AmGENERAL INSURANCE BERHAD (44191-P) (Incorporated in Malaysia) Interim Condensed Financial Statements For The Period Ended 30 September 2015

Transcription

1 (44191-P) Interim Condensed Financial Statements For The Period Ended 30 September 2015

2 CONTENTS PAGE Interim condensed statement of financial position 1 Interim condensed income statement 2 Interim condensed statement of comprehensive income 3 Interim condensed statement of changes in equity 4 Interim condensed statement of cash flows 5-6 Notes to the interim condensed financial statements 7-32

3 INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER Note Assets Property and equipment 90,015 76,339 Investment properties 12 13,395 13,493 Intangible assets 17,270 8,237 Investments 13 3,480,654 3,624,442 Reinsurance assets , ,228 Insurance receivables 15 74,980 63,771 Other receivables , ,571 Deferred tax assets 15,771 14,343 Tax recoverable 15,271 22,308 Cash and short-term deposits 113, ,676 Non-current asset held for sale 17 83,775 83,775 Total assets 4,382,243 4,575,183 Equity Share capital , ,100 Share premium , ,900 Available-for-sale fair value reserves (3,388) 1,071 Retained earnings 507, ,629 Total equity 1,564,824 1,744,700 Liabilities Insurance contract liabilities 19 2,500,950 2,467,506 Other liabilities 11,442 9,892 Insurance payables 71,597 71,655 Other payables 213, ,935 Provision for retirement benefits 19,740 19,495 Total liabilities 2,817,419 2,830,483 Total equity and liabilities 4,382,243 4,575,183 The accompanying notes form an integral part of the interim condensed financial statements. 1

4 INTERIM CONDENSED INCOME STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2015 Unaudited Unaudited to to Note Gross earned premiums 807, ,820 Earned premiums ceded to reinsurers (68,201) (80,467) Net earned premiums 739, ,353 Investment income 73,898 63,073 Realised gains and losses (2,083) 34,454 Fair value gains and losses (6,674) 4,127 Fees and commission income 15,269 15,627 Other operating income 1, Other revenue 81, ,084 Gross benefits and claims paid 19.1 (428,317) (473,023) Claims ceded to reinsurers ,626 46,900 Gross change in contract liabilities 19.1 (77,049) 18,564 Change in contract liabilities ceded to reinsurers 19.1 (1,831) (50,473) Net claims (463,571) (458,032) Fees and commission expenses (88,488) (96,252) Management expenses (137,011) (131,884) Other operating expenses (549) (662) Other expenses (226,048) (228,798) Profit before taxation 131, ,607 Taxation (31,183) (45,304) Net profit for the period 99, ,303 The accompanying notes form an integral part of the interim condensed financial statements. 2

5 INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2015 Unaudited Unaudited to to Net profit for the period 99, ,303 Other comprehensive (loss)/income: Other comprehensive item to be reclassified to the income statement in subsequent periods: Available-for-sale fair value reserve: (Loss)/gain on fair value changes of AFS financial assets (7,326) 6,629 Realised loss/(gain) transferred to the income statement 1,441 (34,418) (5,885) (27,789) Tax effects thereon 1,426 6,947 (4,459) (20,842) Total comprehensive income for the period 95, ,461 Earnings per share (sen) Basic Diluted The accompanying notes form an integral part of the interim condensed financial statements. 3

6 INTERIM CONSENDED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2015 < Non-distributable > Distributable AFS Share Share fair value Retained Total capital premium reserve earnings equity RM'000 (Note 18.1) (Note 18.2) Unaudited At 1 April , ,900 17, ,371 1,545,650 Net profit for the period , ,303 Other comprehensive loss - - (20,842) - (20,842) Total comprehensive (loss)/income for the period - - (20,842) 136, ,461 Dividends on INCPS and RNCPS (Note 7) (25,355) (25,355) Executive share scheme (154) (154) At 30 September , ,900 (3,563) 578,165 1,635,602 Unaudited At 1 April , ,900 1, ,629 1,744,700 Net profit for the period ,998 99,998 Other comprehensive loss - - (4,459) - (4,459) Total comprehensive (loss)/income for the period - - (4,459) 99,998 95,539 Dividends on ordinary shares (250,000) (250,000) Dividends on INCPS and RNCPS (Note 7) (25,355) (25,355) Executive share scheme (60) (60) At 30 September , ,900 (3,388) 507,212 1,564,824 The accompanying notes form an integral part of the interim condensed financial statements. 4

7 INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2015 Unaudited Unaudited to to Note Operating activities Profit before taxation 131, ,607 Adjustments for: Investment income (73,898) (63,073) Realised gains and losses 2,083 (34,454) Fair value gains and losses 6,674 (4,127) Depreciation of property and equipment 5,381 6,403 Property and equipment written-off 1,040 - Intangible assets written-off 4 - Depreciation of investment properties Amortisation of intangible assets 1, Allowance/(reversal) for impairment losses on investments Allowance for impairment losses on insurance receivables 15 (2,228) 3,077 Retirement benefits expense 1,000 1,772 Total adjustments (57,677) (89,401) Changes in working capital: Dividend reinvestment - AFS 13.4 (10,402) - Dividend reinvestment - FVTPL 13.4 (60,615) - Purchase of AFS financial investments 13.4 (62,865) (116,852) Purchase of FVTPL financial investments 13.4 (155,200) (982,688) Maturity of AFS financial assets ,000 Proceeds from sale of AFS financial assets , ,399 Proceeds from sale of FVTPL financial assets , ,412 Change in LAR financial assets ,547 1,655 Reinsurance assets 7,893 60,653 Insurance receivables (8,981) 18,619 Other receivables (1,834) (5,855) Insurance contract liabilities 33,444 (58,765) Other liabilities 1,550 (619) Insurance payables (58) (2,988) Other payables (48,245) (41,480) Net decrease in changes in working capital 112,976 (277,509) 5

8 INTERIM CONSENDED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2015 (CONT'D.) Unaudited Unaudited to to Operating activities (Cont'd.) Dividend income received 71,772 55,385 Interest income received 2,208 5,456 Rental income received Retirement benefits paid (756) (74) Income tax paid (24,147) (39,932) Net cash used in operating activities 235,557 (164,151) Investing activities Proceeds from disposal of property and equipment 2 36 Purchase of property and equipment (20,097) (2,378) Purchase of intangible assets (10,657) (1,406) Net cash used in investing activities (30,752) (3,748) Financing activity Dividends on INCPS and RNCPS (25,355) (25,355) Dividends on ordinary shares (250,000) - Net cash used in financing activity (275,355) (25,355) Net decrease in cash and cash equivalents (70,550) (193,254) Cash and cash equivalents at beginning of period 183, ,080 Cash and cash equivalents at end of period 113, ,826 Cash and cash equivalents comprise: Cash and bank balances 62,457 26,213 Short-term deposits (with original maturity of less than three months) with licensed banks 50, ,613 Cash and cash equivalents 113, ,826 The accompanying notes form an integral part of the interim condensed financial statements. 6

9 NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS - 30 SEPTEMBER CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia. The registered office of the Company is located at 22nd Floor, Bangunan AmBank Group, No. 55 Jalan Raja Chulan, Kuala Lumpur. The principal place of business of the Company is located at Menara Shell, 211 Jalan Tun Sambathan, Wilayah Persekutuan Kuala Lumpur. The immediate holding and penultimate holding companies are AmGeneral Holdings Berhad and AMAB Holdings Sdn. Bhd., respectively. Both the aforesaid companies are incorporated and domiciled in Malaysia. The ultimate holding company is AMMB Holdings Berhad ("AMMB"). AMMB is listed on the Main Market of Bursa Malaysia Securities Berhad. The Company is engaged principally in the underwriting of all classes of general insurance business. There have been no significant changes in the nature of the principal activity of the Company during the financial period. 2. BASIS OF PREPARATION The unaudited interim condensed financial statements of the Company is unaudited and have been prepared in accordance with Malaysian Financial Reporting Standard ("MFRS") Interim Financial Reporting as issued by Malaysian Accounting Standard Board ("MASB") and International Accounting Standard ("IAS") 34 - Interim Financial Reporting as issued by the International Accounting Standard Boards ("IASB") and the Financial Reporting Guidelines issued by Bank Negara Malaysia. The unaudited interim condensed financial statements do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's audited financial statements for the financial period ended 31 March

10 2. BASIS OF PREPARATION (CONT'D) The notes attached to the unaudited interim condensed financial statements provide an explanation of events and transactions that are significant to gain an understanding of changes in the financial position and performance of the Company since the financial period ended 31 March The interim condensed financial statements are presented in Ringgit Malaysia ("RM") and all values are recorded to the nearest thousand ("RM'000") except when otherwise indicated. Amended Standards and Interpretations The significant accounting policies and methods of computation applied in the preparation of the interim condensed financial statements are consistent with those adopted in the preparation of the Company's audited financial statements for the financial period ended 31 March 2015, except for the following: MFRSs, Interpretations and amendments Effective Date MFRS 119 Employee Benefits - Defined Benefits Plans: Employee 1 July 2014 Contributions (Amendments to MFRS 119) Annual Improvements to MFRS Cycle 1 July 2014 Annual Improvements to MFRS Cycle 1 July 2014 The adoption of the above did not have any significant effects on the interim condensed financial statements upon their initial application. 3. COMMENTS ON SEASONALITY OR CYCLICALITY The business and operations of the Company were not significantly affected by any seasonal or fluctuations during the interim period ended 30 September UNUSUAL ITEMS There were no unusual items affecting assets, liabilities, equity, net income or cash flows for the interim period ended 30 September

11 5. CHANGE IN ESTIMATES There were no changes in the basis used for the accounting estimates for the period ended 30 September interim 6. DEBT AND EQUITY SECURITIES There were no issuance, repurchase and repayment of debt and equity securities by the Company during the interim financial period ended 30 September DIVIDEND In the current interim period ended 30 September 2015, the Company paid the following dividend in respect of the financial year ended 31 March RM'000 Ordinary Shares Dividend of cent per ordinary shares declared on 27 April 2015 and paid on 15 May 2015 INCPS: Dividend of 5.5 cent per INCPS on 100,000,000 INCPS declared on 26 August 2015 and paid on 14 September 2015 RNCPS: Dividend of 5.5 cent per RNCPS on 100,000,000 RNCPS declared on 26 August 2015 and paid on 14 September ,000 3,355 22, ,355 In respect of financial period ended 31 March 2014: INCPS: Dividend of 5.5 cent per INCPS on 100,000,000 INCPS declared on 29 May 2014 and paid on 24 September 2014 RNCPS: Dividend of 5.5 cent per RNCPS on 100,000,000 RNCPS declared on 29 May 2014 and paid on 24 September ,355 22,000 25,355 9

12 8. MATERIAL EVENTS SUBSEQUENT TO THE END OF INTERIM PERIOD Non-current asset held for sale The purchaser s financier has remitted the balance of the purchase price amounting to RM68m to the Company s lawyer. The balance of the purchase price will be released to the Company when the transfer of ownership has been completed as per term and conditions of the sale and purchase agreement. In the interim, the Company has issued a letter of undertaking dated 30 September 2015 to the purchaser s financier wherein the Company has agreed to refund the balance of the purchase price to the Financier in the event that the registration of the transfer of ownership and or the charge cannot be perfected for any reason whatsoever. 9. EFFECT OF CHANCES IN THE COMPOSITION OF THE COMPANY There were no changes in the composition of the Company during the interim period under review. 10. SIGNIFICANT EVENT On 15 January 2015, the Company had entered into a conditional Sale and Purchase Agreement for the proposed disposal of Menara Kurnia located at Jalan PJS 8/9, Petaling Jaya at a total cash consideration of RM85.0 million. The disposal has not been completed as at the date of this report as certain conditions precedent have yet to be met. Please refer to Note 17 for further details. 11. CONTINGENT LIABILITIES There were no contingent liabilities as at the date of this report since the last financial year ended 31 March

13 12. INVESTMENT PROPERTIES Cost At 30 September 2015/ 31 March ,508 17,508 Accumulated depreciation At 1 April 2015/2014 4,015 3,819 Charge for the period At 30 September 2015/31 March ,113 4,015 Carrying amount 13,395 13,493 Fair value 21,320 21,320 The Company s investment properties consist of two commercial properties in Malaysia. Management determined that the investment properties consist of two classes of asset, commercial land and office floors based on the nature, characteristics and risks of each property. The fair values of the properties are based on valuations performed by Henry Butcher Sdn Bhd and PPC International Sdn Bhd, respectively, both of which are accredited independent valuers. Henry Butcher Sdn Bhd and PPC International Sdn Bhd are specialists in valuing these types of properties. The valuation model applied is in accordance with that recommended by the International Valuation Standards Committee and meets the requirements of MFRS 13. Description of valuation techniques used and key inputs to valuation on investment properties: Valuation technique Key inputs Commercial land Comparison method Sale evidence Office floors Comparison method Locations/accessibility Condition/Construction Occupancy rate Period of sale Fair value hierarchy disclosures for investment properties have been provided in Note 24. The Company has determined that the highest and best use of the properties are its current use. 11

14 12. INVESTMENT PROPERTIES (CONT'D.) The amount of rental income and expenses recorded in the income statement are as follows: Unaudited Unaudited to to Rental income derived from investment properties Direct operating expenses (including repairs and maintenance) generating rental income (17) (159) Profit arising from investment properties (17) 158 The Company has no restrictions on the reliability of its investment properties and no contractual obligations to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements. 13. INVESTMENTS Note Debt securities 5,072 5,107 Equity securities 44,759 47,310 Loans 7,380 10,919 Fixed and call deposits 8,276 6,833 Investments in subsidiaries: Collective investment schemes ,415,167 3,554,273 3,480,654 3,624,442 The Company's investments are summarised by categories as follows: Note Loans and receivables ("LAR") ,656 17,752 Available-for-sale ("AFS") , ,255 Fair value through profit & loss ("FVTPL") ,925,576 3,046,435 3,480,654 3,624,442 12

15 13. INVESTMENTS (CONT'D.) 13.1 LAR At amortised cost: Fixed and call deposits with licensed banks 8,276 6,833 Loans: Commercial loans: 4,500 6,750 Mortgage loans 3,006 3,684 Other loans ,929 10,919 Allowance for impairment losses (549) - 7,380 10,919 15,656 17,752 The carrying value of the fixed and call deposits with licensed banks approximates fair value due to the relatively short term maturities. The carrying values of the commercial loans, mortgage loans and other loans is a reasonable approximate of fair values due to the insignificant impact of discounting AFS At fair value: Equity securities: Quoted in Malaysia 43,329 45,880 Collective investment schemes (Note 13.5): Quoted in Malaysia 489, ,838 Debt securities: Unquoted in Malaysia 5,072 5, , ,825 At cost less impairment loss: Equity securities: Unquoted in Malaysia 1,430 1, , ,255 13

16 13. INVESTMENTS (CONT'D.) 13.3 FVTPL At fair value: Collective investment schemes (Note 14.5): Quoted in Malaysia 2,925,576 3,046, Carrying values of investments LAR AFS FVTPL TOTAL At 1 April ,113 1,295,503 1,803,719 3,121,335 Purchases ,169 1,416,756 1,647,005 Maturities (4,441) (30,000) - (34,441) Disposals - (944,276) (180,000) (1,124,276) Realised gains recorded in: Income statement - 30,661-30,661 Fair value gains recorded in: Income statement - - 5,960 5,960 Other comprehensive income - (21,610) - (21,610) Movement in impairment allowance - (55) - (55) Amortisation net of accretion - (137) - (137) At 31 March , ,255 3,046,435 3,624,442 Purchases 1,443 62, , ,508 Dividend reinvestment 10,402 60,615 71,017 Maturities (2,990) - (2,990) Disposals (86,742) (330,000) (416,742) Realised losses recorded in: Income statement - (1,441) - (1,441) Fair value losses recorded in: Income statement - - (6,674) (6,674) Other comprehensive income - (5,885) - (5,885) Movement in impairment allowance (549) - - (549) Amortisation net of accretion - (32) - (32) At 30 September , ,422 2,925,576 3,480,654 14

17 13. INVESTMENTS (CONT'D.) 13.5 Investments in subsidiaries - collective investment schemes At fair value: AFS (Note 13.2) 489, ,838 FVTPL (Note 13.3) 2,925,576 3,046,435 3,415,167 3,554,273 Details of the Company's investments in subsidiaries - collective investment schemes in Malaysia are as follows: % of ownership interest held Name of wholesale unitprincipal by the Company trust fund activities AmCash Investment in money market 92.60% 95.77% Institutional 1 AmIncome Investment in debt securities 99.73% 99.70% Institutional 1 and money market AmIncome Investment in debt securities 99.96% 99.95% Institutional 3 and money market Philip Institutional Investment in debt securities % % Fixed Income Fund* and money market * Audited by firms of Chartered Accountants other than Ernst & Young. 15

18 14. REINSURANCE ASSETS Note Reinsurance assets on: Claims liabilities , ,371 Premium liabilities ,328 54, , ,761 Allowance for impairment losses (8,533) (8,533) 356, ,228 Individually impaired At 1 April 2015/2014 8,533 44,776 Charged for the period/year - 5,077 Recovery for the period /year - (41,320) At 30 September 2015 / 31 March ,533 8, INSURANCE RECEIVABLES Due premiums including agents, brokers and co-insurers balances 82,416 80,889 Due from reinsurers and cedants 23,884 16, ,300 97,319 Allowance for impairment losses (31,320) (33,548) 74,980 63,771 16

19 15. INSURANCE RECEIVABLES (CONT'D.) Individually Collectively impaired impaired Total RM'000 Audited At 1 April ,521 4,328 67,849 Charge/(reversal) for the year 4, ,326 Recovery for the period Amount written off (40,020) - (40,020) At 31 March ,695 4,853 33,548 Unaudited At 1 April ,695 4,853 33,548 Charge/(reversal) for the period (4,873) 2,645 (2,228) At 30 September ,822 7,498 31, OTHER RECEIVABLES Income due and accrued 12,379 12,467 Malaysian Institute of Insurance ("MII") bonds Share of net assets held under Malaysian Motor Insurance Pool ("MMIP") 64,814 63,919 Amounts owing by utimate holding, holding and other related comnpanies Reinsurance deposits 16,951 17,601 Sundry receivables 26,923 26, , ,571 Allowance for impairment losses , ,571 17

20 17. NON-CURRENT ASSET HELD FOR SALE At 1 April 2015/ ,775 - Transferred from property and equipment - 83,775 At 30 September 2015/31 March ,775 83,775 During the current period, the Company entered into negotiations with a third party to sell its leasehold land and buildings and other related assets. On 15 January 2015, the Company entered into a conditional Sale and Purchase Agreement for the proposed disposal of its self-occupied property, Menara Kurnia located at Jalan PJS 8/9, Petaling Jaya at a total cash consideration of RM85.0 million. The disposal has not been completed as at the date of this report as certain conditions precedent have yet to be met. Refer to note 8 for further details. 18. SHARE CAPITAL AND SHARE PREMIUM 18.1 Share capital Note Ordinary shares of RM1.00 each (a) 600, ,000 INCPS of RM1.00 each (b) 6,100 6,100 RNCPS of RM1.00 each (c) 40,000 40, , ,100 (a) Ordinary shares of RM1.00 each: Unaudited Audited < > < > No. of No. of shares Amount shares Amount ('000) RM'000 ('000) RM'000 Authorised: At beginning and end of period/year 2,500,000 2,500,000 2,500,000 2,500,000 Issued and paid-up: At beginning and end of period/year 600, , , ,000 18

21 18. SHARE CAPITAL AND SHARE PREMIUM (CONT'D.) 18.1 Share capital (Cont'd.) (b) INCPS of RM1.00 each: Unaudited Audited < > < > No. of No. of shares Amount shares Amount ('000) RM'000 ('000) RM'000 Authorised: At beginning and end of period/year 100, , , ,000 Issued and paid-up: At beginning and end of period/year 6,100 6,100 6,100 6,100 During the financial period ended 31 March 2014, the Company issued 6,100,000 INCPS of RM1.00 each at issue price of RM10.00 per share. The salient features of the INCPS issued by the Company are as follows: (i) (ii) (iii) Subject always to the prior approval of BNM and the discretion of the Board, the INCPS confer on the holders the right to a non-cumulative preferential dividend calculated at 5.5% per annum each year to be declared and paid within six months from the end of each financial year, calculated based on the issue price of the INCPS, in priority to any other classes of shares to the extent that there are profits available for the distribution and compliance with the capital adequacy requirements as stipulated by BNM. The INCPS holders are entitled at any time to convert all or any of the INCPS held to ordinary shares in the Company, pari passu as between themselves, on the basis of one (1) INCPS for one (1) new ordinary share. The INCPS shall not be transferable (in whole or in part) and shall not be redeemed by the Company. 19

22 18. SHARE CAPITAL AND SHARE PREMIUM (CONT'D.) 18.1 Share capital (Cont'd.) (c) RNCPS of RM1.00 each: Unaudited Audited < > < > No. of No. of shares Amount shares Amount ('000) RM'000 ('000) RM'000 Authorised: At beginning and end of period/year 400, , , ,000 Issued and paid-up: At beginning and end of period/year 40,000 40,000 40,000 40,000 During the financial period ended 31 March 2014, the Company issued 40,000,000 RNCPS of RM1.00 each at issue price of RM10.00 per share. The salient features of the RNCPS issued by the Company are as follows: (i) (ii) Subject always to the prior approval of BNM and the discretion of the Board, the RNCPS confer on the holders the right to a non-cumulative preferential dividend calculated at 5.5% per annum each year to be declared and paid within six months from the end of each financial year, calculated based on the issue price of the RNCPS, in priority to any other classes of shares to the extent that there are profits available for the distribution and compliance with the capital adequacy requirements as stipulated by BNM. The RNCPS holders are entitled at any time to convert all or any of the RNCPS held to ordinary shares in the Company, pari passu as between themselves, on the basis of one (1) RNCPS for one (1) new ordinary share. 20

23 18. SHARE CAPITAL AND SHARE PREMIUM (CONT'D.) 18.1 Share capital (Cont'd.) (iii) The RNCPS shall not be transferable (in whole or in part). Subject to the prior of BNM and the provisions of Section 61 of the Companies Act, 1965 in Malaysia, the RNCPS may at the sole option of the Company be redeemed at a redemption price which is equal to the issue price at which the relevant RNCPS have been issued. It should be redeemed upon and subject to the terms hereunder, provided that the Company shall not redeem any RNCPS during the first five years of the issue of the RNCPS Share premium At beginning and end of period/year 414, ,900 The share premium arose as a result of: - - Issuance of 6,100,000 INCPS of RM1.00 each at an issue price of RM10.00 per INCPS, resulting in a share premium of RM54,900,000; and Issuance of 40,000,000 RNCPS of RM1.00 each at an issue price of RM10.00 per RNCPS, resulting in a share premium of RM360,000,

24 19. INSURANCE CONTRACT LIABILITIES Unaudited < > Audited < > Gross Reinsurance Net Gross Reinsurance Net Note Provision for claims reported by policyholders 1,042,640 (203,303) 839,337 1,013,392 (222,641) 790,751 Provision for incurred but not reported claims ("IBNR") 625,142 (77,416) 547, ,085 (47,714) 524,371 Provision for fund provision of risk margin for adverse deviation ("FRAD") 144,249 (35,821) 108, ,505 (48,016) 101,489 1,812,031 (316,540) 1,495,491 1,734,982 (318,371) 1,416,611 Less : Impairment loss on reinsurance assets - 8,533 8,533-8,533 8,533 Claim liabilities ,812,031 (308,007) 1,504,024 1,734,982 (309,838) 1,425,144 Premium liabilities ,919 (48,328) 640, ,524 (54,390) 678,134 2,500,950 (356,335) 2,144,615 2,467,506 (364,228) 2,103,278 Included in motor insurance contract liabilities is the Company's proportionate share of claim liabilities and premium liabilities in MMIP of RM69.0 million and RM10.5 million respectively ( : claim liabilities of RM63.8 million and premium liabilities of RM10.7 million). 22

25 19. INSURANCE CONTRACT LIABILITIES (CONT'D.) 19.1 Claim liabilities < > < > Gross Reinsurance Net Gross Reinsurance Net At 1 April 2015/2014 1,734,982 (318,371) 1,416,611 1,710,589 (386,820) 1,323,769 Transferred from holding company Claims incurred in the current accident period (direct and facultative) 560,589 (53,652) 506, ,301 (60,243) 462,058 Adjustment to claims incurred in prior accident period (direct and facultative) (65,435) 11,857 (53,578) 396,445 29, ,891 Claims incurred during the period (treaty inwards claims) 10,212-10,212 22,252 (12) 22,240 Claims paid during the period (428,317) 43,626 (384,691) (916,605) 99,258 (817,347) At 30 September 2015/31 March ,812,031 (316,540) 1,495,491 1,734,982 (318,371) 1,416, Premium liabilities < > < > Gross Reinsurance Net Gross Reinsurance Net At 1 April 2015/ ,524 (54,390) 678, ,937 (71,496) 704,441 Premiums written during the period 763,887 (62,139) 701,748 1,565,492 (141,629) 1,423,863 Premiums earned during the period (807,492) 68,201 (739,291) (1,608,905) 158,735 (1,450,170) At 30 September 2015/31 March ,919 (48,328) 640, ,524 (54,390) 678,134 23

26 20. OPERATING LEASE ARRANGEMENTS 20.1 The Company as lessee The Company has entered into lease agreements for rental of office premises. The future aggregate minimum lease payments under operating lease contracted for as at the reporting date but not recognised as liabilities, are as follows: Unaudited Unaudited Not later than 1 year 12,618 1,279 Later than 1 year and not later than 5 years 20,391 1,039 33,009 2,318 The future aggregate minimum lease payments disclosed above include the renewable lease arrangement with AmMetLife Insurance Berhad The Company as lessor The Company has entered into a lease agreements on its investment properties. This lease has remaining lease term of between 1 to 3 years. The future aggregate minimum lease receivables under the operating lease contracted for as at the reporting date but not recognised as assets, are as follows: Unaudited Unaudited Not later than 1 year Later than 1 year and not later than 5 years

27 21. CAPITAL COMMITMENTS Unaudited Unaudited Capital expenditure: Approved and contracted but not provided for: Renovation 2,708 38,280 Computer hardware and software 61,517 24,500 64,225 62, SIGNIFICANT RELATED PARTY DISCLOSURES The Company had the following balances with related parties are as follow: Included in insurance receivables: Due from agents, brokers and co-insurers: AmBank (M) Berhad 8,956 7,818 AmInvestment Bank Berhad Arab-Malaysian Credit Berhad ,462 8,393 25

28 22. SIGNIFICANT RELATED PARTY DISCLOSURES (CONT'D.) The Company had the following balances with related parties are as follow: Included in amount owing by ultimate holding, and other related companies: AMMB Holdings Berhad - ultimate holding company AmGeneral Holdings Berhad - holding company Insurance Australia Limited Included in income due and accrued: AmBank (M) Berhad 3 9 AmFunds Management Berhad 12,237 12,360 12,240 12,369 Included in insurance payables: Due to agents, brokers and co-insurers: AmBank (M) Berhad 5,667 6,325 AmInvestment Bank Berhad ,799 6,438 Included in amount owing to other related companies: AmBank (M) Berhad 5,339 3,838 AMMB Holdings Berhad AmGeneral Holdings Berhad - holding company AmMetLife Insurance Berhad ,723 4,256 Included in accrued expenses and deposits: AmBank (M) Berhad 4,968 4,218 Insurance Australia Limited 3,402 1,745 8,370 5,963 26

29 22. SIGNIFICANT RELATED PARTY DISCLOSURES (CONT'D.) The significant transactions of the Company with related parties during the financial period are as follows: Unaudited Unaudited to to Interest and dividend income from: AmBank (M) Berhad 226 1,171 AmFunds Management Berhad 70,796 53,315 Hwang Income Plus Fund - 37 Amara Institutional Income Fund - 1,030 Opus Strategic Fixed Income Fund 2-1,862 71,022 57,415 Commission income from: IAG Re Labuan (L) Berhad 3,238 4,170 Commission expenses to: AmBank (M) Berhad (10,874) (12,056) AmInvestment Bank Berhad (214) (134) Arab-Malaysian Credit Berhad (5) (3) (11,093) (12,193) Management expenses to: AmBank (M) Berhad (6,832) (7,067) AmFunds Management Bhd (65) - AmMetLife Insurance Berhad 427 (9) AmTrustee Berhad (1) (30) Insurance Australia Limited (2,048) (1,362) Harpers Travel (M) Sdn. Bhd. (1,894) (259) (10,413) (8,727) Reinsurance premiums ceded to: AmGeneral Holdings Berhad - (12,433) IAG Re Labuan (L) Berhad (12,033) (3,201) (12,033) (15,634) Claims recovery from: IAG Re Labuan (L) Berhad 7,727 2,132 27

30 22. SIGNIFICANT RELATED PARTY DISCLOSURES (CONT'D.) The significant transactions of the Company with related parties during the financial period are as follows (Cont'd.): Unaudited Unaudited to to Rental expenses to: AmBank (M) Berhad - (21) AmMetLife Insurance Berhad (229) (275) (229) (296) Rental income from: AmMetLife Insurance Berhad FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The carrying value of the fixed and call deposits with licensed banks approximate fair value due to the relatively short term maturities. The carrying values of the commercial loans, mortgage loans and other loans are reasonable approximates of fair values due to the insignificant impact of discounting. The following methods and assumption were used to estimate the fair values: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - - In the principal market for the asset or liability; or In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. 28

31 23. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (CONT'D.) A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: - Level 1 - Level 2 - Level 3 Quoted (unadjusted) market prices in active markets for identical assets or liabilities Valuation techniques for which all input that is significant to the fair value measurement is directly or indirectly observable Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There have been no transfers of assets between Level 1 and Level 2 of the fair value hierarchy during the financial period ended 30 September 2015 and 31 March The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market bid prices for assets and offer prices for liabilities, at the close of business on the reporting date. For investments in unit and property trust funds and collective investment schemes, fair value is determined by reference to published bid values. The fair values of debt securities are determined by reference to Bond Pricing Agency Malaysia. 29

32 24. FAIR VALUE HIERARCHY The table below analyses those financial instruments carried at fair value by their valuation methods. (a) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities (b) Level 2 - Valuation techniques for which all input that is significant to the fair value measurement is directly or indirectly observable (c) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable Unaudited Level 1 Level 2 Level 3 Total 30 September 2015 Note Assets measured at fair value on a recurring basis: AFS financial assets: Corporate debt securities 13-5,072-5,072 Equity securities 13 43, ,329 Unit and property trust funds Collective investment schemes , ,591 FVTPL financial assets: Collective investment schemes 13-2,925,576-2,925,576 Assets measured at fair value on a non-recurring basis: 43,329 3,420,239-3,463,568 Assets for which fair values are disclosed: Investment properties 12-21,320-21,320 30

33 24. FAIR VALUE HIERARCHY (CONT'D.) Audited Level 1 Level 2 Level 3 Total 31 March 2015 Note Assets measured at fair value: AFS financial assets: Corporate debt securities 13-5,107-5,107 Equity securities 13 45, ,880 Unit and property trust funds Collective investment schemes , ,838 Negotiable instruments of deposits FVTPL financial assets: Collective investment schemes 13-3,046,435-3,046,435 Assets measured at fair values on a non-recurring basis 45,880 3,559,380-3,605,260 Assets for which fair values are disclosed: Investment properties 12-21,320-21,320 The fair values of investment properties were derived based on the methods disclosed in Note 12. The fair value of non-current asset held for sale is based on its selling price (less cost to sell) as disclosed in Note 17. Methods to derive fair value of other assets in disclosed in Note

34 25. REGULATORY CAPITAL REQUIREMENTS The total capital available of the Company as at 30 September 2015, as prescribed under the RBC Framework is provided below: Eligible Tier 1 capital Fully paid-up ordinary shares 600, ,000 Share premiums 54,900 54,900 Paid-up non-cumulative irredeemable preference shares 6,100 6,100 Retained earnings 507, ,629 1,168,212 1,343,629 Tier 2 capital RNCPS 400, ,000 Available-for-sale fair value reserves (3,388) 1, , ,071 Amounts deducted from capital (38,745) (14,343) Total capital available 1,526,079 1,730,357 32