601) (1,112) (2) – (2,904)Finance cost (14,544) – – – 2,375 (12,169)

Profit from operations 41,020 151,160 13,465 2,991 (52,312) 156,324Share of results of associates 741 (30,851) – – – (30,110)

Profit before zakat and tax 41,761 120,309 13,465 2,991 (52,312) 126,214Zakat – – (400) – – (400)Tax expense (10,432) (39,220) (4,556) – 12,409 (41,799)

Net profit for the year 31,329 81,089 8,509 2,991 (39,903) 84,015

216 MNRB

41. SEGMENT INFORMATION (CONT’D)



2011

RevenueExternal 247 1,238,093 211,910 13,012 – 1,463,262Inter-segment 37,015 11,342 – 475 (48,832) –

1,463,262

ResultsNet earned premiums – 1,025,940 – – – 1,025,940Interest/proSt income 247 53,369 4,514 2,524 (2,375) 58,279Other revenue 37,337 75,381 215,255 12,730 (49,345) 291,358Net claims – (609,542) – – – (609,542)Other expenses (40,773) (360,344) (200,388) (24,647) 37,129 (589,023)Depreciation (678) (3,195) (4,101) (96) (665) (8,735)Amortisation (241) (1,653) (1,169) (14) – (3,077)Finance cost (9,500) – – – 2,375 (7,125)

(Loss)/profit from operations (13,608) 179,956 14,111 (9,503) (12,881) 158,075Share of results of associates 278 6,600 – – – 6,878

(Loss)/profit before zakatand tax (13,330) 186,556 14,111 (9,503) (12,881) 164,953Zakat – – (400) 28 – (372)Tax expense (1,185) (39,017) (4,770) – 3,333 (41,639)

Net (loss)/profit for the year (14,515) 147,539 8,941 (9,475) (9,548) 122,942






2012

AssetsSegment assets 950,085 2,603,032 2,311,730 202,619 (957,783) 5,109,683Investment in associates 1,957 75,658 – – – 77,615Add: Consolidation adjustmentson investment in associates 941 7,826 – – – 8,767

952,983 2,686,516 2,311,730 202,619 (957,783) 5,196,065

LiabilitiesSegment liabilitiesBorrowings 320,000 – – – (50,000) 270,000Insurance and takaful contractliabilities – 1,618,214 17,149 3,080 – 1,638,443

Other liabilities 17,104 92,159 1,734,552 101,836 (11,960) 1,933,691

337,104 1,710,373 1,751,701 104,916 (61,960) 3,842,134

EquitiesSegment equitiesGeneral reinsurance andshareholders’ funds 614,938 976,143 303,784 96,401 (895,823) 1,095,443Add: Consolidationadjustments 941 – – – – 941

Takaful funds – – 256,245 – – 256,245Retakaful funds – – – 1,302 – 1,302

615,879 976,143 560,029 97,703 (895,823) 1,353,931

952,983 2,686,516 2,311,730 202,619 (957,783) 5,196,065

218 MNRB




2011

AssetsSegment assets 828,561 2,198,417 1,792,926 227,129 (811,107) 4,235,926Investment in associates 1,957 75,658 – – – 77,615Add: Consolidation adjustmentson investment in associates 520 39,407 – – – 39,927

831,038 2,313,482 1,792,926 227,129 (811,107) 4,353,468

LiabilitiesSegment liabilitiesBorrowings 200,000 – – – (50,000) 150,000Insurance and takaful contractliabilities – 1,392,077 15,146 5,486 – 1,412,709

Other liabilities 13,926 72,467 525,354 127,011 (6,383) 732,375

213,926 1,464,544 540,500 132,497 (56,383) 2,295,084

EquitiesSegment equitiesGeneral reinsurance andshareholders’ funds 616,592 809,531 194,173 93,216 (754,724) 958,788Add: Consolidationadjustments 520 39,407 – – – 39,927

Takaful funds – – 1,058,253 – – 1,058,253Retakaful funds – – – 1,416 – 1,416

617,112 848,938 1,252,426 94,632 (754,724) 2,058,384

831,038 2,313,482 1,792,926 227,129 (811,107) 4,353,468



42. RISK MANAGEMENT FRAMEWORK

(a) Risk governance framework

The Group’s Risk Management Framework is designed to determine the level of risk acceptable to the Grouprelating to its core operations by setting the appropriate Board approved limits for adherence by managementafter taking into account the risk parameters, the nature, the size, mix and complexity of business andoperations. An enterprise risk management process is adopted to identify and evaluate key business risks thatmay affect the organisation and to establish and implement an appropriate system of internal controls tomanage these risks while ensuring full and effective control over signiScant strategic, Snancial, organisationaland compliance matters.

The key objectives of the risk management framework are to:

(i) provide information on risk governance and accountabilities;(ii) provide guidance to a standard approach to managing risks;(iii) create a risk awareness culture; and(iv) enhance professionalism, increase proStability and value for shareholders.

The Risk Management Governance structure is as follows:

(i) The Board of Directors is responsible for the management of risks. The Risk Management Committee ofthe Board (“RMCB”) assesses the adequacy of risk management policies and the risk managementframework for identifying, measuring, monitoring and controlling risks; ensures adequate infrastructure,resources and systems for effective management of risks are in place; and is also responsible to reviewand recommend to the Board proposed risk management strategies, policies and risk tolerance limits;

(ii) The Operational Risk Management Committee (“ORMC”) which comprises the President/Group ChiefExecutive OfScer and senior management assists the RMCB in identifying, measuring, monitoring andcontrolling risks within the Group to ensure the adequacy and effectiveness of infrastructure, resources andsystems in place;

(iii) The Risk Management and Compliance Division assists the RMCB and ORMC in developing andmaintaining the Risk Management Framework in consultation with stakeholders;

(iv) Other Departments in the Group implement risk management policies, that are consistent with the RiskManagement Framework, to address speciSc Departmental requirements and ensure that they are incompliance with day-to-day operations; and

(v) The Line Managers of each Department in the Group are responsible for using the various components ofthe Risk Management Framework as an integral part of their normal processes and procedures.

The Group has an Investment Committee to further manage risks associated with investments and assetallocation.

(b) Capital Management Objectives, Policies and Approach

The Capital Management Plan (“CMP”) of MNRB is designed to ensure effective capital management so as tomaximise the Group’s value by optimising capital structure in place and enhancing capital efSciency. It is alsodesigned to address the funding requirements of the Group to meet its various Snancial obligations.

220 MNRB

42. RISK MANAGEMENT FRAMEWORK (CONT’D)

(b) Capital Management Objectives, Policies and Approach (cont’d)

The CMP also includes descriptions of triggers and action plans in place for the Group to monitor the CapitalAdequacy Ratio (“CAR”) and Solvency Margin Ratio (“SMR”) of its subsidiaries and to carry out correctivemeasures when necessary to maintain the Snancial health of the Group. It is intended that capital will be utilisedmore efSciently in a controlled manner so that the Group will be able to manage its capital position above theinternal target of its subsidiaries.

Capital Management Objectives

The main objective of capital management is to monitor and maintain, at all times, an appropriate level ofcapital which is commensurate with the Group’s risk proSle. The key objective of the CMP is to triggerappropriate action plans to be taken by the Board and the management of the Group in event of internalcapital levels falling below the internal target requirement. This includes remedial actions that must beundertaken by the Board and the management to improve the Group’s 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 stakeholders’ objectives; and

(ii) Establish responsibility of the Board and Group’s management in developing an internal capital adequacyassessment process and setting capital targets that are commensurate with its risk proSle and controlenvironment.

Approach to capital management

The Group conducts stress test and in the case of its relevant subsidiaries, the stress tests are in compliancewith BNM/RH/GL 003-23: Guidelines of Stress Testing for Insurer and BNM/RH/GL 004-16: Guidelines of StressTesting for Takaful Operators. The impact of the adverse scenarios on the capital position of the Group on theSMR/CAR is assessed quarterly focusing on short to medium term views.

(c) Regulatory framework

The reinsurance subsidiary and the takaful and retakaful subsidiaries are required to comply with the InsuranceAct and Regulations, 1996 and the Takaful Act, 1984, respectively, which are administered by Bank NegaraMalaysia. BNM is primarily interested in protecting the rights of policyholders and participants and monitoringthe subsidiaries closely to ensure prudent management of its business operations. At the same time, BNM isalso interested in ensuring that the subsidiaries maintain an appropriate solvency position to meet unforeseenliabilities arising from economic cycle or natural disasters.

In addition, the Company is required to comply with the Listing Requirements of Bursa Malaysia SecuritiesBerhad, Guidelines issued by the Securities Commission and the Capital Markets and Services Act, 2007 as aresult of its status as a listed company on the Main Market of Bursa Malaysia Securities Berhad.



43. UNDERWRITING RISK

(a) General reinsurance

(i) Nature of risk

The reinsurance subsidiary principally underwrites the following main classes of general reinsurancebusiness: Fire, Motor, Marine, and Miscellaneous. Risks under these contracts usually cover a twelve monthduration other than some long term contracts which may cover up to 3 years or more. For generalreinsurance, the most signiScant risks arise from adverse development of the loss ratios and catastrophicloss events. These risk vary signiScantly in relation to economic conditions and territories from which therisk originates.

The above risks are mitigated by diversiScation across a large portfolio of business to ensure a balancedmix and spread of business as required by underwriting policies. DiversiScation through the implementationof underwriting strategies and claim management policies reduces the volatility of risks and improves theoverall portfolio experience, and also ensures that conservative estimates are secured on its insurancecontract liabilities.

The reinsurance subsidiary also manages its loss exposure through the use of retrocession programmeswhich are reviewed annually by the ORMC and RMCB, and subsequently approved by the Board. Prudentstandards are applied in the assessment of the security of the Company’s key retrocessionaires. To manageits underwriting risk, the reinsurance subsidiary also complies with guidelines imposed by BNM inconducting the underwriting of business.

(ii) Concentration of risk by type of business

The table below measures the concentration of contracts by liabilities exposure:

Retro-Gross cession Net

RM’000 RM’000 RM’0002012

Fire 691,210 (250,046) 441,164Motor 387,389 (7,477) 379,912Marine 233,623 (72,640) 160,983Miscellaneous 305,992 (27,473) 278,519

1,618,214 (357,636) 1,260,578

Local 1,054,897 (146,348) 908,549Overseas 563,317 (211,288) 352,029

1,618,214 (357,636) 1,260,578

2011

Fire 457,190 (41,635) 415,555Motor 424,694 120 424,814Marine 211,699 (94,162) 117,537Miscellaneous 298,494 (10,920) 287,574

1,392,077 (146,597) 1,245,480

Local 1,083,270 (144,333) 938,937Overseas 308,807 (2,264) 306,543

1,392,077 (146,597) 1,245,480

222 MNRB

43. 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 itspremium liabilities, are based upon previous claims experience, existing knowledge of events, the termsand conditions of relevant policies and interpretation of circumstances. Upon notiScation of a claim by itscedants, the reinsurance subsidiary sets aside reserves to meet the expected ultimate loss arising from thisclaim. 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 theservices of an independent qualiSed external actuary engaged for the purpose of ensuring that claim andpremium liabilities are objectively assessed and adequately provided for. Any such deSciency is recognisedin the Snancial statements.

(iv) Impact on liabilities, profit and equity

Key Assumptions

Liabilities are determined based upon previous claims experience, existing knowledge of events, the termsand conditions of the relevant contracts and interpretation of circumstances. Particularly relevant are pastexperiences with similar cases, historical claims development trends, legislative changes, judicial decisionsand economic conditions.

The inherent uncertainties in estimating liabilities can arise from a variety of factors such as the range andquality of data available, underlying assumptions made and random volatility in future experience.

Sensitivity analysis

As a general reinsurer, the insurance contract liabilities of the reinsurance subsidiary are sensitive to variouskey factors which are both internal and external. External factors to which the reinsurance subsidiary issensitive to include:

(i) Claims practices of ceding companies;(ii) Frequency and severity of claims incurred by cedants;(iii) Changes in premium rates in insurance and reinsurance markets; and(iv) Legislative and regulatory changes.

In general, due to the number of cedants providing business to the reinsurance subsidiary, the impact ofchanges to such variables cannot be reliably predicted. Accordingly, a sensitivity analysis on the abovefactors cannot be performed.

The main internal factors to which the reinsurance subsidiary is sensitive to pertain to the loss ratiosobserved from its claims experience. The most signiScant component of this would be large or catastrophicclaims reported by cedants to the reinsurance subsidiary. Based on historical trends and claimsperformance, large losses reported by cedants are increasing in terms of frequency and severity.Accordingly, the sensitivity analysis is performed by determining the estimated large losses thatmanagement believes would reasonably occur over the next 12 months as noted below.





(iv) Impact on liabilities, profit and equity (cont’d)

Sensitivity analysis (cont’d)

This analysis assumes that other factors relevant, but not signiScant, to the valuation of claim liabilities areconstant.

Impact on Impact on Impact onGross Net Profit Impact on

Liabilities Liabilities before Tax Equity*RM’000 RM’000 RM’000 RM’000

2012

Fire 50,565 17,687 17,687 13,265Marine 19,149 7,157 7,157 5,368Motor 1,185 1,185 1,185 889Miscellaneous 16,639 6,156 6,156 4,617

87,538 32,185 32,185 24,139

2011

Fire 26,799 14,543 14,543 10,908Marine 16,656 9,039 9,039 6,779Motor 91 91 91 69Miscellaneous 6,297 3,418 3,418 2,563

49,843 27,091 27,091 20,319

* The impact on the equity reTects the after tax impact.

The method used in performing the sensitivity analysis did not change from the previous year.

(v) Claims development table

The following tables show the estimate of cumulative ultimate incurred claims, including both claimsprovisions and IBNR for each successive underwriting year at each Snancial year end, along withcumulative claim payments to-date.

In setting provisions for claims, the reinsurance subsidiary relies on advice by its cedants and exercisesdiscretion where the claim may develop more adversely than advised. An estimate will be made in theabsence of a reported Sgure 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 signiScant uncertainty in the early stages asclaims are still being intimated and developed, particularly so for large and catastrophic claims. Theseuncertainties 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 waschanged. This change involved a more granular segregation of the business of the reinsurance subsidiaryinto speciSc portfolios with the intention of achieving greater accuracy in the estimation process.Accordingly, data pertaining to the gross general reinsurance liabilities prior to underwriting year 2009 wasnot available and hence only post underwriting year 2009 developments in gross general reinsuranceliabilities are disclosed.

224 MNRB



(v) Claims development table (cont’d)

The following tables have excluded the impact of speciSc large losses and other claims that managementbelieves are not relevant for purposes of establishing claims development trends.

Gross General Reinsurance Claim Liabilities for 2012:

Before SubUnderwriting Year 2004 2004 2005 2006 2007 2008 2009 2010 2011 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 accident year – – – – 418,389 573,070 640,777 643,911One year later – – – 408,945 496,009 570,029 603,851 –Two year later – – 403,736 448,593 493,161 573,383 – –Three year later – 334,075 417,448 464,785 492,705 – – –Four year later 352,998 338,991 399,937 457,881 – – – –Five year later 357,333 326,336 395,525 – – – – –Six year later 345,542 324,864 – – – – – –Seven year later 343,972 – – – – – – –

Current estimate of bookedultimate claims incurred (a) 343,959 324,776 395,184 456,141 487,436 560,570 567,276 321,985

At the end of accident year 69,606 45,677 42,356 53,719 63,614 92,548 81,664 72,602One year later 210,770 178,766 217,724 224,029 256,339 301,430 304,808 –Two year later 263,625 240,126 294,220 333,537 358,844 430,566 – –Three year later 291,312 265,782 335,359 379,990 411,516 – – –Four year later 308,433 290,901 355,014 403,432 – – – –Five year later 321,954 303,512 369,071 – – – – –Six year later 331,801 310,509 – – – – – –Seven year later 337,629 – – – – – – –

Cumulative paymentsto-date (b) 337,629 310,509 369,071 403,432 411,516 430,566 304,808 72,602

Expected claimliabilities (a) – (b) 56,075 6,330 14,267 26,113 52,709 75,920 130,004 262,468 249,383 873,269

Other portfolios 413,672

Best Estimate of Claim Liabilities 1,286,941Claim handling expenses 2,156Fund PRAD at 75% ConSdence Interval 100,563

Gross General Reinsurance Claim Liabilities 1,389,660






Net General Reinsurance Claim Liabilities for 2012:

Before SubAccident year 2004 2004 2005 2006 2007 2008 2009 2010 2011 Total








Best Estimate of Claim Liabilities 990,033Claim handling expenses 2,156Fund PRAD at 75% ConSdence Interval 79,887Less: Retrocession recoveries (38,510)

Net General Reinsurance Claim Liabilities 1,033,566

226 MNRB




Gross General Reinsurance Claim Liabilities for 2011

Before SubUnderwriting Year 2003 2003 2004 2005 2006 2007 2008 2009 2010 Total


At the end of accident year – – – – – 418,389 573,070 640,777One year later – – – – 408,945 496,009 570,029 –Two year later – – – 403,736 448,593 493,161 – –Three year later – – 334,075 417,448 464,785 – – –Four year later – 352,998 338,991 399,937 – – – –Five year later 322,570 357,333 326,336 – – – – –Six year later 288,868 345,542 – – – – – –Seven year later 271,056 – – – – – – –






Best Estimate of Claim Liabilities 1,044,334Claim handling expenses 3,657Fund PRAD at 75% ConSdence Interval 83,448

Gross General Reinsurance Claim Liabilities 1,131,439






Net General Reinsurance Contract Liabilities for 2011

Before SubAccident year 2003 2003 2004 2005 2006 2007 2008 2009 2010 Total








Best Estimate of Claim Liabilities 939,372Claim handling expenses 3,657Fund PRAD at 75% ConSdence Interval 75,260Less: Retrocession recoveries (15,051)

Net General Reinsurance Claim Liabilities 1,003,238

228 MNRB



(i) Nature of risk

The takaful subsidiary principally issues the following types of general takaful certiScates: motor, householdand commercial Sre, business interruption, personal accident, and other miscellaneous commercialcontracts. Risks under these certiScates usually cover a twelve month duration other than long term Srewhich may cover durations up to thirty years or more. For general takaful business, the risk arises from thefrequency and severity of loss events. These risks vary signiScantly in relation to the location of risks, typeof risks covered and industry.

The above risks are mitigated by diversiScation across a large portfolio of business. The portfolioexperience is improved via the implementation of underwriting strategies and claim management policieswhich attempt to minimise losses.

The takaful subsidiary also manages its loss exposure by the use of retakaful arrangements. The retakafultreaty arrangements are reviewed annually by the RMCB and approved by the Board.

(ii) Concentration of risk by type of certificates

The table below sets sets out the concentration of takaful certiScates liabilities by class:

Gross Retakaful NetRM’000 RM’000 RM’000

2012

Fire 35,638 (3,396) 32,242Motor 213,980 (20,429) 193,551Marine, Aviation & Transit 1,531 (606) 925Miscellaneous 42,561 (17,725) 24,836

293,710 (42,156) 251,554

2011

Fire 30,727 (5,443) 25,284Motor 217,398 (2,594) 214,804Marine, Aviation & Transit 5,217 (1,785) 3,432Miscellaneous 38,391 (24,529) 13,862

291,733 (34,351) 257,382

All business of the general takaful fund is derived from participants in Malaysia; accordingly, disclosure ofconcentration risk by geographical region is not relevant to the general takaful fund.




(b) General takaful fund (cont’d)

(iii) Impact on liabilities, profit and equity

Key Assumptions

The principal assumptions underlying the estimation of liabilities is that the takaful subsidiary’s future claimsdevelopment will follow a similar pattern to past claims development experience.

Additional qualitative judgments are used to assess the extent to which past trends may not apply in thefuture, for example, isolated occurrence, changes in market factors such as public attitudes to claimsnotiScation and reporting, economic conditions, as well as internal factors, such as portfolio mix, policyconditions and claims handling procedures. Judgment is further used to assess the extent to whichexternal factors, such as judical decisions and government legislation affect the estimates.

Other key circumstances affecting the reliability of assumptions include variation in proSt rates and delaysin settlement.


The general takaful claim liabilities are sensitive to the key assumptions shown below. It has not beenpossible to quantify the sensitivity of certain assumptions, such as, legislative changes or uncertainty in theestimation process.

The analysis below is performed for reasonably possible movements in key assumptions with all otherassumptions held constant, showing the impact on gross and net liabilities, proSt before tax and thegeneral takaful fund. The correlation of assumptions have a signiScant effect in determining the ultimateclaims liabilities; however, for purposes of the sensitivity analysis, changes in assumptions are consideredindividually. It should be noted that movements in these assumptions are non-linear.

The sensitivity analysis has been performed for the major classes only which are the Motor Act and MotorOthers class by considering the ultimate loss ratio with an extra charge for the provision in adversedeviation.

Change in Impact onassumption Impact Impact Impact on Generalof Ultimate on Gross on Net Profit takaful

Claims Liabilities Liabilities before Tax fund*Ratio RM’000 RM’000 RM’000 RM’000

2012

Motor Act Average Severity + 10% 12,330 15,766 (15,766) (11,825)Motor Others ExpectedLoss Ratio + 10% 20,535 24,130 (24,130) (18,098)

2011

Motor Act Average Severity + 5% 85,673 69,312 (69,312) (51,984)Motor Others ExpectedLoss Ratio + 10% 21,424 21,095 (21,095) (15,821)

* The impact on the general takaful fund reTects the after tax impact.

A downward change in assumption would have an equivalent, but opposite, impact on the gross and netliabilties, proSt before tax and the general takaful fund.

The method used in performing the sensitivity analysis did not change from the previous year.

230 MNRB



(iv) Claims development table

The following tables show the estimate of cumulative incurred claims, including both claims notiSed andIBNR for each successive accident year at each Snancial year end, together with cumulative paymentsto-date.

In setting provisions for claims, the takaful subsidiary gives consideration to the probability and magnitudeof future experience being more adverse than assumed and exercises a degree of caution in settingreserves when there is considerable uncertainty. In general, the uncertainty associated with the ultimateclaims experience in an accident year is greatest when the accident year is at an early stage ofdevelopment and the margin necessary to ensure adequacy of provision is relatively at its highest. Asclaims develop and the ultimate cost of claims becomes more certain, the relative level of marginmaintained would decrease.

Gross General Takaful Claim Liabilities for 2012:

Accident year 2005 2006 2007 2008 2009 2010 2011 2012 TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Current estimate ofcumulative claimsincurred (a) 7,862 24,732 32,743 50,301 86,452 134,623 146,833 150,396



Expected claim liabilities(a) – (b) 10 209 768 2,579 8,627 34,084 51,516 101,268

Best estimate of claimsliabilities (inclusive of claimhandling expenses) 199,062

Fund PRAD at 75%conSdence interval 11,607

Gross General TakafulClaim Liabilities 210,669





(iv) Claims development table (cont’d)

Net General Takaful Claim Liabilities for 2012:



Current estimate ofcumulative claimsincurred (a) 7,482 22,817 30,328 45,894 76,773 124,071 131,893 139,773



Expected claim liabilities(a) – (b) 9 (97) 697 2,173 7,608 29,457 43,114 93,528




232 MNRB





Gross General Takaful Claim Liabilities for 2011


At the end of accident year 1,027 11,728 29,337 36,388 50,997 100,090 125,472 144,938One year later 875 10,898 27,311 36,179 51,290 93,740 142,627 –Two year later 855 9,936 26,773 35,120 51,483 89,887 – –Three year later 806 9,683 26,178 33,672 51,708 – – –Four year later 790 8,396 25,494 33,695 – – – –Five year later 787 7,951 24,949 – – – – –Six year later 735 7,900 – – – – – –Seven year later 740 – – – – – – –

Current estimate ofcumulative claimsincurred (a) 740 7,900 24,949 33,695 51,708 89,887 142,627 144,938

At the end of accident year 203 3,957 8,984 13,366 17,599 29,070 43,215 48,128One year later 610 6,632 18,976 25,083 34,059 64,212 83,077 –Two year later 614 7,123 20,128 27,784 39,159 72,939 – –Three year later 687 7,436 21,967 30,245 44,893 – – –Four year later 714 7,728 23,560 31,292 – – – –Five year later 730 7,807 24,474 – – – – –Six year later 730 7,826 – – – – – –Seven year later 734 – – – – – – –

Cumulative paymentsto-date (b) 734 7,826 24,474 31,292 44,893 72,939 83,077 48,128

Expected claim liabilities(a) – (b) 6 74 475 2,403 6,815 16,948 59,550 96,810








Net General Takaful Claim Liabilities for 2011



Current estimate ofcumulative claimsincurred 674 6,903 23,128 31,341 47,484 78,446 119,456 134,955


Cumulative paymentsto-date 668 6,831 22,968 29,091 42,202 64,559 79,479 44,714

Expected claim liabilities 6 72 160 2,250 5,282 13,887 39,977 90,241



Net General TakafulClaim Liabilities 160,702

234 MNRB




(i) Nature of risk

The takaful subsidiary principally issues the following types of family takaful certiScates: Family TakafulPlans, Mortgage Takaful Plans, Group Takaful Plans and Investment-linked Takaful Plans.

Family takaful underwriting risk arises when actual claims experience is different from the assumptionsused in setting the prices for products and establishing the technical provisions and liabilities for claims.Sources of risk include certiScate lapses and certiScate claims such as mortality, morbidity and expenses.

The takaful subsidiary utilises retakaful to manage mortality and morbidity risks. The takaful subsidiary’sretakaful management strategy and policy are reviewed by the ALCO and RMCB, and approved by theBoard. Retakaful structures are set based on the type of risk to be covered.

The takaful subsidiary reviews the actual mortality, morbidity, lapsation and surrender experience, as well asexpense experience to ensure that the policies, guidelines and limits put in place to manage these risksremain adequate and appropriate.

For investment-linked funds, the risk exposure for the participant’s risk fund is limited only to theunderwriting aspect as all investment risks are borne by the participant.

Stress Testing (“ST”) is performed twice a year. The purpose of the ST is to test the solvency of the familytakaful fund under the various scenarios according to regulatory guidelines, simulating drastic changes inmajor parameters such as new business volume, investment environment, mortality/morbidity patterns andlapse rates.

(ii) Concentration of risk by type of certificates


2012

Family takaful plans 378,245 – 378,245Investment-linked takaful plans 1,010 – 1,010Mortgage takaful plans 425,344 (75,351) 349,993Group credit takaful plans 168,145 (8,416) 159,729Risk Fund 62,351 (13,856) 48,495Special Fund 86,860 – 86,860Others 99,378 (18,061) 81,317

1,221,333 (115,684) 1,105,649

2011

Family takaful plans 255,843 – 255,843Investment-linked takaful plans 772 – 772Mortgage takaful plans 368,534 (68,936) 299,598Group credit takaful plans 126,764 (8,986) 117,778Risk Fund 78,272 (21,218) 57,054Special Fund 68,192 – 68,192Others 104,235 (38,243) 65,992

1,002,612 (137,383) 865,229

All business of the family takaful fund is derived from participants in Malaysia; accordingly, disclosure ofconcentration risk by geographical region is not relevant to the family takaful fund.




(iii) Key Assumptions

Judgement is required in determining the liabilities of the family takaful fund and in the selection ofassumptions used in the estimation of those liabilities. Assumptions in use are based on past experience,current internal data, external market indices and benchmarks which reTect current observable marketprices and other published information. Assumptions and estimates are determined at the date of valuationand no credit is taken for the possible beneScial effects of voluntary withdrawals. Assumptions are furtherevaluated 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 on mortality rates are based on those rates detailed in the Actuarial CertiScate submitted toBank Negara Malaysia. They reTect the historical experience in the market and are adjusted, whenappropriate, to reTect 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 proSts for the shareholders interms of lower surplus administration charge income.

Discount rates

Family takaful liabilities of credit–related products Mortgage Reducing Term Takaful (“MRTT”) and GroupCredit Takaful (“GCT”) are determined as the sum of the discounted value of the expected beneSts less thediscounted value of the expected tabarru’ (risk charge) that would be required to meet these future cashoutTows. Discount rates are based on the Family Fund’s historical investment performance and adjusteddownwards for conservatism.

A decrease in the discount rate will increase the value of the family takaful liability and therefore reduceproSts for the shareholders in terms of lower surplus administration charge income.

The assumptions that have a signiScant effect on the statement of Snancial position and income statementof the family takaful fund are listed below by portfolio assumptions impacting net liabilities:

Type of DiscountBusiness Mortality and morbidity rates rates

2012/2011 Credit related (MRTT and GCT) Base mortality 1 and adjusted forretakaful rates 2 3%

Others Base mortality 3%

1 These rates are obtained from the various industry mortality and morbidity experience tables that wereused to determine the contribution rates.

2 Retakaful rates are derived from the fund’s retakaful arrangements with respect to the MRTT and GCTbusiness.

236 MNRB




(iv) Sensitivity analysis

The analysis below is performed for reasonably possible movements in key assumptions with all otherassumptions held constant, showing the impact on gross and net liabilities, proSt before tax and familytakaful fund. The correlations of assumptions will have a signiScant effect in determining the ultimate claimsliabilities, but to demonstrate the impact due to changes in assumptions, assumptions had to be changedon an individual basis. It should be noted that movements in these assumptions are non-linear. Sensitivityinformation will also vary according to the current economic assumptions.

Impact onImpact on Impact on Impact on Family

Change in Gross Net Profit takafulAssumptions Liabilities liabilities Before Tax fund*

% RM’000 RM’000 RM’000 RM’000

2012

Mortality/morbidity + 10% 1,957 1,957 (1,957) (1,957)Discount rates + 1% (1,247) (1,247) 1,247 1,247

2011

Mortality/morbidity + 10% 9,548 9,548 (9,548) (8,784)Discount rates + 1% (1,378) (1,378) 1,378 1,268

• The impact on family takaful fund reTects the after tax impact.

The method used and signiScant assumptions made for deriving sensitivity information did not change fromthe previous year.


(i) Nature of risk

The retakaful subsidiary principally writes facultative and proportional and non proportional treatybusinesses accepted from takaful and retakaful operators. Portfolios are segregated by class and bydomestic and overseas businesses.

For general retakaful, the most signiScant risks arise from adverse development of the loss ratios andcatastrophic loss events. These risks vary signiScantly in relation to economic conditions and territoriesfrom which the risk originates.

The retakaful subsidiary also manages its loss exposure by the use of retrotakaful arrangements. Theretrotakaful arrangements are reviewed annually by the RMCB and approved by the Board.



(d) General retakaful fund (cont’d)

(ii) Concentration of risk

The table below sets sets out the concentration of takaful contract liabilities by classes of business and bylocal and overseas:


2012

Fire 43,712 (4,083) 39,629Motor 9,301 – 9,301Marine, Aviation & Transit 12,022 (2,411) 9,611Miscellaneous 16,825 (35) 16,790

81,860 (6,529) 75,331

Local 54,515 (3,933) 50,582Overseas 27,345 (2,596) 24,749

81,860 (6,529) 75,331

2011

Fire 40,921 (4,580) 36,341Motor 5,197 – 5,197Marine, Aviation & Transit 9,365 (2,686) 6,679Miscellaneous 18,027 (102) 17,925

73,510 (7,368) 66,142

Local 47,685 (1,346) 46,339Overseas 25,825 (6,022) 19,803

73,510 (7,368) 66,142


Key Assumptions

The principal assumptions underlying the estimation of liabilities is that the retakaful subsidiary’s futureclaims development will follow a similar pattern to past claims development experience.

Additional qualitative judgements are used to assess the extent to which past trends may not apply in thefuture, for example, isolated occurrence, changes in market factors such as public attitudes to claimsnotiScation and reporting, economic conditions, as well as internal factors, such as portfolio mix, policyconditions and claims handling procedures. Judgement is further used to assess the extent to whichexternal factors, such as judical decisions and government legislation affect the estimates.

Other key circumstances affecting the reliability of assumptions include variation in proSt rates and delaysin settlement.

238 MNRB



(d) General retakaful fund (cont’d)

(iii) Impact on liabilities, profit and equity (cont’d)


The general retakaful fund’s claim liabilities are sensitive to changes in the loss ratio especially in the eventof large or catastropic claims. However, as the business is still relatively new, the amount of informationavailable to conduct a sensitivity analysis is limited.

Due to limited information, the analysis below is carried out by assuming the IBNR provision is insufScientand that the ultimate loss requires a 5% top-up. The top-up is applied to all classes of business and doesnot have any impact on the retrotakaful programme.

This analysis assumes all other parameters are held constant.

Impact onImpact on Impact on Impact on General

Gross Net loss retakafulLiabilities Liabilities before Tax fund*

RM’000 RM’000 RM’000 RM’0002012

Fire 4,172 3,746 3,746 3,746Motor 560 560 560 560Marine, Aviation & Transit 667 649 649 649Miscellaneous 1,268 1,268 1,268 1,268

2011

Fire 1,544 1,544 1,544 1,544Motor 288 288 288 288Marine, Aviation & Transit 259 259 259 259Miscellaneous 968 968 968 968

* The impact on the general retakaful fund reTects the after tax impact.

(iv) Claims Development table

As this is only the Sfth Snancial year since the incorporation of the retakaful subsidiary, management is ofthe opinion that it is not meaningful to present the claims development table in the Snancial statements.


(i) Nature of risk

The retakaful subsidiary principally issues the following types of family retakaful treaty: Individual FamilyRetakaful Plans, Group Family Retakaful Plans and Individual Medical Retakaful Plans.

Family Retakaful underwriting risk relates to the pricing and loss ratios arising from family Retakafulproducts. The risks arise when actual claims experience is different from the assumptions used in settingthe yearly renewable term fees for retakaful products. Deviations in actual claims experience compared tothe assumptions used may be due to deviations in actual mortality, morbidity and expense experience.



(e) Family retakaful fund (cont’d)

(i) Nature of risk (cont’d)

The retakaful subsidiary utilises retrotakaful to manage the mortality and morbidity risks. The retakafulsubsidiary’s retrotakaful strategy and policy are reviewed annually by the ORMC and RMCB, and approvedby the Board. Retrotakaful structures are established based on the type of risk covered.

The retakaful subsidiary reviews the actual experience of mortality, morbidity and expense experience toensure that appropriate policies, guidelines and limits put in place to manage these risks remain adequateand appropriate.

Stress Testing (“ST”) is performed twice a year. The purpose of the ST is to test the solvency of the familyretakaful fund under various scenarios. These scenarios are based on regulatory guidelines and simulatedrastic changes in major parameters such as new business volume, investment environment andmortality/morbidity patterns.

(ii) Concentration of risk

The table below sets out the concentration of retakaful contract liabilities by local and overseas treaties:


2012

Local Treaties 4,544 (1,611) 2,933Overseas Treaties 810 (253) 557

5,354 (1,864) 3,490

2011

Local Treaties 2,265 (619) 1,646Overseas Treaties 229 (37) 192

2,494 (656) 1,838

Business of the family retakaful fund is derived from Malaysia and overseas risks. Accordingly, liabilities ofthe family retakaful fund are mainly spread along these regions namely Malaysia, Brunei and Indonesia.


Key Assumptions

Material judgement is required in determining the liabilities and in the choice of assumptions. Assumptionsin use are based on past experience, current internal data, external market indices and benchmarks whichreTect current observable market prices and other published information. Assumptions and prudentestimates are determined at the date of valuation and no credit is taken for possible beneScial effects ofvoluntary withdrawals. Assumptions are further evaluated on a continuous basis in order to ensure realisticand reasonable valuations.

240 MNRB



(e) Family retakaful fund (cont’d)

(iii) Impact on liabilities, profit and equity (cont’d)

Key Assumptions (cont’d)

The estimation of liabilities is particularly sensitive to the assumption of loss ratios due to the nature of thepricing of family retakaful products which are based on yearly renewable terms.


Impact onImpact on Impact on Family

Change in actuarial Profit retakafulassumptions reserve before Tax fund

RM’000 RM’000 RM’0002012

Loss ratio – 20% (751) (751) (751)Loss ratio + 20% 1,371 1,371 1,371

2011

Loss ratio – 20% (430) (430) (430)Loss ratio + 20% 650 650 650

44. FINANCIAL RISK

Transactions in Snancial instruments may result in the Group assuming Snancial risks. These include credit risk,liquidity risk and market risk. This note presents information about the Group’s exposure to each of the above risksand the Group’s objectives, policies and processes for measuring and managing such risks.

(a) Credit Risk

Credit risk is the risk of Snancial loss resulting from the failure of counterparties to reinsurance, takaful, retakafuland investment transactions to meet their contractual obligations.

Credit risk includes the following major elements:

(i) Investment credit risk which is the risk of Snancial loss arising from a change in the value of an investmentdue to a rating downgrade, default, or widening of credit spreads. Changes in credit spreads are largelydriven by the different economic cycles and operating cycles while the less liquid securities tend to bepriced at a wider spread. The liquidity of the securirites is directly determined by its bid-to-ask spread.

(ii) Derivative counterparty risk which is the risk of Snancial loss arising from a derivative counterparty’sdefault, or the deterioration of the derivative counterparty’s Snancial position. As at the reporting date, theGroup does not transact in derivatives and is not exposed to this risk; and

(iii) Reinsurance/retakaful counterparty risk which is the risk of Snancial loss arising from a default by theretrocessionaire/retakaful operator, or the deterioration of the solvency position of the retrocessionaire/retakaful operator.


44. FINANCIAL RISK (CONT’D)

(a) Credit Risk (cont’d)

The Group is exposed to investment credit risk on its investment portfolio, primarily from investments incorporate bonds. A creditworthiness assessment for new and existing investments is undertaken by the Groupin accordance with the Investment Policy as approved by the Investment Committee. In addition, the creditratings of the bond portfolio are regularly monitored and any downgrade in credit ratings will be evaluated todetermine the required actions. As at the reporting date, the Group’s bond portfolio has no material exposurebelow 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 the advance settlement of premiums/contributions to the reinsurer/retakaful operator; and

(iii) as a result of reserves held by the reinsurer/retakaful operator which would have to be met by thereinsurance/takaful/retakaful subsidiary 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, thepolicies are further aimed at investing in a diverse portfolio of bonds in order to reduce the potentialimpact that may arise from individual companies defaulting;

(ii) Counterparty limits are set for investments, cash deposits and foreign exchange trade exposure to ensurethat there is no concentration of credit risk;

(iii) The Group’s investment portfolio is managed to ensure diversiScation and focuses on high qualityinvestment grade Sxed income securities. For the Snancial year ended 31 March 2012, the average creditquality of the Group’s investment portfolio was AAA as determined by Rating Agency Malaysia (“RAM”) orMalaysian Rating Corporation Berhad (“MARC”); and

(iv) To mitigate reinsurance/retakaful counterparty risk, the Group will give due consideration to the creditquality of a reinsurer/retakaful operator. To facilitate this process, a list of acceptable reinsurer/retakafuloperator based on their rating is maintained within the Group. The Group regularly reviews the Snancialsecurity of its reinsurers/retakaful operators.

242 MNRB




Credit exposure by credit rating for 2012

The table below provides information regarding the credit risk exposures of the Group by classifying assetsaccording to the Group’s credit ratings of counterparties.

(i) General reinsurance and shareholders’ funds

NotGovernment BBB subject toguaranteed to AAA C to BB credit risk Not rated Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – – 5,648 – 5,648Structured products – – – 12,296 – 12,296Warrants – – – 9 – 9

HTM investmentsMalaysian governmentsecurities 49,187 – – – – 49,187

Unquoted debt securities 69,042 17,017 279 – 5,737 92,075Government investmentissues 160,467 – – – – 160,467

Commercial papers – 35,868 – – – 35,868

AFS financial assetsUnquoted shares in Malaysia – – – 45,003 – 45,003Unquoted debt securities 29,566 797,041 – - – 826,607Golf club memberships – – – 228 – 228Quoted shares in Malaysia – – – 79,911 – 79,911Quoted shares outsideMalaysia – – – 224 – 224

Warrants – – – 6 – 6

Loans and receivablesFixed and call depositswith licensed:Commercial banks – 132,546 – – – 132,546Investment banks - 430,797 – – – 430,797

Islamic investment accountswith licensed:Co-operative bank – 42,897 – – – 42,897Islamic banks – 103,598 – – 43,776 147,374Investment banks – 10,412 – – – 10,412Development bank – 12,542 – – 23,557 36,099Building society – – – – 5,831 5,831




Credit exposure by credit rating for 2012 (cont’d)

(i) General reinsurance and shareholders’ funds (cont’d)


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Loans and receivables (cont’d)Institutional trust deposit 54,529 – – – 6,911 61,440Islamic repo placements – 2,000 – – – 2,000Units held in investment-linked fund – – – – 10,000 10,000

Secured staff loans – – – – 11,227 11,227Qard given to Generalretakaful fund – – – – 33,702 33,702

Due from:General takaful fund – – – – 7,806 7,806Family takaful fund – – – – 13,818 13,818General retakaful fund – – – – 3,322 3,322Family retakaful fund – – – – 3,871 3,871Subsidiaries – – – – – –

Income due and accrued – – – – 18,526 18,526Due from insurance Pool accounts – – – – 19,969 19,969Other receivables and deposits – – – – 24,861 24,861

Reinsurance assets – – – – 357,636 357,636Insurance receivables – 20,054 – – 130,046 150,100Cash and bank balances – 2,701 – – 59 2,760

362,791 1,607,473 279 143,325 720,655 2,834,523

244 MNRB





(ii) General takaful fund

NotGovernment BBB subject toguaranteed to AAA C to BB Not rated credit risk Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2012 (cont’d)

Financial assets at FVTPLQuoted shares in Malaysia – – – – 1,040 1,040Warrants – – – – 9 9

HTM investmentsGovernment investmentissues 48,990 – – – – 48,990

Unquoted debt securities 18,322 2,999 – – – 21,321

AFS financial assetsQuoted shares in Malaysia – – – – 4,764 4,764Warrants – – – – 11 11Shariah approved unit trustfunds – – – – 7,968 7,968

Unquoted debt securities – 99,563 – – – 99,563

Loans and receivablesIslamic investment accountswith licensed:Islamic banks – 12,260 – 24,575 – 36,835Investment banks – – – 2,384 – 2,384Development bank – 14,139 – 11,735 – 25,874

Due from Family takaful fund – – – 963 – 963Income due and accrued – – – 2,324 – 2,324Other receivables and deposits – – – 2,038 – 2,038

Retakaful certiScates assets – – – 42,156 – 42,156Takaful certiScates receivables – 5,069 – 20,394 – 25,463Cash and bank balances – 21,650 – 562 – 22,212

67,312 155,680 – 107,131 13,792 343,925





(iii) Family takaful fund

NotGovernment BBB subject toguaranteed to AAA C to BB Not rated credit risk Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – – – 2,346 2,346Warrants – – – – 9 9

HTM investmentsGovernment investmentissues 185,970 – – – – 185,970

Unquoted debt securities 36,249 17,038 – – – 53,287

AFS financial assetsQuoted shares in Malaysia – – – – 41,796 41,796Warrants – – – – 58 58Shariah approved unit trustfunds – – – – 11,952 11,952

Unquoted debt securities 57,338 329,922 - - - 387,260

Loans and receivablesIslamic investment accountswith licensed:Islamic banks – 112,738 – 133,718 – 246,456Investment banks – – – 27,631 – 27,631Development bank – 53,854 – 37,597 – 91,451

Institutional trust fund – – – 19,493 – 19,493Islamic repo placements – 1,000 – 5,649 – 6,649Due from holding company – – – 1,212 – 1,212Income due and accrued – – – 8,190 – 8,190Other receivables and deposits – – – 1,085 – 1,085

Retakaful contract assets – – – 115,684 – 115,684Takaful contract receivables – 28,359 – 102,023 – 130,382Cash and bank balances – 50,871 – 2,137 – 53,008

222,219 263,860 –- 454,419 2,355 942,853

246 MNRB





(iv) General takaful fund

NotGovernment BBB subject toguaranteed to AAA credit risk Not rated Total

RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – 38 – 38

HTM investmentsIslamic BNM monetary notes 1,988 – – – 1,988Government investment issues 9,004 – – – 9,004Commercial papers – 499 – – 499

AFS financial assetsUnquoted debt securities 507 14,137 – – 14,644Quoted shares in Malaysia – – 104 – 104

Loans and receivablesIslamic investment accountswith licensed:Co-operative bank – 18,447 – – 18,447Islamic banks – 13,954 – – 13,954

Income due and accrued – – – 432 432Other receivables and deposits – – – 366 366

Retakaful assets – – – 6,529 6,529Takaful receivables – – – 23,281 23,281Cash and bank balances – 9 – – 9

11,499 47,046 142 30,608 89,295

(v) Family retakaful fund

HTM investmentsUnquoted debt securities 701 – – – 701Government investment issues 3,000 – – – 3,000

AFS financial assetsUnquoted debt securities 1,522 2,174 – – 3,696Quoted shares in Malaysia – – 169 – 169

Loans and receivablesIslamic investment accountswith licensedIslamic banks – 872 – – 872

Income due and accrued – – – 100 100Other receivables and deposits – – – 21 21

Retakaful assets – – – 1,864 1,864Takaful receivables – – – 2,437 2,437Cash and bank balances – 9 – – 9

5,223 3,055 169 4,422 12,869





(vi) Company

BBB Not subjectto AAA to credit risk Not Rated TotalRM’000 RM’000 RM’000 RM’000

HTM investmentsUnquoted debt securities – – 5,059 5,059

AFS financial assetsUnquoted shares in Malaysia – – 500 500Golf club memberships – – 50 50Quoted shares in Malaysia – – 623 623

Loans and receivablesFixed and call deposits with licensed:Commercial banks 8,266 – – 8,266Investment banks 7,398 – – 7,398Islamic banks 3,909 – – 3,909

Secured staff loans – – 2,309 2,309Income due and accrued – – 381 381Due from subsidiaries – – 537 537Other receivables and deposits – – 327 327

19,573 – 9,786 29,359

Credit exposure by credit rating for 2011

The table below provides information regarding the credit risk exposures of the Group by classifying assetsaccording to the Group’s credit ratings of counterparties.



RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – – 2,878 – 2,878Structured products – – – 12,019 – 12,019Warrants – – – 15 – 15

HTM investmentsIslamic BNM Monetary notes 4,996 – – – – 4,996Malaysian governmentsecurities 100,414 – – – – 100,414

Unquoted debt securities 80,067 31,072 385 – 7,645 119,169Government investmentissues 87,653 – – – – 87,653

Commercial papers – 17,526 – – – 17,526

248 MNRB





(i) General reinsurance and shareholders’ funds (cont’d)


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

AFS financial assetsUnquoted shares in Malaysia – – – 46,152 – 46,152Unquoted debt securities 3,014 624,691 – – – 627,705Golf club memberships – – – 228 – 228Quoted shares in Malaysia – – – 62,206 – 62,206Quoted shares outside Malaysia – – – 341 – 341

Loans and receivablesFixed and call depositswith licensed:Commercial banks – – – 129,776 – 129,776Investment banks – – – 431,034 – 431,034

Islamic investment accountswith licensed:Co-operative bank – – – 81,451 – 81,451Islamic banks – – – 127,252 – 127,252Development bank – – – 13,472 – 13,472Building society – – – 8,269 – 8,269

Institutional trust deposit – – – 58,595 - 58,595Islamic repo placements – 5,000 – – 7,668 12,668Units held in investment-linked fund – – – – 10,000 10,000

Secured staff loans – – – – 12,618 12,618Qard given to:General takaful fund – – – – 12,043 12,043General retakaful fund – – – – 36,295 36,295

Due from:General takaful fund – – – – 2,739 2,739Family takaful fund – – – – 29,110 29,110Family retakaful fund – – – – 11,120 11,120

Income due and accrued – – – – 16,213 16,213Due from insurance Poolaccounts – – – – 19,971 19,971

Other receivables and deposits – – – – 21,948 21,948Reinsurance assets – – – – 146,597 146,597Insurance receivables – – – – 138,173 138,173Cash and bank balances – 9,468 – – 15 9,483

276,144 687,757 385 973,688 472,155 2,410,129





(ii) General takaful fund

NotGovernment BBB subject toguaranteed to AAA Not rated credit risk Total

RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – – 1,090 1,090Warrants – – – 15 15

HTM investmentsGovernment investment issues 50,940 – – – 50,940Unquoted debt securities 14,324 2,004 – – 16,328

AFS financial assetsQuoted shares in Malaysia – – – 8,652 8,652Shariah approved unit trust funds – – – 5,888 5,888Unquoted debt securities – 90,605 – – 90,605

Loans and receivablesIslamic investment accountswith licensed:Islamic banks – 21,425 10,824 – 32,249Development bank – 12,069 6,508 – 18,577

Islamic repo placements – 5,814 – – 5,814Income due and accrued – – 2,160 – 2,160Other receivables and deposits – – 1,649 – 1,649

Retakaful assets – – – 34,351 34,351Takaful receivables – 8,848 23,950 – 32,798Cash and bank balances – 47,437 74 – 47,511

65,264 188,202 45,165 49,996 348,627

(iii) Family takaful fund

Financial assets at FVTPLQuoted shares in Malaysia – – – 1,817 1,817Warrants – – – 15 15

HTM investmentsGovernment investment issues 163,241 – – – 163,241Unquoted debt securities 24,103 25,043 – – 49,146

AFS financial assetsQuoted shares in Malaysia – – – 15,988 15,988Shariah approved unit trust funds – – – 8,585 8,585Unquoted debt securities 21,106 257,922 – - 279,028

250 MNRB





(iii) Family takaful fund (cont’d)

NotGovernment BBB subject toguaranteed to AAA Not rated credit risk Total

RM’000 RM’000 RM’000 RM’000 RM’000

Loans and receivablesIslamic investment accountswith licensed:Islamic banks – 50,989 39,017 – 90,006

Investment banks – 1,507 – – 1,507Development bank – 40,496 18,860 – 59,356

Institutional trust fund – – 18,592 – 18,592Islamic repo placements – 94,254 19,713 – 113,967Due from:General takaful fund – – 12,971 – 12,971Holding company – – 199 – 199

Income due and accrued – – 5,247 – 5,247Other receivables and deposits – – 1,297 – 1,297

Retakaful assets – – 137,383 – 137,383Takaful receivables – 2,648 81,258 – 83,906Cash and bank balances – 63,756 756 – 64,512

208,450 536,615 335,293 26,405 1,106,763

(iv) General retakaful fund


RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – 70 – 70Structured products

HTM investmentsGovernment investment issues 4,004 – – – 4,004Commercial papers

AFS financial assetsUnquoted debt securities 502 5,867 – – 6,369

Loans and receivablesIslamic investment accountswith licensedIslamic banks – – 10,562 – 10,562

Income due and accrued – – – 188 188Due from shareholder’s fund – – – 34,343 34,343

Retakaful assets – – – 7,368 7,368Takaful receivables – 214 – 13,715 13,929Cash and bank balances – – 14 – 14

4,506 6,081 10,646 55,614 76,847





(v) Family retakaful fund


RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia – – 35 – 35

HTM investmentsUnquoted debt securities 701 – – – 701Government investment issues 3,007 – – – 3,007

AFS financial assetsUnquoted debt securities 1,507 2,141 – – 3,648

Loans and receivablesIslamic investment accountswith licensed:Co-operative bank – 3,618 – – 3,618Islamic banks – 4,088 – – 4,088

Income due and accrued – – – 118 118Retakaful assets – – – 7,368 7,368Takaful receivables – – – 920 920Cash and bank balances – – 181 – 181

5,215 9,847 216 8,406 23,684

(vi) Company

NotBBB subject to

to AAA credit risk Not rated TotalRM’000 RM’000 RM’000 RM’000

HTM investmentsUnquoted debt securities – – 6,967 6,967

AFS financial assetsUnquoted shares in Malaysia – 1,649 – 1,649Golf club memberships – 50 – 50Quoted shares in Malaysia – 903 – 903

Loans and receivablesFixed and call deposits with licensed:Commercial banks 3,069 – – 3,069Investment banks 1,000 – – 1,000

Islamic investment accounts with licensedIslamic banks 3,813 – – 3,813

Secured staff loans – – 2,334 2,334Due from subsidiaries – – 459 459Income due and accrued – – 26 26Other receivables and deposits – – 58 58

7,882 2,602 9,844 20,328

252 MNRB




Loan

The fair values of loans receivable are equivalent to their carrying value as they are either receivable within 12months from the date of recognition or are issued at interest rates comparable to those for similar instrumentsin the market.

Movement of allowance for impairment losses on receivables

Generalreinsurance and General Family General Familyshareholders’ takaful takaful retakaful retakaful


2012

At beginning of year 5,820 8,055 882 1,545 22(Recoveries)/charge for the year (1,522) (1,537) 978 (463) 19

At end of year 4,298 6,518 1860 1,082 41

2011

At beginning of year 5,984 11,109 246 1,209 –(Recoveries)/charge for the year (164) (3,054) 636 336 22

At end of year 5,820 8,055 882 1,545 22

(b) Liquidity Risk

Liquidity risk is the risk that the Group will not have available sufTcient cash resources to meet its paymentobligations without incurring material additional costs.

The Group assesses its liquidity risk by ensuring the following:

(i) the Group is able to meet its payment obligations under normal and stressed operating environmentswithout suffering any loss;

(ii) additions/withdrawals from the Group’s investment funds are managed efTciently; and(iii) appropriate measures are in place to respond to liquidity risk.

As part of its liquidity management strategy, the Group has in place a framework capable of measuring andreporting on:

(i) daily cash Uows;(ii) minimum liquidity holdings;(iii) cash Uow forecasts covering a minimum period of 2 months and up to a maximum of 1 year;(iv) the composition and market values of company’s investment portfolios, including liquid holdings; and(v) the holding of liquid assets in the respective reinsurance, takaful and retakaful funds.



(b) Liquidity Risk (cont’d)

In order to manage the liquidity of the reinsurance/takaful/retakaful funds, the investment mandate requires thata certain proportion of the fund is maintained as liquid assets. Accordingly, the Group is required to maintain aminimum holding of low risk assets of 10% and no maximum limit on its placements in Txed and call deposits.

Maturity Profiles for 2012

The table below summarises the maturity proTle of the Tnancial assets and liabilities of the Group based onremaining undiscounted contractual obligations, including interest payable and receivable.

For insurance contracts/takaful and retakaful certiTcates liabilities and reinsurance/retakaful certiTcate assets,maturity proTles are determined based on estimated timing of net cash outUows from the recognisedinsurance/takaful liabilities.

Unearned premiums/contributions and the reinsurers’/retakaful operator’s share of unearned premiums/contributions 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 classiying assetsaccording to the Group’s credit ratings of counterparties.


NoCarrying Up to 1 – 5 Over maturity

value 1 year years 5 years date TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia 5,648 – – – 5,648 5,648Structured products 12,296 6,828 5,468 – – 12,296Warrants 9 – – – 9 9

HTM investmentsMalaysian governmentsecurities 49,187 31,970 15,329 7,858 – 55,157

Unquoted debt securities 92,075 16,138 62,574 25,740 – 104,452Government investmentissues 160,467 13,290 53,383 139,610 – 206,283

Commercial papers 35,868 35,868 – – – 35,868

AFS financial assetsUnquoted sharesin Malaysia 45,003 – – – 45,003 45,003

Unquoted debt securities 826,607 92,632 533,114 405,337 – 1,031,083Golf club memberships 228 – – – 228 228Quoted shares in Malaysia 79,911 – – – 79,911 79,911Quoted shares outsideMalaysia 224 – – – 224 224

Warrants 6 – – – 6 6

254 MNRB




Maturity profiles for 2012 (cont’d)




Loans and receivablesFixed and call depositswith licensed:Commercial banks 132,546 133,109 – – – 133,109Investment banks 430,797 432,652 – – – 432,652

Islamic investmentaccounts with licensed:Co-operative bank 42,897 43,121 – – – 43,121Islamic banks 147,374 148,775 – – – 148,775Investment banks 10,412 10,412 – – – 10,412Development bank 36,099 36,099 – – – 36,099Building society 5,831 5,831 – – – 5,831

Institutional trust deposit 61,440 3,081 64,530 – – 67,611Islamic repo placements 2,000 2,002 – – – 2,002Units held in investment-linked fund 10,000 – – – 10,000 10,000

Secured staff loans 11,227 4,481 6,596 150 – 11,227Qard to general retakafulfund 33,702 – – 33,702 – 33,702

Due from:General takaful fund 7,806 7,806 – – – 7,806Family takaful fund 13,818 13,818 – – – 13,818General retakaful fund 3,322 3,322 – – – 3,322Family retakaful fund 3,871 3,871 – – – 3,871

Income due and accrued 18,526 18,526 – – – 18,526Due from insurance Poolaccounts 19,969 – 19,969 – – 19,969

Other receivables anddeposits 24,861 24,861 – – – 24,861

Reinsurance assets 356,094 147,032 178,159 30,903 – 356,094Insurance receivables 150,100 150,100 – – – 150,100Cash and bank balances 2,760 2,760 – – – 2,760

Total financial andinsurance assets 2,832,981 1,388,385 933,654 643,300 146,497 3,111,836

Islamic medium term notes (150,000) (154,958) – – – (154,958)Short term revolving creditfacility (120,000) (123,753) – – – (123,753)

Insurance contract liabilities (1,389,660) (564,819) (684,392) (140,449) – (1,389,660)Insurance and takafulpayables (88,110) (88,110) – – – (88,110)

Other payables (48,354) (48,354) – – – (48,354)

Total financial andinsurance liabilities (1,796,124) (979,994) (684,392) (140,449) – (1,804,835)





(b) General takaful fundNo

Carrying Up to 1 – 5 Over maturityvalue 1 year years 5 years date Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets at FVTPLQuoted shares in Malaysia 1,040 – – – 1,040 1,040Warrants 9 – – – 9 9

HTM investmentsGovernment investmentissues 48,990 2,016 20,163 39,626 – 61,805

Unquoted debt securities 21,321 1,853 5,734 19,774 – 27,361AFS financial assetsQuoted shares in Malaysia 4,764 – – – 4,764 4,764Quoted shares outsideMalaysia – – – – – –

Warrants 11 – – – 11 11Shariah approved unit trustfunds 7,968 – – – 7,968 7,968

Unquoted debt securities 99,563 9,026 76,350 33,860 – 119,236Loans and receivablesIslamic investment accountswith licensed:Islamic banks 36,835 37,353 – – – 37,353Investment banks 2,384 2,438 – – – 2,438Development bank 25,874 26,582 – – – 26,582

Due from Family takafulfund 963 963 – – – 963

Income due and accrued 2,324 2,324 – – – 2,324Other receivables anddeposits 2,038 2,038 – – – 2,038

Retakaful assets 23,536 10,381 12,975 180 – 23,536Takaful receivables 25,463 25,463 – – – 25,463Cash and bank balances 22,212 22,212 – – – 22,212

Total financial andinsurance assets 325,295 142,649 115,222 93,440 13,792 365,103

Takaful contract liabilities (210,669) (92,919) (116,138) (1,612) – (210,669)Takaful payables (13,827) (13,827) – – – (13,827)Other payables (26,075) (26,075) – – – (26,075)

Total financial andinsurance liabilities (250,571) (132,821) (116,138) (1,612) – (250,571)

256 MNRB





(c) Family takaful fundNo


RM’000 RM’000 RM’000 RM’000 RM’000 RM’00



Unquoted debt securities 53,287 5,977 24,353 36,548 – 66,878AFS financial assetsQuoted shares in Malaysia 41,796 – – – 41,796 41,796Warrants 58 – – – 58 58Shariah approved unit trustfunds 11,952 – – –- 11,952 11,952

Unquoted debt securities 387,260 40,456 170,023 352,657 - 563,136Loans and receivablesIslamic investmentaccounts with licensed:Islamic banks 246,456 249,323 – – – 249,323Investment banks 27,631 28,240 – – – 28,240Development bank 91,451 93,529 – – – 93,529

Institutional trust fund 19,493 975 20,973 – – 21,948Islamic repo placements 6,649 6,815 – – – 6,815Due from:Holding company 1,212 1,212 – – – 1,212Income due and accrued 8,190 8,190 – – – 8,190Other receivables anddeposits 1,085 1,085 – – – 1,085

Retakaful assets 115,684 – – 866 114,818 115,684Takaful receivables 130,382 130,382 – – – 130,382Cash and bank balances 53,008 53,008 – – – 53,008

Total financial andinsurance assets 942,853 600,750 123,555 163,861 117,173 1,005,339

Takaful contract liabilities (1,221,333) (4,397) (30,039) (1,186,897) – (1,221,333)Takaful payables (69,774) (69,774) – – – (69,774)Other payables (59,180) (59,180) – – – (59,180)

Total financial andinsurance liabilities (1,350,287) (133,351) (30,039) (1,186,897) – (1,350,287)





(d) General retakaful fundNo


RM’000 RM’000 RM’000 RM’000 RM’000 RM’00

Financial assets at FVTPLQuoted shares in Malaysia 38 – – – 38 38

HTM investmentsIslamic BNM monetary notes 1,988 1,988 – – – 1,988Government investmentissues 9,004 5,177 857 4,382 – 10,416

Commercial papers 499 499 – – – 499AFS financial assetsUnquoted debt securities 14,644 660 15,245 1,199 – 17,104Quoted shares in Malaysia 104 – – – 104 104

Loans and receivablesIslamic investmentaccounts with licensed:Co-operative bank 18,447 18,532 – – – 18,532Islamic banks 13,954 13,976 – – – 13,976

Income due and accrued 432 432 – – – 432Other receivables anddeposits 366 366 – – – 366

Retakaful assets 5,758 2,523 3,057 178 – 5,758Takaful receivables 23,281 23,281 – – – 23,281Cash and bank balances 9 9 – – – 9

Total financial andinsurance assets 88,524 67,443 19,159 5,759 142 92,503



258 MNRB








HTM investmentsUnquoted debt securities 701 29 140 701 – 870Government investmentissues 3,000 3,003 – – – 3,003

AFS financial assetsUnquoted debt securities 3,696 166 3,559 781 – 4,506Quoted shares in Malaysia 169 – – – 169 169

Loans and receivablesIslamic investmentaccounts with licensedIslamic banks 872 873 – – – 873

Income due and accrued 100 100 – – – 100Other receivables anddeposits 21 21 – – – 21

Retakaful assets 1,864 1,864 – – – 1,864Takaful receivables 2,437 2,437 – – – 2,437Cash and bank balances 9 9 – – – 9


Takaful contract liabilities (5,354) (5,354) – – – (5,354)Takaful payables (2,321) (2,321) – – – (2,321)Other payables (3,871) (3,871) – – – (3,871)

Total financial andinsurance liabilities (11,546) (11,546) – – – (11,546)





(f) Company



HTM investmentsUnquoted debt securities 5,059 5,077 – – – 5,077

AFS financial assetsUnquoted shares in Malaysia 500 – – – 500 500Golf club memberships 50 – – – 50 50Quoted shares in Malaysia 623 – – – 623 623


Islamic investmentaccounts with licensedIslamic banks 3,909 3,922 – – – 3,922

Secured staff loans 2,309 2,309 – – – 2,309Due from subsidiaries 537 – – – 537 537Income due and accrued 381 – – – 381 381

Other receivables anddeposits 327 – – – 327 327

Cash and bank balances 11 11 – – – 11

Total financial andinsurance assets 29,370 27,041 – – 2,418 29,459

Islamic medium term notes (200,000) (190,500) – – – (190,500)Short term revolvingcredit facility (120,000) (123,753) – – – (123,753)

Other payables (17,104) (17,104) – – – (17,104)

Total financial liabilities (337,104) (331,357) – – – (331,357)

260 MNRB








Financial assets at FVTPLQuoted shares in Malaysia 2,878 – – – 2,878 2,878Structured products 12,019 – 12,019 – – 12,019Warrants 15 – – – 15 15

HTM investmentsIslamic BNM Monetarynotes 4,996 5,000 – – – 5,000

Malaysian governmentsecurities 100,414 59,286 45,968 – – 105,254

Unquoted debt securities 119,169 36,176 76,909 21,126 – 134,211Government investmentissues 87,653 7,822 42,829 57,462 – 108,113

Commercial papers 17,526 18,002 – – – 18,002AFS financial assetsUnquoted shares inMalaysia 46,152 – – – 46,152 46,152

Unquoted debt securities 627,705 90,260 438,253 219,836 – 748,349Golf club memberships 228 – – – 228 228Quoted shares in Malaysia 62,206 – – – 62,206 62,206Quoted shares outsideMalaysia 341 – – – 341 341


Islamic investmentaccounts with licensed:Co-operative bank 81,451 81,915 – – – 81,915Islamic banks 127,252 127,733 – – – 127,733Development bank 13,472 13,472 – – – 13,472Building society 8,269 8,269 – – – 8,269

Institutional trust deposit 58,595 2,607 63,660 - - 66,267Islamic repo placements 12,668 12,668 – – – 12,668Units held in investment-linked fund 10,000 – – – 10,000 10,000








Loans and receivables (cont’d)Secured staff loans 12,618 3,281 9,337 – – 12,618Qard given to:General takaful fund 12,043 – – 12,043 – 12,043General retakaful fund 36,295 – – 36,295 – 36,295

Due from:General takaful fund 2,739 2,739 – – – 2,739Family takaful fund 29,110 29,110 – – – 29,110Family retakaful fund 11,120 11,120 – – – 11,120

Income due and accrued 16,213 16,213 – – – 16,213Due from insurance Poolaccounts 19,971 – 19,971 – – 19,971

Other receivables anddeposits 21,948 21,948 – – – 21,948

Reinsurance assets 128,201 55,253 62,391 10,557 – 128,201Insurance receivables 138,173 138,173 – – – 138,173Cash and bank balances 9,483 9,483 – – – 9,483

Total financial andinsurance assets 1,034,574 893,876 92,968 48,338 10,000 1,045,182

Islamic medium termnotes (150,000) (159,500) – – – (159,500)

Insurance contractliabilities (1,131,439) (467,276) (527,644) (136,519) – (1,131,439)

Insurance and takafulpayables (65,394) (65,394) – – – (65,394)

Other payables (94,860) (94,860) – – – (94,860)


262 MNRB










Unquoted debt securities 16,328 681 5,022 14,849 – 20,552AFS financial assetsQuoted shares in Malaysia 8,652 – – – 8,652 8,652Shariah approved unittrust funds 5,888 – – – 5,888 5,888

Unquoted debt securities 90,605 5,907 67,198 37,253 – 110,358Loans and receivablesIslamic investmentaccounts with licensed:Islamic banks 32,249 32,489 – – – 32,489Development bank 18,577 18,814 – – – 18,814

Islamic repo placements 5,814 5,820 – – – 5,820Income due and accrued 2,160 2,160 – – – 2,160Other receivables anddeposits 1,649 1,649 – – – 1,649

Retakaful assets 32,410 14,260 16,529 1,621 – 32,410Takaful receivables 32,798 32,798 – – – 32,798Cash and bank balances 47,511 47,511 – – – 47,511

Total financial andinsurance assets 346,686 166,078 106,417 97,860 15,645 386,000












Unquoted debt securities 49,146 13,601 18,167 25,086 – 56,854AFS financial assetsQuoted shares in Malaysia 15,988 – – – 15,988 15,988Shariah approved unittrust funds 8,585 – – – 8,585 8,585

Unquoted debt securities 279,028 12,919 165,101 196,156 – 374,176Loans and receivablesIslamic investmentaccounts with licensed:Islamic banks 90,006 87,172 3,587 – – 90,759Investment banks 1,507 1,517 – – – 1,517Development bank 59,356 59,937 – – – 59,937

Institutional trust fund 18,592 932 20,934 – – 21,866Islamic repo placements 113,967 114,117 – – – 114,117Due from:General takaful fund 12,971 12,971 – – – 12,971Holding company 5,247 5,247 – – – 5,247

Income due and accrued 199 199 – – – 199Other receivables anddeposits 1,297 1,297 – – – 1,297

Retakaful assets 137,383 – – 137,383 – 137,383Takaful receivables 83,906 83,906 – – – 83,906Cash and bank balances 64,512 64,512 – – – 64,512

Total financial andinsurance assets 588,943 431,807 24,521 137,383 – 593,711

Takaful contract liabilities (1,002,612) (4,434) (21,617) (976,561) – (1,002,612)Takaful payables (34,406) (34,406) – – – (34,406)Other payables (67,519) (67,519) – – – (67,519)


264 MNRB









HTM investmentsGovernment investmentissues 4,004 172 857 4,554 – 5,583

AFS financial assetsUnquoted debt securities 6,369 296 6,437 1,215 – 7,948

Loans and receivablesIslamic investmentaccounts with licensedIslamic banks 10,562 10,583 – – – 10,583

Income due and accrued 188 188 – – – 188Due from shareholder’sfund 34,343 – – 34,343 – 34,343

Retakaful assets 6,837 3,077 3,555 205 – 6,837Takaful receivables 13,929 13,929 – – – 13,929Cash and bank balances 14 14 – – – 14


Takaful contract liabilities (54,582) (24,561) (28,383) (1,638) – (54,582)Takaful payables (3,250) (2,818) (432) – – (3,250)










HTM investmentsGovernment investmentissues 3,007 93 3,010 – – 3,103

Unquoted debt securities 701 28 142 727 – 897AFS financial assetsUnquoted debt securities 3,648 165 3,670 788 – 4,623

Loans and receivablesIslamic investmentaccounts with licensed:Co-operative bank 3,618 3,627 – – – 3,627Islamic banks 4,088 4,092 – – – 4,092

Income due and accrued 118 118 – – – 118Retakaful assets 656 656 – – – 656Takaful receivables 920 920 – – – 920Cash and bank balances 181 181 – – – 181


Takaful contract liabilities (2,494) (2,494) – – – (2,494)Takaful payables (2,007) – – (2,007) – (2,007)Other payables (11,120) (11,120) – – – (11,120)

Total financial andinsurance liabilities (15,621) (13,614) – (2,007) – (15,621)

266 MNRB





(f) Company



HTM investmentsUnquoted debt securities 6,967 130 7,011 – – 7,141

AFS financial assetsUnquoted shares inMalaysia 1,649 – – – 1,649 1,649Golf club memberships 50 – – – 50 50Quoted shares in Malaysia 903 – – – 903 903


Islamic investmentaccounts with licensedIslamic banks 3,813 3,813 – – – 3,813

Secured staff loans 2,334 2,334 – – – 2,334Income due and accrued 26 26 – – – 26Due from subsidiaries 459 459 – – – 459Other receivables anddeposits 58 58 – – – 58

Cash and bank balances 75 75 – – – 75

Total financial andinsurance assets 20,403 10,964 7,011 – 2,602 20,577

Islamic medium term notes (200,000) (9,500) (209,500) – – (219,000)Other payables (13,926) (13,926) – – – (13,926)

Total financial liabilities (213,926) (23,426) (209,500) – – (232,926)



(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 lossalso arises from volatility in asset prices, interest/proTt rates, or exchange rates. Market risk includes thefollowing elements:

(i) Equity price risk which is the risk of Uuctuations in the fair value or future cash Uows of a Tnancialinstrument arising from stock market dynamics impacting equity prices;

(ii) Foreign exchange risk which is the risk of Uuctuations in the fair value or future cash Uows of a Tnancialinstrument arising from a movement of or volatility in exchange rates; and

(iii) Interest/proTt rate risk which is the risk of Uuctuations in the fair value or future cash Uows of a Tnancialinstrument arising from variability in interest/proTt rates.

Equity risk

Equity price risk is the risk that the fair value of future cash Uows of a Tnancial instrument Uuctuates becauseof changes in market prices (other than those arising from interest rate/proTt yield risk or currency risk), whetherthose changes are caused by factors speciTc to the individual Tnancial instrument or its issuer or factorsaffecting similar Tnancial instruments traded in the market.

The Group’s equity risk exposures relates to Tnancial assets and Tnancial liabilities whose values will Uuctuateas a result of changes in market prices.

The Group’s price risk policy requires it to manage such risks by setting and monitoring objectives andconstraints on investments, diversiTcation plans and limits on investments in each country, sector, market andissuer, having regard also to such limits as stipulated by BNM for its reinsurance, takaful and retakafulsubsidiaries. The Group complied with such limits as stipulated by BNM during the Tnancial year and has nosigniTcant concentration of price risk.

The analysis below is performed for reasonably possible movements in key variables with all other variablesheld constant, showing the impact on proTt before tax and equity (inclusive of the impact on othercomprehensive income). The correlation of variables have a signiTcant effect in determining the ultimate impacton price risk, but to demonstrate the impact due to changes in variables, changes in variables are consideredindividually. It should be noted that movements in these variables are non-linear.


GroupImpact on

Changes in Profit/ Impact onmarket Surplus Equity/indices before Tax Funds

RM’000 RM’000

2012

General reinsurance and shareholders’ fundsBursa Malaysia +5% 282 3,395Bursa Malaysia –5% (282) (3,350)

268 MNRB



(c) Market Risk (cont’d)

Equity risk (cont’d)

GroupImpact on

Changes in Profit/ Impact onmarket Surplus Equity/indices before Tax Funds

RM’000 RM’000

2012

General takaful fundBursa Malaysia +5% 52 239Bursa Malaysia –5% (52) (239)

Family takaful fundBursa Malaysia +5% 118 2,093Bursa Malaysia –5% (118) (2,093)

General retakaful fundBursa Malaysia +5% 2 7Bursa Malaysia –5% (2) (7)

Family retakaful fundBursa Malaysia +5% – 8Bursa Malaysia –5% – (8)

2011

General reinsurance and shareholders’ fundsBursa Malaysia +5% 144 2,441Bursa Malaysia –5% (144) (2,441)

General takaful fundBursa Malaysia +5% 55 122Bursa Malaysia –5% (55) (122)

Family takaful fundBursa Malaysia +5% 91 819Bursa Malaysia –5% (91) (819)

General retakaful fundBursa Malaysia +5% 4 4Bursa Malaysia –5% (4) (4)

Family retakaful fundBursa Malaysia +5% 2 2Bursa Malaysia –5% (2) (2)




Foreign exchange risk/currency risk

Currency risk is the risk that the fair value of future cash Uows of a Tnancial instrument will Uuctuate due tovolatility in foreign exchange rates.

As the Group’s business is conducted primarily in Malaysia, the Group’s functional and presentation currency isMalaysian Ringgit. The Group’s main foreign exchange risk from recognised assets and liabilities are resultingfrom reinsurance and retakaful transactions of the reinsurance and retakaful subsidiaries. These balances areexpected to be settled and realised on net basis within 12 months; accordingly the impact arising fromsensitivity in foreign exchange rates is deemed to be minimal.

Interest/Profit rate risk

The Group is exposed to fair value interest/proTt rate risk where changes to interest/proTt rates result inchanges to fair values rather than cash Uows on assets such as Txed interest income assets. Conversely,Uoating rate loans expose the Group to cash Uow interest/proTt rate risk.

The earnings of the Group are affected by changes in market interest/proTt rates due to the impact suchchanges have on interest/proTt income from cash and cash equivalents, including investments in Txed/Islamicdeposits. Fixed Income portfolio is inversely related to proTt rates hence it is the source of portfolio volatility.

The Group manages its interest/proTt rate risk by matching, where possible, the duration and proTle of assetsand liabilities to minimise the impact of mismatches between the value of assets and liabilities frominterest/proTt rate movements.

The nature of the Group’s exposure to interest/proTt rate risk and its objectives, policies and processes formanaging interest/proTt rate risk have not changed signiTcantly from the previous Tnancial year.

The following tables set out the carrying amount, by maturity, of the Group’s Tnancial instruments that areexposed to interest/proTt rate risk.


A change of 25 basis points (“bp”) in interest/proTt rates at the reporting date would have increased/(decreased)the value of the portfolio of Txed-income investment by the amounts shown below.

Impact onChanges in Equity/

variable FundsRM’000

2012

General reinsurance and shareholders’ fundsInterest/proTt rates + 25 bp (7,610)Interest/proTt rates – 25 bp 7,780

270 MNRB




Interest/Profit rate risk (cont’d)

Sensitivity analysis (cont’d)

Impact onChanges in Equity/

variable FundsRM’000

2012 (cont’d)

General takaful fundInterest/proTt rates + 25 bp (938)Interest/proTt rates – 25 bp 929

Family takaful fundInterest/proTt rates + 25 bp (6,311)Interest/proTt rates – 25 bp 6,541

General retakaful fundInterest/proTt rates + 25 bp (111)Interest/proTt rates – 25 bp 118

Family retakaful fundInterest/proTt rates + 25 bp (35)Interest/proTt rates – 25 bp 36

2011

General reinsurance and shareholders’ fundsInterest/proTt rates + 25 bp (7,008)Interest/proTt rates – 25 bp 6,262

General takaful fundInterest/proTt rates + 25 bp (912)Interest/proTt rates – 25 bp 928

Family takaful fundInterest/proTt rates + 25 bp (4,049)Interest/proTt rates – 25 bp 4,146

General retakaful fundInterest/proTt rates + 25 bp (94)Interest/proTt rates – 25 bp 68

Family retakaful fundInterest/proTt rates + 25 bp (42)Interest/proTt rates – 25 bp 41


45. OTHER RISKS

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 controlled by having detailedoperation manual describing the responsibilities in relation to management of the properties to maintain quality andsatisTed tenants.

The Tnancial risk of declining tenant’s are managed through careful selection of properties, having quality tenantswith long term tenancies and continuously maintaining and upgrading facilities.

The Group has no signiTcant exposure of property risk.

Operational Risk

Operational Risk is the risk of loss arising from system failure, human error, fraud or external events. When controlsfail to perform, operational risks can cause damage to reputation, have legal or regulatory implications or can lead toTnancial loss. The Group cannot expect to eliminate all operational risks, but by initiating a rigorous controlframework and by monitoring and responding to potential risks, the Group is able to manage risks. Controls includeeffective segregation of duties, access controls, authorisation and reconciliation procedures, staff education andassessment processes, including the use of internal audit. Business risks such as changes in environment,technology and the industry are monitored through the Group’s strategic planning and budgeting process.

Shariah Non-Compliance Risk

Shariah Non-Compliance risk refers to possible failure to meet the obligation of Shariah principles. When controls failto perform, Shariah non-compliance risk can cause reputational and operational damage, have regulatory implicationsor can even lead to Tnancial loss and Tnally, impediment from Allah’s barakah or blessing. The takaful and retakafulsubsidiaries expect to mitigate such risk by intitiating, monitoring and responding to robust Shariah controlframework. Controls include effective oversight of the Shariah Committee, supported by internal Shariah ComplianceDepartment in all aspects of the takaful and retakaful subsidiaries’ operations. Other relevant controls include staffawareness training and internal operating guidelines, including the use of internal and external Shariah audit.

Compliance Risk

Compliance risk is the risk arising from violations of, or non conformance with business principles, internal policiesand procedures, related laws, 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 sanctionsand/or Tnancial loss.

The Group has established a Compliance Division at the Group and subsidiary level to oversee and monitor allcompliance aspects in observing regulatory requirements. In this respect, it has developed internal policies andprocedures to ensure compliance with all applicable laws and guidelines issued by the regulatory authorities.

272 MNRB


46. TAKAFUL AND RETAKAFUL FUNDS

GENERAL TAKAFUL INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Operating revenue 3 204,516 232,756

Gross earned contribution 4 209,314 210,526Earned contribution ceded to retakaful operators (23,451) (32,549)

Net earned contribution 4 185,863 177,977

Investment income 5 10,782 8,560Realised gains and losses 6 2,580 2,706Fair value gains and losses 7 (133) (19)Fee and commission income 8 7,278 3,938Other operating revenue 1,537 3,054

Other revenue 22,044 18,239

Gross claims paid 21(b) (122,249) (104,436)Claims ceded to retakaful operators 21(b) 10,205 6,995Gross change to contract liabilities 21(b) (17,557) (49,809)Change in contract liabilities ceded to retakaful operators 21(b) (8,874) 13,248

Net claims (138,475) (132,417)

Fee expenses 8 (54,486) (56,157)Other operating expenses (2,003) (1,770)

Other expenses (56,489) (57,927)

Profit before taxation 12,943 5,872

Taxation 12(b) (2,270) (1,427)

Net proTt for the year 10,673 4,445


46. TAKAFUL AND RETAKAFUL FUNDS (CONT’D)

GENERAL TAKAFUL STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Net profit for the year 10,673 4,445

Other comprehensive loss:

AFS fair value reserve:Net gains on fair value changes 30 2,442 2,236Realised gain transferred to income statement 30 (2,477) (2,416)Deferred tax relating to net loss on AFS Tnancial assets 30 9 36

Total comprehensive income for the year 10,647 4,301

274 MNRB



GENERAL TAKAFUL STATEMENT OF FINANCIAL POSITIONAS AT 31 MARCH 2012

Note 2012 2011RM’000 RM’000

AssetsFinancial assets:Financial assets at FVTPL 20(a) 1,049 1,105HTM investments 20(b) 70,311 67,268AFS Tnancial assets 20(c) 112,306 105,145Loans and receivables 20(d) 70,418 60,449

Retakaful assets 20(b) 42,156 34,351Takaful receivables 22 25,463 32,798Deferred tax assets 17 1,370 1,571Cash and bank balances 22,212 47,511

Total general takaful assets 345,285 350,198

LiabilitiesTakaful contract liabilities 21(b) 293,710 291,733Takaful payables 26 13,827 7,932Tax payable 2,577 564Other payables 27 26,075 39,477

Total general takaful liabilities 336,189 339,706

Participants’ FundGeneral takaful fund 30 9,096 10,492

Total general takaful liabilities and participants’ fund 345,285 350,198



FAMILY TAKAFUL INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000


Gross contribution 465,617 494,213Contribution ceded to retakaful operators (48,302) (44,403)

Net contribution 417,315 449,810

Investment income 5 41,198 31,121Realised gains and losses 6 9,124 8,073Fair value gains and losses 7 (289) (7,429)Fee and commission income 8 70 21


Gross beneTts paid (131,688) (117,667)BeneTts ceded to retakaful operators 82,374 25,303Gross change to certiTcate liabilities (2,772) (3,655)Change in certiTcate liabilities ceded to retakaful operators (13,555) 16,540

Net claims (65,641) (79,679)

Fee expenses 8 (144,516) (157,132)Other operating expenses (4,645) (3,500)

Other expenses (149,161) (160,632)

Profit before taxation 252,616 241,285

Taxation 12(c) (4,038) (2,983)

Net profit for the year 248,578 238,302

276 MNRB



FAMILY TAKAFUL STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Net surplus for the year 31 248,578 238,302

Other comprehensive income:

AFS fair value reservesNet gains on fair value changes 31 13,090 9,480Realised gain transferred to income statement 31 (8,902) (7,456)Deferred tax relating to net gain on AFS Tnancial assets 31 (328) (175)

Total comprehensive income for the year 252,438 240,151



FAMILY TAKAFUL STATEMENT OF FINANCIAL POSITIONAS AT 31 MARCH 2012

Note 2012 2011RM’000 RM’000

AssetsInvestment properties 14 103,828 103,518Financial assets:Financial assets at FVTPL 20(a) 2,355 1,832HTM investments 20(b) 239,257 212,387AFS Tnancial assets 20(c) 441,066 303,601Loans and receivables 20(d) 402,167 303,142

Retakaful assets 21(c) 115,684 137,383Takaful receivables 22 130,382 83,906Cash and bank balances 53,008 64,152Investment-linked business assets 34 119,177 91,409

Total family takaful assets 1,606,924 1,301,690

LiabilitiesTakaful contract liabilities 21(c) 1,221,333 1,002,612Takaful payables 26 69,774 34,406Tax payable 4,411 1,260Deferred tax liabilities 17 2,355 2,135Other payables 27 59,180 67,519Investment-linked business liabilities 34 2,722 1,954

Total family takaful liabilities 1,359,775 1,109,886

Participants’ FundFamily takaful fund 31 130,694 102,349Investment-linked fund 34 116,455 89,455

247,149 191,804

Total family takaful liabilities and participants’ fund 1,606,924 1,301,690

278 MNRB



GENERAL RETAKAFUL INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000


Gross earned contribution 4 59,437 39,569Contribution ceded to retakaful operators 4 (10,634) (8,958)

Net earned contribution 48,803 30,611

Investment income 5 1,223 761Realised gains and losses 6 131 124Fair value gains and losses 7 1 1Fee and commission income 8 1,120 977Other operating revenue 476 9


Gross claims paid 21(d) (24,990) (12,636)Claims ceded to retakaful operators 21(d) 3,033 859Gross change to contract liabilities 21(d) (9,688) (12,328)Change in contract liabilities ceded to retakaful operators 21(d) (1,079) (1,935)

Net claims (32,724) (26,040)

Fee and commission expense 8 (20,793) (19,806)Other operating expenses (398) (1,006)


Loss before taxation (2,161) (14,369)Taxation 12(d) – –

Net loss for the year (2,161) (14,369)



GENERAL RETAKAFUL STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Net loss for the year (2,161) (14,369)


Available-for-sale reserveGain/(loss) on fair value changes 32 225 190Realised gain transferred to income statement 32 (113) (113)Deferred tax relating to net gain on AFS Tnancial assets 32 (28) (19)

Total comprehensive loss for the year (2,077) (14,311)

280 MNRB



GENERAL RETAKAFUL STATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Assets

Financial assets:Financial assets at FVTPL 20(a) 38 70HTM investments 20(b) 11,491 4,004AFS Tnancial assets 20(c) 14,748 6,369Loans and receivables 20(d) 33,199 45,093

Retakaful assets 21(d) 6,529 7,368Takaful receivables 22 23,281 13,929Tax recoverable 7 6Cash and bank balances 9 14

Total general retakaful fund assets 89,302 76,853

Liabilities

Deferred tax liabilities 17 51 23Takaful contract liabilities 21(d) 81,860 73,510Takaful payables 26 4,069 3,250Other payables 27 3,322 –

Total general retakaful fund liabilities 89,302 76,783

General retakaful fund 32 – 70

Total liabilities and general retakaful fund 89,302 76,853



FAMILY RETAKAFUL INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000


Gross earned contribution 26,000 12,897Contribution ceded to retakaful operators (4,377) (4,163)

Net earned contribution 21,623 8,734

Investment income 5 487 446Realised gains and losses 6 80 123Fair value gains and losses 7 – 1Fee and commission income 8 108 103Other operating revenue – 15

Other revenue 675 688

Gross beneTts paid 21(e) (19,788) (11,036)Claims ceded to retakaful operators 21(e) 2,428 4,263Gross change to contract liabilities 21(e) (2,860) (716)Change in contract liabilities ceded to retakaful operators 21(e) 1,208 (5)

Net claims (19,012) (7,494)

Fee and commission expense 8 (3,342) (1,533)Other operating expenses (34) (21)


(Loss)/profit before taxation (90) 374Taxation 12(e) – –

Net (loss)/profit for the year (90) 374

282 MNRB



FAMILY RETAKAFUL STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Net (loss)/profit for the year (90) 374


Available-for-sale reserveGain on fair value changes 33 137 136Realised gain transferred to income statement 33 (75) (114)Deferred tax relating to net gain on AFS Tnancial assets 33 (16) (5)

Total comprehensive (loss)/income for the year (44) 391



FAMILY RETAKAFUL STATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 MARCH 2012

Note 2012 2011RM’000 RM’000

Assets

Financial assets:Financial assets at FVTPL 20(a) – 35HTM investments 20(b) 3,701 3,708AFS Tnancial assets 20(c) 3,865 3,648Loans and receivables 20(d) 993 7,824

Retakaful assets 21(e) 1,864 656Takaful receivables 22 2,437 920Tax recoverable 4 4Cash and bank balances 9 181

Total family retakaful fund assets 12,873 16,976

Liabilities

Deferred tax liabilities 17 25 9Takaful contract liabilities 21(e) 5,354 2,494Takaful payables 26 2,321 2,007Other payables 27 3,871 11,120

Total family retakaful fund liabilities 11,571 15,630

Family retakaful fund 33 1,302 1,346

Total liabilities and family retakaful fund 12,873 16,976

284 MNRB


47. FAIR VALUES OF FINANCIAL INSTRUMENTS

FRS 7 Financial Instruments: Disclosures requires the classiTcation of Tnancial instruments held at fair valueaccording to a hierarchy that reUects the signiTcance of inputs used in making the measurements, in particular,whether the inputs used are observable or unobservable. The following levels of hierarchy are used for determiningand disclosing the fair value of the Group and of the Company’s Tnancial instruments:

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

In accordance with the transitional provisions of Amendments to FRS 7 Improving Disclosures about FinancialInstruments, the Group and the Company had applied the disclosure requirements of the Standard prospectivelyand, hence, comparative disclosures have not been provided.

As at the reporting date, the Group and the Company held the following Tnancial assets that are measured at fairvalue:

Level 1 Level 2 Level 3 TotalRM’000 RM’000 RM’000 RM’000

General reinsurance and shareholders’ fund


Quoted shares in Malaysia 5,648 – – 5,648Structured products – 12,296 – 12,296Warrants 9 – – 9

5,657 12,296 – 17,953

(b) AFS financial assets

Unquoted debt securities – 695,024 – 695,024Golf club memberships – – 228 228Quoted shares in Malaysia 79,911 – – 79,911Quoted shares outside Malaysia 224 – – 224Warrants 6 – – 6

80,141 695,024 228 775,393



Quoted in Malaysia 1,040 – – 1,040Warrants 9 – – 9

1,049 – – 1,049


47. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT’D)

Level 1 Level 2 Level 3 TotalRM’000 RM’000 RM’000 RM’000

General takaful fund (cont’d)


Quoted shares in Malaysia 4,764 – – 4,764Warrants 11 – – 11Shariah approved unit trust funds – 7,968 – 7,968Unquoted debt securities – 99,563 – 99,563

4,775 107,531 – 112,306

Family takaful fund


Quoted in Malaysia 2,346 – – 2,346Warrants 9 – – 9

2,355 – – 2,355


Quoted shares in Malaysia 41,706 – – 41,796Warrants 58 – – 58Shariah approved unit trust funds – 11,952 – 11,952Unquoted debt securities – 387,260 – 387,260

41,854 399,212 – 441,066



Shares quoted in Malaysia 38 – – 38


Unquoted debt securities – 14,644 – 14,644Quoted shares in Malaysia 104 – – 104

104 14,644 – 14,748


(a) AFS financial assets

Unquoted debt securities – 3,696 – 3,696Quoted shares in Malaysia 169 – – 169

169 3,696 – 3,865

286 MNRB

48. SUPPLEMENTARY INFORMATION – BREAKDOWN OF RETAINED PROFITS INTO REALISED ANDUNREALISED PROFITS OR LOSSES

The breakdown of the retained proTts of the Group and of the Company as at 31 March 2012 into realised andunrealised proTts or losses is presented in accordance with the directives issued by Bursa Malaysia SecuritiesBerhad dated 25 March 2010 and 20 December 2010 and prepared in accordance with Guidance on Special MatterNo. 1, Determination of Realised and Unrealised ProTts or Losses in the Context of Disclosure Pursuant to BursaMalaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Realised and unrealised proTtsof the Company and its subsidiaries:– Realised 699,614 634,986 295,728 295,893– Unrealised 7,402 13,098 1,891 3,098

707,016 648,084 297,619 298,991

Share of (accumulated losses)/retainedproTts from associated companies:– Realised (7,615) 18,067 – –– Unrealised – 6,741 – –

699,401 672,892 297,619 298,991Less: Consolidation adjustments 3,800 (21,746) – –

Total retained proTts 703,201 651,146 297,619 298,991



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 were no proceeds raised from corporate proposals during the Tnancial year ended 31 March 2012.

(2) Share buy–back

There was no proposal by the Company to carry out a share buy-back during the Tnancial year ended 31 March 2012.

(3) Options or convertible securities

No options or convertible securities were issued by the Company during the Tnancial year ended 31 March 2012 and thereare no options or convertible securities outstanding and exercisable at the end of the Tnancial year ended 31 March 2012.

(4) Depository receipt programme

The Company did not sponsor any depository receipt programme during the Tnancial year ended 31 March 2012.

(5) Sanctions and/or penalties

There was no sanction and/or penalty imposed on the Company and its subsidiary companies, directors or management bythe relevant regulatory bodies during the Tnancial year ended 31 March 2012.

(6) Non–audit fees

The amount of non–audit fees paid to external auditors by the Group and the Company for the Tnancial year ended 31 March2012 amounted to RM74,500 and RM3,000 respectively.

(7) Variation in results

There were no signiTcant variations between the audited results for the Tnancial year ended 31 March 2012 and the unauditedresults previously announced.

There were no proTt estimate, forecast or projection issued by the Company and its subsidiary companies during the Tnancialyear ended 31 March 2012.

(8) Profit guarantee

There was no proTt guarantee given by the Company and its subsidiary companies during the Tnancial year ended 31 March2012.

(9) Material contracts

There were no material contracts entered into by the Company and its subsidiary companies involving directors’ and majorshareholders’ interests, which subsisted at the end of the Tnancial year ended 31 March 2012 or, if not then subsisting,entered into since the end of the previous Tnancial year.

(10) Revaluation policy

The revaluation policy on landed properties classiTed as Investment Properties are as disclosed in Note 2.14 to the Tnancialstatements.

(11) Recurrent related party transaction of revenue or trading nature

MNRB did not 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 bythe MNRB Group qualiTed as exempted transactions as deTned under Paragraph 10.08(11)(e), Part E of Chapter 10 of theListing Requirements of Bursa Securities.

ADDITIONAL COMPLIANCE INFORMATION

288 MNRB

SHARE CAPITAL

Authorised capital : 500,000,000 ordinary shares

Issued and fully paid-up : 213,069,500 ordinary shares of RM1.00 each

No. of shareholders : 5,290

Class of shares : RM1.00 ordinary shares

Voting right : 1 vote per ordinary share

ANALYSIS BY SIZE OF SHAREHOLDINGSas at 31 July 2012

Share Capital No. of Holders Percentage of Percentage ofSize of Shareholdings Shareholders Shareholders No. of Shares Share Capital

(%) (%)

less than 100 138 2.61 1,555 0.00100 to 1,000 1,773 33.51 1,636,846 0.771,001 to 10,000 2,508 47.41 10,879,305 5.1010,001 to 100,000 756 14.29 23,541,439 11.05100,001 to less than 5% of issued shares 112 2.12 34,765,255 16.325% and above of issued shares 3 0.06 142,245,100 66.76

TOTAL 5,290 100.00 213,069,500 100.00

LIST OF SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE)as at 31 July 2012

Names Shareholdings Percentage(%)

1. AMANAHRAYA TRUSTEES BERHAD 104,318,800 48.96<SKIM AMANAH SAHAM BUMIPUTERA>

2. PERMODALAN NASIONAL BERHAD 24,926,300 11.70

3. AMANAHRAYA TRUSTEES BERHAD 13,000,000 6.10<AMANAH SAHAM MALAYSIA>

LIST OF THIRTY (30) LARGEST SHAREHOLDERSas at 31 July 2012


1. AMANAHRAYA TRUSTEES BERHAD 104,318,800 48.96<SKIM AMANAH SAHAM BUMIPUTERA>

2. PERMODALAN NASIONAL BERHAD 24,926,300 11.70

3. AMANAHRAYA TRUSTEES BERHAD 13,000,000 6.10<AMANAH SAHAM MALAYSIA>

4. AMANAHRAYA TRUSTEES BERHAD 4,559,500 2.14<AMANAH SAHAM WAWASAN 2020>

5. JOHAN ENTERPRISE SDN BHD 2,230,000 1.05

ANALYSIS OF SHAREHOLDINGSas at 31 July 2012


LIST OF THIRTY (30) LARGEST SHAREHOLDERSas at 31 July 2012 (CONT’D)


6. HONG LEONG ASSURANCE BERHAD 1,992,149 0.93<AS BENEFICIAL OWNER (S’HOLDERS NPAR)>

7 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 1,279,000 0.60<PLEDGED SECURITIES ACCOUNT FOR SHANMUGAM A/L THOPPALAN (8069535)>

8 CITIGROUP NOMINEES (ASING) SDN BHD 1,250,800 0.59<CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND>

9 NEOH CHOO EE & COMPANY, SDN BERHAD 1,080,000 0.51

10 GAN CHUN HUI 744,500 0.35

11 HONG LEONG ASSURANCE BERHAD 550,000 0.26<AS BENEFICIAL OWNER (LIFE PAR)>

12 HLG NOMINEE (TEMPATAN) SDN BHD 500,000 0.23<HONG LEONG FUND MANAGEMENT SDN BHD FOR HONG LEONG ASSURANCE BHD (LIFE)>

13 HLG NOMINEE (TEMPATAN) SDN BHD 500,000 0.23<HONG LEONG FUND MANAGEMENT SDN BHD FOR HONG LEONG FOUNDATION>

14 CITIGROUP NOMINEES (ASING) SDN BHD 497,100 0.23<CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES>

15 CHONG YIEW ON 489,500 0.23

16 LEE KOK HAI 402,000 0.19

17 HLB NOMINEES (TEMPATAN) SDN BHD 382,000 0.18<PLEDGED SECURITIES ACCOUNT FOR GOH CHU YONG>

18 CHUA HIN BEE 380,000 0.18

19 MULTI – PURPOSE INSURANS BHD 369,753 0.17

20 THONG SU – F’NG 362,100 0.17

21 LIM TEAN KAU 360,000 0.17

22 CHEN CHIN PENG 350,000 0.16

23 CITIGROUP NOMINEES (ASING) SDN BHD 341,200 0.16<CBNY FOR EMERGINGMARKET CORE EQUITY PORTFOLIO DFA INVESTMENT DIMENSIONS GROUP INC>

24 LIM YEE BEE 315,500 0.15

25 ANUAR BIN MOHD HASSAN 300,000 0.14

26 HLB NOMINEES (TEMPATAN) SDN BHD 300,000 0.14<PLEDGED SECURITIES ACCOUNT FOR LIEW SUN YICK>

27 PUBLIC NOMINEES (TEMPATAN) SDN BHD 298,000 0.14<PLEDGED SECURITIES ACCOUNT FOR TEE SEE KIM (E-TSA)>

28 LEONG SOO HA & LEONG CHOON YIN 292,000 0.14

29 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 277,000 0.13<PLEDGED SECURITIES ACCOUNT FOR OOI CHIN HOCK (8058312)>

30 CHOW SONG KUANG 262,600 0.12

TOTAL 162,909,802 76.46

290 MNRB

INFORMATION ON DIRECTORS’ SHAREHOLDINGSas at 30 July 2012

Nos. Names of Directors Shareholdings Percentage(%)

1. SHARKAWI ALIS 0 0.00

2. P. RAVEENDEREN 10,000 0.01

3. DATO' SYED ARIFF FADZILLAH SYED AWALLUDDIN 0 0.00

4. YUSOFF YAACOB 0 0.00

5. DATUK MOHD KHALIL DATO’ MOHD NOOR 5,000 0.00

6. PAISOL AHMAD 0 0.00

7. MEGAT DZIAUDDIN MEGAT MAHMUD 0 0.00

8. MOHD DIN MERICAN 0 0.00

CATEGORY OF SHAREHOLDERSas at 31 July 2012

Type of Ownership Shareholders Shareholdings Percentage(%) (%)

Government Agencies 1 0.02 10 0.00Individual 4,427 83.69 38,156,013 17.91Companies 120 2.27 157,221,208 73.79Nominees Company 742 14.02 17,692,269 8.30

GRAND TOTAL 5,290 100.00 213,069,500 100.00

ANALYSIS OF SHAREHOLDINGSas at 31 July 2012


Tenure/ Land area Net BookExisting use/ (sq.ft) value as at

Date of Date of Description of Age of Build-up area 31/3/2012Address Acquisition Revaluation Properties buildings (sq.ft.) (RM)

INVESTMENT PROPERTIES

No. 15, Jalan Sri Hartamas 7 14 July 1984 22 October 2009 1 unit of Freehold/ 1,600/ 2,700,000.00Taman Sri Hartamas 4 storey rented out/ 6,15050480 Kuala Lumpur shophouse 28 years

No. 17, Jalan Sri Hartamas 7 14 July 1984 22 October 2009 1 unit of Freehold/ 1,600/ 2,900,000.00Taman Sri Hartamas 4 storey rented out/ 6,15050480 Kuala Lumpur shophouse 28 years

Total Investment Properties 5,600,000.00

SELF OCCUPIED PROPERTIES

No. C420 26 August 1982 29 February 2012 1 unit of Freehold/ Not 119,600.00Tanjung Biru Condominium apartment staff & guest applicable/Port Dickson holiday 820Negeri Sembilan accommodation/

28 years

No. D130 4 April 1984 29 February 2012 1 unit of Freehold/staff & Not 119,600.00Tanjung Biru Condominium apartment guest holiday applicable/Port Dickson accommodation/ 820Negeri Sembilan 30 years

No. 30, Ground Floor 2 June 1984 5 March 2012 1 unit of Freehold/store/ 2,000/ 1,345,500.00Jalan SS6/8, Kelana Jaya 4 storey 28 years 7,16047301 Petaling Jaya shophouseSelangor

No. 17, Lorong Dungun 17 February 1995 5 March 2012 1 unit of Freehold/OfTce 61,300/ 113,723,350.06Damansara Heights 12 storey premises/ 358,67650490 Kuala Lumpur building rented out/car park with 2 storey 17 years

basementcar park

No. F41 & F45 18 June 1984 2 March 2012 2 unit of Leasehold Not 478,400.00Frasers Pine Resort apartments expiring in applicable/Frasers Hill May 2082/ 3,585Pahang Darul Makmur staff & guest

holidayaccommodation/

28 years

LIST OF PROPERTIES31 March 2012

292 MNRB

Tenure/ Land area Net BookExisting use/ (sq.ft) value as at

Date of Date of Description of Age of Build-up area 31/3/2012Address Acquisition Revaluation Properties buildings (sq.ft.) (RM)

SELF OCCUPIED PROPERTIES (CONT’D)

Manchester Tower 28 July 2008 19 March 2012 1 unit of Freehold/ Not 700,127.80Apartment 2406 apartment occupied applicable/Dubai Marina by staff/ 1,011Dubai, UAE 5 years

Apt. 507 29 July 2008 19 March 2012 1 unit of Freehold/ Not 796,454.16Marina Diamond 5 apartment occupied applicable/Dubai Marina by staff/ 1,084Dubai, UAE 5 years

Yansoon 4 30 September 2010 18 March 2012 1 unit of Freehold/ Not 1,765,967.97Apartment 204 apartment occupied applicable/Burj Khalifa by staff/ 1,475Dubai Downtown 2 yearsUAE

Total Self Occupied Properties 119,049,000

NON-CURRENT ASSET HELD FOR SALE

No. 45, Block A 30 April 2003 31 March 2011 5 storey Freehold/ 33,540/ 34,173,000Medan Setia Satu purpose build rented out/ 97,179Plaza Damansara ofTce/with as ofTceBukit Damansara 2 storey premises/50490 Kuala Lumpur basement 16 years

car park

No. 14, Jalan 19/1 23 June 2000 25 January 2011 1 unit of Leasehold 130,860 17,800,000.0046300 Petaling Jaya 6 storey expiring inSelangor factory/ofTce September 2063/

building rented out aswith 2 storey ofTce premises/basement 18 yearscar park

No. 14, Jalan 19/1 23 June 2000 25 January 2011 Leasehold Leasehold 44,812 5,200,000.0046300 Petaling Jaya land expiring inSelangor September 2063/

NA

Total non-current asset held for sale 57,173,000.00

LIST OF PROPERTIES31 March 2012

PROXY FORM

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 atthe Auditorium, 3rd Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur onTuesday, 25 September 2012 at 3.00 p.m. and at any adjournment thereof, on the following resolutions referred to in theNotice of Annual General Meeting.

NO. RESOLUTIONS FOR AGAINST

ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the Tnancial year ended31 March 2012 and the Reports of the Directors and Auditors thereon

2. To approve the payment of a First and Final Dividend

3. To re-elect P. Raveenderen, who retires by rotation pursuant to Article 86of the Company’s Articles of Association

4. To re-elect Yusoff Yaacob, who retires by rotation pursuant to Article 86of the Company’s Articles of Association

5. To re-elect Mohd Din Merican, who retires pursuant to Article 92of the Company’s Articles of Association

6. To approve the payment of Directors’ fees

7. To re-appoint Messrs Ernst & Young as Auditors of the Company andto authorise the Directors to Tx their remuneration

SPECIAL BUSINESS

8. To re-appoint Datuk Mohd Khalil Dato’ Mohd Noor, who retires pursuantto Section 129(6) of the Companies Act, 1965

9. To amend the Articles of Association of the Company

(Please indicate with a cross (X) in the spaces provided whether you wish your votes to be casted for or against theresolutions above. In the absence of speciTc instructions, your proxy will vote or abstain as he/they may think Tt.)

Dated day of 2012.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. Aproxy need not be a member of the Company. A member may appoint more than two (2) proxies to attend the meeting provided themember 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 authorised nominee, it may appoint at least one (1) proxy inrespect of each securities account it holds. An Instrument appointing a proxy shall be in writing, and in the case of an individual shallbe signed by the appointor or by his attorney duly authorised in writing, and in the case of a Corporation shall be either given under itscommon seal or signed on its behalf by its attorney or an ofTcer of the Corporation so authorised. All proxies must be deposited at theofTce of the Share Registrar of the Company, Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Block D13, PusatDagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor, not less than 48 hours before the time set for the Annual GeneralMeeting or any adjournment thereof. Only members registered in the Record of Depositors as at 19 September 2012 shall be eligible toattend the AGM or appoint proxy to attend and vote on his/her behalf.

No. of Shares Held

MMNNRRBB HHOOLLDDIINNGGSS BBEERRHHAADD(13487–A)

Symphony Share Registrars Sdn. Bhd.

Level 6, Symphony House

Block D13, Pusat Dagangan Dana 1

Jalan PJU 1A/46

47301 Petaling Jaya

Selangor

Please afTx Stamp

1st fold

2nd fold

1. How to lodge a complaint?You can lodge a complaint by downloading and completingthe Complaint Form and faxing or sending it to:

Customer Care CentreBursa Malaysia BerhadLower Ground Floor, Exchange SquareBukit Kewangan50200 Kuala Lumpur

2. What should be in the complaint?Complainant should furnish information that enable properevaluation of the complaint which includes the following:• Name of the complainant, address, email and telephone

number.• The name, address, email, telephone number and website

address (if any) of the party(ies) mentioned in thecomplaint.

• SpeciTc details of how, why and when the subject matterof complaint occurred.

COMPLAINT AGAINST PUBLIC LISTED COMPANYThis form is intended to facilitate the lodgement of complaints with the Bursa Malaysia Berhad (Bursa Malaysia), by investorsagainst Public Listed Companies (PLCs) in Malaysia. Investors are encouraged, in the Trst instance, to amicably settle anydifferences directly with the PLC concerned.

COMPLAINT FORM

A. Particulars of Complainant

Name :(As per NRIC/Passport/Registration document)

Old NRIC No. :

New NRIC No. : – –

Nationality :

Registered Address :(As per NRIC/Passport/Registration document)

Correspondence Address :

Telephone No. (Home) :

Telephone No. (OfTce) :

Handphone No. :

Fax No. :

E–mail :

B. Nature of Complaint(Cross (X) where applicable)

Against Stock/Futures Broking Companies Against Bursa Malaysia

Against Dealers/Remisiers Against Share Registrars/Issuing House

Against Public Listed Companies Others, please specify

3. What happens after a complaint is filed?Each complaint will be reviewed and evaluated for referral tothe appropriate unit within Bursa Malaysia. Where a possibleviolation is detected, the matter will be referred to theInvestigation Department. Investigation into a complaint wouldbe made on a conTdential basis to preserve the investigativeprocess and would not be disclosed to the complainant.

4. What is the timeframe for resolution?The investigation into your complaint may take anytime from afew days to several months, depending on the complexity ofthe case. Towards ensuring speedy resolutions, please ensurethat all available documentation with regard to your complaintis enclosed with the standard complaint form.

Complainants are encouraged to call Customer CareHotline at 03–2732 0067 should you have any queries in theinterim.

C. Action Taken(Cross (X) where applicable)

Have you lodged a report or complaint to the police, other government agency or statutory/regulatory authority?

No

Yes, I have lodged a complaint/report with:

Police Date: Report ref. no.:

Registrar of Companies Date: Report ref. no.:

Stock/Futures Broking Company : (please indicate)

Company: Date: Report ref. no.:

Bursa Malaysia Date: Report ref. no.:

Others: (please indicate)

Date: Report ref. no.:

D. Supporting Documents(Cross (X) where applicable)

Do you have any documents or letters in support of your complaint?

No

Yes, I will forward them to Bursa Malaysia in due course

Yes, the following documents are attached with this complaint form:

i) v)

ii) vi)

iii) vii)

iv) viii)

E. Particulars of Complaint

Complaint Against :

Details of Complaint :

Notes : i. Please attach supporting documents, if available.ii. Please continue in other sheet if there is insufficient space.

Signature :

Date :

Please forward this form and any additional information to:

Customer Care CentreBursa Malaysia BerhadLower Ground FloorBukit Kewangan50200 Kuala Lumpur

Tel: 03–2732 0067 Fax: 03–2732 5258E–mail: [email protected]/

[email protected]

FOR OFFICE USE ONLY

Received by:

Date:

MNRB HOLDINGS BERHAD(13487-A)

12th Floor, Bangunan Malaysian ReNo. 17, Lorong Dungun, Damansara Heights50490 Kuala LumpurTel : (603) 2096 8000Fax : (603) 2096 7000Email : [email protected]

www.mnrb.com.my