Syarikat Takaful Malaysia Am Berhad · 1 Syarikat Takaful Malaysia Am Berhad (Company No. 1246486-D) (Incorporated in Malaysia) Condensed statement of financial position as at 30

Syarikat Takaful Malaysia Am Berhad(Company No. 1246486-D)

(Incorporated in Malaysia)

Condensed Interim Financial Statements - unaudited

for the financial period from

1 January 2019 to 30 June 2019

1



Condensed statement of financial position as at 30 June 2019 - unaudited

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

ASSETS

Property and equipment 5,477 - 13,892 6,222 - 14,637

Investment properties - 10,615 2,200 - 10,615 2,200

Other investments 2 154,506 414,786 569,292 92,017 444,082 536,099

Retakaful assets 3 - 345,450 345,450 - 334,914 334,914

Deferred tax assets 37,089 - 37,089 34,611 - 34,611

Current tax assets - - - 1,795 - 1,795

Loans and receivables,

excluding takaful receivables 4 168,015 241,861 396,545 117,868 165,895 274,510

Takaful receivables - 53,926 53,926 - 62,879 62,879

Cash and cash equivalents 5 34,958 91,736 126,694 75,208 116,792 192,000

TOTAL ASSETS 400,045 1,158,374 1,545,088 327,721 1,135,177 1,453,645

EQUITY AND LIABILITIES

Share capital 100,000 - 100,000 100,000 - 100,000

Reserves 104,251 - 104,251 54,462 - 54,462

Total equity attributable to

owners of the Company 204,251 - 204,251 154,462 - 154,462

LIABILITIES

Takaful contract liabilities 6 - 1,065,007 1,065,007 - 1,016,084 1,016,084

Expense reserves 158,327 - 158,327 143,309 - 143,309

Takaful payables 8,535 26,927 35,462 9,144 42,577 51,721

Other payables 28,088 61,327 76,084 20,806 73,523 85,076

Current tax liabilities 844 5,113 5,957 - 2,993 2,993

TOTAL LIABILITIES 195,794 1,158,374 1,340,837 173,259 1,135,177 1,299,183

TOTAL EQUITY AND LIABILITIES 400,045 1,158,374 1,545,088 327,721 1,135,177 1,453,645

The notes on pages 7 to 33 are an integral part of these financial statements.

<----------------- 30.06.2019 --------------->

Company

Takaful

Operator

General

Takaful

<-------------- 31.12.2018 --------------->

Takaful

Operator

General

Takaful Company

2Syarikat Takaful Malaysia Am Berhad(Company No. 1246486-D)


Condensed statement of profit or loss and other comprehensive income

for the period ended 30 June 2019 - unaudited


Operating revenue 7 6,181 383,593 389,774 339 55,819 56,158

Takaful operator income 167,937 - - 23,825 - -

Gross earned contributions 8(i) - 370,442 370,442 - 54,360 54,360

Contributions ceded to retakaful 8(ii) - (138,386) (138,386) - (19,077) (19,077)

Net earned contributions 8(iii) - 232,056 232,056 - 35,283 35,283

Administrative income - 31,198 31,198 - 5,687 5,687

Investment income 6,181 15,704 21,885 339 2,327 2,666

Realised gains and (losses) 135 1,489 1,624 - - -

Fair value gains and (losses) 837 993 1,830 - 312 312

Reversal of impairment losses on

financial instruments - - - - 663 663

Other operating income 48 53 101 27 19 46

Other income 7,201 49,437 56,638 366 9,008 9,374

Gross benefits and claims paid 9 - (147,807) (147,807) - (20,927) (20,927)

Claims ceded to retakaful 9 - 62,541 62,541 - 10,205 10,205

Gross change to contract liabilities 9 - (33,493) (33,493) - (63,260) (63,260)

Change to contract liabilities ceded

to retakaful 9 - 20,460 20,460 - 49,886 49,886

Net benefits and claims 9 - (98,299) (98,299) - (24,096) (24,096)

Wakalah fee expense - (167,937) - - (23,825) -

Administrative fees (35,014) - (35,014) (4,528) - (4,528)

Expense reserves (15,018) - (15,018) (1,502) - (1,502)

Management expenses (60,538) - (60,538) (8,597) - (8,627)

Impairment losses on

financial instruments (62) (2,371) (2,433) (4) - (4)

Other operating expenses (3,148) (19) (3,167) (5) (27) (32)

Other expenses (113,780) (170,327) (116,170) (14,636) (23,852) (14,693)

Total profit for the period 61,358 12,867 74,225 9,555 (3,657) 5,868

Profit attributable to the

Takaful Operator/participants - (12,867) (12,867) - 3,657 3,687

Profit before zakat and taxation 61,358 - 61,358 9,555 - 9,555

Zakat (300) - (300) (50) - (50)

Tax expense 10 (14,987) - (14,987) (2,395) - (2,395)

Profit for the year 46,071 - 46,071 7,110 - 7,110

<- 6 months period ended 30.06.2019 ->

Takaful

Operator

General

Takaful Company

<------- 12.09.2017 - 30.06.2018 ------->

Takaful

Operator

General

Takaful Company

3

Condensed statement of profit or loss and other comprehensive income

for the period ended 30 June 2019 (continued) - unaudited

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Profit for the year 46,071 - 46,071 7,110 - 7,110

Other comprehensive income,

net of tax

Items that may be reclassified

subsequently to profit or loss

Debt investments measured at

fair value through other

comprehensive income (FVOCI)

- net change in fair value 3,718 11,504 3,718 (2) 1,344 (2)

Other comprehensive income

attributable to participants - (11,504) - - (1,344) -

Total other comprehensive income

for the year 3,718 - 3,718 (2) - (2)

Total comprehensive income

for the year 49,789 - 49,789 7,108 - 7,108


<------- 12.09.2017 - 30.06.2018 ------->

Takaful

Operator

General

Takaful Company

Company No. 1246486-D

<- 6 months period ended 30.06.2019 ->

Takaful

Operator

General

Takaful Company

4



30 June 2019 - unaudited

Distributable

Share Fair value Retained Total

capital reserve earnings equity

Company RM’000 RM’000 RM’000 RM’000

At date of incorporation * - - *

Fair value of debt investments

measured at FVOCI - 855 - 855


for the period - 855 - 855

Profit for the period - - 53,607 53,607


for the period - 855 53,607 54,462

Contributions by and distributions to owners

of the Company

- Issue of ordinary shares 100,000 - - 100,000

Total transactions with owners

of the Company 100,000 - - 100,000

At 31 December 2018 / 1 January 2019 100,000 855 53,607 154,462

Fair value of debt investments

measured at FVOCI - 3,718 - 3,718


for the period - 3,718 - 3,718

Profit for the period - - 46,071 46,071


for the period - 3,718 46,071 49,789

At 30 June 2019 100,000 4,573 99,678 204,251

* Denotes RM1


<- Non - distributable ->


Condensed statements of changes in equity for the period ended

<------ Attributable to owners of the Company ---->

5Syarikat Takaful Malaysia Am Berhad(Company No. 1246486-D)


Condensed statements of cash flows for the period ended

30 June 2019 - unaudited

6 months

period

ended 12.09.2017 -

30.06.2019 30.06.2018

RM’000 RM’000

Cash flows from operating activities

Profit before zakat and taxation 61,358 9,555

Adjustments for:

Depreciation 1,247 222

Fair value change of fair value through profit or loss financial assets (1,830) (312)

Profit from Islamic debt securities and investment accounts (20,578) (2,663)

Dividend income from Shariah approved shares (1,159) (45)

Amortisation of premiums, net of accretion of discounts 630 105

Profit from Malaysian Government Islamic papers (736) (36)

Impairment losses on financial instruments 90 -

Operating profit before changes in working capital 38,932 6,826

Profit received from Islamic debt securities, investment accounts

and Malaysian Government Islamic papers 19,704 2,699

Dividend income from Shariah approved shares 1,159 45

Purchase of investments (88,738) (69,763)

Proceeds from sale of investments 53,285 -

Maturity of other investments 23,000 5,695

Increase in retakaful assets (10,536) (47,099)

(Decrease) / Increase in receivables (113,083) 77,137

Increase in Takaful contract liabilities 37,918 57,445

(Decrease) / Increase in payables (10,438) 19,153

(48,797) 52,138

Income taxes paid (16,000) -

Net cash used in operating activities (64,797) 52,138

Cash flows from investing activities

Purchase of property and equipment (509) -

Net cash used in investing activities (509) -

6

Condensed statements of cash flows for the period ended

30 June 2019 (continued) - unaudited

6 months

period

ended 12.09.2017 -

30.06.2019 30.06.2018

RM’000 RM’000

Cash flows from financing activity

Proceeds from issue of share capital - 100,000

Net cash generated from financing activity - 100,000

Net increase in cash and cash equivalents (65,306) 152,138

Cash and cash equivalents at 1 January / date of incorporation 192,000 107,229

Cash and cash equivalents at 30 June 126,694 259,367

Cash and cash equivalents

6 months

period

ended 12.09.2017 -

30.06.2019 30.06.2018

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 5) 34,958 125,753

- General Takaful Fund (Note 5) 91,736 133,614

126,694 259,367



Cash and cash equivalents included in the statement of cash flows comprise the following statement of financial

position amounts:

7



Notes to the condensed interim financial statements

1. Basis of preparation

(a) Statement of compliance

• MFRS 16, Leases

• IC Interpretation 23, Uncertainty over Income Tax Treatments

• Amendments to MFRS 3, Business Combinations (Annual Improvements to MFRS

Standards 2015-2017 Cycle)

• Amendments to MFRS 9, Financial Instruments – Prepayment Features with

Negative Compensation

A Takaful Operator is required to present consolidated financial statements for itself and the

Takaful fund it manages and controls in accordance with the requirements of MFRS 10,

Consolidated Financial Statements. The statement of financial position and the statement of

profit or loss and other comprehensive income of the Takaful Operator 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 statement of financial position and

the statement of 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

fund managed by it. The statement of financial position and the statement ofprofit or loss and

other comprehensive income of the General Takaful Fund include only the assets, liabilities,

income and expenses of the General Takaful Fund that is set up, managed and controlled by the

Takaful Operator.

The condensed interim financial statements of the Company are unaudited and have been

prepared in accordance with MFRS 134: Interim Financial Reporting issued by the Malaysian

Accounting Standard Board ("MASB"), IAS 34 Interim Financial Reporting issued by

International Accounting Standards Board and Guidelines / Circulars issued by Bank Negara

Malaysia (“BNM”) and Shariah rulings and precepts. They do not include all of the

information required for full annual financial statements, and should be read in conjunction

with the Company’s annual financial statements for the year ended 31 December 2018.

MFRSs, Interpretations and amendments effective for annual periods beginning on or after

1 January 2019

The accounting policies and presentation adopted by the Company for the condensed interim

financial statements are consistent with those adopted in the Company's audited financial

statements for the financial year ended 31 December 2018, except for the adoption of the

following:

8

1. Basis of preparation (continued)

(a) Statement of compliance (continued)

• Amendments to MFRS 11, Joint Arrangements (Annual Improvements to MFRS


• Amendments to MFRS 112, Income Taxes (Annual Improvements to MFRS


• Amendments to MFRS 123, Borrowing Costs (Annual Improvements to MFRS


• Amendments to MFRS 128, Investments in Associates and Joint Ventures –

Long-term Interests in Associates and Joint Ventures

2. Other investments30.06.2019 31.12.2018

Note RM’000 RM’000

Takaful Operator

Fair value through profit or loss (FVTPL) (a) 28,575 -

Fair value through other comprehensive income (FVOCI) (b) 125,931 92,017

154,506 92,017

General Takaful

Fair value through profit or loss (FVTPL) (a) 29,634 52,956


414,786 444,082

Company

Fair value through profit or loss (FVTPL) (a) 58,209 52,956


569,292 536,099


MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1

January 2019(continued)

The initial application of the abovementioned standards, amendments and interpretations do not

have any material impacts to the financial statements of the Company.

9

2. Other investments (continued)

(a) FVTPL financial assets

30.06.2019 31.12.2018

At fair value RM’000 RM’000

Takaful Operator

Islamic debt securities

- Unquoted in Malaysia 16,781 -

Structured deposits 11,794 -

28,575 -

General Takaful

Unit trusts

- Quoted in Malaysia - 1,199


- Unquoted in Malaysia 24,530 24,352

Structured deposits 5,104 27,405

29,634 52,956

Company

Unit trusts

- Quoted in Malaysia - 1,199



Structured deposits 16,898 27,405

58,209 52,956


10


(b) FVOCI financial assets

30.06.2019 31.12.2018

At fair value RM’000 RM’000

Takaful Operator



Institutional Trust Account 19,616 -

Malaysian Government Islamic papers 10,832 10,084

125,931 92,017

General Takaful



Institutional Trust Account 50,832 42,603


385,152 391,126

Company



Institutional Trust Account 70,448 42,603


511,083 483,143


11


(c) Carrying values of financial instruments

FVTPL FVOCI Company

RM’000 RM’000 RM’000

At date of incorporation - - -

Transfer of General Takaful business

from immediate holding company 76,869 373,324 450,193

Purchases 5,397 120,892 126,289

Maturities (1,000) (18,840) (19,840)

Disposals (28,304) - (28,304)

Dividend capitalised - 1,454 1,454

Fair value gains recorded in:

Profit or loss 44 - 44

Other comprehensive income - 1,119 1,119

Participants’ fund - 5,941 5,941

Amortisation of premiums,

net of accretion of discounts (50) (747) (797)

At 31 December 2018/ 1 January 2019 52,956 483,143 536,099

Purchases 27,738 61,000 88,738

Maturities (23,000) - (23,000)

Disposals (1,272) (50,389) (51,661)

Dividend capitalised - 1,610 1,610

Fair value gains recorded in:

Profit or loss 1,830 - 1,830

Other comprehensive income - 4,830 4,830

Participants’ fund - 11,476 11,476

Amortisation of premiums,

net of accretion of discounts (43) (587) (630)

At 30 June 2019 58,209 511,083 569,292

(d) 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.

12


(d) Fair values of financial instruments (continued)

(e) Maturity of other investments

The following investments mature after 12 months:

30.06.2019 31.12.2018

RM’000 RM’000

Takaful Operator

FVTPL financial assets 28,575 -

FVOCI financial assets 110,861 81,984

General Takaful

FVTPL financial assets 24,634 46,757


Company

FVTPL financial assets 53,209 46,757


3. Retakaful assets2019 2018


General Takaful / Company

Claims liabilities 6(a) 278,490 258,030

Contribution liabilities 6(b) 66,960 76,884

345,450 334,914

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 is Institutional Trust Account.


13

4. Loans and receivables, excluding takaful receivables

30.06.2019 31.12.2018

RM’000 RM’000

Takaful Operator

Financing receivables

Staff financing 62 -

Fixed and call deposits with licensed financial institutions

with maturity more than three months

Licensed banks in Malaysia 139,544 95,391

139,606 95,391

Other receivables

Investment receivable 3,320 1,760

Due from General Takaful 13,331 9,253

Prepayment 947 192

Sundry deposits 1 1

Sundry receivables 10,810 11,271

28,409 22,477

168,015 117,868

General Takaful


Secured financing 5,292 5,292

Allowance for impairment (381) (381)

4,911 4,911




Other receivables


Sundry deposits 987 868

Sundry receivables 157 597

Due from immediate holding company 330 233

8,128 7,891

241,861 165,895


14

4. Loans and receivables, excluding takaful receivables (continued)

30.06.2019 31.12.2018

RM’000 RM’000

Company


Secured financing 5,292 5,292

Staff financing 62 -

Allowance for impairment (381) (381)

4,973 4,911




368,366 248,484

Other receivables


Prepayment 947 192

Sundry deposits 988 869

Sundry receivables 10,967 11,868

Due from immediate holding company 330 233

23,206 21,115

396,545 274,510

The following loans and receivables, excluding takaful receivables mature after 12 months:

30.06.2019 31.12.2018

RM’000 RM’000

Takaful Operator

Other receivables 1 1

General Takaful

Financing receivables 4,911 4,911

Fixed and call deposits with licensed financial institutions 6 6


5,904 5,785


15

4. Loans and receivables, excluding takaful receivables (continued)

30.06.2019 31.12.2018

RM’000 RM’000

Company

Financing receivables 4,911 4,911

Fixed and call deposits with licensed financial institutions 6 6


5,905 5,786

Offsetting of financial assets and financial liabilities

5. Cash and cash equivalents30.06.2019 31.12.2018

RM’000 RM’000

Takaful Operator

Cash and bank balances 3,297 1,432

Fixed and call deposits with licensed financial

institutions with maturity less than three months


34,958 75,208

General Takaful





91,736 116,792

Company





126,694 192,000


No financial assets and liabilities have been set off for presentation purposes.

16

6. Takaful contract liabilities

The takaful contract liabilities comprise the following:

30.06.2019 31.12.2018



Provision for outstanding claims (a) 501,477 467,984

Provision for unearned contributions (b) 374,418 376,971

Participants’ fund (c) 189,112 171,129

1,065,007 1,016,084


17

6. Takaful contract liabilities (continued)

(a) Provision for outstanding claims

Gross Retakaful Net Gross Retakaful Net



Provision for claims reported by participants 282,513 (175,201) 107,312 267,294 (165,838) 101,456

Provision for IBNR 218,964 (103,289) 115,675 200,690 (92,192) 108,498

Provision for outstanding claims 501,477 (278,490) 222,987 467,984 (258,030) 209,954

Movement of provision for outstanding claims:

At 1 January / date of incorporation 9 467,984 (258,030) 209,954 - - -

Transfer of General Takaful business from

immediate holding company - - - 399,517 (210,499) 189,018

Claims incurred during the period 163,026 (71,904) 91,122 203,155 (86,967) 116,188

Adjustment to claims incurred in prior

accident years - - - (108) (2,146) (2,254)

Claims paid during the period 9 (147,807) 62,541 (85,266) (155,014) 57,655 (97,359)

Increase in IBNR 18,274 (11,097) 7,177 20,395 (16,073) 4,322

Acquisition of General Takaful business - - - 39 - 39

At 30 June / 31 December 9 501,477 (278,490) 222,987 467,984 (258,030) 209,954


<----------------- 31.12.2018 -----------------><----------------- 30.06.2019 ----------------->

18


(b) Provision for unearned contributions


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Provision for unearned contributions 374,418 (66,960) 307,458 376,971 (76,884) 300,087

Movement of provision for unearned contributions:

At 1 January / date of incorporation 376,971 (76,884) 300,087 - - -


immediate holding company - - - 367,590 (77,773) 289,817

Contributions written during the period 8 367,889 (128,462) 239,427 395,358 (155,882) 239,476

Contributions earned during the period 8 (370,442) 138,386 (232,056) (397,446) 156,771 (240,675)

Acquisition of General Takaful business - - - 11,469 - 11,469

At 30 June / 31 December 374,418 (66,960) 307,458 376,971 (76,884) 300,087

(c) Participants’ fund


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


Unallocated surplus / accumulated surplus 175,350 - 175,350 168,871 - 168,871

Fair value reserves 13,762 - 13,762 2,258 - 2,258

189,112 - 189,112 171,129 - 171,129


<----------------- 31.12.2018 ----------------->

<----------------- 31.12.2018 ----------------->

<----------------- 30.06.2019 ----------------->

<----------------- 30.06.2019 ----------------->

19


(c) Participants’ fund (continued)

The participants’ fund movements are analysed as follows:


RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


At 1 January / date of incorporation 171,129 - 171,129 - - -


immediate holding company - - - 160,085 - 160,085

Net earned contributions 232,056 - 232,056 240,675 - 240,675

Investment income 15,704 - 15,704 17,289 - 17,289

Realised gains and (losses) 1,489 - 1,489 - - -

Fair value gains and (losses) 993 - 993 119 - 119

Other operating income 53 - 53 3,494 - 3,494

Net benefits and claims (98,299) - (98,299) (118,256) - (118,256)

Fees deducted (net) (136,739) - (136,739) (127,911) - (127,911)

Other operating expenses (2,390) - (2,390) (289) - (289)

Profit paid to participants (3,245) - (3,245) (8,737) - (8,737)

Profit attributable to the Takaful Operator - - - (1,147) - (1,147)

Net change in fair value on debt investments at FVOCI 11,504 11,504 6,054 6,054

Withholding tax (3,143) - (3,143) (247) - (247)

At 30 June / 31 December 189,112 - 189,112 171,129 - 171,129

<----------------- 30.06.2019 -----------------> <----------------- 31.12.2018 ----------------->


20

7. Operating revenue01.01.2019 -

30.06.2019

12.09.2017-

30.06.2018


Takaful Operator

Investment income 6,181 339

General Takaful

Gross contributions 8 367,889 53,492

Investment income 15,704 2,327

383,593 55,819

Company

Gross contributions 8 367,889 53,492

Investment income 21,885 2,666

389,774 56,158

8. Net earned contributions01.01.2019 -

30.06.2019

12.09.2017-

30.06.2018



(i) Gross contributions 6(b),7 367,889 53,492

Change in unearned contributions reserves 2,553 868

Gross earned contributions 6(b) 370,442 54,360

(ii) Retakaful 6(b) (128,462) (16,289)

Change in unearned contributions reserves (9,924) (2,788)

Contributions ceded to retakaful 6(b) (138,386) (19,077)

(iii) Net earned contributions 232,056 35,283


21

9. Net benefits and claims01.01.2019 -

30.06.2019

12.09.2017-

30.06.2018



Gross benefits / claims paid 6(a) (147,807) (20,927)

Retakaful recoveries 6(a) 62,541 10,205

Net benefits / claims paid (85,266) (10,722)

Gross change in contract liabilities:

At 30 June 6(a) (501,477) (462,777)

Less:

At 1 January / date of incorporation 6(a) (467,984) -


from immediate holding company - (399,517)

(33,493) (63,260)

Change in contract liabilities

ceded to retakaful companies:

At 30 June 6(a) 278,490 260,385

Less:

At 1 January / date of incorporation 6(a) 258,030 -


from immediate holding company - 210,499

20,460 49,886

(98,299) (24,096)


22

10. Tax expense01.01.2019 -

30.06.2019

12.9.2017-

30.06.2018

Takaful Operator / Company RM’000 RM’000

Recognised in profit or loss

Current tax expense

Current tax recognised in profit or loss 18,639 2,847

Deferred tax benefits

Deferred tax recognised in profit or loss (3,652) (452)

Total tax expense 14,987 2,395

Reconciliation of tax expense

Profit for the period 46,071 7,110

Zakat 300 50

Total income tax expense 14,987 2,395

Profit before zakat and taxation 61,358 9,555

Income tax using Malaysian tax rate of 24% 14,726 2,293

Items not subject to tax (2,365) (749)

Non-deductible expenses 2,626 851

Tax expense 14,987 2,395

Recognised directly in equity

Deferred tax

FVOCI financial assets 1,174 (1)


23

11. Financial instruments (continued)

11.1 Fair value information

Fair value of financial instruments Fair value of financial instruments Total Carrying

carried at fair value not carried at fair value fair value amount

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

30 June 2019 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful Operator

Financial assets

Institutional Trust

Account - - 19,616 19,616 - - - - 19,616 19,616

Islamic debt securities - 112,264 - 112,264 - - - - 112,264 112,264

Malaysian Government

Islamic papers - 10,832 - 10,832 - - - - 10,832 10,832

Structured deposits - 11,794 - 11,794 - - - - 11,794 11,794

- 134,890 19,616 154,506 - - - - 154,506 154,506

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their

fair values and carrying amounts shown in the statement of financial position.


24


11.1 Fair value information (continued)





General Takaful

Financial assets

Institutional Trust

Account - - 50,832 50,832 - - - - 50,832 50,832



Islamic papers - 10,818 - 10,818 - - - - 10,818 10,818


- 363,954 50,832 414,786 - - - - 414,786 414,786


25







Company

Financial assets

Institutional Trust

Account - - 70,448 70,448 - - - - 70,448 70,448



Islamic papers - 21,650 - 21,650 - - - - 21,650 21,650


- 498,844 70,448 569,292 - - - - 569,292 569,292


26


11.1 Fair value information




31 December 2018 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Takaful Operator

Financial assets



Islamic papers - 10,084 - 10,084 - - - - 10,084 10,084

- 92,017 - 92,017 - - - - 92,017 92,017


The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their

fair values and carrying amounts shown in the statement of financial position.

27







General Takaful

Financial assets

Unit trusts 1,199 - - 1,199 - - - - 1,199 1,199

Institutional Trust

Account - - 42,603 42,603 - - - - 42,603 42,603



Islamic papers - 30,272 - 30,272 - - - - 30,272 30,272


1,199 400,280 42,603 444,082 - - - - 444,082 444,082


28







Company

Financial assets

Unit trusts 1,199 - - 1,199 - - - - 1,199 1,199

Institutional Trust

Account - - 42,603 42,603 - - - - 42,603 42,603



Islamic papers - 40,356 - 40,356 - - - - 40,356 40,356


1,199 492,297 42,603 536,099 - - - - 536,099 536,099


29



Policy on transfer between levels

Level 1 fair value

Level 2 fair value

Non-derivative financial liabilities

Transfer between Level 1 and 2 fair values

Level 3 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 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.

There has been no transfer between Level 1 and 2 fair values during the financial period.

(31.12.2018 : No transfer in either direction).

Fair value, which is determined for disclosure purposes, is calculated based on the present

value of future principal and profit cash flows, discounted at the market rate of profit at the

end of the reporting period.


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 3 fair value is estimated using unobservable inputs for the financial assets and

liabilities.

30



Level 3 fair value (continued)

30.06.2019 31.12.2018

Institutional Trust Account RM’000 RM’000

Takaful Operator

Balance at 1 January / date of incorporation - -

Purchases 19,000

Gains and losses recognised in profit or loss

Investment income - realised 172 -

Gains and losses recognised in other comprehensive income

Net change in fair value (unrealised) 444 -

Balance at 30 June / 31 December 19,616 -

General Takaful

Balance at 1 January / date of incorporation 42,603 -

Transfer of General Takaful business from immediate

holding company - 40,605

Purchases 7,000


Investment income - realised 1,079 1,454


Net change in fair value (unrealised) 150 544

Balance at 30 June / 31 December 50,832 42,603

The following table shows a reconciliation of Level 3 fair values:


31



Level 3 fair value (continued)

30.06.2019 31.12.2018

Institutional Trust Account RM’000 RM’000

Company

Balance at 1 January / date of incorporation 42,603 -

Transfer of General Takaful business from immediate

holding company - 40,605

Purchases 26,000 -


Investment income - realised 1,251 1,454


Net change in fair value (unrealised) 594 544

Balance at 30 June / 31 December 70,448 42,603

Financial instruments carried at fair value

Inter-relationship

Significant between significant

unobservable unobservable inputs and

Type Valuation technique inputs fair value measurement

Institutional Trust Discounted cash flows Discount rate The estimated fair value

Account using market interest of 4.58% would increase (decrease)

rates for a similar if the discount rate were

instrument at the (lower) higher.

measurement date.

The following table shows a reconciliation of Level 3 fair values (continued):


The following table shows the valuation technique used in the determination of fair values

within Level 3, as well as the key unobservable inputs used in the valuation models.

32



Sensitivity analysis for Level 3

Impact on Impact on Impact on

Change in profit Impact on operating participants’

variables before tax equity* surplus fund

RM’000 RM’000 RM’000 RM’000

30 June 2019

Takaful Operator

Discount rate +1% (851) (647) - -

Discount rate -1% 898 682 - -

General Takaful

Discount rate +1% - - (1,055) (1,055)

Discount rate -1% - - 1,097 1,097

Company

Discount rate +1% (851) (647) (1,055) (1,055)

Discount rate -1% 898 682 1,097 1,097

31 December 2018

General Takaful /

Company

Discount rate +1% - - (922) (922)

Discount rate -1% - - 955 955

* impact on equity reflects adjustments for tax, when applicable.

Valuation processes applied by the Company for Level 3 fair value


The Company 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 reviews significant unobservable inputs and valuation adjustments.

33

12. Regulatory capital requirements

30.06.2019 31.12.2018

RM’000 RM’000

Tier 1 capital 298,735 261,056

Tier 2 capital 18,334 3,113

Amount deducted from capital (37,089) (34,611)

Total capital available 279,980 229,558


The Company’s capital management policy is to optimise the efficient and effective use of resources

to maximise the return on equity and provide an appropriate level of capital to protect participants

and meet regulatory requirements.

The Company is required to comply with the regulatory capital requirement prescribed in the Risk

Based Capital for Takaful (RBCT) Framework issued by Bank Negara Malaysia where Takaful

operators are required to satisfy a minimum capital adequacy ratio of 130%. As at period end, the

Company has a capital adequacy ratio in excess of the minimum requirement.

The capital structure of the Company as at 30 June 2019, as prescribed under the RBCT Framework

is provided below:

Documents

Syarikat Takaful Malaysia Am Berhad · 1 Syarikat Takaful Malaysia Am Berhad (Company No. 1246486-D) (Incorporated in Malaysia) Condensed statement of financial position as at 30