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Syarikat Takaful Malaysia Berhad (131646-K) LAPORAN TAHUNAN 2014 ANNUAL REPORT

LAPORAN TAHUNAN • 2014 • ANNUAL REPORT · LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646K) 002. ... berakhir 31 Disember 2014, akan dibayar pada 25

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Page 1: LAPORAN TAHUNAN • 2014 • ANNUAL REPORT · LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646K) 002. ... berakhir 31 Disember 2014, akan dibayar pada 25

Syarikat Takaful Malaysia Berhad(131646-K)

LAPORAN TAHUNAN • 2014 • ANNUAL REPORT

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002 Notis Mesyuarat Agung Tahunan ke-30 Notice of 30th Annual General Meeting

006 Penyata Mengiringi Notis Mesyuarat Agung Tahunan ke-30

Statement Accompanying Notice of 30th Annual General Meeting

007 Struktur Korporat Corporate Structure

008 Ringkasan Kewangan Lima Tahun Five Years Financial Highlights

010 Maklumat Korporat Corporate Information

012 Profil Lembaga Pengarah

Board of Directors’ Profile

020 Profil Badan Penasihat Syariah

Shariah Advisory Body’s Profile

025 Jawatankuasa Pengurusan

Management Committee

026 Penyata Urus Tadbir Korporat Corporate Governance Statement

040 Laporan Jawatankuasa Audit Audit Committee Report

048 Penyata Pengurusan Risiko dan Kawalan Dalaman Statement on Risk Management and Internal Control

053 Maklumat Pematuhan Tambahan

Additional Compliance Information

055 Penyata Pengerusi Chairman’s Statement

069 Penyata Kewangan Financial Statements

280 Maklumat Hartanah

Particulars of Properties

287 Statistik Pegangan Saham

Shareholding Statistics

291 Rangkaian Cawangan & Syarikat Subsidiari Branch Network & Subsidiary Companies

Borang Proksi Proxy Form

ISI KANDUNGANCONTENTS

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NOTICE IS HEREBY GIVEN that the THIRTIETH (30TH) ANNUAL GENERAL MEETING of SYARIKAT TAKAFUL MALAYSIA BERHAD will be held at Dewan Ahmad Mohamed Ibrahim, 5th Floor, Annexe Block, Menara Takaful Malaysia, No. 4, Jalan Sultan Sulaiman, 50000 Kuala Lumpur on Tuesday, 12 May 2015, at 10:00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 December 2014, together with the reports of the Directors and Auditors thereon. (Resolution 1)

2. To approve a final dividend of 35% single tier in respect of the financial year ended 31 December 2014. (Resolution 2)

3. To re-elect the following Directors, each of whom retires pursuant to Article 62 of the Company’s Articles of Association:

3.1 Tan Sri Ismee Ismail (Resolution 3)

3.2 Mahadzir Azizan (Resolution 4)

3.3 Dato’ Sulaiman Mohd Yusof (Resolution 5)

4. To approve the payment of the Directors’ fees of RM747,000 for the financial year ended 31 December 2014. (RM696,000 for the financial year ended 31 December 2013) (Resolution 6)

5. To approve the payment of Shariah Advisory Body Members’ fees of RM168,000 for the financial year ended 31 December 2014. (RM168,000 for the financial year ended 31 December 2013) (Resolution 7)

6. To re-appoint Messrs KPMG Desa Megat & Co. as the Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 8)

DENGAN INI DIMAKLUMKAN bahawa MESYUARAT AGUNG TAHUNAN SYARIKAT TAKAFUL MALAYSIA BERHAD yang KETIGA PULUH (30) akan diadakan di Dewan Ahmad Mohamed Ibrahim, Tingkat 5, Blok Annex, Menara Takaful Malaysia, No. 4, Jalan Sultan Sulaiman, 50000 Kuala Lumpur pada hari Selasa, 12 Mei 2015, jam 10:00 pagi bagi tujuan-tujuan berikut:

SEBAGAI URUSAN BIASA

1. Untuk menerima Penyata-penyata Kewangan Beraudit bagi tahun kewangan berakhir 31 Disember 2014, berserta laporan Pengarah dan Juruaudit berkaitan dengannya. (Resolusi 1)

2. Untuk meluluskan dividen akhir sebanyak 35% tier tunggal bagi tahun kewangan berakhir 31 Disember 2014. (Resolusi 2)

3. Untuk melantik semula Pengarah-pengarah berikut yang bersara menurut Artikel 62 Tataurusan Pertubuhan Syarikat:

3.1 Tan Sri Ismee Ismail (Resolusi 3)

3.2 Mahadzir Azizan (Resolusi 4)

3.3 Dato’ Sulaiman Mohd Yusof (Resolusi 5)

4. Untuk meluluskan bayaran yuran Pengarah-pengarah sebanyak RM747,000 bagi tahun kewangan berakhir 31 Disember 2014. (RM696,000 bagi tahun kewangan berakhir 31 Disember 2013) (Resolusi 6)

5. Untuk meluluskan bayaran yuran Ahli-ahli Badan Penasihat Syariah sebanyak RM168,000 bagi tahun kewangan berakhir 31 Disember 2014. (RM168,000 bagi tahun kewangan berakhir 31 Disember 2013) (Resolusi 7)

6. Untuk melantik semula Tetuan KPMG Desa Megat & Co. sebagai Juruaudit Syarikat dan memberi kuasa kepada Pengarah-pengarah untuk menetapkan bayaran Juruaudit. (Resolusi 8)

Notis Mesyuarat Agung Tahunan Ke-30Notice of 30th Annual General Meeting

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Notis Mesyuarat Agung Tahunan Ke-30

Notice of 30th Annual General Meeting

AS SPECIAL BUSINESS

7. Ordinary Resolution - Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature with BIMB Holdings Berhad and its Subsidiaries (“BHB Group”).

“THAT, subject to compliance with the Listing Requirements of Bursa Malaysia Securities Berhad, Companies Act 1965, Memorandum and Articles of Association of the Company and all other applicable laws, rules, regulations and guidelines, approval be and is hereby given to the Company and its subsidiaries (“Takaful Malaysia Group”) to enter into the Recurrent Related Party Transactions of a revenue or trading nature with the BHB Group which are necessary for the day to day operations of the Takaful Malaysia Group as set out in Section 2.3 of the Circular to Shareholders dated 17 April 2015 (“Circular”), provided that:

(a) the transactions are in the ordinary course of business and are on terms which are not more favourable to the related parties than those generally available to the public and on terms not to the detriment of the minority shareholders of the Company;

(b) the transactions are made at arm’s length and on normal commercial terms; and

(c) the disclosure will be made in the annual report with the breakdown of the aggregate value of the transactions conducted pursuant to the mandate during the financial year.

AND THAT such authority shall commence immediately upon the passing of this resolution and shall continue to be in force until:

(a) the conclusion of the next annual general meeting of the Company, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next annual general meeting after the date that it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“CA”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of CA); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting,

whichever is the earlier”. (Resolution 9)

SEBAGAI URUSAN KHAS

7. Resolusi Biasa - Cadangan Mandat Pemegang-pemegang Saham bagi Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan Berbentuk Hasil atau Perdagangan dengan BIMB Holdings Berhad dan subsidiari-subsidiarinya (“Kumpulan BHB”).

“BAHAWA, tertakluk kepada pematuhan dengan Keperluan Penyenaraian Bursa Malaysia Securities Berhad, Akta Syarikat 1965, Memorandum dan Tataurusan Pertubuhan Syarikat dan semua undang-undang, peraturan dan garis panduan yang berkaitan, kelulusan dengan ini diberikan kepada Syarikat dan subsidiari-subsidiarinya (“Kumpulan Takaful Malaysia”) untuk memeterai Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan Berbentuk Hasil atau Perdagangan dengan Kumpulan BHB yang perlu bagi operasi harian Kumpulan Takaful Malaysia seperti yang dinyatakan dalam Seksyen 2.3 Pekeliling kepada Para Pemegang Saham bertarikh 17 April 2015 (“Pekeliling”), dengan syarat bahawa:

(a) urusniaga tersebut adalah dalam urusan biasa perniagaan dan mengikut terma yang tidak lebih memihak kepada pihak berkaitan berbanding yang secara umumnya tersedia kepada orang ramai dan mengikut terma yang tidak menjejaskan para pemegang saham minoriti Syarikat;

(b) urusniaga dilaksanakan secara tulus dan mengikut terma komersial biasa; dan

(c) penzahiran akan dibuat dalam laporan tahunan dengan pecahan nilai agregat urus niaga yang dijalankan menurut mandat pada tahun kewangan.

DAN BAHAWA kelulusan tersebut akan bermula serta merta setelah resolusi ini diluluskan dan akan terus berkuatkuasa sehingga:

(a) tamat mesyuarat agung tahunan Syarikat yang akan datang, di mana mandat tersebut akan luput, melainkan kuasa tersebut diperbaharui melalui satu resolusi yang diluluskan dalam mesyuarat tersebut;

(b) tamat tempoh di mana mesyuarat agung tahunan berikutnya selepas tarikh ia dikehendaki untuk diadakan menurut Seksyen 143(1) Akta Syarikat, 1965 (“AS”) (tetapi tidak melebihi penangguhan seperti yang dibenarkan menurut Seksyen 143(2) AS); atau

(c) dibatalkan atau dipinda melalui resolusi yang diluluskan oleh pemegang saham dalam mesyuarat agung,

yang mana lebih awal”. (Resolusi 9)

SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

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Notis Mesyuarat Agung Tahunan Ke-30

Notice of 30th Annual General Meeting

8. To transact any other business for which due notice has been given.

FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 30th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 41(f)(ii) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 5 May 2015. Only a depositor whose name appears on the Record of Depositors as at 5 May 2015 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT NOTICE IS ALSO HEREBY GIVEN THAT subject to shareholders’ approval at the 30th Annual General Meeting of the Company to be held on Tuesday, 12 May 2015, a final dividend of 35% single tier in respect of the financial year ended 31 December 2014 will be paid on 25 May 2015 to Depositors registered in the Record of Depositors at the close of business on 6 May 2015.

FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 4:00 p.m. on 6 May 2015 in respect of transfers; and

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

By Order of the Board

MOHAMAD ASRI YUSOFF (MIA 14171)Company SecretaryKuala Lumpur17 April 2015

8. Untuk melaksanakan sebarang urusan yang mana notis sewajarnya telah diberi.

NOTIS SETERUSNYA DENGAN INI DIBERI BAHAWA untuk tujuan menentukan ahli yang akan layak untuk menghadiri AGM yang ke-30, Syarikat akan membuat permohonan kepada Bursa Malaysia Depository Sdn Bhd, selaras dengan Artikel 41(f)(ii) Tataurusan Pertubuhan Syarikat dan Seksyen 34(1) Akta Perindustrian Sekuriti (Depositori Pusat) 1991, untuk menerbitkan Rekod Pendeposit Mesyuarat Agung pada 5 Mei 2015. Hanya pendeposit yang namanya tersenarai di dalam Rekod Pendeposit pada 5 Mei 2015 sahaja berhak untuk menghadiri mesyuarat atau melantik proksi untuk menghadiri dan/atau mengundi bagi pihaknya.

NOTIS PENERIMAAN DAN PEMBAYARAN DIVIDEN

NOTIS DENGAN INI JUGA DIBERI BAHAWA tertakluk kepada kelulusan para pemegang saham pada Mesyuarat Agung Tahunan Syarikat ke-30 yang akan diadakan pada hari Selasa, 12 Mei 2015, dividen akhir sebanyak 35% tier tunggal bagi tahun kewangan berakhir 31 Disember 2014, akan dibayar pada 25 Mei 2015 kepada para Pendeposit yang berdaftar di dalam Rekod Pendeposit pada penutupan perniagaan pada 6 Mei 2015.

NOTIS SETERUSNYA DENGAN INI JUGA DIBERI BAHAWA seorang Pendeposit adalah layak untuk menerima dividen hanya dalam keadaan:

(a) Saham yang telah dipindahkan ke dalam Akaun Sekuriti Pendeposit sebelum 4:00 petang pada 6 Mei 2015 berhubung pindahan; dan

(b) Saham yang dibeli di Bursa Malaysia Securities Berhad dengan asas kelayakan menurut Peraturan Bursa Malaysia Securities Berhad.

Atas Arahan Lembaga Pengarah

MOHAMAD ASRI YUSOFF (MIA 14171)Setiausaha SyarikatKuala Lumpur17 April 2015

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Notis Mesyuarat Agung Tahunan Ke-30

Notice of 30th Annual General Meeting

Notes:

1. Appointment of Proxy

(i) A member of the Company entitled to attend and vote at this meeting is entitled to appoint not more than two (2) proxies to attend and to vote instead of him at the same meeting and a proxy need not be a member of the Company.

(ii) Where a member of the Company appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

(iii) Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(iv) The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his attorney and in the case of a corporation, must be under seal or under the hand of an officer or attorney duly authorised.

(v) The instrument appointing a proxy must be deposited at the Registered Office of the Company at Tingkat 26, Blok Annex, Menara Takaful Malaysia, No. 4, Jalan Sultan Sulaiman, 50000 Kuala Lumpur not less than forty eight (48) hours before the time for holding the meeting or any adjournment thereof.

(vi) Only members whose names appear in the Record of Depositors on 5 May 2015 shall be eligible to attend, speak and vote at the AGM or appoint proxy(ies) to attend, speak and/or vote on their behalf.

2. Explanatory Note on Special Business

(i) Proposed Shareholders’ Mandate for Recurrent Related Party Transaction of a Revenue or Trading Nature.

The proposed Resolution 9, if passed, will empower the Company to conduct recurrent related party transactions of a revenue or trading in nature which are necessary for the Takaful Malaysia Group’s day to day operations and will eliminate the need to convene separate general meetings from time to time to seek shareholders’ approval. The details on the Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature are set out in the Circular to Shareholders dated 17 April 2015.

Nota-Nota:

1. Pelantikan Proksi

(i) Seorang ahli Syarikat yang berhak menghadiri dan mengundi di mesyuarat ini layak untuk melantik tidak lebih daripada dua (2) proksi untuk menghadiri dan mengundi bagi pihaknya pada mesyuarat yang sama dan proksi itu tidak semestinya seorang ahli Syarikat.

(ii) Sekiranya ahli Syarikat melantik dua (2) proksi, pelantikan tersebut akan menjadi tidak sah melainkan beliau menyatakan nisbah pegangan yang akan diwakili oleh setiap proksi.

(iii) Sekiranya ahli Syarikat adalah nomini berkecuali yang dibenarkan seperti yang ditakrifkan di bawah Akta Perindustrian Sekuriti 1991 (Depositori Pusat) yang memegang saham-saham biasa Syarikat untuk beberapa pemilik benefisial dalam satu akaun sekuriti (“akaun omnibus”), tidak ada had untuk bilangan proksi yang boleh dilantik oleh nomini berkecuali yang dibenarkan bagi setiap akaun omnibus yang dipegangnya.

(iv) Suratcara pelantikan proksi bagi individu hendaklah ditandatangani oleh pelantik atau peguamnya dan dalam hal perbadanan, ia mestilah dimeterai atau ditandatangani oleh seorang pegawai atau peguamnya yang telah diberi kuasa sewajarnya.

(v) Suratcara pelantikan seorang proksi mestilah dihantar ke Pejabat Berdaftar Syarikat di Tingkat 26, Blok Annex, Menara Takaful Malaysia, No. 4, Jalan Sultan Sulaiman, 50000 Kuala Lumpur, tidak lewat dari empat puluh lapan (48) jam sebelum waktu yang ditetapkan bagi mengadakan mesyuarat atau sebarang penangguhannya.

(vi) Hanya ahli yang tersenarai di dalam Rekod Pendeposit pada 5 Mei 2015 yang layak untuk hadir, bersuara dan mengundi pada AGM atau melantik seorang proksi (proksi-proksi) untuk hadir, bersuara dan/atau mengundi bagi pihak mereka.

2. Nota Penerangan kepada Urusan Khas

(i) Cadangan Mandat Pemegang-pemegang Saham bagi Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan Berbentuk Hasil atau Perdagangan.

Cadangan Resolusi No. 9 jika diluluskan, akan memberi kuasa kepada Syarikat untuk melaksanakan Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan Berbentuk Hasil atau Perdagangan yang perlu bagi operasi harian Kumpulan Takaful Malaysia dan akan menghapuskan keperluan untuk menjalankan mesyuarat agung yang berasingan dari masa ke semasa untuk mendapatkan kelulusan para pemegang saham. Butiran Cadangan Mandat Pemegang-pemegang Saham bagi Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan Berbentuk Hasil atau Perdagangan ada dinyatakan di dalam Pekeliling kepada Pemegang Saham bertarikh 17 April 2015.

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PENYATA MENGIRINGI NOTIS MESYUARAT AGUNG TAHUNAN KETIGA PULUH MENGIKUT PERENGGAN 8.27 (2) KEPERLUAN PENYENARAIAN PASARAN UTAMA BURSA MALAYSIA SECURITIES BERHAD

Tiada individu yang dilantik sebagai Pengarah (selain daripada pengarah yang bersedia untuk dilantik semula iaitu Tan Sri Ismee Ismail, Mahadzir Azizan dan Dato’ Sulaiman Mohd Yusof) dalam Mesyuarat Agung Tahunan Syarikat Takaful Malaysia Berhad yang Ketiga Puluh akan datang.

Penyata Mengiringi Notis Mesyuarat Agung Tahunan Ke-30Statement Accompanying Notice of 30th Annual General Meeting

STATEMENT ACCOMPANYING NOTICE OF THIRTIETH ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.27 (2) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

There is no individual standing for election as Director (other than directors standing for re-election i.e. Tan Sri Ismee Ismail, Mahadzir Azizan and Dato’ Sulaiman Mohd Yusof) at this forthcoming Thirtieth Annual General Meeting of Syarikat Takaful Malaysia Berhad.

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Struktur KorporatCorporate Structure

Syarikat-Syarikat Subsidiari / Subsidiary Companies

56.00% 63.09%

*

42.73%57.24%52.67%

47.08%

* in members’ voluntary liquidation

SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

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Ringkasan Kewangan Lima Tahun5 Years Financial Highlights

2010*

2011

2012

2013

2014

839,909

699,344

973,005

1,052,493

958,060

2010*

2011

2012

2013

2014

679,831

567,736

848,711

932,169

852,331

2010*

2011

2012

2013

2014

606,354

441,889

401,437

428,406

451,319

2010*

2011

2012

2013

2014

499,491

383,316

349,547

386,635

418,459

2010*

2011

2012

2013

2014

5,366,657

5,845,979

6,371,644

6,924,543

7,164,788

2010*

2011

2012

2013

2014

4,966,219

5,440,049

5,963,150

6,543,726

6,743,602

Jumlah Sumbangan Kasar Takaful Keluarga (RM’000) / Total Family Takaful Gross Contribution (RM’000)

Jumlah Sumbangan Kasar Takaful Am (RM’000) / Total General Takaful Gross Contribution (RM’000)

Jumlah Aset (RM’000) / Total Assets (RM’000)

Kumpulan / Group

Kumpulan / Group

Kumpulan / Group

Syarikat / Company

Syarikat / Company

Syarikat / Company

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Ringkasan Kewangan Lima Tahun

5 Years Financial Highlights

2010*

2011

2012

2013

2014

97,370

100,685

124,458

177,787

186,308

2010*

2011

2012

2013

2014

92,664

93,485

127,031

181,014

188,966

2010*

2011

2012

2013

2014

10.2

18.4

21.3

25.9

24.3

2010*

2011

2012

2013

2014

17,096

25,644

40,704

84,665

130,329

2010*

2011

2012

2013

2014

2.42

2.77

3.07

3.51

3.58

2010*

2011

2012

2013

2014

34.60

47.20

62.18

85.37

86.27

Keuntungan Sebelum Cukai Selepas Zakat (RM’000) / Profit Before Taxation After Zakat (RM’000)

Pulangan atas Ekuiti (%) / Return on Equity (%)

Aset Bersih Sesaham (RM) / Net Assets Per Share (RM) Pendapatan Sesaham (Sen) / Earnings Per Share (Sen)

Kumpulan / Group

Kumpulan / Group

Syarikat / Company

Syarikat / Company

Kumpulan / Group

* 18 months financial period

Kumpulan / Group

Dividen yang Dibayar / (Ditolak Cukai) (RM’000) / Dividend Paid / (Net of Taxation) (RM’000)

SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

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Maklumat KorporatCorporate Information

LEMBAGA PENGARAH / BOARD OF DIRECTORS

Pengerusi / Chairman

TAN SRI ISMEE ISMAILPengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director

Ahli-ahli / Members

DATO’ SRI MOHAMED HASSAN KAMILPengarah Urusan Kumpulan / Group Managing Director

DATUK ROZAIDA OMARPengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director

MAHADZIR AZIZANPengarah Bukan Eksekutif Bebas Kanan / Senior Independent Non-Executive Director

DATO’ SULAIMAN MOHD YUSOFPengarah Bukan Eksekutif Bebas /Independent Non-Executive Director

DATO’ JOHAN ABDULLAHPengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director

ZAKARIA ISMAILPengarah Bukan Eksekutif Bebas / Independent Non-Executive Director

DATO’ OTHMAN ABDULLAHPengarah Bukan Eksekutif Bebas / Independent Non-Executive Director

Setiausaha / Secretary

MOHAMAD ASRI YUSOFF (MIA 14171)

BADAN PENASIHAT SYARIAH / SHARIAH ADVISORY BODY

Pengerusi / Chairman

DR. AHMAD SHAHBARI @ SOBRI SALAMON

Ahli-ahli / Members

DATO’ MOHD. BAKIR HJ. MANSOR

DR. AIDA OTHMAN

PROFESSOR DR. MUHAMAD RAHIMI OSMAN

DATO’ WAN MOHAMAD DATO’ SHEIKH ABDUL AZIZ

Setiausaha / Secretary

MOHAMAD ASRI YUSOFF

JAWATANKUASA AUDIT / AUDIT COMMITTEE

MAHADZIR AZIZANPengerusi / Chairman

DATO’ SULAIMAN MOHD YUSOF

ZAKARIA ISMAIL

DATO’ OTHMAN ABDULLAH

JAWATANKUASA PEMILIHAN / NOMINATION COMMITTEE

MAHADZIR AZIZANPengerusi / Chairman

ZAKARIA ISMAIL

DATUK ROZAIDA OMAR

DATO’ SULAIMAN MOHD YUSOF

DATO’ JOHAN ABDULLAH

JAWATANKUASA GANJARAN / REMUNERATION COMMITTEE

ZAKARIA ISMAILPengerusi / Chairman

MAHADZIR AZIZAN

DATO’ JOHAN ABDULLAH

DATUK ROZAIDA OMAR

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Maklumat Korporat

Corporate Information

JAWATANKUASA RISIKO LEMBAGA PENGARAH / BOARD RISK COMMITTEE

ZAKARIA ISMAILPengerusi / Chairman

MAHADZIR AZIZAN

DATO’ JOHAN ABDULLAH

DATO’ SULAIMAN MOHD YUSOF

PENGURUSAN / MANAGEMENT

DATO’ SRI MOHAMED HASSAN KAMILPengarah Urusan Kumpulan / Group Managing Director

LEE HIN SZEKetua Pegawai Kewangan / Chief Financial Officer

AZIAN KASSIMKetua Pegawai Pelaburan / Chief Investment Officer

LEEM WHY CHONGPengurus Besar, Aktuari & Aktuari Dilantik / General Manager, Actuarial & Appointed Actuary

SHUHAIBAHTULASLAMIAH HURMUZANPengurus Besar, Sumber Manusia / General Manager, Human Resource

NORAZLIN MOHD DAHARIPengurus Besar, Perniagaan Korporat / General Manager, Corporate Business

NORLIDA SAIDPengurus Besar, Perniagaan Korporat / General Manager, Corporate Business

MOHD SUHAIMI AHMADPengurus Besar, Perniagaan Runcit / General Manager, Retail Business

MARK ANTHONY NATHANPengurus Besar, Bankatakaful / General Manager, Bancatakaful

PATRICK WONG CHANG YANGKetua Pegawai Informasi / Chief Information Officer

MOHAMAD ASRI YUSOFFPengurus Besar, Hal Ehwal Korporat / Setiausaha SyarikatGeneral Manager, Corporate Affairs / Company Secretary

JURUAUDIT / AUDITORS

KPMG Desa Megat & Co. (AF 0759)Chartered AccountantsLevel 10, KPMG Tower8, First AvenueBandar Utama47800 Petaling JayaSelangor Darul Ehsan

Tel : +603-7721 3388Fax : +603-7721 3399

PEJABAT BERDAFTAR / REGISTERED OFFICE

Tingkat 26, Blok AnnexMenara Takaful MalaysiaNo. 4, Jalan Sultan Sulaiman50000 Kuala Lumpur

Tel : +603-2268 1984Fax : +603-2274 2864Email : [email protected] : www.takaful-malaysia.com.my

PENDAFTAR / REGISTRAR

Symphony Share Registrars Sdn Bhd (378993-D)Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor

Tel : +603-7849 0777Fax : +603-7841 8151/52Email :[email protected] : www.symphony.com.my

TEMPAT DITUBUHKAN DAN DOMISIL / PLACE OF INCORPORATION AND DOMICILE

Malaysia

PENYENARAIAN BURSA SAHAM / STOCK EXCHANGE LISTING

Pasaran Utama Bursa Malaysia Securities Berhad pada 30 Julai 1996 /Main Market of Bursa Malaysia Securities Berhad on 30 July 1996

Kod Stok / Stock Code:

6139

Nama Stok / Stock Name:

TAKAFUL

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Profil Lembaga PengarahBoard of Directors’ Profile

Beliau adalah ahli fellow Chartered Institute of Management Accountants (CIMA) dan ahli Institut Akauntan Malaysia (MIA).

Beliau kini merupakan Pengarah Urusan Kumpulan dan Ketua Pegawai Eksekutif Lembaga Tabung Haji. Sebelum itu, beliau merupakan Ketua Pegawai Eksekutif ECM Libra Securities Sdn Bhd dan Pengarah ECM Libra Capital Sdn Bhd. Beliau juga pernah berkhidmat dengan beberapa organisasi dalam pelbagai kapasiti antaranya selaku Pengurus Besar Kanan Kewangan, Lembaga Tabung Haji; Ketua Akauntan di Pengurusan Danaharta Nasional Berhad; Pengurus Besar Pembangunan Perniagaan di Arab Malaysian Development Berhad dan beberapa jawatan berkaitan kewangan di syarikat-syarikat Shell di Malaysia. Beliau juga adalah Pengarah BIMB Holdings Berhad, Bank Islam Malaysia Berhad, TH Plantations Berhad dan beberapa syarikat lain.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri kesemua sembilan (9) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

TAN SRI ISMEE ISMAILPengerusi / Chairman

Tan Sri Ismee Ismail, berusia 50 tahun, adalah warganegara Malaysia dan telah dilantik sebagai Pengerusi Bukan Eksekutif Bukan Bebas Takaful Malaysia pada 16 Disember 2009.

Tan Sri Ismee Ismail, aged 50, is a Malaysian citizen and was appointed to the Board on 16 December 2009 as a Non-Independent Non-Executive Chairman of Takaful Malaysia.

He is a fellow member of Chartered Institute of Management Accountants (CIMA) and a member of the Malaysian Institute of Accountants (MIA).

He is currently the Group Managing Director and Chief Executive Officer of Lembaga Tabung Haji. Prior to that, he was the Chief Executive Officer of ECM Libra Securities Sdn Bhd and a Director of ECM Libra Capital Sdn Bhd. He has also served several organisations in various capacities including that of Senior General Manager of Finance, Lembaga Tabung Haji; Chief Accountant at Pengurusan Danaharta Nasional Berhad; General Manager of Business Development at Arab Malaysian Development Berhad and has held several finance-related positions at Shell companies of Malaysia. He is also a Director of BIMB Holdings Berhad, Bank Islam Malaysia Berhad, TH Plantations Berhad and several other companies.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended all nine (9) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

DATO’ SRI MOHAMED HASSAN KAMILPengarah Urusan Kumpulan / Group Managing Director

Dato’ Sri Mohamed Hassan Kamil, berusia 52 tahun, adalah warganegara Malaysia dan dilantik sebagai Pengarah Bukan Eksekutif Bukan Bebas Takaful Malaysia pada 1 September 2006. Beliau kini adalah Pengarah Urusan Kumpulan bagi Takaful Malaysia sejak 1 April 2007. Beliau juga merupakan Pengerusi Lembaga Komisaris P.T. Syarikat Takaful Indonesia dan P.T. Asuransi Takaful Keluarga.

Dato’ Sri Mohamed Hassan Kamil, aged 52, is a Malaysian citizen and was appointed to the Board on 1 September 2006 as a Non-Independent Non-Executive Director of Takaful Malaysia. He is currently the Group Managing Director of Takaful Malaysia since 1 April 2007. He is also the Chairman of the Board of Commissioners of P.T. Syarikat Takaful Indonesia and P.T. Asuransi Takaful Keluarga.

Beliau merupakan graduan Sarjana Muda Sains dalam bidang Sains Aktuari dan Sarjana Pentadbiran Perniagaan dari University of Iowa, USA. Beliau juga adalah Fellow of the Society of Actuaries, USA dan Chartered Life Underwriter.

Beliau telah bekerja di Amerika Syarikat sebagai Aktuari dari tahun 1987 hingga 1994 sebelum pulang ke Malaysia sebagai Timbalan Pengurus Besar di Malaysia National Insurance. Pada tahun 1996, beliau menyertai ING Insurance Berhad sebagai Naib Presiden Kanan dan Ketua Aktuari. Pada tahun 2004, beliau menjadi Timbalan Pengurus Besar bagi P.T. AIA Indonesia.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri kesemua sembilan (9) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

He graduated with a Bachelor of Science in Actuarial Science and a Master in Business Administration from the University of Iowa, USA. He is a Fellow of the Society of Actuaries, USA and a Chartered Life Underwriter.

He worked in the United States as an Actuary from 1987 to 1994 prior to returning to Malaysia as Deputy General Manager at Malaysia National Insurance. In 1996, he joined ING Insurance Berhad as Senior Vice President and Chief Actuary. In 2004, he became the Deputy General Manager for P.T. AIA Indonesia.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended all nine (9) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

Beliau adalah Akauntan Bertauliah (M) dan merupakan ahli Association of Chartered Certified Accountants (ACCA) United Kingdom sejak tahun 1986.

Beliau memulakan kerjayanya sebagai Akauntan Kewangan di FELDA pada tahun 1986. Pada tahun 1990, beliau menjadi Pengurus Kredit di Citibank Berhad sehingga tahun 1991. Beliau kemudiannya menyertai Guthrie Trading Sdn Bhd pada tahun 1992 sebagai Pengurus Kewangan sehingga tahun 1993. Selepas itu, beliau menjadi Pengarah Kewangan di Glaxo SmithKline Consumer Healthcare Sdn Bhd dari tahun 1994 sehingga tahun 2003. Kini beliau adalah Ketua Pegawai Kewangan Kumpulan di Lembaga Tabung Haji sejak tahun 2004. Beliau juga merupakan Pengarah Pelikan International Corporation Berhad dan BIMB Holdings Berhad.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri kesemua sembilan (9) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

DATUK ROZAIDA OMARPengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director

Datuk Rozaida Omar, berusia 52 tahun, adalah warganegara Malaysia dan telah dilantik sebagai Pengarah Bukan Eksekutif Bukan Bebas Takaful Malaysia pada 15 Mei 2007. Beliau juga merupakan ahli Jawatankuasa Pemilihan dan Jawatankuasa Ganjaran.

Datuk Rozaida Omar, aged 52, is a Malaysian citizen and is a Non-Independent Non-Executive Director of Takaful Malaysia and was appointed to the Board on 15 May 2007. She is also a member of the Nomination Committee and Remuneration Committee.

She is a Chartered Accountant (M) and a member of the Association of Chartered Certified Accountants (ACCA) United Kingdom since 1986.

She started her career as a Financial Accountant at FELDA in 1986. In 1990, she became a Credit Manager at Citibank Berhad until 1991. She then joined Guthrie Trading Sdn Bhd in 1992 as a Finance Manager until 1993. After that, she became a Finance Director of Glaxo SmithKline Consumer Healthcare Sdn Bhd from 1994 until 2003. She is currently the Group Chief Financial Officer of Lembaga Tabung Haji since 2004. She is also a Director of Pelikan International Corporation Berhad and BIMB Holdings Berhad.

She has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. She has no conviction for offences within the past ten (10) years and has attended all nine (9) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

MAHADZIR AZIZANPengarah Bukan Eksekutif Bebas Kanan / Senior Independent Non-Executive Director

Mahadzir Azizan, berusia 66 tahun, adalah warganegara Malaysia yang telah dilantik sebagai Pengarah Bukan Eksekutif Bebas Takaful Malaysia pada 1 September 2007. Beliau telah dilantik sebagai Pengarah Bukan Eksekutif Bebas Kanan pada 2 Jun 2011.

Mahadzir Azizan, aged 66, is a Malaysian citizen and is an Independent Non-Executive Director of Takaful Malaysia who was appointed to the Board on 1 September 2007. He was appointed as Senior Independent Non-Executive Director on 2 June 2011.

Beliau juga merupakan Pengerusi Jawatankuasa Audit dan Jawatankuasa Pemilihan dan ahli Jawatankuasa Risiko Lembaga Pengarah dan Jawatankuasa Ganjaran. Beliau juga merupakan ahli Lembaga Komisaris P.T. Asuransi Takaful Keluarga.

Beliau memperolehi kelulusan Barrister-At-Law dari Lincoln’s Inn, London, United Kingdom dan diterima masuk ke English Bar pada tahun 1978.

Beliau telah memegang pelbagai jawatan penting di dalam sektor awam dan swasta. Selepas tamat pengajian, beliau telah menyertai perkhidmatan Perundangan dan Kehakiman Kerajaan Malaysia sebagai Timbalan Pendakwaraya dan Penasihat Undang-Undang. Beliau kemudiannya menyertai sektor swasta dan berkhidmat di Malaysian International Shipping Corporation (“MISC”) dan Island & Peninsular Berhad, syarikat hartanah Permodalan Nasional Berhad (“PNB”) selama 24 tahun. Semasa di sektor swasta, beliau juga telah berkhidmat sebagai Ahli Majlis MARA dan juga sebagai Pengarah di pelbagai syarikat berkaitan Kerajaan. Kini, beliau juga merupakan Pengarah ECM Libra Financial Group Berhad, Libra Invest Berhad, RCE Capital Berhad dan beberapa syarikat lain.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri lapan (8) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

He is also the Chairman of the Audit Committee and Nomination Committee and a member of Board Risk Committee and Remuneration Committee. He is also a member of the Board of Commissioners of P.T. Asuransi Takaful Keluarga.

He is a Barrister-At-Law from Lincoln’s Inn, London, United Kingdom and was called to the English Bar in 1978.

He has held key positions both in private and public sector. After graduation, he joined the Judicial and Legal Service of the Malaysian Government as a Deputy Public Prosecutor and Federal Counsel and subsequently ventured into the private sector and served Malaysian International Shipping Corporation (“MISC”) and Island & Peninsular Berhad, the property arm of Permodalan Nasional Berhad (“PNB”) for 24 years. Whilst in the private sector, he also served as Ahli Majlis MARA as well as various other directorships in government linked companies. Currently, he is also a Director of ECM Libra Financial Group Berhad, Libra Invest Berhad, RCE Capital Berhad and several other companies.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended eight (8) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

Beliau memperolehi Ijazah Sarjana Muda Undang-undang (LLB) dari University of Buckingham, United Kingdom pada tahun 1984 dan diterima masuk ke Malaysian Bar pada tahun 1986.

Beliau memulakan kerjayanya sebagai Pelatih Wartawan Kadet dengan Agensi Berita Bernama pada tahun 1969. Seterusnya pada tahun yang sama, beliau menyertai Polis Di Raja Malaysia. Beliau menjawat pelbagai jawatan dalam Polis Di Raja Malaysia seperti Timbalan Superitendan Personel, Setiausaha yang bertanggungjawab kepada Ketua Polis Negara, Tun Haniff Omar, Pegawai Polis Daerah Sentul, Alor Setar dan Sungai Petani dan Penolong Pesuruhjaya Penyelidikan dan Perancangan di Bukit Aman. Pada tahun 2002, beliau menjadi Timbalan Pengarah Pengurusan (Disiplin), Timbalan Pengarah Jabatan Narkotik pada tahun 2003, Ketua Polis Negeri Sembilan pada tahun 2004, Timbalan Pengarah, Jabatan Siasatan Jenayah Komersial pada tahun 2005 dan sebagai Ketua Polis Kuala Lumpur pada tahun 2006 sehingga persaraan beliau. Pada bulan April 2007, beliau membuka syarikat guamannya sendiri, sekarang ini dikenali sebagai Sulaiman, Jamellah & Clement. Beliau juga merupakan Pengarah AWC Berhad dan beberapa syarikat sendirian berhad yang lain.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri kesemua sembilan (9) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

DATO’ SULAIMAN MOHD YUSOFPengarah Bukan Eksekutif Bebas / Independent Non-Executive Director

Dato’ Sulaiman Mohd Yusof, berusia 64 tahun, adalah warganegara Malaysia dan telah dilantik sebagai Pengarah Bukan Eksekutif Bebas Takaful Malaysia pada 1 Januari 2008. Beliau juga merupakan ahli Jawatankuasa Audit, Jawatankuasa Pemilihan dan Jawatankuasa Risiko Lembaga Pengarah. Beliau juga merupakan Pengerusi Asean Retakaful International (L) Ltd. (dalam pembubaran secara sukarela oleh ahli).

Dato’ Sulaiman Mohd Yusof, aged 64, is a Malaysian citizen and is an Independent Non-Executive Director of Takaful Malaysia and was appointed to the Board on 1 January 2008. He is also a member of the Audit Committee, Nomination Committee and Board Risk Committee. He is also the Chairman of Asean Retakaful International (L) Ltd. (in members’ voluntary liquidation).

He graduated with a Bachelor of Law (LLB) from the University of Buckingham, United Kingdom in 1984 and was called to the Malaysian Bar in 1986.

He started his career as a Cadet Reporter Trainee with Bernama News Agency in 1969. Later in the same year, he joined Royal Malaysia Police. He assumed various positions at the Royal Malaysia Police such as Deputy Superintendent of Personnel, Secretary responsible for the IGP, Tun Haniff Omar, Police Officer for District of Sentul, Alor Setar and Sungai Petani and Assistant Commissioner of Research and Planning at Bukit Aman. In 2002, he became the Deputy Director, Management (Discipline), in 2003 as Deputy Director, Narcotics Department, in 2004 as the Chief Police Officer of Negeri Sembilan, in 2005 as Deputy Director, Commercial Crime Investigation Department and in 2006 as the Chief Police Officer of Kuala Lumpur until his retirement. In April 2007, he started his own legal firm, currently known as Sulaiman, Jamellah & Clement. He is also a Director of AWC Berhad and other private limited companies.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended all nine (9) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

DATO’ JOHAN ABDULLAHPengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director

Dato’ Johan Abdullah, berusia 58 tahun, adalah warganegara Malaysia dan merupakan Pengarah Bukan Eksekutif Bukan Bebas Takaful Malaysia dan telah dilantik pada 15 Ogos 2008. Beliau juga merupakan ahli Jawatankuasa Pemilihan, Jawatankuasa Risiko Lembaga Pengarah dan Jawatankuasa Ganjaran.

Dato’ Johan Abdullah, aged 58, is a Malaysian citizen and is a Non-Independent Non-Executive Director of Takaful Malaysia and was appointed to the Board on 15 August 2008. He is also a member of the Nomination Committee, Board Risk Committee and Remuneration Committee.

Beliau memperolehi Diploma Perbankan dari Universiti Teknologi MARA, Shah Alam pada tahun 1983, Ijazah Sarjana Muda Pentadbiran Perniagaan (Kewangan) dari Eastern Michigan University, USA pada tahun 1985 dan Ijazah Sarjana Pentadbiran Perniagaan (Kewangan) dari Morehead State University, USA pada tahun 1986.

Beliau memulakan kerjaya profesionalnya pada tahun 1987 di Kuala Lumpur Stock Exchange (sekarang ini dikenali sebagai Bursa Malaysia Securities Berhad) sebagai Pegawai Penyenaraian. Pada tahun 1989, beliau menyertai bahagian Kewangan Korporat di Bumiputra Merchant Bankers Berhad dan meletak jawatan pada awal tahun 1995 sebagai Pengurus Kanan. Beliau kemudiannya menyertai Damansara Realty Berhad sebagai Pengurus Besar, Perancangan Korporat. Seterusnya pada tahun 1999, beliau menyertai semula Bursa Malaysia Securities Berhad dan telah memegang pelbagai jawatan kanan termasuk Deputy Chief Regulatory Officer, Group Regulation. Beliau menyertai BIMB Holdings Berhad (“BHB”) sebagai Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif pada Mei 2008 dan berkhidmat dengan kumpulan tersebut selama lebih dari enam tahun. Pada Januari 2015, beliau dilantik sebagai Timbalan Pengarah Urusan Kumpulan dan Ketua Pegawai Eksekutif di Lembaga Tabung Haji. Pada Februari 2015, beliau juga telah dilantik sebagai Pengarah BHB. Beliau juga merupakan Pengarah Bank Islam Malaysia Berhad dan anak-anak syarikat di dalam kumpulan BHB.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri lapan (8) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

He obtained a Diploma in Banking from University Technology MARA, Shah Alam in 1983, a Bachelor of Business Administration (Finance) from Eastern Michigan University, USA in 1985 and a Master in Business Administration (Finance) from Morehead State University, USA in 1986.

He started his professional career in 1987 with Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad) as Listing Officer. In 1989, he joined Corporate Finance division of Bumiputra Merchant Bankers Berhad and left the bank in early 1995 as Senior Manager. Later he joined Damansara Realty Berhad as General Manager, Corporate Planning. Subsequently in the year 1999, he rejoined Bursa Malaysia Securities Berhad and took up various senior positions including that of Deputy Chief Regulatory Officer, Group Regulation. He joined BIMB Holdings Berhad (“BHB”) as the Group Managing Director/Chief Executive Officer in May 2008 and served the group for more than six years. In January 2015, he was appointed as Deputy Group Managing Director and Chief Executive Officer of Lembaga Tabung Haji. In February 2015, he was also appointed as a Director of BHB. He is also a Director of Bank Islam Malaysia Berhad and other subsidiaries within BHB Group.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended eight (8) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

Beliau memperolehi Ijazah Sarjana Muda Ekonomi (Kepujian) dari Universiti Malaya pada tahun 1974 dan Sarjana Pentadbiran Perniagaan dan Sarjana Sastera dalam Ekonomi dari Boston University, Amerika Syarikat, masing-masing pada tahun 1981 dan 1983. Beliau juga merupakan ahli bersekutu The Institute of Bankers, London.

Beliau memulakan kerjayanya di Bank Negara Malaysia (BNM) pada tahun 1974 dan memegang pelbagai jawatan seperti Eksekutif Kanan, Penyeliaan Perbankan; Setiausaha Sulit, Pejabat Gabenor, Eksekutif Kanan, Ekonomi; Penolong kepada Pengarah Eksekutif, South East Asia Group IMF; di Washington, D.C Amerika Syarikat; Pengurus, Ekonomi; Pengurus, Penyeliaan Perbankan; Timbalan Pengarah, Pelaburan; Timbalan Pengarah, Penyeliaan Perbankan; Pengarah, Penyeliaan Perbankan; Pengarah, Penyeliaan Insurans dan Pengarah, Pengawalan Insurans. Beliau telah dipinjamkan sebagai Pengarah Urusan di Entrepreneurs Rehabilitation Fund (ERF) pada tahun 2002 sehingga 2004 dan seterusnya dipinjamkan sebagai Pengarah Latihan dan Pentadbiran di The South East Asian Central Banks Research and Training Centre (SEACEN) pada tahun 2004 sehingga persaraan beliau pada tahun 2007. Beliau juga merupakan ahli Lembaga Pengarah di Malaysian Insurance Institute (MII) dan ahli EXCO MII dari tahun 2000 sehingga 2002 dan ahli Lembaga Pengarah Export-Import Bank of Malaysia Berhad dari tahun 2008 sehingga 2014.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri lapan (8) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

ZAKARIA ISMAILPengarah Bukan Eksekutif Bebas / Independent Non-Executive Director

Zakaria Ismail, berusia 63 tahun, adalah warganegara Malaysia dan merupakan Pengarah Bukan Eksekutif Bebas Takaful Malaysia dan telah dilantik pada 15 Mei 2010. Beliau juga merupakan Pengerusi Jawatankuasa Ganjaran dan Jawatankuasa Risiko Lembaga Pengarah dan ahli Jawatankuasa Audit dan Jawatankuasa Pemilihan.

Zakaria Ismail, aged 63, is a Malaysian citizen and is an Independent Non-Executive Director of Takaful Malaysia and was appointed to the Board on 15 May 2010. He is also the Chairman of the Remuneration Committee and Board Risk Committee and a member of Audit Committee and Nomination Committee.

He obtained his Bachelor of Economics (Honours) from the University of Malaya in 1974, and a Master in Business Administration and a Master of Arts in Economics from Boston University, USA in 1981 and 1983 respectively. He is also an associate of The Institute of Bankers, London.

He started his career with Bank Negara Malaysia (BNM) in 1974 and assumed various positions such as Senior Executive, Banking Supervision; Private Secretary, Office of the Governor; Senior Executive, Economics; Assistant to the Executive Director, South East Asia Group IMF; in Washington, D.C. USA; Manager, Economics; Manager, Banking Supervision; Deputy Director, Investment; Deputy Director, Banking Supervision; Director, Banking Supervision; Director, Insurance Supervision and Director, Insurance Regulation. He was seconded to the Entrepreneurs Rehabilitation Fund (ERF) as its Managing Director in 2002 until 2004 and then was seconded to The South East Asian Central Banks Research and Training Centre (SEACEN) as its Director of Training and Administration from 2004 until his retirement in 2007. He was also a Board member of the Malaysian Insurance Institute (MII) and member of the EXCO of MII from 2000 until 2002 and a Board member of Export-Import Bank of Malaysia Berhad from 2008 until 2014.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended eight (8) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Lembaga Pengarah

Board of Directors’ Profile

DATO’ OTHMAN ABDULLAHPengarah Bukan Eksekutif Bebas / Independent Non-Executive Director

Dato’ Othman Abdullah, berusia 66 tahun, adalah warganegara Malaysia dan telah dilantik sebagai Pengarah Bukan Eksekutif Bebas Takaful Malaysia pada 1 Disember 2012. Beliau juga merupakan ahli Jawatankuasa Audit.

Dato’ Othman Abdullah, aged 66, is a Malaysian citizen and was appointed on 1 December 2012 as an Independent Non-Executive Director of Takaful Malaysia. He is also a member of Audit Committee.

Beliau memperolehi Sarjana Muda Ekonomi dalam Perakaunan dari Universiti Malaya pada tahun 1977 dan merupakan ahli Institut Akauntan Malaysia (MIA).

Beliau memulakan kerjayanya pada tahun 1977 sebagai Akauntan Perbendaharaan di Jabatan Akauntan Negara (AG). Beliau telah memegang pelbagai jawatan di Jabatan AG antaranya sebagai Akauntan Kanan Perbendaharaan pada tahun 1982 dan Akauntan pada tahun 1984. Beliau telah dipinjamkan kepada Lembaga Letrik Sabah sebagai Timbalan Pengurus Besar (Kewangan) pada tahun 1987. Pada tahun 1993, beliau telah dilantik sebagai Timbalan Pengarah, Bahagian Perkhidmatan Operasi Pusat dan Agensi (BPOPA) dan kemudiannya menjadi Pengarah BPOPA pada tahun 1995. Seterusnya, pada tahun 1999 beliau telah dilantik sebagai Pengarah, Bahagian Pengurusan Perakaunan Cawangan; pada tahun 2000 sebagai Timbalan Akauntan Negara Malaysia dan pada tahun 2003 sebagai Akauntan Negara Malaysia sehingga beliau bersara pada bulan Mac 2005. Kini, beliau juga adalah Pengarah ECM Libra Financial Group Berhad.

Beliau tidak mempunyai perhubungan kekeluargaan dengan mana-mana pengarah/pemegang saham utama Takaful Malaysia dan tidak mempunyai percanggahan kepentingan dengan Takaful Malaysia. Beliau tidak pernah disabitkan dengan apa-apa kesalahan dalam tempoh sepuluh (10) tahun yang lalu dan telah menghadiri kesemua sembilan (9) mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Disember 2014.

He obtained his Bachelor of Economics in Accounting from the University of Malaya in 1977 and is a member of the Malaysian Institute of Accountants (MIA).

He started his career in 1977 as Treasury Accountant at the Accountant General’s (AG) Department. He held various positions in the AG Department among others as the Senior Treasury Accountant in 1982 and Accountant in 1984. He was seconded to the Sabah Electricity Board as the Deputy General Manager (Finance) in 1987. In 1993, he was appointed as the Deputy Director of Central Operation and Agency Services Division (BPOPA) and later he became the Director of BPOPA in 1995. In 1999, he then served as the Director of Branch Account Management Division, in 2000 as the Deputy Accountant General of Malaysia and in 2003 as the Accountant General of Malaysia until his retirement in March 2005. Currently, he is also a Director of ECM Libra Financial Group Berhad.

He has no family relationship with any other directors/major shareholders of Takaful Malaysia and has no conflict of interest with Takaful Malaysia. He has no conviction for offences within the past ten (10) years and has attended all nine (9) Board of Directors’ meetings held during the financial year ended 31 December 2014.

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Profil Badan Penasihat SyariahShariah Advisory Body’s Profile

Beliau memperolehi Ijazah Sarjana Muda Sastera dalam Syariah dari Universiti Al–Azhar, Mesir pada tahun 1970, Sarjana Sastera dalam Pengajian Antarabangsa dari Universiti Fairleigh Dickenson, Amerika Syarikat pada tahun 1973, Sarjana Falsafah dalam Sains Politik dan Ijazah Doktor Falsafah dalam Sejarah dari Universiti New York, Amerika Syarikat masing-masing pada tahun 1975 dan 1979.

Beliau memulakan kerjayanya pada tahun 1978 sebagai Pensyarah di Jabatan Syariah, Fakulti Pengajian Islam, Universiti Kebangsaan Malaysia (UKM) sebelum dipinjamkan ke Universiti Islam Antarabangsa Malaysia (UIAM) dari tahun 1983 hingga 1984. Semasa di UKM, beliau telah dilantik sebagai Penyelaras bagi Pendidikan Umum dari tahun 1981 hingga 1982. Pada tahun 1982, beliau berkhidmat sebagai Pemangku Ketua Jabatan Syariah. Beliau juga merupakan Penyelaras Program Diploma dan Sijil Pengajian Islam UKM sehingga tahun 1983. Beliau kembali ke UKM pada tahun 1984 sebagai Prof. Madya di Jabatan Syariah sehingga tahun 1985. Kemudian beliau menjadi Pengarah Eksekutif Pusat Rawatan Islam (MAIS) dari tahun 1996 hingga 1999. Kini, beliau merupakan Pengerusi Eksekutif Pusrawi Corporation Sdn Bhd, ahli Majlis Perundingan Islam di Jabatan Perdana Menteri (JPM) dan Pengerusi Majlis Pengawasan Syariah Bank Islam Malaysia Berhad.

Beliau telah menghasilkan tulisan dalam bidang sejarah pendidikan, ekonomi, perbankan Islam dan perundangan Islam sebanyak 14 buah buku, 7 jilid terjemahan, 300 skrip tv dan 40 kertas kerja. Beliau juga dianugerahkan sebagai ‘Tokoh Ulamak Bestari Negeri Selangor’ pada tahun 2000, ‘Tokoh Ma’al Hijrah Negeri Selangor’ pada tahun 2001 dan Ahli Majlis Agama Islam Negeri Selangor selama 21 tahun.

DR. AHMAD SHAHBARI @ SOBRI SALAMONPengerusi / Chairman

Dr. Ahmad Shahbari @ Sobri Salamon, berusia 72 tahun, adalah warganegara Malaysia dan merupakan Pengerusi Badan Penasihat Syariah (BPS) Takaful Malaysia. Beliau telah dilantik pada 1 Julai 1985.

Dr. Ahmad Shahbari @ Sobri Salamon, aged 72, is a Malaysian citizen and is the Chairman of the Shariah Advisory Body (SAB) of Takaful Malaysia. He was appointed on 1 July 1985.

He graduated with a Bachelor of Arts in Shariah from the University of Al-Azhar, Egypt in 1970, a Master of Arts in International Studies from Fairleigh Dickenson University, USA in 1973, a Master of Philosophy in Political Sciences and a Doctor of Philosophy in History from New York University, USA in 1975 and 1979 respectively.

He started his career in 1978 as a Lecturer at the Shariah Department, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia (UKM) prior to his secondment to the International Islamic University Malaysia (IIUM) from 1983 to 1984. Whilst with UKM, he was appointed as the Coordinator for the General Teachings from 1981 to 1982. In 1982, he served as the Acting Head of the Shariah Department. He was also the Programme Coordinator for Diploma and Certificate in Islamic Studies of UKM until 1983. He returned to UKM in 1984 as a Associate Prof. in the Shariah Department until 1985. He then became an Executive Director of Pusat Rawatan Islam (MAIS) from 1996 to 1999. Currently, he is the Executive Chairman of Pusrawi Corporation Sdn Bhd, a member of the Islamic Consultative Council in the Prime Minister’s Department and the Chairman of the Shariah Supervisory Council of Bank Islam Malaysia Berhad.

He has produced writings in educational history, economy, Islamic banking and Islamic law, a total of 14 books, 7 translation bindery, 300 tv scripts and 40 paper works. He was also awarded ‘Tokoh Ulamak Bestari Negeri Selangor’ in 2000, ‘Tokoh Ma’al Hijrah Negeri Selangor’ in 2001 and a member of Religious Council of Selangor State for 21 years.

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Profil Badan Penasihat Syariah

Shariah Advisory Body’s Profile

DATO’ MOHD BAKIR HJ. MANSORAhli / Member

Dato’ Mohd Bakir Hj. Mansor, berusia 78 tahun, adalah warganegara Malaysia dan merupakan ahli Badan Penasihat Syariah (BPS) Takaful Malaysia, dilantik pada 1 Julai 2002.

Dato’ Mohd Bakir Hj. Mansor, aged 78, is a Malaysian citizen and is a member of the Shariah Advisory Body (SAB) of Takaful Malaysia, appointed on 1 July 2002.

Beliau memperolehi Shahadah Ulya (Sijil Tertinggi) dari Kolej Islam Malaya pada tahun 1967.

Beliau telah memulakan kerjayanya sebagai guru sementara di Madrasah Mashhoor Islamiyah, Pulau Pinang dari tahun 1967 hingga 1970. Beliau kemudiannya berkhidmat sebagai Pegawai Penerangan sementara di Majlis Kebangsaan Hal Ehwal Agama Islam Malaysia mulai tahun 1971 hingga 1973; sebagai Pegawai Hal Ehwal Islam di Bahagian Hal Ehwal Islam, Jabatan Perdana Menteri dari tahun 1973 hingga 1977; sebagai Pegawai Perancangan Pendidikan Agama di Jabatan Kemajuan Masyarakat, Kementerian Pertanian dari tahun 1978 hingga 1980; sebagai Penolong Pengarah Dokumentasi di Bahagian Hal Ehwal Islam, Jabatan Perdana Menteri mulai tahun 1980 hingga 1981 dan sebagai seorang Ketua Penolong Pengarah Pusat Penyelidikan Islam dari tahun 1981 hingga 1984. Beliau kemudiannya berkhidmat dengan Bank Islam Malaysia Berhad sebagai Koordinator Syariah merangkap Setiausaha Majlis Pengawasan Syariah Bank dari tahun 1984 hingga 2001. Beliau pernah berkhidmat sebagai Internal Research Fellow for the Centre of Fiqh Muamalat di Institut Perbankan dan Kewangan Islam Malaysia (IBFIM) dari 2 Januari 2001 hingga 30 Jun 2009.

Beliau kini merupakan Penasihat Syariah Ternama di Pusat Fiqh Muamalat berkuatkuasa dari 1 Julai 2009. Beliau juga adalah ahli Majlis Pengawasan Syariah Bank Islam Malaysia Berhad, ahli Jawatankuasa Panel Syariah Amanah Ikhtiar Malaysia, Pengerusi Jawatankuasa Penasihat Syariah BIMB Securities Sdn Bhd dan Pengerusi Jawatankuasa Penasihat Syariah Kumpulan Wang Simpanan Pekerja. Sebelum dilantik sebagai ahli BPS Takaful Malaysia pada 1 Julai 2002, beliau adalah Setiausaha BPS Takaful Malaysia sejak ia ditubuhkan pada tahun 1985 hingga Disember 2001.

Beliau telah dikurniakan “Anugerah Maulidur Rasul 1434H/2013M” oleh kerajaan Malaysia kerana sumbangannya dalam industri kewangan Islam.

He obtained the Shahadah Ulya (Highest Certificate) from Kolej Islam Malaya in 1967.

He started his career as a temporary teacher at Madrasah Mashhoor Islamiyah, Pulau Pinang from 1967 to 1970. He then served as a temporary Information Officer at the National Council for Islamic Religious Affairs Malaysia from 1971 to 1973; as an Islamic Affairs Officer at the Islamic Affairs Division, the Prime Minister’s Department from 1973 to 1977; as the Religious Education Planning Officer at the Community Development Department, Ministry of Agriculture from 1978 to 1980; as an Assistant Documentation Director at the Islamic Affairs Division, the Prime Minister’s Department from 1980 to 1981 and as a Chief Assistant Director of Islamic Research Centre from 1981 to 1984. He then served at Bank Islam Malaysia Berhad as Shariah Coordinator cum Secretary to the Bank’s Shariah Supervisory Council from 1984 to 2001. He was previously an Internal Research Fellow for the Centre of Fiqh Muamalat at Islamic Banking and Finance Institute Malaysia (IBFIM) from 2 January 2001 until 30 June 2009.

He is currently a Distinguished Shariah Advisor for the Centre of Fiqh Muamalat effective from 1 July 2009. He is also a member of the Shariah Supervisory Council of Bank Islam Malaysia Berhad, a member of the Shariah Panel of Amanah Ikhtiar Malaysia, the Chairman of the Shariah Advisory Committee of BIMB Securities Sdn Bhd and the Chairman of the Shariah Advisory Committee of the Employees Provident Fund. Before being appointed as a member of the SAB of Takaful Malaysia on 1 July 2002, he was the Secretary of the SAB of Takaful Malaysia since its inception in 1985 to December 2001.

He was conferred with “Anugerah Maulidur Rasul 1434H/2013M” by the government of Malaysia for his contributions in promoting the Islamic finance industry.

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Profil Badan Penasihat Syariah

Shariah Advisory Body’s Profile

Beliau memperolehi Ijazah Sarjana Muda Undang-undang (LL.B) pada tahun 1992 dan Ijazah Sarjana Muda Undang-undang (LL.B Syariah) dalam tahun 1993 dari Universiti Islam Antarabangsa Malaysia. Pada tahun 1995, beliau memperolehi Sarjana Undang-undang (LL.M) dari Universiti Cambridge, England. Pada tahun 2005 beliau memperolehi Ijazah Doktor Falsafah dari Universiti Harvard, Amerika Syarikat dan PostDoctorate Fellowship dari universiti yang sama pada tahun 2006.

Beliau memulakan kerjayanya dengan Tetuan Zain & Co. pada tahun 1993 sebagai Penolong Pegawai Undang Undang. Pada tahun 1995, beliau menyertai Universiti Islam Antarabangsa sebagai Pensyarah. Beliau pernah menjadi penyelidik untuk United Nations dari tahun 1998 hingga 1999 dan berkhidmat di Universiti Harvard sebagai Teaching Fellow dari tahun 2002 sehingga 2006.

Beliau kini merupakan rakan kongsi di firma guaman Tetuan Zaid Ibrahim & Co. dan juga sebagai ahli Lembaga Pengarah ZICO Shariah Advisory Services Sdn Bhd.

DR. AIDA OTHMANAhli / Member

Dr. Aida Othman, berusia 46 tahun, adalah warganegara Malaysia dan merupakan ahli Badan Penasihat Syariah (BPS) Takaful Malaysia. Beliau telah dilantik pada 6 Mac 2008.

Dr. Aida Othman, aged 46, is a Malaysian citizen and is a member of the Shariah Advisory Body (SAB) of Takaful Malaysia. She was appointed on 6 March 2008.

She graduated from the International Islamic University Malaysia with a Bachelor of Law (LL.B) degree in 1992 and a Bachelor of Law (LL.B Shariah) degree in 1993. In 1995, she obtained a Master in Law (LL.M) from the Cambridge University, England. In 2005, she obtained a Doctor of Philosophy from the Harvard University, USA and a PostDoctorate Fellowship from the same university in 2006.

She started her career with Messrs. Zain & Co. in 1993 as Assistant Legal Officer. In 1995, she joined International Islamic University Malaysia as a Lecturer. She was previously a researcher for United Nations from 1998 until 1999 and served the Harvard University as a Teaching Fellow from 2002 until 2006.

Currently she is a partner at a law firm Messrs. Zaid Ibrahim & Co. and also as a Board member of ZICO Shariah Advisory Services Sdn Bhd.

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Profil Badan Penasihat Syariah

Shariah Advisory Body’s Profile

Professor Dr. Muhamad Rahimi OsmanAhli / Member

Profesor Dr. Muhamad Rahimi Osman, berusia 54 tahun, adalah warganegara Malaysia dan merupakan ahli Badan Penasihat Syariah (BPS) Takaful Malaysia. Beliau telah dilantik pada 12 Januari 2010.

Professor Dr. Muhamad Rahimi Osman, aged 54, is a Malaysian citizen and is a member of the Shariah Advisory Body (SAB) of Takaful Malaysia. He was appointed on 12 January 2010.

Berkelulusan Ijazah Sarjana Muda Syariah (Hons) dari Universiti Malaya pada tahun 1987, Ijazah Sarjana dalam Ekonomi Islam dari Universiti Yarmouk, Jordan dan Doktor Falsafah (PhD) dalam Perbankan Islam dari Universiti Islam Antarabangsa Malaysia masing-masing pada tahun 1996 dan 2007. Sekarang ini, beliau memegang jawatan Dekan, Akademi Pengajian Islam Kontemporari (ACIS), Universiti Teknologi MARA (UiTM), Shah Alam.

Beliau memulakan kerjayanya sebagai pensyarah di Pusat Pendidikan Islam, Universiti Teknologi MARA (UiTM), Shah Alam pada tahun 1988. Beliau telah dilantik memegang beberapa jawatan pentadbiran seperti Koordinator Sains Sosial Islam, Ketua Unit Zakat, Timbalan Pengarah, Pusat Pemikiran dan Kefahaman Islam (CITU) dan Pengarah, Institut Kajian Zakat Malaysia (IKaZ), Universiti Teknologi MARA.

Beliau juga adalah ahli jawatankuasa Penyelaras Kurikulum Program Muamalat, Takaful, Kewangan dan Perbankan Islam, Kementerian Pengajian Tinggi Malaysia, Ahli Senat Universiti dan ahli Majlis Dekan Pengajian Islam, Institusi Pengajian Tinggi Awam Malaysia dan beberapa jawatankuasa lain di dalam dan luar Universiti.

Beliau juga telah menulis buku dan membentangkan kertas kerja di peringkat nasional dan antarabangsa dan terlibat menjalankan penyelidikan dalam bidang ekonomi, perbankan dan kewangan Islam. Artikel beliau juga telah diterbitkan dalam jurnal tempatan dan antarabangsa.

He graduated from the University of Malaya in 1987, holding a Bachelor of Shariah (Hons). He obtained his Master in Islamic Economics from the University of Yarmouk, Jordan and a Doctor of Philosophy (PhD) in Islamic Banking from the International Islamic University Malaysia in 1996 and 2007 respectively. Currently, he is a Dean of the Academy of Contemporary Islamic Studies (ACIS), Universiti Teknologi MARA (UiTM), Shah Alam.

He joined Universiti Teknologi MARA (UiTM), Shah Alam in 1988 as an academic staff at the Centre for Islamic Education. He was appointed to several administration posts such as Coordinator of Islamic Social Science, Head of Zakat Unit, Deputy Director, Centre for Islamic Thought and Understanding (CITU) and Director of the Zakat Research Institute of Malaysia (IKaZ), Universiti Teknologi MARA.

He also serves as a member of the Curriculum Review Committee for Muamalat, Takaful, Islamic Banking and Finance of the Ministry of Higher Education Malaysia, member of the Senate University, and member of the Dean Council of Islamic Studies, Higher Learning Institutions of Malaysia and several other committees inside and outside of the University.

He has written books and presented papers at national and international seminars related to Islamic economics, Islamic banking and finance. His articles have also been published in local and international journals.

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Profil Badan Penasihat Syariah

Shariah Advisory Body’s Profile

Beliau memperolehi Diploma Pendidikan pada tahun 1977 dan Sarjana Muda dalam Pengajian Islam (Kepujian) pada tahun 1978 dari Universiti Kebangsaan Malaysia. Beliau juga memperolehi Diploma Sains Pengurusan dari Institut Tadbiran Awam Negara (INTAN) pada tahun 1989. Beliau merupakan ahli British Institute of Management (MBIM) sejak tahun 1985.

Beliau memulakan kerjayanya pada tahun 1978 sebagai Penolong Pengarah dan kemudiannya menjadi Penolong Pengarah Kanan di Institut Dakwah dan Latihan Islam (INDAH) Bahagian Hal Ehwal Islam (BAHEIS), Jabatan Perdana Menteri. Beliau kemudian menjadi Atase Agama di Pejabat Pesuruhjaya Tinggi Malaysia di London selama tiga tahun sejak tahun 1982. Selepas pulang ke Malaysia pada tahun 1986, beliau dinaikkan pangkat sebagai Ketua Penolong Pengarah di BAHEIS dan kemudiannya sebagai Ketua Bahagian Amar Ma’ruf dan Ketua Pendaftar Nikah, Cerai dan Rujuk di Jabatan Agama Islam Wilayah Persekutuan (JAWI). Pada tahun 1993, beliau bertugas sebagai Ketua Penolong Pengarah Ekonomi, Pentadbiran Sosial, Pusat Penyelidikan Islam. Pada tahun 1994, beliau merupakan Pengetua Darul Quran Jabatan Kemajuan Islam Malaysia (JAKIM) dan kemudiannya memegang pelbagai jawatan seperti Pengarah Bahagian Keluarga, Sosial dan Pengurusan Masjid (KESUMA), Pengarah Bahagian Penyelidikan, Timbalan Ketua Pengarah (Operasi) dan Ketua Pengarah masing-masing pada tahun 2000, 2003, 2004 dan 2007 sebelum beliau bersara pada 22 April 2011. Sepanjang tempoh menjadi Ketua Pengarah JAKIM, beliau juga bertindak sebagai Setiausaha Jawatankuasa Fatwa Kebangsaan.

Beliau juga pernah berkhidmat sebagai ahli Majlis Penasihat Syariah di Bank Negara Malaysia pada tahun 2008 sehingga tahun 2010. Kini, beliau merupakan ahli Lembaga Pengarah Institut Kefahaman Islam Malaysia (IKIM) dan ahli Jawatankuasa Penasihat Ibadat Haji (Tabung Haji-JAKIM).

DATO’ WAN MOHAMAD DATO’ SHEIKH ABDUL AZIZAhli / Member

Dato’ Wan Mohamad Dato’ Sheikh Abdul Aziz, berusia 62 tahun, adalah warganegara Malaysia dan merupakan ahli Badan Penasihat Syariah (BPS) Takaful Malaysia. Beliau telah dilantik pada 1 Jun 2011.

Dato’ Wan Mohamad Dato’ Sheikh Abdul Aziz, aged 62, is a Malaysian citizen and is a member of the Shariah Advisory Body (SAB) of Takaful Malaysia. He was appointed on 1 June 2011.

He graduated from Universiti Kebangsaan Malaysia with a Diploma in Education in 1977 and a Bachelor of Islamic Studies (Honours) in 1978. He also obtained a Diploma in Management Science from the National Institute of Public Administration (Institut Tadbiran Awam Negara (INTAN) in 1989. He is a member of British Institute of Management (MBIM) since 1985.

He started his career in 1978 as an Assistant Director and later as Senior Assistant Director at the Institut Dakwah dan Latihan Islam (INDAH) of Islamic Affairs Division (Bahagian Hal Ehwal Islam (BAHEIS), Prime Minister’s Department. He then served as Atase Agama at the Malaysian High Commission’s office in London for three years from 1982. Upon returning to Malaysia in 1986, he was promoted to Chief Assistant Director in BAHEIS and thereafter as theChief of Amar Ma’ruf Division and Chief Registrar of Marriage, Divorce and Ruju’ at the Federal Territory Islamic Religious Department (Jabatan Agama Islam Wilayah Persekutuan (JAWI)). In 1993, he served as Chief Assistant Director of Social, Administration and Economy at the Islamic Research Center. In 1994, he served as Principal at the Darul Quran of the Malaysian Islamic Development Department (Jabatan Kemajuan Islam Malaysia (JAKIM)) and later assumed various positions such as Director of Family, Social and Mosque Management Division (KESUMA), Director of Research Division, Deputy Director General (Operation) and Director General of JAKIM in 2000, 2003, 2004 and 2007 respectively before his retirement on 22 April 2011. He also served as Secretary to the National Fatwa Committee while serving as Director General of JAKIM.

He was also previously a member of the Shariah Advisory Council of Bank Negara Malaysia from 2008 until 2010. He is currently a Board member of the Institute of Islamic Understanding Malaysia (Institut Kefahaman Islam Malaysia (IKIM) and a member of the Hajj Advisory Committee (Tabung Haji-JAKIM).

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Jawatankuasa PengurusanManagement Committee

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DATO’ SRI MOHAMED HASSAN KAMILPengarah Urusan Kumpulan Group Managing Director

LEE HIN SZEKetua Pegawai Kewangan Chief Financial Officer

AZIAN KASSIMKetua Pegawai Pelaburan Chief Investment Officer

LEEM WHY CHONGPengurus Besar, Aktuari & Aktuari Dilantik General Manager, Actuarial & Appointed Actuary

SHUHAIBAHTULASLAMIAH HURMUZANPengurus Besar, Sumber Manusia General Manager, Human Resource

NORAZLIN MOHD DAHARIPengurus Besar, Perniagaan Korporat General Manager, Corporate Business

NORLIDA SAIDPengurus Besar, Perniagaan Korporat General Manager, Corporate Business

MOHD SUHAIMI AHMADPengurus Besar, Perniagaan RuncitGeneral Manager, Retail Business

MARK ANTHONY NATHANPengurus Besar, BankatakafulGeneral Manager, Bancatakaful

PATRICK WONG CHANG YANGKetua Pegawai Informasi Chief Information Officer

MOHAMAD ASRI YUSOFFPengurus Besar, Hal Ehwal Korporat /Setiausaha Syarikat General Manager, Corporate Affairs / Company Secretary

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Penyata Urus Tadbir KorporatCorporate Governance Statement

CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“the Board”) of Syarikat Takaful Malaysia Berhad (“Takaful Malaysia”) continues to subscribe and fully support the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) and is committed to ensure that the Principles and Recommendations are observed and practised throughout the Group so that the affairs of the Group are conducted with professionalism, accountability and integrity with the objective of safeguarding and enhancing shareholders’ value and financial performance of the Group.

The Board is pleased to report on the application of the Principles of the MCCG 2012 and the extent of compliance with the Recommendations of the MCCG 2012 as required under the MCCG 2012, the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and Corporate Governance Guide (“CG Guide”) issued by Bursa Malaysia Berhad during the financial year under review.

DIRECTORS

The Board

The Board is responsible for the overall corporate governance of the Group and is also entrusted with the responsibility of exercising reasonable care of the Company as well as Group’s resources in the best interests of its shareholders and in ensuring the proper conduct of business.

Board Charter

The Board is mindful of the need to protect the interests of its shareholders and other stakeholders. In discharging its duties effectively, the Board is guided by its Terms of Reference (“Charter”) which set out the roles and responsibilities of the Board. The Board will regularly review the Charter to keep it up to date with changes in regulations and best practices and ensure its effectiveness and relevance to the Board’s objectives.

Roles and Responsibility

The Board has the overall responsibility of ensuring that Takaful Malaysia operates as intended in the declared objectives of the Company. Consequently, it has the power to decide on all matters pertaining to the Company’s business as empowered by the Company’s Articles of Association, Companies Act 1965 and all relevant guidelines of Bank Negara Malaysia, Securities Commission

PENYATA URUS TADBIR KORPORAT

Lembaga Pengarah Syarikat Takaful Malaysia Berhad (“Takaful Malaysia”) terus mematuhi dan menyokong sepenuhnya Kod Urus Tadbir Korporat Malaysia 2012 (“MCCG 2012”) dan sentiasa komited dalam memastikan supaya Prinsip-prinsip dan Cadangan-cadangan dipatuhi dan diamalkan oleh keseluruhan Kumpulan bagi membolehkan urus selia hal-ehwal Kumpulan dikendalikan secara profesional, bertanggungjawab dan berwibawa dengan objektif untuk melindungi dan mempertingkatkan nilai pelaburan pemegang saham dan prestasi kewangan Kumpulan.

Lembaga Pengarah dengan ini berbesar hati melaporkan pelaksanaan penggunaan Prinsip-prinsip MCCG 2012 dan sejauh mana Kumpulan telah mematuhi Cadangan-cadangan oleh MCCG 2012 sebagaimana yang ditetapkan menurut MCCG 2012, Keperluan Penyenaraian Pasaran Utama (“Keperluan Penyenaraian”) Bursa Malaysia Securities Berhad (“Bursa Securities”) dan Panduan Urus Tadbir Korporat (“Panduan CG”) yang dikeluarkan oleh Bursa Malaysia Berhad sepanjang tahun kewangan yang dikaji.

PENGARAH

Lembaga Pengarah

Lembaga Pengarah bertanggungjawab terhadap keseluruhan aspek urus tadbir korporat Kumpulan dan juga diamanahkan dengan tanggungjawab dalam melaksanakan penjagaan yang sewajarnya ke atas Syarikat serta sumber-sumber Kumpulan bagi memelihara kepentingan para pemegang saham dan memastikan pengurusan perniagaan yang sewajarnya.

Piagam Lembaga Pengarah

Lembaga Pengarah sedar akan keperluan untuk melindungi kepentingan para pemegang saham dan pihak berkepentingan lain. Bagi melaksanakan tugasnya dengan berkesan, Lembaga Pengarah berpandu kepada Terma Rujukan (“Piagam”) yang menggariskan peranan dan tanggungjawab Lembaga Pengarah. Lembaga Pengarah akan mengkaji Piagam dari semasa ke semasa bagi memastikan ianya selari dengan perubahan dalam peraturan-peraturan dan amalan terbaik dan memastikan ianya berkesan dan relevan dengan objektif Lembaga Pengarah.

Peranan dan Tanggungjawab

Lembaga Pengarah mempunyai tanggungjawab yang menyeluruh untuk memastikan Takaful Malaysia beroperasi sebagaimana yang dinyatakan dalam objektif Syarikat. Oleh itu, mereka mempunyai kuasa untuk membuat keputusan mengenai semua perkara yang berkaitan dengan perniagaan Syarikat seperti yang terkandung di dalam Tataurusan Pertubuhan Syarikat, Akta Syarikat 1965 dan

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

and the Listing Requirements, and if required, to delegate these powers accordingly. Some of the specific powers of the Board would include the following:

• To establish and approve policies on the future direction of the Company within the general objective of attaining progress in its overall corporate missions which cover all aspects of operations, including strategic planning, credit administration and control, asset and liability management encompassing the management of liquidity risk, return on investment risk and market risk, accounting system and control, service quality, automation plan, prevention of money laundering, risk management, profit planning and budgeting, adequacy of capital and human resource development;

• To approve new investments, divestments and acquisitions, including the setting up of new subsidiaries/associated companies and the participation in new business activities locally or overseas;

• To review and approve the annual business plan and budget, and monitoring the quantitative and qualitative performance of Takaful Malaysia, both at the Company and Group levels, against target and objectives;

• To ensure that the business operations of the Company are conducted in accordance with the Shariah principles;

• Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacement of Management; and

• Reviewing the adequacy and integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

The Management of the Company is headed by the Group Managing Director/Chief Executive Officer. He is accountable to the Board in ensuring that the Company is operating effectively.

Board Meetings

Board meetings are scheduled in advance at the beginning of a calendar year with additional meetings convened when necessary. All Directors have complied with the Listing Requirements on attendance for Board meetings held during the financial year under review. Nine (9) Board meetings were held during the financial year under review with details of meetings’ attendance of each Director are as follows:

semua garis panduan yang berkaitan dengan Bank Negara Malaysia, Suruhanjaya Sekuriti dan Keperluan Penyenaraian, dan jika perlu, untuk mewakilkan kuasa-kuasa ini dengan sewajarnya. Beberapa kuasa tertentu Lembaga Pengarah termasuk seperti yang berikut:

• Untuk menubuhkan dan meluluskan polisi mengenai masa depan Syarikat di dalam objektif umum untuk mencapai kemajuan yang menyeluruh dalam misi korporat merangkumi semua aspek operasi, termasuk perancangan strategik, pentadbiran dan kawalan kredit, pengurusan aset dan liabiliti merangkumi pengurusan risiko kecairan, pulangan ke atas risiko pelaburan dan risiko pasaran, sistem perakaunan dan kawalan, kualiti perkhidmatan, pelan automasi, pencegahan penggubahan wang haram, pengurusan risiko, perancangan keuntungan dan belanjawan, kecukupan modal dan pembangunan sumber manusia;

• Untuk meluluskan pelaburan baru, pelupusan dan pemerolehan, termasuk penubuhan anak syarikat / syarikat bersekutu yang baru dan penyertaan dalam aktiviti perniagaan baru di dalam atau di luar negara;

• Untuk mengkaji dan meluluskan pelan tahunan perniagaan dan belanjawan, dan memantau prestasi kuantitatif dan kualitatif Takaful Malaysia, kedua-dua di peringkat Syarikat dan Kumpulan, berbanding dengan sasaran dan objektif;

• Untuk memastikan bahawa operasi perniagaan Syarikat dijalankan mengikut prinsip-prinsip Syariah;

• Perancangan peralihan jawatan, termasuk melantik, melatih, menetapkan pampasan dan di mana perlu, menggantikan Pengurusan; dan

• Mengkaji kecukupan dan integriti sistem kawalan dalaman Syarikat dan sistem pengurusan maklumat, termasuk sistem yang selari dengan undang-undang, peraturan-peraturan, kaedah-kaedah, arahan dan garis panduan berkaitan.

Pengurusan Syarikat diketuai oleh Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif. Beliau bertanggungjawab terhadap Lembaga Pengarah bagi memastikan Syarikat beroperasi dengan berkesan.

Mesyuarat Lembaga Pengarah

Mesyuarat Lembaga Pengarah dijadualkan terlebih dahulu pada permulaan tahun kalendar dengan mesyuarat tambahan diadakan bila perlu. Semua Pengarah telah mematuhi Keperluan Penyenaraian bagi kehadiran mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan yang dikaji. Sembilan (9) mesyuarat Lembaga Pengarah telah diadakan pada tahun kewangan yang dikaji dengan butiran kehadiran setiap Pengarah seperti berikut:

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Nama / Kehadiran / Peratus (%) /Name Attendance Percentage (%)

Tan Sri Ismee Ismail(Pengerusi/Pengarah Bukan Eksekutif Bukan Bebas / Chairman/Non-Independent Non-Executive Director) 9/9 100

Dato’ Sri Mohamed Hassan Kamil (Pengarah Eksekutif Bukan Bebas / Non-Independent Executive Director) 9/9 100

Datuk Rozaida Omar (Pengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director) 9/9 100

Mahadzir Azizan(Pengarah Bukan Eksekutif Bebas Kanan / Senior Independent Non-Executive Director) 8/9 89

Dato’ Sulaiman Mohd Yusof (Pengarah Bukan Eksekutif Bebas / Independent Non-Executive Director) 9/9 100

Dato’ Johan Abdullah (Pengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Director) 8/9 89

Zakaria Ismail(Pengarah Bukan Eksekutif Bebas / Independent Non-Executive Director) 8/9 89

Dato’ Othman Abdullah (Pengarah Bukan Eksekutif Bebas / Independent Non-Executive Director) 9/9 100

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of Takaful Malaysia as evidenced by the attendance record of the Directors at Board meetings, as set out in the above table.

The Board also took note of the expectation on time commitment to carry out their responsibilities outlined in one of the recommendations of the MCCG 2012. In this respect, members of the Board will notify the Chairman prior to their acceptance of any new directorship.

As prescribed in Paragraph 15.06 of the Listing Requirements, Directors must not hold directorships at more than five PLCs. None of the Directors have exceeded these limits during the financial year under review. The Directors are required to declare their directorships and/or interests in other public and private companies on a monthly basis. Such information is also used to monitor the number of directorships held by the Directors, particularly those on PLCs and to notify the Companies Commission of Malaysia of any changes in other directorships on public companies.

All Directors have the backing of extensive work experience in various fields and therefore able to exercise independent judgement in order to discharge their duties.

Lembaga Pengarah berpuas hati dengan tahap komitmen masa yang diberikan oleh para Pengarah ke arah memenuhi peranan dan tanggungjawab mereka sebagai Pengarah Takaful Malaysia seperti yang tertera di dalam rekod kehadiran para Pengarah di dalam mesyuarat Lembaga Pengarah, sebagaimana yang dinyatakan dalam jadual di atas.

Lembaga Pengarah juga mengambil maklum harapan komitmen masa untuk menjalankan tanggungjawab mereka seperti yang digariskan di dalam salah satu cadangan MCCG 2012. Dalam hal ini, Lembaga Pengarah akan memberitahu Pengerusi sebelum penerimaan mereka terhadap apa-apa jawatan pengarah baru.

Sebagaimana yang ditetapkan dalam Perenggan 15.06 Keperluan Penyenaraian, Pengarah tidak boleh memegang jawatan pengarah melebihi daripada lima PLC. Tiada Pengarah yang telah melebihi had ini sepanjang tahun kewangan yang dikaji. Para Pengarah dikehendaki mengisytiharkan jawatan pengarah dan/atau kepentingan mereka di dalam syarikat-syarikat awam dan swasta setiap bulan. Maklumat tersebut juga digunakan untuk memantau bilangan jawatan pengarah yang dipegang oleh para Pengarah, terutamanya dalam PLC dan untuk memaklumkan Suruhanjaya Syarikat Malaysia terhadap sebarang perubahan di dalam jawatan pengarah di syarikat-syarikat awam.

Semua Pengarah memiliki latar belakang pengalaman kerja yang luas dalam pelbagai bidang, dan dengan ini membolehkan mereka membuat pertimbangan yang sewajarnya dalam melaksanakan tugas mereka.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Directors’ Code of Ethics

The Directors observe the code of ethics in accordance with the Company Directors’ Code of Ethics established by the Companies Commission of Malaysia which provides guidance for proper standards of conduct and sound and prudent business practices as well as standard of ethical behaviour for Directors, based on principles of integrity, responsibility, sincerity and corporate social responsibility. Takaful Malaysia’s Code of Conduct and Ethics consist of 3 major areas, namely:

• Corporate Governance;

• Relationship with shareholders, employees, creditors and customers; and

• Social responsibilities and the environment.

Board Balance and Independence of Directors

During the financial year under review, the Board comprises the following:

Nama / Komposisi / Peratus (%) /Name Composition Percentage (%)

Pengarah Eksekutif Bukan Bebas / Non-Independent Executive Director 1/8 12.5

Pengarah Bukan Eksekutif Bukan Bebas / Non-Independent Non-Executive Directors 3/8 37.5

Pengarah Bukan Eksekutif Bebas / Independent Non-Executive Directors 4/8 50.0

The above composition is in compliance with the Listing Requirements which require that one third (1/3) of Directors of Takaful Malaysia to be Independent Directors. One of the recommendations of the MCCG 2012 states that the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director. The Board deliberated on this matter and agreed for the number of Independent Directors to be maintained at 50% of the Board members as the Board feel that there is a need for a balanced Board members to ensure that the interest of the Company and all the stakeholders are protected.

The Board has adopted a nine-year policy for Independent Non-Executive Directors in August 2011 i.e. before the issuance of MCCG 2012. The tenure of all the four Independent Non-Executive Directors does not exceed a cumulative term of nine (9) years as recommended by the MCCG 2012. They continue to fulfill the definition of independence as set out in the Listing Requirements. Therefore, with regard to the two Independent Non-Executive Directors who are seeking re-appointment under Article 62 of the Company’s Articles of Association at the forthcoming 30th AGM, the Board recommends and supports their proposed re-appointment.

Kod Etika Lembaga Pengarah

Para Pengarah mematuhi kod etika selaras dengan Kod Etika Pengarah Syarikat yang dibentuk oleh Suruhanjaya Syarikat Malaysia yang memberi panduan bagi piawaian berhemah dalam tingkah laku dan amalan perniagaan yang berhemat serta piawaian etika tingkah laku bagi Pengarah, berdasarkan prinsip integriti, tanggungjawab, keikhlasan dan tanggungjawab sosial korporat.

Kod Kelakuan dan Etika Takaful Malaysia terdiri daripada 3 bahagian utama, iaitu:

• Urus Tadbir Korporat;

• Hubungan dengan pemegang saham, pekerja, pemiutang dan pelanggan; dan

• Tanggungjawab sosial dan alam sekitar.

Keseimbangan Lembaga Pengarah dan Kebebasan Pengarah

Sepanjang tahun kewangan yang dikaji, Lembaga Pengarah terdiri daripada:

Komposisi di atas mematuhi Keperluan Penyenaraian yang mewajibkan satu pertiga (1/3) daripada para Pengarah Takaful Malaysia terdiri daripada Pengarah Bebas. Salah satu cadangan MCCG 2012 menyatakan bahawa Lembaga Pengarah mesti terdiri daripada majoriti Pengarah Bebas jika Pengerusi Lembaga Pengarah bukan merupakan seorang Pengarah Bebas. Lembaga Pengarah membincangkan mengenai perkara ini dan bersetuju bahawa bilangan Pengarah Bebas akan dikekalkan pada 50% daripada ahli-ahli Lembaga Pengarah kerana Lembaga Pengarah merasakan adanya keperluan keseimbangan ahli Lembaga Pengarah bagi memastikan kepentingan Syarikat dan semua pihak yang berkepentingan dilindungi.

Lembaga Pengarah telah menerima pakai polisi sembilan tahun bagi Pengarah Bukan Eksekutif Bebas dalam bulan Ogos 2011 sebelum penerbitan MCCG 2012. Tempoh untuk semua empat orang Pengarah Bukan Eksekutif Bebas tidak melebihi tempoh kumulatif sembilan (9) tahun seperti yang disyorkan oleh MCCG 2012. Mereka terus memenuhi definisi bebas seperti yang dinyatakan di dalam Keperluan Penyenaraian. Oleh itu, berkaitan dengan dua Pengarah Bukan Eksekutif Bebas yang menawarkan pelantikan semula di bawah Artikel 62 Tataurusan Pertubuhan Syarikat pada Mesyuarat Agung Tahunan ke-30 yang akan datang, Lembaga Pengarah mencadangkan dan menyokong cadangan pelantikan semula mereka.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

The Corporate Governance Blueprint 2011 stated that the goal is for women participation on Boards to reach 30% by 2016 and the progress towards this goal will be monitored and assessed in 2013. Takaful Malaysia’s Board currently has one women member out of eight members (i.e. 12.5%) since May 2007 while the Shariah Advisory Body also has one women member out of five members (i.e. 20%) since March 2008.

The Board with their different backgrounds and specialisations, collectively bring with them a wide range of experience and expertise in areas such as finance, insurance, actuary, accounting, company secretarial, legal, management and banking. The profiles of the Directors are provided on pages 12 to 19 of the Annual Report. There is a clear division of responsibilities between the Chairman and the Group Managing Director to ensure that there is a balance of power and authority.

The roles and responsibilities of the Chairman and Group Managing Director are distinct and separate, in accordance with the relevant best practice. The Chairman is responsible for running the Board to achieve its objectives and lead the discussion at the Board level to encourage a healthy level of deliberation whilst the Group Managing Director is responsible for managing the Company and the Group as well as the implementation of the Board’s policies and decisions.

The Board has identified and appointed Mahadzir Azizan as a Senior Independent Non-Executive Director to whom concerns may be conveyed by shareholders and other stakeholders.

Board Committees

To enable the Board to discharge its duties effectively whilst enhancing business and operational efficacy, the Board delegates certain responsibilities to four (4) Board Committees, namely:

• Audit Committee;

• Nomination Committee;

• Remuneration Committee; and

• Board Risk Committee.

All Committees have clear written terms of reference and the Board receives reports of their proceedings and deliberations. The Chairman of the various Committees will report to the Board the outcome of their meetings and such reports are incorporated in the minutes of the Board meeting.

The Committees’ membership are based on Directors’ skills and experience as well as their ability to add value to the Committees.

Rangka Tindakan Urus Tadbir Korporat 2011 menyatakan matlamat untuk mencapai 30% penyertaan wanita di dalam Lembaga Pengarah menjelang tahun 2016 dan kemajuan ke arah matlamat ini akan dipantau dan dinilai pada tahun 2013. Lembaga Pengarah Takaful Malaysia kini mempunyai seorang ahli wanita dari lapan ahli (iaitu 12.5%) sejak Mei 2007 manakala Badan Penasihat Syariah juga mempunyai seorang ahli wanita daripada lima orang ahli (iaitu 20%) sejak Mac 2008.

Lembaga Pengarah yang mempunyai pelbagai latar belakang dan kepakaran khusus, secara kolektifnya membawa bersama mereka pengalaman dan kepakaran yang luas dalam bidang-bidang seperti kewangan, insurans, aktuari, perakaunan, kesetiausahaan syarikat, perundangan, pengurusan dan perbankan. Profil ahli Lembaga Pengarah ada dibentangkan di muka surat 12 hingga 19 dalam Laporan Tahunan ini. Terdapat pembahagian yang jelas antara tanggungjawab Pengerusi dan Pengarah Urusan Kumpulan bagi memastikan keseimbangan kuasa dan autoriti.

Peranan dan tanggungjawab Pengerusi dan Pengarah Urusan Kumpulan adalah jelas dan berbeza, mengikut amalan terbaik yang berkaitan. Pengerusi bertanggungjawab terhadap pengendalian Lembaga Pengarah untuk mencapai objektifnya dan menerajui perbincangan di peringkat Lembaga Pengarah untuk menggalakkan tahap perbincangan yang seimbang sementara Pengarah Urusan Kumpulan bertanggungjawab terhadap pengurusan Syarikat dan Kumpulan serta pelaksanaan dasar dan keputusan yang telah diputuskan oleh Lembaga Pengarah.

Lembaga Pengarah telah mengenalpasti dan melantik Mahadzir Azizan sebagai Pengarah Bukan Eksekutif Bebas Kanan di mana sebarang kemusykilan boleh dirujuk oleh pemegang saham dan pihak berkepentingan lain.

Jawatankuasa Lembaga Pengarah

Dalam memastikan Lembaga Pengarah melaksanakan tugas mereka dengan lebih berkesan di samping meningkatkan perniagaan dan kecekapan operasi, Lembaga Pengarah mengagihkan tanggungjawab tertentu kepada empat (4) Jawatankuasa Lembaga Pengarah, iaitu:

• Jawatankuasa Audit;

• Jawatankuasa Pemilihan;

• Jawatankuasa Ganjaran; dan

• Jawatankuasa Risiko Lembaga Pengarah.

Setiap Jawatankuasa mempunyai terma rujukan bertulis yang jelas dan Lembaga Pengarah menerima laporan bagi setiap persidangan dan pertimbangan Jawatankuasa tersebut. Pengerusi bagi setiap Jawatankuasa akan melaporkan kepada Lembaga Pengarah setiap keputusan dari mesyuarat yang dijalankan dan laporan tersebut akan dimasukkan ke dalam minit Mesyuarat Lembaga Pengarah.

Keahlian Jawatankuasa adalah bergantung kepada kemahiran dan pengalaman seseorang Pengarah serta kebolehan mereka memberi nilai tambah kepada Jawatankuasa.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Shariah Advisory Body

The Shariah Advisory Body is entrusted by the Board to ensure that the Group’s operations and products offered are in accordance with the Shariah. All matters which require the Shariah Advisory Body’s opinion and decision are deliberated at the Shariah Advisory Body meetings with the attendance of the Management and representatives from the Shariah Division. Thereon, the said matters are brought to the attention of the Board for an informed decision making.

The Shariah Advisory Body consists of five (5) members, all of whom have the necessary experiences and expertise in their respective fields. The Chairman of the Shariah Advisory Body is Dr. Ahmad Shahbari @ Sobri Salamon. The Shariah Advisory Body met six (6) times during the financial year under review with details of meetings’ attendance of each member are as follows:

Nama / Kehadiran / Peratus (%) /Name Attendance Percentage (%)

Dr. Ahmad Shahbari @ Sobri Salamon 6/6 100

Dato’ Mohd Bakir Hj. Mansor 6/6 100

Dr. Aida Othman 5/6 83

Professor Dr. Muhamad Rahimi Osman 5/6 83

Dato’ Wan Mohamad Dato’ Sheikh Abdul Aziz 4/6 67

Whistle Blowing Policy and Fraud & Integrity Policy

The Company has established the Whistle Blowing Policy in response to the Whistleblower Protection Act, 2010 with the following objectives:-

• To enable the employees to raise any concerns of integrity and misconduct as well as to enable the Board to be informed at an early stage of any misconduct or improprieties;

• To protect the employees from punishment or unfair treatment for disclosing concerns in good faith in accordance with the Whistle Blowing Policy; and

• To develop a culture of openness, accountability and integrity within the Company.

In addition, the Company has also established the Fraud & Integrity Policy to facilitate the development of controls that will aid in the detection and prevention of fraud against the Company internally and externally. The objectives of the Fraud & Integrity Policy are as follows:-

Badan Penasihat Syariah

Badan Penasihat Syariah telah diberi kepercayaan oleh Lembaga Pengarah bagi memastikan operasi dan produk yang ditawarkan oleh Kumpulan adalah berlandaskan Syariah. Kesemua perkara yang memerlukan pandangan dan keputusan Badan Penasihat Syariah akan dibentangkan di dalam mesyuarat Badan Penasihat Syariah di mana ianya juga dihadiri oleh pihak Pengurusan dan wakil dari Bahagian Syariah. Kemudian, perkara tersebut akan dibawa kepada Lembaga Pengarah untuk memaklumkan keputusan yang telah dibuat.

Badan Penasihat Syariah terdiri daripada lima (5) orang ahli di mana kesemuanya mempunyai pengalaman dan kepakaran yang diperlukan di dalam bidang masing-masing. Dr. Ahmad Shahbari @ Sobri Salamon merupakan Pengerusi Badan Penasihat Syariah. Enam (6) mesyuarat Badan Penasihat Syariah telah diadakan sepanjang tahun kewangan yang dikaji dengan butiran kehadiran setiap ahli seperti berikut:

Polisi Pemberitahuan Maklumat dan Polisi Penipuan & Integriti

Syarikat telah mewujudkan Polisi Pemberitahuan Maklumat lanjutan daripada Akta Perlindungan Pemberi Maklumat, 2010 dengan objektif seperti berikut:-

• Untuk membolehkan pekerja-pekerja menyuarakan apa-apa kemusykilan mengenai integriti dan salah laku disamping membolehkan Lembaga Pengarah diberitahu pada peringkat awal mana-mana salah laku atau perbuatan yang tidak sopan;

• Untuk melindungi pekerja-pekerja daripada hukuman atau perlakuan yang tidak adil akibat menyuarakan kemusykilan dengan cara yang betul selaras dengan Polisi Pemberitahuan Maklumat; dan

• Untuk membentuk budaya keterbukaan, akauntabiliti dan integriti dalam Syarikat.

Di samping itu, Syarikat juga telah mewujudkan Polisi Penipuan & Integriti untuk memudahkan perkembangan kawalan yang akan membantu dalam pengesanan dan pencegahan penipuan terhadap Syarikat secara dalaman dan luaran. Objektif Polisi Penipuan & Integriti adalah seperti berikut:-

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

• To ensure prompt and consistent action as well as to ensure the effectiveness and relevance of internal control in mitigating fraud risk;

• To safeguard the Company from financial losses,reputation damage as well as to instill confidence of participants and stakeholders; and

• To enable Management to focus on achieving business strategies and target.

Both of the above policies are available on the Company’s portal.

Corporate Disclosure Policy

The Company is guided by the Listing Requirements regarding the Corporate Disclosure Policy.

Sustainability Policy

As a pioneer Shariah-compliant financial services provider for takaful, Takaful Malaysia and its subsidiaries strive to be responsible corporate citizens. Takaful Malaysia is committed to uphold the Shariah principles in relation to its business and social responsibilities.

The Board promotes good corporate governance in the application of sustainability practices particularly through the corporate social responsibility initiatives/programs undertaken by the Company throughout the year.

Supply of Information to the Board

The Board has full and timely access to information with Board papers distributed in advance of meetings to enable the Directors to obtain further explanation, where necessary, in order to be properly briefed before the meetings. The Board papers include the minutes of previous Board meeting, minutes of meetings of all Committees of the Board and reports relevant to the issues of the meetings covering areas such as financial, investment, information technology, operational, human resource and regulatory compliance matters. The Group Managing Director keeps the Board informed, on timely basis, of all material matters affecting the Group’s performance and major developments within the Group.

The Senior Management are invited to attend the Board meetings to present and brief the Board on matters/reports relating to their areas of responsibility as and when required.

• Bagi memastikan tindakan segera dan konsisten serta memastikan keberkesanan dan keberkaitan kawalan dalaman dalam mengurangkan risiko penipuan;

• Untuk melindungi Syarikat dari kerugian kewangan, kerosakan reputasi serta menanam keyakinan peserta-peserta dan pihak berkepentingan lain; dan

• Untuk membolehkan Pengurusan memberi tumpuan kepada pencapaian strategi perniagaan dan sasaran.

Kedua-dua polisi di atas boleh diperolehi di portal Syarikat.

Dasar Pendedahan Korporat

Syarikat berpandu kepada Keperluan Penyenaraian mengenai Dasar Pendedahan Korporat.

Dasar Kemampanan

Sebagai perintis penyedia perkhidmatan kewangan yang mematuhi Syariah bagi takaful, Takaful Malaysia dan anak-anak syarikatnya berusaha untuk menjadi warga korporat yang bertanggungjawab. Takaful Malaysia komited untuk menegakkan prinsip-prinsip Syariah berhubung dengan perniagaan dan tanggungjawab sosialnya.

Lembaga Pengarah menganjurkan urus tadbir korporat yang baik dalam penglibatan amalan kemampanan khususnya melalui inisiatif-inisiatif tanggungjawab sosial korporat/program yang dijalankan oleh Syarikat sepanjang tahun.

Sumber Maklumat kepada Lembaga Pengarah

Lembaga Pengarah mempunyai akses penuh dan secukupnya kepada maklumat berkenaan kertas Lembaga Pengarah yang diedarkan sebelum mesyuarat agar Pengarah boleh mendapatkan penjelasan lanjut, apabila diperlukan bagi mendapatkan penerangan yang sewajarnya sebelum mesyuarat. Kertas Lembaga Pengarah merangkumi minit mesyuarat Lembaga Pengarah yang lalu, minit mesyuarat semua Jawatankuasa Lembaga Pengarah dan laporan yang berkaitan isu-isu mesyuarat yang meliputi kewangan, pelaburan, teknologi maklumat, operasi, sumber manusia dan perkara berkaitan dengan pematuhan peraturan. Pengarah Urusan Kumpulan akan memaklumkan kepada Lembaga Pengarah tepat pada masanya, berhubung semua isu penting yang boleh mempengaruhi prestasi Kumpulan dan pembangunan utama yang berlaku dalam Kumpulan.

Pengurusan Kanan dijemput untuk menghadiri mesyuarat Lembaga Pengarah apabila diperlukan bagi membentangkan dan menerangkan perkara-perkara/laporan berkaitan dengan bidang tanggungjawab mereka kepada Lembaga Pengarah.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

All Directors have unrestricted access to timely and accurate information and access to the advice and services of the Company Secretary, who is responsible for ensuring that Board meeting’s procedures are followed and that all applicable rules and regulations are complied with. He is also responsible for advising the Directors of their obligations and duties, disclosure of their interest in securities, disclosure of any conflict of interest in a transaction involving the Company, prohibition on dealing in securities and restrictions on disclosure of price-sensitive information. The Directors can also seek independent professional advice in furtherance of their duties, at Takaful Malaysia’s expense.

The Board is also regularly updated from time to time by the Company Secretary and/or Management on updates to the regulations and guidelines, as well as any amendments thereto issued by Bank Negara Malaysia, Bursa Securities, Securities Commission, Companies Commission of Malaysia and other relevant regulatory authorities.

Appointment to the Board

The appointment of new Board members is considered and evaluated by the Nomination Committee in a formal and transparent process, and the Nomination Committee would recommend the appointment to the Board for approval. In line with the Islamic Financial Services Act 2013 (previously Takaful Act 1984) and the requirement of Bank Negara Malaysia (“BNM”), the appointment of Directors is subject to the approval from BNM. The Company Secretary will ensure that all the appointments are properly made, all necessary information are obtained, as well as all legal and regulatory requirements are met.

The Board, with the assistance of the Nomination Committee, also considers the following criterion in the selection process:

• Probity, personal integrity and reputation – the person must have key qualities such as integrity, diligence, independence of mind and fairness;

• Competence and capability – the person must have the necessary skills, ability and commitment to carry out the role; and

• Financial integrity – the person must manage his/her debts or financial affairs prudently.

The process flow for the appointment of new directors is as follows:

• Identification of candidates

• Evaluation of suitability of candidates

• Meeting with candidates

• Deliberation by the Nomination Committee

• Recommendation to Board

Semua ahli Lembaga Pengarah mempunyai akses yang tidak terhad kepada maklumat yang tepat dan pada masa yang ditetapkan serta khidmat nasihat Setiausaha Syarikat yang bertanggungjawab untuk memastikan supaya prosedur mesyuarat Lembaga Pengarah dituruti dan semua syarat serta peraturan yang diterima pakai dipatuhi. Beliau juga bertanggungjawab bagi menasihatkan Pengarah tentang kewajipan dan tugas mereka, penzahiran kepentingan mereka dalam sekuriti, pendedahan sebarang konflik yang berkepentingan dalam urusniaga yang melibatkan Syarikat, larangan menjalankan urusniaga sekuriti dan sekatan ke atas pendedahan maklumat sensitif-harga. Para Pengarah juga boleh mendapatkan nasihat badan profesional bebas dalam menjalankan tugas mereka, di bawah tanggungan Takaful Malaysia.

Lembaga pengarah juga sentiasa dimaklumkan dari semasa ke semasa oleh Setiausaha Syarikat dan/atau Pengurusan berkaitan dengan peraturan-peraturan dan garis panduan terkini, serta apa-apa pindaan yang dikeluarkan oleh Bank Negara Malaysia, Bursa Sekuriti, Suruhanjaya Sekuriti, Suruhanjaya Syarikat Malaysia dan lain-lain pihak berkuasa yang berkaitan.

Pelantikan sebagai ahli Lembaga Pengarah

Pelantikan ahli Lembaga Pengarah yang baru dipertimbang dan dinilai oleh Jawatankuasa Pemilihan dalam proses yang formal dan telus, dan Jawatankuasa tersebut akan mengesyorkan pelantikan tersebut kepada Lembaga Pengarah untuk diluluskan. Selaras dengan Akta Perkhidmatan Kewangan Islam 2013 (sebelumnya Akta Takaful 1984) dan keperluan Bank Negara Malaysia (“BNM”), pelantikan Pengarah adalah tertakluk kepada kelulusan BNM. Setiausaha Syarikat akan memastikan supaya semua pelantikan dilakukan dengan cara yang betul di mana semua maklumat yang diperlukan diperolehi serta semua syarat perundangan dan peraturan dipenuhi.

Lembaga Pengarah, dengan dibantu oleh Jawatankuasa Pemilihan, juga mempertimbangkan kriteria berikut dalam proses pemilihan:

• Kejujuran, integriti dan reputasi peribadi - seseorang itu mestilah mempunyai kualiti utama seperti integriti, ketekunan, kebebasan minda dan keadilan;

• Kecekapan dan kemampuan - seseorang itu mestilah mempunyai kemahiran yang diperlukan, keupayaan dan komitmen untuk memainkan peranan; dan

• Integriti kewangan - seseorang itu mestilah berhemat menguruskan hutang atau hal ehwal kewangannya.

Aliran proses bagi pelantikan pengarah baru adalah seperti berikut:

• Mengenal pasti calon

• Penilaian terhadap kesesuaian calon

• Perjumpaan dengan calon

• Perbincangan dengan Jawatankuasa Pemilihan

• Cadangan kepada Lembaga Pengarah

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Nama / Kehadiran / Peratus (%) /Name Attendance Percentage (%)

Mahadzir Azizan 3/3 100

Dato’ Johan Abdullah 3/3 100

Datuk Rozaida Omar 3/3 100

Dato’ Sulaiman Mohd Yusof 2/3 67

Zakaria Ismail 3/3 100

Thereafter, the application for the appointment of such candidate would be submitted to BNM for approval.

Nomination Committee

The Nomination Committee consists of five (5) Non- Executive Directors, three (3) of whom are Independent Directors. The Chairman of the Nomination Committee is Mahadzir Azizan, a Senior Independent Non-Executive Director, in line with the recommendation of the MCCG 2012. The Nomination Committee met three (3) times during the financial year under review with details of meetings’ attendance of each member as follows:

The Nomination Committee is empowered by the Board and its terms of reference are to bring to the Board recommendations as to the appointment of new Directors, Group Managing Director/Chief Executive Officer, Shariah Advisory Body members, General Managers and Appointed Actuary, and keeps under review the terms of appointment of Directors, Group Managing Director/Chief Executive Officer, Shariah Advisory Body members, General Managers and Appointed Actuary. The Nomination Committee is also empowered to assess the effectiveness of the Board, its Committees, contribution of each individual Director and the performance of the Shariah Advisory Body. The Nomination Committee also discussed the succession plan of the Senior Management of Takaful Malaysia and conducted an assessment of the Independence of Independent Directors.

Among the key activities undertaken by the Nomination Committee during the financial year under review were:

• Proposed appointment and re-appointment of Senior Management,

• Proposed appointment and re-appointment of Shariah Advisory Body members,

• Proposed re-appointment of Directors and appointment of additional Remuneration Committee member,

Selepas itu, permohonan bagi pelantikan calon akan dikemukakan kepada BNM untuk kelulusan.

Jawatankuasa Pemilihan

Jawatankuasa Pemilihan terdiri daripada lima (5) Pengarah Bukan Eksekutif di mana tiga (3) daripada mereka adalah Pengarah Bebas. Pengerusi Jawatankuasa ialah Mahadzir Azizan, seorang Pengarah Bukan Eksekutif Bebas Kanan selaras dengan cadangan MCCG 2012. Jawatankuasa Pemilihan telah bermesyuarat sebanyak tiga (3) kali sepanjang tahun kewangan yang dikaji dengan butiran kehadiran setiap ahli seperti berikut:

Jawatankuasa Pemilihan telah diberikan mandat oleh Lembaga Pengarah dan terma rujukannya untuk membentang kepada Pengarah cadangan pemilihan ahli Lembaga Pengarah yang baru, Pengarah Urusan Kumpulan / Ketua Pegawai Eksekutif, ahli Badan Penasihat Syariah, Pengurus Besar dan Aktuari Dilantik, dan sentiasa mengkaji syarat-syarat pelantikan Pengarah, Pengarah Urusan Kumpulan / Ketua Pegawai Eksekutif, ahli Badan Penasihat Syariah, Pengurus Besar dan Aktuari Dilantik. Jawatankuasa Pemilihan juga diberi mandat untuk menilai keberkesanan Lembaga Pengarah, Jawatankuasanya dan sumbangan setiap Pengarah dan prestasi Badan Penasihat Syariah. Jawatankuasa Pemilihan juga merangka pelan peralihan jawatan bagi Pengurusan Kanan Takaful Malaysia dan menjalankan penilaian terhadap Kebebasan Pengarah Bebas.

Antara aktiviti utama yang dijalankan oleh Jawatankuasa Pemilihan sepanjang tahun kewangan yang dikaji seperti berikut:

• Cadangan pelantikan dan pelantikan semula Pengurusan Kanan,

• Cadangan pelantikan dan pelantikan semula ahli Badan Penasihat Syariah,

• Cadangan pelantikan semula Pengarah dan pelantikan ahli tambahan Jawatankuasa Ganjaran,

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

• Directors’ Performance Evaluation i.e. the performance of the Board as a whole as well as the effectiveness of each individual director, and

• Succession Planning.

Directors’ Training

All Directors have attended the Mandatory Accreditation Programme (“MAP”) as required by Bursa Securities. The Directors will continue to attend other relevant training programmes, courses and seminars to enhance their skills and knowledge in discharging their duties as Directors.

During the year, the Directors attended relevant training courses including the following:

• Linkage 20 Conversations @ Harvard, Cambridge, MA-U.S.A.

• GST Awareness Workshop by Ernst & Young Tax Consultants Sdn Bhd

• Boardroom-AIG Seminar on Enterprise Risk Management and Directors & Officers Insurance

• Nominating Committee Programme

• Directors Breakfast Series with Beverly Behan:“Great Companies Deserve Great Board”

• Meeting with Takaful Operators and Insurance Companies

• BNM Dialogue Session with Nomination Committee Members

Takaful Malaysia also continued to provide BNM’s Circulars, updated Listing Requirements and new regulations and guidelines from other relevant regulatory authorities to assist the Directors in keeping abreast with the latest development.

Re-election

The Articles of Association provide for all Directors including the Group Managing Director / Chief Executive Officer to submit themselves for re-election at least every three (3) years in compliance with the Listing Requirements.

To assist shareholders in their decision, sufficient information, such as personal profile, meetings attendance and shareholding in the Company of each director standing for re-election are furnished in the Annual Report.

• Penilaian Prestasi Pengarah iaitu prestasi Lembaga Pengarah secara keseluruhan dan juga keberkesanan setiap pengarah individu, dan

• Perancangan peralihan jawatan.

Latihan Pengarah

Semua ahli Lembaga Pengarah telah menghadiri Program Latihan Akreditasi Mandatori (“MAP”) seperti yang dikehendaki oleh Bursa Securities. Mereka akan terus menghadiri lain-lain program latihan, kursus dan seminar yang relevan untuk mempertingkatkan kemahiran dan pengetahuan mereka dalam menjalankan tugas mereka sebagai Pengarah.

Sepanjang tahun ini, para Pengarah telah menghadiri pelbagai kursus latihan yang berkaitan termasuk:

• Linkage 20 Conversations @ Harvard, Cambridge, MA-U.S.A.

• GST Awareness Workshop by Ernst & Young Tax Consultants Sdn Bhd

• Boardroom-AIG Seminar on Enterprise Risk Management and Directors & Officers Insurance

• Nominating Committee Programme

• Directors Breakfast Series with Beverly Behan:”Great Companies Deserve Great Board”

• Meeting with Takaful Operators and Insurance Companies

• BNM Dialogue Session with Nomination Committee Members

Takaful Malaysia juga terus menyediakan Pekeliling BNM, Keperluan Penyenaraian yang dikemaskini dan peraturan-peraturan dan panduan-panduan baru dari pihak berkuasa lain yang berkaitan untuk membantu para Pengarah dalam mendapatkan maklumat mengenai perkembangan terkini.

Pemilihan Semula

Tataurusan Pertubuhan Syarikat memperuntukkan agar semua Pengarah termasuk Pengarah Urusan Kumpulan / Ketua Pegawai Eksekutif untuk menawarkan diri mereka bagi pemilihan semula sekurang-kurangnya setiap tiga (3) tahun sekali selaras dengan Keperluan Penyenaraian.

Bagi membantu para pemegang saham membuat keputusan, maklumat yang mencukupi seperti profil peribadi, kehadiran mesyuarat dan pegangan saham dalam Syarikat bagi setiap Pengarah yang bersedia untuk pemilihan semula disediakan dalam Laporan Tahunan.

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DIRECTORS’ REMUNERATION

Level and Make-up of Remuneration

The Remuneration Committee is responsible in recommending the remuneration framework for the Directors as well as the remuneration package of Executive Director, Shariah Advisory Body members and General Managers to the Board so as to ensure that Takaful Malaysia attracts, motivates and retains the Directors, Shariah Advisory Body members and Senior Management needed to run it successfully.

The remuneration package for Executive Director is structured on the basis of linking rewards to financial and individual performance. Performance is measured against the Key Performance Indicators as approved by the Board. It is the ultimate responsibility of the Board to approve the remuneration of the Executive Director. The Executive Director does not participate in any way in determining his individual remuneration.

In the case of Non-Executive Directors and Shariah Advisory Body members, the remuneration package is determined by the Board as a whole, based on the experience and level of expertise and responsibilities undertaken by the Non-Executive Directors and Shariah Advisory Body members, in line with the Group’s overall practice on compensation and benefits. Directors’ fees and Shariah Advisory Body members’ fees are approved by the shareholders at the Annual General Meeting.

Remuneration Committee

The Remuneration Committee consists of four (4) Non-Executive Directors, two (2) of whom are Independent Directors. The Chairman of the Committee is Zakaria Ismail, an Independent Non-Executive Director. The Remuneration Committee met six (6) times during the financial year under review with details of meetings’ attendance of each member are as follows:

Nama / Kehadiran / Peratus (%) /Name Attendance Percentage (%)

Zakaria Ismail 6/6 100

Dato’ Johan Abdullah 6/6 100

Mahadzir Azizan 6/6 100

Datuk Rozaida Omar* 4/5 80

* Merujuk kepada mesyuarat-mesyuarat yang diadakan selepas tarikh pelantikan beliau pada 14 Februari 2014 / Refer to the number of meetings which was held after her appointment date on 14 February 2014.

Penyata Urus Tadbir Korporat

Corporate Governance Statement

GANJARAN PENGARAH

Peringkat dan Kandungan Ganjaran

Jawatankuasa Ganjaran bertanggungjawab mengesyorkan rangka kerja ganjaran bagi para Pengarah termasuk pakej ganjaran bagi Pengarah Eksekutif, ahli Badan Penasihat Syariah dan Pengurus Besar kepada Lembaga Pengarah bagi memastikan Takaful Malaysia mampu menarik minat, memberi motivasi dan mengekalkan ahli Lembaga Pengarah, ahli Badan Penasihat Syariah dan Pengurusan Kanan yang diperlukan untuk mentadbir dengan jayanya.

Pakej ganjaran bagi Pengarah Eksekutif distrukturkan atas dasar yang menghubungkan ganjaran kewangan dan prestasi individu. Prestasi diukur berdasarkan Petunjuk Prestasi Utama yang diluluskan oleh Lembaga Pengarah. Lembaga Pengarah bertanggungjawab sepenuhnya untuk meluluskan ganjaran Pengarah Eksekutif. Pengarah Eksekutif tidak terlibat dalam apa juga cara dalam menentukan ganjarannya sendiri.

Bagi Pengarah Bukan Eksekutif dan ahli Badan Penasihat Syariah, pakej ganjaran ditentukan oleh Lembaga Pengarah secara keseluruhan, berdasarkan pengalaman dan tahap kepakaran dan tanggungjawab yang dipikul oleh Pengarah Bukan Eksekutif dan ahli Badan Penasihat Syariah, sejajar dengan amalan keseluruhan Kumpulan mengenai ganjaran dan imbuhan. Yuran para Pengarah dan yuran ahli Badan Penasihat Syariah diluluskan oleh para pemegang saham di Mesyuarat Agung Tahunan.

Jawatankuasa Ganjaran

Jawatankuasa Ganjaran terdiri daripada empat (4) orang Pengarah Bukan Eksekutif, di mana dua (2) daripada mereka adalah Pengarah Bebas. Pengerusi Jawatankuasa ialah Zakaria Ismail, seorang Pengarah Bukan Eksekutif Bebas. Jawatankuasa Ganjaran telah bermesyuarat sebanyak enam (6) kali sepanjang tahun kewangan yang dikaji dengan butiran kehadiran setiap ahli seperti berikut:

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Pengarah Bukan Eksekutif / Pengarah Eksekutif / Non-Executive Jumlah / Executive Director Directors Total (RM’000) (RM’000) (RM’000)

Yuran / Fees 0 747 747

Gaji dan lain-lain emolumen / Salaries and other emoluments 5,223 440 5,663

Manfaat seumpamanya / Benefits-in-kind 202 394 596

Jumlah / Total 5,425 1,581 7,006

Ganjaran Pengarah / Jumlah Pengarah /Directors’ Remuneration Number of Directors Pengarah Eksekutif / Pengarah Bukan Eksekutif / Executive Director Non-Executive Directors

RM50,000 dan ke bawah / and below – –

RM50,001 – RM100,000 – –

RM100,001 – RM150,000 – –

RM150,001 – RM200,000 – 2

RM200,001 – RM250,000 – 3

RM250,001 – RM300,000 – 2

Melebihi / More than RM300,000 1 –

Jumlah / Total 1 7

Disclosure

The details of the remuneration for the Directors for the financial year ended 31 December 2014 are as follows:

Pendedahan

Ringkasan maklumat mengenai ganjaran para Pengarah bagi tahun kewangan berakhir 31 Disember 2014 adalah seperti berikut:

Disclosure of each Director’s remuneration, including that of the Group Managing Director, is set out in the Annual Audited Financial Statements of this Annual Report.

SHAREHOLDERS

Dialogue between the Company and Investors

Takaful Malaysia recognizes the importance to keep the shareholders well-informed of all major developments of Takaful Malaysia on a timely basis. The Chairman and Group Managing Director hold discussions with shareholders at least once (1) a year during the Annual General Meeting. Additionally, various disclosures and announcements made to Bursa Securities including quarterly, semi-annual returns and annual results facilitate the dissemination of information to the shareholders. In addition, all these announcements and other information about the Company is available on Takaful Malaysia’s website, www.takaful-malaysia.com.my.

Pendedahan ganjaran setiap Pengarah, termasuk Pengarah Urusan Kumpulan, ada dibentangkan di dalam Penyata Kewangan Tahunan yang telah diaudit dalam Laporan Tahunan ini.

PEMEGANG SAHAM

Dialog antara Syarikat dan para Pelabur

Takaful Malaysia sedar akan kepentingan untuk sentiasa memaklumkan kepada para pemegang saham berkenaan semua perkembangan utama Takaful Malaysia dari semasa ke semasa. Pengerusi dan Pengarah Urusan Kumpulan mengadakan perbincangan dengan pemegang saham sekurang-kurangnya sekali (1) setahun semasa Mesyuarat Agung Tahunan. Selain itu, pelbagai pendedahan dan pengumuman dibuat kepada Bursa Securities termasuk keputusan suku tahunan, laporan setengah tahunan dan keputusan tahunan bagi memudahkan penyebaran maklumat kepada pemegang saham. Tambahan lagi, semua pengumuman-pengumuman ini dan maklumat-maklumat lain mengenai Syarikat boleh diperolehi di laman web Takaful Malaysia, iaitu www.takaful-malaysia.com.my.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

The Annual General Meeting

The Annual General Meeting (“AGM”) is the principal forum for dialogues with shareholders. Besides the normal agenda for the AGM, the Group Managing Director presents the progress and performance of the business as contained in the Annual Report and provides opportunities for shareholders to raise questions pertaining to the business activities of the Group. Board members, Shariah Advisory Body members, Senior Management and the Company’s external auditors are available to respond to shareholders’ enquiries during the AGM.

The Group Managing Director also shared with the shareholders the Company’s responses to questions submitted in advance of the AGM by the Minority Shareholder Watchdog Group (“MSWG”). The Notice of AGM was dispatched to shareholders within the 21 days requirement under the Companies Act 1965 and Listing Requirements. For re-election of Directors, the Board will ensure that full information is disclosed through the notice of meeting regarding directors who are retiring and who are willing to serve if re-elected.

Each item of special business included in the notice of the meeting will be accompanied by an explanatory statement for the proposed resolution to facilitate full understanding and evaluation of issues involved.

At the 29th AGM of the Company held on 22 April 2014, no substantive resolutions were put forth for shareholders’ approval, other than resolutions pertaining to the adoption of audited financial statements for the year ended 31 December 2013, payment of final dividend, re-appointment/re-election of retiring Directors, payment of Directors’ and Shariah Advisory Body members’ fees, re-appointment of external auditors and Shareholders’ Mandate for Recurrent Related Party Transactions. As such, the resolutions put forth for shareholders’ approval at the 29th AGM were voted on by a show of hands.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board ensures that the annual financial statements and quarterly announcements to shareholders are prepared in accordance with approved accounting standards and present a balance and understandable assessment of the Group’s position and prospects. The Audit Committee assists the Board in ensuring accuracy and adequacy of information by reviewing and recommending for adoption information for disclosure.

Mesyuarat Agung Tahunan

Mesyuarat Agung Tahunan (“AGM”) adalah forum utama bagi dialog dengan pemegang saham. Selain dari agenda biasa untuk AGM, Lembaga Pengarah akan membentangkan laporan prestasi dan pencapaian perniagaan seperti yang dinyatakan dalam Laporan Tahunan dan memberi peluang kepada pemegang saham untuk mengemukakan soalan mengenai aktiviti perniagaan Kumpulan. Ahli Lembaga Pengarah, ahli Badan Penasihat Syariah, Pengurusan Kanan dan juruaudit luar Syarikat hadir untuk menjawab pertanyaan para pemegang saham pada Mesyuarat Agung Tahunan.

Pengarah Urusan Kumpulan juga berkongsi dengan para pemegang saham Syarikat mengenai jawapan kepada soalan-soalan yang dikemukakan terlebih dahulu sebelum AGM oleh Badan Pengawas Pemegang Saham Minoriti Berhad (“MSWG”). Notis Mesyuarat Agung Tahunan telah dihantar kepada para pemegang saham lebih awal sedikit daripada keperluan 21 hari di bawah Akta Syarikat, 1965 dan Keperluan Penyenaraian. Bagi pemilihan semula para Pengarah, Lembaga Pengarah akan memastikan maklumat sepenuhnya dimaklumkan menerusi notis mesyuarat berhubung para Pengarah yang akan bersara dan mana-mana Pengarah yang menawarkan diri untuk berkhidmat sekiranya dilantik semula.

Setiap perkara urusan khas yang terkandung dalam notis mesyuarat akan disertakan dengan penyata penerangan bagi resolusi yang dicadangkan untuk memudahkan pemahaman sepenuhnya dan penilaian terhadap isu berkaitan.

Pada Mesyuarat Agung Tahunan Syarikat ke-29 yang diadakan pada 22 April 2014, tiada resolusi substantif yang telah dikemukakan untuk kelulusan pemegang saham, selain daripada resolusi-resolusi yang berkaitan untuk menerima pakai penyata kewangan yang telah diaudit bagi tahun berakhir 31 Disember 2013, pembayaran dividen akhir, pelantikan semula / pemilihan semula Pengarah Bukan Eksekutif yang bersara, pembayaran yuran Pengarah-pengarah dan ahli-ahli Badan Penasihat Syariah, pelantikan semula juruaudit luar dan Mandat Pemegang-pemegang Saham bagi Urusniaga-urusniaga yang Berulang dengan Pihak Berkaitan. Oleh itu, resolusi yang dikemukakan untuk kelulusan pemegang saham pada AGM yang ke-29 telah diundi dengan cara mengangkat tangan.

AKAUNTABILITI DAN AUDIT

Laporan Kewangan

Lembaga Pengarah perlu memastikan yang penyata kewangan tahunan dan pengumuman suku tahunan kepada pemegang saham disediakan selaras dengan piawaian perakaunan yang diluluskan dan membentangkan penilaian yang seimbang dan boleh difahami mengenai kedudukan dan prospek Kumpulan. Jawatankuasa Audit membantu Lembaga Pengarah memastikan ketepatan dan kelengkapan maklumat dengan mengkaji dan mencadangkan mengguna pakai maklumat bagi tujuan pendedahan.

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Penyata Urus Tadbir Korporat

Corporate Governance Statement

Statement of Directors’ Responsibilities in Relation to Financial Statements

The Directors are required under the Companies Act, 1965, to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year and of the income statement and cash flows for the Company and the Group for the financial year.

The Directors consider that, in preparing the financial statements for the year ended 31 December 2014, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. The Directors have also considered that all applicable accounting standards have been followed and confirm that the financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Company maintains adequate accounting records which disclose with reasonable accuracy the financial position of the Company to enable them to ensure that the financial statements comply with the requirements of the Companies Act, 1965.

The Directors generally have the duty to take such steps as are reasonably available to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

Internal Control and Risk Management

The Board acknowledges its responsibility and is committed in maintaining a sound system of internal control and risk management practice. However, such system can only provide reasonable but not absolute assurance against material misstatements or losses.

The Statement on Risk Management and Internal Control furnished on pages 48 to 52 in the Annual Report provides an overview of the state of risk management and internal control within the Group.

Relationships with the Auditors

The role of the Audit Committee is as stated on pages 40 to 47. Through the Audit Committee of the Board, the Company has established transparent and appropriate relationship with the Company’s auditors, both internal and external. If required, the external auditors are invited to attend meetings of the Committee.

This statement is made in accordance with the resolution of the Board of Directors dated 10 February 2015.

Penyata Tanggungjawab Para Pengarah Berkenaan Penyata Kewangan

Menurut Akta Syarikat, 1965, Lembaga Pengarah perlu menyediakan penyata kewangan bagi setiap tahun kewangan yang memberi gambaran yang benar dan saksama mengenai keadaan urusan hal-ehwal Syarikat dan Kumpulan sehingga akhir tahun kewangan serta penyata hasil dan aliran tunai Syarikat dan Kumpulan untuk tahun kewangan.

Para Pengarah memberi pertimbangan bahawa, dalam menyediakan penyata kewangan bagi tahun berakhir 31 Disember 2014, Kumpulan telah menggunakan dasar perakaunan yang sesuai, digunakan secara konsisten dan disokong oleh pertimbangan dan anggaran yang wajar dan berhemat. Para Pengarah juga telah mempertimbangkan bahawa kesemua piawaian perakaunan yang berkaitan dipatuhi dan mengesahkan bahawa penyata kewangan disediakan mengikut dasar perniagaan berterusan.

Para Pengarah bertanggungjawab memastikan supaya Syarikat menyediakan rekod perakaunan yang secukupnya yang menunjukkan ketepatan yang munasabah mengenai kedudukan kewangan Syarikat bagi membolehkan mereka memastikan agar penyata kewangan tersebut mematuhi keperluan Akta Syarikat, 1965.

Para Pengarah mempunyai tanggungjawab secara am untuk mengambil langkah yang munasabah dalam memastikan perlindungan aset Syarikat dan Kumpulan terpelihara dan mengelakkan serta mengesan sebarang bentuk penipuan dan kesalahan undang-undang.

Kawalan Dalaman dan Pengurusan Risiko

Lembaga Pengarah mengiktiraf tanggungjawabnya dan komited untuk mengekalkan pelaksanaan sistem kawalan dalaman dan amalan pengurusan risiko yang berwibawa. Walau bagaimanapun, sistem tersebut hanya dapat memberikan jaminan berpatutan dan bukannya mutlak daripada sebarang salah nyata atau kerugian ketara.

Penyata Pengurusan Risiko dan Kawalan Dalaman yang dibentangkan di muka surat 48 hingga 52 dalam Laporan Tahunan ini memberikan tinjauan menyeluruh mengenai pengurusan risiko dan kawalan dalaman Kumpulan.

Hubungan dengan Juruaudit

Peranan Jawatankuasa Audit dinyatakan di muka surat 40 hingga 47. Melalui Jawatankuasa Audit Lembaga Pengarah, Syarikat telah mewujudkan hubungan yang telus dan sesuai dengan juruaudit Syarikat, sama ada dalaman mahupun luaran. Jika perlu, juruaudit luar akan dijemput untuk menghadiri mesyuarat Jawatankuasa.

Penyata ini dibuat selaras dengan resolusi Lembaga Pengarah bertarikh 10 Februari 2015.

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Laporan Jawatankuasa AuditAudit Committee Report

AUDIT COMMITTEE REPORT

The Board of Directors of Syarikat Takaful Malaysia Berhad (“Takaful Malaysia”) is pleased to present the Audit Committee Report for the financial year under review.

MEMBERSHIP AND MEETINGS

The Audit Committee (“Committee”) currently comprises four (4) members, all of whom are Independent Non-Executive Directors. The details of members and meetings held during the financial year ended 31 December 2014 are as follows:

Name of Audit No. of Meetings Committee Members Held Attended

Mahadzir Azizan 6 6(Chairman)(Senior Independent Non-Executive Director)

Dato’ Sulaiman Mohd Yusof 6 6(Independent Non-Executive Director)

Zakaria Ismail 6 6(Independent Non-Executive Director)

Dato’ Othman Abdullah 6 6(Independent Non-Executive Director)

Dato’ Othman Abdullah is a member of the Malaysian Institute of Accountants (“MIA”). Thus, Takaful Malaysia complies with Paragraph 15.09(1)(c)(i) of the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) which stipulate that at least one (1) member of the Committee must be a member of the MIA.

The Committee met six (6) times during the financial year. The meetings were appropriately structured and conducted through the use of agenda which were distributed to members with sufficient notification. The Group Managing Director, the Chief Financial Officer and the Chief Internal Auditor normally attend the meetings.

During the financial year ended 31 December 2014, the Chief Financial Officer and the Assistant General Manager / Head of Internal Audit attended all the meetings held, while the Group Managing Director attended 5 out of 6 meetings held.

LAPORAN JAWATANKUASA AUDIT

Lembaga Pengarah Syarikat Takaful Malaysia Berhad (“Takaful Malaysia”) dengan berbesar hati membentangkan Laporan Jawatankuasa Audit bagi tahun kewangan yang dikaji.

KEAHLIAN DAN MESYUARAT

Jawatankuasa Audit (“Jawatankuasa”) kini terdiri daripada empat (4) orang ahli, di mana kesemuanya adalah Pengarah Bukan Eksekutif Bebas. Maklumat terperinci mengenai ahli dan mesyuarat yang diadakan sepanjang tahun kewangan berakhir 31 Disember 2014 adalah seperti berikut:

Nama Ahli Bil. Mesyuarat Jawatankuasa Audit Diadakan Dihadiri

Mahadzir Azizan 6 6(Pengerusi)(Pengarah Bukan Eksekutif Bebas Kanan)

Dato’ Sulaiman Mohd Yusof 6 6(Pengarah Bukan Eksekutif Bebas)

Zakaria Ismail 6 6(Pengarah Bukan Eksekutif Bebas)

Dato’ Othman Abdullah 6 6(Pengarah Bukan Eksekutif Bebas)

Dato’ Othman Abdullah adalah ahli Institut Akauntan Malaysia (“MIA”). Oleh itu, Takaful Malaysia telah mematuhi Perenggan 15.09(1)(c)(i) Keperluan Penyenaraian Pasaran Utama (“Keperluan Penyenaraian”) Bursa Malaysia Securities Berhad (“Bursa Securities”) yang menggariskan bahawa sekurang-kurangnya seorang (1) ahli Jawatankuasa mestilah merupakan ahli MIA.

Jawatankuasa telah bermesyuarat sebanyak enam (6) kali pada tahun kewangan ini. Mesyuarat tersebut telah disusun dan dijalankan dengan sewajarnya melalui penggunaan agenda yang diedarkan kepada ahli terlebih dahulu dengan notis yang mencukupi. Pengarah Urusan Kumpulan, Ketua Pegawai Kewangan dan Ketua Audit Dalaman selalunya menghadiri mesyuarat tersebut.

Dalam tahun kewangan berakhir 31 Disember 2014, Ketua Pegawai Kewangan dan Penolong Pengurus Besar / Ketua Audit Dalaman menghadiri kesemua mesyuarat yang diadakan, manakala Pengarah Urusan Kumpulan menghadiri 5 daripada 6 mesyuarat yang diadakan.

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Laporan Jawatankuasa Audit

Audit Committee Report

TERMS OF REFERENCE

Composition

The members of the Committee shall be appointed by the Board from amongst their numbers and shall comprise at least three (3) members, all of whom must be Non-Executive Directors with majority of them shall be Independent Directors. An Independent Non-Executive Director shall be the one who fulfils the requirements as provided in the Bursa Securities Listing Requirements and the guidelines of Bank Negara Malaysia (“BNM”).

At least one (1) member of the Committee:

1) must be a member of the MIA; or

2) if he is not a member of the MIA, he must have at least three (3) years’ working experience and:-

(a) he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

(b) he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

3) fulfils such other requirements as prescribed or approved by Bursa Securities.

The members of the Committee shall elect a Chairman from amongst their numbers who shall be an Independent Non-Executive Director. If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the number of members are reduced below three (3), the Board shall within three (3) months of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members. No alternate Director can be appointed as a member of the Committee.

The Board shall review the term of office and performance of the Committee and each of its members at least once every three (3) years to ensure the Committee and members have carried out their duties in accordance with their terms of reference.

Quorum and Committee’s Procedures

Meetings shall be conducted at least four (4) times annually or more frequently as circumstances dictate.

In order to form a quorum for the meeting, the majority of members present must be Independent Non-Executive Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

TERMA RUJUKAN

Komposisi

Ahli Jawatankuasa hendaklah dilantik oleh Lembaga Pengarah daripada kalangan mereka dan hendaklah terdiri daripada sekurang-kurangnya tiga (3) orang ahli, di mana kesemuanya hendaklah terdiri dari Pengarah Bukan Eksekutif dengan majoritinya adalah Pengarah Bebas. Seorang Pengarah Bukan Eksekutif Bebas hendaklah merupakan ahli yang memenuhi keperluan seperti yang diperuntukkan dalam Keperluan Penyenaraian Bursa Securities dan garis panduan Bank Negara Malaysia (“BNM”).

Sekurang-kurangnya seorang (1) ahli Jawatankuasa:

1) mestilah merupakan ahli MIA; atau

2) jika beliau bukan ahli MIA, beliau mestilah mempunyai pengalaman bekerja sekurang kurangnya selama tiga (3) tahun dan:-

(a) beliau mestilah lulus peperiksaan yang dinyatakan dalam Bahagian I Jadual Pertama Akta Akauntan 1967; atau

(b) beliau mestilah merupakan ahli salah sebuah persatuan akauntan yang dinyatakan dalam Bahagian II Jadual Pertama Akta Akauntan 1967; atau

3) memenuhi keperluan-keperluan lain yang digariskan atau diluluskan oleh Bursa Securities.

Ahli Jawatankuasa hendaklah melantik Pengerusi daripada kalangan mereka yang merupakan seorang Pengarah Bukan Eksekutif Bebas. Sekiranya seorang ahli Jawatankuasa meletak jawatan, meninggal dunia atau atas sebarang sebab tidak lagi menjadi ahli sehingga menyebabkan bilangan ahli kurang daripada tiga (3) orang, maka Lembaga Pengarah hendaklah melantik ahli baru dalam bilangan yang diperlukan untuk mencukupkan bilangan minimum ahli kepada tiga (3) orang dalam tempoh tiga (3) bulan dari peristiwa tersebut. Pengarah gantian tidak boleh dilantik sebagai ahli Jawatankuasa.

Lembaga Pengarah hendaklah mengkaji semula tempoh perkhidmatan dan prestasi Jawatankuasa Audit dan setiap ahlinya sekurang-kurangnya setiap tiga (3) tahun sekali bagi memastikan Jawatankuasa dan ahlinya telah menjalankan tugas-tugas mereka berdasarkan terma rujukan.

Korum dan Prosedur Jawatankuasa

Mesyuarat hendaklah diadakan sekurang-kurangnya empat (4) kali setahun atau dengan lebih kerap, mengikut keperluan.

Bagi membentuk korum mesyuarat, majoriti ahli yang hadir mestilah merupakan Pengarah Bukan Eksekutif Bebas. Sekiranya Pengerusi tidak hadir, ahli-ahli yang hadir hendaklah melantik seorang Pengerusi bagi mesyuarat tersebut daripada kalangan ahli-ahli yang hadir.

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Laporan Jawatankuasa Audit

Audit Committee Report

The Company Secretary shall be the Secretary of the Committee. The Secretary, in concurrence with the Chairman, shall draw up an agenda, which shall be circulated together with relevant supporting papers within reasonable time prior to each meeting to the members of the Committee. The Secretary shall circulate the minutes of meetings to all members of the Committee.

The Committee may, as and when deemed necessary, invite other Board members and / or Senior Management members to attend the Committee meetings.

The Committee shall, at least twice (2) a year, meet with the external auditors to discuss any matter with the Committee without the presence of any executive members of the Board and Senior Management. The Chairman of the Committee shall convene a meeting of the Committee to consider any matter which the external auditors believe should be brought to the attention of the Directors or shareholders.

The Committee shall regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter.

Authority

The Committee is authorised by the Board to investigate any matter within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are required to cooperate with any request made by the Committee.

The Committee shall have full and unrestricted access to any information pertaining to the Group. The Committee shall have the resources that are required to perform its duties. The Committee can obtain, at the expense of Takaful Malaysia, external legal or other independent professional advice it considers necessary.

The Committee shall have direct communication channels with the internal and external auditors, the risk management personnel and with Senior Management of the Group and shall be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of Bursa Securities Listing Requirements, the Committee shall promptly report such matter to the Bursa Securities.

Setiausaha Syarikat hendaklah bertindak sebagai Setiausaha Jawatankuasa. Atas persetujuan Pengerusi, Setiausaha hendaklah merangka agenda yang akan diedarkan kepada ahli Jawatankuasa bersama-sama dengan kertas sokongan yang berkaitan dalam tempoh yang berpatutan sebelum setiap mesyuarat. Setiausaha hendaklah mengedarkan minit mesyuarat kepada semua ahli Jawatankuasa.

Jawatankuasa boleh, apabila dianggap perlu, menjemput ahli Lembaga Pengarah lain dan / atau ahli Pengurusan Kanan untuk menghadiri mesyuarat Jawatankuasa.

Jawatankuasa ini hendaklah bermesyuarat dengan juruaudit luar sekurang-kurangnya dua (2) kali setahun, untuk membincangkan sebarang perkara dengan Jawatankuasa tanpa kehadiran mana-mana ahli eksekutif Lembaga Pengarah dan Pengurusan Kanan. Pengerusi Jawatankuasa akan mengadakan mesyuarat untuk mempertimbangkan sebarang perkara yang pihak juruaudit luar percaya perlu di bawa kepada perhatian para Pengarah atau pemegang saham.

Jawatankuasa hendaklah mengatur prosiding mesyuaratnya, dengan mengambil kira konvensyen biasa berhubung perkara tersebut.

Kuasa

Jawatankuasa diberi kuasa oleh Lembaga Pengarah untuk menyiasat sebarang perkara dalam terma rujukannya. Jawatankuasa juga diberi kuasa untuk mendapatkan sebarang maklumat yang diperlukan daripada mana-mana kakitangan dan semua kakitangan dikehendaki memberi kerjasama terhadap sebarang permintaan yang dibuat oleh Jawatankuasa.

Jawatankuasa hendaklah mempunyai akses penuh dan tanpa had kepada sebarang maklumat berkaitan Kumpulan dan hendaklah mempunyai sumber yang diperlukan untuk melaksanakan tugasnya. Jawatankuasa boleh mendapatkan nasihat perundangan atau profesional bebas luar lain yang dianggap perlu, dengan perbelanjaan ditanggung oleh Takaful Malaysia.

Jawatankuasa hendaklah mempunyai saluran komunikasi secara langsung dengan juruaudit dalaman dan juruaudit luar, kakitangan pengurusan risiko dan dengan Pengurusan Kanan Kumpulan dan boleh mengadakan mesyuarat dengan juruaudit luar, juruaudit dalaman atau kedua-duanya sekali, tanpa dihadiri oleh para pengarah dan kakitangan Syarikat, bila-bila dianggap perlu.

Sekiranya Jawatankuasa berpendapat bahawa sebarang perkara yang dilaporkan olehnya kepada Lembaga Pengarah masih belum diselesaikan dengan memuaskan sehingga menyebabkan pelanggaran Keperluan Penyenaraian Bursa Securities, Jawatankuasa hendaklah melaporkan dengan segera perkara tersebut kepada Bursa Securities.

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Laporan Jawatankuasa Audit

Audit Committee Report

Duties and Responsibilities

The primary objective of the Committee is to provide an independent oversight of Takaful Malaysia’s financial reporting and internal control system and ensuring checks and balances within Takaful Malaysia.

Therefore, the duties and responsibilities of the Committee include the followings:

• to review with the external auditor and report to the Board, the audit scope and plan, including any changes to the planned scope of the external audit plan and evaluation of the system of internal control.

• to review the adequacy of the internal audit scope and plan, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work.

• to review the external and internal audit reports to ensure that appropriate and prompt remedial action is taken by Management on major deficiencies in controls or procedures that are identified and reported to the Board.

• to review the major audit findings and Management’s response during the year with Management, external auditors and internal auditors, including the status of previous audit recommendations.

• to review the independence and objectivity of the external auditors and their services, including non-audit services and the professional fees, so as to ensure a proper balance between objectivity and value for money.

• to review the appointment, performance, audit fees and any question regarding the resignation or dismissal of external auditors before making recommendations to the Board.

• to review the quarterly and year-end financial statements, before the approval by the Board, focusing particularly on:

- changes in or implementation of major accounting policy and practice;

- significant adjustments and unusual event arising from the audit;

- the going concern assumption; and- compliance with accounting standards, Bursa Securities

and other legal requirements.

• to review the Chairman’s statement and corporate governance disclosures made in the Directors’ Report.

Tugas dan Tanggungjawab

Objektif utama Jawatankuasa adalah untuk menyediakan pengawasan bebas laporan kewangan Takaful Malaysia dan sistem kawalan dalaman serta memastikan semakan dan keseimbangan di dalam Takaful Malaysia.

Oleh yang demikian, tugas dan tanggungjawab Jawatankuasa adalah termasuk perkara-perkara berikut:

• mengkaji dengan juruaudit luar dan melaporkan kepada Lembaga Pengarah, skop dan pelan audit, termasuk sebarang perubahan kepada skop yang dirancang bagi pelan audit luar dan penilaian bagi sistem kawalan dalaman.

• mengkaji kecukupan skop dan pelan audit dalaman, fungsi-fungsi, daya saing dan sumber fungsi audit dalaman dan sama ada ianya mempunyai kuasa diperlukan untuk menjalankan tugas.

• mengkaji laporan audit dalaman dan luar bagi memastikan supaya tindakan segera dan sewajarnya diambil oleh pihak Pengurusan terhadap kekurangan utama dalam kawalan atau prosedur yang telah dikenal pasti dan dilaporkan kepada Lembaga Pengarah.

• mengkaji penemuan audit utama dan tindakan Pengurusan sepanjang tahun dengan pihak Pengurusan, juruaudit luar dan juruaudit dalaman termasuk status syor-syor audit yang terdahulu.

• mengkaji kebebasan dan objektif juruaudit luar dan perkhidmatan mereka, termasuk perkhidmatan bukan audit dan yuran profesional, untuk memastikan keseimbangan yang betul antara objektif dan nilai untuk wang.

• mengkaji pelantikan, prestasi, yuran audit dan sebarang persoalan berhubung peletakan jawatan atau pemecatan juruaudit luar sebelum memberi cadangan kepada Lembaga Pengarah.

• mengkaji keputusan suku tahunan dan penyata kewangan akhir tahun, sebelum kelulusan Lembaga Pengarah dengan menumpu terutamanya kepada:

- perubahan atau pelaksanaan dasar dan praktis perakaunan utama;

- pelarasan ketara dan peristiwa penting dan luar biasa timbul dari audit;

- andaian perniagaan berterusan; dan- pematuhan kepada standard kewangan, Bursa

Securities dan keperluan undang undang.

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Laporan Jawatankuasa Audit

Audit Committee Report

• to discuss problems and reservations arising from the interim and final audits, and any matter the auditor may wish to discuss (in the absence of Management where necessary).

• to review the Internal Audit Charter, budget and staffing of the Internal Audit Division.

• to review internal controls, including the scope of the internal audit governance, procedures, findings and recommend action to be taken by Management. The internal audit reports should not be subject to the clearance of the Chief Executive Officer / Group Managing Director or Executive Directors.

• to direct and where appropriate supervise any special projects or investigation considered necessary, and review investigation report on any major defalcation, frauds and thefts.

• to ensure that the accounts are prepared in a timely and accurate manner for regulatory, management and general reporting purposes, with regular reviews carried out on the adequacy of provisions made.

• to review any related party transaction and conflict of interest situation that may arise within the Company or the Group, including any transaction, procedure or course of conduct that raises questions of management integrity.

• to ensure that supervisory issues raised by Bank Negara Malaysia are resolved in a timely manner.

• to perform any other functions as may be agreed by the Board.

SUMMARY OF ACTIVITIES OF THE COMMITTEE

The activities undertaken by the Committee during the financial year under review include the following:

• Reviewed and monitored with the external auditors, the results and progress of the audit for the financial year ended 31 December 2013, the audit report and the Management letter, including Management’s response thereto.

• Discussed the re-appointment of external auditors for the financial years ended/ending 31 December 2014 and 2015, and assessed their sustainability and independence for reappointment.

• Reviewed the external auditors’ scope of work and audit plans for the financial year ended 31 December 2014. Prior to the audit, representatives from the external auditors presented their audit strategy and plan.

• mengkaji penyata Pengerusi dan pemberitahuan urus tadbir korporat yang dibuat dalam Laporan Pengarah.

• membincangkan masalah dan persoalan yang wujud dari audit interim dan akhir dan sebarang perkara yang ingin dibincangkan oleh juruaudit (tanpa kehadiran pihak Pengurusan jika perlu).

• mengkaji Piagam Audit Dalaman, belanjawan dan komposisi kakitangan Bahagian Audit Dalaman.

• mengkaji kawalan dalaman, termasuk skop urus tadbir, prosedur, penemuan audit dalaman dan mencadangkan tindakan yang perlu diambil oleh Pengurusan. Laporan audit dalaman tidak tertakluk kepada kebenaran daripada Ketua Pegawai Eksekutif / Pengarah Urusan Kumpulan atau Pengarah Eksekutif.

• mengarah dan sekiranya wajar, menyelia sebarang projek atau siasatan khas jika perlu, dan mengkaji laporan siasatan berkenaan sebarang penyalahgunaan, penipuan dan kecurian yang besar.

• memastikan akaun disediakan tepat pada masanya dan dengan cara yang tepat bagi tujuan pengawalseliaan, pengurusan dan laporan umum, dengan ulasan yang selalu dijalankan terhadap kecukupan peruntukan yang telah dibuat.

• mengkaji sebarang urusniaga pihak berkaitan dan situasi konflik kepentingan yang mungkin timbul dalam Syarikat atau Kumpulan, termasuk sebarang urusniaga, prosedur atau tatacara yang menimbulkan persoalan terhadap kewibawaan pihak Pengurusan.

• memastikan bahawa isu-isu penyeliaan yang dibangkitkan oleh Bank Negara Malaysia diselesaikan tepat pada masanya.

• melaksanakan sebarang fungsi lain yang mungkin dipersetujui oleh Lembaga Pengarah.

RINGKASAN AKTIVITI-AKTIVITI JAWATANKUASA

Aktiviti-aktiviti yang telah dijalankan oleh Jawatankuasa sepanjang tahun kewangan yang dikaji termasuk:

• Mengkaji dan memantau dengan juruaudit luar, keputusan dan perkembangan audit bagi tahun kewangan berakhir 31 Disember 2013, laporan audit dan surat Pengurusan, termasuk tindakan Pengurusan berkaitannya.

• Berbincang mengenai pelantikan semula juruaudit luar bagi tahun kewangan berakhir/akan berakhir 31 Disember 2014 dan 2015, dan menilai kesesuaian dan kebebasan mereka untuk pelantikan semula.

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Laporan Jawatankuasa Audit

Audit Committee Report

• Discussed the audit fees payable to the external auditors.

• Discussed with external auditors any matters that warrant the Board and Shareholders’ attention without the presence of the member of the Executive Directors and Management.

• Reviewed the Internal Audit Annual Audit Plan, 2013 Achievements and Revision to 2014 Annual Audit Plan.

• Reviewed the internal audit reports and special audit reports (i.e. on Finance, Operations, IT, Investment, etc) which highlighted the audit issues, recommendations and Management’s response thereto. Discussed with Management on actions taken or to be taken to improve the system of internal control based on improvement opportunities identified in the internal audit reports.

• Reviewed follow-up reports by the internal auditors on the status of actions taken by the Management on recommendations suggested in the audit reports.

• Discussed BNM’s supervisory letter and the action plans thereto.

• Reviewed follow-up reports by the internal auditors on BNM’s examination findings and status of actions taken by the Management on issues raised by BNM.

• Reviewed follow-up reports by the internal auditors on external auditors’ findings as set out in the Management letter and status of actions taken by the Management on issues raised by the external auditors.

• Reviewed the audited financial statements of the Company prior to submission to the Board for their consideration and approval. The review was to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act 1965 and the applicable approved accounting standards.

• Reviewed the Compliance reports including compliance risk assessment, prioritization and management policy, and quarterly compliance critical self assessment confirmation.

• Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s approval.

• Reviewed related party transactions within the Group.

• Mengkaji skop kerja dan rancangan audit juruaudit luar bagi tahun kewangan berakhir 31 Disember 2014. Sebelum audit dijalankan, wakil-wakil juruaudit luar telah membentangkan strategi dan rancangan audit.

• Berbincang mengenai yuran audit yang perlu dibayar kepada juruaudit luar.

• Berbincang dengan juruaudit luar berhubung sebarang perkara yang memerlukan perhatian Lembaga Pengarah dan Pemegang Saham tanpa kehadiran ahli Lembaga Pengarah Eksekutif dan pihak Pengurusan.

• Mengkaji Pelan Audit Tahunan Audit Dalaman, Pencapaian 2013 dan Semakan kepada Pelan Audit Tahunan 2014.

• Mengkaji laporan audit dalaman dan audit khas (seperti Laporan-Laporan Audit Kewangan, Operasi dan Teknologi Maklumat) yang menekankan isu-isu audit cadangan dan maklum balas pihak Pengurusan yang berkaitan. Berbincang dengan Pengurusan mengenai tindakan yang telah dan akan diambil untuk mempertingkatkan sistem kawalan dalaman berdasarkan peluang-peluang penambahbaikan yang telah dikenal pasti dalam laporan audit dalaman.

• Mengkaji laporan susulan oleh juruaudit dalaman mengenai status tindakan yang diambil oleh pihak Pengurusan terhadap cadangan yang diberikan dalam laporan audit.

• Membincangkan surat penyeliaan BNM dan pelan tindakan selanjutnya.

• Mengkaji laporan susulan oleh juruaudit dalaman berhubung isu-isu yang dibangkitkan berdasarkan penemuan daripada pemeriksaan oleh BNM dan status tindakan yang diambil oleh pihak Pengurusan mengenai isu yang dibangkitkan oleh BNM.

• Mengkaji laporan susulan oleh juruaudit dalaman berhubung isu yang dibangkitkan dalam surat Pengurusan oleh juruaudit luar dan status tindakan yang diambil oleh pihak Pengurusan mengenai isu tersebut.

• Mengkaji penyata kewangan Syarikat yang telah diaudit sebelum diserahkan kepada Lembaga Pengarah bagi pertimbangan dan kelulusan mereka. Kajian ini adalah untuk memastikan supaya penyata kewangan yang telah diaudit disediakan mengikut peruntukan Akta Syarikat 1965 dan piawaian perakaunan berkaitan yang diluluskan.

• Mengkaji laporan Pematuhan termasuk penaksiran pematuhan risiko, pengutamaan dan polisi pengurusan, dan pengesahan penaksiran sendiri pematuhan kritikal suku tahunan.

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Laporan Jawatankuasa Audit

Audit Committee Report

• Reviewed the disclosure statements in the Annual Report such as Corporate Governance Statement, Statement on Risk Management and Internal Control, Audit Committee Report and Chairman’s Statement in compliance with Bursa Securities Listing Requirements and Securities Commission.

• Reviewed the Investment-Linked Funds Annual Report.

INTERNAL AUDIT FUNCTION AND ACTIVITIES

The Internal Audit Division is independent of the activities or operations of other operating units and reports directly to the Audit Committee. The principal role of the division is to undertake independent regular and systematic reviews of the systems of internal controls so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. The internal audit practices a risk-based approach in its audit plan and examination.

It is the responsibility of the Internal Audit Division to provide the Committee with independent and objective reports on the state of internal control of the various operating units within the Group and the extent of compliance of the units with the Group’s established policies and procedures as well as relevant statutory requirements.

The following activities were undertaken by the Internal Audit Division during the financial year under review:

• Executed independent assurance role by performing scheduled reviews on the effectiveness, efficiency and economical of control mechanism to address risks and concerns in the areas of operations, financial, information technology, product development, investment and strategic functions on a risk based audit approach as set out in the Formalised Internal Audit Strategic Plan (FYE 2013 and 2014).

• Provided reasonable assurance on the extent of compliance with established policies and procedures as well as BNM statutory requirements and other regulatory bodies.

• Rendered advisory services to the Management of the Company and its subsidiaries.

• Recommended improvements to the business processes and enhancement to the existing system of internal controls.

• Conducted follow-up audit on status of actions taken by the Management on recommendations suggested in audit reports of internal auditors, external auditors, BNM examiners, etc.

• Mengkaji pengumuman keputusan kewangan suku tahunan yang belum diaudit sebelum disyorkan kepada Lembaga Pengarah untuk kelulusan.

• Mengkaji urusniaga pihak yang berkaitan dalam Kumpulan.

• Menyediakan bimbingan ke atas penyediaan penyata pendedahan dalam Laporan Tahunan seperti Penyata Urus Tadbir Korporat, Penyata Pengurusan Risiko dan Kawalan Dalaman, Laporan Jawatankuasa Audit dan Penyata Pengerusi dalam mematuhi Keperluan Penyenaraian Bursa Securities dan Suruhanjaya Sekuriti.

• Mengkaji Laporan Tahunan Dana Berkaitan Pelaburan.

FUNGSI DAN AKTIVITI-AKTIVITI AUDIT DALAMAN

Bahagian Audit Dalaman adalah bebas daripada aktiviti atau operasi unit-unit operasi lain dan melapor terus kepada Jawatankuasa Audit. Peranan utama bahagian ini adalah untuk menjalankan kajian sistem kawalan dalaman secara bebas, kerap dan sistematik supaya dapat memberi jaminan yang sewajarnya bahawa sistem tersebut mampu terus beroperasi secara berkesan dan memuaskan. Audit dalaman mengamalkan pendekatan berasaskan risiko dalam rancangan audit dan pemeriksaannya.

Adalah menjadi tanggungjawab Bahagian Audit Dalaman untuk menyediakan laporan bebas dan objektif kepada Jawatankuasa tentang status kawalan dalaman di pelbagai unit operasi dalam Kumpulan serta tahap pematuhan unit-unit tersebut terhadap dasar dan prosedur Kumpulan serta terhadap keperluan berkanun yang berkaitan.

Aktiviti-aktiviti berikut telah dijalankan oleh Bahagian Audit Dalaman dalam tahun kewangan yang dikaji:

• Melaksanakan peranan jaminan bebas dengan membuat ulasan kajian berjadual ke atas keberkesanan, kecekapan dan mekanisma kawalan ekonomi untuk mengutarakan risiko dan keutamaan dalam bidang operasi, kewangan, teknologi maklumat, pembangunan produk, pelaburan dan fungsi-fungsi strategik yang menggunapakai pendekatan audit berasaskan risiko seperti yang dinyatakan dalam Pelan Strategik Audit Dalaman Rasmi (Tahun Kewangan Berakhir 2013 dan 2014).

• Menyediakan jaminan yang munasabah ke atas tahap pematuhan polisi dan prosedur yang telah disediakan di samping keperluan statutori BNM dan badan-badan perundangan lain.

• Memberi khidmat nasihat kepada Pengurusan dan subsidiari Syarikat.

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Laporan Jawatankuasa Audit

Audit Committee Report

• Carried out special reviews and investigations as requested by Senior Management and endorsement from the Committee Chairman.

• Reviewed the adequacy and appropriateness of the internal controls and risk exposures in the new product packages based on the revised Product Development Framework (PDF).

• Provided guidance and advices to the Project Steering Committee for new and revised products/projects before launching.

• Conducted audit computer hardware, operating and application systems as well as the Information Communication Technology (ICT) network of Takaful Malaysia.

• Participated in tender and selection process and other Committees in the capacity of an observer.

• Conducted independent evaluation of the adequacy and relevance of Business Continuity Management (BCM) policy, strategies, procedures and testing of the Disaster Recovery Plan (DRP).

• Reviewed and compiled the updates on the Supervisory Concerns prior to submission to Bank Negara Malaysia.

• Reviewed the outsourcing activities for the Company.

• Assisted Management in preparing the Audit Committee Report and Statement on Risk Management and Internal Control for disclosure in the Annual Report.

Reports from the audit assignments are forwarded to the Management for attention and necessary corrective actions as recommended. The Management is responsible for ensuring that corrective actions on reported weaknesses are taken within the required time frame. The costs incurred in maintaining the Internal Audit function which is performed in-house for the financial year under review was approximately RM1.7 million comprising mainly salaries, travelling and accommodation expenses and subsistence allowance for audit assignments.

• Mencadangkan peningkatan ke atas proses perniagaan dan penambahbaikan bagi sistem kawalan dalaman yang sedia ada.

• Menjalankan audit susulan berhubung status tindakan yang diambil oleh Pengurusan berdasarkan cadangan yang dibuat dalam penemuan audit juruaudit dalaman, juruaudit luar, pegawai pemeriksa BNM dan lain-lain.

• Menjalankan semakan khas dan penyiasatan seperti yang diminta oleh Pengurusan Kanan dan pengesahan daripada Pengerusi Jawatankuasa.

• Mengkaji semula kecukupan dan kesesuaian kawalan dalaman dan pendedahan risiko di dalam pakej produk baru berdasarkan semakan semula Rangka Kerja Pembangunan Produk.

• Menyediakan bimbingan dan nasihat kepada Jawatankuasa Pemandu Projek sebelum pelancaran produk/projek baru dan lama.

• Menjalankan audit ke atas perkakasan komputer, sistem operasi dan aplikasi serta rangkaian Teknologi Komunikasi Maklumat (ICT) Takaful Malaysia.

• Menjadi pemerhati dalam tender dan proses pemilihannya dan dalam Jawatankuasa-jawatankuasa yang lain.

• Menjalankan penilaian bebas bagi menentukan kesempurnaan dan kesesuaian Pengurusan Kesinambungan Perniagaan (BCM) dasar, strategi, prosedur dan ujian Pelan Pemulihan Bencana (DRP).

• Menyemak dan mengumpul data-data terkini Supervisory Concern sebelum diserahkan kepada Bank Negara Malaysia.

• Mengkaji semula aktiviti-aktiviti perkhidmatan luar yang dilaksanakan oleh Syarikat.

• Membimbing Pengurusan dalam menyediakan Laporan Jawatankuasa Audit dan Penyata Kawalan Dalaman untuk dizahirkan dalam Laporan Tahunan.

Laporan daripada tugasan audit dikemukakan kepada pihak Pengurusan untuk perhatian dan tindakan pembetulan yang perlu seperti yang dicadangkan. Pihak Pengurusan bertanggungjawab memastikan tindakan pembetulan terhadap kelemahan yang dilapor dilaksanakan dalam jangka masa yang ditetapkan. Jumlah kos yang terbabit bagi mengekalkan fungsi Audit Dalaman yang dilakukan secara dalaman bagi tahun kewangan yang dikaji adalah lebih kurang RM1.7 juta di mana ia merangkumi sebahagian besarnya adalah gaji, elaun perjalanan dan penginapan dan elaun sara hidup bagi menjalankan tugasan audit.

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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

This statement is made pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad with regard to the Group’s compliance with the Principles and Recommendations provisions relating to internal controls as stipulated in the Malaysian Code on Corporate Governance (“the Code”).

BOARD RESPONSIBILITY

The Board acknowledges its overall responsibility for the internal control environment and its effectiveness in safeguarding shareholders’ interests and Group’s assets.

The system of internal control addresses the need for an effective and efficient business operations, sound financial reporting and control procedures, and compliance with relevant laws and regulations. The Board also recognises that reviewing the Group’s system of internal control is a concerted and continuing process, designed to manage and appropriately mitigate the risk of failure in achieving business objectives. Accordingly, the Group’s system of internal control provides reasonable assurance against material misstatement or loss. The Management has given the assurance to the Board on the adequacy and effectiveness of the Group’s risk management and internal control system.

KEY INTERNAL CONTROL PROCESSES

The key internal control processes that the Board has established in reviewing the adequacy and integrity of the system of internal control, including compliance with applicable laws, regulations, rules, directives and guidelines, are as follows:

RISK MANAGEMENT FRAMEWORK

The Board acknowledges the identification and the management of risks involved play an important and integral part in achieving the Group’s business objectives and the management of its daily operations.

In pursuing these objectives, the Board has put in place an Operational Risk Management (“ORM”) framework within the Company to ensure there is an on-going process of identifying, evaluating, monitoring and managing the significant risk exposures surrounding its business operations. The Group has established a risk management process whereby the roles and responsibility of Board Risk Committee (“BRC”) is to provide effective oversight on company-wide risks through quarterly Board Risk Committee meetings.

The company reviews the Risk Management framework and where necessary, enhancements were made to improve its risk management practices. Operational Loss Incidences reporting based on the BNM’s ORION requirement are reported to BNM, BRC and the Board to act as a gauge on the effectiveness of the ORM in place.

PENYATA PENGURUSAN RISIKO DAN KAWALAN DALAMAN

Penyata ini disediakan menurut Keperluan Penyenaraian Pasaran Utama Bursa Malaysia Securities Berhad berkaitan dengan Pematuhan Kumpulan terhadap Prinsip dan Cadangan peruntukan-peruntukan Amalan Terbaik yang berkaitan dengan kawalan dalaman seperti yang digariskan di dalam Kod Urus Tadbir Korporat Malaysia (“Kod”).

TANGGUNGJAWAB LEMBAGA PENGARAH

Lembaga Pengarah mengiktiraf bahawa mereka bertanggungjawab sepenuhnya terhadap persekitaran kawalan dalaman dan keberkesanannya dalam menjaga kepentingan-kepentingan pemegang-pemegang saham dan aset-aset Kumpulan.

Sistem kawalan dalaman turut memenuhi keperluan untuk operasi-operasi perniagaan yang berkesan dan cekap, laporan kewangan yang baik dan prosedur-prosedur kawalan, serta pematuhan terhadap undang-undang dan peraturan-peraturan yang berkaitan. Lembaga Pengarah turut mengakui bahawa penyemakan terhadap system kawalan dalaman Kumpulan adalah usaha yang jitu dan berterusan, dirangka untuk mengurus dan menghalang risiko kegagalan untuk mencapai objektif-objektif perniagaan. Sewajarnya, sistem kawalan dalaman Kumpulan turut memberikan jaminan yang munasabah ke atas salah nyata atau kerugian yang ketara. Pihak Pengurusan telah memberi jaminan kepada Lembaga Pengarah berkaitan kecukupan dan keberkesanan pengurusan risiko Kumpulan dan sistem kawalan dalaman.

PROSES-PROSES KAWALAN DALAMAN UTAMA

Proses-proses kawalan dalaman utama yang telah ditubuhkan oleh Lembaga Pengarah dalam menyemak kecukupan serta integriti sistem kawalan dalaman termasuk pematuhan kepada undang-undang, peraturan-peraturan, syarat-syarat, arahan-arahan dan garis panduan-garis panduan adalah seperti berikut :

RANGKA KERJA PENGURUSAN RISIKO

Lembaga Pengarah mengiktiraf bahawa mengenal pasti dan mengurus risiko yang berkaitan adalah perkara penting dan merupakan asas untuk mencapai objektif perniagaan Kumpulan serta pengendalian operasi hariannya.

Bagi mencapai objektif tersebut, Lembaga Pengarah telah menyediakan Rangka Kerja Pengurusan Risiko Operasi (“ORM”) dalam Syarikat, bagi memastikan supaya wujud proses yang berterusan bagi mengenalpasti, menilai, memantau dan mengurus pendedahan risiko berkaitan yang sememangnya lazim dalam operasi perniagaannya. Kumpulan telah menubuhkan proses pengurusan risiko yang berperanan untuk bertanggungjawab terhadap risiko Syarikat melalui Lembaga Pengarah Jawatankuasa Risiko (“BRC”) bagi menyediakan pemantauan berkesan terhadap keseluruhan pengurusan risiko syarikat melalui mesyuarat suku tahunannya.

Syarikat telah mengemaskini Rangka Kerja Pengurusan Risiko dan bila perlu, penambahbaikan telah dibuat untuk meningkatkan amalan pengurusan risiko. Insiden Kerugian Operasi berdasarkan keperluan ORION dari Bank Negara Malaysia (“BNM”) dilaporkan kepada BNM, BRC dan Lembaga Pengarah sebagai ukuran keberkesanan ORM.

Penyata Pengurusan Risiko dan Kawalan DalamanStatement on Risk Management and Internal Control

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Penyata Pengurusan Risiko dan Kawalan Dalaman

Statement on Risk Management and Internal Control

The Company’s risk appetite statement provides a decision-making framework for the strategic and operational treatment of risk, which facilitates a risk-aligned strategic planning process. It is intended to help the Company in making forward-looking and well-informed strategic decisions that manages risk prudently and yet remain profitable to its shareholder.

As a risk mitigation towards disasters and/or major disruptions; the Company has also established a Business Continuity Management (“BCM”) Framework. The BCM Manual was developed to facilitate effective response to business disruption and to ensure that the Company is capable of responding to such incidents in an organised and timely manner. Business Continuity Plans are developed and tested for functionality and Disaster Recovery Plans are tested twice a year on the production main server. During the financial year, a business continuity plan was implemented at Head Office, to establish the Company’s readiness to maintain critical operations when faced with possible disasters and/or disruptions.

The Risk and Capital Management Framework has been revised in August 2014 to be consistent with implementation of Risk Based Capital Framework for Takaful Operators (“RBCT”) and the Company’s Individual Target Capital Level (“ITCL”). The company’s Capital Adequacy Ratios (“CAR”) and Stress Testing Reports are updated on a quarterly and semi-annually basis respectively to the Board of Directors, as required under Risk and Capital Management Framework and Asset Liability Management Framework.

PARTICIPANT RISK FUND (“PRF”) SURPLUS MANAGEMENT GOVERNANCE FRAMEWORK

The Board has approved the PRF Surplus Management Governance Framework in November 2013 to provide the governance process in managing the participant risk fund surplus position. This Framework forms part of the Company’s corporate governance process to promote prudent management and good risk management practices of takaful risk funds to enhance the funds’ financial resilience and protect the interest of participants.

INTERNAL AUDIT FUNCTION

The Internal Audit Division (“IAD”) assists the Board and Audit Committee in the discharge of their responsibilities. The internal audit function provides assurance on the efficiency and effectiveness of the internal control systems implemented by management. An annual audit plan is developed based on an assessment of risk priorities, exposures, and business strategies of the Group. IAD also investigates incidents of fraud, malpractices and makes necessary recommendation to the Audit Committee to impede recurrence. The implementation of management action plans to address the control lapses noted during the financial period are monitored through follow-up reviews.

Penyata selera-risiko Syarikat menyediakan satu rangka kerja pengambilan keputusan bagi risiko strategik dan operasi, yang memudahkan proses perancangan strategik sejajar dengan risiko. Ia bertujuan membantu Syarikat dalam membuat keputusan strategik yang berwawasan dan bermaklumat bagi pengurusan risiko secara berhemat dan lagi kekal menguntungkan untuk pemegang saham.

Sebagai pencegahan risiko terhadap bencana dan / atau gangguan utama, Syarikat telah mewujudkan Rangka Kerja Pengurusan Kesinambungan Perniagaan (“BCM”). Pelan Kesinambungan Perniagaan telah dibangunkan untuk memudahkan tindak balas yang berkesan terhadap gangguan perniagaan dan untuk memastikan bahawa Syarikat mampu bertindak balas terhadap insiden itu mengikut cara yang cepat dan tepat pada masanya. Pelan Pemulihan Perniagaan telah dibangunkan dan diuji fungsinya sebanyak dua kali setahun pada sistem pelayan pengeluaran yang utama. Dalam tahun kewangan ini, pelan kesinambungan perniagaan telah dilaksanakan di Ibu Pejabat bagi mempertingkatkan kesediaan Syarikat untuk mengekalkan operasi kritikal apabila berhadapan dengan bencana dan / atau gangguan.

Rangka Kerja Pengurusan Risiko dan Modal telah disemak semula pada bulan Ogos 2014 selaras dengan pelaksanaan Rangka Kerja Modal Berasaskan Risiko bagi Pengendali Takaful (“RBCT”) dan Tahap Sasaran Modal Individu (“ITCL”) Syarikat. Nisbah Kecukupan Modal (“CAR”) dan Laporan Ujian Tekanan Syarikat dikemaskini kepada Lembaga Pengarah setiap suku tahun dan setengah tahun seperti yang dikehendaki dalam Rangka Kerja Pengurusan Risiko dan Modal dan Rangka Kerja Pengurusan Aset Liabiliti.

RANGKA KERJA TADBIR URUS PENGURUSAN LEBIHAN DANA RISIKO PESERTA (“PRF”)

Lembaga Pengarah telah meluluskan Rangka Kerja Tadbir Urus Pengurusan Lebihan Dana Risiko Peserta (“PRF”) pada November 2013 dalam persiapan untuk menyediakan proses tadbir urus dalam menguruskan kedudukan lebihan dana risiko peserta. Rangka Kerja ini membentuk sebahagian daripada proses tadbir urus korporat Syarikat untuk menggalakkan pengurusan berhemat dan amalan pengurusan risiko yang baik terhadap dana risiko takaful bagi meningkatkan daya tahan dana kewangan dan melindungi kepentingan peserta.

FUNGSI AUDIT DALAMAN

Bahagian Audit Dalaman (“IAD”) membantu Lembaga Pengarah dan Jawatankuasa Audit dalam menjalankan tanggungjawab mereka. Audit Dalaman berfungsi untuk memberikan jaminan ke atas keberkesanan dan kelancaran sistem kawalan dalaman yang dilaksana oleh pihak pengurusan. Pelan Audit Tahunan dibangunkan dari penilaian terhadap kepentingan risiko, pendedahan, dan strategi Kumpulan. IAD juga menyiasat kejadian penipuan, pemalsuan serta memberikan cadangan-cadangan kepada Jawatankuasa Audit untuk menghalang pengulangan semula. Pelaksanaan pelan tindakan pengurusan yang dirangka untuk menghalang kelemahan kawalan yang telah diperakui sepanjang tempoh kewangan yang dipantau melalui kajian susulan.

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The Committee reviews and approves the Annual Audit Plan, reports and findings including the follow-ups of the Internal Auditors. They also review the actions taken on internal control issues identified in reports prepared by External Auditors and Regulatory Bodies during their meetings and consider the impact on the effectiveness and adequacy of the Group’s internal control system.

KEY ELEMENTS OF INTERNAL CONTROL

The key elements of internal control that the Board has established which provide effective internal controls including compliance with applicable laws, regulations and guidelines are as follows:

• Organisational Structure

The Group has established a defined organisational structure with lines of responsibility and accountability with a defined delegation of authority of Committees of the Board and Management.

• Limit of Authorities

Limit of authorities has been revised and approved by the Board in November 2014 and implemented in the areas of Underwriting, Claims approval, and other business process.

• Standard Operating Procedures

The Standard Operating Procedures that govern the key business processes such as finance, actuarial, human resources, claims, investments and etc, are in place within the organisation.

• Product Development Framework

In March 2012, the Company was granted the approval by Bank Negara Malaysia (“BNM”) to adopt “launch-and-file” system for new products. In view of the “launch-and-file” system granted to the Company, the policies and procedures within the Product Development Framework have been reviewed to align with BNM’s supervisory expectations under the Introduction of New Product Guidelines.

• Compliance Function

The Company has established Compliance Framework setting out the compliance governance and methodology. All compliances requirements, matrixes, SOPs and guidelines are posted in the Corporate Portal – Compliance Division.

• Whistle Blowing Policy and Fraud and Integrity Policy

The Board has also approved the Whistle Blowing Policy in response to the Whistleblower Protection Act, 2010 as well as Fraud and Integrity Policy in August 2011 which is essential in promoting ethical conduct within the Group.

Penyata Pengurusan Risiko dan Kawalan Dalaman

Statement on Risk Management and Internal Control

Jawatankuasa juga mengkaji dan meluluskan Pelan Audit Tahunan, laporan-laporan serta penemuan termasuk susulan oleh Audit Dalaman. Mereka juga mengkaji tindakan yang diambil ke atas penemuan kawalan dalaman yang dikenalpasti di dalam laporan-laporan yang disediakan oleh juruaudit luar dan badan-badan penguatkuasaan semasa mesyuarat-mesyuarat mereka serta menilai kesan ke atas keberkesanan dan kecukupan sistem kawalan dalaman Kumpulan.

UNSUR-UNSUR KAWALAN DALAMAN UTAMA

Unsur-unsur utama kawalan dalaman yang diwujudkan oleh Lembaga Pengarah bagi menyediakan kawalan dalaman yang berkesan termasuk pematuhan terhadap undang-undang, peraturan-peraturan dan garis panduan garis panduan adalah seperti berikut:

• Struktur Organisasi

Kumpulan telah membentuk sebuah struktur organisasi yang tersusun dengan had-had tanggungjawab dan akauntabiliti yang jelas serta pengagihan kuasa yang bertakrif kepada Jawatankuasa-jawatankuasa Lembaga Pengarah dan Pengurusan.

• Had Kuasa

Had kuasa yang disemak telah diluluskan oleh Lembaga Pengarah pada November 2014 dan telah dilaksanakan dalam bidang Pengunderaitan, kelulusan Tuntutan dan proses perniagaan yang lain.

• Prosedur Operasi Piawai

Prosedur Operasi Piawai yang mengawal seluruh proses perniagaan seperti kewangan aktuari, sumber manusia, tuntutan, pelaburan dan lain-lain telah ditempatkan di dalam organisasi.

• Rangka Kerja Pembangunan Produk

Pada bulan Mac 2012, Syarikat telah mendapat kelulusan daripada BNM untuk mengamalkan system “pelancaran dan fail” untuk produk-produk baru. Memandangkan sistem ”pelancaran dan fail” telah diberikan kepada Syarikat, polisi dan prosedur yang merangkumi Rangka Kerja Pembangunan Produk telah dikaji semula berdasarkan jangkaan penyeliaan daripada BNM di bawah Pengenalan Garis Panduan Produk Baru.

• Fungsi Pematuhan

Syarikat telah mewujudkan Piagam Pematuhan dan Rangka Kerja yang telah ditubuhkan yang menggariskan pematuhan tadbir urus dan metodologi. Semua kehendak pematuhan, matrik, prosedur operasi piawai dan garis panduan telah di muatkan dalam Portal Korporat – Bahagian Pematuhan.

• Polisi Pemberitahuan Maklumat dan Polisi Penipuan dan Integriti

Lembaga Pengarah juga telah meluluskan Polisi Pemberitahuan Maklumat sebagai respons kepada Akta Perlindungan Pemberi Maklumat, 2010 serta Polisi Penipuan dan Integriti pada Ogos 2011 yang penting dalam menggalakkan kelakuan beretika dalam Kumpulan.

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• Shariah Governance Framework

The Shariah Governance framework was revised and approved by the Shariah Advisory Body (“SAB”) and the Board on 8 October 2013 and 22 November 2013 respectively. The framework is designed to meet the following objectives:

i. To set out the Company’s Shariah governance structures and arrangements to ensure that all its operations and business activities are in accordance with Shariah.

ii. To provide a comprehensive guidance to the Board, SAB and Management in discharging its duties in matters relating to Shariah.

iii. To outline the functions relating to Shariah review, Shariah audit, Shariah advisory & research and Shariah risk management processes.

• Assets and Liability Management Framework

The objective is to establish a framework for managing and monitoring the asset-liability risk to enable the Company to respond adequately to the relevant changes in new environment, to identify the opportunities and to avoid the threats, with a view to ensuring stable development and protection of interests of all stakeholders. Various investment limits are set to enhance investment controls after considering the Company’s solvency position and its risk tolerance.

• Takaful Operational Framework

The Company has established a framework to govern and document the operational models adopted, fund segregation policy of takaful funds, policy on investment strategy and method used for the calculation of investment profit for participant investment fund, policy on recognition of surplus/deficit and its allocation/distribution, policy on deficit rectification mechanism including repayment of qard, management of income from takaful business, and allowable expenses charges to takaful funds.

• Surplus Management and Distribution Policy

In managing the takaful funds, takaful operators are expected to manage the interest of various stakeholders without compromising prudence. This policy serves as a guide to the Company in managing the surplus position and surplus distribution to participants and shareholders by providing key principles, considerations and practices to ensure good maintenance of fund solvency and financial resilience, and to safeguard the interests of participants and equitable treatment of participants.

The annual distribution of surplus shall be endorsed by the Shariah Advisory Body and Board of Directors.

Penyata Pengurusan Risiko dan Kawalan Dalaman

Statement on Risk Management and Internal Control

• Rangka Kerja Tadbir Urus Syariah

Rangka Kerja Tadbir Urus Syariah telah disemak semula dan diluluskan oleh Badan Penasihat Syariah (“BPS”) dan Lembaga Pengarah masing-masing pada 8 Oktober 2013 dan 22 November 2013. Rangka kerja ini direka untuk memenuhi objektif berikut:

i. Untuk menetapkan struktur dan susunan tadbir urus Syariah Syarikat, bagi memastikan semua operasi dan aktiviti adalah selaras dengan Syariah.

ii. Untuk menyediakan satu panduan yang komprehensif kepada Lembaga Pengarah, BPS dan Pengurusan dalam menjalankan tugasnya dalam hal-hal yang berkaitan dengan Syariah.

iii. Untuk menggariskan fungsi yang berkaitan dengan kajian Syariah, audit Syariah, penasihat dan penyelidikan Syariah dan proses-proses pengurusan risiko berkaitan Syariah.

• Rangka Kerja Pengurusan Aset Liabiliti

Objektifnya adalah untuk mewujudkan sebuah rangka kerja untuk mengurus dan memantau risiko asset liabiliti bagi membolehkan Syarikat untuk bertindak balas secukupnya kepada perubahan yang berkaitan dalam persekitaran baru, untuk mengenal pasti peluang dan untuk mengelakkan ancaman, dengan tujuan untuk memastikan pembangunan yang stabil dan perlindungan kepentingan semua pemegang kepentingan. Pelbagai had pelaburan ditetapkan untuk meningkatkan kawalan pelaburan selepas menimbangkan kedudukan kesolvenan Syarikat dan toleransi risiko.

• Rangka Kerja Operasi Takaful

Syarikat telah mewujudkan satu rangka kerja untuk mentadbir dan mendokumentasi model operasi yang diguna-pakai, polisi pengasingan dana-dana takaful, polisi mengenai strategi pelaburan dan kaedah yang digunakan untuk pengiraan keuntungan pelaburan bagi dana pelaburan peserta, polisi pengiktirafan lebihan / defisit dan peruntukan / pengedaran, polisi mengenai mekanisma pembetulan defisit termasuk pembayaran balik qardh, pengurusan pendapatan daripada perniagaan takaful dan perbelanjaan dan caj-caj ke atas dana takaful yang dibenarkan.

• Pengurusan Lebihan dan Dasar Pengagihan

Dalam menguruskan dana-dana takaful, pengendali-pengendali takaful dijangka akan menguruskan kepentingan pelbagai pihak berkepentingan tanpa menjejaskan sikap berhemah. Polisi ini berfungsi sebagai panduan kepada Syarikat dalam menguruskan kedudukan lebihan dan pembahagian lebihan kepada peserta dan pemegang saham dengan menyediakan prinsip, pertimbangan dan amalan yang utama untuk memastikan penyelenggaraan kesolvenan dana yang baik dan daya tahan kewangan dan untuk melindungi kepentingan peserta dan memberikan layanan yang saksama kepada semua peserta-peserta.

Pengagihan lebihan tahunan hendaklah disahkan oleh Badan Penasihat Syariah dan Lembaga Pengarah.

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• Business / Marketing Plan and Budget Process

The Group’s annual business / marketing plan and budget are submitted to the Board for approval.

• Financial Reporting

Management accounts / reports are tabled to the Board for review and discussion. Financial budget and projections are tabled to the Board for approval. The public release of quarterly reports is made after reviewed by the Audit Committee and approved by the Board. On-going efforts are in place to address financial control issues or risks, which include strengthening the financial closing and reconciliation process.

• Information Technology System

IT Steering Committee

An IT Steering Committee has been established to oversee the development of Information Technology (“IT”) that provides management an oversight of the IT function within the Company. IT Steering committee is chaired by the Group Managing Director. The committee is responsible for authorising major IT expenditures within the approved limits, monitoring approved IT projects, formulating IT policies and IT strategic plans.

Data Governance Framework

As prescribed by BNM guidelines, the data governance framework was established in November 2009. The framework covers processes and related controls over data security and integrity.

IT Project Steering Committee

IT Project Steering Committee is chaired by the Group Managing Director. The Committee consists of representatives from IT and business users, oversees the progress and development of business related IT project during the financial period.

CONCLUSION

Although control lapses were identified for certain business processes within the Group, there were no significant control failures or weaknesses that has resulted in material loss that requires disclosure in the Group’s annual report for the financial period under review.

This statement is made in accordance with the Board of Directors resolution dated 12 March 2015.

Penyata Pengurusan Risiko dan Kawalan Dalaman

Statement on Risk Management and Internal Control

• Pelan Perniagaan / Pemasaran dan Proses Belanjawan

Pelan perniagaan / pemasaran serta belanjawan tahunan Kumpulan dibentangkan kepada Lembaga Pengarah untuk kelulusan.

• Laporan Kewangan

Laporan / akaun pengurusan dibentangkan kepada Lembaga Pengarah untuk dikaji dan dibincangkan. Bajet dan unjuran kewangan dibentangkan kepada Lembaga Pengarah untuk kelulusan.

Penyebaran laporan suku tahunan kepada orang awam dilakukan selepas ia dikaji oleh Jawatankuasa Audit dan diluluskan oleh Lembaga Pengarah. Usaha berterusan turut dijalankan untuk menangani isu-isu kawalan kewangan atau risiko-risiko termasuk pengukuhan terhadap proses penutupan kewangan dan pelarasan.

• Sistem Teknologi Maklumat

Jawatankuasa Peneraju IT

Jawatankuasa Peneraju IT telah ditubuhkan untuk mengawasi pembangunan Teknologi Maklumat (“IT”) yang menyediakan pihak pengurusan pengawalan ke atas fungsi IT di dalam Syarikat. Jawatankuasa Peneraju IT dipengerusikan oleh Pengarah Urusan Kumpulan. Jawatankuasa ini bertanggungjawab untuk meluluskan perbelanjaan berkaitan IT yang besar mengikut had yang telah ditetapkan dan memantau projek yang telah diluluskan, merumuskan polisi dan pelan strategik IT.

Rangka Kerja Pengurusan Data

Seperti yang ditentukan oleh Garis Panduan BNM, Rangka Kerja Pengurusan Data telah ditubuhkan pada November 2009. Rangka Kerja ini merangkumi proses-proses serta kawalan-kawalan yang berkaitan dengan sekuriti dan integriti data.

Jawatankuasa Peneraju Projek IT

Jawatankuasa Peneraju Projek IT dipengerusikan oleh Pengarah Urusan Kumpulan. Jawatankuasa yang terdiri dari wakil-wakil daripada IT dan pengguna perniagaan, mengawasi prestasi dan pembangunan projek IT yang berkaitan dengan perniagaan sepanjang tempoh kewangan.

KESIMPULAN

Walaupun terdapat kelemahan kawalan yang dikenal pasti dalam proses-proses perniagaan tertentu dalam Kumpulan, namun tiada sebarang kegagalan kawalan atau kelemahan ketara yang menyebabkan kerugian besar yang memerlukan pendedahan dalam laporan tahunan Kumpulan bagi tempoh kewangan yang dikaji.

Penyata ini disediakan selaras dengan resolusi Lembaga Pengarah bertarikh 12 Mac 2015.

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Maklumat Pematuhan TambahanAdditional Compliance Information

1. UTILISATION OF PROCEEDS

There were no proceeds raised / utilised by Takaful Malaysia from corporate proposals during the financial year.

2. SHARE BUYBACKS

There were no share buybacks by Takaful Malaysia during the financial year.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

No options, warrants or convertible securities were issued by Takaful Malaysia during the financial year.

4. AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR) PROGRAMME

Takaful Malaysia did not sponsor any ADR or GDR programme during the financial year.

5. IMPOSITIONS OF SANCTIONS / PENALTIES

There were no sanctions and/or penalties imposed on Takaful Malaysia and its subsidiaries, Directors or Management by relevant regulatory bodies during the financial year.

6. NON-AUDIT FEES

There were RM175,000 non-audit fees paid to external auditors during the financial year.

7. VARIATION IN RESULTS

There was no significant variation (differing by 10% or more) between the results for the financial year and the unaudited results previously announced. Takaful Malaysia did not release any profit estimate, forecast or projections for the financial year.

8. PROFIT GUARANTEE

There was no profit guarantee given by Takaful Malaysia during the financial year.

9. MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS

There were no material contracts entered into by Takaful Malaysia and its subsidiary companies involving Directors and major Shareholders’ interest, either still subsisting at the end of the financial year or entered into since the end of the previous financial year except for related parties transactions disclosed in Note 42 to the financial statements.

1. PENGGUNAAN DANA

Tiada dana yang diterbitkan / digunakan oleh Takaful Malaysia daripada cadangan korporat sepanjang tahun kewangan.

2. PEMBELIAN BALIK SAHAM

Tiada sebarang pembelian balik saham dilakukan oleh Takaful Malaysia sepanjang tahun kewangan.

3. OPSYEN, WARAN ATAU SEKURITI BOLEH TUKAR

Tiada sebarang opsyen, waran atau sekuriti boleh tukar yang diterbitkan oleh Takaful Malaysia sepanjang tahun kewangan.

4. PROGRAM AMERICAN DEPOSITORY RECEIPT (ADR) ATAU GLOBAL DEPOSITORY RECEIPT (GDR)

Takaful Malaysia tidak menaja sebarang program ADR atau GDR sepanjang tahun kewangan.

5. PENGENAAN SEKATAN / PENALTI

Tiada sekatan dan/atau penalti yang dikenakan ke atas Takaful Malaysia dan subsidiari, para Pengarah atau Pengurusannya oleh pihak berkuasa berkaitan sepanjang tahun kewangan.

6. YURAN BUKAN AUDIT

Yuran bukan audit yang dibayar kepada juruaudit luar pada tahun kewangan berjumlah RM175,000.

7. VARIASI KEPUTUSAN

Tiada variasi ketara (berbeza sebanyak 10% atau lebih) antara keputusan untuk tahun kewangan dan keputusan tidak diaudit yang diumumkan sebelumnya. Takaful Malaysia tidak mengeluarkan sebarang anggaran, ramalan atau unjuran keuntungan bagi tahun kewangan.

8. JAMINAN KEUNTUNGAN

Tiada jaminan keuntungan diberi oleh Takaful Malaysia sepanjang tahun kewangan.

9. KONTRAK PENTING MELIBATKAN PENGARAH DAN PEMEGANG SAHAM UTAMA

Tiada kontrak penting yang dimeterai oleh Takaful Malaysia dan syarikat-syarikat subsidiarinya yang membabitkan kepentingan para Pengarah dan Pemegang Saham utama, sama ada yang masih wujud pada akhir tahun kewangan atau yang dimeterai sejak akhir tahun kewangan sebelumnya kecuali untuk urus niaga pihak berkaitan yang dinyatakan dalam Nota 42 kepada penyata kewangan.

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Maklumat Pematuhan Tambahan

Additional Compliance Information

10. URUSNIAGA PIHAK BERKAITAN YANG BERULANG / RECURRENT RELATED PARTY TRANSACTIONS

Bentuk Urusniaga

Pihak Berkaitan yang Berurusniaga

Pihak Berkaitan, kepentingan mereka dan bentuk hubungan dengan Kumpulan Takaful Malaysia

Nilai Urusniaga Sebenar dari 1 Januari 2014 hingga 31 Disember 2014 (RM’000)

Sewa bangunanpejabat yangdibayar kepadaTakaful Malaysiaoleh Bank IslamMalaysia Berhad(BIMB)

BIMB BIMB adalah subsidiari 100% milik BHB. Lembaga Tabung Haji (LTH) adalah pemegang saham utama BHB dan BHB adalah pemegang saham utama Takaful Malaysia yang memegang kepentingan ekuiti sebanyak 60.31% dalam Syarikat pada 31 Disember 2014.

Tan Sri Ismee Ismail adalah Pengarah BHB dan BIMB dan juga merupakan Pengarah Takaful Malaysia, yang dilantik oleh BHB sementara Dato’ Johan Abdullah adalah Pengarah BHB, BIMB dan Takaful Malaysia, yang dilantik oleh LTH. Tan Sri Ismee Ismail dan Dato’ Johan Abdullah tidak mempunyai sebarang kepentingan langsung atau tidak langsung dalam BHB, BIMB dan Takaful Malaysia.

Datuk Rozaida Omar adalah Pengarah BHB dan juga Pengarah Takaful Malaysia, yang dilantik oleh LTH. Dato’ Sri Mohamed Hassan Kamil adalah Pengarah Takaful Malaysia, yang dilantik oleh BHB. Datuk Rozaida Omar tidak mempunyai sebarang kepentingan langsung atau tidak langsung dalam BHB dan Takaful Malaysia. Dato’ Sri Mohamed Hassan Kamil mempunyai kepentingan ekuiti secara langsung sebanyak 0.04% dalam Syarikat tetapi tidak mempunyai sebarang kepentingan langsung atau tidak langsung dalam BHB.

2,632

Nature of Transactions

Related Parties Transacted with

Related Parties, their interests and nature of relationships with the Takaful Malaysia Group

Actual Transaction Value from 1 January 2014 to 31 December 2014 (RM’000)

Rental of officepremises payableto TakafulMalaysia by BankIslam MalaysiaBerhad (BIMB)

BIMB BIMB is a 100% owned subsidiary of BHB. Lembaga Tabung Haji (LTH) is a major shareholder of BHB and BHB is a major shareholder of Takaful Malaysia holding an equity interest of 60.31% in the Company as at 31 December 2014.

Tan Sri Ismee Ismail is a Director in BHB and BIMB and is also a Director in Takaful Malaysia, nominated by BHB while Dato’ Johan Abdullah is a Director in BHB, BIMB and Takaful Malaysia, nominated by LTH. Tan Sri Ismee Ismail and Dato’ Johan Abdullah do not have any direct or indirect interest in BHB, BIMB and Takaful Malaysia.

Datuk Rozaida Omar is a Director in BHB and is also a Director in Takaful Malaysia, nominated by LTH. Dato’ Sri Mohamed Hassan Kamil is a Director in Takaful Malaysia, nominated by BHB. Datuk Rozaida Omar does not have any direct or indirect interest in BHB and Takaful Malaysia. Dato’ Sri Mohamed Hassan Kamil has a direct equity interest of 0.04% in the Company but does not have any direct or indirect interest in BHB.

2,632

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Penyata PengerusiChairman’s Statement

Para Pemegang Saham,

Saya dengan sukacitanya membentangkan Laporan Tahunan Syarikat Takaful Malaysia Berhad bagi tahun kewangan berakhir 2014.Pada tahun 2014, ekonomi dunia menunjukkan tanda-tanda pemulihan, tetapi lebih rendah daripada jangkaan awal. Ekonomi dunia berkembang pada kadar sederhana iaitu 2.6% pada tahun kewangan ini. Kuasa ekonomi utama dunia pula bukan sahaja berhadapan dengan ketegangan geopolitik serantau dan domestik, malah turut dibelenggu oleh suasana kewangan global yang semakin tidak menentu. Pemulihan ekonomi negara-negara membangun di zon Eropah lembap disebabkan oleh nisbah hutang tinggi yang berterusan, pelaburan awam dan swasta yang lemah serta kebimbangan terhadap deflasi. Walau bagaimanapun, di sebalik keadaan turun naik yang ketara ini, Amerika Syarikat menampilkan kadar pemulihan yang lebih pantas didorong oleh asas ekonomi yang kukuh disokong oleh peningkatan keadaan pekerjaan, pasaran perumahan dan kewangan yang baik.

Dear Shareholders,

It is my pleasure to present the Annual Report of Syarikat Takaful Malaysia Berhad for the financial year ended 2014.In 2014, the global economy staged some measure of a recovery, but fell short of initial expectations. The global economy expanded at a moderate pace of 2.6% during the financial year. The major global economies encountered not only regional and domestic geopolitical tensions, but were also hampered by increased global financial uncertainties. The economic situation in developed countries within the Euro zone experienced a slow recovery due to persistent high debt ratios, weakened public and private investments and the fear of deflation. However, despite some erratic fluctuations, the United States experienced a faster revival rate bolstered by strong economic fundamentals supported by a step up in employment, the housing market and financial conditions.

TAN SRI ISMEE ISMAIL

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Penyata Pengerusi

Chairman’s Statement

In emerging markets, economic growth slowed down especially so in China where the growth dipped to 7.4% in 2014, compared to an average growth of 10% spanning the three decades prior to 2010. Malaysia’s annual GDP growth in 2014 expanded to 6% compared to 4.7% in the previous year. The plunge in the international price of crude petroleum as well as the weakening ringgit affected the local financial market. Driven by strong private sector consumption and investment, the country grew by domestic demand with the services sector remaining as the main contributor of the GDP growth.

In spite of the challenging environment, on the Global front, the Takaful operators continued to gain market share in the rapid-growth markets with strong double-digit growth rates over the past years. This strong growth is not expected to be sluggish in the coming years as markets like the United Arab Emirates, Malaysia and Indonesia still have low family Takaful penetration rates.

The local Takaful industry in 2014 witnessed significant developments as Malaysia improved market practices and also strengthened its regulatory front. The enforcement of the Risk Based Capital for Takaful (RBCT) Framework which was effective on the 1st of January 2014 and the introduction of the Islamic Financial Services Act 2013 (IFSA) have been hailed as important milestones in the local Takaful industry. Simply put, the RBCT and IFSA demand stronger governance from Takaful operators subjecting them to the same supervisory standards as the conventional players with a view to be as good, if not, better than them. The Takaful landscape in Malaysia continues to evolve at a rapid pace compared to the developments in the conventional insurance sector.

Di pasaran yang sedang berkembang, pertumbuhan ekonomi menjadi semakin perlahan khususnya di China di mana pertumbuhan menurun kepada 7.4% pada 2014, berbanding dengan purata 10% sepanjang tempoh tiga dekad sebelum 2010. Pertumbuhan KDNK tahunan Malaysia pada 2014 berkembang kepada 6% berbanding 4.7% pada tahun lepas. Kemerosotan harga minyak mentah antarabangsa serta nilai ringgit yang semakin lemah menjejaskan pasaran kewangan tempatan. Hasil dorongan keteguhan penggunaan dan pelaburan sektor swasta, ekonomi negara berkembang hasil permintaan domestik dengan sektor perkhidmatan kekal sebagai penyumbang utama kepada pertumbuhan KDNK.

Di peringkat global, pengendali Takaful terus menikmati peningkatan bahagian dalam pasaran yang berkembang pesat dengan kadar pertumbuhan dua digit sepanjang beberapa tahun lepas, walaupun berhadapan dengan persekitaran yang mencabar. Pertumbuhan kukuh ini dijangka tidak akan berkurangan pada tahun-tahun akan datang kerana pasaran-pasaran seperti Emiriah Arab Bersatu, Malaysia dan Indonesia masih mempunyai kadar penembusan Takaful Keluarga yang rendah.

Industri Takaful tempatan pada 2014 mengalami perkembangan ketara berikutan amalan pasaran Malaysia yang semakin baik dan pengawalseliaan yang semakin berkesan. Penguatkuasaan Modal Berasaskan Risiko bagi Rangka Kerja Takaful (RBCT) yang berkuatkuasa pada 1 Januari 2014 dan pengenalan Akta Perkhidmatan Kewangan Islam 2013 (IFSA) dianggap sebagai pencapaian penting dalam industri Takaful tempatan. Ringkasnya, RBCT dan IFSA menuntut tadbir urus yang lebih mantap daripada pengendali Takaful dengan menggariskan piawaian penyeliaan yang sama seperti syarikat konvensional, bermatlamat untuk menjadi sekurang-kurangnya sama seperti mereka atau lebih baik lagi. Lanskap Takaful di Malaysia terus berkembang dengan pesat berbanding pertumbuhan dalam sektor insurans konvensional.

Walaupun keadaan pasaran ekuiti tidak menentu, saya dengan sukacitanya melaporkan bahawa Takaful Malaysia telah mencatatkan satu lagi tahun membanggakan pada tahun yang ditinjau ini. Syarikat berjaya mencatat pertumbuhan keuntungan selepas cukai bagi kumpulan dan syarikat, masing-masing pada kadar 3% dan 4%. Pertambahan keuntungan menyebabkan EPS meningkat kepada hampir 86 sen sesaham, peningkatan lebih kurang 1% berbanding dengan 85 sen pada tahun lepas. Kumpulan juga berjaya mengekalkan Pulangan atas Ekuiti lebih 24% pada tahun yang ditinjau dan merupakan salah satu yang tertinggi antara institusi kewangan.

Bagi suku keempat 2014, Takaful Malaysia muncul sebagai peneraju pasaran dengan menguasai 21% bahagian pasaran dalam perniagaan Takaful Keluarga. Syarikat juga mengekalkan kedudukannya sebagai peneraju pasaran dalam perniagaan Takaful Keluarga Berkelompok, dengan menguasai 23% bahagian pasaran. Suku keempat 2014 menyaksikan Takaful Malaysia menjamin kedudukan sebagai Pengendali Takaful Am kedua terbesar, dengan mempeproleh kira-kira 19% daripada perniagaan Takaful Am.

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Penyata Pengerusi

Chairman’s Statement

Despite the volatile equity market, it gives me great pleasure to report that Takaful Malaysia has registered another good year for the year under review. The company managed to register a growth in profit after taxation for the group and company at 3% and 4% respectively. The growth in profit has resulted in improvements in EPS to almost 86 sen per share, which is about a 1% increase when compared to last year’s 85 sen. The group also managed to maintain a Return on Equity of above 24% during the year under review which is one of the highest among financial institutions.

For Q4 2014, Takaful Malaysia emerged as the market leader having gained a market share of 21% in the Family Takaful business. The company also sustained its position as the market leader in the Group Family Takaful business, capturing 23% of its market share. Q4 2014 saw Takaful Malaysia secure the position as the second largest General Takaful Operator, capturing about 19% of the General Takaful business.

Takaful Malaysia continues to emphasize on the four core areas of customer reach, operational agility, cost competitiveness and stakeholder confidence. Being the first Takaful operator in Malaysia, we have become a dynamic brand offering the best service levels and competitive products. We continue to be cautious in accepting only profitable underwriting contracts while avoiding those prone to greater risks to derive healthy underwriting profits. The Company’s multi-channel distribution strategy has helped to drive the business growth to greater heights.

Takaful Malaysia terus memberi penekanan kepada empat bidang teras iaitu capaian pelanggan, ketangkasan operasi, daya saing kos dan keyakinan pemegang kepentingan. Sebagai pengendali Takaful pertama di Malaysia, kami telah menjadi satu jenama dinamik yang menawarkan perkhidmatan terbaik dan produk yang berdaya saing. Kami akan terus berhati-hati untuk hanya menerima kontrak pengunderaitan yang menguntungkan sementara mengelakkan daripada pelaburan yang mempunyai risiko besar bagi menghasilkan keuntungan pengunderaitan yang lebih teguh. Strategi pengedaran pelbagai saluran yang diamalkan oleh Syarikat, telah membantu untuk memacu pertumbuhan perniagaan ke tahap yang lebih tinggi.

Yang paling penting, inisiatif berterusan kami untuk mewujudkan kesedaran orang ramai tentang keistimewaan Pulangan Tunai telah mempertingkatkan kehadiran jenama kami di pasaran untuk menjadikan Takaful Malaysia jenama isi rumah di samping mengukuhkannya sebagai insurans pilihan untuk perlindungan. Kelebihan Pulangan Tunai telah memberikan kami kelebihan kompetitif berbanding pesaing lain di pasaran secara menyeluruh. Dengan mempunyai kedudukan istimewa tersebut, kami pasti bersedia sepenuhnya untuk terus bersaing dalam perniagaan yang mencabar dan berdaya saing ini.

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Penyata Pengerusi

Chairman’s Statement

Most importantly, our ongoing initiative of creating public awareness for our Cash Back privilege has enhanced our brand presence in the market making Takaful Malaysia a household name while establishing it as the preferred choice for protection. The Cash Back privilege has given us the competitive advantage over other competitors in the market at large. With such a cutting-edge proposition, we are definitely well equipped to compete in this tough and competitive business.

THE YEAR IN REVIEW – HIGHLIGHTS & ACHIEVEMENTS

FINANCIAL PERFORMANCE

Group Performance

For the year under review, the Group’s operating revenue declined slightly below 2013`s revenue by 3.5% to RM1.65 billion. Despite its slightly lower operating revenue, the Group profit before zakat and taxation (PBZT) still depicted an increase of 4% to RM186.7 million compared to the previous financial year of RM179.3 million.

Profit after zakat and taxation (PAZT) grew by 3% to RM138.7 million from RM134.4 million in the previous financial year. The improved profits were largely attributable to lower management expenses and favorable claim ratios in the General Takaful business.

Takaful Malaysia’s total asset size increased by 4% to RM7.2 billion.

Company Performance

In 2014, the Family Takaful industry in Malaysia as a whole contracted by about 3.5% due to lower new business sales from credit related products. Anticipating a potential tapering in credit related sales, Takaful Malaysia closely monitored the activity and proactively crafted various strategies to manage the situation. The Company, through its multi-distribution and operational capabilities managed to re-align the target product mix, expanded partnership with product distributors and grew the General Takaful market segment. The success in implementing all these initiatives minimized the impact of lower sales of credit related products to operating revenue. These initiatives enabled Takaful Malaysia to emerge as the market leader in the Family Takaful market segment.

Takaful Malaysia ended the financial year under review with another improvement in its profit despite lower operating revenue.

For 2014, the Company achieved a 4% growth in PBZT amounting to RM189.2 million as compared to RM182.3 million in 2013. Operating revenue was lower by 3% to RM1.5 billion from RM1.54 billion in 2013 and the total gross contribution was recorded at RM1.27 billion, 4% lower compared to RM1.32 billion last year. The General Takaful gross contribution grew by 8% from the previous financial year to close at RM418.5 million. Family Takaful gross contribution of

TAHUN YANG DITINJAU – PERISTIWA PENTING & PENCAPAIAN

PRESTASI KEWANGAN

Prestasi Kumpulan

Pada tahun yang ditinjau, hasil kendalian Kumpulan menurun sedikit daripada hasil 2013 sebanyak 3.5% kepada RM1.65 bilion. Walaupun hasil kendalian ini rendah sedikit, namun keuntungan sebelum zakat dan cukai (PBZT) Kumpulan masih menunjukkan peningkatan 4% kepada RM186.7 juta berbanding tahun kewangan sebelumnya berjumlah RM179.3 juta.

Keuntungan selepas zakat dan cukai (PAZT) pula bertambah 3% kepada RM138.7 juta daripada RM134.4 juta pada tahun kewangan sebelumnya. Keuntungan yang semakin meningkat ini disebabkan oleh perbelanjaan pengurusan yang lebih rendah dan nisbah tuntutan yang menggalakkan dalam perniagaan Takaful Am.

Saiz jumlah aset Takaful Malaysia pula meningkat sebanyak 4% kepada RM7.2 bilion.

Prestasi Syarikat

Pada 2014, industri Takaful Keluarga di Malaysia secara keseluruhannya menguncup lebih kurang 3.5% disebabkan oleh jualan perniagaan baharu yang lebih rendah daripada produk berkaitan kredit. Dengan jangkaan terdapat penguncupan dalam jualan berkaitan kredit, Takaful Malaysia memantau dengan teliti aktiviti dan merangka secara proaktif pelbagai strategi untuk menangani situasi ini. Syarikat, melalui pelbagai saluran pengedaran dan kemampuan operasi berjaya menyelaraskan semula sasaran campuran produk, mengembangkan perkongsian dengan pengedar produk dan meningkatkan segmen pasaran Takaful Am. Pelaksanaan inisiatif ini berjaya meminimumkan kesan jualan lebih rendah produk berkaitan kredit kepada hasil kendalian. Inisiatif ini telah membolehkan Takaful Malaysia menjadi peneraju pasaran dalam segmen pasaran Takaful Keluarga.

Takaful Malaysia mengakhiri tahun kewangan yang ditinjau dengan satu lagi peningkatan dalam keuntungannya walaupun mencatat hasil kendalian yang lebih rendah.

Bagi 2014, Syarikat mencapai pertumbuhan 4% dalam PBZT berjumlah RM189.2 juta berbanding RM182.3 juta pada 2013. Hasil kendalian berkurangan sebanyak 3% kepada RM1.5 bilion daripada RM1.54 bilion pada 2013 dan jumlah caruman kasar dicatat pada RM1.27 bilion, 4% lebih rendah berbanding RM1.32 bilion pada tahun lepas. Sumbangan kasar Takaful Am meningkat sebanyak 8% berbanding tahun sebelumnya untuk ditutup pada RM418.5 juta. Sumbangan kasar Takaful Keluarga sebanyak RM852.3 juta adalah 9% lebih rendah daripada 2013 disebabkan oleh jualan lebih rendah Produk Kredit Berkelompok berikutan peraturan Bank

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Penyata Pengerusi

Chairman’s Statement

RM852.3 million was 9% lower from 2013 mainly due to lower sales for Group Credit products as a result of Bank Negara Malaysia`s rule on personal financing. The drop was partly cushioned by stronger sales in mortgage related Takaful products and investment linked products.

The Company’s profit before zakat and taxation (PBZT) increased by 4%, mainly due to a 14 % decrease in management expenses and lower claim ratios for the General Takaful businesses.

The lower effective tax rate has a direct impact to PAZT, which grew by 4% to RM144.5 million from RM139.3 million in the previous financial year.

REVIEW OF SUBSIDIARIES

PT Syarikat Takaful Indonesia (STI)

Our Indonesian subsidiaries, PT Asuransi Takaful Umum (ATU), PT Asuransi Takaful Keluarga (ATK) and Syarikat Takaful Indonesia (STI) continue to face stiff competition from conventional domestic players who are still permitted to sell Islamic products through a window concept. Consequently, the contribution from our Indonesian operations to the Group’s bottom line is less than 5% of the total, with gross contribution standing at less than 15% of the Group’s total gross contribution.

However, we remain positive about our prospects in the country given the Group’s long presence in Indonesia and the expected regulatory changes disallowing the operation of Islamic windows by conventional insurers. The country’s fast growing population, a large proportion of who are Muslims, further bolsters our confidence. With rising incomes in tandem with rapid development the demand for protection and investment products in Islamic and conventional insurance are likely to increase in the near future.

Negara Malaysia berhubung pembiayaan peribadi. Kejatuhan ini sebahagiannya diimbangi oleh jualan yang lebih kukuh bagi produk berkaitan gadai janji dan produk berkaitan pelaburan Takaful.

Keuntungan sebelum zakat dan cukai (PBZT) Syarikat meningkat sebanyak 4%, didorong terutamanya oleh penurunan 14% dalam perbelanjaan pengurusan dan nisbah tuntutan yang lebih rendah untuk peniagaan Takaful Am.

Kadar cukai efektif yang lebih rendah memberi kesan langsung kepada PAZT, yang meningkat sebanyak 4% kepada RM144.5 juta daripada RM139.3 juta pada tahun kewangan lepas.

TINJAUAN SYARIKAT SUBSIDIARI

PT Syarikat Takaful Indonesia (STI)

Subsidiari kami di Indonesia, PT Asuransi Takaful Umum (ATU), PT Asuransi Takaful Keluarga (ATK) dan Syarikat Takaful Indonesia (STI) terus menghadapi persaingan sengit daripada syarikat insurans konvensional tempatan yang masih dibenarkan menjual produk Islam melalui konsep tingkap. Justeru, sumbangan daripada operasi Indonesia kami kepada keputusan Kumpulan adalah kurang daripada 5% jumlah keseluruhan dengan sumbangan kasar kurang daripada 15% jumlah caruman Kumpulan.

Walau bagaimanapun, kami kekal positif berhubung prospek kami di negara ini kerana Kumpulan telah lama bertapak di Indonesia dan jangkaan perubahan peraturan yang tidak membenarkan syarikat insurans konvensional mengendalikan operasi tingkap Islam. Pertambahan pesat penduduk negara ini, yang sebahagian besarnya beragama Islam, mengukuhkan lagi keyakinan kami. Dengan peningkatan pendapatan selaras dengan pembangunan pesat, permintaan terhadap produk perlindungan dan pelaburan dalam insurans Islam dan konvensional mungkin akan meningkat dalam masa terdekat.

Kami akan terus memberi tumpuan untuk mengembangkan perniagaan Indonesia kami melalui bank dan agensi runcit.

DIVIDEN

Dengan mengambil kira pertumbuhan keuntungan, Lembaga Pengarah pada 1 Oktober 2014 mengisytiharkan dividen interim untuk pemegang saham sebanyak 40% tier tunggal berjumlah RM65,202,600 bagi tahun kewangan berakhir 31 Disember 2014. Dividen interim sebanyak 40% adalah sama dengan hasil dividen sebanyak 3.55% berdasarkan kepada harga penutup saham Syarikat sebanyak RM11.28 pada 31 Disember 2014.

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Penyata Pengerusi

Chairman’s Statement

We will continue on focusing to grow our Indonesia business via the bank and retail agency force.

DIVIDENDS

Taking into consideration the growth in profits, the Board of Directors, on the 1st of October 2014 declared an interim dividend for the shareholders of 40 % single tier amounting to RM65,202,600 for the financial year ended 31 December 2014. The interim dividend of 40% equate to a dividend yield of 3.55% based on the Company’s share closing market price of RM11.28 as at 31 December 2014.

In addition to the above interim dividend, the Board of Directors is also proposing a final dividend of 35% single tier amounting to RM57,052,275 at the Annual General Meeting. The total interim and proposed final dividends represent a payout ratio of approximately 88% of the net profits generated for the year ended 31 December 2014.

UNDERWRITING & INVESTMENT

In 2014, Takaful Malaysia continued to register a strong performance in underwriting activities and expanded its market reach to further cement the Company as the preferred choice for protection not just amongst Takaful operators but also amongst conventional insurance providers as well. Our underwriting activities intensified tremendously as a result of our prudent assessment in underwriting.

The growth for our Motor and Fire segment was 11%. We also registered strong growth in products like the Employee Benefit, Individual Mortgage Protection Solutions and the Investment-Linked businesses. For the Investment-Linked business over the past twelve months, we achieved the highest growth of 19%. This stellar performance was a result of many factors: the robust growth in the Group Takaful business, the solid growth in General Takaful business over the past three years, the growing acceptance of the Takaful Malaysia brand as well as the outstanding performance of our investment activities to name a few.

On the investment side, 2014 witnessed significant shifts in the global financial market landscape. The economic growth of many countries in Asia grew at a more subdued pace. In Malaysia, the local financial markets faced a challenging year, registering a lower growth than anticipated. As at 31st December 2014, the FBM KLCI Index closed 5.7% lower than at the beginning of the financial year, as a result of the drop in oil prices and the weakening ringgit.

Despite the challenging investment environment, our overall investment portfolio remained resilient in delivering a sustainable 5-year average investment yield of more than 6% per annum. Cautious and important steps underpinning our investment strategies were taken to achieve sustainable investment results, in particular for the

Sebagai tambahan kepada dividen interim di atas, Lembaga Pengarah juga mencadangkan dividen akhir sebanyak 35% tier tunggal berjumlah RM57,052,275 pada Mesyuarat Agung Tahunan. Jumlah dividen interim dan dividen akhir yang dicadangkan ini mewakili nisbah pembayaran lebih kurang 88% daripada keuntungan bersih yang dijana bagi tahun berakhir 31 Disember 2014.

PENGUNDERAITAN & PELABURAN

Pada 2014, Takaful Malaysia terus mencatatkan prestasi yang kukuh dalam aktiviti pengunderaitan dan memperluaskan capaian pasarannya untuk mengukuhkan lagi kedudukan Syarikat sebagai pilihan utama untuk perlindungan bukan sahaja di kalangan pengendali Takaful tetapi juga di antara penyedia insurans konvensional. Aktiviti pengunderaitan dipertingkat hasil penilaian berhemat semasa proses pengunderaitan.

Selain pertumbuhan 11% bagi segmen Motor dan Kebakaran, kita juga mencatatkan pertumbuhan yang kukuh bagi produk seperti Manfaat Pekerja, Penyelesaian Perlindungan Gadai Janji Individu dan perniagaan Berkaitan Pelaburan. Dalam tempoh dua belas bulan lepas, Perniagaan Berkaitan Pelaburan telah mencatat pertumbuhan tertinggi sebanyak 19%. Prestasi yang cemerlang ini didorong oleh pelbagai faktor: pertumbuhan besar perniagaan Takaful Berkelompok, pertumbuhan yang kukuh dalam perniagaan Takaful Am sepanjang tempoh tiga tahun lepas, penerimaan yang semakin meningkat terhadap jenama Takaful Malaysia serta prestasi cemerlang aktiviti pelaburan kami, sekadar menyebut beberapa aktiviti.

Dari sudut pelaburan, tahun 2014 menyaksikan perubahan ketara dalam lanskap pasaran kewangan global. Pertumbuhan ekonomi di kebanyakan Negara di Asia tumbuh pada kadar yang lebih lembap. Di Malaysia, pasaran kewangan tempatan berhadapan dengan tahun yang mencabar apabila mencatatkan pertumbuhan yang lebih rendah daripada jangkaan. Pada 31 Disember 2014, Indeks FBM KLCI ditutup 5.7% lebih rendah berbanding pada awal tahun kewangan, disebabkan oleh penurunan harga minyak dan kemerosotan nilai ringgit.

Walaupun berhadapan dengan persekitaran pelaburan yang mencabar, portfolio pelaburan keseluruhan kekal teguh untuk mencatatkan hasil pelaburan purata 5 tahun yang mampan pada kadar lebih 6% setahun. Beberapa langkah berwaspada telah diambil dan ini merencatkan strategi pelaburan kami demi memastikan keputusan pelaburan yang mampan, khususnya bagi kelas aset Ekuiti dan Sukuk. Antara yang paling ketara adalah langkah strategik yang diambil oleh Syarikat untuk mempelbagaikan portfolio pelaburan dengan melabur dalam aset kelas lain yang memberi pulangan ke atas pelaburan sebanyak 6%.

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Penyata Pengerusi

Chairman’s Statement

Equity and Sukuk asset classes. Notably, the Company also took a strategic step of diversifying the investment portfolio by investing in other asset classes that provided a return-on-investment of 6%.

On the equity side, the active portfolio management strategy was employed to timely reduce exposure by tilting the investment towards defensive sectors like telecommunications and utilities and to realise income at the beginning of the year. This approach successfully helped the Company to minimize the impact of the drop that the equity market experienced towards the end of the year.

For the Sukuk portfolio, there was a minimal opportunity for profit taking activities during the period under review due to the rising interest rate. Nevertheless, the Company selectively purchased high yielding papers with good credit scores to bolster the Sukuk portfolio yield and recurring income.

The performances of the investment linked funds are also encouraging. Our range of investment linked funds namely myEquity Index Fund, myGrowth Fund, myBlue Chips Fund, myDividend Fund, myBalanced Fund, Ittizan and Istiqrar outperformed their respective benchmarks in the market. To top it off, our myEquity Index Fund and myDividend Index Fund registered an outstanding accomplishment with an outperformance of 740 bps and 723 bps against their

Dari segi ekuiti, strategi pengurusan portfolio yang aktif telah digunakan bagi mengurangkan pendedahan pada masa yang tepat dengan mengubah pelaburan ke arah sektor defensif seperti telekomunikasi dan utiliti untuk merealisasi pendapatan pada awal tahun. Pendekatan ini berjaya membantu Syarikat meminimumkan kesan kejatuhan yang dialami oleh pasaran ekuiti menjelang akhir tahun.

Bagi portfolio Sukuk, hanya terdapat peluang yang minimum bagi aktiviti pengambilan untung sepanjang tempoh yang ditinjau disebabkan oleh kenaikan kadar faedah. Walau bagaimanapun, pembelian kertas pulangan tinggi yang terpilih dengan rekod kredit yang baik oleh Syarikat telah melonjakkan hasil portfolio Sukuk dan pendapatan berulang.

Prestasi dana-dana berkaitan pelaburan juga menggalakkan. Rangkaian pelaburan berkaitan dana kami iaitu Dana myEquity Index, Dana myGrowth, Dana myBlue Chips, Dana myDividend Index, Dana myBalanced Fund, Ittizan dan Istiqrar mengatasi penanda aras masing-masing. Yang terbaik adalah Dana myEquity Index dan Dana myDividend Index yang mencatatkan kejayaan cemerlang dengan mengatasi prestasi 740 bps dan 723 bps berbanding prestasi penanda aras masing-masing.

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Penyata Pengerusi

Chairman’s Statement

benchmark performance.

SUSTAINING OUR BRAND AS THE PREFERRED CHOICE FOR INSURANCE

For 30 years, Takaful Malaysia has been the ONLY Takaful operator in the country to reward its customers with a Cash Back across its General Takaful products and this clearly distinguishes us from all our competitors in the Malaysian insurance industry.

To reinforce this feature in the minds of the consumer public, and to drive home our brand identity as the preferred choice for insurance, the Company engaged in various advertising and promotional efforts to expand the visibility of the Takaful Malaysia Brand.

During the year under review, the Company launched its ‘No Claims? Get 15% Cash Back For Motor Insurance’ outdoor advertising campaign and embarked on various advertising channels and strategic advertising partnerships. We also promoted the Company’s Motor Takaful offering via point-of-purchase advertising. In 2014, Takaful Malaysia paid out a record total of RM30 million via the 15%

MENGEKALKAN JENAMA KAMI SEBAGAI PILIHAN UTAMA UNTUK INSURANS

Selama 30 tahun, Takaful Malaysia menjadi SATU-SATUNYA syarikat Takaful di negara ini yang memberikan ganjaran Pulangan Tunai kepada pelanggannya bagi semua produk Takaful Am dan ini jelas menunjukkan keistimewaan dan perbezaan kami berbanding para pesaing dalam industri insurans Malaysia.

Untuk mengukuhkan lagi ciri-ciri ini di dalam minda pengguna awam, dan untuk memastikan identiti jenama kami sebagai pilihan utama insurans, Syarikat telah melancarkan pelbagai usaha pengiklanan dan promosi bagi mempertingkatkan kehadiran Jenama Takaful Malaysia.

Pada tahun yang ditinjau, Syarikat melancarkan kempen pengiklanan luarnya ‘Tiada Tuntutan? Dapatkan Pulangan Tunai 15% Bagi Insurans Motor’ dan telah memulakan pelbagai saluran pengiklanan dan perkongsian pengiklanan strategik. Kami juga turut mempromosikan produk Takaful Motor melalui iklan di tempat belian. Pada 2014, Takaful Malaysia telah mencatatkan rekod pembayaran sebanyak RM30 juta melalui ganjaran Pulangan Tunai 15% kepada para pelanggan dan rakan perniagaan kami.

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Penyata Pengerusi

Chairman’s Statement

Cash Back feature to our customers and business partners.

REINFORCING OUR OPERATIONS

In a continuous effort to exceed our customers’ expectations via operational excellence and technology enhancement, we improved our business processes and organizational structure to delivering comprehensive protection solutions and services to our wide-ranging customers. Our operational processes were streamlined to adapt to the ever changing needs of the customers for further growth in market share.

Takaful Malaysia launched a new corporate portal called myTakaful Corporate that is specifically designed with extensive self-service facility capabilities and content platform for its valued corporate clients. This was aimed to provide the best online service to their corporate clients. For business partners, Takaful Malaysia further enhanced their excellent and professional customer service to make it even more convenient for business partners to do business with the Company.

Takaful Malaysia also trimmed down their cost by continuous improvements, reduced inventory and increased efficiency of their internal processes thereby making the Company’s overall operations well-organized and competent. Moving forward, the management is determined to build on the performance achieved in 2014 by focusing on improving the needs of the customers, by ensuring the employees are positive and productive, and by instilling a culture of

MEMPERKUKUHKAN OPERASI KAMI

Dalam usaha berterusan kami untuk melebihi jangkaan pelanggan melalui kecemerlangan operasi dan peningkatan teknologi, kami telah mempertingkatkan proses perniagaan dan struktur organisasi untuk menyediakan penyelesaian dan perlindungan komprehensif dan perkhidmatan menyeluruh kepada segenap lapisan pelanggan kami. Proses operasi kami telah diperkemaskan agar sesuai dengan keperluan pelanggan yang sentiasa berubah dalam usaha untuk mencapai pertumbuhan positif dalam bahagian pasaran.

Takaful Malaysia telah melancarkan portal korporat baharu dikenali sebagai myTakaful Corporate yang direka khusus dengan kemudahan layan diri dan platform kandungan yang ekstensif untuk pelanggan korporat yang dihargai. Ini bertujuan untuk menyediakan perkhidmatan dalam talian terbaik kepada pelanggan korporat mereka. Bagi rakan-rakan perniagaan, Takaful Malaysia terus mempertingkatkan lagi perkhidmatan pelanggannya yang cemerlang dan profesional untuk membolehkan rakan perniagaan lebih selesa berurusniaga dengan Syarikat.

Takaful Malaysia juga mengurangkan kosnya melalui langkah penambahbaikan yang berterusan, mengurangkan inventori dan mempertingkatkan kecekapan proses dalaman, telah berjaya menjadikan operasi keseluruhan Syarikat lebih tersusun dan cekap. Melangkah ke hadapan, pihak pengurusan berazam untuk menggunakan prestasi yang dicapai pada tahun 2014 dengan memberi tumpuan terhadap usaha mempertingkatkan keperluan pelanggan, dengan memastikan kakitangan kekal positif dan produktif, serta menyemai budaya kecemerlangan di seluruh Syarikat.

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Penyata Pengerusi

Chairman’s Statement

excellence across the Company.

INVESTING IN OUR PEOPLE

At Takaful Malaysia, we truly believe that employees are the key to our growth and success and we are committed to growing our employees. We continue to implement strategic human resource initiatives that serve as a catalyst in maximizing the productivity levels from our employees across the Company.

In recognizing our employees as our greatest assets, we have invested in growing our employees by offering personalized training and developmental programs. We focused on enhancing the skills of our employees and encouraged retention of key employees by placing them in a succession planning exercise. Aside from engaging and motivating the employees, we streamlined our human resource system by identifying issues and executing remedial measures so as to further cement employee loyalty, boost their engagement and productive capacity. Our employees are Takaful Malaysia’s brand ambassadors and a vital element of delivering the Company’s brand promise.

KEEPING IN LINE WITH OUR CORPORATE BRAND PROMISE

Giving back to the community has always been an integral aspect of our corporate culture, corresponding to the Company’s corporate philosophy of improving lives and contributing towards a caring society. Our active involvement in creating and implementing solutions to social challenges is in response to our stakeholder demands and expectations. We remain dedicated to serving the communities in which we live and work in through our corporate citizenship programs, thereby holding true to our brand promise of “We Protect. We Care. We Share”. We also encourage employee engagement and commitment throughout our Corporate Social Responsibility’s (CSR) activities. During the financial year under review, Takaful Malaysia disbursed RM1.9 million for activities and programs under our CSR umbrella namely, Takaful myJalinan Kasih and Takaful myJalinan Ilmu. Our CSR initiatives enabled us to provide both monetary and in-kind contributions to various charitable organizations, education centres and communities. Takaful Malaysia also made zakat contributions

PELABURAN DALAM MODAL INSAN

Di Takaful Malaysia, kami benar-benar percaya bahawa kakitangan merupakan kunci kepada pertumbuhan dan kejayaan Syarikat. Kami komited untuk memperkasakan kakitangan kami dengan terus melaksanakan inisiatif-inisiatif sumber manusia yang strategik dan menjadi pemangkin dalam memaksimumkan tahap produktiviti di kalangan kakitangan seluruh Syarikat.

Dalam mengiktiraf kakitangan sebagai asset yang paling berharga, kami telah melabur untuk memajukan kakitangan kami dengan menawarkan latihan berbentuk peribadi dan program pembangunan kepada mereka. Kami memberi tumpuan terhadap usaha untuk mempertingkatkan kemahiran dan menggalakkan agar kakitangan utama dikekalkan dalam Syarikat dengan meletakkan mereka melalui pelaksanaan pelan penggantian. Selain daripada melibatkan dan memberi motivasi kepada pekerja, kami menyesuaikan sistem sumber manusia kami dengan mengenal pasti isu dan melaksanakan pelbagai langkah pembaikan untuk mengukuhkan kesetiaan kakitangan, menggalakkan penglibatan dan keupayaan produksi mereka. Kakitangan kami adalah duta jenama Takaful Malaysia dan merupakan elemen penting dalam menyampaikan janji jenama Syarikat.

BERUSAHA MEMENUHI JANJI JENAMA KORPORAT KAMI

Menyumbang kepada masyarakat sentiasa menjadi aspek penting dalam budaya korporat kami, sejajar dengan falsafah Syarikat untuk mempertingkatkan kualiti kehidupan dan menyumbang ke arah membina masyarakat prihatin. Penglibatan aktif kami dalam mewujudkan dan melaksanakan penyelesaian untuk perubahan sosial adalah tindak balas terhadap permintaan dan harapan pemegang kepentingan kami. Kami terus beriltizam untuk berbakti kepada masyarakat di mana kami tinggal dan bekerja melalui program warga korporat kami, yang memenuhi janji jenama kami “Kami Lindungi. Kami Prihatin. Kami Berkongsi”. Kami juga menggalakkan penglibatan dan komitmen kakitangan menerusi aktiviti Tanggungjawab Sosial Korporat (CSR) kami. Pada tahun kewangan yang ditinjau, Takaful Malaysia mengagihkan sebanyak RM1.9 juta untuk pelbagai aktiviti

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Penyata Pengerusi

Chairman’s Statement

across all 14 state religious departments amounting to RM1 million.

ACCOLADES

Takaful Malaysia clinched two significant accolades and recognition during the year. In February 2014, we were awarded as the Best Takaful Company in Malaysia for the second consecutive year at the 8th International Takaful Awards held in Abu Dhabi. Two consecutive wins is a testimony of our success in delivering our brand promise by promoting financial security and meaningful relationships with our customers.

Takaful Malaysia was also acclaimed as a top three winner in 3 different categories under the Finance Sector at The Edge Billion Ringgit Club Corporate Awards 2014. The Company clinched 2nd place for the ‘Best Performing Stock - Highest returns to shareholders over 3 years’, 3rd place for the ‘Most Profitable Company - Highest return on equity over 3 years’ and 3rd place for the ‘Highest Profit Growth Company - Highest compound growth in profit before tax over 3 years’.

PROSPECTS AND OUTLOOK

The Takaful industry in Malaysia is growing more rapidly compared to the conventional insurance sector. However, in a climate of an increasing cost of living coupled with the upcoming Goods and Services Tax (GST), the Takaful sector is expected to be impacted

dan program di bawah naungan CSR iaitu Takaful myJalinan Kasih dan Takaful myJalinan Ilmu. Inisiatif CSR kami telah membolehkan kami menyediakan menyumbang kewangan dan barangan kepada pelbagai organisasi amal, pusat pendidikan dan komuniti. Takaful Malaysia juga membayar zakat di semua 14 jabatan agama negeri berjumlah RM1 juta.

ANUGERAH

Takaful Malaysia meraih dua anugerah dan pengiktirafan penting pada tahun ini. Pada bulan Februari 2014, kami telah diiktiraf sebagai Syarikat Takaful Terbaik di Malaysia bagi tahun kedua berturut-turut di ‘International Takaful Awards’ kelapan yang berlangsung di Abu Dhabi. Dua kemenangan berturut-turut ini menjadi testimoni kejayaan dalam menyampaikan janji jenama kami dengan mempromosi jaminan kewangan dan jalinan yang erat dengan pelanggan kami.

Takaful Malaysia juga dinobatkan sebagai pemenang utama dalam tiga kategori berbeza di bawah Sektor Kewangan bagi The Edge Billion Ringgit Club Corporate Awards 2014. Syarikat berjaya merangkul tempat kedua bagi ‘Saham Berprestasi Terbaik – Pulangan Tertinggi kepada pemegang saham selama tiga tahun’ dan tempat ketiga untuk ‘Syarikat Paling Menguntungkan – Pulangan Tertinggi ke atas ekuiti selama tiga tahun’ dan tempat ketiga bagi kategori ‘Syarikat dengan Pertumbuhan Keuntungan Tertinggi – Pertumbuhan terkumpul tertinggi dalam keuntungan sebelum cukai sepanjang tiga tahun’.

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Penyata Pengerusi

Chairman’s Statement

to a certain extent in 2015. Demand for Takaful products may be hampered arising from poorer consumer confidence and sentiment.

The implementation of GST is expected to free an adjustment period in the consumer’s mind. Takaful operators will have to ensure readiness and compliance with the newly introduced GST regulations. The challenge for most operators would be in educating consumers on the applicability of GST as the treatments for different Takaful products may vary.

At the same time, there is no doubt that Takaful has proven to be an effective risk management solution to help the consumers manage their uncertainties in life by providing protection. In the light of these circumstances, we are cautiously optimistic about expecting a greater need for Takaful despite the market uncertainties. We project the General and Family Takaful growth for 2015 to be in the region of around 15%.

Industry operators will continue to compete via their respective multi-channel distribution strategies to drive business growth to a higher level and every operator is anticipated to intensify recruitment of quality agents to grow its agency business. Takaful operators will also continue to be cautious in accepting only underwriting contracts within their risk appetite while avoiding those that are prone to greater risks. This is to ensure that they are able to derive healthier underwriting profits while mitigating increases in the loss ratio for both the Family Takaful and General Takaful businesses.

Takaful operators have to push for innovative ideas to keep their

PROSPEK DAN MASA DEPAN

Industri Takaful di Malaysia sedang berkembang dengan pesat berbanding dengan sektor insurans konvensional. Walau bagaimanapun, dalam persekitaran kos sara hidup yang semakin meningkat berserta pelaksanaan Cukai Barangan dan Perkhidmatan (GST), sektor Takaful dijangka agak terjejas pada tahun 2015. Permintaan terhadap produk Takaful mungkin digugat oleh kelemahan keyakinan dan sentimen pengguna.

Pelaksanaan GST dijangka akan merungkaikan segala persoalan yang ada di dalam minda pengguna. Pengendali Takaful perlu memastikan kesediaan dan pematuhan terhadap peraturan GST yang baru diperkenalkan. Cabaran bagi kebanyakan pengendali adalah untuk mendidik pengguna tentang kesesuaian GST kerana pengurusan bagi pelbagai produk Takaful mungkin berbeza.

Pada masa yang sama, tidak dinafikan bahawa Takaful terbukti sebagai penyelesaian pengurusan risiko yang berkesan untuk membantu ketidakpastian para pengguna dalam kehidupan mereka dengan menyediakan perlindungan. Berasaskan keadaan ini, kami berhati-hati tetapi yakin dalam membuat jangkaan berhubung keperluan yang lebih besar terhadap Takaful walaupun pasaran tidak menentu. Kami menjangka pertumbuhan Takaful Am dan Keluarga pada 2015 berada di sekitar 15%.

Pengendali industri akan terus bersaing melalui strategi pengedaran pelbagai saluran untuk menjana pertumbuhan perniagaan ke tahap yang lebih tinggi dan setiap pengendali dijangka akan

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Penyata Pengerusi

Chairman’s Statement

growth momentum strong in this hyper-competitive industry. Developing new product offerings is definitely an area that all Takaful operators are looking into. Another focus would also be in enhancing the product development of existing product suites, in order to offer the customers extra benefits and flexibility.

We also realize that there is a need for the Takaful operators to compete in the larger insurance market as a whole rather than just amongst the Takaful operators because of the similarity of the market segments. For this, Takaful operators need to be well equipped with unique selling propositions, competitive and innovative product offerings and offering excellent customer service experience. Takaful operators have to continue to work hard to dispel the perception that Takaful products are only for the Muslim segment amongst the non-Muslim community in order to increase the penetration rate amongst the non-Muslim community. The current response received from the non-Muslim market is still considerably low notwithstanding the various strategic initiatives carried out by Takaful operators.

The outlook for the Takaful industry next year is expected to continue to be positive despite the current global and domestic uncertainties. The industry is projected to remain encouraging for Takaful operators through the introduction of new or enhanced innovative products. There is plenty of room for organic growth, given the fact that Malaysia still has low insurance penetration in the Takaful sector. However, the industry players need to take into account the challenges impeding Takaful sector, for instance, the competition within the sector as well as operational issues that are affecting its profitability and growth. For that reason, Takaful operators need to not only reassess their strategies, but also reinforce their operations thoroughly for future growth and sustainability.

Takaful Malaysia will strive to perform better in 2015 and we are confident that our performance is expected to be positive across

memperhebatkan pengambilan ejen-ejen yang berkualiti dalam usaha untuk mengembangkan perniagaan agensi masing-masing. Pengendali Takaful juga akan terus berhati-hati untuk menerima kontrak pengunderaitan mengikut selera risiko mereka sambil mengelakkan daripada yang cenderung kepada risiko yang lebih besar. Ini bertujuan untuk memastikan supaya mereka mampu menghasilkan keuntungan pengunderaitan yang lebih teguh sambil mengawal peningkatan dalam nisbah kerugian bagi perniagaan Takaful Keluarga dan Am.

Pengendali Takaful perlu mengemukakan idea inovatif untuk memastikan momentum pertumbuhan mereka terus kukuh di dalam industri yang amat kompetitif ini. Membangunkan tawaran produk baharu pasti merupakan satu bidang yang perlu diberi perhatian oleh semua pengendali Takaful. Satu lagi fokus adalah langkah untuk mempertingkatkan pembangunan produk sedia ada, bagi menawarkan manfaat tambahan dan fleksibiliti kepada para pelanggan.

Kami juga menyedari bahawa pengendali Takaful perlu bersaing dalam pasaran insurans yang lebih besar secara keseluruhan dan bukan setakat dengan pengendali Takaful sahaja kerana persamaan segmen pasaran. Justeru, pengendali Takaful perlu dilengkapi dengan cadangan penjualan yang unik, penawaran produk yang kompetitif dan inovatif serta penyediaan pengalaman perkhidmatan pelanggan yang cemerlang. Pengendali Takaful perlu terus berusaha untuk menghapuskan persepsi bahawa produk Takaful adalah hanya untuk segmen Muslim sahaja tetapi turut memberi perhatian terhadap segmen bukan Muslim bagi meningkatkan penembusan dalam kalangan masyarakat bukan Islam. Sambutan semasa yang diterima daripada pasaran bukan Islam masih agak rendah walaupun terdapat pelbagai inisiatif strategik yang telah dilaksanakan oleh pengendali Takaful.

Masa depan bagi industri Takaful pada tahun hadapan dijangka terus positif walaupun suasana global dan domestik diselubungi ketidakpastian. Industri ini diunjur kekal menggalakkan bagi pengendali Takaful melalui pengenalan beberapa produk inovatif baharu atau yang dipertingkatkan. Masih terdapat ruang yang luas untuk pertumbuhan organik, memandangkan Malaysia masih mempunyai kadar penembusan insurans yang rendah dalam sektor Takaful. Walau bagaimanapun, pihak yang terlibat dalam industri perlu mengambil kira cabaran yang menanti di sektor Takaful, contohnya persaingan dalam sektor serta isu-isu operasi yang menjejaskan keuntungan dan pertumbuhannya. Atas sebab itu, pengendali Takaful tidak hanya perlu menilai semula strategi mereka, tetapi juga mengukuhkan operasi mereka secara menyeluruh untuk pertumbuhan masa depan yang mampan.

Takaful Malaysia akan berusaha untuk menampilkan prestasi lebih baik pada 2015 dan kami yakin bahawa prestasi kami akan positif di seluruh segmen perniagaan khususnya perniagaan Takaful Keluarga Berkelompok. Kami akan terus mengamalkan strategi pengurusan

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A New Look at Life

Takaful myGenLife

We Protect. We Care. We Share.

Syarikat Takaful Malaysia Berhad (131646-K)

26th Floor, Annexe Block, Menara Takaful Malaysia,

No. 4, Jalan Sultan Sulaiman, 50000 Kuala Lumpur.

P.O. Box 11483, 50746 Kuala Lumpur.

1-300 8 TAKAFUL (825 2385)

takaful-malaysia.com.my

[email protected]

Syarikat Takaful Malaysia Berhad

We Should Talk

Syarikat Takaful Malaysia Berhad is a company licensed under the Islamic Financial Services Act 2013 and

regulated by Bank Negara Malaysia.

Takaful myHealth Protector

Simply A Better Choice for Your Health

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Penyata Pengerusi

Chairman’s Statement

our entire business segments especially the Group Family Takaful business. We will continue to practice active management strategy, prudent underwriting and investment activities. We will also be offering comprehensive customer-centric products to suit the growing needs of our customers by introducing new/enhanced innovative products and by providing an excellent customer service experience. In addition, we will enhance our infrastructure and operations, grow our network, empower our agency force and establish strategic partnerships with corporate clients and bank partners. These strategies and measures coupled with more aggressive marketing and branding campaigns will ensure that we defend and grow our market share.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to take this opportunity to convey my utmost gratitude, particularly to our management and employees for their dedication and commitment to excellence in delivering our brand promise throughout the year. My deep gratitude also goes to our valued shareholders for your confidence and continuing support towards the Company as well as to all our business partners and intermediaries for the full support conveyed through our active partnerships.

Last but not least, I would like to express my thanks and appreciation to my fellow Directors on the Board and the Shariah Advisory Body for their prudent insights, wise counsel and dynamic commitment in providing excellent service and in taking the Company to greater heights.

I am confident in our ability to consistently deliver sustainable growth for the Company in the years ahead as we are well-equipped with the right mix of sound strategies, talented people and a strong brand promise. Together, let us continue our successful journey in making Takaful Malaysia, the leader of the Takaful Industry.

Tan Sri Ismee IsmailChairman

yang aktif, pengunderaitan yang berhemat, dan aktiviti pelaburan. Kami juga akan menawarkan produk mengutamakan pelanggan yang komprehensif supaya sesuai dengan keperluan para pelanggan kami yang semakin meningkat melalui pengenalan produk-produk baharu/inovatif sambil menyediakan perkhidmatan pelanggan yang cemerlang. Di samping itu, kami akan terus mempertingkatkan infrastruktur dan operasi, meluaskan rangkaian, memperkasa kekuatan agensi dan mewujudkan perkongsian strategik dengan pelanggan korporat dan rakan bank. Strategi dan langkah ini disokong oleh kempen pemasaran dan penjenamaan yang lebih agresif akan memastikan kami bukan sahaja berjaya mempertahankan malah meluaskan lagi bahagian pasaran kami.

PENGHARGAAN

Bagi pihak Lembaga Pengarah, saya ingin mengambil kesempatan ini untuk merakamkan ucapan setinggi-tinggi penghargaan, khususnya kepada pihak pengurusan dan kakitangan di atas dedikasi dan komitmen mereka terhadap kecemerlangan bagi merealisasikan janji jenama kami sepanjang tahun ini. Ucapan terima kasih yang tidak terhingga juga ingin dirakamkan kepada pemegang saham kami yang dihargai atas keyakinan dan sokongan berterusan anda sekalian terhadap Syarikat serta kepada rakan perniagaan dan ejen atas sokongan tidak berbelah bahagi melalui perkongsian aktif kita.

Akhir sekali, saya ingin merakamkan ucapan ribuan terima kasih dan penghargaan kepada rakan seperjuangan saya di dalam Lembaga Pengarah dan Badan Penasihat Syariah atas pandangan yang bijaksana, nasihat yang membina dan iltizam teguh mereka dalam memberikan perkhidmatan yang cemerlang bagi melonjakkan Syarikat ke satu tahap yang lebih tinggi.Saya yakin Syarikat mampu mencatat pertumbuhan mampan yang berterusan dalam tempoh beberapa tahun akan datang kerana kami dilengkapi dengan pelbagai strategi yang mantap, modal insan yang berbakat serta janji jenama yang teguh. Marilah kita berganding bahu meneruskan perjalanan bagi memastikan Takaful Malaysia menerajui Industri Takaful.

Tan Sri Ismee IsmailPengerusi

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FINANCIALSTATEMENTS 070 Directors’ Report

075 Statement by Directors

076 Statutory Declaration

077 Report of the Shariah Advisory Body

079 Independent Auditors’ Report

081 Statements of Financial Position

083 Statements of Profit or Loss and Other Comprehensive Income

087 Statements of Changes In Equity

091 Statements of Cash Flows

093 Notes to the Financial Statements

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The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2014.

Principal activities

The Company is principally engaged in managing family and general takaful businesses, whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results Group Company RM’000 RM’000

Profit for the year attributable to: Owners of the Company 140,521 144,463 Non-controlling interests (1,786) -

138,735 144,463

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year under review, except as disclosed in the financial statements.

Dividends

Since the end of the previous financial year, the Company:

i) paid a second interim single tier dividend of 40 sen per ordinary share totalling RM65,126,800 in respect of the financial year ended 31 December 2013 on 8 May 2014; and

ii) declared a first interim single tier dividend of 40 sen per ordinary share totalling RM65,202,600 in respect of the financial year ended 31 December 2014 on 1 October 2014 and paid on 4 November 2014.

The final dividend recommended by the Directors in respect of the financial year ended 31 December 2014 is single tier dividend of 35 sen per ordinary share totalling RM57,052,275.

Directors of the Company

Directors who served since the date of the last report are:

Tan Sri Ismee IsmailDato’ Sri Mohamed Hassan KamilDato’ Othman AbdullahDato’ Sulaiman Mohd YusofDato’ Johan AbdullahDatuk Rozaida Omar Mahadzir AzizanZakaria Ismail

In accordance with Article 62 of the Company’s Articles of Association, Tan Sri Ismee Ismail, Mahadzir Azizan and Dato’ Sulaiman Mohd Yusof will retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

Directors’ Reportfor the year ended 31 December 2014

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Directors’ interests in shares

The interests and deemed interests in the shares and options over shares of the Company and of its related corporations of those who were Directors at financial year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM1.00 each Shares vested under the As at Restricted As at 1.1.2014 Share Plan Sold 31.12.2014

Dato’ Sri Mohamed Hassan Kamil - 69,500 - 69,500

Number of ordinary shares of RM1.00 each granted under the Long Term Incentive Plan (LTIP) As at As at 1.1.2014 Granted Exercised 31.12.2014

Dato’ Sri Mohamed Hassan Kamil - Restricted Share Plan 208,600 - 69,500 139,100 - Performance Share Plan 178,700 128,200 - 306,900

None of the Directors holding office at 31 December 2014 had any interest in the shares and options over shares of the Company and of its related corporations during the financial year.

Issue of shares and debentures

During the financial year, the Company issued 189,500 new ordinary shares of RM1.00 each, pursuant to the Company’s Restricted Share Plan under the Long Term Incentive Plan at a weighted average share price of RM8.96 per ordinary share. The new ordinary shares issued during the financial year ended 31 December 2014 rank pari passu in all respects with the existing ordinary shares of the Company.

There were no other changes in the authorised, issued and paid-up capital of the Company during the financial year. There were no debentures issued during the financial year.

Long Term Incentive Plan

At the Extraordinary General Meeting held on 24 July 2013, the Company’s shareholders approved the establishment of a Long Term Incentive Plan (LTIP), which comprises a Restricted Share Plan (RSP) and a Performance Share Plan (PSP), of not more than 10% of issued and paid-up share capital of the Company (excluding treasury shares) to eligible employees and the executive director of the Company. The LTIP was effected on 25 July 2013 following the submission of the By-Laws for the LTIP to Bursa Malaysia Securities Berhad, the receipt of all required approvals and the compliance with the requirements pertaining to the LTIP.

The salient features of the LTIP are as disclosed in Note 16 to the financial statements.

As at the date of this Report, the shares granted under LTIP are as follow:

Number of ordinary shares of RM1.00 each At At 1 January 31 December 2014 Granted Exercised Forfeited 2014

Restricted Share Plan 607,100 - (189,500) (39,000) 378,600 Performance Share Plan 724,200 460,100 - (111,500) 1,072,800

1,331,300 460,100 (189,500) (150,500) 1,451,400

Directors’ Reportfor the year ended 31 December 2014

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Options granted over unissued shares

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

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which has the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate apart from the issue of the LTIP.

Statement on corporate governance and internal controls

(a) Board responsibilities

The Board of Directors (the Board) is ultimately responsible for the proper stewardship of the Group’s and Company’s resources, the achievement of corporate objectives and good corporate citizenship and discharges this responsibility through compliance with the Islamic Financial Services Act 2013 and Bank Negara Malaysia’s (BNM) Guidelines on Directorship for Takaful Operators (BNM/RH/GL 004-1) and other directives, in addition to adopting other best practices on corporate governance.

The Board comprises seven non-executive directors and one executive director to enable a balanced and objective consideration of issues, hence facilitating optimal decision making. The executive director adds value to the decision making process by providing a management and operational perspective to issues placed before the Board.

(b) Management accountability

The Group and the Company have an organisational structure showing all reporting lines as well as clearly documented job descriptions for all management and executive employees. Authority limits, as approved by the Board, are clearly established and made available to all employees.

(c) Corporate independence

The Group and the Company have complied with BNM’s Guidelines on Related Party Transactions for Takaful Operators (BNM/RH/GL 004-7). Necessary disclosures have been made to the Board and when required, prior Board’s approval has been obtained. All material related party transactions have been disclosed in Note 42 to the financial statements.

(d) Internal controls and operational risk management

The Board has overall oversight responsibility to ensure the Group and the Company maintain an adequate system of internal controls, effective and efficient operations, and risk management, as well as procedures to ensure compliance with laws, regulations, internal guidelines and requirements to safeguard the assets of the Group and the Company and stakeholders’ interests.

The Group and the Company established the Operational Risk Management Framework to ensure an ongoing process of identifying, evaluating, monitoring and managing the significant risk exposures surrounding its business operations.

All new Takaful products are governed by the Group’s and the Company’s Product Development Framework.

Whistle Blowing Policy & Fraud and Integrity Policy, Shariah Governance Framework and Assets and Liabilities Management Framework are also in place to provide basic structure and further strengthen the existing control mechanism underlying the business activities.

Business Continuity Management is consistently practiced and tested twice a year to safeguard the lives of the employees and others in the office premises and ensure the business is up and running at all times.

The Board, Group Managing Director and Management Committee are consciously committed to the risk culture and ensure Board Risk Committee perform as required.

Directors’ Reportfor the year ended 31 December 2014

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Statement on corporate governance and internal controls (continued)

(e) Public accountability

As custodian of public funds, the Group’s and the Company’s dealings with the public are always conducted fairly, honestly and professionally.

(f) Financial reporting

The Group and the Company have maintained proper accounting records and the Group’s and the Company’s financial statements are prepared in accordance with Malaysian Financial Reporting Standards (MFRS) issued by the Malaysian Accounting Standards Board (MASB), International Financial Reporting Standards (IFRS), the requirements of the Companies Act, 1965, the Islamic Financial Services Act 2013 and Takaful Guidelines / Circulars issued by BNM and Principles of Shariah.

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known impaired debts have been written off and adequate impairment allowance made for impaired debts,

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise, and

iii) there was adequate provision for incurred claims, including Incurred But Not Reported (IBNR) claims.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for impaired debts or the amount of the allowance for impaired debts and provision for incurred claims including IBNR claims in the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

Directors’ Reportfor the year ended 31 December 2014

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Other statutory information (continued)

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

For the purpose of this paragraph, contingent and other liabilities do not include liabilities arising from contracts of takaful underwritten in the ordinary course of business of the Group and of the Company.

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 December 2014 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of the financial year and the date of this report.

Auditors

The auditors, Messrs KPMG Desa Megat & Co., have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………………………..................……Tan Sri Ismee Ismail

……………………………………………………..................……Dato’ Sri Mohamed Hassan Kamil

Kuala Lumpur

Date: 30 March 2015

Directors’ Reportfor the year ended 31 December 2014

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In the opinion of the Directors, the financial statements set out on pages 81 to 279 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia and comply with the Principles of Shariah so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2014 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out in Note 44 on page 279 to the financial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………………………..................……Tan Sri Ismee Ismail

……………………………………………………..................……Dato’ Sri Mohamed Hassan Kamil

Kuala Lumpur

Date: 30 March 2015

Statement by Directorspursuant to Section 169(15) of the Companies Act, 1965

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I, Lee Hin Sze, the officer primarily responsible for the financial management of Syarikat Takaful Malaysia Berhad, do solemnly and sincerely declare that the financial statements set out on pages 81 to 279 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named in Kuala Lumpur in the Federal Territory on 30 March 2015.

……………………………………………………..................……Lee Hin Sze

Before me:

Statutory Declarationpursuant to Section 169(16) of the Companies Act, 1965

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In carrying out the roles and responsibilities of the Shariah Advisory Body of Syarikat Takaful Malaysia Berhad (Takaful Malaysia), we hereby submit our report for the financial year ended 31 December 2014:

In compliance with the Islamic Financial Services Act 2013, the Shariah Advisory Body of Takaful Malaysia was established for the purpose of advising Takaful Malaysia in ensuring its businesses, affairs and activities comply with Shariah.

The Management of Takaful Malaysia is responsible in ensuring that Takaful Malaysia conducts its businesses, affairs and activities in accordance with the Shariah. It is our responsibility to form an independent opinion, based on our reviews of the operations of Takaful Malaysia, and to produce this report.

We held six (6) meetings during the financial year ended 31 December 2014 in which we reviewed the principles and the contracts relating to the products and transactions introduced by Takaful Malaysia.

We also conducted our reviews as to whether the businesses, operations and activities of Takaful Malaysia are in compliance with the Shariah and the Shariah rulings as issued by the Shariah Advisory Council of Bank Negara Malaysia, as well as Shariah decisions made by us.

We assessed the work carried out by Shariah review and Shariah audit functions which included examining, on a test basis, each type of transactions, the relevant documentations and procedures adopted by Takaful Malaysia. Our assessments were planned and performed in a way to ensure all the information and explanations considered necessary were obtained in order to provide us with sufficient evidence to give reasonable assurance that Takaful Malaysia has not violated the Shariah. In addition, we hereby report the following:

1. Throughout the financial year, we discussed and deliberated various issues in relation to Takaful products;

2. We also approved the Mudharabah (profit) and surplus distribution rate declarations for Family and General Takaful products;

3. Furthermore, we also approved several Shariah guidelines to be implemented by Takaful Malaysia; and

4. We also noted that reports were sent to Bank Negara Malaysia on a monthly basis which served as a declaration or official attestation on the status of Shariah compliance of Takaful Malaysia.

Report of the Shariah Advisory Body

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In our opinion:

1. The contracts and related documentations used by Takaful Malaysia during the financial year ended 31 December 2014 were in compliance with the Shariah;

2. The Shariah basis for the allocation of profit and surplus between Shareholders’ Fund, Participants’ Investment Fund and Participants’ Risk Fund were appropriate;

3. All earnings from sources or by means prohibited by the Shariah were considered for disposal to charitable causes;

4. The calculation of zakat was in compliance with the Shariah; and

5. Any Shariah non-compliance events occurred during the financial year were reported to Bank Negara Malaysia and rectified accordingly.

We, the members of the Shariah Advisory Body of Takaful Malaysia, do hereby confirm that the operations of Takaful Malaysia for the financial year ended 31 December 2014 were conducted in conformity with the Shariah.

We bear witness only to what we know, and we could not well guard against the unseen! (surah Yusuf, verse: 81)

Chairman of the SAB : ………………………………Dr. Ahmad Shahbari @ Sobri Salamon

Member of the SAB : ………………………………Dato’ Mohd Bakir Hj. Mansor

Kuala Lumpur,

Date: 30 March 2015

Report of the Shariah Advisory Body

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Report on the Financial Statements

We have audited the financial statements of Syarikat Takaful Malaysia Berhad, which comprise the statements of financial position as at 31 December 2014 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 81 to 279.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal controls as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2014 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

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

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements.

Independent Auditors’ Reportto the members of Syarikat Takaful Malaysia Berhad

(Company No. 131646-K)(Incorporated in Malaysia)

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Report on Other Legal and Regulatory Requirements (continued)

c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 44 on page 279 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Desa Megat & Co Mok Wan KongFirm Number: AF 0759 Approval Number: 2877/12/16 (J)Chartered Accountants Chartered Accountant

Petaling Jaya, Selangor

Date: 30 March 2015

Independent Auditors’ Reportto the members of Syarikat Takaful Malaysia Berhad(Company No. 131646-K)(Incorporated in Malaysia)

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<------------------------------------------------------------- Group --------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Group Operator Takaful Takaful Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

ASSETS

Property and equipment 3 39,760 - - 256,100 24,308 - - 240,935Investment properties 4 10,838 217,508 21,810 33,816 16,604 216,003 23,740 39,720Investment in associate 6 - - - - - - - -Other investments 7 431,952 3,390,049 494,528 4,278,729 484,169 3,642,815 605,251 4,694,140Retakaful assets 8 - 259,801 422,659 682,460 - 183,463 452,470 635,933Deferred tax assets 9 38,549 - - 38,549 41,724 - - 41,724Current tax assets 500 - - 500 - - - - Loans and receivables, excluding takaful receivables 10 164,596 663,993 106,163 887,768 160,537 521,902 89,576 717,476Takaful receivables 11 - 90,972 37,619 128,591 - 68,197 48,959 117,156Qard receivables 12 - - - - - - - -Cash and cash equivalents 13 146,499 597,341 112,435 856,275 89,171 265,736 75,712 430,619Assets held for sale 14 - - 2,000 2,000 1,730 2,260 2,850 6,840

TOTAL ASSETS 832,694 5,219,664 1,197,214 7,164,788 818,243 4,900,376 1,298,558 6,924,543

EQUITY AND LIABILITIES

Share capital 15 163,006 - - 163,006 162,817 - - 162,817Reserves 15 418,371 (24,912) (26,368) 419,955 408,028 (23,028) (24,922) 409,257

Total equity attributable to owners of the Company 581,377 (24,912) (26,368) 582,961 570,845 (23,028) (24,922) 572,074Non-controlling interests 14,136 - - 13,485 18,342 - - 17,825

TOTAL EQUITY 595,513 (24,912) (26,368) 596,446 589,187 (23,028) (24,922) 589,899

LIABILITIES

Qard payables 17 - 24,912 27,301 - - 23,028 25,634 -Takaful contract liabilities 18 - 5,077,546 1,103,465 6,143,211 - 4,750,730 1,181,016 5,893,651 Expense reserves 19 142,127 - - 142,127 131,522 - - 131,522Takaful payables 20 - 40,949 20,368 61,317 - 25,859 49,569 75,428Other payables 21 89,838 101,169 72,448 216,471 91,367 123,787 67,261 227,876Current tax liabilities 5,216 - - 5,216 6,167 - - 6,167

TOTAL LIABILITIES 237,181 5,244,576 1,223,582 6,568,342 229,056 4,923,404 1,323,480 6,334,644

TOTAL EQUITY AND LIABILITIES 832,694 5,219,664 1,197,214 7,164,788 818,243 4,900,376 1,298,558 6,924,543

Statements of Financial Positionas at 31 December 2014

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Financial Positionas at 31 December 2014

<----------------------------------------------------------- Company ------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Company Operator Takaful Takaful Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

ASSETSProperty and equipment 3 27,216 - - 233,751 13,955 - - 222,172Investment properties 4 10,760 207,360 21,810 33,395 15,520 207,525 23,740 38,568Investments in subsidiaries 5 49,376 - - 49,376 58,712 - - 58,712Investment in associate 6 - - - - - - - -Other investments 7 403,764 3,134,283 488,352 3,988,599 468,467 3,451,164 600,343 4,481,879Retakaful assets 8 - 251,452 414,220 665,672 - 175,861 434,990 610,851Deferred tax assets 9 34,916 - - 34,916 40,279 - - 40,279Current tax assets 500 - - 500 - - - - Loans and receivables, excluding takaful receivables 10 155,112 649,074 96,748 870,538 134,751 495,498 75,538 667,840Takaful receivables 11 - 86,548 31,715 118,263 - 62,835 40,511 103,346Cash and cash equivalents 13 111,923 538,358 96,311 746,592 45,773 204,687 62,779 313,239Assets held for sale 14 - - 2,000 2,000 1,730 2,260 2,850 6,840

TOTAL ASSETS 793,567 4,867,075 1,151,156 6,743,602 779,187 4,599,830 1,240,751 6,543,726

EQUITY AND LIABILITIES

Share capital 15 163,006 - - 163,006 162,817 - - 162,817Reserves 15 428,181 - - 428,181 416,444 - - 416,444

Total equity attributable to owners of the Company 591,187 - - 591,187 579,261 - - 579,261

LIABILITIES

Takaful contract liabilities 18 - 4,733,280 1,061,389 5,756,869 - 4,458,849 1,127,203 5,547,957 Expense reserves 19 137,673 - - 137,673 127,279 - - 127,279Takaful payables 20 - 39,228 19,753 58,981 - 22,725 48,449 71,174Other payables 21 64,707 94,567 70,014 198,892 66,866 118,256 65,099 212,274Current tax liabilities - - - - 5,781 - - 5,781

TOTAL LIABILITIES 202,380 4,867,075 1,151,156 6,152,415 199,926 4,599,830 1,240,751 5,964,465

TOTAL EQUITY AND LIABILITIES 793,567 4,867,075 1,151,156 6,743,602 779,187 4,599,830 1,240,751 6,543,726

The notes on pages 93 to 279 are an integral part of these financial statements.

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<------------------------------------------------------------- Group --------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Group Operator Takaful Takaful Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Operating revenue 22 26,483 1,150,010 480,483 1,652,639 24,529 1,233,516 459,283 1,713,006

Takaful operator income 492,083 - - - 556,918 - - -

Gross earned contributions 23(i) - 958,130 457,441 1,415,806 - 1,098,994 424,992 1,523,388Contributions ceded to retakaful 23(ii) - (65,737) (180,457) (246,194) - (51,952) (132,969) (184,921)

Net earned contributions 23(iii) - 892,393 276,984 1,169,612 - 1,047,042 292,023 1,338,467

Administrative income - 2,590 37,934 40,524 - 1,022 29,932 30,954Investment income 24 26,483 191,950 29,164 243,025 24,529 181,023 30,877 232,705Realised gains and (losses) 25 3,441 37,490 4,519 45,450 11,816 117,092 15,844 144,597Fair value gains and (losses) 26 1,282 12,894 (23) 13,346 (195) 9,025 596 9,676Other operating income 27 10,898 3,277 3,263 9,462 11,951 1,133 1,798 5,483

Other income 42,104 248,201 74,857 351,807 48,101 309,295 79,047 423,415

Gross benefits and claims paid 28 - (601,070) (201,051) (796,785) - (607,451) (176,055) (769,419)Claims ceded to retakaful 28 - 51,176 70,578 121,754 - 47,009 32,834 79,843Gross change to contract liabilities 28 - (6,066) 61,333 55,267 - (46,995) (83,693) (130,688)Change to contract liabilities ceded to retakaful 28 - 17,976 (20,073) (2,097) - 16,687 92,416 109,103

Net benefits and claims 28 - (537,984) (89,213) (621,861) - (590,750) (134,498) (711,161)

Wakalah fee expense - (195,589) (166,253) - - (246,744) (146,055) - Commission expense / Administrative fees (118,547) - (49) (118,596) (130,270) (112) (201) (130,324)Expense reserves 19 (10,415) - - (10,415) (42,770) - - (42,770)Management expenses 29 (206,076) - - (204,404) (236,312) - - (234,131)Other operating expenses 31 (12,729) (15,567) (9,058) (36,240) (17,940) (8,796) (2,985) (18,229)

Other expenses (347,767) (211,156) (175,360) (369,655) (427,292) (255,652) (149,241) (425,454)

Total profit for the year 186,420 391,454 87,268 529,903 177,727 509,935 87,331 625,267

Profit attributable to the Takaful Operator / participants - (391,816) (87,104) (343,206) - (520,574) (87,155) (445,963)

Profit / (Loss) before zakat and taxation 186,420 (362) 164 186,697 177,727 (10,639) 176 179,304Zakat (389) - - (389) (1,517) - - (1,517)Tax expense 32 (47,545) - - (47,573) (43,261) - - (43,407)

Profit / (Loss) for the year 138,486 (362) 164 138,735 132,949 (10,639) 176 134,380

Statements of Profit or Loss and Other Comprehensive Incomefor the year ended 31 December 2014

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Profit or Loss and Other Comprehensive Incomefor the year ended 31 December 2014

<------------------------------------------------------------- Group --------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Group Operator Takaful Takaful Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Profit / (Loss) for the year 138,486 (362) 164 138,735 132,949 (10,639) 176 134,380

Other comprehensive income / (expense), net of taxItems that will not be reclassified subsequently to profit or lossRevaluation of property and equipment 2,500 - - 7,892 2,379 - - 6,207Other comprehensive income attributable to participants - - - (5,477) - - - (4,265)

2,500 - - 2,415 2,379 - - 1,942

Items that may be reclassified subsequently to profit or lossFair value change of available- for-sale financial assets (7,170) (59,701) (9,912) (7,170) 1,882 (99,503) (6,909) 1,882Foreign currency translation differences for foreign operations 5,036 (1,995) (1,267) 5,093 (7,314) (1,000) (2,861) (7,299)Other comprehensive income attributable to participants - 60,174 9,569 - - 99,303 8,066 -

(2,134) (1,522) (1,610) (2,077) (5,432) (1,200) (1,704) (5,417)

Total other comprehensive income / (expense) for the year 33 366 (1,522) (1,610) 338 (3,053) (1,200) (1,704) (3,475)

Total comprehensive income / (expense) for the year 138,852 (1,884) (1,446) 139,073 129,896 (11,839) (1,528) 130,905

Profit / (Loss) for the year attributable to: Owners of the Company 140,137 (362) 164 140,521 137,265 (10,639) 176 138,999 Non-controlling interests (1,651) - - (1,786) (4,316) - - (4,619)

138,486 (362) 164 138,735 132,949 (10,639) 176 134,380

Total comprehensive income / (expense) for the year attributable to: Owners of the Company 136,047 (1,884) (1,446) 136,402 137,882 (11,839) (1,528) 139,193 Non-controlling interests 2,805 - - 2,671 (7,986) - - (8,288)

138,852 (1,884) (1,446) 139,073 129,896 (11,839) (1,528) 130,905

Basic earnings per ordinary share (sen) 34 86.27 85.37

Diluted earnings per ordinary share (sen) 34 85.87 84.83

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Profit or Loss and Other Comprehensive Incomefor the year ended 31 December 2014

<----------------------------------------------------------- Company ------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Company Operator Takaful Takaful Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Operating revenue 22 23,764 1,032,970 446,688 1,499,062 21,669 1,103,000 416,459 1,537,381

Takaful operator income 444,918 - - - 500,584 - - -

Gross earned contributions 23(i) - 850,714 421,986 1,272,386 - 978,839 385,875 1,364,116Contributions ceded to retakaful 23(ii) - (55,633) (172,857) (228,490) - (41,004) (126,471) (167,475)

Net earned contributions 23(iii) - 795,081 249,129 1,043,896 - 937,835 259,404 1,196,641

Administrative income - 984 37,220 38,204 - 1,022 29,325 30,347Investment income 24 23,764 180,639 28,229 228,586 21,669 170,831 29,824 219,175Realised gains and (losses) 25 1,862 26,163 4,458 32,483 11,029 108,016 15,641 134,531Fair value gains and (losses) 26 380 (959) (23) (160) - 11,808 596 14,530Other operating income 27 7,692 3,180 2,835 8,737 6,982 1,096 1,267 2,590

Other income 33,698 210,007 72,719 307,850 39,680 292,773 76,653 401,173

Gross benefits and claims paid 28 - (531,092) (186,704) (714,917) - (540,752) (157,328) (686,637)Claims ceded to retakaful 28 - 42,070 67,596 109,666 - 36,841 29,296 66,137Gross change to contract liabilities 28 - (6,944) 49,290 42,346 - (35,702) (87,902) (123,604)Change to contract liabilities ceded to retakaful 28 - 18,505 (11,342) 7,163 - 16,046 91,991 108,037

Net benefits and claims 28 - (477,461) (81,160) (555,742) - (523,567) (123,943) (636,067)

Wakalah fee expense - (169,951) (151,203) - - (216,795) (127,024) -Commission expense / Administrative fees (96,395) - (26) (96,421) (103,197) (112) (168) (103,218)Expense reserves 19 (10,394) - - (10,394) (42,306) - - (42,306)Management expenses 29 (173,735) - - (171,518) (201,787) - - (199,389)Other operating expenses 31 (9,039) (14,546) (3,725) (26,558) (11,275) (7,899) (2,898) (22,032)

Other expenses (289,563) (184,497) (154,954) (304,891) (358,565) (224,806) (130,090) (366,945)

Total profit for the year 189,053 343,130 85,734 491,113 181,699 482,235 82,024 594,802

Profit attributable to the Takaful Operator / participants - (343,130) (85,734) (301,947) - (482,235) (82,024) (412,520)

Profit before zakat and taxation 189,053 - - 189,166 181,699 - - 182,282Zakat (200) - - (200) (1,268) - - (1,268)Tax expense 32 (44,475) - - (44,503) (41,550) - - (41,696)

Profit for the year 144,378 - - 144,463 138,881 - - 139,318

The notes on pages 93 to 279 are an integral part of these financial statements.

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<----------------------------------------------------------- Company ------------------------------------------------------------> 2014 2013 Takaful Family General Takaful Family General Operator Takaful Takaful Company Operator Takaful Takaful Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Profit for the year 144,378 - - 144,463 138,881 - - 139,318

Other comprehensive income / (expense), net of tax

Items that will not be reclassified subsequently to profit or lossRevaluation of property and equipment 117 - - 3,189 126 - - 1,285Other comprehensive income attributable to participants - - - (3,157) - - - (1,596)

117 - - 32 126 - - (311)

Items that may be reclassified subsequently to profit or lossFair value change of available- for-sale financial assets (7,054) (56,548) (10,197) (7,054) 2,517 (89,750) (6,673) 2,517Other comprehensive income attributable to participants - 56,548 10,197 - - 89,750 6,673 -

(7,054) - - (7,054) 2,517 - - 2,517

Total other comprehensive (expense) / income for the year 33 (6,937) - - (7,022) 2,643 - - 2,206

Total comprehensive income for the year 137,441 - - 137,441 141,524 - - 141,524

Profit for the year attributable to:Owners of the Company 144,378 - - 144,463 138,881 - - 139,318

Total comprehensive income for the year attributable to: Owners of the Company 137,441 - - 137,441 141,524 - - 141,524

Statements of Profit or Loss and Other Comprehensive Incomefor the year ended 31 December 2014

The notes on pages 93 to 279 are an integral part of these financial statements.

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<--------------------------------- Attributable to owners of the Company ------------------------------> <------------------------------ Non - distributable -----------------------------> Distributable Non- Share Share Translation Revaluation Fair value LTIP Retained controlling Total capital premium reserve reserve reserve reserve earnings Total interests equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013 162,817 4,098 (8,834) 5,040 7,827 - 328,300 499,248 26,113 525,361

Revaluation of property and equipment 33 - - - 376 - - 575 951 991 1,942Fair value of available-for-sale financial assets 33 - - - - 2,073 - - 2,073 (191) 1,882Foreign currency translation differences for foreign operations 33 - - (2,830) - - - - (2,830) (4,469) (7,299)

Other comprehensive (expense) / income for the year 33 - - (2,830) 376 2,073 - 575 194 (3,669) (3,475)Profit / (Loss) for the year - - - - - - 138,999 138,999 (4,619) 134,380

Total comprehensive (expense) / income for the year - - (2,830) 376 2,073 - 139,574 139,193 (8,288) 130,905

Contributions by and distributions to owners of the Company

- Share-based payment transactions 16 - - - - - 2,016 - 2,016 - 2,016 - Dividends to owners of the Company 35 - - - - - - (68,383) (68,383) - (68,383)

Total transactions with owners of the Company - - - - - 2,016 (68,383) (66,367) - (66,367)

At 31 December 2013 162,817 4,098 (11,664) 5,416 9,900 2,016 399,491 572,074 17,825 589,899 Note 15 Note 15 Note 15 Note 15 Note 15 Note 15

Statements of Changes in Equityfor the year ended 31 December 2014

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Changes in Equityfor the year ended 31 December 2014

<--------------------------------- Attributable to owners of the Company ------------------------------> <------------------------------ Non - distributable -----------------------------> Distributable Non- Share Share Translation Revaluation Fair value LTIP Retained controlling Total capital premium reserve reserve reserve reserve earnings Total interests equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2014 162,817 4,098 (11,664) 5,416 9,900 2,016 399,491 572,074 17,825 589,899 Revaluation of property and equipment 33 - - - 1,271 - - 95 1,366 1,049 2,415 Fair value of available-for-sale financial assets 33 - - - - (7,188) - - (7,188) 18 (7,170)Foreign currency translation differences for foreign operations 33 - - 1,703 - - - - 1,703 3,390 5,093

Other comprehensive income / (expense) for the year - - 1,703 1,271 (7,188) - 95 (4,119) 4,457 338 Profit / (Loss) for the year - - - - - - 140,521 140,521 (1,786) 138,735

Total comprehensive income / (expense) for the year - - 1,703 1,271 (7,188) - 140,616 136,402 2,671 139,073

Contributions by and distributions to owners of the Company

- LTIP exercised 16 189 1,509 - - - (1,698) - - - - - Share-based payment transactions 16 - - - - - 4,814 - 4,814 - 4,814 - Dividends to owners of the Company 35 - - - - - - (130,329) (130,329) - (130,329)

189 1,509 - - - 3,116 (130,329) (125,515) - (125,515)Capital repayment from a subsidiary - - - - - - - - (7,011) (7,011)

Total transactions with owners of the Company 189 1,509 - - - 3,116 (130,329) (125,515) (7,011) (132,526)

At 31 December 2014 163,006 5,607 (9,961) 6,687 2,712 5,132 409,778 582,961 13,485 596,446

Note 15 Note 15 Note 15 Note 15 Note 15 Note 15

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Changes in Equityfor the year ended 31 December 2014

<------------------------------ Attributable to owners of the Company ---------------------------> <------------------------ Non - distributable ------------------------> Distributable Share Share Revaluation Fair value LTIP Retained Total capital premium reserve reserve reserve earnings equityCompany Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013 162,817 4,098 1,247 7,704 - 328,238 504,104

Revaluation of property and equipment 33 - - (311) - - - (311)Fair value of available-for-sale financial assets 33 - - - 2,517 - - 2,517

Other comprehensive (expense) / income for the year 33 - - (311) 2,517 - - 2,206Profit for the year - - - - - 139,318 139,318

Total comprehensive (expense) / income for the year - - (311) 2,517 - 139,318 141,524

Contributions by and distributions to owners of the Company

- Share-based payment transactions 16 - - - - 2,016 - 2,016 - Dividends to owners of the Company 35 - - - - - (68,383) (68,383)

Total transactions with owners of the Company - - - - 2,016 (68,383) (66,367)

At 31 December 2013 162,817 4,098 936 10,221 2,016 399,173 579,261

Note 15 Note 15 Note 15 Note 15 Note 15 Note 15

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Changes in Equityfor the year ended 31 December 2014

<------------------------------ Attributable to owners of the Company ---------------------------> <------------------------ Non - distributable ------------------------> Distributable Share Share Revaluation Fair value LTIP Retained Total capital premium reserve reserve reserve earnings equityCompany Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2014 162,817 4,098 936 10,221 2,016 399,173 579,261

Revaluation of property and equipment 33 - - (22) - - 54 32 Fair value of available-for-sale financial assets 33 - - - (7,054) - - (7,054)

Other comprehensive (expense) / income for the year 33 - - (22) (7,054) - 54 (7,022)Profit for the year - - - - - 144,463 144,463

Total comprehensive (expense) / income for the year - - (22) (7,054) - 144,517 157,441

Contributions by and distributions to owners of the Company

- LTIP exercised 16 189 1,509 - - (1,689) - - - Share-based payment transactions 16 - - - - 4,814 - 4,814 - Dividends to owners of the Company 35 - - - - - (130,329) (130,329)

Total transactions with owners of the Company 189 1,509 - - 3,116 (130,329) (125,515)

At 31 December 2014 163,006 5,607 914 3,167 5,132 413,361 591,187

Note 15 Note 15 Note 15 Note 15 Note 15 Note 15

The notes on pages 93 to 279 are an integral part of these financial statements.

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Statements of Cash Flows for the year ended 31 December 2014

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesProfit before zakat and taxation 186,697 179,304 189,166 182,282 Adjustments for: Depreciation 11,577 13,574 8,742 11,241 Equity settled share-based payment 4,814 2,016 4,814 2,016 Fair value change of investment properties (1,645) (6,101) (1,620) (5,754) Fair value change of fair value through profit or loss financial assets (11,701) (3,575) 1,780 (8,776) Profit from financing receivables (274) (3,630) (274) (3,630) Profit from Islamic debt securities, investment accounts and Islamic accepted bills (198,132) (179,160) (183,853) (165,697) Dividend income from Shariah approved shares (31,116) (30,001) (30,852) (29,724) Gains on disposal of available-for-sale financial assets (44,248) (144,886) (31,553) (135,064) Gains on disposal of property and equipment (119) (391) (59) (147) Gains on disposal of investment properties (638) - (426) - (Gains) / Losses on disposal of assets held for sale (445) 680 (445) 680 Write-off of property and equipment 52 51 52 37 Amortisation of premiums, net of accretion of discounts 6,118 8,938 6,229 8,692 Impairment loss of financial assets 15,051 2,247 13,789 1,508 (Writeback of impairment loss) / Impairment loss of investment in a subsidiary - - (1,648) 5,017 Impairment loss of property and equipment 227 6 227 - Profit from Malaysian Government Islamic papers (17,678) (27,180) (17,678) (27,180)

Operating loss before changes in working capital (81,460) (188,108) (43,609) (164,499)

Profit from Islamic debt securities, investment accounts, Islamic accepted bills and profit from Malaysian Government Islamic papers 215,810 206,340 201,531 192,877 Dividend income from Shariah approved shares 21,226 16,085 20,962 15,808 Increase in retakaful assets (45,559) (202,981) (54,821) (199,916) Increase in receivables (179,816) (118,103) (217,341) (99,113) Increase in Takaful contract liabilities 299,645 590,575 272,205 546,284 (Decrease) / Increase in payables (14,818) 86,136 (14,220) 82,215

215,028 389,944 164,708 373,656 Zakat paid (1,264) (1,225) (546) (1,048)Income taxes paid (43,653) (60,500) (43,653) (60,500)

Net cash generated from operating activities 170,111 328,219 120,509 312,108

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The notes on pages 93 to 279 are an integral part of these financial statements.

Statements of Cash Flows for the year ended 31 December 2014

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Cash flows from investing activities

Purchase of investments (3,531,527) (3,211,437) (3,231,828) (3,079,041) Proceeds from sale of investments 3,754,762 2,756,813 3,509,424 2,662,651 Maturity of other investments 168,620 207,160 159,474 202,634 Purchase of property and equipment (20,968) (7,522) (19,844) (6,589) Proceeds from sale of property and equipment 810 1,673 460 251 Proceeds from sale of investment properties 8,224 - 7,219 - Proceeds from sale of assets held for sale 7,285 3,110 7,285 3,110

Net cash generating from / (used in) in investing activities 387,206 (250,203) 432,190 (216,984)

Cash flows from financing activities

Distributions from a subsidiary - - 10,984 - Distributions to non-controlling interests (7,011) - - - Dividends paid to owners of the Company (130,329) (84,665) (130,329) (84,665)

Net cash used in financing activities (137,340) (84,665) (119,345) (84,665)

Net increase / (decrease) in cash and cash equivalents 419,977 (6,649) 433,353 10,459 Effect of exchange rate fluctuations on cash held 5,679 (14,984) - -Cash and cash equivalents at 1 January 430,619 452,252 313,239 302,780

Cash and cash equivalents at 31 December 856,275 430,619 746,592 313,239

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Cash and bank balances and fixed and call deposits with licensed financial institutions with maturity less than three months - Takaful Operator (Note 13) 146,499 89,171 111,923 45,773 - Family Takaful Fund (Note 13) 597,341 265,736 538,358 204,687 - General Takaful Fund (Note 13) 112,435 75,712 96,311 62,779

856,275 430,619 746,592 313,239

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Syarikat Takaful Malaysia Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of the principal place of business and registered office of the Company is as follows:

26th Floor, Annexe Block Menara Takaful Malaysia No. 4, Jalan Sultan Sulaiman 50000 Kuala Lumpur

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates. The financial statements of the Company as at and for the financial year ended 31 December 2014 do not include other entities.

The Company is principally engaged in managing family and general takaful businesses, whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

The immediate holding company during the financial year is BIMB Holdings Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. The ultimate holding corporation of the Company during the financial year is Lembaga Tabung Haji, a statutory body established under the Tabung Haji Act 1995 (Act 535).

The financial statements were authorised for issue by the Board of Directors on 30 March 2015.

1. Basis of preparation

(a) Statement of compliance

The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (MFRSs), International Financial Reporting Standards, the Companies Act, 1965, Islamic Financial Services Act 2013, Takaful Guidelines / Circulars issued by Bank Negara Malaysia (BNM) and Principles of Shariah.

A Takaful Operator is required to present consolidated financial statements for itself and the Takaful funds it manages and controls in accordance with the requirements of MFRS 127, Consolidated and Separate Financial Statements. The statements of financial position and the statements of profit or loss and other comprehensive income of the Takaful Operator, Family Takaful Fund and General Takaful Fund are supplementary financial information presented in accordance with the requirements of BNM and Islamic Financial Services Act 2013 in Malaysia to segregate assets, liabilities, income and expenses of Takaful funds from its own. The statements of financial position and profit or loss and other comprehensive income of the Takaful Operator include only assets, liabilities, income and expenses of the Takaful Operator, excluding the Takaful funds managed by it. The statements of financial position and profit or loss and other comprehensive income of the Family and General Takaful Fund include only the assets, liabilities, income and expenses of the family solidarity fund and General Takaful Fund that is set up, managed and controlled by the Takaful Operator.

Notes to the Financial Statements

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Notes to the Financial Statements

1. Basis of preparation (continued)

(a) Statement of compliance (continued)

The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and the Company:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2011-2013

Cycle)• Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions• Amendments to MFRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016• Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements 2012-2014

Cycle) • Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle) • Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures –

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture • Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities, and MFRS

128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception • Amendments to MFRS 11, Joint Arrangements - Accounting for Acquisitions of Interest in Joint operations • MFRS 14, Regulatory Deferral Accounts • Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative • Amendments to MFRS 116, Property, Plant and Equipment and MFRS138, Intangible Assets - Clarification of Acceptable

Methods of Depreciation and Amortisation • Amendments to MFRS 116, Property, Plant and Equipment and MFRS141, Agriculture - Agriculture: Bearer Plants • Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle) • Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial Statements • Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017• MFRS 15, Revenue from Contracts with Customers MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018• MFRS 9, Financial Instruments (2014)

The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:

• from the annual period beginning on 1 January 2015 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 July 2014.

• from the annual period beginning on 1 January 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, except for MFRS 141, Agriculture - Agriculture: Bearer Plants.

• from the annual period beginning on 1 January 2017 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2017.

• from the annual period beginning on 1 January 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018.

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Notes to the Financial Statements

1. Basis of preparation (continued)

(a) Statement of compliance (continued)

The initial application of the abovementioned amendments and interpretation are not expected to have any material impacts to the financial statements of the Group and the Company except as mentioned below:

MFRS 15, Revenue from Contracts with Customers

MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfer of Assets from Customers and IC Interpretation 131, Revenue – Barter Transactions Involving Advertising Services. Upon adoption of MFRS 15, it is expected that the timing of revenue recognition for non-insurance contracts might be different as compared with the current practices.

The adoption of MFRS 15 will result in a change in accounting policy. The Group and the Company is currently assessing the financial impact of adopting MFRS 15.

MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities, and on hedge accounting.

The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with MFRS which requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:

• Note 2(f) and Note 4 – Investment properties• Note 2(c) and Note 39 – Financial instruments• Note 2(o), (p) and Note 19 - Computation of expense reserves• Note 2(n), (o), Note 8 and Note 18 – Provision for outstanding claims including IBNR claims and actuarial liabilities

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Notes to the Financial Statements

2. Summary of significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and have been applied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

The Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net asset at the acquisition date.

Transaction costs, other than those associated with the issue of Islamic debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Acquisition of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(a) Basis of consolidation (continued)

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associate, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(vi) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

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2. Summary of significant accounting policies (continued)

(a) Basis of consolidation (continued)

(vii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the reporting date, except for those that are measured at fair value that are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, which are recognised in other comprehensive income.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations denominated in functional currencies other than RM and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve (FCTR) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

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2. Summary of significant accounting policies (continued)

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised as fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Financial assets at fair value through profit or loss

Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

(b) Held-to-maturity investments

Held-to-maturity investments category comprises Islamic debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

(c) Loans and receivables

Loans and receivables category comprises Islamic debt instruments that are not quoted in an active market (including fixed deposits with financial institutions with maturities more than 3 months).

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial assets (continued)

(d) Available-for-sale financial assets

Available-for-sale category comprises investment in equity and Islamic debt securities instruments that are not held for trading nor held to maturity.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Profit income calculated for an Islamic debt instrument using the effective interest method is recognised in profit or loss.

(e) Takaful receivables

Takaful receivables are recognised when due and measured on initial recognition at the fair value of the consideration receivable. Subsequent to initial recognition, takaful receivables are measured at amortised cost, using the effective interest method.

All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(j)(i) and (ii)).

Financial liabilities

All financial liabilities are initially measured at fair value and subsequently measured at amortised cost other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(c) Financial instruments (continued)

(iii) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.

(iv) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(d) Property and equipment

(i) Recognition and measurement

The land and buildings are stated at cost / valuation less any accumulated depreciation and any accumulated impairment losses. Items of equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

The Group and the Company revalue their land and buildings annually and at shorter intervals whenever the fair values of the revalued assets are expected to differ materially from their carrying value. Additions subsequent to their revaluation are stated in the financial statements at cost until the next revaluation exercise.

An external independent valuation company, having the appropriate recognised professional qualifications, values the Group’s land and buildings on an annual basis. The revalued amounts are based on market value, being the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arm’s length transaction.

Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit arising is offset against the revaluation reserve to the extent of any previous surpluses recognised for the same property. In all other cases, a decrease in carrying amount is charged to profit or loss.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(d) Property and equipment (continued)

(i) Recognition and measurement (continued)

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

When significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.

The gain or loss on disposal of an item of property and equipment is determined by comparing the proceeds from disposal with the carrying amount of property and equipment and is recognised net within “realised gains and losses” in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property and equipment under construction are not depreciated until the assets are ready for their intended use.

The annual depreciation rates for the current and comparative periods are as follows:

Buildings 2.0%Renovation 16.7%Furniture, fixtures and fittings 16.7% - 20.0%Motor vehicles 20.0%Computer and equipment 20.0% - 33.3%

The depreciable amount is determined after deducting the at end of the reporting period, and adjusted as appropriate.

Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted as appropriate.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(e) Leased assets

(i) Finance lease

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of profit on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property and equipment.

(ii) Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the Group’s or the Company’s statement of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property and measured using fair value model.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classified as prepaid lease payments.

(f) Investment property

(i) Investment property carried at fair value

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of services or for administrative purposes.

Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in profit or loss for the period in which they arise.

Cost includes expenditure that is directly attributable to the acquisition of the investment property.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.

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104

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(f) Investment property (continued)

(ii) Reclassifications to / from investment property carried at fair value

When an item of property and equipment is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.

When the use of a property changes such that it is reclassified as property and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

(iii) Determination of fair value

An external, independent valuation firm, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group’s and the Company’s investment property portfolio annually.

The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.

(g) Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.

Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets, or disposal group are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on pro-rata basis, except that no loss is allocated to financial assets, deferred tax assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Intangible assets and property and equipment once classified as held for sale are not amortised or depreciated. In addition, equity accounting of equity accounted investees ceases once classified as held for sale.

(h) Cash and cash equivalents and placements with financial institutions

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

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105

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(i) Qard

Any deficits arising in the Takaful funds are made good via a benevolent loan, or Qard, granted by the Takaful Operator to the Takaful funds. Qard is stated at cost less any provision for impairment losses. In the Takaful funds, the Qard is stated at cost. The Qard shall be repaid from future surpluses of the Takaful funds.

Qard receivables are assessed by Takaful Operator at each reporting date whether there is any indication of impairment. An impairment loss of Qard is recognised if its carrying amount exceeds its recoverable amount.

The recoverable amount is the net surplus of the Participants’ Risk Fund (PRF) or part of the Participants’ Risk Fund where the Participants’ Risk Fund is managed under smaller sub-funds (PRF). The net surplus of the PRF is the amount of the PRF less the best estimate value of liabilities calculated according to valuation methods prescribed via Guidelines on Valuation Basis of Liabilities for General Takaful Business and Guidelines on Valuation Basis of Liabilities for Family Takaful Business). In deriving the net surplus of the PRF, the value of the PRF should be as at that point in time and there should not be assumption of growth of the PRF.

Impairment losses are recognised in profit or loss. Impairment losses are subsequently reversed in profit or loss if objective evidence exists that the Qard receivable is no longer impaired.

(j) Impairment

(i) Financial assets, excluding takaful receivables

All financial assets (except for financial assets categorised as fair value through profit or loss, investments in subsidiaries and investment in associate) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables (excluding takaful receivables where the policy is set out in Note 2(j)(ii) below) and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective profit rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.

If, in a subsequent period, the fair value of an Islamic debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

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106

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(j) Impairment (continued)

(ii) Takaful receivables

If there is objective evidence that the takaful receivable is impaired, the Group and the Company reduce the carrying amount of the takaful receivable accordingly and recognises that impairment loss in profit or loss. The Group and the Company gather the objective evidence that a takaful receivable is impaired using the same process adopted for financial assets carried at amortised cost. The impairment loss is calculated under the same method used for those financial assets. These processes are described in Note 2(j)(i).

(iii) Other assets

The carrying amounts of other assets (except for deferred tax asset and investment property measured at fair value and non-current assets classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the other assets in the cash-generating unit (groups of cash-generating units) on a pro-rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

(k) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Ordinary shares

Ordinary shares are classified as equity.

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107

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(k) Equity instruments (continued)

(ii) Distributions of assets to owners of the Company

The Group measures a liability to distribute assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

(l) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group and the Company have a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

The Group’s and the Company’s contribution to the statutory pension fund is charged to profit or loss in the financial year to which they relate. Once the contributions have been paid, the Group and the Company have no further payment obligations.

(iii) Share-based payment transactions

The grant date fair value of share-based payment granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the employee share options is measured using Monte Carlo Simulation. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

(m) Provisions

A provision is recognised if, as a result of a past event, the Group and the Company have a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

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108

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(n) General Takaful Fund

The General Takaful Fund is maintained in accordance with the Islamic Financial Services Act 2013. Included in General Takaful Fund are funds arising from:

• General Takaful; and• General retakaful funds.

The General Takaful underwriting results are determined for each class of takaful business after taking into account retakaful, unearned contributions, claims incurred and administrative fees.

Contribution income

Contributions are recognised in a financial period in respect of risks assumed during that particular financial period based on the inception date. Inward treaty retakaful contributions are recognised on the basis of periodic advices received from ceding takaful operators.

Unearned contribution reserves

The Unearned Contribution Reserves (UCR) represent the portion of the net contributions of takaful certificates written that relate to the unexpired periods of the certificates at the end of the financial year.

In determining the UCR at the end of the reporting period, the method that most accurately reflects the actual unearned contributions is used, as follows:

a) 1/365th method for all General Takaful business.b) 1/8th method for all classes of General Treaty Inward Retakaful business.

Provision for outstanding claims

A liability for outstanding claims is recognised in respect of direct takaful business. The amount of outstanding claims is the best estimate of the expenditure required together with related expenses less recoveries, if any, to settle the present obligation at the end of the reporting period. Any difference between the current estimated cost and subsequent settlement is dealt with in the takaful statement of profit or loss and other comprehensive income of the Group and of the Company in the year in which the settlement takes place.

Provision is also made for the cost of claims (together with related expenses) and Incurred But Not Reported Claims (IBNR) at the end of the reporting period, using a mathematical method of estimation by a qualified external actuary where historical claims experience are used to project future claims. The provision includes a risk margin for adverse deviation. As with all projections, there are elements of uncertainty and the projected claims may be different from actual. These uncertainties arise from changes in underlying risk, changes in spread of risks, claims settlement pattern as well as uncertainties in the projection model and underlying assumptions.

(o) Family Takaful Fund

Included in Family Takaful Fund are funds arising from:

• Family Takaful;• Group Family Takaful; and• Family retakaful funds.

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109

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(o) Family Takaful Fund (continued)

The Family Takaful Fund is maintained in accordance with the requirements of the Islamic Financial Services Act 2013 and includes the amounts attributable to participants which represents the participants’ share of the underwriting surplus and return on the investments, where applicable and are distributable in accordance with the terms and conditions prescribed by the Group and the Company.

The surplus transfer from the Family Takaful Fund to profit or loss is based on the pre-determined profit sharing ratio of the underwriting surplus and return on investments.

Contribution income

Contribution is recognised as soon as the amount of the contribution can be reliably measured. Initial contribution is recognised from inception date and subsequent contribution is recognised when it is due. At the end of each financial period, all due contributions are accounted for to the extent that they can be reliably measured.

Investment-linked business

Investments of the investment-linked business are stated at closing market prices. Any increase or decrease in value of these investments is taken into the investment-linked business revenue accounts.

Actuarial reserves

Actuarial reserves comprise the Prospective Actuarial Valuation, Cash Flow Projection Valuation and Unearned Contribution Valuation as explained below:

(i) Prospective Actuarial Valuation

For credit-related products, the liabilities of Family Takaful Fund shall be valued based on the sum of present value of future benefits and any expected future expenses payable from the takaful funds, less the present value of future gross tabarru’ arising from the certificate, discounted at the appropriate risk discount rate as defined in the valuation guidelines.

For a credit-related takaful certificate whose sustainability of tabarru’ deductions is dependent on the performance of the Participants Investment Fund (PIF), the calculation is subject to adjusting the future gross tabarru’ cash flow such that it is limited to the period where the PIF can sustain the tabarru’ and assuming that the takaful coverage is in force for the full duration of the takaful contract.

(ii) Cash Flow Projection Valuation

For products with PIF other than credit-related products, the liabilities shall be valued by projecting future cash flows to ensure that all future obligations can be met without recourse to additional finance or capital support at any future time during the duration of the certificate. The cash flow projection shall use a basis that is consistent with the requirements of the valuation guidelines.

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110

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(o) Family Takaful Fund (continued)

(iii) Unearned Contribution Valuation

Yearly renewable products or extensions shall be valued according to the following:

(a) For a certificate covering death or survival, the liabilities shall be valued on an unexpired risk basis using a prospective estimate of expected future payments arising from future events covered as at the valuation date. These future payments shall include allowance for direct claims related expenses, direct investment-related expenses, cost of retakaful and expected future contribution refunds expected during the unexpired period.

(b) For a certificate covering contingencies other than death or survival, the net liability is the maximum of unexpired risk reserve or unearned contribution reserve.

Provision for outstanding claims

Claims and provisions for claims arising on family and group family takaful certificates, including settlement costs, are accounted for using the case basis method and for this purpose, the benefits payable under a family takaful certificate are recognised as follows:

a) Maturity or other policy benefit payments due on specified dates are accounted for as claims payable on the due dates.

b) Death, surrender and other benefits without due dates are treated as claims payable on the date of receipts of intimation of death of the participant or occurrence of contingency covered.

c) For individual family, group health and medical business, provision is made for the cost of claims (together with related expenses) and IBNR at the end of the reporting period, using a mathematical method of estimation by a qualified internal actuary where historical claims experience are used to project future claims. The provision includes a risk margin for adverse deviation. As with all projections, there are elements of uncertainty and the projected claims may be different from actual. These uncertainties arise from changes in underlying risk, changes in spread of risks, claim settlement pattern as well as uncertainties in the projection model and underlying assumptions.

(p) Expense reserves

The expense reserves is reported as a liability in Takaful Operator’s Fund.

(i) General Takaful Fund

The expense reserve for mudharabah certificates is calculated based on best estimate of the provision for unexpired expense risk (UER) and the provision for risk margin for adverse deviation (PRAD). The expense reserve for wakalah certificates refers to the higher of aggregate of the Unearned Wakalah Fee (UWF) for all lines of business or best estimate of the provision for UER and the PRAD at total fund level.

(ii) Family Takaful Fund

Expense reserves consists of the following:

(a) Expense liabilities

The method used to value expense liabilities shall be consistent with the method used to value takaful liabilities of the corresponding family takaful certificate (for example, for a long-term ordinary takaful certificate, the valuation method for expense liabilities should also be long-term in nature).

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111

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(p) Expense reserves (continued)

(ii) Family Takaful Fund (continued)

(b) Deficiency Reserve for Skim Anuiti Takaful KWSP

In addition to the expense liabilities above, an additional requirement is also complied as stipulated below:

If Participant Investment Fund (PIF) is expected to be insufficient to meet future annuity certain benefit and / or future life annuity tabarru’, another provision shall be set aside that is in line with requirement of the valuation guideline. Upon PIF insufficiency, the Operator’s Fund shall honour the annuity certain benefit payment to participants as well as the tabarru’ to PRF.

(q) Product classification

The Family Takaful Fund and General Takaful Fund consist of certificate contracts that transfer takaful risk.

Takaful contracts are those contracts that transfer significant takaful risk. A takaful contract is a contract under which the fund has accepted significant takaful risk from another party (the certificate holders) by agreeing to compensate the participants if a specified uncertain future event (the takaful event) adversely affects the participants. As a general guideline, to determine whether a contract has significant takaful risk, benefits paid are compared with benefits payable if the takaful event did not occur.

Investment contracts are those contracts that do not transfer significant insurance risk. There are no contracts that are classified as investment contracts in the Family and General Takaful Funds.

Once a contract has been classified as a takaful contract, it remains a takaful contract for the remainder of its life-time, even if the takaful risk reduces significantly during this period, unless all rights and obligations are extinguished or expired.

Takaful contracts in the current portfolio are classified as being without discretionary participation features (DPF) as it does not satisfy the criteria for DPF. DPF is a contractual right to receive, as a supplement to guaranteed benefits, additional benefits that are:

• likely to be a significant portion of the total contractual benefits;• whose amount or timing is contractually at the discretion of the issuer; and• that are contractually based on the:

- performance of a specified pool of contracts or a specified type of contract;- realised and / or unrealised investment returns on a specified pool of assets held by the issuer; or- the profit or loss of the company, fund or other entity that issues the contract.

(r) Retakaful

The funds cede takaful risk in the normal course of business. Retakaful assets represent balances receivable and recoverable from retakaful operators. Amounts recoverable from retakaful operators are estimated in a manner consistent with the outstanding claims provision or settled claims associated with the retakaful’s certificates and are in accordance with the related retakaful contracts.

Ceded retakaful arrangements do not relieve the fund from its obligations to participants. Contributions and claims are presented on a gross basis for both ceded and assumed retakaful.

Retakaful assets are reviewed for impairment at each reporting date or more frequently when an indication of impairment arises during the reporting period. Impairment occurs when there is objective evidence as a result of an event that occurred after initial recognition of the retakaful asset that the Family and General Takaful Fund may not receive all outstanding amounts due under the terms of the contract and the event has a reliably measurable impact on the amounts that the Family and General Takaful Fund will receive from the retakaful operator. The impairment loss is recorded in profit or loss.

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112

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(r) Retakaful (continued)

Gains or losses on buying retakaful, if any, are recognised in profit or loss immediately at the date of purchase and are not amortised.The funds also assume retakaful risk in the normal course of business for Family Takaful and General Takaful contracts when applicable.

Contributions and claims on assumed retakaful are recognised as revenue or expenses in the same manner as they would be if the retakaful were considered direct business, taking into account the product classification of the retakaful business. Retakaful liabilities represent balances due to retakaful operators. Amounts payable are estimated in a manner consistent with the related retakaful contract.

Retakaful assets or liabilities are derecognised when the contractual rights are extinguished or expired or when the contract is transferred to another party.

Retakaful contracts that do not transfer significant takaful risk are accounted for directly through the statement of financial position. These are deposit assets or financial liabilities that are recognised based on the consideration paid or received less any explicit identified contributions or fees to be retained by the retakaful operators. Investment income on these contracts is accounted for using the effective yield method when accrued.

(s) Other revenue recognition

(i) Financing income

Income from financing is recognised on an accrual basis, except where financing is considered impaired, i.e. where repayments are in arrears for more than 90 days, in which case recognition of such income is suspended. Subsequent to suspension, income is recognised on the receipt basis until all arrears have been paid.

Income is recognised on a time proportion basis that takes into account the effective yield of the asset.

(ii) Wakalah fees

Wakalah fees are recognised as income or expenses by the respective funds based on a predetermined percentage of gross contributions upon inception of certificates. Wakalah surplus / (deficit) is arrived at after deducting commission and management expenses against the Wakalah fees charged.

(iii) Rental income

Rental is recognised on an accrual basis except where default in payment of rent has already occurred and rent dues remain outstanding for over 90 days, in which case recognition of rental income is suspended. Subsequent to suspension, income is recognised on the receipt basis until all arrears have been paid.

(iv) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(t) Zakat

This represents tithes payable by the Group and the Company to comply with the Principles of Shariah and as approved by the Shariah Advisory Body. Zakat is computed at 2.5% of zakat base of the Company, which is computed using the “Adjusted Growth method” as approved by the Shariah Committee. The zakat computation is reviewed by the Shariah Committee. The Board has the discretion to pay additional zakat above the obligatory amount payable.

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113

Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(u) Income tax expense

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(v) Operating lease payments

The Group recognises its Ijarah financing obligations as operating leases. Lease payments under the operating lease are recognised as an expense in profit or loss on a straight-line basis over the lease term.

(w) Earnings per share

The Group presents basic earnings per share (EPS) data for its ordinary shares.

Basic EPS is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(x) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

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Notes to the Financial Statements

2. Summary of significant accounting policies (continued)

(y) Fair value measurements

Fair value of an asset or a liability, except for share-based payments and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

When measuring the fair value of an asset or liability, the Group uses observable market data as far as possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can assess at the measurement date.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset or liability.

The Group and the Company recognise transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.

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Notes to the Financial Statements

3. Property and equipment

Group Takaful Operator Office equipment, furniture, Freehold Leasehold Motor fixtures Land Buildings Land Buildings vehicles and fittings TotalCost / Valuation RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013 935 315 5,854 4,691 1,910 109,631 123,336Additions - - - - 465 4,358 4,823Disposals - - (812) (380) (429) (343) (1,964)Write-offs - - - - - (4,513) (4,513)Revaluation 94 26 2,044 (844) - - 1,320Effect of movement in exchange rates - - (1,020) (578) (162) (1,525) (3,285)

At 31 December 2013 / 1 January 2014 1,029 341 6,066 2,889 1,784 107,608 119,717Additions - - - - 1,285 18,523 19,808 Disposals - - - - (209) (407) (616)Write-offs - - - - - (482) (482)Revaluation (69) 179 1,394 (83) - - 1,421 Effect of movement in exchange rates - - 295 127 54 406 882

At 31 December 2014 960 520 7,755 2,933 2,914 125,648 140,730

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Notes to the Financial Statements

3. Property and equipment (continued)

Group Takaful Operator Office equipment, furniture, Freehold Leasehold Motor fixturesAccumulated depreciation and Land Buildings Land Buildings vehicles and fittings Total impairment loss Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013Accumulated depreciation - - - 275 852 92,260 93,387Accumulated impairment loss - - - 197 - - 197

- - - 472 852 92,260 93,584Depreciation for the year 29 - 6 491 315 315 8,372 9,499Disposals - - (10) (4) (356) (312) (682)Write-offs - - - - - (4,462) (4,462)Adjustment for revaluation - (6) (481) (572) - - (1,059)Effect of movement in exchange rates - - - (51) (75) (1,345) (1,471)

At 31 December 2013 / 1 January 2014Accumulated depreciation - - - - 736 94,513 95,249Accumulated impairment loss - - - 160 - - 160

- - - 160 736 94,513 95,409Depreciation for the year 29 - 7 751 321 361 5,811 7,251 Disposals - - - - (173) (400) (573)Write-offs - - - - - (430) (430)Adjustment for revaluation - (7) (751) (321) - - (1,079)Effect of movement in exchange rates - - - 7 25 360 392

At 31 December 2014Accumulated depreciation - - - - 949 99,854 100,803 Accumulated impairment loss - - - 167 - - 167

- - - 167 949 99,854 100,970

Carrying amountsAt 1 January 2013 935 315 5,854 4,219 1,058 17,371 29,752

At 31 December 2013 / 1 January 2014 1,029 341 6,066 2,729 1,048 13,095 24,308

At 31 December 2014 960 520 7,755 2,766 1,965 25,794 39,760

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Notes to the Financial Statements

3. Property and equipment (continued)

Group Office equipment, furniture, Freehold Leasehold Motor fixtures Land Buildings Land Buildings vehicles and fittings TotalCost / Valuation Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2013 49,272 131,121 20,528 22,977 1,910 109,631 335,439Additions - 2,699 - - 465 4,358 7,522Disposals - - (812) (380) (429) (343) (1,964)Write-offs - - - - - (4,513) (4,513)Reclassified from investment properties 4 - 5,535 - - - - 5,535Reclassified to assets held for sale 14 - - (800) (460) - - (1,260)Revaluation 1,284 (4,541) 4,469 (139) - - 1,073Effect of movement in exchange rates (25) (21) (1,930) (1,062) (162) (1,525) (4,725)

At 31 December 2013 / 1 January 2014 50,531 134,793 21,455 20,936 1,784 107,608 337,107Additions - 1,160 - - 1,285 18,523 20,968 Disposals (257) (406) - - (209) (407) (1,279)Write-offs - - - - - (482) (482)Converted to freehold building during the year - 3,644 - (3,644) - - - Reclassified to assets held for sale 14 - - (842) (1,158) - - (2,000)Revaluation 3,056 (3,596) 2,755 240 - - 2,455 Effect of movement in exchange rates 3 4 571 243 54 406 1,281

At 31 December 2014 53,333 135,599 23,939 16,617 2,914 125,648 358,050

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Notes to the Financial Statements

3. Property and equipment (continued)

Group Office equipment, furniture, Freehold Leasehold Motor fixturesAccumulated depreciation and Land Buildings Land Buildings vehicles and fittings Total impairment loss Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013Accumulated depreciation - - - 275 852 92,260 93,387Accumulated impairment loss 61 39 114 774 - - 988

61 39 114 1,049 852 92,260 94,375Charge for the year 29 - 2,787 1,139 961 315 8,372 13,574Impairment loss 31 - 6 - - - - 6Disposals - - (10) (4) (356) (312) (682)Write-offs - - - - - (4,462) (4,462)Adjustment for revaluation - (2,787) (1,129) (1,218) - - (5,134)Effect of movement in exchange rates - (3) - (82) (75) (1,345) (1,505)

At 31 December 2013 / 1 January 2014Accumulated depreciation - - - - 736 94,513 95,249Accumulated impairment loss 61 42 114 706 - - 923

61 42 114 706 736 94,513 96,172Charge for the year 29 - 2,783 1,665 957 361 5,811 11,577 Impairment loss 31 139 - 88 - - - 227 Disposals (1) (14) - - (173) (400) (588)Write-offs - - - - - (430) (430)Adjustment for revaluation - (2,783) (1,665) (957) - - (5,405)Effect of movement in exchange rates - - - 12 25 360 397

At 31 December 2014Accumulated depreciation - - - - 949 99,854 100,803 Accumulated impairment loss 199 28 202 718 - - 1,147

199 28 202 718 949 99,854 101,950

Carrying amounts At 1 January 2013 49,211 131,082 20,414 21,928 1,058 17,371 241,064

At 31 December 2013 / 1 January 2014 50,470 134,751 21,341 20,230 1,048 13,095 240,935

At 31 December 2014 53,134 135,571 23,737 15,899 1,965 25,794 256,100

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Notes to the Financial Statements

3. Property and equipment (continued)

Company Takaful Operator

Office equipment, furniture, Freehold Leasehold Motor fixtures Land Buildings Land Buildings vehicles and fittings TotalCost / Valuation Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013 935 315 - - 897 98,057 100,204Additions - - - - 174 3,716 3,890Disposals - - - - (329) (343) (672)Write-offs - - - - - (2,867) (2,867)Revaluation 94 26 - - - - 120

At 31 December 2013 / 1 January 2014 1,029 341 - - 742 98,563 100,675Additions - - - - 683 18,001 18,684 Disposals - - - - - (4) (4)Write-offs - - - - - (482) (482)Revaluation (69) 179 - - - - 110

At 31 December 2014 960 520 - - 1,425 116,078 118,983

Accumulated depreciation At 1 January 2013 - - - - 319 81,849 82,168Charge for the year 29 - 6 - - 156 7,794 7,956Disposals - - - - (256) (312) (568)Write-offs - - - - - (2,830) (2,830)Adjustment for revaluation - (6) - - - - (6)

At 31 December 2013 / 1 January 2014 - - - - 219 86,501 86,720 Charge for the year 29 - 7 - - 188 5,292 5,487 Disposals - - - - - (3) (3)Write-offs - - - - - (430) (430)Adjustment for revaluation - (7) - - - - (7)

At 31 December 2014 - - - - 407 91,360 91,767

Carrying amountsAt 1 January 2013 935 315 - - 578 16,208 18,036

At 31 December 2013 / 1 January 2014 1,029 341 - - 523 12,062 13,955

At 31 December 2014 960 520 - - 1,018 24,718 27,216

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Notes to the Financial Statements

3. Property and equipment (continued)

Company

Office equipment, furniture, Freehold Leasehold Motor fixtures Land Buildings Land Buildings vehicles and fittings TotalCost / Valuation Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013 49,115 130,983 10,055 15,074 897 98,057 304,181Additions - 2,699 - - 174 3,716 6,589Disposals - - - - (329) (343) (672)Write-offs - - - - - (2,867) (2,867)Reclassified from investment properties 4 - 5,535 - - - - 5,535Reclassified to assets held for sale 14 - - (800) (460) - - (1,260)Revaluation 1,274 (4,538) 481 777 - - (2,006)

At 31 December 2013 / 1 January 2014 50,389 134,679 9,736 15,391 742 98,563 309,500Additions - 1,160 - - 683 18,001 19,844 Disposals (112) (288) - - - (4) (404)Write-offs - - - - - (482) (482)Converted to freehold building during the year - 3,644 - (3,644) - - - Reclassified to assets held for sale 14 - - (842) (1,158) - - (2,000)Revaluation 3,056 (3,596) 7 428 - - (105)

At 31 December 2014 53,333 135,599 8,901 11,017 1,425 116,078 326,353

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Notes to the Financial Statements

3. Property and equipment (continued)

Company (continued)

Office equipment, furniture, Freehold Leasehold Motor fixturesAccumulated depreciation and Land Buildings Land Buildings vehicles and fittings Total impairment loss Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2013Accumulated depreciation - - - - 319 81,849 82,168Accumulated impairment loss 60 28 114 406 - - 608

60 28 114 406 319 81,849 82,776Charge for the year 29 - 2,784 172 335 156 7,794 11,241Disposals - - - - (256) (312) (568)Write-offs - - - - - (2,830) (2,830)Adjustment for revaluation - (2,784) (172) (335) - - (3,291)

At 31 December 2013 / 1 January 2014Accumulated depreciation - - - - 219 86,501 86,720Accumulated impairment loss 60 28 114 406 - - 608

60 28 114 406 219 86,501 87,328Charge for the year 29 - 2,783 169 310 188 5,292 8,742 Impairment loss 31 139 - 88 - - - 227Disposals - - - - - (3) (3) Write-offs - - - - - (430) (430)Adjustment for revaluation - (2,783) (169) (310) - - (3,262)

At 31 December 2014Accumulated depreciation - - - - 407 91,360 91,767 Accumulated impairment loss 199 28 202 406 - - 835

199 28 202 406 407 91,360 92,602

Carrying amounts At 1 January 2013 49,055 130,955 9,941 14,668 578 16,208 221,405

At 31 December 2013 / 1 January 2014 50,329 134,651 9,622 14,985 523 12,062 222,172 At 31 December 2014 53,134 135,571 8,699 10,611 1,018 24,718 233,751

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Notes to the Financial Statements

3. Property and equipment (continued)

3.1 Revaluation of properties

All the Group’s and Company’s land and buildings were revalued in December 2014 by independent professional qualified valuers using the comparison method.

Had the land and buildings of the Group and of the Company been carried at historical cost less accumulated depreciation, their carrying amounts would have been as follows:

Group Takaful Operator Group Company Takaful Operator Company 2014 2013 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Freehold land 487 487 43,601 43,846 487 487 43,601 43,705 Freehold buildings 132 137 95,265 94,569 137 137 95,265 94,504 Leasehold land and buildings 3,281 3,486 19,079 23,997 - - 13,683 19,029

3,900 4,110 157,945 162,412 619 624 152,549 157,238

3.2 Leasehold land and buildings

Included in the carrying amounts of the leasehold land and buildings are:

Group Takaful Operator Group Company Takaful Operator Company 2014 2013 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Leasehold land and buildings with unexpired lease period of - more than 50 years - - 11,510 17,277 - - 11,510 17,277 - less than 50 years 10,521 8,795 28,126 24,294 - - 7,800 7,330

10,521 8,795 39,636 41,571 - - 19,310 24,607

3.3 During the year 2014, a leasehold building was corverted to freehold building.

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Notes to the Financial Statements

4. Investment properties

Takaful Operator Family Takaful General Takaful Group 2014 2013 2014 2013 2014 2013 2014 2013Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 16,604 18,194 216,003 212,813 23,740 25,774 39,720 45,470Additions - - 1,067 2,479 93 220 - - Disposal (6,181) - (2,053) - - - (7,586) - Reclassified to property and equipment 3 - - - - - - - (5,535)Reclassified to assets held for sale 14 - (1,730) - (2,810) (2,000) (2,850) - (6,130)Fair value gains / (losses) for the year - net 26 385 317 2,090 4,938 (23) 596 1,645 6,101 Effect of movement in exchange rates 30 (177) 401 (1,417) - - 37 (186)

At 31 December 10,838 16,604 217,508 216,003 21,810 23,740 33,816 39,720

Comprising of:Freehold land and buildings 3,880 8,931 179,515 177,095 14,840 14,800 11,010 16,975 Leasehold land and buildings more than 50 years 6,880 6,830 24,085 26,867 570 2,550 20,025 18,030 Leasehold land and buildings less than 50 years 78 843 13,908 12,041 6,400 6,390 2,781 4,715

10,838 16,604 217,508 216,003 21,810 23,740 33,816 39,720

The following are amounts arising from investment properties that have been recognised in profit or loss during the financial year.

Takaful Operator Family Takaful General Takaful Group 2014 2013 2014 2013 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Rental income 24 670 642 8,169 7,320 732 783 3,887 3,087

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Notes to the Financial Statements

4. Investment properties (continued)

Takaful Operator Family Takaful General Takaful Company 2014 2013 2014 2013 2014 2013 2014 2013Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 15,520 17,250 207,525 204,824 23,740 25,774 38,568 44,479Additions - - 1,067 2,479 93 220 - - Disposal (5,140) - (2,053) - - - (6,793) -Reclassified to property and equipment 3 - - - - - - - (5,535)Reclassified to assets held for sale 14 - (1,730) - (2,810) (2,000) (2,850) - (6,130)Fair value gains / (losses) for the year - net 26 380 - 821 3,032 (23) 596 1,620 5,754

At 31 December 10,760 15,520 207,360 207,525 21,810 23,740 33,395 38,568

Comprising of:Freehold land and buildings 3,880 8,690 179,515 177,095 14,840 14,800 11,010 16,975 Leasehold land and buildings more than 50 years 6,880 6,830 24,085 26,867 570 2,550 20,025 18,030 Leasehold land and buildings less than 50 years - - 3,760 3,563 6,400 6,390 2,360 3,563

10,760 15,520 207,360 207,525 21,810 23,740 33,395 38,568

The following are amounts arising from investment properties that have been recognised in profit or loss during the financial year.

Takaful Operator Family Takaful General Takaful Company 2014 2013 2014 2013 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Rental income 24 670 642 7,623 6,709 732 783 3,867 3,051

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Notes to the Financial Statements

4. Investment properties (continued)

Investment properties comprise a number of commercial properties that are leased to third parties. During the financial year, a property has been transferred to assets held for sale (see note 14).

Fair value information

Fair value of investment properties are categorised as follows:

Group Level 1 Level 2 Level 3 Total2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorFreehold land and buildings - - 3,880 3,880 Leasehold land and buildings - more than 50 years - - 6,880 6,880 - less than 50 years - - 78 78

- - 10,838 10,838

Family TakafulFreehold land and buildings - - 179,515 179,515 Leasehold land and buildings - more than 50 years - - 24,085 24,085 - less than 50 years - - 13,908 13,908

- - 217,508 217,508

General TakafulFreehold land and buildings - - 14,840 14,840 Leasehold land and buildings - more than 50 years - - 570 570 - less than 50 years - - 6,400 6,400

- - 21,810 21,810

GroupFreehold land and buildings - - 11,010 11,010 Leasehold land and buildings - more than 50 years - - 20,025 20,025 - less than 50 years - - 2,781 2,781

- - 33,816 33,816

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Notes to the Financial Statements

4. Investment properties (continued)

Fair value information (continued)

Company Level 1 Level 2 Level 3 Total2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorFreehold land and buildings - - 3,880 3,880 Leasehold land and buildings - more than 50 years - - 6,880 6,880

- - 10,760 10,760

Family TakafulFreehold land and buildings - - 179,515 179,515 Leasehold land and buildings - more than 50 years - - 24,085 24,085 - less than 50 years - - 3,760 3,760 - - 207,360 207,360

General TakafulFreehold land and buildings - - 14,840 14,840 Leasehold land and buildings - more than 50 years - - 570 570 - less than 50 years - - 6,400 6,400

- - 21,810 21,810

CompanyFreehold land and buildings - - 11,010 11,010 Leasehold land and buildings - more than 50 years - - 20,025 20,025 - less than 50 years - - 2,360 2,360

- - 33,395 33,395

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Notes to the Financial Statements

4. Investment properties (continued)

Fair value information (continued)

Group Level 1 Level 2 Level 3 Total2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorFreehold land and buildings - - 8,931 8,931Leasehold land and buildings - more than 50 years - - 6,830 6,830 - less than 50 years - - 843 843

- - 16,604 16,604

Family TakafulFreehold land and buildings - - 177,095 177,095Leasehold land and buildings - more than 50 years - - 26,867 26,867 - less than 50 years - - 12,041 12,041

- - 216,003 216,003

General TakafulFreehold land and buildings - - 14,800 14,800Leasehold land and buildings - more than 50 years - - 2,550 2,550 - less than 50 years - - 6,390 6,390

- - 23,740 23,740

GroupFreehold land and buildings - - 16,975 16,975Leasehold land and buildings - more than 50 years - - 18,030 18,030 - less than 50 years - - 4,715 4,715

- - 39,720 39,720

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Notes to the Financial Statements

4. Investment properties (continued) Fair value information (continued)

Company Level 1 Level 2 Level 3 Total2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorFreehold land and buildings - - 8,690 8,690Leasehold land and buildings - more than 50 years - - 6,830 6,830

- - 15,520 15,520

Family TakafulFreehold land and buildings - - 177,095 177,095Leasehold land and buildings - more than 50 years - - 26,867 26,867 - less than 50 years - - 3,563 3,563

- - 207,525 207,525

General TakafulFreehold land and buildings - - 14,800 14,800Leasehold land and buildings - more than 50 years - - 2,550 2,550 - less than 50 years - - 6,390 6,390

- - 23,740 23,740

CompanyFreehold land and buildings - - 16,975 16,975Leasehold land and buildings - more than 50 years - - 18,030 18,030 - less than 50 years - - 3,563 3,563

- - 38,568 38,568

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

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Notes to the Financial Statements

4. Investment properties (continued)

Fair value information (continued)

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical investment properties that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indirectly.

Level 2 fair values of land and buildings have been generally derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties.

Transfer between Level 1 and 2 fair values

There is no transfer between Level 1 and 2 fair values during the financial year.

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the investment property.

The following table shows a reconciliation of Level 3 fair values:

Takaful Family General Operator Takaful Takaful GroupGroup Note RM’000 RM’000 RM’000 RM’000

At 1 January 2013 18,194 212,813 25,774 45,470Additions - 2,479 220 -Reclassified to property and equipment 3 - - - (5,535)Reclassified to assets held for sale 14 (1,730) (2,810) (2,850) (6,130)

Gains and losses recognised in profit or loss - Change in fair value - unrealised 26 317 4,938 596 6,101

Effect of movement in exchange rates (177) (1,417) - (186)

At 31 December 2013 16,604 216,003 23,740 39,720

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Notes to the Financial Statements

4. Investment properties (continued)

Fair value information (continued)

The following table shows a reconciliation of Level 3 fair values (continued):

Takaful Family General Operator Takaful Takaful GroupGroup Note RM’000 RM’000 RM’000 RM’000

At 1 January 2014 16,604 216,003 23,740 39,720Additions - 1,067 93 - Disposal (6,181) (2,053) - (7,586)Reclassified to assets held for sale 14 - - (2,000) -

Gains and losses recognised in profit or loss - Change in fair value - unrealised 26 385 2,090 (23) 1,645

Effect of movement in exchange rates 30 401 - 37

At 31 December 2014 10,838 217,508 21,810 33,816

Takaful Family General Operator Takaful Takaful CompanyCompany Note RM’000 RM’000 RM’000 RM’000

At 1 January 2013 17,250 204,824 25,774 44,479Additions - 2,479 220 -Reclassified to property and equipment 3 - - - (5,535)Reclassified to assets held for sale 14 (1,730) (2,810) (2,850) (6,130)

Gains and losses recognised in profit or loss - Change in fair value - unrealised 26 - 3,032 596 5,754

At 31 December 2013 / 1 January 2014 15,520 207,525 23,740 38,568Additions - 1,067 93 - Disposal (5,140) (2,053) - (6,793)Reclassified to assets held for sale 14 - - (2,000) -

Gains and losses recognised in profit or loss - Change in fair value - unrealised 26 380 821 (23) 1,620

At 31 December 2014 10,760 207,360 21,810 33,395

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Notes to the Financial Statements

4. Investment properties (continued)

Fair value information (continued)

The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the significant unobservable inputs used in the valuation models.

Inter-relationship between significant unobservableValuation technique Significant unobservable inputs inputs and fair value measurement

Comparison method: The valuation method consider Adjustment rate based on the The estimated fair value wouldthe sales and listing of comparable properties comparable of sales in the past increase (decrease) if:recorded in the area and adjustments are made that was analysed by the National - the rate were higher or lowerbetween the subject properties and those similar Property Information Centre (NAPIC) - the historical sales transactionproperties. The adjustments are made in relation under Valuation and Property were higher or lowerto location and accessibility, size and shape of the Services Department, Ministry of lot, physical features, legal and legislation constraints, Finance Malaysia. building design and condition, supply and demand, building code and public restriction.

Valuation processes applied by the Group and the Company for Level 3 fair value

The Group’s and the Company’s investment properties were valued by independent professional valuer firms, using the comparison, cost and investment methods of valuations, where applicable.

In the comparison method approach, the sales and listings of comparable properties within nearby locations are compiled. From the compiled data, adjustments are made by the valuers between the subject property and those similar properties.

The adjustments made are in relation to location, size and shape of the lot, physical features, legal and legislative constraints, building design and condition, time element, planning provision, improvements and renovation works made, if any, surrounding developments, facilities and amenities available and other factors that may affect the value of the subject property. These adjustments are therefore subject to uncertainties such as property market outlook, potential increases in rental rates and general economic conditions.

In the cost method approach, the indication of values consists of the sum of the present worth of the improvement value.

For the valuation of the improvements, the valuers have considered the following:i) Cost of replacement of the building in accordance with current trend of market prices for materials, labour, contractor’s overhead,

profit and fees;ii) Accrued depreciation as evidenced by the observed condition and present and prospective serviceability in comparison with new

units of like kind; andiii) Extent, character and utility of the property.

The investment method is the capitalisation of net rent from a property. Net rent is the residue of gross annual rent less annual expenses (outgoings) required to sustain the rent with allowance for void and management fees.

During the year, the external valuers performed an update valuation of market value of these investment properties in arriving at the fair value, after considering the properties’ existing condition. In prior year, the external valuers have considered the results of all these three methods in their valuation and applied professional judgement in the selection of the fair value of these investment properties.

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Notes to the Financial Statements

5. Investments in subsidiaries

Company Takaful Operator / Company 2014 2013 RM’000 RM’000

At costUnquoted shares 69,775 80,759Less: Accumulated impairment losses (20,399) (22,047)

49,376 58,712

Details of the subsidiaries are as follows:

Effective Country of ownership interestName of subsidiaries Principal activities incorporation 2014 2013

Asean Retakaful International Family and General Malaysia 63.09% 63.09% (L) Ltd. (ARIL)** retakaful business

P.T. Syarikat Takaful Investment holding Indonesia 56.00% 56.00% Indonesia and its subsidiaries*

P.T. Asuransi Takaful General Takaful Indonesia 64.70% 64.70% Umum* business

P.T. Asuransi Takaful Family Takaful Indonesia 74.80% 74.80% Keluarga* business

* Not audited by KPMG Desa Megat & Co** Members’ Voluntary Winding-up commenced on 21 May 2012. The subsidiary has been consolidated based on management

accounts.

Non-controlling interests in subsidiaries

The Group’s subsidiaries that have non-controlling interests (NCI) are not material to the Group.

6. Investment in associate

Investment in associate company amounting to RM2,473,000 (2013: RM2,473,000) was fully impaired during the financial year ended 30 June 2007.

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Notes to the Financial Statements

7. Other investments

The other investments comprise the following:

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorAvailable-for-sale (AFS) (a) 425,767 475,590 403,764 468,467 Fair value through profit or loss (FVTPL) (b) 3,937 6,614 - - Held-to-maturity (HTM) (c) 2,248 1,965 - -

431,952 484,169 403,764 468,467

Family TakafulAvailable-for-sale (AFS) (a) 2,719,452 3,094,385 2,643,713 3,022,304 Fair value through profit or loss (FVTPL) (b) 227,618 181,689 63,385 67,506 Held-to-maturity (HTM) (c) 442,979 366,741 427,185 361,354

3,390,049 3,642,815 3,134,283 3,451,164

General TakafulAvailable-for-sale (AFS) (a) 453,249 569,349 450,726 567,669 Held-to-maturity (HTM) (c) 41,279 35,902 37,626 32,674

494,528 605,251 488,352 600,343

Group / CompanyAvailable-for-sale (AFS) (a) 3,560,668 4,101,229 3,460,403 4,020,345 Fair value through profit or loss (FVTPL) (b) 231,555 188,303 63,385 67,506 Held-to-maturity (HTM) (c) 486,506 404,608 464,811 394,028

4,278,729 4,694,140 3,988,599 4,481,879

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Notes to the Financial Statements

7. Other investments (continued)

(a) AFS financial assets Group Company

2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Takaful Operator

Equity securities - Quoted in Malaysia 43,227 93,173 43,227 93,173 - Quoted outside Malaysia 7,087 508 - - - Unquoted in Malaysia 380 380 380 380 - Unquoted outside Malaysia 38 36 - -

50,732 94,097 43,607 93,553

Unit trusts - Quoted in Malaysia 26,237 23,303 26,237 23,303 - Quoted outside Malaysia 14,292 5,712 - -

40,529 29,015 26,237 23,303

Institutional Trust Account 38,259 64,268 38,259 64,268

Malaysian Government Islamic papers - 10,013 - 10,013

Islamic debt securities - Quoted outside Malaysia 586 867 - - - Unquoted in Malaysia 257,861 239,235 257,861 239,235 258,447 240,102 257,861 239,235

Investment in linked funds 37,800 38,095 37,800 38,095

425,767 475,590 403,764 468,467

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Notes to the Financial Statements

7. Other investments (continued)

(a) AFS financial assets (continued) Group Company

2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Family Takaful

Equity securities - Quoted in Malaysia 331,569 704,490 331,569 704,490 - Quoted outside Malaysia 7,660 34 - -

339,229 704,524 331,569 704,490

Unit trusts - Quoted in Malaysia 138,601 83,133 138,601 83,133 - Quoted outside Malaysia 66,087 66,435 - -

204,688 149,568 138,601 83,133

Institutional Trust Account 84,900 196,482 84,900 196,482

Malaysian Government Islamic papers 236,397 383,832 236,397 383,832

Islamic debt securities - Quoted outside Malaysia 1,992 4,267 - - - Unquoted in Malaysia 1,852,246 1,654,367 1,852,246 1,654,367 - Unquoted outside Malaysia - 1,345 - -

1,854,238 1,659,979 1,852,246 1,654,367

2,719,452 3,094,385 2,643,713 3,022,304

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Notes to the Financial Statements

7. Other investments (continued)

(a) AFS financial assets (continued)

Group Company 2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

General Takaful

Equity securities - Quoted in Malaysia 53,624 133,234 53,624 133,234

Unit trusts - Quoted in Malaysia 21,535 20,874 21,535 20,874 - Quoted outside Malaysia 2,523 1,680 - -

24,058 22,554 21,535 20,874

Institutional Trust Account 26,154 38,147 26,154 38,147

Malaysian Government Islamic papers 5,069 61,886 5,069 61,886

Islamic debt securities - Unquoted in Malaysia 344,344 313,528 344,344 313,528

453,249 569,349 450,726 567,669

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Notes to the Financial Statements

7. Other investments (continued)

(a) AFS financial assets (continued)

Group Company 2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Group / Company

Equity securities - Quoted in Malaysia 428,420 930,897 428,420 930,897 - Quoted outside Malaysia 14,747 542 - - - Unquoted in Malaysia 380 380 380 380 - Unquoted outside Malaysia 38 36 - -

443,585 931,855 428,800 931,277

Unit trusts - Quoted in Malaysia 186,373 127,310 186,373 127,310 - Quoted outside Malaysia 82,902 73,827 - -

269,275 201,137 186,373 127,310

Institutional Trust Account 149,313 298,897 149,313 298,897

Malaysian Government Islamic papers 241,466 455,731 241,466 455,731

Islamic debt securities - Quoted outside Malaysia 2,578 5,134 - - - Unquoted in Malaysia 2,454,451 2,207,130 2,454,451 2,207,130 - Unquoted outside Malaysia - 1,345 - -

2,457,029 2,213,609 2,454,451 2,207,130

3,560,668 4,101,229 3,460,403 4,020,345

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Notes to the Financial Statements

7. Other investments (continued)

(b) FVTPL financial assets Group Company

2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Takaful Operator

Equity securities - Quoted outside Malaysia 701 2,573 - - Islamic debt securities - Quoted outside Malaysia 3,236 4,041 - -

3,937 6,614 - -

Family Takaful

Equity securities - Quoted in Malaysia 49,229 51,239 49,229 51,239 - Quoted outside Malaysia 42,893 27,010 - -

92,122 78,249 49,229 51,239

Unit trusts - Quoted outside Malaysia 22,943 18,451 - -

Islamic debt securities - Quoted outside Malaysia 98,397 68,722 - - - Unquoted in Malaysia 14,156 16,267 14,156 16,267

112,553 84,989 14,156 16,267

227,618 181,689 63,385 67,506

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Notes to the Financial Statements

7. Other investments (continued)

(b) FVTPL financial assets (continued) Group Company

2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Group / Company

Equity securities - Quoted in Malaysia 49,229 51,239 49,229 51,239 - Quoted outside Malaysia 43,594 29,583 - -

92,823 80,822 49,229 51,239

Unit trusts - Quoted outside Malaysia 22,943 18,451 - -

Islamic debt securities - Quoted outside Malaysia 101,633 72,763 - - - Unquoted in Malaysia 14,156 16,267 14,156 16,267 115,789 89,030 14,156 16,267

231,555 188,303 63,385 67,506

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Notes to the Financial Statements

7. Other investments (continued)

(c) HTM financial assets Group Company

2014 2013 2014 2013At amortised cost RM’000 RM’000 RM’000 RM’000

Takaful Operator

Islamic debt securities - Quoted outside Malaysia 2,248 1,965 - -

Family Takaful

Islamic debt securities - Quoted outside Malaysia 15,794 5,387 - - - Unquoted in Malaysia 314,535 248,637 314,535 248,637

330,329 254,024 314,535 248,637

Malaysian Government Islamic papers 112,650 112,717 112,650 112,717

442,979 366,741 427,185 361,354

General Takaful

Islamic debt securities - Quoted outside Malaysia 3,653 3,228 - - - Unquoted in Malaysia 5,000 - 5,000 -

8,653 3,228 5,000 -

Malaysian Government Islamic papers 32,626 32,674 32,626 32,674

41,279 35,902 37,626 32,674

Group / Company

Islamic debt securities - Quoted outside Malaysia 21,695 10,580 - - - Unquoted in Malaysia 319,535 248,637 319,535 248,637

341,230 259,217 319,535 248,637

Malaysian Government Islamic papers 145,276 145,391 145,276 145,391

486,506 404,608 464,811 394,028

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Notes to the Financial Statements

7. Other investments (continued)

(c) HTM financial assets (continued) Group Company

2014 2013 2014 2013At fair value RM’000 RM’000 RM’000 RM’000

Takaful Operator

Islamic debt securities - Quoted outside Malaysia 2,093 1,944 - -

Family Takaful

Islamic debt securities - Quoted outside Malaysia 15,441 5,338 - - - Unquoted in Malaysia 316,651 246,841 316,651 246,841

332,092 252,179 316,651 246,841

Malaysian Government Islamic papers 112,582 112,851 112,582 112,851

444,674 365,030 429,233 359,692

General Takaful

Islamic debt securities - Quoted outside Malaysia 3,555 3,169 - - - Unquoted in Malaysia 5,000 - 5,000 -

8,555 3,169 5,000 -

Malaysian Government Islamic papers 32,663 32,778 32,663 32,778

41,218 35,947 37,663 32,778

Group / Company

Islamic debt securities - Quoted outside Malaysia 21,089 10,451 - - - Unquoted in Malaysia 321,651 246,841 321,651 246,841

342,740 257,292 321,651 246,841

Malaysian Government Islamic papers 145,245 145,629 145,245 145,629

487,985 402,921 466,896 392,470

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Notes to the Financial Statements

7. Other investments (continued)

(d) Carrying values of financial instruments

AFS FVTPL HTM Group Note RM’000 RM’000 RM’000 RM’000

At 1 January 2013 3,928,857 220,299 290,431 4,439,587 Purchases 2,951,239 138,913 121,285 3,211,437 Maturities (142,032) (60,602) (4,526) (207,160)Disposals (2,517,880) (94,047) - (2,611,927)Dividend capitalised 13,916 - - 13,916 Fair value gains / (losses) recorded in: Profit or loss 26 - 3,575 - 3,575 Other comprehensive income 39.2 2,721 - - 2,721 Participants’ fund (106,412) - - (106,412) Net assets value attributable to unitholders (3,881) - - (3,881)Impairment losses incurred during the year 31 (2,037) - (210) (2,247)Amortisation of premiums, net of accretion of discounts 24 (8,616) - (322) (8,938)Effect of movement in exchange rates (14,646) (19,835) (2,050) (36,531)

At 31 December 2013 / 1 January 2014 4,101,229 188,303 404,608 4,694,140 Purchases 3,191,765 254,747 85,015 3,531,527 Maturities (161,159) (4,145) (3,316) (168,620) Disposals (3,485,373) (225,141) - (3,710,514) Dividend capitalised 9,890 - - 9,890 Fair value gains / (losses) recorded in: Profit or loss 26 - 11,701 - 11,701 Other comprehensive income 39.2 (9,521) - - (9,521) Participants’ fund (69,613) - - (69,613) Net assets value attributable to unitholders 295 - - 295 Impairment losses incurred during the year 31 (14,690) - (361) (15,051) Amortisation of premiums, net of accretion of discounts 24 (6,027) - (91) (6,118)Effect of movement in exchange rates 3,872 6,090 651 10,613

At 31 December 2014 3,560,668 231,555 486,506 4,278,729

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Notes to the Financial Statements

7. Other investments (continued)

(d) Carrying values of financial instruments (continued)

AFS FVTPL HTM Group Note RM’000 RM’000 RM’000 RM’000

At 1 January 2013 3,829,204 113,682 274,630 4,217,516 Purchases 2,912,127 47,440 119,474 3,079,041 Maturities (142,032) (60,602) - (202,634)Disposals (2,485,797) (41,790) - (2,527,587)Dividend capitalised 13,916 - - 13,916 Fair value gains / (losses) recorded in: Profit or loss 26 - 8,776 - 8,776 Other comprehensive income 39.2 3,356 - - 3,356 Participants’ fund (96,424) - - (96,424) Net assets value attributable to unitholders (3,881) - - (3,881)Impairment losses incurred during the year 31 (1,508) - - (1,508)Amortisation of premiums, net of accretion of discounts 24 (8,616) - (76) (8,692)

At 31 December 2013 / 1 January 2014 4,020,345 67,506 394,028 4,481,879 Purchases 3,074,292 86,551 70,985 3,231,828 Maturities (159,474) - - (159,474)Disposals (3,388,979) (88,892) - (3,477,871)Dividend capitalised 9,890 - - 9,890 Fair value gains / (losses) recorded in: Profit or loss 26 - (1,780) - (1,780) Other comprehensive income 39.2 (9,405) - - (9,405) Participants’ fund (66,745) - - (66,745) Net assets value attributable to unitholders 295 - - 295 Impairment losses incurred during the year 31 (13,789) - - (13,789) Amortisation of premiums, net of accretion of discounts 24 (6,027) - (202) (6,229)

At 31 December 2014 3,460,403 63,385 464,811 3,988,599

(e) Fair values of financial instruments

Quoted market prices category are financial instruments that are measured in whole or in part by reference to published quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange and published market price from print medias. Market observable financial instruments are measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions and are instruments for which pricing is obtained from Bond Pricing Agency Malaysia and regulatory agency. The fair value of investments in structured products are obtained via investments bankers and / or fund managers. Non-market observable inputs means that fair values are determined in whole or in part using a valuation technique based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The main asset class in this category are unquoted equity securities and Institutional Trust Account.

The fair values of the unquoted equity securities were determined to approximate the carrying amount as these are immaterial in the context of the financial statements.

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144

Notes to the Financial Statements

7. Other investments (continued)

(f) Maturity of other investments

The following investments mature after 12 months: Group Company

2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator

AFS financial assets 270,151 249,845 269,854 249,248 FVTPL financial assets 3,237 4,041 - - HTM financial assets 1,812 1,944 - -

Family Takaful

AFS financial assets 2,062,626 1,959,035 2,059,823 1,956,143 FVTPL financial assets 108,784 77,699 12,399 15,805 HTM financial assets 441,557 363,869 427,185 361,354

General Takaful

AFS financial assets 335,215 370,388 335,215 370,388 HTM financial assets 40,905 35,303 37,626 32,674

Group / Company

AFS financial assets 2,667,992 2,579,268 2,664,892 2,575,779 FVTPL financial assets 112,021 81,740 12,399 15,805 HTM financial assets 484,274 401,116 464,811 394,028

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145

Notes to the Financial Statements

8. Retakaful assets Group Company

2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family Takaful

Claims liabilities 18(a) 53,157 35,123 52,126 33,621 Actuarial liabilities 18(c) 206,644 148,340 199,326 142,240

259,801 183,463 251,452 175,861

General Takaful

Claims liabilities 18(a) 352,710 372,270 346,103 357,445 Contribution liabilities 18(b) 69,949 80,200 68,117 77,545

422,659 452,470 414,220 434,990

Group / Company

Claims liabilities 18(a) 405,867 407,393 398,229 391,066 Contribution liabilities 18(b) 69,949 80,200 68,117 77,545 Actuarial liabilities 18(c) 206,644 148,340 199,326 142,240

682,460 635,933 665,672 610,851

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146

Notes to the Financial Statements

9. Deferred tax assets / (liabilities)

<------------------------------------------------- Group -------------------------------------------------> Assets Liabilities Net 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful Operator

Property and equipment - - (359) (359) (359) (359)Investment properties - - (1,895) (1,989) (1,895) (1,989)Other investments 654 - - (2,591) 654 (2,591)Loans and receivables, excluding takaful receivables 1,311 411 - - 1,311 411Takaful receivables 406 720 - - 406 720Other payables 8,257 12,177 - - 8,257 12,177Expense reserves 28,093 32,495 - - 28,093 32,495Unabsorbed tax losses 2,082 860 - - 2,082 860

Tax assets / (liabilities) 40,803 46,663 (2,254) (4,939) 38,549 41,724Set off of tax (2,254) (4,939) 2,254 4,939 - -

Net tax assets 38,549 41,724 - - 38,549 41,724

Group

Property and equipment - - (393) (425) (393) (425)Investment properties - - (1,861) (1,923) (1,861) (1,923)Other investments 654 - - (2,591) 654 (2,591)Loans and receivables, excluding takaful receivables 1,311 411 - - 1,311 411Takaful receivables 406 720 - - 406 720Other payables 8,257 12,177 - - 8,257 12,177Expense reserves 28,093 32,495 - - 28,093 32,495Unabsorbed tax losses 2,082 860 - - 2,082 860

Tax assets / (liabilities) 40,803 46,663 (2,254) (4,939) 38,549 41,724 Set off of tax (2,254) (4,939) 2,254 4,939 - -

Net tax assets 38,549 41,724 - - 38,549 41,724

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147

Notes to the Financial Statements

9. Deferred tax assets / (liabilities) (continued)

<----------------------------------------------- Company -----------------------------------------------> Assets Liabilities Net 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful Operator

Investment properties - - (1,895) (1,989) (1,895) (1,989)Investment in subsidiaries 2,972 3,384 - - 2,972 3,384Other investments 443 - - (2,755) 443 (2,755)Loans and receivables, excluding takaful receivables 269 321 - - 269 321Takaful receivables 390 704 - - 390 704Other payables 5,319 8,794 - - 5,319 8,794Expense reserves 27,418 31,820 - - 27,418 31,820

Tax assets / (liabilities) 36,811 45,023 (1,895) (4,744) 34,916 40,279 Set off of tax (1,895) (4,744) 1,895 4,744 - -

Net tax assets 34,916 40,279 - - 34,916 40,279

Company

Property and equipment - - (34) (66) (34) (66)Investment properties - - (1,861) (1,923) (1,861) (1,923)Investment in subsidiaries 2,972 3,384 - - 2,972 3,384Other investments 443 - - (2,755) 443 (2,755)Loans and receivables, excluding takaful receivables 269 321 - - 269 321Takaful receivables 390 704 - - 390 704Other payables 5,319 8,794 - - 5,319 8,794Expense reserves 27,418 31,820 - - 27,418 31,820

Tax assets / (liabilities) 36,811 45,023 (1,895) (4,744) 34,916 40,279 Set off of tax (1,895) (4,744) 1,895 4,744 - -

Net tax assets 34,916 40,279 - - 34,916 40,279

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148

Notes to the Financial Statements

9.

Defe

rred

tax

asse

ts /

(lia

biliti

es) (

conti

nued

)

Reco

gnis

ed

Re

cogn

ised

Re

cogn

ised

in

oth

er

Effec

t of

Re

cogn

ised

in

oth

er

Effec

t of

in

pro

fit c

ompr

ehen

sive

mov

emen

t As

at

in p

rofit

com

preh

ensi

ve

mov

emen

t

As

at

or lo

ss

inco

me

in e

xcha

nge

31.1

2.20

13 /

or

loss

in

com

e in

exc

hang

e As

at

1.1.

2013

(N

ote

32)

(Not

e 32

) ra

te

1.1.

2014

(N

ote

32)

(Not

e 32

) ra

te

31.1

2.20

14

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Gro

up T

akaf

ul O

pera

tor

Prop

erty

and

equ

ipm

ent

(404

) 54

-

(9)

(359

) (1

) -

1

(3

59)

Inve

stm

ent p

rope

rties

(1

,992

) 3

- -

(1,9

89)

94

- -

(1,8

95)

Oth

er in

vest

men

ts

(321

) (1

,411

) (8

39)

(20)

(2

,591

) 8

86

2,3

51

8

654

Lo

ans a

nd re

ceiv

able

s, e

xclu

ding

ta

kafu

l rec

eiva

bles

63

0 (1

97)

- (2

2)

411

880

-

2

0

1,3

11

Taka

ful r

ecei

vabl

es

863

(141

) -

(2)

720

(314

) -

- 4

06

Oth

er p

ayab

les

11,4

35

1,08

0 -

(338

) 12

,177

(4

,003

) -

83

8,2

57

Expe

nse

rese

rves

21

,918

10

,577

-

- 32

,495

(4

,402

) -

- 2

8,09

3 U

nabs

orbe

d ta

x lo

sses

2,

253

(1,1

81)

- (2

12)

860

1,16

4 -

58

2,0

82

Tax

asse

ts /

(liab

ilitie

s)

34,3

82

8,78

4 (8

39)

(603

) 41

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(5

,696

) 2

,351

17

0

38,

549

Gro

upPr

oper

ty a

nd e

quip

men

t (6

16)

54

146

(9)

(425

) (1

) 3

2

1

(393

)In

vest

men

t pro

perti

es

(1,7

80)

(143

) -

- (1

,923

) 6

2

- -

(1

,861

)O

ther

inve

stm

ents

(3

21)

(1,4

11)

(839

) (2

0)

(2,5

91)

886

2

,351

8

6

54

Loan

s and

rece

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les,

exc

ludi

ng

taka

ful r

ecei

vabl

es

630

(197

) -

(22)

41

1 8

80

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20

1

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Ta

kafu

l rec

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86

3 (1

41)

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) 72

0 (3

14)

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406

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ther

pay

able

s 11

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080

- (3

38)

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77

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253

(1,1

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12)

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1,1

64

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58

2

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asse

ts /

(liab

ilitie

s)

34,3

82

8,63

8 (6

93)

(603

) 41

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(5

,728

) 2,

383

1

70

38,

549

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149

Notes to the Financial Statements9.

De

ferr

ed ta

x as

sets

/ (l

iabi

lities

) (co

ntinu

ed)

Reco

gnis

ed

Reco

gnis

ed

Reco

gnis

ed

in o

ther

in

oth

er

in

pro

fit c

ompr

ehen

sive

As a

t in

pro

fit c

ompr

ehen

sive

As a

t or

loss

in

com

e 31

.12.

2013

/

or lo

ss

inco

me

As a

t

1.

1.20

13

(Not

e 32

) (N

ote

32)

1.1.

2014

(N

ote

32)

(Not

e 32

) 31

.12.

2014

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

Com

pany

Tak

aful

Ope

rato

rIn

vest

men

t pro

perti

es

(1,9

92)

3 -

(1,9

89)

94

-

(1

,895

)In

vest

men

t in

subs

idia

ries

2,13

0 1,

254

- 3

,384

(4

12)

-

2,9

72

Oth

er in

vest

men

ts

(321

) (1

,595

) (8

39)

(2,7

55)

847

2

,351

4

43

Loan

s and

rece

ivab

les,

exc

ludi

ng ta

kafu

l rec

eiva

bles

383

(62)

-

321

(5

2)

-

269

Ta

kafu

l rec

eiva

bles

86

3 (1

59)

- 7

04

(314

) -

3

90

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er p

ayab

les

8,31

7 47

7 -

8,7

94

(3,4

75)

-

5,3

19

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nse

rese

rves

21

,243

10

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-

31,

820

(4

,402

) -

2

7,41

8

Tax

asse

ts /

(liab

ilitie

s)

30,

623

10

,495

(8

39)

40,

279

(7

,714

) 2

,351

3

4,91

6

Com

pany

Prop

erty

and

equ

ipm

ent

(212

) -

146

(66)

-

3

2

(34)

Inve

stm

ent p

rope

rties

(1

,780

) (1

43)

- (1

,923

) 6

2

-

(1,8

61)

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stm

ent i

n su

bsid

iarie

s

2,

130

1,25

4 -

3,38

4 (4

12)

-

2,9

72

Oth

er in

vest

men

ts

(321

) (1

,595

) (8

39)

(2,7

55)

847

2

,351

4

43

Loan

s and

rece

ivab

les,

exc

ludi

ng ta

kafu

l rec

eiva

bles

383

(62)

-

321

(52)

-

2

69

Taka

ful r

ecei

vabl

es

863

(159

) -

704

(314

) -

3

90

Oth

er p

ayab

les

8,31

7 47

7 -

8,79

4 (3

,475

) -

5

,319

Ex

pens

e re

serv

es

21,2

43

10,5

77

- 31

,820

(4

,402

) -

2

7,41

8

Tax

asse

ts /

(liab

ilitie

s)

30,

623

10

,349

(6

93)

40,2

79

(7,7

46)

2,3

83

34,

916

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150

Notes to the Financial Statements

10. Loans and receivables, excluding takaful receivables Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorFinancing receivables Secured financing 83 21 - - Unsecured financing 290 325 290 325 Staff financing 3,522 5,230 2,649 4,015 Allowance for impairment (1,031) (1,245) (821) (1,026)

2,864 4,331 2,118 3,314

Fixed and call deposits with licensed financial institutions with maturity more than three months Licensed banks in Malaysia 96,629 98,731 96,629 85,737 Banks outside Malaysia 2,687 4,037 - -

99,316 102,768 96,629 85,737

Other receivables Investment receivable 22,229 5,043 22,229 5,043 Due from Family Takaful Fund 21 8,788 25,661 7,887 25,661 Due from General Takaful Fund 21 22,410 9,746 22,410 9,746 Prepayment 4,003 5,465 3,044 4,148 Sundry deposits 238 350 238 350 Sundry receivables 4,748 7,173 557 752 62,416 53,438 56,365 45,700

164,596 160,537 155,112 134,751

Family TakafulFinancing receivables Secured financing 70,301 70,301 70,301 70,301 Allowance for impairment (301) (301) (301) (301)

70,000 70,000 70,000 70,000

Fixed and call deposits with licensed financial institutions with maturity more than three months Licensed banks in Malaysia 440,622 391,281 440,622 383,575 Banks outside Malaysia 5,024 7,179 - -

445,646 398,460 440,622 383,575

Other receivables Investment receivable 137,852 40,902 136,526 40,157 Due from Takaful Operator 21 8,566 10,491 - - Sundry deposits 1,171 1,181 1,171 1,181 Prepayment 241 - 241 - Sundry receivables 517 868 514 585

148,347 53,442 138,452 41,923

663,993 521,902 649,074 495,498

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151

Notes to the Financial Statements

10. Loans and receivables, excluding takaful receivables (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General TakafulFinancing receivables Secured financing 5,381 5,381 5,381 5,381 Allowance for impairment (381) (381) (381) (381)

5,000 5,000 5,000 5,000

Fixed and call deposits with licensed financial institutions with maturity more than three months Licensed banks in Malaysia 64,075 62,732 64,075 60,175 Banks outside Malaysia 1,475 1,762 - -

65,550 64,494 64,075 60,175

Other receivables Investment receivable 26,751 7,214 26,751 7,214 Due from Takaful Operator 21 7,121 6,101 - - Due from Family Takaful Fund 21 99 2,540 99 2,540 Prepayment 108 35 - 35 Sundry deposits 715 574 715 574 Sundry receivables 819 3,618 108 -

35,613 20,082 27,673 10,363

106,163 89,576 96,748 75,538

Group / CompanyFinancing receivables Secured financing 75,765 75,703 75,682 75,682 Unsecured financing 290 325 290 325 Staff financing 3,522 5,230 2,649 4,015 Allowance for impairment (1,713) (1,927) (1,503) (1,708)

77,864 79,331 77,118 78,314

Fixed and call deposits with licensed financial institutions with maturity more than three months Licensed banks in Malaysia 601,326 552,744 601,326 529,487 Banks outside Malaysia 9,186 12,978 - -

610,512 565,722 601,326 529,487

Other receivables Investment receivable 186,832 53,159 185,506 52,414 Prepayment 4,352 5,500 3,393 4,183 Sundry deposits 2,124 2,105 2,124 2,105 Sundry receivables 6,084 11,659 1,071 1,337

199,392 72,423 192,094 60,039

887,768 717,476 870,538 667,840

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152

Notes to the Financial Statements

10. Loans and receivables, excluding takaful receivables (continued)

The following loans and receivables, excluding takaful receivables mature after 12 months:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorFinancing receivables 1,383 3,552 885 2,738 Fixed and call deposits with licensed financial institutions 25,000 5,000 25,000 5,000Other receivables 238 350 238 350

26,621 8,902 26,123 8,088

Family TakafulFinancing receivables 70,000 70,000 70,000 70,000Fixed and call deposits with licensed financial institutions 145,000 43,000 145,000 43,000 Other receivables 1,171 1,181 1,171 1,181

216,171 114,181 216,171 114,181

General TakafulFinancing receivables 5,000 5,000 5,000 5,000Fixed and call deposits with licensed financial institutions 20,000 7,000 20,000 7,000Other receivables 715 574 715 574

25,715 12,574 25,715 12,574

Group / CompanyFinancing receivables 76,383 78,740 75,885 77,738 Fixed and call deposits with licensed financial institutions 190,000 55,000 190,000 55,000 Other receivables 2,124 2,105 2,124 2,105

268,507 135,845 268,009 134,843

Offsetting of financial assets and financial liabilities

No financial assets and liabilities have been set off for presentation purposes.

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153

Notes to the Financial Statements

11. Takaful receivables Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family TakafulDue contributions 66,230 46,601 64,247 44,851 Due from retakaful / co-takaful 25,794 24,377 23,323 20,738

92,024 70,978 87,570 65,589 Less: Allowance for impaired debts 39.4 (1,052) (2,781) (1,022) (2,754)

90,972 68,197 86,548 62,835

General Takaful

Due contributions 28,844 41,752 26,430 36,591 Due from retakaful / co-takaful 12,210 12,948 8,406 9,554

41,054 54,700 34,836 46,145 Less: Allowance for impaired debts 39.4 (3,435) (5,741) (3,121) (5,634)

37,619 48,959 31,715 40,511

Group / Company

Due contributions 95,074 88,353 90,677 81,442 Due from retakaful / co-takaful 38,004 37,325 31,729 30,292

133,078 125,678 122,406 111,734 Less: Allowance for impaired debts 39.4 (4,487) (8,522) (4,143) (8,388)

128,591 117,156 118,263 103,346

Offsetting of financial assets and financial liabilities

No financial assets and liabilities have been set off for presentation purposes.

12. Qard receivables Group Company 2014 2013 2014 2013Takaful Operator Note RM’000 RM’000 RM’000 RM’000

At 1 January - - - -Increase during the year 362 11,458 - -Qard written off 31 (362) (11,458) - -

At 31 December - - - -

The Qard is not repayable and has been fully written off, taking into the consideration the subsidiary and it’s Takaful Funds are under Members’ Voluntary Winding-up since 21 May 2012 and there is no expected future experience of the fund to generate surplus.

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154

Notes to the Financial Statements

13. Cash and cash equivalents Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorCash and bank balances 1,877 1,933 300 840 Fixed and call deposits with licensed financial institutions with maturity less than three months Licensed banks in Malaysia 125,681 62,310 111,623 44,933 Banks outside Malaysia 18,941 24,928 - -

146,499 89,171 111,923 45,773

Family TakafulCash and bank balances 31,581 39,750 24,484 32,871 Fixed and call deposits with licensed financial institutions with maturity less than three months Licensed banks in Malaysia 522,350 171,816 513,874 171,816 Banks outside Malaysia 43,410 54,170 - -

597,341 265,736 538,358 204,687

General TakafulCash and bank balances 5,332 40,705 3,000 37,240 Fixed and call deposits with licensed financial institutions with maturity less than three months Licensed banks in Malaysia 96,135 25,539 93,311 25,539 Banks outside Malaysia 10,968 9,468 - -

112,435 75,712 96,311 62,779

Group / CompanyCash and bank balances 38,790 82,388 27,784 70,951 Fixed and call deposits with licensed financial institutions with maturity less than three months Licensed banks in Malaysia 744,166 259,665 718,808 242,288 Banks outside Malaysia 73,319 88,566 - -

856,275 430,619 746,592 313,239

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Notes to the Financial Statements

14. Assets held for sale

As at 31 December 2014, the assets held for sale are as follows: Group and Company 2014 2013 Note RM’000 RM’000

Takaful OperatorAt 1 January 1,730 1,340Settlement for asset held for sale (1,730) (1,340)Transferred from investment properties 4 - 1,730

At 31 December - 1,730

Family TakafulAt 1 January 2,260 1,360Settlement for asset held for sale (2,260) (1,910)Transferred from investment properties 4 - 2,810

At 31 December - 2,260

General TakafulAt 1 January 2,850 540Settlement for asset held for sale (2,850) (540)Transferred from investment properties 4 2,000 2,850

At 31 December 2,000 2,850

Group / CompanyAt 1 January 6,840 3,240Settlement for asset held for sale (6,840) (3,790)Transferred from property and equipment 3 2,000 1,260Transferred from investment properties 4 - 6,130

At 31 December 2,000 6,840

The carrying value of investment properties is the same as its carrying value before being reclassified to current assets.

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Notes to the Financial Statements

15. Share capital and reserves Takaful Operator / Group / Company Number Number Amount of shares Amount of shares 2014 2014 2013 2013 RM’000 ’000 RM’000 ’000

Authorised Ordinary shares of RM1.00 each 500,000 500,000 500,000 500,000

Issued and fully paid Ordinary shares of RM1.00 each At 1 January 162,817 162,817 162,817 162,817 Issued under LTIP 189 189 - -

At 31 December 163,006 163,006 162,817 162,817

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Share premium

Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets recognised in other comprehensive income until the investments are derecognised or impaired.

Revaluation reserve

The revaluation reserve relates to the revaluation of land and buildings.

LTIP (Long Term Incentive Plan) reserve

The LTIP reserve comprises the cumulative value of employee services received for the issue of Restricted Share Plan and Performance Share Plan. When the LTIP is exercised, the amount from the LTIP reserve is transferred to share premium. When the LTIP expires, the amount from the LTIP reserve is transferred to retained earnings. LTIP is disclosed in note 16.

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Notes to the Financial Statements

15. Share capital and reserves (continued)

Retained earnings

The Company may distribute single tier exempt dividend to its shareholders out of its retained earnings. Pursuant to Section 60(1) of the IFSA, the Company is required to obtain Bank Negara Malaysia’s written approval prior to declaring or paying any dividend with effect from financial year beginning 1 January 2014.

Pursuant to the RBC Framework for Takaful Operator, the Company shall not pay dividends if its Capital Adequacy Ratio position is less than its internal target capital level or if the payment of dividend would impair its Capital Adequacy Ratio position to below its internal target.

16. Employee benefits

Share-based payments arrangement

At the Extraordinary General Meeting held on 24 July 2013, the Company’s shareholders approved the establishment of a Long Term Incentive Plan (LTIP), which comprises a Restricted Share Plan (RSP) and a Performance Share Plan (PSP), of not more than 10% of issued and paid-up share capital of the Company (excluding treasury shares) to eligible employees and executive director of the Company. The LTIP was effected on 25 July 2013 following the submission of the By-Laws for the LTIP to Bursa Malaysia Securities Berhad, the receipt of all required approvals and the compliance with the requirements pertaining to the LTIP.

The salient features of the LTIP are, inter alia, as follows:

i) The RSP is a restricted share plan for selected key employees and the executive director of the Group. The RSP Grant is intended as a one-off grant, subject to the discretion of the LTIP Committee for future grants, to retain key employees for the development, growth and success of the Group. The RSP will be vested to the RSP Grantees at no consideration over a period of up to three (3) years pro-rata which may include additional holding periods for each vesting as determined by the LTIP committee, whereby selected employees will be assessed based on, amongst others, the individual performance and achievement, which may include but are not limited to, profit after zakat and taxation and / or other financial measures as may be relevant, in accordance with terms and conditions stipulated and determined by the LTIP Committee in its discretion. The LTIP Committee is a committee established by the Board to implement and administer the LTIP in accordance with the LTIP By-Laws.

ii) The PSP is a performance share plan for selected key employees and the executive director of the Group. The PSP Grant is an annual grant to incentivise key employees for the long-term success and growth of the Group as well as shareholders’ value enhancement. The PSP will be vested to the RSP Grantees at no consideration over a period of up to three (3) years cliff vesting schedule whereby selected employees will be assessed based on, amongst others, the total shareholders’ return, which is the improvement in stock price including dividends paid, and the long-term financial performance of the Company over a period of three (3) financial years, or such other period of time should the LTIP committee choose to do so, in accordance with terms and conditions stipulated and determined by the LTIP Committee in its discretion.

iii) Eligible employees are those executives (including executive director) of the Group (other than subsidiaries which are dormant) who have attained the age of 18 years; entered into a full-time or fixed-term contract of employment with and is on the payroll of a company within the Group; have not served notice of resignation or received notice of termination on the date of the offer; whose service / employment have been confirmed in writing; and have fulfilled other eligibility criteria which has been determined by the LTIP Committee at its sole and absolute discretion from time to time.

iv) The total number of Takaful Malaysia Shares to be offered to any one of the employees and / or to be vested in any one of the grantees shall not be more than 10% of the Takaful Malaysia Shares made available under the LTIP and shall not either singly or collectively through persons connected with the said employee, holds 20% or more of the Company’s issued and paid up share capital.

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Notes to the Financial Statements

16. Employee benefits (continued)

The salient features of the LTIP are, inter alia, as follows (continued):

v) The maximum number of Takaful Malaysia Shares to be allotted and issued under LTIP shall not be more than in aggregate 10% of the issued and paid-up ordinary share capital of the Company at any point in time during the duration of the LTIP.

vi) The LTIP shall be in force for a period of ten (10) years from the effective date of implementation of the LTIP.

vii) The new Takaful Malaysia Shares to be allotted and issued pursuant to the LTIP shall, upon allotment and issuance, rank pari passu in all respects with the then existing issued Takaful Malaysia Shares and shall be entitled to any rights, dividends, allotments and / or distributions attached thereto and / or which may declared, made or paid to the Company’s shareholders, provided that the relevant allotment date of such new shares is before the record date (as defined in the LTIP By-Laws) for any right, allotment or distribution.

viii) If the LTIP Committee so decides (but not otherwise), in the event of any alteration in the capital structure of the Company during the duration of the LTIP, such corresponding alterations (if any) may be made in the number of unvested Takaful Malaysia Shares and / or the method and / or manner in the vesting of the Takaful Malaysia Shares comprised in a grant.

During the year, the number of the shares granted are as follows:

Restricted Performance Shares Shares Number Number of shares of shares Total (’000) (’000) (’000)

At 1 January 2013 - - -Granted during the year 607 724 1,331

Outstanding at 31 December 2013 / 1 January 2014 607 724 1,331Granted during the year - 460 460Exercised during the year (189) - (189)Forfeited during the year (39) (111) (150)

Outstanding at 31 December 2014 379 1,073 1,452

During the financial year, 189,500 shares were exercised. The weighted average share price at the date of exercise for the year was RM8.96 (2013: No shares exercised).

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Notes to the Financial Statements

16. Employee benefits (continued)

The fair value of services received in return for Restricted Shares and Performance Shares granted are based on the fair value of Restricted Shares and Performance Shares granted respectively, measured using the Monte Carlo Simulation, with the following inputs:

Restricted Restricted Performance Performance shares shares shares sharesFair value and assumption 2014 2013 2014 2013

Fair value at grant date 7.194 7.194 10.533 6.996

Weighted average share price 7.194 7.194 10.533 6.996Share price at grant date 7.755 7.755 12.580 7.755Expected volatility (weighted average volatility) 34.30% 34.30% 31.19% to 34.30% 34.30%Option life (expected weighted average life) 3 3 3 3Expected dividends 0.0384 0.0384 0.0384 to 0.0384 0.0431Risk-free interest rate (based on Malaysian government bonds) 3.30% to 3.30% to 3.43% to 3.52% 3.52% 3.52% 3.43%

Value of employee services received for issue of shares Group and Company 2014 2013 RM’000 RM’000

Expense recognised as share-based payments Shares granted in 2013 - Restricted shares 2,327 1,148 - Performance shares 2,017 868

4,344 2,016

Shares granted in 2014 - Performance shares 470 -

4,814 2,016

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Notes to the Financial Statements

17. Qard payables

Group 2014 2013 RM’000 RM’000

Family TakafulAt 1 January 23,028 10,398Increase during the year 362 11,458Effect of movement in exchange rates 1,522 1,172

At 31 December 24,912 23,028

General TakafulAt 1 January 25,634 23,888Effect of movement in exchange rates 1,667 1,746

At 31 December 27,301 25,634

18. Takaful contract liabilities

The takaful contract liabilities comprise the following: Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family TakafulProvision for outstanding claims (a) 203,058 195,807 183,319 176,375 Participants’ fund (c) 4,874,488 4,554,923 4,549,961 4,282,474

5,077,546 4,750,730 4,733,280 4,458,849

General TakafulProvision for outstanding claims (a) 605,433 665,467 584,001 633,291 Provision for unearned contributions (b) 290,899 296,425 276,584 280,111 Participants’ fund (c) 207,133 219,124 200,804 213,801

1,103,465 1,181,016 1,061,389 1,127,203

Group / CompanyProvision for outstanding claims (a) 808,491 861,274 767,320 809,666 Provision for unearned contributions (b) 290,899 296,425 276,584 280,111 Participants’ fund (c) 5,043,821 4,735,952 4,712,965 4,458,180

6,143,211 5,893,651 5,756,869 5,547,957

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(a) Provision for outstanding claims

The provision for outstanding claims and its movements are further analysed as follows:

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulProvision for claims reported by participants 33,310 (3,352) 29,958 40,150 (2,278) 37,872Provision for IBNR 169,748 (49,805) 119,943 155,657 (32,845) 122,812

Provision for outstanding claims 203,058 (53,157) 149,901 195,807 (35,123) 160,684

General TakafulProvision for claims reported by participants 375,636 (259,623) 116,013 433,215 (291,300) 141,915Provision for IBNR 229,797 (93,087) 136,710 232,252 (80,970) 151,282

Provision for outstanding claims 605,433 (352,710) 252,723 665,467 (372,270) 293,197

GroupProvision for claims reported by participants 408,946 (262,975) 145,971 473,365 (293,578) 179,787Provision for IBNR 399,545 (142,892) 256,653 387,909 (113,815) 274,094

Provision for outstanding claims 808,491 (405,867) 402,624 861,274 (407,393) 453,881

<--------------------------------------------- Company ---------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulProvision for claims reported by participants 18,918 (2,526) 16,392 26,139 (1,568) 24,571Provision for IBNR 164,401 (49,600) 114,801 150,236 (32,053) 118,183

Provision for outstanding claims 183,319 (52,126) 131,193 176,375 (33,621) 142,754

General TakafulProvision for claims reported by participants 360,418 (253,588) 106,830 407,039 (277,129) 129,910Provision for IBNR 223,583 (92,515) 131,068 226,252 (80,316) 145,936

Provision for outstanding claims 584,001 (346,103) 237,898 633,291 (357,445) 275,846

CompanyProvision for claims reported by participants 379,336 (256,114) 123,222 433,178 (278,697) 154,481Provision for IBNR 387,984 (142,115) 245,869 376,488 (112,369) 264,119

Provision for outstanding claims 767,320 (398,229) 369,091 809,666 (391,066) 418,600

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(a) Provision for outstanding claims (continued)

Movement of provision for outstanding claims:

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulAt 1 January 28 195,807 (35,123) 160,684 148,565 (18,671) 129,894Claims incurred during the year 593,045 (52,192) 540,853 618,967 (45,815) 573,152Claims paid during the year 28 (601,070) 51,176 (549,894) (607,451) 47,009 (560,442)Increase in IBNR 14,091 (16,960) (2,869) 35,479 (17,881) 17,598Effect of movement in exchange rates 1,185 (58) 1,127 247 235 482

At 31 December 28 203,058 (53,157) 149,901 195,807 (35,123) 160,684

General TakafulAt 1 January 28 665,467 (372,270) 293,197 584,509 (282,479) 302,030Claims incurred during the year 209,162 (83,806) 125,356 313,703 (179,774) 133,929Adjustment to claims incurred in prior accident years (66,989) 45,418 (21,571) (91,255) 74,157 (17,098)Claims paid during the year 28 (201,051) 70,578 (130,473) (176,055) 32,834 (143,221)Increase in IBNR (2,455) (12,117) (14,572) 37,300 (19,633) 17,667Effect of movement in exchange rates 1,299 (513) 786 (2,735) 2,625 (110)

At 31 December 28 605,433 (352,710) 252,723 665,467 (372,270) 293,197

GroupAt 1 January 28 861,274 (407,393) 453,881 733,074 (301,150) 431,924Claims incurred during the year 796,871 (135,998) 660,873 918,583 (225,695) 692,888Adjustment to claims incurred in prior accident years (66,989) 45,418 (21,571) (91,255) 74,157 (17,098)Claims paid during the year 28 (796,785) 121,754 (675,031) (769,419) 79,843 (689,576)Increase in IBNR 11,636 (29,077) (17,441) 72,779 (37,408) 35,371Effect of movement in exchange rates 2,484 (571) 1,913 (2,488) 2,860 372

At 31 December 28 808,491 (405,867) 402,624 861,274 (407,393) 453,881

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(a) Provision for outstanding claims (continued)

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family Takaful At 1 January 28 176,375 (33,621) 142,754 140,673 (17,575) 123,098Claims incurred during the year 523,871 (43,028) 480,843 541,505 (35,555) 505,950Claims paid during the year 28 (531,092) 42,070 (489,022) (540,752) 36,841 (503,911)Increase in IBNR 14,165 (17,547) (3,382) 34,949 (17,332) 17,617

At 31 December 28 183,319 (52,126) 131,193 176,375 (33,621) 142,754

General TakafulAt 1 January 28 633,291 (357,445) 275,846 545,389 (265,454) 279,935Claims incurred during the year 207,072 (89,473) 117,599 299,608 (175,963) 123,645Adjustment to claims incurred in prior accident years (66,989) 45,418 (21,571) (91,255) 74,157 (17,098)Claims paid during the year 28 (186,704) 67,596 (119,108) (157,328) 29,296 (128,032)Increase in IBNR 11,496 (29,746) (18,250) 36,877 (19,481) 17,396

At 31 December 28 548,001 (346,103) 237,898 633,291 (357,445) 275,846

CompanyAt 1 January 28 809,666 (391,066) 418,600 686,062 (283,029) 403,033Claims incurred during the year 728,064 (132,501) 595,563 829,670 (211,518) 618,152Adjustment to claims incurred in prior accident years (66,989) 45,418 (21,571) (91,255) 74,157 (17,098)Claims paid during the year 28 (714,917) 109,666 (605,251) (686,637) 66,137 (620,500)Increase in IBNR 11,496 (29,746) (18,250) 71,826 (36,813) 35,013

At 31 December 28 767,320 (398,229) 369,091 809,666 (391,066) 418,600

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(b) Provision for unearned contributions

The provision for unearned contributions and its movements are further analysed as follows:

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General Takaful / GroupProvision for unearned contributions 290,899 (69,949) 220,950 296,425 (80,200) 216,225

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General Takaful / CompanyProvision for unearned contributions 276,584 (68,117) 208,467 280,111 (77,545) 202,566

Movement of provision for unearned contributions: <------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulAt 1 January 296,425 (80,200) 216,225 295,439 (72,297) 223,142Contributions written during the year 23 451,319 (170,096) 281,223 428,406 (141,347) 287,059Contributions earned during the year 23 (457,441) 180,457 (276,984) (424,992) 132,969 (292,023)Effect of movement in exchange rates 596 (110) 486 (2,428) 475 (1,953)

At 31 December 290,899 (69,949) 220,950 296,425 (80,200) 216,225

GroupAt 1 January 296,425 (80,200) 216,225 295,439 (72,297) 223,142Contributions written during the year 451,554 (170,096) 281,458 427,808 (141,347) 286,461Contributions earned during the year (457,676) 180,457 (277,219) (424,394) 132,969 (291,425)Effect of movement in exchange rates 596 (110) 486 (2,428) 475 (1,953) At 31 December 290,899 (69,949) 220,950 296,425 (80,200) 216,225

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(b) Provision for unearned contributions (continued)

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulAt 1 January 280,111 (77,545) 202,566 279,351 (69,745) 209,606Contributions written during the year 23 418,459 (163,429) 255,030 386,635 (134,271) 252,364Contributions earned during the year 23 (421,986) 172,857 (249,129) (385,875) 126,471 (259,404)

At 31 December 276,584 (68,117) 208,467 280,111 (77,545) 202,566

CompanyAt 1 January 280,111 (77,545) 202,566 279,351 (69,745) 209,606Contributions written during the year 418,145 (163,429) 254,716 386,037 (134,271) 251,766Contributions earned during the year (421,672) 172,857 (248,815) (385,277) 126,471 (258,806)

At 31 December 276,584 (68,117) 208,467 280,111 (77,545) 202,566

(c) Participants’ fund

Participants’ fund balance at end of the reporting period comprise the following:

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulActuarial liabilities 4,022,862 (206,644) 3,816,218 3,708,819 (148,340) 3,560,479Unallocated surplus / accumulated surplus 732,842 - 732,842 699,984 - 699,984AFS reserve (61,878) - (61,878) (2,177) - (2,177)Translation reserve 765 - 765 1,238 - 1,238Net assets value attributable to unitholders 179,897 - 179,897 147,059 - 147,059

4,874,488 (206,644) 4,667,844 4,554,923 (148,340) 4,406,583

General TakafulUnallocated surplus / accumulated surplus 213,255 - 213,255 215,677 - 215,677AFS reserve (6,356) - (6,356) 3,556 - 3,556Translation reserve 234 - 234 (109) - (109)

207,133 - 207,133 219,124 - 219,124

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(c) Participants’ fund (continued)

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

GroupActuarial liabilities 4,022,858 (206,644) 3,816,214 3,708,819 (148,340) 3,560,479Unallocated surplus / accumulated surplus 946,098 - 946,098 915,661 - 915,661AFS reserve (68,234) - (68,234) 1,379 - 1,379Translation reserve 999 - 999 1,129 - 1,129Net assets value attributable to unitholders 142,100 - 142,100 108,964 - 108,964

5,043,821 (206,644) 4,837,177 4,735,952 (148,340) 4,587,612

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulActuarial liabilities 3,776,136 (199,326) 3,576,810 3,498,433 (142,240) 3,356,193Unallocated surplus / accumulated surplus 732,842 - 732,842 699,984 - 699,984AFS reserve (48,083) - (48,083) 8,465 - 8,465Net assets value attributable to unitholders 89,066 - 89,066 75,592 - 75,592

4,549,961 (199,326) 4,350,635 4,282,474 (142,240) 4,140,234

General TakafulUnallocated surplus / accumulated surplus 207,301 - 207,301 210,101 - 210,101AFS reserve (6,497) - (6,497) 3,700 - 3,700

200,804 - 200,804 213,801 - 213,801

CompanyActuarial liabilities 3,776,136 (199,326) 3,576,810 3,498,433 (142,240) 3,356,193Unallocated surplus / accumulated surplus 940,143 - 940,143 910,085 - 910,085AFS reserve (54,580) - (54,580) 12,165 - 12,165Net assets value attributable to unitholders 51,266 - 51,266 37,497 - 37,497

4,712,965 (199,326) 4,513,639 4,458,180 (142,240) 4,315,940

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(c) Participants’ fund (continued)

The participants’ fund movements are analysed as follows:

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulAt 1 January 4,554,923 (148,340) 4,406,583 4,254,771 (63,856) 4,190,915Net earned contributions 958,130 (65,737) 892,393 1,098,994 (51,952) 1,047,042Investment income 191,950 - 191,950 181,023 - 181,023Realised gains and (losses) 37,490 - 37,490 117,092 - 117,092Fair value gains and (losses) 12,894 - 12,894 9,025 - 9,025Other operating income 3,277 - 3,277 1,133 - 1,133Net benefits and claims (607,136) 69,152 (537,984) (654,446) 63,696 (590,750)Fees deducted (net) (192,999) - (192,999) (245,834) - (245,834)Other operating expenses (15,567) - (15,567) (8,796) - (8,796)Profit paid to participants (552) - (552) (762) - (762)Increase in actuarial liabilities 58,295 (58,016) 279 38,482 (85,501) (47,019)Profit attributable to the Takaful Operator (67,443) (3,414) (70,857) (92,464) (11,745) (104,209)Excess payment transferred to participants (1,239) - (1,239) 7,067 - 7,067Change in AFS reserve (59,701) - (59,701) (99,503) - (99,503)Withholding tax (10,655) - (10,655) (3,417) - (3,417)Effect of movement in exchange rates 12,821 (289) 12,532 (47,442) 1,018 (46,424)

At 31 December 4,874,488 (206,644) 4,667,844 4,554,923 (148,340) 4,406,583

General TakafulAt 1 January 219,124 - 219,124 220,795 - 220,795Net earned contributions 276,984 - 276,984 292,023 - 292,023Investment income 29,164 - 29,164 30,877 - 30,877Realised gains and (losses) 4,519 - 4,519 15,844 - 15,844Fair value gains and (losses) (23) - (23) 596 - 596Other operating income 3,263 - 3,263 1,798 - 1,798Net benefits and claims (89,213) - (89,213) (134,498) - (134,498)Fees deducted (net) (128,368) - (128,368) (116,324) - (116,324)Other operating expenses (9,058) - (9,058) (2,985) - (2,985)Profit paid to participants (29,877) - (29,877) (30,877) - (30,877)Profit attributable to the Takaful Operator (59,186) - (59,186) (49,447) - (49,447)Change in AFS reserve (9,912) - (9,912) (6,908) - (6,908)Withholding tax (626) - (626) (613) - (613)Effect of movement in exchange rates 342 - 342 (1,157) - (1,157)

At 31 December 207,133 - 207,133 219,124 - 219,124

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(c) Participants’ fund (continued)

<------------------------------------------------ Group ------------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

GroupAt 1 January 4,735,952 (148,340) 4,587,612 4,434,586 (63,856) 4,370,730Net earned contributions 1,235,114 (65,737) 1,169,377 1,391,017 (51,952) 1,339,065Investment income 221,114 - 221,114 211,900 - 211,900Realised gains and (losses) 42,009 - 42,009 132,936 - 132,936Fair value gains and (losses) 12,871 - 12,871 9,621 - 9,621Other operating income 6,540 - 6,540 2,931 - 2,931Net benefits and claims (696,349) 69,152 (627,197) (782,178) 63,696 (718,482)Fees deducted (net) (321,367) - (321,367) (362,158) - (362,158)Other operating expenses (24,625) - (24,625) (11,781) - (11,781)Profit paid to participants (30,429) - (30,429) (31,639) - (31,639)Increase in actuarial liabilities 58,295 (58,016) 279 38,482 (85,501) (47,019)Profit attributable to the Takaful Operator (126,334) (3,414) (129,748) (145,792) (11,745) (157,537)Excess payment transferred to participants (1,239) - (1,239) 7,067 - 7,067Change in AFS reserve (69,613) - (69,613) (106,411) - (106,411)Withholding tax (11,281) - (11,281) (4,030) - (4,030)Effect of movement in exchange rates 13,163 (289) 12,874 (48,599) 1,018 (47,581)

At 31 December 5,043,821 (206,644) 4,837,177 4,735,952 (148,340) 4,587,612

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Family TakafulAt 1 January 4,282,474 (142,240) 4,140,234 3,958,110 (58,161) 3,899,949Net earned contributions 850,714 (55,633) 795,081 978,839 (41,004) 937,835Investment income 180,639 - 180,639 170,831 - 170,831Realised gains and (losses) 26,163 - 26,163 108,016 - 108,016Fair value gains and (losses) (959) - (959) 11,808 - 11,808Other operating income 3,180 - 3,180 1,096 - 1,096Net benefits and claims (538,036) 60,575 (477,461) (576,454) 52,887 (523,567)Fees deducted (net) (168,967) - (168,967) (215,885) - (215,885)Other operating expenses (14,546) - (14,546) (7,899) - (7,899)Profit paid to participants (171) - (171) (390) - (390)Increase in actuarial liabilities 58,703 (57,086) 1,617 37,409 (84,079) (46,670)Profit attributable to the Takaful Operator (60,791) (4,942) (65,733) (96,907) (11,883) (108,790)Excess payment transferred to participants (1,239) - (1,239) 7,067 - 7,067Change in AFS reserve (56,548) - (56,548) (89,750) - (89,750)Withholding tax (10,655) - (10,655) (3,417) - (3,417)

At 31 December 4,549,961 (199,326) 4,350,635 4,282,474 (142,240) 4,140,234

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Notes to the Financial Statements

18. Takaful contract liabilities (continued)

(c) Participants’ fund (continued)

<---------------------------------------------- Company ----------------------------------------------> 2014 2013 Gross Retakaful Net Gross Retakaful Net RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulAt 1 January 213,801 - 213,801 217,693 - 217,693Net earned contributions 249,129 - 249,129 259,404 - 259,404Investment income 28,229 - 28,229 29,824 - 29,824Realised gains and (losses) 4,458 - 4,458 15,641 - 15,641Fair value gains and (losses) (23) - (23) 596 - 596Other operating income 2,835 - 2,835 1,267 - 1,267Net benefits and claims (81,160) - (81,160) (123,943) - (123,943)Fees deducted (net) (114,009) - (114,009) (97,867) - (97,867)Other operating expenses (3,725) - (3,725) (2,898) - (2,898)Profit paid to participants (29,877) - (29,877) (30,655) - (30,655)Profit attributable to the Takaful Operator (58,031) - (58,031) (47,975) - (47,975)Change in AFS reserve (10,197) - (10,197) (6,673) - (6,673)Withholding tax (626) - (626) (613) - (613)

At 31 December 200,804 - 200,804 213,801 - 213,801

CompanyAt 1 January 4,458,180 (142,240) 4,315,940 4,134,823 (58,161) 4,076,662Net earned contributions 1,099,843 (55,633) 1,044,210 1,238,243 (41,004) 1,197,239Investment income 208,868 - 208,868 200,655 - 200,655Realised gains and (losses) 30,621 - 30,621 123,657 - 123,657Fair value gains and (losses) (982) - (982) 12,404 - 12,404Other operating income 6,015 - 6,015 2,363 - 2,363Net benefits and claims (619,196) 60,575 (558,621) (693,631) 52,887 (640,744)Fees deducted (net) (282,976) - (282,976) (313,752) - (313,752)Other operating expenses (18,271) - (18,271) (10,797) - (10,797)Profit paid to participants (30,048) - (30,048) (31,045) - (31,045)Increase in actuarial liabilities 58,703 (57,086) 1,617 37,409 (84,079) (46,670)Profit attributable to the Takaful Operator (118,527) (4,942) (123,469) (148,763) (11,883) (160,646)Excess payment transferred to participants (1,239) - (1,239) 7,067 - 7,067Change in AFS reserve (66,745) - (66,745) (96,423) - (96,423)Withholding tax (11,281) - (11,281) (4,030) - (4,030)

At 31 December 4,712,965 (199,326) 4,513,639 4,458,180 (142,240) 4,315,940

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Notes to the Financial Statements

19. Expense reserves

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator / Group / CompanyAt 1 January 131,522 89,486 127,279 84,973Provision for the year, net 10,415 42,770 10,394 42,306 Effect of movement in exchange rates 190 (734) - -

At 31 December 142,127 131,522 137,673 127,279

20. Takaful payables

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Family TakafulDue to retakaful companies 30,218 17,941 28,497 14,807 Due to intermediaries / participants 10,731 7,918 10,731 7,918

40,949 25,859 39,228 22,725

General TakafulDue to retakaful companies 16,190 43,418 15,576 42,298 Due to intermediaries / participants 4,178 6,151 4,177 6,151

20,368 49,569 19,753 48,449

Group / CompanyDue to retakaful companies 46,408 61,359 44,073 57,105 Due to intermediaries / participants 14,909 14,069 14,908 14,069

61,317 75,428 58,981 71,174

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Notes to the Financial Statements

21. Other payables Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorDeposit payable 252 272 252 272 Outstanding purchases of investment securities 2,403 1,207 2,403 1,207 Due to Family Takaful Fund 10 8,566 10,491 - -Due to General Takaful Fund 10 7,121 6,101 - -Zakat payable 663 1,505 200 1,009 Other payables and accruals 70,833 71,791 61,852 64,378

89,838 91,367 64,707 66,866

Family TakafulAdvanced takaful contribution 5,009 4,325 5,009 4,325 Deposit payable 5,772 6,081 2,030 1,963 Profit payable to participants 1,539 1,193 17 16 Unclaimed monies 423 659 423 659 Outstanding purchases of investment securities 18,271 6,542 18,271 6,542 Due to Takaful Operator 10 8,788 25,661 7,887 25,661 Due to General Takaful Fund 10 99 2,540 99 2,540 Other payables and accruals 61,268 76,786 60,831 76,550

101,169 123,787 94,567 118,256

General TakafulAdvanced takaful contribution 6,335 6,610 6,335 6,610 Deposit payable 274 328 274 328 Profit payable to participants 2,283 2,038 1,921 1,670 Outstanding purchases of investment securities 3,109 2,481 3,109 2,481 Due to Takaful Operator 10 22,410 9,746 22,410 9,746 Other payables and accruals 38,037 46,058 35,965 44,264

72,448 67,261 70,014 65,099

Group / CompanyAdvanced takaful contribution 11,344 10,935 11,344 10,935 Deposit payable 6,298 6,681 2,556 2,563 Profit payable to participants 3,822 3,231 1,938 1,686 Unclaimed monies 423 659 423 659 Outstanding purchases of investment securities 23,783 10,230 23,783 10,230 Zakat payable 663 1,505 200 1,009 Other payables and accruals 170,138 194,635 158,648 185,192

216,471 227,876 198,892 212,274

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Notes to the Financial Statements

22. Operating revenue

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorInvestment income 24 26,483 24,529 23,764 21,669

Family TakafulGross contributions 23 958,060 1,052,493 852,331 932,169 Investment income 24 191,950 181,023 180,639 170,831

1,150,010 1,233,516 1,032,970 1,103,000

General TakafulGross contributions 23 451,319 428,406 418,459 386,635 Investment income 24 29,164 30,877 28,229 29,824

480,483 459,283 446,688 416,459

Group / CompanyGross contributions 23 1,409,614 1,480,301 1,270,476 1,318,206 Investment income 24 243,025 232,705 228,586 219,175

1,652,639 1,713,006 1,499,062 1,537,381

23. Net earned contributions

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family Takaful(i) Gross contributions 22 958,060 1,052,493 852,331 932,169 Change in actuarial reserves / unearned contributions reserves 70 46,501 (1,617) 46,670

Gross earned contributions 958,130 1,098,994 850,714 978,839

(ii) Retakaful (65,737) (51,952) (55,633) (41,004)

Contributions ceded to retakaful (65,737) (51,952) (55,633) (41,004)

(iii) Net earned contributions 892,393 1,047,042 795,081 937,835

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Notes to the Financial Statements

23. Net earned contributions (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General Takaful(i) Gross contributions 18(b),22 451,319 428,406 418,459 386,635 Change in actuarial reserves / unearned contributions reserves 6,122 (3,414) 3,527 (760)

Gross earned contributions 18(b) 457,441 424,992 421,986 385,875

(ii) Retakaful 18(b) (170,096) (141,347) (163,429) (134,271) Change in actuarial reserves / unearned contributions reserves (10,361) 8,378 (9,428) 7,800

Contributions ceded to retakaful 18(b) (180,457) (132,969) (172,857) (126,471)

(iii) Net earned contributions 276,984 292,023 249,129 259,404

Group / Company(i) Gross contributions 22 1,409,614 1,480,301 1,270,476 1,318,206 Change in actuarial reserves / unearned contributions reserves 6,192 43,087 1,910 45,910

Gross earned contributions 1,415,806 1,523,388 1,272,386 1,364,116

(ii) Retakaful (235,833) (193,299) (219,062) (175,275) Change in actuarial reserves / unearned contributions reserves (10,361) 8,378 (9,428) 7,800

Contributions ceded to retakaful (246,194) (184,921) (228,490) (167,475)

(iii) Net earned contributions 1,169,612 1,338,467 1,043,896 1,196,641

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Notes to the Financial Statements

24. Investment income

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorRental income from investment properties 4 670 642 670 642 FVTPL financial assets Dividend income - Equity securities - quoted outside Malaysia 23 272 - - Profit income - Islamic debt securities 262 172 - -AFS financial assets Dividend income - Equity securities - quoted in Malaysia 2,263 2,121 2,263 2,121 - quoted outside Malaysia 5 133 5 - - - Unit trusts 1,056 1,458 1,056 1,458 Profit income - Institutional Trust Account 2,201 3,119 2,201 3,119 - Islamic debt securities 12,231 10,934 12,175 10,837 - Malaysian Government Islamic papers 23 408 23 408 Amortisation of premiums, net of accretion of discounts (1,191) (1,104) (1,191) (1,104)HTM financial assets Profit income - Islamic debt securities 133 121 - -LAR profit income 7,261 5,349 6,937 4,457 Cash and cash equivalents profit income 1,799 1,317 11 16 Investment expenses (381) (285) (381) (285)

Total investment income 22 26,483 24,529 23,764 21,669

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Notes to the Financial Statements

24. Investment income (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family TakafulRental income from investment properties 4 8,169 7,320 7,623 6,709 FVTPL financial assets Dividend income - Equity securities - quoted in Malaysia 1,220 1,255 1,220 1,255 - quoted outside Malaysia 33 - - - Profit income - Islamic debt securities 6,062 4,638 767 802 AFS financial assets Dividend income - Equity securities - quoted in Malaysia 16,211 17,001 16,211 17,001 - quoted outside Malaysia 75 - - - - Unit trusts 6,516 3,903 6,516 3,903 Profit income - Institutional Trust Account 6,300 9,508 6,300 9,508 - Islamic debt securities 88,398 88,532 88,005 87,781 - Malaysian Government Islamic papers 11,189 18,059 11,189 18,059 Amortisation of premiums, net of accretion of discounts (3,442) (5,495) (3,442) (5,495)HTM financial assets Profit income - Islamic debt securities 13,949 10,206 12,945 9,095 - Malaysian Government Islamic papers 4,368 4,368 4,368 4,368 Amortisation of premiums, net of accretion of discounts (43) (275) (154) (29)LAR profit income 31,665 21,310 31,227 20,660 Cash and cash equivalents profit income 3,766 3,548 115 69 Investment expenses (2,486) (2,855) (2,251) (2,855)

Total investment income 22 191,950 181,023 180,639 170,831

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Notes to the Financial Statements

24. Investment income (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General TakafulRental income from investment properties 4 732 783 732 783 AFS financial assets Dividend income - Equity securities - quoted in Malaysia 2,885 3,461 2,885 3,461 - Unit trusts 701 525 701 525 Profit income - Institutional Trust Account 1,599 1,845 1,599 1,845 - Islamic debt securities 17,001 17,108 17,001 17,108 - Malaysian Government Islamic papers 819 3,066 819 3,066 Amortisation of premiums, net of accretion of discounts (1,394) (2,017) (1,394) (2,017)HTM financial assets Profit income - Islamic debt securities 231 271 - - - Malaysian Government Islamic papers 1,279 1,279 1,279 1,279 Amortisation of premiums, net of accretion of discounts (48) (47) (48) (47)LAR profit income 4,895 4,220 4,818 4,007 Cash and cash equivalents profit income 653 592 26 23 Investment expenses (189) (209) (189) (209)

Total investment income 22 29,164 30,877 28,229 29,824

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Notes to the Financial Statements

24. Investment income (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Group / CompanyRental income from investment properties 4 3,887 3,087 3,867 3,051 FVTPL financial assets Dividend income - Equity securities - quoted in Malaysia 1,220 1,255 1,220 1,255 - quoted outside Malaysia 56 272 - - Profit income - Islamic debt securities 6,324 4,810 767 802 AFS financial assets Dividend income - Equity securities - quoted in Malaysia 21,359 22,583 21,359 22,583 - quoted outside Malaysia 208 5 - - - Unit trusts 8,273 5,886 8,273 5,886 Profit income - Institutional Trust Account 10,100 14,472 10,100 14,472 - Islamic debt securities 117,630 116,574 117,181 115,726 - Malaysian Government Islamic papers 12,031 21,533 12,031 21,533 Amortisation of premiums, net of accretion of discounts 7(d) (6,027) (8,616) (6,027) (8,616)HTM financial assets Profit income - Islamic debt securities 14,313 10,598 12,945 9,095 - Malaysian Government Islamic papers 5,647 5,647 5,647 5,647 Amortisation of premiums, net of accretion of discounts 7(d) (91) (322) (202) (76)LAR profit income 43,821 30,879 42,982 29,124 Cash and cash equivalents profit income 6,218 5,457 152 108 Investment expenses (1,944) (1,415) (1,709) (1,415)

Total investment income 22 243,025 232,705 228,586 219,175

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Notes to the Financial Statements

25. Realised gains and (losses)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorRealised gains / (losses): Property and equipment 63 391 3 147

Investment properties 580 - 368 -

Asset held for sale (221) 27 (221) 27

AFS financial assets Equity securities - quoted in Malaysia 944 7,417 944 7,417 - quoted outside Malaysia 453 166 - - Unit trusts - quoted in Malaysia 465 1,969 465 1,969 - quoted outside Malaysia 854 377 - - Islamic debt securities - unquoted in Malaysia 107 1,151 107 1,151 Malaysian Government Islamic papers 196 163 196 163 Investment units in commodity, equity and fixed income closed end fund - 155 - 155

3,019 11,398 1,712 10,855

3,441 11,816 1,862 11,029

Family TakafulRealised gains / (losses): Investment properties 114 - 114 -

Asset held for sale 69 (691) 69 (691)

AFS financial assets Equity securities - quoted in Malaysia 14,500 61,236 14,500 61,236 - quoted outside Malaysia 305 - - - Unit trusts - quoted in Malaysia 4,200 2,729 4,200 2,729 - quoted outside Malaysia 10,999 9,076 - - Islamic debt securities - unquoted in Malaysia 5,276 40,065 5,276 40,065 - quoted outside Malaysia 23 - - - Malaysian Government Islamic papers 2,004 4,677 2,004 4,677

37,307 117,783 25,980 108,707

37,490 117,092 26,163 108,016

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Notes to the Financial Statements

25. Realised gains and (losses)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

General TakafulRealised gains / (losses): Asset held for sale 597 (16) 597 (16)

AFS financial assets Equity securities - quoted in Malaysia 2,188 11,517 2,188 11,517 Unit trusts - quoted in Malaysia 404 859 404 859 - quoted outside Malaysia 61 203 - - Islamic debt securities - unquoted in Malaysia 600 2,544 600 2,544 Malaysian Government Islamic papers 669 737 669 737

3,922 15,860 3,861 15,657

4,519 15,844 4,458 15,641

Group / CompanyRealised gains / (losses): Property and equipment 119 391 59 147

Investment properties 638 - 426 -

Asset held for sale 445 (680) 445 (680)

AFS financial assets Equity securities - quoted in Malaysia 17,632 80,170 17,632 80,170 - quoted outside Malaysia 758 166 - - Unit trusts - quoted in Malaysia 5,069 5,557 5,069 5,557 - quoted outside Malaysia 11,914 9,656 - - Islamic debt securities - unquoted in Malaysia 5,983 43,760 5,983 43,760 - quoted outside Malaysia 23 - - - Malaysian Government Islamic papers 2,869 5,577 2,869 5,577

44,248 144,886 31,553 135,064

45,450 144,597 32,483 134,531

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Notes to the Financial Statements

26. Fair value gains and (losses)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorFair value gains / (losses) arising from: Investment properties 4 385 317 380 -

FVTPL financial assets Equity securities - quoted outside Malaysia 1,023 (334) - - Islamic debt securities - quoted outside Malaysia (126) (178) - -

897 (512) - -

1,282 (195) 380 -

Family TakafulFair value gains / (losses) arising from: Investment properties 4 2,090 4,938 821 3,032

FVTPL financial assets Equity securities - quoted in Malaysia (1,696) 7,551 (1,696) 7,551 - quoted outside Malaysia 14,259 (1,297) - - Islamic debt securities - quoted outside Malaysia (1,675) (3,392) - - - unquoted in Malaysia (84) (403) (84) (403) Commodity, equity and fixed income closed end fund - 1,628 - 1,628

10,804 4,087 (1,780) 8,776

12,894 9,025 (959) 11,808

General TakafulFair value gains / (losses) arising from: Investment properties 4 (23) 596 (23) 596

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Notes to the Financial Statements

26. Fair value gains and (losses) (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Group / CompanyFair value gains / (losses) arising from: Investment properties 4 1,645 6,101 1,620 5,754

FVTPL financial assets Equity securities - quoted in Malaysia (1,696) 7,551 (1,696) 7,551 - quoted outside Malaysia 15,282 (1,631) - - Islamic debt securities - quoted outside Malaysia (1,801) (3,570) - - - unquoted in Malaysia (84) (403) (84) (403) Commodity, equity and fixed income closed end fund - 1,628 - 1,628

7(d) 11,701 3,575 (1,780) 8,776

13,346 9,676 (160) 14,530

27. Other operating income

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorIncome from Family Takaful business, service charge and management fees 10,215 11,090 5,592 6,755 Writeback of allowance for impaired financing 224 8 205 227Writeback of impairment of investment in subsidiary - - 1,648 - Miscellaneous income 459 853 247 -

10,898 11,951 7,692 6,982

Family TakafulWriteback of allowance for impaired debts 39.4 1,732 1,120 1,732 1,096 Miscellaneous income 1,545 13 1,448 -

3,277 1,133 3,180 1,096

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Notes to the Financial Statements

27. Other operating income (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General TakafulWriteback of allowance for impaired debts 39.4 2,513 1,241 2,513 1,267 Miscellaneous income 750 557 322 -

3,263 1,798 2,835 1,267

Group / CompanyIncome from Family Takaful business, service charge and management fees 2,239 1,691 622 -Writeback of:- Allowance for impaired debts 39.4 4,245 2,361 4,245 2,363- Allowance for impaired financing 224 8 205 227- Impairment of investment in subsidiary - - 1,648 -Miscellaneous income 2,754 1,423 2,017 -

9,462 5,483 8,737 2,590

28. Net benefits and claims

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family TakafulGross benefits / claims paid 18(a) (601,070) (607,451) (531,092) (540,752)Retakaful recoveries 18(a) 51,176 47,009 42,070 36,841

Net benefits / claims paid (549,894) (560,442) (489,022) (503,911)

Gross change in contract liabilities: At 31 December 18(a) (203,058) (195,807) (183,319) (176,375) Less: At 1 January 18(a) (195,807) (148,565) (176,375) (140,673) Effect of movement in exchange rates 1,185 247 - -

(6,066) (46,995) (6,944) (35,702)

Change in contract liabilities ceded to retakaful companies: At 31 December 18(a) 53,157 35,123 52,126 33,621 Less: At 1 January 18(a) 35,123 18,671 33,621 17,575 Effect of movement in exchange rates (58) 235 - -

17,976 16,687 18,505 16,046

(537,984) (590,750) (477,461) (523,567)

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Notes to the Financial Statements

28. Net benefits and claims (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General TakafulGross benefits / claims paid 18(a) (201,051) (176,055) (186,704) (157,328)Retakaful recoveries 18(a) 70,578 32,834 67,596 29,296

Net benefits / claims paid (130,473) (143,221) (119,108) (128,032)

Gross change in contract liabilities: At 31 December 18(a) (605,433) (665,467) (584,001) (633,291) Less: At 1 January 18(a) (665,467) (584,509) (633,291) (545,389) Effect of movement in exchange rates 1,299 (2,735) - -

61,333 (83,693) 49,290 (87,902)

Change in contract liabilities ceded to retakaful companies: At 31 December 18(a) 352,710 372,270 346,103 357,445 Less: At 1 January 18(a) 372,270 282,479 357,445 265,454 Effect of movement in exchange rates (513) 2,625 - -

(20,073) 92,416 (11,342) 91,991

(89,213) (134,498) (81,160) (123,943)

Group / CompanyGross benefits / claims paid 18(a) (796,785) (769,419) (714,917) (686,637)Retakaful recoveries 18(a) 121,754 79,843 109,666 66,137

Net benefits / claims paid (675,031) (689,576) (605,251) (620,500)

Gross change in contract liabilities: At 31 December 18(a) (808,491) (861,274) (767,320) (809,666) Less: At 1 January 18(a) (861,274) (733,074) (809,666) (686,062) Effect of movement in exchange rates 2,484 (2,488) - -

55,267 (130,688) 42,346 (123,604)

Change in contract liabilities ceded to retakaful companies: At 31 December 18(a) 405,867 407,393 398,229 391,066 Less: At 1 January 18(a) 407,393 301,150 391,066 283,029 Effect of movement in exchange rates (571) 2,860 - -

(2,097) 109,103 7,163 108,037

(621,861) (711,161) (555,742) (636,067)

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Notes to the Financial Statements

29. Management expenses

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorPersonnel expenses (including key management personnel) Directors’ remuneration - Salaries and other emoluments 5,815 5,534 5,663 5,383 - Fees 978 911 747 696 Shariah Committee remuneration - Company 29(i) 371 236 371 236 - Subsidiaries 154 173 - - Wages, salaries and others 101,910 117,379 82,305 97,098 Contributions to Employees’ Provident Fund 11,752 14,174 11,752 14,038

120,980 138,407 100,838 117,451

Depreciation of property and equipment 3 7,251 9,499 5,487 7,956 Auditors’ remuneration Company auditors - Statutory audit 544 572 544 572 - Other services 208 20 208 20 Other auditors - Statutory audit 100 121 - -License fees 221 220 114 154 Legal fees 603 192 423 123 Professional fees 14,527 15,956 13,430 14,530 Rental of properties 7,018 7,522 5,550 5,429 Rental of equipments 1,461 1,256 1,461 1,251 Repair and maintenance - property and equipment 9,765 8,302 9,210 7,472Travelling expenses 2,958 3,241 2,689 2,914 Utilities 2,121 1,823 978 929 Communication costs 5,517 6,338 4,446 4,892 Advertising 4,590 3,455 2,931 1,754 Other expenses 28,212 39,388 25,426 36,340

85,096 97,905 72,897 84,336

Total management expenses 206,076 236,312 173,735 201,787

All management expenses are borne by the Takaful Operator.

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Notes to the Financial Statements

29. Management expenses (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Group / CompanyPersonnel expenses (including key management personnel) Directors’ remuneration - Salaries and other emoluments 5,815 5,534 5,663 5,383 - Fees 978 911 747 696 Shariah Committee remuneration - Company 29(i) 371 236 371 236 - Subsidiaries 154 173 - - Wages, salaries and others 101,596 116,781 81,991 96,500 Contributions to Employees’ Provident Fund 11,752 14,174 11,752 14,038

120,666 137,809 100,524 116,853

Depreciation of property and equipment 3 11,577 13,574 8,742 11,241 Auditors’ remuneration Company auditors - Statutory audit 544 572 544 572 - Other services 208 20 208 20 Other auditors - Statutory audit 100 121 - -License fees 221 220 114 154 Legal fees 603 192 423 123 Professional fees 14,527 15,956 13,430 14,530 Rental of properties 1,334 1,864 392 346 Rental of equipments 1,461 1,256 1,461 1,251 Repair and maintenance - property and equipment 9,765 8,302 9,210 7,472 Travelling expenses 2,958 3,241 2,689 2,914 Utilities 2,121 1,823 978 929Communication costs 5,517 6,338 4,446 4,892 Advertising 4,590 3,455 2,931 1,754 Other expenses 28,212 39,388 25,426 36,338

83,738 96,322 70,994 82,536

Total management expenses 204,404 234,131 171,518 199,389

All management expenses are borne by the Takaful Operator.

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Notes to the Financial Statements

29. Management expenses (continued)

(i) The Shariah Committee remuneration is as follows: Company 2014 2013 RM’000 RM’000

Takaful Operator / CompanyShariah Committee remuneration - Fees 168 168 - Other emoluments 109 66 - Benefits-in-kind 94 2

371 236

The total remuneration of the Shariah Committee members are as follows: Company 2014 2013 RM’000 RM’000

Takaful Operator / CompanyDato’ Mohd Bakir Hj Mansor Fees 30 30 Other emoluments 23 13 Benefits-in-kind 30 -

83 43

Dato’ Wan Mohamad Dato’ Sheikh Abdul Aziz Fees 30 30 Other emoluments 20 10

50 40

Ahmad Shahbari @ Sobri Salamon Fees 48 48 Other emoluments 24 18

72 66

Aida Othman Fees 30 30 Other emoluments 21 13 Benefits-in-kind 32 -

83 43

Muhamad Rahimi Osman Fees 30 30 Other emoluments 21 12 Benefits-in-kind 32 2

83 44

371 236

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Notes to the Financial Statements

30. Key management personnel compensation

The key management personnel compensation are as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator / Group / CompanyExecutive Director Salaries and Bonus 4,420 4,035 4,420 4,035 Long Term Incentive Plan 623 - 623 - Other emoluments 252 1,098 180 1,014 Benefits-in-kind 213 91 202 91

5,508 5,224 5,425 5,140

Non-executive Directors Fees 747 696 747 696 Other emoluments 475 375 440 334 Benefits-in-kind 402 192 394 192

1,624 1,263 1,581 1,222

Subsidiaries’ Directors Fees 231 215 - - Other emoluments 45 26 - - Benefits-in-kind 1 1 - -

277 242 - -

Other key management personnel: Short-term employment benefits 7,183 8,530 6,421 7,698 Long Term Incentive Plan 625 - 625 - Benefits-in-kind 130 150 79 94

7,938 8,680 7,125 7,792

Total 15,347 15,409 14,131 14,154

The estimated monetary value of benefits-in-kind received by the Directors are RM597,000 (2013: RM284,000) and RM596,000 (2013: RM283,000) at Group and Company level respectively.

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Notes to the Financial Statements

30. Key management personnel compensation (continued)

The total remuneration (including benefits-in-kind) of the Directors are as follows:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator / Group / CompanyExecutive Director Dato’ Sri Mohamed Hassan Kamil Salaries and bonus 4,420 4,035 4,420 4,035 Long Term Incentive Plan 623 - 623 - Other emoluments 252 1,098 180 1,014 Benefits-in-kind 213 91 202 91

Total remunerations - Executive Director 5,508 5,224 5,425 5,140

Non-executive Directors Tan Sri Ismee Ismail Fees 90 90 90 90 Other emoluments 63 35 63 35 Benefits-in-kind 121 72 121 72 274 197 274 197 Dato’ Othman Abdullah Fees 88 78 88 78 Other emoluments 56 40 56 38 Benefits-in-kind 20 20 20 22 164 138 164 138 Dato’ Sulaiman Mohd Yusof Fees 112 102 112 102 Other emoluments 60 46 60 43 Benefits-in-kind 45 20 45 23 217 168 217 168 Dato’ Johan Abdullah Fees 96 96 96 96 Other emoluments 59 44 59 40 Benefits-in-kind 52 20 52 24 207 160 207 160

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Notes to the Financial Statements

30. Key management personnel compensation (continued)

The total remuneration (including benefits-in-kind) of the Directors are as follows:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator / Group / CompanyNon-executive Directors Datuk Rozaida Omar Fees 83 72 83 72 Other emoluments 52 29 52 29 Benefits-in-kind 50 20 50 20 185 121 185 121

Mahadzir Azizan Fees 142 132 142 132 Other emoluments 109 124 75 80 Benefits-in-kind 92 21 83 24 343 277 300 236

Zakaria Ismail Fees 136 126 136 126 Other emoluments 75 56 75 56 Benefits-in-kind 23 20 23 20 234 202 234 202

Total remuneration - Non-executive Directors 1,624 1,263 1,581 1,222

Total remunerations 7,132 6,487 7,006 6,362

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Notes to the Financial Statements

31. Other operating expenses

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorImpairment of:- Investment in subsidiaries - - - 5,017- AFS financial assets 1,597 184 1,597 184- HTM financial assets 361 210 - -Allowance for impaired wakalah fee receivables 74 - - -Write-off of:- Property and equipment 52 51 52 37- Qard 12 362 11,458 - -- Wakalah fee receivables 1,454 - - -Agency related expenses 5,201 5,836 5,201 5,836Miscellaneous expenses 3,628 201 2,189 201

12,729 17,940 9,039 11,275

Family TakafulImpairment of:- AFS financial assets 11,021 1,418 11,021 889Allowance for impaired debts 39.4 7 - - -Write-off of bad debts - 251 - 251Miscellaneous expenses 4,539 7,127 4,426 6,759

15,567 8,796 14,546 7,899

General TakafulImpairment of:- AFS financial assets 2,072 435 2,072 435Allowance for impaired debts 39.4 213 - - -Write-off of bad debts 1,913 1,168 60 1,168Miscellaneous expenses 4,860 1,382 1,593 1,295

9,058 2,985 3,725 2,898

Group / CompanyImpairment of:- Property and equipment 3 227 6 227 -- Investment in subsidiaries - - - 5,017- AFS financial assets 7(d) 14,690 2,037 13,789 1,508- HTM financial assets 7(d) 361 210 - -Allowance for: - Impaired debts 220 - - -- Impaired wakalah fee receivables 74 - - - Write-off of:- Bad debts 1,913 1,419 60 1,419- Property and equipment 52 51 52 37- Wakalah fee receivables 1,454 - - -Agency related expenses 5,201 5,836 5,201 5,836Miscellaneous expenses 12,048 8,670 7,229 8,215

36,240 18,229 26,558 22,032

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Notes to the Financial Statements

32. Tax expense

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorRecognised in profit or lossCurrent tax expense Malaysian - current 42,308 51,988 42,308 52,045 - prior years (5,547) - (5,547) - Overseas - prior years 5,088 - - - Total current tax recognised in profit or loss 41,849 51,988 36,761 52,045 Deferred tax benefits Deferred tax recognised in profit or loss 9 5,696 (8,727) 7,714 (10,495) Total tax expense 47,545 43,261 44,475 41,550 Reconciliation of tax expense Profit for the year 138,486 132,949 144,378 138,881 Zakat 389 1,517 200 1,268 Total income tax expense 47,545 43,261 44,475 41,550 Profit before zakat and taxation 186,420 177,727 189,053 181,699 Income tax using Malaysian tax rate of 25% 46,605 43,491 47,263 45,425 Effect of tax rates in foreign jurisdictions (432) 531 - - Items not subject to tax (1,761) (6,493) (829) (9,607)Non-deductible expenses 3,592 5,732 3,588 5,732 Over provided in prior years (459) - (5,547) - Tax expense 47,545 43,261 44,475 41,550 Recognised directly in equity Deferred tax AFS financial assets 9 (2,351) 839 (2,351) 839

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Notes to the Financial Statements

32. Tax expense (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Group / CompanyRecognised in profit or lossCurrent tax expense Malaysian - current 42,304 51,988 42,304 52,045 - prior years (5,547) - (5,547) - Overseas - prior years 5,088 - - -

Total current tax recognised in profit or loss 41,845 51,988 36,757 52,045

Deferred tax benefitsDeferred tax recognised in profit or loss 9 5,728 (8,581) 7,746 (10,349)

Total tax expense 47,573 43,407 44,503 41,696

Reconciliation of tax expenseProfit for the year 138,735 134,380 144,463 139,318 Zakat 389 1,517 200 1,268 Total income tax expense 47,573 43,407 44,503 41,696

Profit before zakat and taxation 186,697 179,304 189,166 182,282

Income tax using Malaysian tax rate of 25% 46,633 43,637 47,291 45,571 Effect of tax rates in foreign jurisdictions (432) 531 - - Items not subject to tax (1,761) (6,493) (829) (9,607)Non-deductible expenses 3,592 5,732 3,588 5,732 Over provided in prior years (459) - (5,547) -

Tax expense 47,573 43,407 44,503 41,696

Recognised directly in equity Deferred tax AFS financial assets 9 (2,351) 839 (2,351) 839 Property and equipment - Revaluation reserve 9 (32) (146) (32) (146) 9 (2,383) 693 (2,383) 693

32.1 Based on recent amendments to Section 60AA of the Income Tax Act 1967 (ITA), the wakalah fee received by Shareholders’ fund from Family Business is not subjected to income tax. Accordingly, commission and management expenses incurred by Shareholders’ fund in relation to Family Business are disallowed as deductible expenses. The amended Section 60AA of ITA will be effective for year of assessment 2015 onwards.

32.2 The Group subsidiary in Indonesia, PT Asuransi Takaful Keluarga, was served with additional tax assessment for year of assessment 2007 amounting to approximately RM5.1 million (Rp18.4 billion) on 30 December 2013. The additional assessment raised by the Indonesian tax authority is mainly due to the disallowance of unit linked contribution reserves arising from the increase in value of unit linked investments as tax deduction. Management had submitted an objection on 4 February 2014. Subsequently, the Indonesia tax authority rejected the subsidiary’s objection to the additional tax assessment on 29 January 2015. whilst the subsidiary continues to file appeal to the Tax Court, the Group has provided for the full tax impact in the financial statements.

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Notes to the Financial Statements

33. Other comprehensive income

<------------------------------------------------- Group -------------------------------------------------> 2014 2013 Tax Tax Before (expense)/ Net Before (expense)/ Net tax benefit of tax tax benefit of tax RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful OperatorItems that will not be reclassified subsequently to profit or lossRevaluation of property and equipment - Gains arising during the year 2,500 - 2,500 2,808 146 2,954 - Realisation of revaluation surplus arising from disposal of property and equipment - - - (575) - (575)

2,500 - 2,500 2,233 146 2,379

Items that may be reclassified subsequently to profit or lossForeign currency translation differences for foreign operations 5,036 - 5,036 (7,314) - (7,314)Fair value of available-for-sale financial assets - (Losses) / Gains arising during the year (6,502) 1,597 (4,905) 14,119 (3,553) 10,566 - Reclassification adjustments for gain on disposal included in profit or loss (3,019) 754 (2,265) (11,398) 2,714 (8,684)

(4,485) 2,351 (2,134) (4,593) (839) (5,432)

(1,985) 2,351 366 (2,360) (693) (3,053)

Family TakafulItems that may be reclassified subsequently to profit or lossForeign currency translation differences for foreign operations (1,995) - (1,995) (1,000) - (1,000)Fair value of available-for-sale financial assets - (Losses) / Gains arising during the year (22,394) - (22,394) 18,280 - 18,280 - Reclassification adjustments for gain on disposal included in profit or loss (37,307) - (37,307) (117,783) - (117,783)Other comprehensive income attributable to participants 60,174 - 60,174 99,303 - 99,303

(1,522) - (1,522) (1,200) - (1,200)

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Notes to the Financial Statements

33. Other comprehensive income (continued)

<------------------------------------------------- Group -------------------------------------------------> 2014 2013 Tax Tax Before (expense)/ Net Before (expense)/ Net tax benefit of tax tax benefit of tax RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulItems that may be reclassified subsequently to profit or lossForeign currency translation differences for foreign operations (1,267) - (1,267) (2,861) - (2,861)Fair value of available-for-sale financial assets - (Losses) / Gains arising during the year (5,990) - (5,990) 8,951 - 8,951 - Reclassification adjustments for gain on disposal included in profit or loss (3,922) - (3,922) (15,860) - (15,860)Other comprehensive income attributable to participants 9,569 - 9,569 8,066 - 8,066

(1,610) - (1,610) (1,704) - (1,704)

GroupItems that will not be reclassified subsequently to profit or lossRevaluation of property and equipment - Gains arising during the year 7,955 32 7,987 6,636 146 6,782 - Realisation of revaluation surplus arising from disposal of property and equipment (95) - (95) (575) - (575)Other comprehensive income attributable to participants (5,477) - (5,477) (4,265) - (4,265)

2,383 32 2,415 1,796 146 1,942

Items that may be reclassified subsequently to profit or lossForeign currency translation differences for foreign operations 5,093 - 5,093 (7,299) - (7,299)Fair value of available- for-sale financial assets - (Losses) / Gains arising during the year (6,502) 1,597 (4,905) 14,119 (3,553) 10,566 - Reclassification adjustments for gain on disposal included in profit or loss (3,019) 754 (2,265) (11,398) 2,714 (8,684)

(4,428) 2,351 (2,077) (4,578) (839) (5,417)

(2,045) 2,383 338 (2,782) (693) (3,475)

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Notes to the Financial Statements

33. Other comprehensive income (continued)

<--------------------------------------------- Company ---------------------------------------------> 2014 2013 Tax Tax Before (expense)/ Net Before (expense)/ Net tax benefit of tax tax benefit of tax RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful OperatorItem that will not be reclassified subsequently to profit or lossRevaluation of property and equipment - Gains arising during the year 117 - 117 126 - 126

117 - 117 126 - 126

Items that may be reclassified subsequently to profit or lossFair value of available-for-sale financial assets - (Losses) / Gains arising during the year (7,693) 1,923 (5,770) 14,211 (3,553) 10,658 - Reclassification adjustments for gain on disposal included in profit or loss (1,712) 428 (1,284) (10,855) 2,714 (8,141)

(9,405) 2,351 (7,054) 3,356 (839) 2,517

(9,288) 2,351 (6,937) 3,482 (839) 2,643

Family TakafulItems that may be reclassified subsequently to profit or lossFair value of available-for-sale financial assets - (Losses) / Gains arising during the year (30,568) - (30,568) 18,957 - 18,957 - Reclassification adjustments for gain on disposal included in profit or loss (25,980) - (25,980) (108,707) - (108,707)Other comprehensive income attributable to participants 56,548 - 56,548 89,750 - 89,750

- - - - - -

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Notes to the Financial Statements

33. Other comprehensive income (continued)

<--------------------------------------------- Company ---------------------------------------------> 2014 2013 Tax Tax Before (expense)/ Net Before (expense)/ Net tax benefit of tax tax benefit of tax RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulItems that may be reclassified subsequently to profit or lossFair value of available-for-sale financial assets - (Losses) / Gains arising during the year (6,336) - (6,336) 8,984 - 8,984 - Reclassification adjustments for gain on disposal included in profit or loss (3,861) - (3,861) (15,657) - (15,657)Other comprehensive income attributable to participants 10,197 - 10,197 6,673 - 6,673

- - - - - -

CompanyItems that will not be reclassified subsequently to profit or lossRevaluation of property and equipment - Gains arising during the year 3,252 32 3,284 1,139 146 1,285 - Realisation of revaluation surplus arising from disposal of property and equipment (95) - (95) - - - Other comprehensive income attributable to participants (3,157) - (3,157) (1,596) - (1,596)

- 32 32 (457) 146 (311)

Items that may be reclassified subsequently to profit or lossFair value of available-for-sale financial assets - (Losses) / Gains arising during the year (7,693) 1,923 (5,770) 14,211 (3,553) 10,658 - Reclassification adjustments for gain on disposal included in profit or loss (1,712) 428 (1,284) (10,855) 2,714 (8,141)

(9,405) 2,351 (7,054) 3,356 (839) 2,517

(9,405) 2,383 (7,022) 2,899 (693) 2,206

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Notes to the Financial Statements

34. Earnings per share - Group

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2014 was based on the profit attributable to ordinary shareholders of RM140,521,000 (2013: RM138,999,000) and a weighted average number of ordinary shares outstanding, calculated as follows:

Group 2014 2013 Unit’000 Unit’000

Weighted average number of ordinary shares (basic) 162,882 162,817

Diluted earnings per ordinary share

The calculation of diluted earnings per ordinary share at 31 December 2014 was based on the profit attributable to ordinary shareholders of RM140,521,000 (2013: RM138,999,000) and a weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows:

Group 2014 2013 Unit’000 Unit’000

Weighted average number of ordinary shares (basic) 162,882 162,817Effect of Restricted / Performance shares on issue 767 1,047

Weighted average number of ordinary shares (diluted) 163,649 163,864

35. Dividends

Dividends recognised by the Company: Sen per Total share amount Date of (single tier) RM’000 payment

2014Ordinary dividend paid, final for financial year 2013 40.00 65,127 8.5.2014Ordinary dividend paid, first interim for financial year 2014 40.00 65,202 4.11.2014

Total amount 130,329

2013Ordinary dividend paid, first interim for financial year 2013 12.00 19,538 4.10.2013Ordinary dividend paid, second interim for financial year 2013 30.00 48,845 23.12.2013

Total amount 68,383

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Notes to the Financial Statements

35. Dividends (continued)

Subsequent to the end of the reporting period, the Directors proposed a final dividend as set out below. The dividend will be recognised in subsequent financial period upon approval by the owners of the Company.

Sen per Total share amount (single tier) RM’000

Final dividend proposed (ordinary) for financial year 2014 35.00 57,052

36. Operating segments

Segment information is presented in respect of the Group’s geographical segments. This is based on the Group’s management and internal reporting structure. Inter-segment pricing, if any, is determined based on negotiated terms. The Group does not present information by business segment as it is principally engaged as an operator of Family and General takaful / retakaful businesses. The financial position and performance of the Family and General Takaful businesses managed by the Group and the Company have been disclosed separately within these financial statements.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise expenses, which are all incurred by Takaful Operator for the management of Takaful funds.

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year.

Geographical segments

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are also based on the geographical location of assets.

Malaysia Indonesia Consolidated RM’000 RM’000 RM’000

2014Total external revenue 1,499,636 153,003 1,652,639 Inter-segment revenue - - -

Total segment revenue 1,499,636 153,003 1,652,639

Segment result / Profit before zakat and taxation 186,657 40 186,697

Zakat (389)Tax expense (47,573)

Profit for the year 138,735

Segment assets by location of assets 6,720,181 444,607 7,164,788

Segment liabilities by location of liabilities 6,177,866 390,476 6,568,342

Capital expenditure by location of assets 19,844 1,124 20,968

Depreciation and amortisation 8,742 2,835 11,577

Non-cash expenses other than depreciation and amortisation 14,128 4,863 18,991

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Notes to the Financial Statements

36. Operating segments (continued)

Geographical segments (continued)

Malaysia Indonesia Consolidated RM’000 RM’000 RM’000

2013Total external revenue 1,537,994 175,012 1,713,006Inter-segment revenue - - -

Total segment revenue 1,537,994 175,012 1,713,006

Segment result / Profit before zakat and taxation 175,338 3,966 179,304

Zakat (1,517)Tax expense (43,407)

Profit for the year 134,380

Segment assets by location of assets 6,529,042 395,501 6,924,543

Segment liabilities by location of liabilities 5,922,278 342,366 6,264,644

Capital expenditure by location of assets 6,589 933 7,522

Depreciation and amortisation 11,258 2,316 13,574

Non-cash expenses other than depreciation and amortisation 2,964 759 3,723

37. Risk management framework

The Board with the assistance of the management team is responsible for the Risk Management Framework within the Group. The Board delegates the responsibility of oversight and monitoring of management’s initiatives in managing key risk areas and ensuring the functioning of the risk management processes to the Board Risk Committee (BRC). The BRC is supported by the Management Committee (MC) who is represented by the respective heads of divisions and headed by the Group Managing Director.

The Group established the Operational Risk Management (ORM) Framework to ensure an ongoing process of identifying, evaluating, monitoring and managing the significant risk exposures surrounding its business operations.

By executing the risk management process through robust controls, monitoring and responding to potential risks, the Group is able to mitigate risks to within the risk appetite of the Board. Operational Loss Incidences reporting based on the BNM’s ORION requirement are reported to BNM, BRC and the Board to act as a gauge on the effectiveness of the ORM in place.

Whistle Blowing Policy & Fraud and Integrity Policy and Shariah Governance Framework are also in place to provide basic structure and further strengthen the existing control mechanism underlying the business activities.

Business Continuity Management is consistently practiced in accordance with Bank Negara Malaysia guidelines. The Group tests the Business Continuity Plan annually to ensure the continuity of essential services in the event of major disruption and to safeguard the lives of the employees and others in the office premises. The Disaster Recovery Plan is tested twice a year to ensure the critical IT systems are up and running at all times.

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Notes to the Financial Statements

37. Risk management framework (continued)

In Financial Risk, the Group has a Risk and Capital Management Framework to maintain financial resilience and stability, whilst having the flexibility of pursuing strategic business opportunities to optimize shareholder value.

Stress Testing is conducted twice a year by the Actuarial Division together with Investment Department and Risk Management Department to ensure the Group’s financial standing is secure under several risk scenarios.

Asset and Liability Management Framework and Strategic Asset Allocation are also in place to enhance Financial Risk Management and facilitate in the Group’s and the Company’s investment strategy.

38. Takaful risk management

(a) Family Takaful Fund

The Family Takaful contracts consist of:

(i) Family Takaful non-investment-linked contracts

The Family Takaful non-investment-linked contracts are mainly credit related takaful products, group takaful schemes, yearly renewable individual ordinary medical plans, regular contribution individual ordinary plans and annuity plans. The main product types are Mortgage Reducing Term Takaful (MRTT), Group Credit Takaful, Group Term Takaful and Group Medical Takaful.

(ii) Family Takaful investment-linked contracts

The Family Takaful investment-linked contracts are mainly made up of regular contribution investment-linked products. The main products are Takaful myInvest and Takaful myGenLife.

The key coverage for the Family Takaful contracts

The key coverage for the Family Takaful contracts are death, total and permanent disability, hospital and surgical benefits, personal accident benefits, daily hospitalisation cash allowance benefits, dread disease benefits, waiver of contribution benefits and survival benefits (for annuity).

Concentration of Family Takaful risk

The following gives details of the Group’s and the Company’s concentration of risks based on outstanding actuarial reserves by main product categories:

<------------------- Group -----------------> Gross Retakaful Net Note RM’000 RM’000 RM’000

2014 Term 874,389 (101,692) 772,697 Endowment 1,358,507 (18) 1,358,489 Mortgage 1,466,686 (104,934) 1,361,752 Annuity 323,280 - 323,280

Total Family actuarial liabilities 18(c) 4,022,862 (206,644) 3,816,218

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Notes to the Financial Statements

38. Takaful risk management (continued)

(a) Family Takaful Fund (continued) <------------------- Group -----------------> Gross Retakaful Net Note RM’000 RM’000 RM’000

2013 Term 824,558 (77,821) 746,737 Endowment 1,367,608 - 1,367,608 Mortgage 1,187,668 (70,519) 1,117,149 Annuity 328,985 - 328,985

Total Family actuarial liabilities 18(c) 3,708,819 (148,340) 3,560,479

<---------------- Company ----------------> Gross Retakaful Net Note RM’000 RM’000 RM’000

2014 Term 870,369 (101,555) 768,814 Endowment 1,154,453 - 1,154,453 Mortgage 1,428,034 (97,771) 1,330,263 Annuity 323,280 - 323,280

Total Family actuarial liabilities 18(c) 3,776,136 (199,326) 3,576,810

2013 Term 823,259 (77,821) 745,438 Endowment 1,198,261 - 1,198,261 Mortgage 1,152,418 (64,419) 1,087,999 Annuity 324,495 - 324,495

Total Family actuarial liabilities 18(c) 3,498,433 (142,240) 3,356,193

Key assumptions

Reserves for all plans were valued on a basis that the Appointed Actuary considers adequate and appropriate, and in line with the valuation basis set out by BNM in respect of the Guidelines on Valuation Basis for Liabilities of Family Takaful Business (BNM/RH/GL 004-20) and Risk-Based Capital Framework for Takaful Operator.

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Notes to the Financial Statements

38. Takaful risk management (continued)

(a) Family Takaful Fund (continued)

Key assumptions (continued)

The key assumptions to which the estimation of actuarial liabilities is particularly sensitive are as follows:

- Mortality and morbidity rates

This is significant for contracts with significant coverage for death, total permanent disability and critical illness and the increase in the mortality or morbidity rates would have direct impact on the liability.

- Discount rate

As the liabilities are the present value of future cash flows, both income and outgo, a decrease in discount rate would have an increasing impact on the liabilities and vice-versa.

- Surrender rate

This is only applicable to long-term products, where when the rate is reduced (products with PIF) or increased (products without PIF), the impact is an increase of the liability.

Sensitivities

A summary of key assumptions used for sensitivity analysis is as below:

<----------------Group and Company-------------> Mortality and morbidity Discount Surrender rates rate rate

2014 Endowment +10%(i) -1% -20% Mortgage +10%(i) -1% -20% Investment-linked +10%(i) -1% -20%

2013 Endowment +10%(i) -1% -20% Mortgage +10%(i) -1% -20% Investment-linked +10%(i) -1% -20%

(i) 10% Industry mortality and morbidity experience tables M8388 and M9903

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Notes to the Financial Statements

38. Takaful risk management (continued)

(a) Family Takaful Fund (continued)

Sensitivities (continued)

The analysis below is performed for reasonably possible movements in each of the key assumptions with all other assumptions held constant, showing the impact on gross and net liabilities, and unallocated surplus. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual basis. It should be noted that movements in these assumptions are non-linear. Sensitivity information will also vary according to the current economic assumptions.

<--------------------------------- Group -------------------------------> Impact on Impact on Impact on Change in gross net unallocated assumptions liabilities liabilities surplus RM’000 RM’000 RM’000

2014 Mortality / morbidity rate +10% 196,164 136,580 (136,580) Discount rate -1% 183,304 161,481 (161,481) Surrender rate -20% 58,568 44,264 (44,264)

2013 Mortality / morbidity rate +10% 180,259 135,607 (135,607) Discount rate -1% 146,481 130,140 (130,140) Surrender rate -20% 49,629 42,032 (42,032)

<-------------------------------Company-----------------------------> Impact on Impact on Impact on Change in gross net unallocated assumptions liabilities liabilities surplus RM’000 RM’000 RM’000

2014 Mortality / morbidity rate +10% 139,860 89,541 (89,541) Discount rate -1% 131,698 117,398 (117,398) Surrender rate -20% 7,763 776 (776)

2013 Mortality / morbidity rate +10% 127,987 91,219 (91,219) Discount rate -1% 98,881 88,809 (88,809) Surrender rate -20% 2,457 976 (976)

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Notes to the Financial Statements

38. Takaful risk management (continued)

(b) General Takaful Fund

The General Takaful contracts consist of fire, motor, personal accident, workmen’s compensation and employers’ liability, liabilities and engineering and others.

Concentration of General Takaful risk

The table below sets out the concentration of General Takaful gross contribution by type of business.

<---------------------Group------------------> Gross Retakaful Net Note RM’000 RM’000 RM’000

2014 Fire 163,537 (82,606) 80,931 Motor 208,649 (64,912) 143,737 Marine 5,733 (3,320) 2,413 Miscellaneous 73,400 (19,258) 54,142

Gross contribution 23 451,319 (170,096) 281,223

2013 Fire 154,544 (80,917) 73,627 Motor 187,435 (30,647) 156,788 Marine 5,134 (2,796) 2,338 Miscellaneous 81,293 (26,987) 54,306

Gross contribution 23 428,406 (141,347) 287,059

<---------------- Company -----------------> Gross Retakaful Net Note RM’000 RM’000 RM’000

2014 Fire 154,272 (79,592) 74,680 Motor 195,509 (63,990) 131,519 Marine 4,392 (2,583) 1,809 Miscellaneous 64,286 (17,264) 47,022

Gross contribution 23 418,459 (163,429) 255,030

2013 Fire 141,660 (77,951) 63,709 Motor 170,837 (29,567) 141,270 Marine 3,755 (2,003) 1,752 Miscellaneous 70,383 (24,750) 45,633

Gross contribution 23 386,635 (134,271) 252,364

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Notes to the Financial Statements

38. Takaful risk management (continued)

(b) General Takaful Fund (continued)

Key assumptions

The provision for Takaful liabilities is in accordance with the valuation methods set out by BNM in respect of the Guidelines on Valuation Basis for Liabilities of General Takaful Business (BNM/RH/GL 004-21) and Risk-Based Capital Framework for Takaful Operator. The key assumptions underlying the estimation of liabilities is that the Group’s and the Company’s future claims development will follow a similar pattern to past claims development experience, including average claim cost, average claim frequency and business mix for each accident year.

Additional qualitative judgements are used to assess the extent to which past trends may not apply in the future, for example, isolated occurrences, changes in market factors such as public attitude to claiming, economic conditions, as well as internal factors such as portfolio mix, underwriting policy, policy conditions and claims handling procedures.

Other key circumstances affecting the reliability of assumptions include delays in settlement and changes in foreign currency rates.

Sensitivities

The General Takaful claim liabilities are sensitive to the above key assumptions and change in these assumptions may impact the liabilities and operating surplus of the General Takaful Fund significantly. It has not been possible to quantify the sensitivity of certain assumptions, such as, legislative changes or uncertainty in the estimation process.

The analysis below is performed for reasonably possible movements in key assumptions with all other assumptions held constant, showing the impact on gross and net liabilities and operating surplus. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual basis. It should be noted that movements in these assumptions are non-linear.

The key assumptions to which the estimation of actuarial liabilities is particularly sensitive are as follows:

- Fire loss ratio for latest accident year

This is significant as Fire portfolio is one of the largest under general business, a change in loss ratio estimate will impact the liabilities significantly.

- Motor Act loss ratio for latest accident year

Motor Act business is long tailed in nature and need years before the claim experience matures. A significant impact may result if the ultimate experience differs from current estimation.

- Average claim cost

Reserves are based on assumption that historical average claim cost is reflective of the future experience. Increase in average cost will increase future liabilities.

- Average claim frequency

Reserves are based on assumption that historical average claim number in each accident year reflects the future experience. A change in average number of claims will impact the future liabilities.

- Average claim settlement period

Reserves are based on assumption that claim settlement period will be stable over years. A change in claim handling practice will affect the claim cost and the future liabilities.

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Notes to the Financial Statements

38. Takaful risk management (continued)

(b) General Takaful Fund (continued)

Sensitivities (continued)

Below shows the summary of changes in key assumptions and the impact to the gross and net claim liabilities, and the operating surplus.

<--------------------------------- Group -------------------------------> Impact on Impact on Impact on Change in gross net operating assumptions liabilities liabilities surplus

RM’000 RM’000 RM’000

2014Fire loss ratio for AY 2014 +10% 15,709 6,386 (6,386)Motor Act loss ratio for AY 2014 +10% 3,247 2,919 (2,919)Average claim cost +10% 60,263 28,415 (28,415)Average claim frequency +10% 33,179 20,960 (20,960)Average claim settlement period Increase by 6 months 12,523 8,181 (8,181)

2013Fire loss ratio for AY 2013 +10% 14,351 5,884 (5,884)Motor Act loss ratio for AY 2013 +10% 2,783 2,478 (2,478)Average claim cost +10% 58,903 28,075 (28,075)Average claim frequency +10% 31,943 20,651 (20,651)Average claim settlement period Increase by 6 months 11,675 7,541 (7,541)

<-------------------------------Company-----------------------------> Impact on Impact on Impact on Change in gross net operating assumptions liabilities liabilities surplus

RM’000 RM’000 RM’000

2014Fire loss ratio for AY 2014 +10% 15,603 5,472 (5,472)Motor Act loss ratio for AY 2014 +10% 2,572 1,617 (1,617)Average claim cost +10% 58,994 23,611 (23,611)Average claim frequency +10% 32,361 19,933 (19,933)Average claim settlement period Increase by 6 months 10,158 6,006 (6,006)

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Notes to the Financial Statements

38. Takaful risk management (continued)

(b) General Takaful Fund (continued)

Sensitivities (continued)

<-------------------------------Company-----------------------------> Impact on Impact on Impact on Change in gross net operating assumptions liabilities liabilities surplus

RM’000 RM’000 RM’000

2013Fire loss ratio for AY 2013 +10% 13,202 5,380 (5,380)Motor Act loss ratio for AY 2013 +10% 2,468 2,211 (2,211)Average claim cost +10% 57,014 27,603 (27,603)Average claim frequency +10% 29,865 20,132 (20,132)Average claim settlement period Increase by months 10,249 7,074 (7,074)

Claims development table

The following tables show the estimate of cumulative incurred claims, including both claims notified and IBNR for each successive accident year at the end of reporting period, together with cumulative payments to-date.

In setting provisions for claims, the Group and the Company give consideration to the probability and magnitude of future experience being more adverse than assumed and exercise the degree of caution in setting reserves when there is considerable uncertainty. In general, the uncertainty associated with the ultimate claims experience in an accident year is greatest when the accident year is at an early stage of development and the margin necessary to provide the necessary confidence in adequacy of provision is relatively at its highest. As claims develop and the ultimate cost of claims becomes more certain, the relative level of margin maintained should decrease.

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Notes to the Financial Statements

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fore

20

07

2008

20

09

2010

20

11

2012

20

13

2014

To

tal

Acci

dent

yea

r RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At e

nd o

f acc

iden

t yea

r 3

63,4

21

211

,719

1

51,6

43

256

,026

2

52,1

27

235

,113

3

48,0

58

272

,807

O

ne y

ear l

ater

3

08,4

62

163

,964

1

59,1

47

325

,009

2

56,8

03

226

,965

3

22,0

24

-

Two

year

s lat

er

269

,303

1

70,9

90

202

,227

3

14,7

34

237

,588

1

95,8

07

-

-

Thre

e ye

ars l

ater

2

61,7

23

194

,484

1

86,8

82

289

,971

2

16,2

53

-

-

-

Four

yea

rs la

ter

258

,296

1

82,6

66

172

,266

2

61,7

64

-

-

-

-

Five

yea

rs la

ter

257

,029

1

65,4

83

159

,098

-

-

-

-

-

Si

x ye

ars l

ater

2

50,3

54

161

,903

-

-

-

-

-

-

Se

ven

year

s lat

er

245

,275

-

-

-

-

-

-

-

Curr

ent e

stim

ate

of c

umul

ative

cla

ims i

ncur

red

245

,275

1

61,9

03

159

,098

2

61,7

64

216

,253

1

95,8

07

322

,024

2

72,8

07

1,8

34,9

31

At e

nd o

f acc

iden

t yea

r (

63,4

55)

(50,

291)

(7

1,39

3)

(101

,724

) (5

8,32

6)

(51,

497)

(5

6,64

0)

(64,

682)

One

yea

r lat

er

(179

,619

) (1

09,3

15)

(132

,370

) (1

74,6

90)

(132

,258

) (1

13,3

94)

(130

,366

) -

Tw

o ye

ars l

ater

(2

04,2

97)

(142

,410

) (1

46,6

46)

(205

,770

) (1

64,4

90)

(147

,379

) -

-

Th

ree

year

s lat

er

(219

,658

) (1

52,2

30)

(153

,005

) (2

21,9

59)

(179

,202

) -

-

-

Fo

ur y

ears

late

r (2

27,6

46)

(156

,264

) (1

55,1

43)

(230

,198

) -

-

-

-

Fi

ve y

ears

late

r (2

33,0

71)

(157

,581

) (1

55,9

84)

-

-

-

-

-

Six

year

s lat

er

(234

,596

) (1

58,6

63)

-

-

-

-

-

-

Seve

n ye

ars l

ater

(2

38,3

80)

-

-

-

-

-

-

-

Cum

ulati

ve p

aym

ents

to-d

ate

(238

,380

) (1

58,6

63)

(155

,984

) (2

30,1

98)

(179

,202

) (1

47,3

79)

(130

,366

) (6

4,68

2)

(1,3

04,8

54)

Gro

ss G

ener

al T

akaf

ul c

ontr

act l

iabi

lities

6

,895

3

,240

3

,114

3

1,56

6

37,

051

4

8,42

8

191

,658

2

08,1

25

530

,077

Addi

tiona

l risk

mar

gin

79,4

39Eff

ect o

f mov

emen

t in

exch

ange

rate

s

(4

,083

)

Gro

ss G

ener

al T

akaf

ul c

ontr

act l

iabi

lities

per

fina

ncia

l pos

ition

(Not

e 18

(a))

6

05,4

33

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209

Notes to the Financial Statements38

. Ta

kafu

l ris

k m

anag

emen

t (co

ntinu

ed)

(b)

Gen

eral

Tak

aful

Fun

d (c

ontin

ued)

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es fo

r 201

4 (G

roup

):

Be

fore

20

07

2008

20

09

2010

20

11

2012

20

13

2014

To

tal

Acci

dent

yea

r RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At e

nd o

f acc

iden

t yea

r 1

06,4

09

102

,188

1

07,0

14

211

,276

1

79,6

70

169

,228

1

56,6

15

156

,941

O

ne y

ear l

ater

1

18,8

00

86,

706

1

09,7

00

214

,389

1

83,9

27

169

,004

1

43,6

77

-

Two

year

s lat

er

117

,551

9

2,13

2

115

,733

2

03,8

74

179

,313

1

52,7

65

-

-

Thre

e ye

ars l

ater

1

19,6

07

98,

093

1

07,4

49

197

,585

1

68,6

29

-

-

-

Four

yea

rs la

ter

115

,828

9

6,59

0

104

,480

1

85,0

14

-

-

-

-

Five

yea

rs la

ter

121

,362

9

3,30

6

100

,610

-

-

-

-

-

Si

x ye

ars l

ater

1

20,1

43

90,

836

-

-

-

-

-

-

Se

ven

year

s lat

er

123

,160

-

-

-

-

-

-

-

Curr

ent e

stim

ate

of c

umul

ative

cla

ims i

ncur

red

123

,160

9

0,83

6

100

,610

1

85,0

14

168

,629

1

52,7

65

143

,677

1

56,9

41

1,1

21,6

32

At e

nd o

f acc

iden

t yea

r (4

7,71

7)

(33,

040)

(4

4,09

9)

(84,

167)

(5

3,57

0)

(47,

769)

(4

8,34

0)

(47,

835)

One

yea

r lat

er

(85,

148)

(6

0,70

2)

(79,

458)

(1

43,1

80)

(119

,794

) (1

01,6

19)

(94,

643)

-

Tw

o ye

ars l

ater

(9

4,84

3)

(74,

740)

(9

2,17

1)

(158

,560

) (1

44,8

33)

(122

,291

) -

-

Th

ree

year

s lat

er

(102

,483

) (8

4,23

3)

(97,

214)

(1

71,5

55)

(152

,714

) -

-

-

Fo

ur y

ears

late

r (1

07,2

36)

(87,

523)

(9

8,46

9)

(175

,176

) -

-

-

-

Fi

ve y

ears

late

r (1

14,4

86)

(88,

292)

(9

8,93

0)

-

-

-

-

-

Six

year

s lat

er

(114

,787

) (8

8,68

5)

-

-

-

-

-

-

Seve

n ye

ars l

ater

(1

18,0

94)

-

-

-

-

-

-

-

Cum

ulati

ve p

aym

ents

to-d

ate

(118

,094

) (8

8,68

5)

(98,

930)

(1

75,1

76)

(152

,714

) (1

22,2

91)

(94,

643)

(4

7,83

5)

(898

,368

)

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es

5,0

66

2,1

51

1,6

80

9,8

38

15,

915

3

0,47

4

49,

034

1

09,1

06

223

,264

Addi

tiona

l risk

mar

gin

30,0

46Eff

ect o

f mov

emen

t in

exch

ange

rate

s

(5

87)

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es p

er fi

nanc

ial p

ositi

on (N

ote

18(a

))

252

,723

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210

Notes to the Financial Statements

38.

Taka

ful r

isk

man

agem

ent (

conti

nued

)

(b)

Gen

eral

Tak

aful

Fun

d (c

ontin

ued)

Gro

ss G

ener

al T

akaf

ul c

ontr

act l

iabi

lities

for 2

014

(Com

pany

):

Be

fore

20

07

2008

20

09

2010

20

11

2012

20

13

2014

To

tal

Acci

dent

yea

r RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At e

nd o

f acc

iden

t yea

r 3

47,9

65

197,

826

11

4,83

5

224,

758

22

0,48

3

215,

615

33

1,80

0

262,

204

One

yea

r lat

er

292,

058

14

8,11

2

113,

473

28

7,37

5

232,

454

20

9,16

1

306,

084

-

Tw

o ye

ars l

ater

25

0,49

8

152,

046

15

4,77

5

277,

643

21

5,58

0

177

,695

-

-

Th

ree

year

s lat

er

239,

114

17

4,43

8

139,

639

24

8,67

2

192

,988

-

-

-

Fo

ur y

ears

late

r 23

6,73

4

162,

567

12

3,68

9

227

,251

-

-

-

-

Fi

ve y

ears

late

r 23

5,46

9

146,

915

1

10,5

89

-

-

-

-

-

Six

year

s lat

er

228,

801

1

43,3

29

-

-

-

-

-

-

Seve

n ye

ars l

ater

22

0,71

4

-

-

-

-

-

-

-

Curr

ent e

stim

ate

of c

umul

ative

cla

ims i

ncur

red

220

,714

1

43,3

29

110

,589

2

27,2

51

192

,988

1

77,6

95

306

,084

2

62,2

04

1,6

40,8

54

At e

nd o

f acc

iden

t yea

r (5

0,17

9)

(36,

888)

(3

7,03

6)

(79,

900)

(4

8,45

0)

(43,

107)

(4

7,86

6)

(58,

855)

One

yea

r lat

er

(164

,274

) (9

4,47

8)

(90,

453)

(1

48,0

43)

(113

,694

) (9

9,55

9)

(117

,379

) -

Tw

o ye

ars l

ater

(1

87,4

83)

(127

,247

) (1

02,7

85)

(178

,214

) (1

44,4

54)

(132

,631

) -

-

Th

ree

year

s lat

er

(202

,364

) (1

35,6

64)

(106

,453

) (1

91,3

72)

(158

,005

) -

-

-

Fo

ur y

ears

late

r (2

09,3

24)

(139

,549

) (1

08,6

01)

(198

,460

) -

-

-

-

Fi

ve y

ears

late

r (2

14,7

30)

(140

,865

) (1

09,3

80)

-

-

-

-

-

Six

year

s lat

er

(216

,255

) (1

41,9

42)

-

-

-

-

-

-

Seve

n ye

ars l

ater

(2

19,0

24)

-

-

-

-

-

-

-

Cum

ulati

ve p

aym

ents

to-d

ate

(219

,024

) (1

41,9

42)

(109

,380

) (1

98,4

60)

(158

,005

) (1

32,6

31)

(117

,379

) (5

8,85

5)

(1,1

35,6

76)

Gro

ss G

ener

al T

akaf

ul c

ontr

act l

iabi

lities

1

,690

1

,387

1

,209

2

8,79

1

34,

983

4

5,06

4

188

,705

2

03,3

49

505

,178

Addi

tiona

l risk

mar

gin

78,8

23 G

ross

Gen

eral

Tak

aful

con

trac

t lia

biliti

es p

er fi

nanc

ial p

ositi

on (N

ote

18(a

))

584

,001

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211

Notes to the Financial Statements38

. Ta

kafu

l ris

k m

anag

emen

t (co

ntinu

ed)

(b)

Gen

eral

Tak

aful

Fun

d (c

ontin

ued)

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es fo

r 201

4 (C

ompa

ny):

Be

fore

20

07

2008

20

09

2010

20

11

2012

20

13

2014

To

tal

Acci

dent

yea

r RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At e

nd o

f acc

iden

t yea

r 9

4,92

5

91,

338

9

0,32

0

193

,764

1

64,7

71

155

,701

1

45,9

51

149

,409

O

ne y

ear l

ater

1

06,6

23

74,

215

8

9,55

7

194

,943

1

66,9

38

155

,158

1

31,5

97

-

Two

year

s lat

er

102

,978

7

6,56

3

93,

924

1

84,8

31

162

,745

1

38,8

56

-

-

Thre

e ye

ars l

ater

1

01,2

30

81,

426

8

5,74

5

175

,340

1

51,2

94

-

-

-

Four

yea

rs la

ter

98,

655

7

9,91

3

82,

749

1

62,9

22

-

-

-

-

Five

yea

rs la

ter

104

,183

7

8,15

3

78,

799

-

-

-

-

-

Si

x ye

ars l

ater

1

02,9

67

75,

681

-

-

-

-

-

-

Se

ven

year

s lat

er

101

,654

-

-

-

-

-

-

-

Curr

ent e

stim

ate

of c

umul

ative

cla

ims i

ncur

red

101

,654

7

5,68

1

78,

799

1

62,9

22

151

,294

1

38,8

56

131

,597

1

49,4

09

990

,212

At e

nd o

f acc

iden

t yea

r (3

7,77

0)

(22,

618)

(2

9,19

4)

(68,

055)

(4

4,72

5)

(40,

054)

(4

1,95

6)

(43,

125)

One

yea

r lat

er

(73,

387)

(4

9,15

4)

(62,

390)

(1

25,8

83)

(104

,575

) (8

9,41

9)

(84,

498)

-

Tw

o ye

ars l

ater

(8

1,61

2)

(62,

879)

(7

3,27

1)

(140

,510

) (1

28,5

83)

(109

,666

) -

-

Th

ree

year

s lat

er

(88,

771)

(7

0,96

9)

(76,

033)

(1

50,2

49)

(136

,415

) -

-

-

Fo

ur y

ears

late

r (9

2,65

2)

(74,

198)

(7

7,27

7)

(153

,849

) -

-

-

-

Fi

ve y

ears

late

r (9

9,88

7)

(74,

964)

(7

7,71

5)

-

-

-

-

-

Six

year

s lat

er

(100

,188

) (7

5,35

4)

-

-

-

-

-

-

Seve

n ye

ars l

ater

(1

01,1

22)

-

-

-

-

-

-

-

Cum

ulati

ve p

aym

ents

to-d

ate

(101

,122

) (7

5,35

4)

(77,

715)

(1

53,8

49)

(136

,415

) (1

09,6

66)

(84,

498)

(4

3,12

5)

(781

,744

)

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es

532

3

27

1,0

84

9,0

73

14,

879

2

9,19

0

47,

099

1

06,2

84

208

,468

Addi

tiona

l risk

mar

gin

29,4

30

Net

Gen

eral

Tak

aful

con

trac

t lia

biliti

es p

er fi

nanc

ial p

ositi

on (N

ote

18(a

))

237

,898

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Notes to the Financial Statements

39. Financial instruments

39.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:(a) Loans and receivables (LAR);(b) Fair value through profit or loss (FVTPL) - Held for trading (HFT);(c) Available-for-sale financial assets (AFS);(d) Held-to-maturity financial assets (HTM); and(e) Financial liabilities measured at amortised cost (FL).

<---------------------------------------- Group ---------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2014 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTakaful OperatorOther investments 431,952 - 3,937 425,767 2,248 Loans and receivables, excluding takaful receivables 160,593 160,593 - - - Cash and cash equivalents 146,499 146,499 - - -

739,044 307,092 3,937 425,767 2,248

Family TakafulOther investments 3,390,049 - 227,618 2,719,452 442,979 Retakaful assets 3,352 3,352 - - -Loans and receivables, excluding takaful receivables 663,752 663,752 - - -Takaful receivables 90,972 90,972 - - -Cash and cash equivalents 597,341 597,341 - - -

4,745,466 1,355,417 227,618 2,719,452 442,979

General TakafulOther investments 494,528 - - 453,249 41,279 Retakaful assets 259,623 259,623 - - -Loans and receivables, excluding takaful receivables 106,055 106,055 - - -Takaful receivables 37,619 37,619 - - -Cash and cash equivalents 112,435 112,435 - - -

1,010,260 515,732 - 453,249 41,279

GroupOther investments 4,278,729 - 231,555 3,560,668 486,506 Retakaful assets 262,975 262,975 - - -Loans and receivables, excluding takaful receivables 883,416 883,416 - - -Takaful receivables 128,591 128,591 - - -Cash and cash equivalents 856,275 856,275 - - -

6,409,986 2,131,257 231,555 3,560,668 486,506

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<-------------------------------------- Company -------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2014 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTakaful OperatorOther investments 403,764 - - 403,764 -Loans and receivables, excluding takaful receivables 152,068 152,068 - - -Cash and cash equivalents 111,923 111,923 - - -

667,755 263,991 - 403,764 -

Family TakafulOther investments 3,134,283 - 63,385 2,643,713 427,185 Retakaful assets 2,526 2,526 - - -Loans and receivables, excluding takaful receivables 648,833 648,833 - - -Takaful receivables 86,548 86,548 - - -Cash and cash equivalents 538,358 538,358 - - -

4,410,548 1,276,265 63,385 2,643,713 427,185

General TakafulOther investments 488,352 - - 450,726 37,626 Retakaful assets 253,588 253,588 - - -Loans and receivables, excluding takaful receivables 96,748 96,748 - - -Takaful receivables 31,715 31,715 - - -Cash and cash equivalents 96,311 96,311 - - -

966,714 478,362 - 450,726 37,626

CompanyOther investments 3,988,599 - 63,385 3,460,403 464,811 Retakaful assets 256,114 256,114 - - -Loans and receivables, excluding takaful receivables 867,145 867,145 - - -Takaful receivables 118,263 118,263 - - -Cash and cash equivalents 746,592 746,592 - - -

5,976,713 1,988,114 63,385 3,460,403 464,811

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<-------------------------------------- Group ---------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2014 RM’000 RM’000 RM’000 RM’000 RM’000

Financial liabilitiesTakaful OperatorOther payables (89,838) (89,838) - - -

Family TakafulQard payables (24,912) (24,912) - - -Provision for outstanding claims (33,310) (33,310) - - -Takaful payables (40,949) (40,949) - - -Other payables (101,169) (101,169) - - -

(200,340) (200,340) - - -

General TakafulQard payables (27,301) (27,301) - - -Provision for outstanding claims (375,636) (375,636) - - -Takaful payables (375,636) (375,636) - - -Other payables (72,448) (72,448) - - -

(495,753) (495,753) - - -

GroupProvision for outstanding claims (408,946) (408,946) - - -Takaful payables (61,317) (61,317) - - -Other payables (216,471) (216,471) - - -

(686,734) (686,734) - - -

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<------------------------------------- Company -------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2014 RM’000 RM’000 RM’000 RM’000 RM’000

Financial liabilitiesTakaful OperatorOther payables (64,707) (64,707) - - -

Family TakafulProvision for outstanding claims (18,918) (18,918) - - -Takaful payables (39,228) (39,228) - - -Other payables (94,567) (94,567) - - -

(152,713) (152,713) - - -

General TakafulProvision for outstanding claims (360,418) (360,418) - - -Takaful payables (19,753) (19,753) - - -Other payables (70,014) (70,014) - - -

(450,185) (450,185) - - -

CompanyProvision for outstanding claims (379,336) (379,336) - - -Takaful payables (58,981) (58,981) - - -Other payables (198,892) (198,892) - - -

(637,209) (637,209) - - -

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<-------------------------------------- Group ---------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2013 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTakaful OperatorOther investments 484,169 - 6,614 475,590 1,965Loans and receivables, excluding takaful receivables 155,072 155,072 - - -Cash and cash equivalents 89,171 89,171 - - -

728,412 244,243 6,614 475,590 1,965

Family TakafulOther investments 3,642,815 - 181,689 3,094,385 366,741Retakaful assets 2,278 2,278 - - -Loans and receivables, excluding takaful receivables 521,902 521,902 - - -Takaful receivables 68,197 68,197 - - -Cash and cash equivalents 265,736 265,736 - - -

4,500,928 858,113 181,689 3,094,385 366,741

General TakafulOther investments 605,251 - - 569,349 35,902Retakaful assets 291,300 291,300 - - -Loans and receivables, excluding takaful receivables 89,541 89,541 - - -Takaful receivables 48,959 48,959 - - -Cash and cash equivalents 75,712 75,712 - - -

1,110,763 505,512 - 569,349 35,902

GroupOther investments 4,694,140 - 188,303 4,101,229 404,608Retakaful assets 293,578 293,578 - - -Loans and receivables, excluding takaful receivables 711,976 711,976 - - -Takaful receivables 117,156 117,156 - - -Cash and cash equivalents 430,619 430,619 - - -

6,247,469 1,553,329 188,303 4,101,229 404,608

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<------------------------------------- Company -------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2013 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTakaful OperatorOther investments 468,467 - - 468,467 -Loans and receivables, excluding takaful receivables 130,603 130,603 - - -Cash and cash equivalents 45,773 45,773 - - -

644,843 176,376 - 468,467 -

Family TakafulOther investments 3,451,164 - 67,506 3,022,304 361,354Retakaful assets 1,568 1,568 - - -Loans and receivables, excluding takaful receivables 495,498 495,498 - - -Takaful receivables 62,835 62,835 - - -Cash and cash equivalents 204,687 204,687 - - -

4,215,752 764,588 67,506 3,022,304 361,354

General TakafulOther investments 600,343 - - 567,669 32,674Retakaful assets 277,129 277,129 - - -Loans and receivables, excluding takaful receivables 75,503 75,503 - - -Takaful receivables 40,511 40,511 - - -Cash and cash equivalents 62,779 62,779 - - -

1,056,265 455,922 - 567,669 32,674

CompanyOther investments 4,481,879 - 67,506 4,020,345 394,028Retakaful assets 278,697 278,697 - - -Loans and receivables, excluding takaful receivables 663,657 663,657 - - -Takaful receivables 103,346 103,346 - - -Cash and cash equivalents 313,239 313,239 - - -

5,840,818 1,358,939 67,506 4,020,345 394,028

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<-------------------------------------- Group ---------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2013 RM’000 RM’000 RM’000 RM’000 RM’000

Financial liabilitiesTakaful OperatorOther payables (91,367) (91,367) - - -

Family TakafulQard payables (23,028) (23,028) - - -Provision for outstanding claims (40,150) (40,150) - - -Takaful payables (25,859) (25,859) - - -Other payables (123,787) (123,787) - - -

(212,824) (212,824) - - -

General TakafulQard payables (25,634) (25,634) - - -Provision for outstanding claims (433,215) (433,215) - - -Takaful payables (49,569) (49,569) - - -Other payables (67,261) (67,261) - - -

(575,679) (575,679) - - -

GroupProvision for outstanding claims (473,365) (473,365) - - -Takaful payables (75,428) (75,428) - - -Other payables (227,876) (227,876) - - -

(776,669) (776,669) - - -

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Notes to the Financial Statements

39. Financial instruments (continued)

39.1 Categories of financial instruments (continued)

<------------------------------------- Company -------------------------------------> Carrying LAR/ amount (FL) FVTPL AFS HTM2013 RM’000 RM’000 RM’000 RM’000 RM’000

Financial liabilitiesTakaful OperatorOther payables (66,866) (66,866) - - -

Family TakafulProvision for outstanding claims (26,139) (26,139) - - -Takaful payables (22,725) (22,725) - - -Other payables (118,256) (118,256) - - -

(167,120) (167,120) - - -

General TakafulProvision for outstanding claims (407,039) (407,039) - - -Takaful payables (48,449) (48,449) - - -Other payables (65,099) (65,099) - - -

(520,587) (520,587) - - -

CompanyProvision for outstanding claims (433,178) (433,178) - - -Takaful payables (71,174) (71,174) - - -Other payables (212,274) (212,274) - - -

(716,626) (716,626) - - -

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Notes to the Financial Statements

39. Financial instruments (continued)

39.2 Net gains and losses arising from use of financial instruments

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Takaful OperatorNet gains / (losses) arising on: FVTPL financial assets - recognised in profit or loss 1,182 (68) - -

AFS financial assets - recognised in other comprehensive income 7(d) (9,521) 2,721 (9,405) 3,356 - recognised in profit or loss 18,138 28,155 16,642 27,510

8,617 30,876 7,237 30,866HTM financial assets (228) (89) - -LAR 7,394 (4,784) 7,154 4,700

16,965 25,935 14,391 35,566

Family TakafulNet gains / (losses) arising on:FVTPL financial assets- recognised in profit or loss 18,119 9,980 207 10,833

AFS financial assets- recognised inparticipants’ fund 18(c) (59,701) (99,503) (56,548) (89,750)- recognised in profit or loss 151,533 247,873 140,639 238,575

91,832 148,370 84,091 148,825HTM financial assets 18,274 14,299 17,159 13,434LAR 37,156 25,727 33,074 21,574

165,381 198,376 134,531 194,666

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Notes to the Financial Statements

39. Financial instruments (continued)

39.2 Net gains and losses arising from use of financial instruments (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

General TakafulNet gains / (losses) arising on: AFS financial assets - recognised in participants’ fund 18(c) (9,912) (6,908) (10,197) (6,673) - recognised in profit or loss 23,461 39,413 23,400 39,210

13,549 32,505 13,203 32,537HTM financial assets 1,462 1,503 1,231 1,232LAR 5,935 4,885 7,297 4,129

20,946 38,893 21,731 37,898

Group / CompanyNet gains / (losses) arising on: FVTPL financial assets - recognised in profit or loss 19,301 9,912 207 10,833

AFS financial assets - recognised in other comprehensive income 7(d) (9,521) 2,721 (9,405) 3,356 - recognised in participants’ fund 18(c) (69,613) (106,411) (66,745) (96,423) - recognised in profit or loss 193,132 315,286 180,681 305,140

113,998 211,596 104,531 212,073HTM financial assets 19,508 15,713 18,390 14,666LAR 50,921 37,286 47,525 30,403

203,728 274,507 170,653 267,975

39.3 Financial risk management

The Group and the Company have exposure to the following risks arising from its use of financial instruments:

- Credit risk- Liquidity risk- Market risk (currency risk, profit rate risk, price risk)- Operational risk

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer, an intermediary or counterparty to settle its financial and contractual obligations to the Group and the Company as and when they fall due.

The Group’s and the Company’s portfolio of Islamic debt securities, and to a lesser extent short-term and other investments, are subject to credit risk. This risk is defined as the potential loss resulting from adverse changes in a borrower’s ability to repay the debt. The Group’s and the Company’s objective is to earn competitive relative returns by investing in a diversified portfolio of securities. Management has an investment credit risk policy in place. Limits are established to manage credit quality and concentration risk.

The Group and the Company have takaful and other receivables balances that are subject to credit risk. Among the most significant of these are retakaful recoveries. To mitigate the risk of the counterparties not paying the amount due, the Group and the Company have established certain business and financial guidelines for retakaful approval, incorporating ratings by major agencies and considering currently available market information. The Group and the Company also periodically review the financial stability of retakaful companies from public and other sources and the settlement trend of amounts due from retakaful companies.

Cash and deposits are generally placed with banks and financial institutions licensed under the Financial Services Act 2013 and Islamic Financial Services Act 2013 which are regulated by Bank Negara Malaysia and Sharia Insurance Regulation in Indonesia.

The Group and the Company manage individual exposures as well as concentration of credit risks. At end of the reporting period, there were no significant concentration of credit risks, other than investments in Islamic debts securities issued by single issuer amounted to RM269,671,000 (2013: RM174,999,000) and investment in Institutional Trust Account amounted to RM149,313,000 (2013: RM298,897,000).

Credit exposure

The table below shows the maximum exposure to credit risk for the components recognised in the statements of financial position.

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful Operator AFS financial assets Institutional Trust Account 38,259 64,268 38,259 64,268 Islamic debt securities 258,447 240,102 257,861 239,235 Malaysian Government Islamic papers - 10,013 - 10,013FVTPL financial assets Islamic debt securities 3,236 4,041 - -HTM financial assets Islamic debt securities 2,248 1,965 - -LAR Loans and receivables, excluding takaful receivables 160,593 155,072 152,068 130,603 Cash and cash equivalents 146,499 89,171 111,923 45,773

609,282 564,632 560,111 489,892

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Family TakafulAFS financial assets Institutional Trust Account 84,900 196,482 84,900 196,482 Islamic debt securities 1,854,238 1,659,979 1,852,246 1,654,367 Malaysian Government Islamic papers 236,397 383,832 236,397 383,832FVTPL financial assets Islamic debt securities 112,553 84,989 14,156 16,267HTM financial assets Islamic debt securities 330,329 254,024 314,535 248,637 Malaysian Government Islamic papers 112,650 112,717 112,650 112,717LARRetakaful assets 3,352 2,278 2,526 1,568Loans and receivables, excluding takaful receivables 663,752 521,902 648,833 495,498Takaful receivables 90,972 68,197 86,548 62,835Cash and cash equivalents 597,341 265,736 538,358 204,687

4,086,484 3,550,136 3,891,149 3,376,890

General TakafulAFS financial assets Institutional Trust Account 26,154 38,147 26,154 38,147 Islamic debt securities 344,344 313,528 344,344 313,528 Malaysian Government Islamic papers 5,069 61,886 5,069 61,886HTM financial assets Islamic debt securities 8,653 3,228 5,000 - Malaysian Government Islamic papers 32,626 32,674 32,626 32,674LAR Retakaful assets 259,623 291,300 253,588 277,129 Loans and receivables, excluding takaful receivables 106,055 89,541 96,748 75,503 Takaful receivables 37,619 48,959 31,715 40,511 Cash and cash equivalents 112,435 75,712 96,311 62,779

932,578 954,975 891,555 902,157

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Group / CompanyAFS financial assets Institutional Trust Account 149,313 298,897 149,313 298,897 Islamic debt securities 2,457,029 2,213,609 2,454,451 2,207,130 Malaysian Government Islamic papers 241,466 455,731 241,466 455,731FVTPL financial assets Islamic debt securities 115,789 89,030 14,156 16,267HTM financial assets Islamic debt securities 341,230 259,217 319,535 248,637 Malaysian Government Islamic papers 145,276 145,391 145,276 145,391LAR Retakaful assets 262,975 293,578 256,114 278,697 Loans and receivables, excluding takaful receivables 883,416 711,976 867,145 663,657 Takaful receivables 128,591 117,156 118,263 103,346 Cash and cash equivalents 856,275 430,619 746,592 313,239

5,581,360 5,015,204 5,312,311 4,730,992

Credit exposure by credit rating

The table below provides information regarding the credit risk exposure of the Group and of the Company by classifying assets according to the Group’s and the Company’s internal credit ratings of counterparties.

<-------------------------------- Group --------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets Institutional Trust Account 38,259 - - 38,259 Islamic debt securities 258,447 - - 258,447 FVTPL financial assets Islamic debt securities 3,236 - - 3,236 HTM financial assets Islamic debt securities 2,248 - 562 2,810 LAR Loans and receivables, excluding takaful receivables 160,593 - 1,031 161,624 Qard receivables - - 52,213 52,213 Cash and cash equivalents 146,499 - - 146,499

609,282 - 53,806 663,088

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <-------------------------------- Group --------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2014 RM’000 RM’000 RM’000 RM’000

Family TakafulAFS financial assets Institutional Trust Account 84,900 - - 84,900 Islamic debt securities 1,854,238 - 1,409 1,855,647 Malaysian Government Islamic papers 236,397 - - 236,397 FVTPL financial assets Islamic debt securities 112,553 - - 112,553 HTM financial assets Islamic debt securities 330,329 - - 330,329 Malaysian Government Islamic papers 112,650 - - 112,650 LAR Retakaful assets 3,352 - - 3,352 Loans and receivables, excluding takaful receivables 663,752 - 301 664,053 Takaful receivables 86,608 4,364 1,052 92,024 Cash and cash equivalents 597,341 - - 597,341

4,082,120 4,364 2,762 4,089,246

General TakafulAFS financial assets Institutional Trust Account 26,154 - - 26,154 Islamic debt securities 344,344 - - 344,344 Malaysian Government Islamic papers 5,069 - - 5,069 HTM financial assets Islamic debt securities 8,653 - - 8,653 Malaysian Government Islamic papers 32,626 - - 32,626 LAR Retakaful assets 259,623 - - 259,623 Loans and receivables, excluding takaful receivables 106,055 - 381 106,436 Takaful receivables 29,489 8,130 3,435 41,054 Cash and cash equivalents 112,435 - - 112,435

924,448 8,130 3,816 936,394

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <-------------------------------- Group --------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2014 RM’000 RM’000 RM’000 RM’000

Group

AFS financial assets Institutional Trust Account 149,313 - - 149,313 Islamic debt securities 2,457,029 - 1,409 2,458,438 Malaysian Government Islamic papers 241,466 - - 241,466 FVTPL financial assets Islamic debt securities 115,789 - - 115,789 HTM financial assets Islamic debt securities 341,230 - 562 341,792 Malaysian Government Islamic papers 145,276 - - 145,276 LAR Retakaful assets 262,975 - - 262,975 Loans and receivables, excluding takaful receivables 883,416 - 1,713 885,129 Takaful receivables 116,097 12,494 4,487 133,078 Cash and cash equivalents 856,275 - - 856,275

5,568,866 12,494 8,171 5,589,531

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Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <-------------------------------- Group --------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets Institutional Trust Account 64,268 - - 64,268 Islamic debt securities 240,102 - - 240,102 Malaysian Government Islamic papers 10,013 - - 10,013FVTPL financial assets Islamic debt securities 4,041 - - 4,041HTM financial assets Islamic debt securities 1,614 351 210 2,175LAR Loans and receivables, excluding takaful receivables 153,255 1,817 1,245 156,317 Qard receivables - - 47,950 47,950 Cash and cash equivalents 89,171 - - 89,171

562,464 2,168 49,405 614,037

Family TakafulAFS financial assets Institutional Trust Account 196,482 - - 196,482 Islamic debt securities 1,659,101 878 471 1,660,450 Malaysian Government Islamic papers 383,832 - - 383,832FVTPL financial assets Islamic debt securities 84,989 - - 84,989HTM financial assets Islamic debt securities 254,024 - - 254,024 Malaysian Government Islamic papers 112,717 - - 112,717LAR Retakaful assets 2,278 - - 2,278 Loans and receivables, excluding takaful receivables 521,902 - 301 522,203 Takaful receivables 63,557 4,640 2,781 70,978 Cash and cash equivalents 265,736 - - 265,736

3,544,618 5,518 3,553 3,553,689

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228

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <-------------------------------- Group --------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2013 RM’000 RM’000 RM’000 RM’000

General TakafulAFS financial assets Institutional Trust Account 38,147 - - 38,147 Islamic debt securities 313,528 - - 313,528 Malaysian Government Islamic papers 61,886 - - 61,886HTM financial assets Islamic debt securities 3,228 - - 3,228 Malaysian Government Islamic papers 32,674 - - 32,674LAR Retakaful assets 291,300 - - 291,300 Loans and receivables, excluding takaful receivables 89,541 - 381 89,922 Takaful receivables 37,884 11,075 5,742 54,701 Cash and cash equivalents 75,712 - - 75,712

943,900 11,075 6,123 961,098

GroupAFS financial assets Institutional Trust Account 298,897 - - 298,897 Islamic debt securities 2,212,731 878 471 2,214,080 Malaysian Government Islamic papers 455,731 - - 455,731FVTPL financial assets Islamic debt securities 89,030 - - 89,030HTM financial assets Islamic debt securities 258,866 351 - 259,217 Malaysian Government Islamic papers 145,391 - - 145,391LAR Retakaful assets 293,578 - - 293,578 Loans and receivables, excluding takaful receivables 710,159 1,817 1,927 713,903 Takaful receivables 101,441 15,715 8,523 125,679 Cash and cash equivalents 430,619 - - 430,619

4,996,443 18,761 10,921 5,026,125

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229

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <----------------------------- Company ------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets Institutional Trust Account 38,259 - - 38,259 Islamic debt securities 257,861 - - 257,861 LAR Loans and receivables, excluding takaful receivables 152,068 - 821 152,889 Cash and cash equivalents 111,923 - - 111,923

560,111 - 821 560,932

Family TakafulAFS financial assets Institutional Trust Account 84,900 - - 84,900 Islamic debt securities 1,852,246 - - 1,852,246 Malaysian Government Islamic papers 236,397 - - 236,397 FVTPL financial assets Islamic debt securities 14,156 - - 14,156 HTM financial assets Islamic debt securities 314,535 - - 314,535 Malaysian Government Islamic papers 112,650 - - 112,650 LAR Retakaful assets 2,526 - - 2,526 Loans and receivables, excluding takaful receivables 648,833 - 301 649,134 Takaful receivables 83,193 3,355 1,022 87,570 Cash and cash equivalents 538,358 - - 538,358

3,887,794 3,355 1,323 3,892,472

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230

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <----------------------------- Company ------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2014 RM’000 RM’000 RM’000 RM’000

General TakafulAFS financial assets Institutional Trust Account 26,154 - - 26,154 Islamic debt securities 344,344 - - 344,344 Malaysian Government Islamic papers 5,069 - - 5,069 HTM financial assets Islamic debt securities 5,000 - - 5,000 Malaysian Government Islamic papers 32,626 - - 32,626 LAR Retakaful assets 253,588 - - 253,588 Loans and receivables, excluding takaful receivables 96,748 - 381 97,129 Takaful receivables 24,381 7,334 3,121 34,836 Cash and cash equivalents 96,311 - - 96,311

884,221 7,334 3,502 895,057

CompanyAFS financial assets Institutional Trust Account 149,313 - - 149,313 Islamic debt securities 2,454,451 - - 2,454,451 Malaysian Government Islamic papers 241,466 - - 241,466 FVTPL financial assets Islamic debt securities 14,156 - - 14,156 HTM financial assets Islamic debt securities 319,535 - - 319,535 Malaysian Government Islamic papers 145,276 - - 145,276 LAR Retakaful assets 256,114 - - 256,114 Loans and receivables, excluding takaful receivables 867,145 - 1,503 868,648 Takaful receivables 107,574 10,689 4,143 122,406 Cash and cash equivalents 746,592 - - 746,592

5,301,622 10,689 5,646 5,317,957

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231

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <----------------------------- Company ------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets Institutional Trust Account 64,268 - - 64,268 Islamic debt securities 239,235 - - 239,235 Malaysian Government Islamic papers 10,013 - - 10,013LAR Loans and receivables, excluding takaful receivables 130,603 - 1,026 131,629 Cash and cash equivalents 45,773 - - 45,773

489,892 - 1,026 490,918

Family TakafulAFS financial assets Institutional Trust Account 196,482 - - 196,482 Islamic debt securities 1,654,367 - - 1,654,367 Malaysian Government Islamic papers 383,832 - - 383,832FVTPL financial assets Islamic debt securities 16,267 - - 16,267HTM financial assets Islamic debt securities 248,637 - - 248,637 Malaysian Government Islamic papers 112,717 - - 112,717LAR Retakaful assets 1,568 - - 1,568 Loans and receivables, excluding takaful receivables 495,498 - 301 495,799 Takaful receivables 58,270 4,565 2,754 65,589 Cash and cash equivalents 204,687 - - 204,687

3,372,325 4,565 3,055 3,379,945

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232

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Credit exposure by credit rating (continued) <----------------------------- Company ------------------------------> Neither Past-due past-due but not nor impaired impaired Impaired Total2013 RM’000 RM’000 RM’000 RM’000

General TakafulAFS financial assets Institutional Trust Account 38,147 - - 38,147 Islamic debt securities 313,528 - - 313,528 Malaysian Government Islamic papers 61,886 - - 61,886HTM financial assets Malaysian Government Islamic papers 32,674 - - 32,674LAR Retakaful assets 277,129 - - 277,129 Loans and receivables, excluding takaful receivables 75,503 - 381 75,884 Takaful receivables 31,872 8,639 5,634 46,145 Cash and cash equivalents 62,779 - - 62,779

893,518 8,639 6,015 908,172

CompanyAFS financial assets Institutional Trust Account 298,897 - - 298,897 Islamic debt securities 2,207,130 - - 2,207,130 Malaysian Government Islamic papers 455,731 - - 455,731FVTPL financial assets Islamic debt securities 16,267 - - 16,267HTM financial assets Islamic debt securities 248,637 - - 248,637 Malaysian Government Islamic papers 145,391 - - 145,391LAR Retakaful assets 278,697 - - 278,697 Loans and receivables, excluding takaful receivables 663,657 - 1,708 665,365 Takaful receivables 90,142 13,204 8,388 111,734 Cash and cash equivalents 313,239 - - 313,239

4,717,788 13,204 10,096 4,741,088

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233

Notes to the Financial Statements39

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Page 235: LAPORAN TAHUNAN • 2014 • ANNUAL REPORT · LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646K) 002. ... berakhir 31 Disember 2014, akan dibayar pada 25

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234

Notes to the Financial Statements

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Page 236: LAPORAN TAHUNAN • 2014 • ANNUAL REPORT · LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646K) 002. ... berakhir 31 Disember 2014, akan dibayar pada 25

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235

Notes to the Financial Statements39

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236

Notes to the Financial Statements

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ased

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237

Notes to the Financial Statements39

. Fi

nanc

ial i

nstr

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ts (c

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Page 239: LAPORAN TAHUNAN • 2014 • ANNUAL REPORT · LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646K) 002. ... berakhir 31 Disember 2014, akan dibayar pada 25

LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646-K)

238

Notes to the Financial Statements

39.

Fina

ncia

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tinue

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ily T

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.

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SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

239

Notes to the Financial Statements

39.

Fina

ncia

l ins

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.

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LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646-K)

240

Notes to the Financial Statements

39.

Fina

ncia

l ins

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241

Notes to the Financial Statements39

. Fi

nanc

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oor’s

.

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242

Notes to the Financial Statements

39.

Fina

ncia

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on

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aysia

sove

reig

n ra

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acco

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by

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dard

& P

oor’s

.

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SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

243

Notes to the Financial Statements39

. Fi

nanc

ial i

nstr

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244

Notes to the Financial Statements

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SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

245

Notes to the Financial Statements39

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LAPORAN TAHUNAN 2014 ANNUAL REPORT SYARIKAT TAKAFUL MALAYSIA BERHAD (131646-K)

246

Notes to the Financial Statements

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SYARIKAT TAKAFUL MALAYSIA BERHAD LAPORAN TAHUNAN 2014 ANNUAL REPORT(131646-K)

247

Notes to the Financial Statements39

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248

Notes to the Financial Statements

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249

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Age analysis of takaful receivables past-due but not impaired

A financial asset is deemed past-due when the counterparty has failed to make payment even though the outstanding amount is contractually due. Receivables past-due but not impaired includes contribution due and claims recovery from retakaful which remained outstanding after the contractual due date for more than 6 months.

The age analysis of takaful receivables past-due but not impaired as at the end of the reporting period based on days past-due was as follows:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Family Takaful Days past-due1-30 days 623 1,754 597 1,696 31-60 days 247 37 151 25 61-90 days 416 2 402 - 91-180 days 1,423 700 1,394 697 > 180 days 1,655 2,147 811 2,147

4,364 4,640 3,355 4,565

General TakafulDays past-due1-30 days 997 552 902 413 31-60 days 415 748 352 65961-90 days 1,140 478 1,080 334 91-180 days 1,230 2,335 1,018 1,913 > 180 days 4,348 6,962 3,982 5,320

8,130 11,075 7,334 8,639

Group / CompanyDays past-due1-30 days 1,620 2,306 1,499 2,109 31-60 days 662 785 503 684 61-90 days 1,556 480 1,482 334 91-180 days 2,653 3,035 2,412 2,610 > 180 days 6,003 9,109 4,793 7,467

12,494 15,715 10,689 13,204

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250

Notes to the Financial Statements

39. Financial instruments (continued)

39.4 Credit risk (continued)

Impairment loss of takaful receivables

The Group and the Company assess impairment on an individual and collective basis. The Group and the Company will assess on a case by case basis, whether there is any objective evidence that the outstanding due is impaired for contribution due and claims recovery that are considered individually significant. The criteria that the Group and the Company use to determine whether there is objective evidence of impairment for those selected for individual assessment include:

(i) contribution due or claims recovery past-due for 6 months or more and where outstanding receivables is above 2% of total takaful receivables and RM200,000 for Family and General takaful receivables respectively;

(ii) significant financial difficulty of customer / intermediaries;

(iii) long outstanding balances where these are disputed and not resolved; and

(iv) breach of contract, such as default or delinquency in payments.

The Group and the Company record impairment allowance for loans and receivables and takaful receivables in separate “Allowance for Impairment” accounts. Unless the Group and the Company are satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivables directly.

A reconciliation of the allowance for impairment losses for takaful receivables was as follows:

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Family TakafulAt 1 January 11 2,781 3,901 2,754 3,850Writeback of impairment loss 27 (1,732) (1,120) (1,732) (1,096)Allowance for impaired debts 31 7 - - - Effect of movement in exchange rates (4) - - -

At 31 December 11 1,052 2,781 1,022 2,754

General TakafulAt 1 January 11 5,741 6,982 5,634 6,901Writeback of impairment loss 27 (2,513) (1,241) (2,513) (1,267)Allowance for impaired debts 31 213 - - - Effect of movement in exchange rates (6) - - -

At 31 December 11 3,435 5,741 3,121 5,634

Group / CompanyAt 1 January 11 8,522 10,883 8,388 10,751Writeback of impairment loss 27 (4,245) (2,361) (4,245) (2,363)Allowance for impaired debts 31 220 - - - Effect of movement in exchange rates (10) - - -

At 31 December 11 4,487 8,522 4,143 8,388

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Notes to the Financial Statements

39. Financial instruments (continued)

39.5 Liquidity risk

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting obligations associated with financial instruments. In respect of catastrophic events, there is also a liquidity risk associated with the timing differences between gross cash outflows and expected retakaful recoveries.

The following policies and procedures are in place to mitigate the Group’s and the Company’s exposure to liquidity risk:

- The Group and the Company-wide liquidity risk policy setting out the evaluation and determination of the components of liquidity risk of the Group and the Company. Compliance with the policy is monitored and reported monthly and exposures and breaches are reported to the Group’s and the Company’s Risk Management Committee as soon as practicable. The policy is regularly reviewed for pertinence and for changes in the risk environment.

- Setting up guidelines on asset allocations, portfolio limit structures and maturity profiles of assets, in order to ensure sufficient funding is available to meet takaful and investment contracts obligations.

- Setting up contingency funding plans which specify minimum proportions of funds to meet emergency calls as well as specifying events that would trigger such plans.

- The Company’s catastrophe excess of loss retakaful contracts contains clauses permitting the immediate draw down of funds to meet claims payments should claims events exceed certain amount.

Maturity profiles

The table below summarises the maturity profile of the financial liabilities of the Group and of the Company based on remaining undiscounted contractual obligations, including profit payable.

For takaful contract liabilities, maturity profiles are determined based on estimated timing of net cash outflows from the recognised takaful liabilities. Investment-linked liabilities are repayable or transferable on demand and are included in the “up to a year” column.

<--------------------------------------------------- Group -----------------------------------------------------> Carrying Up to 1 - 3 3 - 5 More than No value a year* years years 5 years Maturity Total2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful OperatorOther payables 89,838 86,446 588 16 2,788 - 89,838

Family TakafulQard payables 24,912 24,912 - - - - 24,912 Provision for outstanding claims 33,310 32,240 240 93 737 - 33,310 Takaful payables 40,949 40,949 - - - - 40,949 Other payables 101,169 88,710 12,299 121 39 - 101,169

200,340 186,811 12,539 214 776 - 200,340

* expected utilisation or settlement is within 12 months from the reporting date.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.5 Liquidity risk (continued)

Maturity profiles (continued) <--------------------------------------------------- Group ----------------------------------------------------->

Carrying Up to 1 - 3 3 - 5 More than No value a year* years years 5 years Maturity Total2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

General TakafulQard payables 27,301 27,301 - - - - 27,301 Provision for outstanding claims 375,636 137,499 130,439 106,136 1,562 - 375,636 Takaful payables 20,368 20,204 164 - - - 20,368 Other payables 72,448 72,268 180 - - - 72,448

495,753 257,272 130,783 106,136 1,562 - 495,753

GroupProvision for outstanding claims 408,946 169,739 130,679 106,229 2,299 - 408,946 Takaful payables 61,317 61,153 164 - - - 61,317 Other payables 216,471 200,440 13,067 137 2,827 - 216,471

686,734 431,332 143,910 106,366 5,126 - 686,734

2013Takaful OperatorOther payables 91,367 88,466 798 12 2,091 - 91,367

Family TakafulQard payables 23,028 23,028 - - - - 23,028Provision for outstanding claims 40,150 39,077 369 284 420 - 40,150Takaful payables 25,859 25,859 - - - - 25,859Other payables 123,787 122,410 1,124 217 36 - 123,787

212,824 210,374 1,493 501 456 - 212,824

General TakafulQard payables 25,634 25,634 - - - - 25,634Provision for outstanding claims 433,215 163,421 151,542 100,969 17,283 - 433,215Takaful payables 49,569 48,833 736 - - - 49,569Other payables 67,261 67,149 90 22 - - 67,261

575,679 305,037 152,368 100,991 17,283 - 575,679

GroupProvision for outstanding claims 473,365 202,498 151,911 101,253 17,703 - 473,365Takaful payables 75,428 74,692 736 - - - 75,428Other payables 227,876 223,486 2,012 251 2,127 - 227,876

776,669 500,676 154,659 101,504 19,830 - 776,669

* expected utilisation or settlement is within 12 months from the reporting date.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.5 Liquidity risk (continued)

Maturity profiles (continued) <------------------------------------------------ Company -------------------------------------------------->

Carrying Up to 1 - 3 3 - 5 More than No value a year* years years 5 years Maturity Total2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful OperatorOther payables 64,707 64,455 252 - - - 64,707

Family TakafulProvision for outstanding claims 18,918 18,918 - - - - 18,918 Takaful payables 39,228 39,228 - - - - 39,228 Other payables 94,567 82,108 12,299 121 39 - 94,567

152,713 140,254 12,299 121 39 - 152,713

General TakafulProvision for outstanding claims 360,418 124,160 128,560 106,136 1,562 - 360,418 Takaful payables 19,753 19,753 - - - - 19,753 Other payables 70,014 69,834 180 - - - 70,014

450,185 213,747 128,740 106,136 1,562 - 450,185

CompanyProvision for outstanding claims 379,336 143,078 128,560 106,136 1,562 - 379,336 Takaful payables 58,981 58,981 - - - - 58,981 Other payables 198,892 186,001 12,731 121 39 - 198,892

637,209 388,060 141,291 106,257 1,601 - 637,209

* expected utilisation or settlement is within 12 months from the reporting date.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.5 Liquidity risk (continued)

Maturity profiles (continued) <------------------------------------------------ Company -------------------------------------------------->

Carrying Up to 1 - 3 3 - 5 More than No value a year* years years 5 years Maturity Total2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful OperatorOther payables 66,866 66,594 272 - - - 66,866

Family TakafulProvision for outstanding claims 26,139 26,139 - - - - 26,139Takaful payables 22,725 22,725 - - - - 22,725Other payables 118,256 116,879 1,124 217 36 - 118,256

167,120 165,743 1,124 217 36 - 167,120

General TakafulProvision for outstanding claims 407,039 143,168 145,619 100,969 17,283 - 407,039Takaful payables 48,449 48,449 - - - - 48,449Other payables 65,099 64,987 90 22 - - 65,099

520,587 256,604 145,709 100,991 17,283 - 520,587

GroupProvision for outstanding claims 433,178 169,307 145,619 100,969 17,283 - 433,178Takaful payables 71,174 71,174 - - - - 71,174Other payables 212,274 210,513 1,486 239 36 - 212,274

716,626 450,994 147,105 101,208 17,319 - 716,626

* expected utilisation or settlement is within 12 months from the reporting date.

39.6 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three (3) types of risk - foreign exchange rates (Currency risk), market profit yields (Profit Yield risk) and market prices (Price risk).

The key features of the Group’s and the Company’s market risk management practices and policies are as follows:

- A Group and the Company-wide market risk policy setting out the evaluation and determination of components of market risk for the Group and the Company. Compliance with the policy is monitored and reported monthly to the Risk Management Committee (RMC) and exposures and breaches are reported as soon as practicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.6 Market risk (continued)

- Set asset allocation, portfolio limit structure and diversification benchmark to ensure that assets back specific contract liabilities and that assets are held to deliver income and gains for certificate holders in line with terms of the respective contracts expectations of policies. The Group’s and the Company’s policies on asset allocation, portfolio limit structure and diversification benchmark have been set in line with Group’s and Company’s risk management policy after taking cognisance of the regulatory requirements in respect of maintenance of assets and solvency.

The Group and the Company also issue unit-linked investment policies. In the unit-linked business, the certificate holders bear investment risk on the assets held in the unit-linked funds as the certificate benefits are directly linked to value of the assets in the funds. The Group’s and Company’s exposure to market risk on this business is limited to the extent that income arising from asset management charges is based on the value of the assets in the funds.

39.7 Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group’s and the Company’s primary transactions are carried out in Ringgit Malaysia (RM) and its exposure to foreign exchange risk arises principally with respect to Indonesia Rupiah (Rp) and US Dollar (USD).

As the Group’s and Company’s business is conducted primarily in Malaysia, the Group’s and the Company’s financial assets are also primarily maintained in Malaysia as required under the Islamic Financial Services Act 2013, and hence, primarily denominated in the same currency (the local RM) as its takaful and investment contract liabilities. Accordingly, the main foreign exchange risk from recognised assets and liabilities arises from transactions other than those in which takaful and investment contract liabilities are expected to be settled.

As the Group’s and the Company’s main foreign exchange risk from recognised assets and liabilities arises from retakaful transactions for which the balances are expected to be settled and realised in less than a year, the impact arising from sensitivity in foreign exchange rates is deemed minimal as the Group and the Company has no significant concentration of foreign currency risk.

The Group’s and the Company’s exposure to currency risk is immaterial in the context of the financial statements and hence, sensitivity analysis is not presented.

39.8 Profit yield risk

Profit yield risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market profit yield.

Floating rate / yield instruments expose the Group and the Company to cash flow risk, whereas fixed rate / yield instruments expose the Group and the Company to fair value risk.

Risk management objectives, policies and processes for managing the risk

The Group’s and the Company’s profit risk policy requires Management to manage the risk by maintaining an appropriate mix of variable and fixed rate / yield instruments. The policy also requires Management to manage the maturities of profit-bearing financial assets and liabilities. Floating rate / yield instruments will be re-priced at intervals of not more than one (1) year. Profit on fixed rate / yield instruments is priced at inception of the financial instrument and is fixed until maturity.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.8 Profit yield risk (continued)

Exposure to profit yield risk

The profit yield profile of the Group’s and the Company’s significant profit-bearing financial instruments, based on carrying amounts as at the end of the reporting period was as follows:

Group Company 2014 2013 2014 2013 Fixed rate instruments RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets 258,447 250,115 257,861 249,248 FVTPL financial assets 3,236 4,041 - -HTM financial assets 2,248 1,965 - -LAR 246,802 194,337 210,370 133,984

510,733 450,458 468,231 383,232

Family TakafulAFS financial assets 2,090,635 2,043,811 2,088,643 2,038,199 FVTPL financial assets 112,553 84,989 14,156 16,267 HTM financial assets 442,979 366,741 427,185 361,354 LAR 1,081,406 694,446 1,024,496 625,391

3,727,573 3,189,987 3,554,480 3,041,211

General TakafulAFS financial assets 349,413 375,414 349,413 375,414 HTM financial assets 41,279 35,902 37,626 32,674 LAR 177,653 104,501 162,386 90,714

568,345 515,817 549,425 498,802

Group / CompanyAFS financial assets 2,698,495 2,669,340 2,695,917 2,662,861 FVTPL financial assets 115,789 89,030 14,156 16,267 HTM financial assets 486,506 404,608 464,811 394,028 LAR 1,505,861 993,284 1,397,252 850,089

4,806,651 4,156,262 4,572,136 3,923,245

The Group and the Company have no significant concentration of profit yield risk.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.8 Profit yield risk (continued)

Exposure to profit yield risk (continued) <------------------------------- Group -----------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets +50bps - (8,020) - -FVTPL financial assets +50bps 10 10 - -

10 (8,010) - -

AFS financial assets -50bps - 8,790 - -FVTPL financial assets -50bps (10) (10) - -

(10) 8,780 - -

Family TakafulAFS financial assets +50bps - - - (146,929)FVTPL financial assets +50bps - - (8) (8)

- - (8) (146,937)

AFS financial assets -50bps - - - 128,438 FVTPL financial assets -50bps - - 4 4

- - 4 128,442

General TakafulAFS financial assets +50bps - - - (19,240)AFS financial assets -50bps - - - 16,050

GroupAFS financial assets +50bps - (8,020) - (166,169)FVTPL financial assets +50bps 10 10 (8) (8)

10 (8,010) (8) (166,177)

AFS financial assets -50bps - 8,790 - 144,488 FVTPL financial assets -50bps (10) (10) 4 4

(10) 8,780 4 144,492

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.8 Profit yield risk (continued)

Exposure to profit yield risk (continued) <------------------------------- Group -----------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets +50bps - (8,351) - -FVTPL financial assets +50bps 11 11 - -

11 (8,340) - -

AFS financial assets -50bps - 10,603 - -FVTPL financial assets -50bps (11) (11) - -

(11) 10,592 - -

Family TakafulAFS financial assets +50bps - - - (118,321)FVTPL financial assets +50bps - - (325) (325)

- - (325) (118,646)

AFS financial assets -50bps - - - 158,130FVTPL financial assets -50bps - - 368 368

- - 368 158,498

General TakafulAFS financial assets +50bps - - - (16,681)AFS financial assets -50bps - - - 20,933

GroupAFS financial assets +50bps - (8,351) - (135,002)FVTPL financial assets +50bps 11 11 (325) (325)

11 (8,340) (325) (135,327)

AFS financial assets -50bps - 10,603 - 179,063FVTPL financial assets -50bps (11) (11) 368 368

(11) 10,592 368 179,431

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.8 Profit yield risk (continued)

Exposure to profit yield risk (continued) <----------------------------- Company --------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets +50bps - (8,021) - -AFS financial assets -50bps - 8,791 - -

Family TakafulAFS financial assets +50bps - - - (146,939)FVTPL financial assets +50bps - - (515) (515)

- - (515) (147,454)

AFS financial assets -50bps - - - 128,448FVTPL financial assets -50bps - - 511 511

- - 511 128,959

General TakafulAFS financial assets +50bps - - - (19,240)AFS financial assets -50bps - - - 16,050

CompanyAFS financial assets +50bps - (8,021) - (166,179)FVTPL financial assets +50bps - - (515) (515)

- (8,021) (515) (166,694)

AFS financial assets -50bps - 8,791 - 144,498 FVTPL financial assets -50bps - - 511 511

- 8,791 511 145,009

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.8 Profit yield risk (continued)

Exposure to profit yield risk (continued) <----------------------------- Company --------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorAFS financial assets +50bps - (8,354) - -AFS financial assets -50bps - 10,606 - -

Family TakafulAFS financial assets +50bps - - - (118,348)FVTPL financial assets +50bps - - (667) (667)

- - (667) (119,015)

AFS financial assets -50bps - - - 158,157FVTPL financial assets -50bps - - 710 710

- - 710 158,867

General TakafulAFS financial assets +50bps - - - (16,681)AFS financial assets -50bps - - - 20,933

CompanyAFS financial assets +50bps - (8,354) - (135,029)FVTPL financial assets +50bps - - (667) (667)

- (8,354) (667) (135,696)

AFS financial assets -50bps - 10,606 - 179,090FVTPL financial assets -50bps - - 710 710

- 10,606 710 179,800

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.9 Other price risk

Equity price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from profit yield risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or factors affecting similar financial instruments traded in the market.

The Group’s and the Company’s equity price risk exposure relates to financial assets whose values will fluctuate as a result of changes in market prices (excluding those investment securities held for the account of unit-linked business).

Risk management objectives, policies and processes for managing the risk

The Group’s and the Company’s price risk policy requires it to manage such risks by setting and monitoring objectives and constraints on investments, diversification plans, limits on investments in each country, sector, market and issuer, having regard also to such limits stipulated by BNM. The Group and the Company comply with BNM stipulated limits during the financial year and have no significant concentration of price risk.

Equity price risk sensitivity analysis

The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on OCI / Equity for Takaful Operator, and showing the impact on operating surplus / participants’ fund for Investment-linked Fund, and participants’ fund for Family Takaful Fund and General Takaful Fund accordingly. The correlation of variables will have a significant effect in determining the ultimate impact on price risk, but to demonstrate the impact due to changes in variables, variables had to be changed on individual basis. It should be noted that movements in these variables are non-linear.

<------------------------------- Group -----------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorMarket price +15% 8 12,073 - -Market price -15% (8) (12,073) - -

Family TakafulMarket price +15% - - 8,136 77,429 Market price -15% - - (8,136) (77,429)

General TakafulMarket price +15% - - - 11,318Market price -15% - - - (11,318)

GroupMarket price +15% 8 7,820 8,136 88,747Market price -15% (8) (7,820) (8,136) (88,747)

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.9 Other price risk (continued)

Equity price risk sensitivity analysis (continued) <------------------------------- Group -----------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorMarket price +15% (39) 17,331 - -Market price -15% 39 (17,331) - -

Family TakafulMarket price +15% - - 5,736 124,525Market price -15% - - (5,736) (124,525)

General TakafulMarket price +15% - - - 23,085Market price -15% - - - (23,085)

GroupMarket price +15% (39) 13,045 5,736 147,610Market price -15% 39 (13,045) (5,736) (147,610)

<----------------------------- Company --------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorMarket price +15% - 12,067 - -Market price -15% - (12,067) - -

Family TakafulMarket price +15% - - 7,384 77,910Market price -15% - - (7,384) (77,910)

General TakafulMarket price +15% - - - 11,274Market price -15% - - - (11,274)

CompanyMarket price +15% - 7,814 7,384 89,184Market price -15% - (7,814) (7,384) (89,184)

* impact on equity reflects adjustments for tax, when applicable.

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Notes to the Financial Statements

39. Financial instruments (continued)

39.9 Other price risk (continued)

Equity price risk sensitivity analysis (continued) <----------------------------- Company --------------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorMarket price +15% - 17,389 - -Market price -15% - (17,389) - -

Family TakafulMarket price +15% - - 7,686 125,829Market price -15% - - (7,686) (125,829)

General TakafulMarket price +15% - - - 23,116Market price -15% - - - (23,116)

CompanyMarket price +15% - 13,103 7,686 148,945Market price -15% - (13,103) (7,686) (148,945)

* impact on equity reflects adjustments for tax, when applicable.

39.10 Fair value information

The carrying amounts of cash and cash equivalents, and short-term receivables and payables reasonably approximate their fair values due to the relatively short-term nature of these financial instruments.

It was not practicable to estimate the fair value of the Group’s investment in unquoted shares due to the lack of comparable quoted market prices in an active market and the fair value cannot be reliably measured. Please refer to the respective note for the fair values of other financial assets and liabilities, together with the carrying amounts shown in the statements of financial position.

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Notes to the Financial Statements

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265

Notes to the Financial Statements39

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266

Notes to the Financial Statements

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267

Notes to the Financial Statements39

. Fi

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268

Notes to the Financial Statements

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269

Notes to the Financial Statements39

. Fi

nanc

ial i

nstr

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ts (c

ontin

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39

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270

Notes to the Financial Statements

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Notes to the Financial Statements39

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272

Notes to the Financial Statements

39. Financial instruments (continued)

39.10 Fair value information (continued)

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the identical financial assets or liabilities, either directly or indirectly.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

Transfer between Level 1 and 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year (2013: no transfer in either direction).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

The following table shows a reconciliation of Level 3 fair values:

Group and Company 2014 2013 RM’000 RM’000

Institutional Trust Account

Takaful OperatorBalance at 1 January 64,268 61,270Maturities (28,236) -Gains and losses recognised in profit or loss Investment income - realised 2,227 2,998

Balance at 31 December 38,259 64,268

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273

Notes to the Financial Statements

39. Financial instruments (continued)

39.10 Fair value information (continued) Group and Company 2014 2013 RM’000 RM’000

Institutional Trust Account

Family TakafulBalance at 1 January 196,482 187,332Maturities (117,624) -Gains and losses recognised in profit or loss Investment income - realised 6,042 9,150

Balance at 31 December 84,900 196,482

General TakafulBalance at 1 January 38,147 36,379Maturities (13,614) -Gains and losses recognised in profit or loss Investment income - realised 1,621 1,768

Balance at 31 December 26,154 38,147

Group / CompanyBalance at 1 January 298,897 284,981Maturities (159,474) -Gains and losses recognised in profit or loss Investment income - realised 9,890 13,916

Balance at 31 December 149,313 298,897

The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models.

(a) Financial instruments carried at fair value Inter-relationship Significant between significant unobservable unobservable inputs andType Valuation technique inputs fair value measurement

Institutional Trust Account Discounted cash flows Discount rate of 4.58% The estimated fair value using market interest would increase (decrease) rates for a similar if the discount rate were instrument at the (lower) higher. measurement date.

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274

Notes to the Financial Statements

39. Financial instruments (continued)

39.10 Fair value information (continued)

(a) Financial instruments carried at fair value (continued)

Sensitivity analysis for Level 3 <------------------- Group and Company----------------------> Impact on Impact on Impact on Change in profit Impact on operating participants’ variables before tax equity* surplus fund2014 RM’000 RM’000 RM’000 RM’000

Takaful OperatorDiscount rate +1% - (611) - -Discount rate -1% - 633 - -

Family TakafulDiscount rate +1% - - - (936)Discount rate -1% - - - 965

General TakafulDiscount rate +1% - - - (206)Discount rate -1% - - - 210

Group / CompanyDiscount rate +1% - (611) - (1,142)Discount rate -1% - 633 - 1,175

2013Takaful OperatorDiscount rate +1% - (707) - -Discount rate -1% - 733 - -

Family TakafulDiscount rate +1% - - - (1,950)Discount rate -1% - - - 2,003

General TakafulDiscount rate +1% - - - (546)Discount rate -1% - - - 562

Group / CompanyDiscount rate +1% - (707) - (2,496)Discount rate -1% - 733 - 2,565

* impact on equity reflects adjustments for tax, when applicable.

Valuation processes applied by the Group for Level 3 fair value

The Group has an established control framework in respect to the measurement of fair values of financial instruments. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, which reports directly to the Chief Investment Officer and Chief Financial Officer. The valuation team regularly review significant unobservable inputs and valuation adjustments.

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Notes to the Financial Statements

40. Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorNon-related parties: Less than one year 651 1,465 651 1,465 Between one and five years 6,366 4,465 6,366 4,465

7,017 5,930 7,017 5,930

Related party: Less than one year 92 177 - -

92 177 - -

7,109 6,107 7,017 5,930

Group / CompanyNon-related parties: Less than one year 651 1,465 651 1,465 Between one and five years 6,366 4,465 6,366 4,465

7,017 5,930 7,017 5,930

Lease commitments are wholly payable from the Takaful Operator. The Group and the Company lease a number of computers and

equipment under operating leases. The leases typically run for a period of five years, with an option to renew the lease after that date.

Leases as lessor

The Group and the Company lease out their investment properties (see Note 4). The future minimum lease receivables under non-cancellable leases are as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Takaful OperatorNon-related parties: Less than one year 43 31 43 31 Between one and five years 57 29 57 29

100 60 100 60

Related party: Less than one year 763 432 763 432 Between one and five years 693 568 693 568

1,456 1,000 1,456 1,000

1,556 1,060 1,556 1,060

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276

Notes to the Financial Statements

40. Operating leases (continued)

Leases as lessor (continued)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Family TakafulNon-related parties: Less than one year 6,425 4,169 6,425 4,169 Between one and five years 7,806 3,091 7,806 3,091

14,231 7,260 14,231 7,260

Related party: Less than one year 1,170 1,403 1,078 1,226 Between one and five years 936 553 936 553

2,106 1,956 2,014 1,779

16,337 9,216 16,245 9,039

General TakafulNon-related parties: Less than one year 535 353 535 353 Between one and five years 656 254 656 254

1,191 607 1,191 607

Related party: Less than one year 184 309 184 309 Between one and five years 244 323 244 323

428 632 428 632

1,619 1,239 1,619 1,239

Group / CompanyNon-related parties: Less than one year 7,003 4,553 7,003 4,553 Between one and five years 8,519 3,374 8,519 3,374

15,522 7,927 15,522 7,927

Related party: Less than one year 2,117 1,967 2,025 1,967 Between one and five years 1,873 1,444 1,873 1,444

3,990 3,411 3,898 3,411

19,512 11,338 19,420 11,338

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277

Notes to the Financial Statements

41. Capital commitments Group and Company 2014 2013 RM’000 RM’000

Authorised by the Directors and contracted for 15,183 1,357

42. Related parties

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice-versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group. Compensation paid to key management personnel have been disclosed in Note 30.

The Group has related party relationships with its holding companies, significant investors, subsidiaries and associates, Directors and key management personnel.

Significant related party transactions

Related party transactions have been entered into in the normal course of business under normal trade terms. The significant related party transactions of the Company, other than key management personnel compensation as disclosed in Note 30, are as follows:

Group and Company 2014 2013 RM’000 RM’000

Ultimate holding companyContribution income for Family Takaful 5,823 -Contribution income for General Takaful 2,675 2,677Claims paid for Family Takaful 985 -Claims paid for General Takaful 718 1,726

Holding companyDividend paid 78,726 41,372Contribution income for Family Takaful 81 -Contribution income for General Takaful 17 -Claims paid for Family Takaful 187 -

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278

Notes to the Financial Statements

42. Related parties (continued)

Significant related party transactions (continued) Group and Company 2014 2013 RM’000 RM’000

Related companiesContribution income for Family Takaful 11,692 -Contribution income for General Takaful 3,590 626 Claims paid for Family Takaful 7,369 -Claims paid for General Takaful 64 9,685Investment income 7,325 1,911Rental income 2,632 2,567Commision paid 3,241 232Bank charges 1,158 708

The significant outstanding balances of the Group and of the Company with its related parties, are as follows:

Group and Company 2014 2013 RM’000 RM’000

Takaful OperatorBank balances 231 770Fixed and call deposits 48,391 -

48,622 770

Family TakafulBank balances 12,256 22,941Fixed and call deposits 60,209 11,055

72,465 33,996

General TakafulBank balances 1,776 36,824Fixed and call deposits 24,099 2,120

25,875 38,944

Group / CompanyBank balances 14,263 60,535Fixed and call deposits 132,699 13,175

146,962 73,710

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