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Company No. 23820 W

AXA AFFIN GENERAL INSURANCE BERHAD(Incorporated in Malaysia)

STATUTORY FINANCIAL STATEMENTS

31 DECEMBER 2018

Company No. 23820 W


CONTENTS

Page

CORPORATE INFORMATION ii

DIRECTORS’ REPORT 1 - 11

STATEMENT BY DIRECTORS 12

STATUTORY DECLARATION 12

INDEPENDENT AUDITORS' REPORT 13 - 16

FINANCIAL STATEMENTS

STATEMENTS OF FINANCIAL POSITION 17

STATEMENTS OF INCOME 18

STATEMENTS OF COMPREHENSIVE INCOME 19

STATEMENTS OF CHANGES IN EQUITY 20 - 21

STATEMENTS OF CASH FLOWS 22 - 23

NOTES TO THE FINANCIAL STATEMENTS 24 - 95

i

Company No. 23820 W


CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive Director

Jean, Paul, Dominique, Louis Drouffe (appointed w.e.f. 24 May 2018)Emmanuel Jean Louis Nivet (resigned w.e.f. 23 May 2018)

Non-Executive Directors

Tan Sri Hashim bin Meon General Tan Sri Ahmad Saruji bin Che Rose, RMAF (Retired)Yu Choong CheongDatin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018)Jean, Paul, Dominique, Louis Drouffe (resigned w.e.f. 23 May 2018)

SECRETARIES

Aisah Bevi binti Abdul RahmanNor Hakimah binti Haji Abdul Latiff

AUDITORS

PricewaterhouseCoopers PLT

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

Ground Floor, Wisma Boustead71, Jalan Raja Chulan50200 Kuala Lumpur

ii

Company No. 23820 W


DIRECTORS’ REPORT

DIRECTORS

Tan Sri Hashim bin Meon General Tan Sri Ahmad Saruji bin Che Rose, RMAF (Retired)Jean, Paul, Dominique, Louis DrouffeYu Choong CheongDatin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018)Emmanuel Jean Louis Nivet (resigned w.e.f. 23 May 2018)

PRINCIPAL ACTIVITY

FINANCIAL RESULTS

CompanyRM'000

Net profit for the financial year 100,345

DIVIDENDS

ISSUE OF SHARES

No shares were issued by the Company during the financial year.

The Directors have pleasure in submitting their report together with the audited financial statements of theCompany for the financial year ended 31 December 2018.

The Directors in office during the financial year and during the period from the end of the financial year to thedate of the report are:

The Company are principally engaged in the underwriting of all classes of general insurance business. Therehave been no significant changes in the nature of this activity of the Company during the financial year.

No dividend has been paid or declared by the Company since the end of the previous financial year. TheDirectors do not recommend any dividend in respect of the financial year ended 31 December 2018.

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Company No. 23820 W


DIRECTORS’ REPORT (CONTINUED)

RESERVES AND PROVISIONS

INSURANCE LIABILITIES

BAD AND DOUBTFUL DEBTS

CURRENT ASSETS

VALUATION METHODS

Before the financial statements of the Company were made out, the Directors took reasonable steps toascertain that proper action had been taken in relation to the writing off of impaired debts and the making ofimpairment allowance for impaired debts, and satisfied themselves that all known impaired debts had beenwritten off and adequate allowance had been made for impaired debts.

At the date of this report, the Directors are not aware of any circumstances that would render the amountwritten-off for impaired debts or the amount of the impairment allowance for impaired debts in the financialstatements of the Company inadequate to any substantial extent.

Before the financial statements of the Company were made out, the Directors took reasonable steps toascertain that any current assets, other than debts, which were unlikely to realise in the ordinary course ofbusiness, their values as shown in the accounting records of the Company have been written down toamounts which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances which would render the valuesattributed to the current assets in the financial statements of the Company misleading.

At the date of this report, the Directors are not aware of any circumstances which have arisen which renderadherence to the existing methods of valuation of assets or liabilities of the Company misleading orinappropriate.

Before the financial statements of the Company were made out, the Directors took reasonable steps toascertain that there was adequate provision for insurance liabilities in accordance with the valuation methodsspecified in Part D of the Risk-Based Capital Framework (“RBC Framework”) issued by Bank NegaraMalaysia (“BNM”) for insurers.

All material transfers to or from reserves or provisions during the financial year are as disclosed in thefinancial statements.

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Company No. 23820 W



CONTINGENT AND OTHER LIABILITIES

At the date of this report, other than as disclosed above, there does not exist:

(a)

(b)

CHANGE OF CIRCUMSTANCES

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Company for the financial year were not, in the opinion of the Directors,substantially affected by any item, transaction or event of a material and unusual nature.

In August 2016, Malaysia Competition Commission (“MyCC”) had commenced investigation under Section15(1) of the Competition Act 2010 (“the Act”) against PIAM (Malaysian General Insurance Association) and22 member companies with regards to an alleged infringement of Section 4(2)(a) of the Act in relation to anagreement to fix parts trade discount and labour rates for 6 vehicle makes. On 22 February 2017, MyCCissued a proposed decision to all 22 member companies, proposing to impose collective penalty of RM213million on the general insurance industry. PIAM and its members (including the Company) had submittedtheir respective Written Representation to MyCC in April 2017. The first oral representation was completed inJanuary 2018. However, there was a change of government after the 14th general election. The CompetitionCommittee (new Chairman was appointed) decided to review this case. A new oral representation wasagreed to be held. The case management was held on 21 February 2019 and it was agreed that the oralrepresentation from all relevant insurers (represented by counsels) will be held on 13 and 14 May 2019 and17 and 18 June 2019 respectively.

any charge on the assets of the Company which has arisen since the end of the financial year whichsecures the liabilities of any other person, or

any contingent liability in respect of the Company that has arisen since the end of the financial year.

Other than as disclosed above, no contingent or other liability of the Company has become enforceable, or islikely to become enforceable within the period of twelve months after the end of the financial year which, inthe opinion of the Directors, will or may substantially affect the ability of the Company to meet theirobligations when they fall due.

For the purpose of this paragraph, contingent or other liabilities do not include liabilities arising from contractsof insurance underwritten in the ordinary course of business of the Company.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in thisreport or the financial statements of the Company, which would render any amount stated in the financialstatements misleading.

There has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affectsubstantially the results of the operations of the Company for the financial year in which this report is made.

3

Company No. 23820 W



CORPORATE GOVERNANCE

Composition of the Board of Directors (“the Board”)

The composition of the Board during the period since the date of the last report is as follows:

Tan Sri Hashim bin Meon General Tan Sri Ahmad Saruji bin Che Rose, RMAF (Retired)Jean, Paul, Dominique, Louis DrouffeYu Choong CheongDatin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018)Emmanuel Jean Louis Nivet (resigned w.e.f. 23 May 2018)

The Board comprises individuals with a wide range of professional skills and operational experience:

Tan Sri Hashim bin Meon

Gen. Tan Sri Ahmad Saruji bin Che Rose (RMAF), (Retired)

Tan Sri Hashim bin Meon graduated from University of Malaya in 1970 with honours degree in Arts. He alsoholds a Master of Public Administration degree from University of Southern California, Los Angeles, USA,and has held several senior government positions during his long career. He was Selangor State Secretary(1995 – 1999) and then Secretary General, Ministry of Defence until he retired in 2003. He now sits on theBoard of a number of local companies, and also the Board of Trustees of several Non-GovernmentalOrganisations (“NGOs”). He was appointed a Director of the Company since January 2006 and assumedchairmanship in 2018.

Gen. Tan Sri Ahmad Saruji bin Che Rose (RMAF), (Retired) holds a Masters' Degree in Defence Studiesand an Advanced Diploma in Defence Resources Management. He was the Chief of the Royal MalaysianAir Force from 1996 to 2001, and was an Independent Director of a number of defence related companiesnamely, Airod Sdn Bhd, SME Aerospace Sdn Bhd and Aerospace Technology System Corporation (ATSC).After retirement from government service in 2001, he served as Chairman of BH Insurance (M) Bhd(formerly Royal & Sun Alliance Insurance Bhd.). He was appointed as an Independent Director of theCompany on 2 June 2010.

The Board and management have reviewed the Company’s corporate governance structures andprocedures with reference to Policy Document BNM/RH/PD/029-09 on Corporate Governance issued byBNM and are satisfied that the Company has complied with all the prescriptive applications in theFramework. Where applicable, best practices are adopted to improve the standard of the Company’scorporate governance. There is no departure from the Framework principles applicable to general insurancebusiness.

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Company No. 23820 W



CORPORATE GOVERNANCE (CONTINUED)

Composition of the Board of Directors (“the Board”) (continued)

Jean, Paul, Dominique, Louis Drouffe

Yu Choong Cheong

Emmanuel Jean Louis Nivet

Datin Zaimah Binti Zakaria

Mr. Emmanuel Jean Louis Nivet, graduated from Normandie Business School in France, started in theInsurance Industry in 1983 as an Underwriter. After 8 years, he joined AXA Group where he was appointedas Chief Underwriting Officer in 2001.Prior to joining the Company in 2012, he was the Chief ExecutiveOfficer of AXA Corporate Solutions, UK Branch for 5 years. He is currently the Chief Executive Officer andExecutive Director of the Company. He is also the Country Head overseeing AXA entities in Malaysia.

Datin Zaimah Zakaria holds a Bachelor of Science in Agribusiness from University Putra Malaysia (UPM) in1981 and Master in Business Administration (Finance) from International Islamic University Malaysia (IIUM)in 2003. She has held several senior positions in the banking sector during her long career and her lastposition prior to her retirement in 2015 was as the Executive Vice President at RHB Bank, Kuala Lumpur.Datin Zaimah has vast experience in financial industry. Currently, she is an occasional speaker onInternational Social Etiquette covering personal grooming, art of communication and entertaining includingdining etiquette and also guest speaker on Investment Banking and Treasury related products. She is alsoan independent director of Malaysian Reinsurance Berhad and Bank Simpanan Nasional.

Mr Jean Drouffe is currently Chief Executive Officer, General Insurance, AXA Asia, based in Hong Kong andtaking the role since January 2016. He is a member of the AXA Asia Executive Committee and of the GroupP&C Board. After completing his studies in Economics and Applied Mathematics at Ecole Polytechnique,France, he graduated from ENSAE and became a Qualified Actuary of the French Institute IAF. He startedhis career at Arthur Andersen, Paris as an Actuarial Consultant. He then joined AXA GIE, Paris where hewas in charge of launching and leading the economic capital for AXA Group.

Mr. Yu Choong Cheong graduated in 1975 from University of Malaya with an Honours Degree in Economics(Business Administration). He has vast experience in investment management, project studies andmanagement and general financial management. He was appointed as Financial Controller of Affin HoldingsBerhad (AHB) when the company was listed on Bursa Malaysia in 1991. He was then promoted to GeneralManager in 2001 and was the Executive Director of AHB from year 2004 to May 2013. He started his careerwith Lembaga Tabung Angkatan Tentera (LTAT), which is the ultimate holding body corporate of AHB in1975 and retired in 2007 as a General Manager (Investment). He was conferred Kesatria Mangku Negara in1995 and Johan Setia Mahkota in 2004. Currently he is a non-executive director of Union Harvest Sdn Bhdand Union Harvest (M) Sdn Bhd.

He spent 9 years in AXA UK in London, initially as Chief Risk Officer and then as Chief Finance Officer inAXA Insurance and subsequently became Chief Finance Officer of AXA UK Group. He then relocated toParis and took the responsibility of Chief Executive Office of AXA France West Region, leading the AXAbusiness for retail and SME business for the Western quadrant of France until December 2015. He iscurrently a director of four (4) AXA entities.

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Company No. 23820 W




Attendance at Board Meeting

Directors’ Training

Audit Committee ("AC")

The composition of the AC is as follows:

Datin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018) Chairperson (Independent)General Tan Sri Ahmad Saruji bin Che Rose (RMAF), (Retired) Member (Independent)Yu Choong Cheong Member (Independent)Tan Sri Hashim bin Meon Member (Non-executive)

The responsibilities of the AC include, but are not limited to the following:

(i)

(ii)

(iii) Select independent auditors for appointment by the Company’s Board each year.

(iv) Consider the appointment, appraisal, resignation and dismissal of the Internal Auditor.

Review the overall condition, in particular, the financial status of the Company, its internal controls andaudit programme.

Review with external auditors, the scope of their audit and audit reports, including their findings and anyaction to be taken.

All existing Directors have attended the “FIDE Programme” as required by Bank Negara Malaysia. TheDirectors also participated in other briefings/programs to better equip themselves to effectively dischargetheir duties.

The Board holds regular meetings, with additional meetings being convened as necessary. All memberscomplied with the minimum attendance requirements for the Board meetings during the financial year ended31 December 2018.

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Company No. 23820 W




Audit Committee (continued)

Nomination and Remuneration Committee (“NRC”)

The composition of the NRC is as follows:

Datin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018) Chairperson (Independent)General Tan Sri Ahmad Saruji bin Che Rose (RMAF) (Retired) Member (Independent)Yu Choong Cheong Member (Independent)Tan Sri Hashim bin Meon Member (Non-executive)Jean, Paul, Dominique, Louis Drouffe (resigned w.e.f. 23 May 2018) Member (Non-executive)

The primary responsibilities of the NRC are as follows:

(i)

(ii)

(iii)

(iv)

(v)

(vi)

On an annual basis, review and evaluate the effectiveness of the Board as a whole, the contribution byeach Director to the effectiveness of the Board, the contribution of the Board’s various committees andthe performance of the CEO.

Develop a policy on remuneration of Directors and senior executives, and determine the remunerationpackages of individual Directors under conditions of objectivity and full transparency in accordance withPolicy Document BNM/RH/PD/029-9 on Corporate Governance issued by BNM.

Overseeing the overall composition of the Board in terms of the appropriate size and mix of skills, thebalance between executive, non-executive and independent Directors and other core competenciesrequired.

Examine and recommend the Directors’ fees and allowances in accordance with market practice or asprescribed by the shareholders of the Company.

There were four (4) meetings held in the current financial year and all members attended these meetings.

Recommending and assessing the nominees for directorship, the Directors to fill Board committees aswell as nominees for the CEO position including assessment and recommendation on the Directors tobe re-appointed at the Annual General Meeting of the Company.

Overseeing the appointment, management succession planning and performance evaluation of keysenior officers.


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Company No. 23820 W




Risk Management Committee (“RMC”)

The composition of the RMC is as follows:

Yu Choong Cheong Chairman (Independent)General Tan Sri Ahmad Saruji bin Che Rose (RMAF), (Retired) Member (Independent)Datin Zaimah Binti Zakaria (appointed w.e.f. 2 January 2018) Member (Independent)Tan Sri Hashim bin Meon Member (Non-executive)

The primary responsibilities of the RMC are as follows:

(i)

(ii)

(iii)


Review and recommend risk management strategies, policies and risk tolerance for the Board’sapproval.

Review and assess the adequacy of risk management policies and framework for identifying,measuring, monitoring and controlling risks as well as the extent to which these are operatingeffectively.

Ensure adequate infrastructure, resources and systems are in place for an effective risk management,for example ensuring that staff responsible for implementing risk management system, perform theirduties independently of the Company’s risk taking activities.

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Company No. 23820 W




DIRECTORS’ BENEFITS

DIRECTORS’ INTERESTS

At At01.01.2018 Acquired Disposed 31.12.2018

The ultimate holding corporation, AXA

Jean, Paul, Dominique, Louis Drouffe 30,121 11,186 (9,773) 31,534

During and at the end of the financial year, no arrangements subsisted to which the Company are parties,with the object or objects of enabling Directors of the Company to acquire benefits by means of theacquisition of shares in or debentures of the Company or any other body corporate, other than the AXAGroup Share Plan scheme which applies to all employees of the Company and the options over the shares inthe ultimate holding corporation as disclosed in this report.

Since the end of the previous financial year, no Director of the Company has received or becomes entitled toreceive any benefit (other than benefits included in the aggregate amount of emoluments received or dueand receivable by the Directors disclosed in Note 24 to the financial statements) by reason of a contractmade by the Company or a related corporation with a Director or with a firm of which he is a member, or witha company in which the Director has a substantial financial interest, except that certain Directors receiveremuneration as Directors/Executives of the related corporations.

According to the register of Directors’ shareholdings required to be kept under Section 59 of the CompaniesAct 2016, the interest of the Directors in office at the end of the financial year in shares in the Company or itssubsidiaries or its holding company or subsidiaries of the holding company during the financial year were asfollows:

Number of ordinary shares of 2.29 Euros each

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Company No. 23820 W




DIRECTORS’ INTERESTS (CONTINUED)

Options over shares in the ultimate holding corporation, AXA, granted to the Directors are as follows:

At At01.01.2018 Granted Exercised Forfeited 31.12.2018

Jean, Paul, Dominique, LouisDrouffe 118,722 19,578 (4,200) - 134,100

DIRECTORS’ REMUNERATION

Details of Directors’ remuneration are set out in Note 24 to the financial statements.

SHARE OPTION SCHEME

No Share Option Scheme was offered during the financial year.

SUBSIDIARIES

Details of subsidiaries are set out in Note 9 to the financial statements.

AUDITORS REMUNERATION

Details of auditors’ remuneration are set out in Note 24 to the financial statements.

HOLDING CORPORATION

Options over ordinary shares of 2.29 Euros each

Other than the above, none of the other Directors in office at the end of the financial year held any interest inshares in, or debentures of, the Company or its related corporations during the financial year.

The immediate and ultimate holding companies are AXA Asia and AXA S.A. (hereinafter referred to as“AXA”), respectively, both are incorporated in France.

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Company No. 23820 W



AUDITORS

TAN SRI HASHIM BIN MEON DATIN ZAIMAH BINTI ZAKARIADIRECTOR DIRECTOR

Kuala Lumpur

This report was approved by the Board of Directors on 20 March 2019. Signed on behalf of the Board ofDirectors:-

The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed theirwillingness to accept re-appointment as auditors.

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Company No. 23820 W


STATEMENT BY DIRECTORSPURSUANT TO SECTION 251 (2) OF THE COMPANIES ACT, 2016

Signed on behalf of the Board of Directors in accordance with their resolution dated 20 March 2019.

TAN SRI HASHIM BIN MEON DATIN ZAIMAH BINTI ZAKARIADIRECTOR DIRECTOR

Kuala Lumpur.

STATUTORY DECLARATIONPURSUANT TO SECTION 251 (1) OF THE COMPANIES ACT, 2016

EMMANUEL JEAN LOUIS NIVET

COMMISSIONER FOR OATHS

I, Emmanuel Jean Louis Nivet, the officer primarily responsible for the financial management of AXA AffinGeneral Insurance Berhad, do solemnly and sincerely declare that the financial statements set out onpages 17 to 95 are, in my opinion, correct, and I make this solemn declaration conscientiously believingthe same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named Emmanuel Jean Louis Nivet at Kuala Lumpur inMalaysia on 20 March 2019, before me.

We, Tan Sri Hashim bin Meon and Datin Zaimah binti Zakaria, being two of the Directors of AXA AffinGeneral Insurance Berhad, do hereby state that, in the opinion of the Directors, the financial statementsset out on pages 17 to 95 are drawn up so as to give a true and fair view of the financial position of theCompany as at 31 December 2018 and of the financial performance and cash flows of the Company forthe financial year ended 31 December 2018 in accordance with Malaysian Financial Reporting Standards,International Financial Reporting Standards and the provisions of the Companies Act, 2016.

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INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD(Incorporated in Malaysia)(Company No. 23820-W)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion

What we have audited

Basis for opinion

Independence and other ethical responsibilities

In our opinion, the financial statements of AXA Affin General Insurance Berhad (“the Company”) give a trueand fair view of the financial position of the Company as at 31 December 2018, and of the Company'sfinancial performance and their cash flows for the year then ended in accordance with Malaysian FinancialReporting Standards, International Financial Reporting Standards and the requirements of the CompaniesAct 2016 in Malaysia.

We have audited the financial statements of the Company, which comprise the statements of financialposition as at 31 December 2018 of the Compnay, and the statements of income, statements ofcomprehensive income, statements of changes in equity and statements of cash flows of the Company forthe year then ended, and notes to the financial statements, including a summary of significant accountingpolicies, as set out on pages 17 to 95.

We conducted our audit in accordance with approved standards on auditing in Malaysia and InternationalStandards on Auditing. Our responsibilities under those standards are further described in the “Auditors’responsibilities for the audit of the financial statements” section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct andPractice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Boardfor Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled ourother ethical responsibilities in accordance with the By-Laws and the IESBA Code.

13

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD (Incorporated in Malaysia) (Company No.23820-W) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the financial statements of AXA Affin General Insurance Berhad (“the Company”) give a true and fair view of the financial position of the Company as at 31 December 2018, and of the Company’s financial performance and their 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, 2016 in Malaysia. What we have audited We have audited the financial statements of the Company, which comprise the statements of financial position as at 31 December 2018 of the Company, and the statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 17 to 95. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and other ethical responsibilities We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), Chartered Accountants, Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, P.O. Box 10192, 50706 Kuala Lumpur, Malaysia T: +60 (3) 2173 1188, F: +60 (3) 2173 1288, www.pwc.com/my

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INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD (CONTINUED)(Incorporated in Malaysia)(Company No. 23820-W)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Information other than the financial statements and auditors’ report thereon

Responsibilities of the Directors for the financial statements

The Directors of the Company are responsible for the other information. The other information comprisesDirectors’ Report, which we obtained prior to the date of this auditors’ report, and the Chairman’s statementand Corporate Responsibility Initiatives, which are expected to be made available to us after that date. Otherinformation does not include the financial statements of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Company does not cover the other information and we do notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Company, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements of the Company or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.

The Directors of the Company are responsible for the preparation of the financial statements of theCompany that give a true and fair view in accordance with Malaysian Financial Reporting Standards,International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia.The Directors are also responsible for such internal control as the directors determine is necessary toenable the preparation of financial statements of the Company that are free from material misstatement,whether due to fraud or error.

In preparing the financial statements of the Company, the Directors are responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless the Directors either intend to liquidate the Companyor to cease operations, or have no realistic alternative but to do so.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD (CONTINUED) (Incorporated in Malaysia) (Company No. 23820-W) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Information other than the financial statements and auditors’ report thereon The Directors of the Company are responsible for the other information. The other information comprises Directors’ Report, which we obtained prior to the date of this auditors’ report, and the Chairman’s statement and Corporate Responsibility Initiatives, which are expected to be made available to us after that date. Other information does not include the financial statements of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial statements The Directors of the Company are responsible for the preparation of the financial statements of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Company, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

14



Auditors’ responsibilities for the audit of the financial statements

(a)

(b)

(c)

(d)

(e) Evaluate the overall presentation, structure and content of the financial statements of the Company,including the disclosures, and whether the financial statements of the Company represent theunderlying transactions and events in a manner that achieves fair presentation.

Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditors’ reportto the related disclosures in the financial statements of the Company or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors’ report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.

Our objectives are to obtain reasonable assurance about whether the financial statements of the Companyas a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with approved standards on auditing in Malaysia and InternationalStandards on Auditing will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and InternationalStandards on Auditing, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements of the Company,whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the Directors.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD (CONTINUED) (Incorporated in Malaysia) (Company No. 23820-W) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the

Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the Directors. (d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the

Company, including the disclosures, and whether the financial statements of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

15



Auditors’ responsibilities for the audit of the financial statements (continued)

(f)

OTHER MATTERS

PRICEWATERHOUSECOOPERS PLT WONG HUI CHERNLLP0014401-LCA & AF 1146 3252/05/2020 JChartered Accountants Chartered Accountant

Kuala Lumpur20 March 2019

We communicate with the Directors regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identifyduring our audit.

This report is made solely to the members of the Company, as a body, in accordance with Section 266 ofthe Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to anyother person for the content of this report.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements of theCompany. We are responsible for the direction, supervision and performance of the company audit.We remain solely responsible for our audit opinion.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AXA AFFIN GENERAL INSURANCE BERHAD (CONTINUED) (Incorporated in Malaysia) (Company No. 23820-W) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements (continued) (f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities

or business activities within the Company to express an opinion on the financial statements of the Company. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS PLT WONG HUI CHERN LLP0014401-LCA & AF 1146 3252/05/2020 J Chartered Accountants Chartered Accountant Kuala Lumpur 20 March 2019

16

Company No. 23820 W


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2018

2018 2017Note Company Company

RM'000 RM'000AssetsProperty, plant and equipment 5 27,313 31,357

Intangible asset – software 6 22,914 18,716

Goodwill 7 165,822 165,822

Investments 8 2,593,022 2,565,865

Available-for-sale (“AFS”) financial

assets 1,569,330 1,695,561

Loans and receivables 1,023,692 870,304

Reinsurance assets 10 320,905 396,079

Insurance receivables 11 282,948 231,456

Other receivables and prepayments 12 89,796 92,518

Deferred tax assets 16 13,846 3,391

Cash and cash equivalents 48,542 65,123Total assets 3,565,108 3,570,327

Equity and liabilitiesShare capital 13 190,645 190,645

Retained earnings 14 921,388 821,043

AFS reserve 7,813 16,608

Revaluation reserve 13,175 13,169

Share option reserve 4,801 4,801

Total equity 1,137,822 1,046,266

Insurance contract liabilities 15 1,892,278 1,925,669

Borrowing 17 130,100 201,367

Insurance payables 18 233,892 241,422

Other payables 19 165,921 147,361

Tax payable 5,095 8,242

Total liabilities 2,427,286 2,524,061Total equity and liabilities 3,565,108 3,570,327

The accompanying notes form an integral part of the financial statements.

17

Company No. 23820 W


STATEMENTS OF INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

2018Note Company Group Company

RM'000 RM'000 RM'000

Gross earned premiums 20(a) 1,436,564 1,411,559 1,411,559Premiums ceded to reinsurers 20(b) (232,347) (245,950) (245,950)Net earned premiums 1,204,217 1,165,609 1,165,609

Investment income 21 103,795 97,739 97,363Realised gains and losses 22 14,901 3,006 1,016Realised and unrealised foreign

exchange gains/(losses) 635 (1,283) (1,283)Reinsurance commission

income 49,948 53,114 53,114Other operating revenue 815 1,061 1,061Other revenue 170,094 153,637 151,271

Gross claims paid 15(a) (971,661) (808,117) (808,117)Claims ceded to reinsurers 15(a) 194,106 103,176 103,176Gross change to claims liabilities 59,130 (189,726) (189,726)Change to claims liabilities ceded

to reinsurers (81,581) 161,236 161,236Net claims incurred (800,006) (733,431) (733,431)

Commission expense (171,097) (163,523) (163,523)Fair value losses 23 (462) (809) (809)Management expenses 24(a) (248,522) (258,433) (258,303)Finance costs 24(b) (14,227) (16,994) (16,994)Other operating expenses - (1,619) (1,619)Other expenses (434,308) (441,378) (441,248)

Profit before taxation 139,997 144,437 142,201Taxation 25 (39,652) (40,537) (40,234)Net profit for the financial year 100,345 103,900 101,967

Basic earnings per share (sen) 26 84 87 86


2017

18

Company No. 23820 W


STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018


RM'000 RM'000 RM'000

Net profit for the financial year 100,345 103,900 101,967

Other comprehensive income

Items that may be subsequently reclassified to the statement of income:

Available-for-sale reserve:Net gain arising during the

period (Note 8(c)) 3,325 13,203 13,164Net realised gain transferred to

income statement (Note 8(c)) (14,897) (2,928) (938)Tax effect thereon (Note 16) 2,777 (2,470) (2,938)

(8,795) 7,805 9,288

Items that will not be reclassified to the statement of income:

Revaluation reserve:Surplus/(deficit) arising during the

financial year 6 (518) (518)Tax effect thereon (Note 16) - 23 23

6 (495) (495)

Total comprehensive income for the financial year 91,556 111,210 110,760


2017

19

Company No. 23820 W


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

DistributableShare Share Revaluation Share option AFS Retained

Group capital premiums reserve reserve reserve earnings TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2017 119,048 71,597 13,664 4,801 8,803 717,143 935,056Total comprehensive income for the

financial year - - (495) - 7,805 103,900 111,210Conversion of share premium to share

capital * 71,597 (71,597) - - - - -At 31 December 2017 190,645 - 13,169 4,801 16,608 821,043 1,046,266

*


Non-distributable

The New Companies Act, 2016 (“New Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and parvalue of share capital. Consequently, any amount standing to credit of the share premium account of RM71,597,000 becomes part of Group's sharecapital pursuant to the transitional provisions set out in Section 618 (2) of the New Act. There is no impact on the numbers of ordinary shares in issue orthe relative entitlement of any of the members as a result of this transition.

20

Company No. 23820 W


STATEMENTS OF CHANGES IN EQUITY (CONTINUED)FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018

DistributableShare Share Revaluation Share option AFS Retained

Company capital premiums reserve reserve reserve earnings TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2018 190,645 - 13,169 4,801 16,608 821,043 1,046,266Total comprehensive income for the

financial year - - 6 - (8,795) 100,345 91,556At 31 December 2018 190,645 - 13,175 4,801 7,813 921,388 1,137,822

At 1 January 2017 119,048 71,597 13,664 4,801 7,320 719,076 935,506Total comprehensive income for the

financial year - - (495) - 9,288 101,967 110,760Conversion of share premium to share

capital * 71,597 (71,597) - - - - -At 31 December 2017 190,645 - 13,169 4,801 16,608 821,043 1,046,266

*


Non-distributable

The New Companies Act, 2016 (“New Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and parvalue of share capital. Consequently, any amount standing to credit of the share premium account of RM71,597,000 becomes part of Company's sharecapital pursuant to the transitional provisions set out in Section 618 (2) of the New Act. There is no impact on the numbers of ordinary shares in issue orthe relative entitlement of any of the members as a result of this transition.

21

Company No. 23820 W


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018


RM'000 RM'000 RM'000

Operating ActivitiesNet profit for the financial year 100,345 103,900 101,967Investment income (103,795) (97,739) (97,363)Finance costs 14,227 16,994 16,994Realised gains and losses (14,901) (3,006) (1,016)Fair value losses 462 809 809Taxation 39,652 40,537 40,234Purchase of AFS financial assets (306,052) (1,157,439) (1,157,439)Proceeds from disposal of AFS

financial assets 204,302 422,005 826,839Proceeds from maturity of AFS

financial assets 230,000 159,500 159,500

Non-cash items:Depreciation of property, plant

and equipment 5,902 5,563 5,563Amortisation of intangible asset -

software 7,093 3,412 3,412Realised and unrealised foreign exchange (635) 1,283 1,283

(gain)/lossAllowance for impairment of insurance

receivables 1,601 799 799

Changes in working capital:(Increase)/decrease in loans and

receivables (152,753) 363,179 (40,068)Decrease/(increase) in reinsurance assets 75,174 (158,599) (158,599)(Increase)/decrease in insurance

receivables (53,093) 1,237 1,237Decrease/(increase) in other receivables 2,722 (3,487) (3,487)(Decrease)/increase in insurance contract

liabilities (33,391) 173,218 173,218Increase/(decrease) in insurance

payables (7,530) (18,718) (18,718)Increase in other payables 18,560 14,552 14,552Cash generated/(used in) from

operating activities 27,890 (132,000) (130,283)

Dividend income received 15,550 513 14,578Interest income received 89,089 88,526 72,792Interest paid on borrowings (15,494) (17,498) (17,498)Drawdown of borrowing - 130,000 130,000Repayment of borrowing (70,000) (30,000) (30,000)Income tax paid (50,477) (34,260) (34,260)Net cash (outflows)/inflows from

operating activities (3,442) 5,281 5,329

2017

22

Company No. 23820 W


STATEMENTS OF CASH FLOWS (CONTINUED)FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018


RM'000 RM'000 RM'000

Investing ActivitiesProceeds from disposal of

property, plant and equipment 6 154 154Purchase of property, plant

and equipment (1,854) (6,422) (6,422)Purchase of intangible assets -

software (11,291) (15,313) (15,313)Net cash outflows from

investing activities (13,139) (21,581) (21,581)

Net decrease in cash andcash equivalents (16,581) (16,300) (16,252)

Cash and cash equivalents at the beginning of the financial year 65,123 81,423 81,375

Cash and cash equivalents at the end of the financial year 48,542 65,123 65,123

Cash and cash equivalents comprise:Cash and bank balances 48,542 65,123 65,123


2017

23

Company No. 23820 W


NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2018

1 PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

2 BASIS OF PREPARATION

(a)

• MFRS 15 ‘Revenue from Contracts with Customers’• IC Interpretation 22 ‘Foreign Currency Transactions and Advance Consideration’• IC Interpretation 23 ‘Uncertainty over Income Tax Treatments’ (“IC Interpretation 23”)• Amendments to MFRS 4 - Applying MFRS 9 ‘Financial Instruments’ with MFRS 4

‘Insurance Contracts’

The Company, a public limited company incorporated and domiciled in Malaysia, is principally engagedin the underwriting of all classes of general insurance business. In 2017, the Company has disposedoff all units in the wholesale unit trust fund which is a structured entity as disclosed in Note 9 to thefinancial statements. As the Company no longer has control over the structured entity, the structuredentity is de-consolidated from the date that control ceases. Consequently, there is no consolidatedstatement of financial statement as at 31 December 2018. Other than this, there has been nosignificant changes in the nature of the activities during the financial year.

Standards, amendments to published standards and interpretations that are applicable to theCompany that are effective

On 1 January 2018, the Company adopted the following standards mandatory for financial yearbeginning on 1 January 2018:

The adoption of these amendments did not have any impact on the current period or any priorperiod and is not likely to affect future periods.

The immediate and ultimate holding companies are AXA Asia and AXA S.A. (hereinafter referred to as“AXA”), respectively, both are incorporated in France.

The financial statements were authorised for issue by the Board of Directors in accordance with aresolution of the Directors on 20 March 2019.

The financial statements of the Group and Company have been prepared under the historical costconvention except as disclosed in this summary of significant accounting policies, and comply withMalaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards andthe requirements of the Companies Act, 2016 in Malaysia.

The Company has met the minimum capital requirements as prescribed by the RBC Framework andthe Guidelines on Internal Capital Adequacy Assessment Process (“ICAAP”) for Insurers as at the dateof the statements of financial position.

The preparation of financial statements in conformity with MFRS requires the use of certain criticalaccounting estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the statement of financial position and thereported amounts of revenues and expenses during the reported financial year. It also requires theDirectors to exercise their judgement in the process of applying the Group’s and Company’saccounting policies. Although these estimates and judgement are based on the Directors’ bestknowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimates are significant to the financial statements, are disclosed in Note 4 to the financial statements.

24

Company No. 23820 W


NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2018 (CONTINUED)

2 BASIS OF PREPARATION (CONTINUED)

(a)

•

For liabilities, the standard retains most of the MFRS 139 requirements. These includeamortised cost accounting for most financial liabilities, with bifurcation of embeddedderivatives. The main change is that, in cases where the fair value option is taken forfinancial liabilities, the part of a fair value change due to an entity’s own credit risk isrecorded in other comprehensive income rather than the income statement, unless thiscreates an accounting mismatch. MFRS 9 introduces an expected credit losses model onimpairment that replaces the incurred loss impairment model used in MFRS 139. Theexpected credit losses model is forward-looking and eliminates the need for a trigger eventto have occurred before credit losses are recognised.

Standards, amendments to published standards and interpretations that are applicable to theCompany that are effective (continued)

MFRS 9 ‘Financial Instruments’ (effective from 1 January 2018) will replace MFRS 139“Financial Instruments: Recognition and Measurement”.

MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishesthree primary measurement categories for financial assets: amortised cost, fair valuethrough profit or loss and fair value through other comprehensive income (“OCI”). The basisof classification depends on the entity’s business model and the contractual cash flowcharacteristics of the financial asset. Investments in equity instruments are alwaysmeasured at fair value through profit or loss with an irrevocable option at inception topresent changes in fair value in OCI (provided the instrument is not held for trading). A debtinstrument is measured at amortised cost only if the entity is holding it to collect contractualcash flows and the cash flows represent principal and interest.

The amendments to MFRS 4 allow entities to avoid temporary volatility in profit or loss thatmight result from adopting MFRS 9 “Financial Instruments” before the forthcoming newinsurance contracts standard. This is because certain financial assets have to be measuredat fair value through profit or loss under MFRS 9; whereas, under MFRS 4 ‘InsuranceContracts’, the related liabilities from insurance contracts are often measured on amortisedcost basis.

25

Company No. 23820 W




(a)

•

(b)

• MFRS 16 ‘Leases’ (effective from 1 January 2019).

MFRS 16 ‘Leases’ supersedes MFRS 117 ‘Leases’ and the related interpretations.

MFRS 16 eliminates the classification of leases by the lessee as either finance leases (onbalance sheet) or operating leases (off balance sheet). MFRS 16 requires a lessee torecognise a “right-of-use” of the underlying asset and a lease liability reflecting future leasepayments for most leases.

The right-of-use asset is depreciated in accordance with the principle in MFRS 116‘Property, Plant and Equipment’ and the lease liability is accreted over time with interestexpense recognised in the income statement. For lessors, MFRS 16 retains most of therequirements in MFRS 117. Lessors continue to classify all leases as either operatingleases or finance leases and account for them differently.

The Company has yet to assess the full impact of MFRS 16 onto the Company’s accountingpolicies.

Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to controlthe use of an identified asset for a period of time in exchange for consideration.

The temporary exemption enables eligible entities to defer the implementation date ofMFRS 9 for annual periods beginning before 1 January 2021 at the latest. An entity mayapply the temporary exemption from MFRS 9 if its activities are predominantly connectedwith insurance whilst the overlay approach allows an entity to adjust profit or loss for eligiblefinancial assets by removing any accounting volatility to other comprehensive income thatmay arise from applying MFRS 9.

An entity can apply the temporary exemption from MFRS 9 from annual periods beginningon or after 1 January 2018. An entity may start applying the overlay approach when itapplies MFRS 9 for the first time.

The Company qualifies for the temporary exemption from applying MFRS 9 and will deferand adopt MFRS 9 together with MFRS 17, Insurance Contracts for the financial yearbeginning on or after 1 January 2021 (Note 33 to the financial statements).

Standards, amendments to published standards and interpretations that are applicable to theCompany that are effective (continued)

The amendments to MFRS 4 provide 2 different approaches for entities: (i) a temporaryexemption from MFRS 9 for entities that meet specific requirements; and (ii) the overlayapproach. Both approaches are optional.

Standards, amendments to published standards and interpretations to existing standards that areapplicable and relevant to the Company but not yet effective

MFRS 9 ‘Financial Instruments’ (effective from 1 January 2018) replaces MFRS 139“Financial Instruments: Recognition and Measurement” (continued).

26

Company No. 23820 W




(b)

•

Alternative measurement models are provided for the different insurance coverages:-

- Variable Fee Approach should be applied for insurance contracts that specify a linkbetween payments to the policyholder and the returns on the underlying items

The requirements of MFRS 17 align the presentation of revenue with other industries.Revenue is allocated to the periods in proportion to the value of the expected coverage andother services that the insurer provides in the period, and claims are presented whenincurred. Investment components are excluded from revenue and claims.

Insurers are required to disclose information about amounts, judgements and risks arisingfrom insurance contracts.

Standards, amendments to published standards and interpretations to existing standards that areapplicable and relevant to the Company but not yet effective (continued)

MFRS 17 'Insurance Contracts' (effective from 1 January 2021) replaces MFRS 4'Insurance Contracts'.

MFRS 17 applies to insurance contracts issued, to all reinsurance contracts and toinvestment contracts with discretionary participating features if an entity also issuesinsurance contracts. For fixed-fee service contracts whose primary purpose is the provisionof services, an entity has an accounting policy choice to account for them in accordancewith either MFRS 17 or MFRS 15 “Revenue”. An entity is allowed to account financialguarantee contracts in accordance with MFRS 17 if the entity has asserted explicitly that itregarded them as insurance contracts. Insurance contracts, (other than reinsurance) wherethe entity is the policyholder are not within the scope of MFRS 17. Embedded derivativesand distinct investment and service components should be ‘unbundled’ and accounted forseparately in accordance with the related MFRSs. Voluntary unbundling of othercomponents is prohibited.

MFRS 17 requires a current measurement model where estimates are remeasured at eachreporting period. The measurement is based on the building blocks of discounted,probability-weighted cash flows, a risk adjustment and a contractual service margin (“CSM”)representing the unearned profit of the contract. An entity has a policy choice to recognisethe impact of changes in discount rates and other assumptions that related to financial riskseither in profit or loss or in other comprehensive income.

Simplified Premium Allocation Approach if the insurance coverage period is a year orless

All other new amendments to the published standards and interpretations to existing standardsissued by the MASB effective for financial periods subsequent to 1 January 2018 are not relevantto the Company.

The Company has not fully assessed the impact of MFRS 17 on its financial statements.

The International Accounting Standards Board has tentatively proposed to amend theeffective date of IFRS 17 ‘Insurance Contracts’ to 1 January 2022.

27

Company No. 23820 W



3 SIGNIFICANT ACCOUNTING POLICIES

(a) Subsidiaries

(b) Investment in a subsidiary

In the Group’s separate financial statements, investment in a subsidiary is stated at cost lessaccumulated impairment losses. Where an indication of impairment exists, the carrying amountof the investment is assessed and written down immediately to its recoverable amount. Seeaccounting policy Note 3(g) to the financial statements on impairment of financial assets. Theamount due from subsidiary of which the Company does not expect repayment in the foreseeablefuture are considered as part of the Company’s investments in the subsidiary.

Subsidiaries are all entities (including structured entities) over which the Group has control. TheGroup controls an entity when the Group is exposed to, or has rights to, variable returns from itsinvolvement with the entity and has the ability to affect those returns through its power over theentity.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisitionmethod of accounting, subsidiaries are fully consolidated from the date on which control istransferred to the Group and are de-consolidated from the date that control ceases. The cost ofan acquisition is measured as the fair value of the assets given, equity instruments issued andliabilities incurred or assumed at the date of exchange, plus costs directly attributable to theacquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a businesscombination are measured initially at their fair values at the acquisition date, irrespective of theextent of any minority interest. The excess of the cost of acquisition over the fair value of theGroup’s share of the identifiable net assets acquired at the date of acquisition is reflected asgoodwill. See accounting policy Note 3(d) to the financial statements on goodwill. If the cost ofacquisition is less than the fair value of the identifiable net assets of the subsidiary acquired, thegain is recognised directly in the statement of income.

Inter-company transactions, balances and unrealised gains on transactions between Groupcompanies are eliminated. Unrealised losses are also eliminated. This may indicate animpairment of the asset transferred. Accounting policies of subsidiaries have been changedwhere necessary to ensure consistency with the policies adopted by the Group.

The gain or loss on disposal of a subsidiary which is the difference between net disposalproceeds and the Group’s share of its net assets as of the date of disposal including thecumulative amount of any exchange differences that relate to the subsidiary, is recognised in thestatement of income attributable to the parent.

28

Company No. 23820 W



3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Property, plant and equipment

Freehold building 50 yearsMotor vehicles 5 - 6 yearsOffice and computer equipment 3 - 5 yearsFurniture, fixtures and fittings 5 - 10 years

Land and buildings are initially stated at cost and subsequently revalued by the Directors, basedon independent valuation of the open market value on the existing use basis carried out byprofessional valuers. The valuation of the land and buildings is carried out once in every threeyears or earlier if the carrying values of the revalued assets are materially higher and/or lowerthan the market values.

Land and buildings, which are substantially occupied by the Company for their operations, areclassified under property, plant and equipment.

When the land and buildings are revalued, any accumulated depreciation at the date ofrevaluation is eliminated against the gross carrying amount of the asset. The net amount is thenrestated as the revalued amount of the asset.

The surplus arising on revaluation is credited to an asset revaluation reserve account except thata surplus, to the extent that such surplus is related to and not greater than a deficit arising onrevaluation previously recorded as an expense, is credited to the income statement. A deficitarising on revaluation is recognised as an expense except that, to the extent that such a deficit isrelated to a surplus which was previously recorded as a credit to the asset revaluation reserveaccount and which has not been subsequently reversed or utilised, it is charged directly to thataccount.

Freehold land is not depreciated as it has infinite life. Depreciation of property and equipment isprovided for on a straight-line basis to write off the cost of each asset to its residual value overthe following estimated useful lives:

The residual values and useful lives of property, plant and equipment are reviewed, and adjustedif appropriate, at each date of the statement of financial position.

Property and equipment are stated at cost less accumulated depreciation and any accumulatedimpairment losses.

All items of property and equipment are initially stated at cost. Subsequent costs are included inthe asset’s carrying amount or recognised as a separate asset, as appropriate, only when it isprobable that future economic benefits associated with the item will flow to the Company and thecost of the item can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are charged to the income statement during thefinancial year in which they are incurred.

Subsequent costs recognition, property and equipment are stated at cost less accumulateddepreciation and any accumulated impairment losses.

29

Company No. 23820 W




(c) Property, plant and equipment (continued)

(d) Goodwill

(e) Intangible assets - software

Gains and losses on disposals are determined by comparing proceeds with carrying amounts andare credited or charged in the statement of income.

Goodwill represents the excess of the cost of acquisition of the subsidiary over the fair value ofthe Company's share of the identifiable net assets at the date of acquisition.

At each date of the statement of financial position, the Company assess whether there is anyindication of impairment. If such indications exist, an analysis is performed to assess whether thecarrying amount of the asset is fully recoverable. A write-down is made if the carrying amountexceeds the recoverable amount. See accounting policy Note 3(h) to the financial statements onimpairment of non-financial assets.

Goodwill is tested annually for impairment and carried at cost less accumulated impairmentlosses. Impairment losses on goodwill are not reversed. See accounting policy Note 3(h) to thefinancial statements on impairment of non-financial assets.

The Company allocates goodwill to the combined general insurance business as a whole, whichhas been identified as a cash-generating unit.

Where computer software is not an integral part of a related item of computer hardware, thesoftware is treated as an intangible asset. Capitalised internal-use software costs include externaldirect costs of materials and services consumed in developing or obtaining the software, payrolland payroll-related costs for employees who are directly associated with and who devotesubstantial time to the project. Capitalisation of these costs ceases no later than the point atwhich the project is substantially completed and ready for its intended purpose. These costs areamortised over their expected useful life of 4 years on a straight-line basis, with the useful livesbeing reviewed annually.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Theallocation is made to each of the cash-generating units ("CGUs"), or groups of CGUs that isexpected to benefit from the synergies of the combination.

30

Company No. 23820 W




(f) Investments and financial assets

(i) LAR

(ii) AFS

The Company classify their investments into loans and receivables (“LAR”) or available-for-sale(“AFS”) financial assets. Classification of the financial assets is determined at initial recognition.

LAR are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. These financial assets are initially recognised at fair value plusall transaction costs directly attributable to the acquisition. After initial measurement, LARare measured at amortised cost, using the effective yield method, less allowance forimpairment. Gains and losses are recognised in the statement of income when the financialassets are derecognised or impaired, as well as through the amortisation process.

AFS financial assets are investments that are not classified as fair value through profit orloss, held-to-maturity or loans and receivables. AFS financial assets initially recorded at fairvalue. After initial measurement, the AFS financial assets are re-measured at fair value.

Interest from AFS financial assets calculated using the effective interest method, isrecognised in the statement of income. Any gains or losses arising from a change in fairvalue, net of income tax, are recognised directly in statement of comprehensive income,except for impairment losses. When the AFS financial assets are derecognised, thecumulative fair value gains or losses previously recognised in other comprehensive incomeare transferred to the statement of income as net realised gains or losses on AFS financialassets.

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Company No. 23820 W




(g) Impairment of financial assets

(i) Financial assets carried at amortised cost

(ii) Financial assets carried at cost

(iii) Financial assets carried at fair value

If, in a subsequent period, the amount of the impairment loss decreases and the decreasecan be related objectively to an event occurring after the impairment was recognised, thepreviously recognised impairment loss is reversed by adjusting the allowance account. Theamount of the reversal is recognised in the statement of income.

If there is objective evidence that an impairment loss on securities carried at cost (e.g.equity instruments or which there is no active market or whose fair value cannot be reliablymeasured) has been incurred, the amount of the loss is measured as the differencebetween the asset’s carrying amount and the present value of estimated future cash flowsdiscounted at the current market rate of return for similar securities. Such impairmentlosses shall not be reversed.

In the case of AFS financial assets, a significant or prolonged decline in the fair value of thefinancial asset below its cost is considered in determining whether the assets are impaired.If any such evidence exists for financial asset held at AFS, the cumulative loss, measuredas the difference between the acquisition cost and the current fair value, less anyimpairment loss on that financial asset previously recognised in the statement of income isremoved from statement of comprehensive income and recognised in the statement ofincome.

The Company assess at each date of the statement of financial position whether there isobjective evidence that a financial asset or a group of financial assets is impaired. A financialasset is impaired and impairment losses are incurred if, and only if, there is objective evidence ofimpairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flowsof the financial asset that can be reliably estimated.

If there is objective evidence that an impairment loss on financial asset carried at amortisedcost has been incurred, the amount of the loss is measured as the difference between theasset’s carrying amount and the present value of estimated future cash flows discounted atthe financial asset’s original effective interest rate. The carrying amount of the asset isreduced through the use of an allowance account and the amount of the loss is recognisedin the statement of income.

If, in a subsequent period, the fair value of a debt instrument classified as AFS increasesand the increase can be objectively related to an event occurring after the impairment losswas recognised in the statement of income, the impairment loss is reversed through thestatement of income. Impairment losses previously recognised in the statement of incomeon equity instruments are not reversed through the statement of income.

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Company No. 23820 W




(h) Impairment of other non-financial assets

An impairment loss is charged to the income statement immediately.

(i) Insurance receivables

(j) Cash and cash equivalents

(k) Share capital

(l) Borrowings

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance ofnew shares and options are shown in equity as a deduction, net of tax, from the proceeds.

Cash and cash equivalents consist of cash and bank balances, excluding fixed and call depositswhich are held for investment purpose.

The carrying values of assets that are subject to amortisation are reviewed for impairment whenthere is an indication that the assets might be impaired. Impairment is measured by comparingthe carrying values of the assets with their recoverable amounts. The recoverable amount is thehigher of the fair value less cost to sell and the value in use, which is measured by reference todiscounted cash flows. Recoverable amounts are estimated for individual assets, or, if it is notpossible, for the cash-generating unit. Non-financial assets that suffered impairment arereviewed for possible reversal of impairment at each reporting date.

Insurance receivables are recognised when due and measured on initial recognition at the fairvalue. Subsequent to initial recognition, insurance receivables are measured at amortised cost,using the effective yield method.

If there is objective evidence that the insurance receivable is impaired, the Company reduce thecarrying amount of the insurance receivable accordingly and recognise that impairment loss inthe statement of income. The Company gather the objective evidence that an insurancereceivable is impaired using the same processes adopted for financial assets carried atamortised cost. The impairment loss is calculated under the same method used for thesefinancial assets.

A subsequent increase in the recoverable amount of an asset is treated as a reversal of theprevious impairment loss and is recognised to the extent of the carrying amount of the asset thatwould have been determined (net of amortisation and depreciation) had no impairment loss beenrecognised. The reversal is recognised in the statement of income immediately. Impairment losson goodwill is not reversed.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings aresubsequently stated at amortised costs, any difference between the proceeds (net of redemptioncost) and the redemption value is recognised in the deferments of income over the period of theborrowings using the effective interest yield. All other borrowing costs are recognised instatement of income in the period which they are incurred.

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Company No. 23820 W




(m) Insurance product classification

The Company issue contracts that transfer insurance risk.

(n) General insurance underwriting results

Premium income

Premium liabilities

Premium liabilities refer to the higher of:

(i) the aggregate of the unearned premium reserves (“UPR”); or

(ii)

Insurance contracts are those that transfer significant insurance risk. An insurance contract is acontract under which the Company (the insurer) have accepted significant insurance risk fromanother party (the policyholders) by agreeing to compensate the policyholders if a specifieduncertain future event (the insured event) adversely affects the policyholders. As a generalguideline, the Company determine whether they have significant insurance risk, by comparingclaims payable on the occurrence of an insured event with claims payable if the insured eventhad not occurred.

The general insurance underwriting results are determined for each class of business after takinginto account reinsurances, commissions, unearned premiums and claims incurred.

Premiums are recognised in a financial year in respect of the risks assumed during that particularfinancial year. Premiums from direct business are recognised during the financial year upon theissuance of debit notes or policies. Premiums in respect of risks incepted for which debit notes orpolicies have not been raised as of the date of the statement of financial position are accrued atthat date as pipeline premiums.

Inward treaty reinsurance premiums are recognised on the basis of periodic advices receivedfrom ceding insurers.

Outward reinsurance premiums are recognised in the same accounting period as the originalpolicy to which the reinsurance relates.

the best estimate value of the insurer’s unexpired risk reserves (“URR”) at the valuationdate and the Provision of Risk Margin for Adverse Deviation (“PRAD”) calculated at theoverall Company level. The best estimate value is a prospective estimate of the expectedfuture payments arising from future events insured under policies in force as at valuationdate and also includes allowance for the insurer’s expenses, including overheads and costof reinsurance, expected to be incurred during the unexpired period in administering thesepolicies and settling the relevant claims, and shall allow for expected future premiumrefunds.

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Company No. 23820 W




(n) General insurance underwriting results (continued)

Premium liabilities (continued)

(i) 25% method for marine cargo, aviation cargo and transit business;

(ii)

(iii)

Acquisition costs

Claims liabilities

The cost of acquiring and renewing insurance policies net of income derived from cedingreinsurance premiums is recognised as incurred and properly allocated to the periods in which itis probable they give rise to income.

A liability for outstanding claims is recognised in respect of both direct insurance and inwardreinsurance.

Provision for claims liabilities is made for the estimated costs of all claims together with relatedexpenses less reinsurance recoveries, in respect of claims notified but not settled at the date ofthe statement of financial position. Provision is also made for the cost of claims, together withrelated expenses, incurred but not reported at the date of the statement of financial position,based on an actuarial valuation.

UPR represent the portion of the net premiums of insurance policies written that relate to theunexpired periods of the policies at the end of the financial period.

In determining UPR at the date of the statement of financial position, the method that mostaccurately reflected the actual unearned premium is used, as follows:

time apportionment method for non-annual policies reduced by the percentage of accountedgross direct business commissions to the corresponding premiums, not exceeding limitsspecified by BNM; and

1/365th method for all other classes of general business in respect of Malaysian policies,reduced by the corresponding percentage of accounted gross direct business commissionto the corresponding premium, not exceeding limits specified by BNM.

Throughout the course of the financial year, management regularly re-assesses claims andprovision both on an individual and class basis, based on independent professional advice andreports, other available information and management’s own assessment of the claims andprovisions.

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Company No. 23820 W





Reinsurance

Reinsurance contracts that do not transfer significant insurance risk are accounted for directlythrough the statement of financial position. These are deposit assets or financial liabilities that arerecognised based on the consideration paid or received less any explicit identified premiums orfees to be retained by the reinsured. Investment income on these contracts is accounted forusing the effective yield method when accrued.

Reinsurance assets or liabilities are derecognised when the contractual rights are extinguished orexpire or when the contract is transferred to another party.

Premiums and claims on assumed reinsurance are recognised as revenue or expenses in thesame manner as they would be if the reinsurance were considered direct business. Reinsuranceliabilities represent balances due to reinsurance companies. Amount payable are estimated in amanner consistent with the related insurance contract.

The Group and the Company also assume reinsurance risk in the normal course of business forgeneral insurance contracts when applicable.

Gains or losses on buying reinsurance are recognised in the statement of income immediately atthe date of purchase and are not amortised.

Reinsurance assets are reviewed for impairment at each reporting date or more frequently whenan indication of impairment arises during the reporting period. Impairment occurs when there isobjective evidence as a result of an event that occurred after initial recognition of the reinsuranceasset that the Group and the Company may not receive all outstanding amounts due under theterms of the contract and the event has a reliably measurable impact on the amounts that theGroup and the Company will receive from the reinsurer. The impairment loss is recorded in thestatement of income.

Ceded reinsurance arrangements do not relieve the Group and the Company from theirobligations to policyholders. Premiums and claims are presented on a gross basis for both cededand assumed reinsurance.

The Group and the Company cede insurance risk in the normal course of business for all of itsbusinesses. Reinsurance assets represent balances due from reinsurance companies. Amountsrecoverable from reinsurers are estimated in a manner consistent with the outstanding claimsprovision or settled claims associated with the reinsurer’s policies and are in accordance with therelated reinsurance contracts.

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Company No. 23820 W





Insurance contract liabilities

These liabilities comprise claims liabilities and premiums liabilities.

General insurance contract liabilities are recognised when contracts are entered into andpremiums are charged.

Claims liabilities are based on the estimated ultimate cost of all claims incurred but not settled atthe date of the statement of financial position, whether reported or not, together with relatedclaims handling costs and reduction for the expected value of salvage and other recoveries.Delays can be experienced in the notification and settlement of certain types of claims, therefore,the ultimate cost of these claims cannot be known with certainty at the date of the statement offinancial position. The liability is calculated at the reporting date using a range of standardactuarial claim projection techniques based on empirical data and current assumptions that mayinclude a margin for adverse deviation. The liability is not discounted for the time value of money.No provision for equalisation or catastrophe reserve is recognised. The liabilities arederecognised when the contract expires, is discharged or is cancelled.

The provision for unearned premiums represents premiums received for risks that have not yetexpired. Generally, the reserve is released over the term of the contract and is recognised aspremium income.

At each reporting date, the Company review the unexpired risks and a liability adequacy test isperformed to determine whether there is any overall excess of expected claims and associatedexpenses (policy administration and claims handing) incurred in future over unearned premiums.This calculation uses current estimates of future contractual cash flows (taking into considerationcurrent loss ratio and general policy administration and claims handling expense ratios) expectedto be paid out, loaded with a risk margin to cope with the uncertainty surrounding the estimates. Ifthese estimates show that the carrying amount of the unearned premiums is inadequate, thedeficiency is recognised in the statement of income by setting up a provision for liabilityadequacy.

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Company No. 23820 W




(o) Other revenue recognition

Dividend income is recognised when the right to receive payment is established.

(p) Income tax

Deferred tax assets are recognised to the extent that it is probable that taxable profits will beavailable against which the deductible temporary differences or unused tax losses can be utilised.

Deferred tax is recognised in full, using the liability method, on temporary differences arisingbetween the amounts attributed to assets and liabilities for tax purpose and their carryingamounts in the financial statements. However, deferred tax is not accounted if it arises from initialrecognition of an asset or liability in a transaction other than a business combination that at thetime of the transaction affects neither accounting nor taxable profit or loss.

Current tax expense is determined according to the tax laws in Malaysia and includes all taxesbased upon the taxable profits and is measured using the tax rates that have been enacted at thereporting date. Current tax is recognised in the statement of income.

Gains or losses arising on disposal of financial assets are credited or charged to the statement ofincome.

Rental income is recognised on a time proportion basis except where default in payment of renthas already occurred and the rent due remains outstanding, in which case recognition of rentalincome is suspended. Subsequent to suspension, rental income is recognised on receipt basisuntil all arrears have been paid.

Other interest income, including amortisation of premiums or accretion of discounts, isrecognised on a time proportion basis that takes into account the effective yield of the asset.

When a loan and receivable is impaired, the Company reduce the carrying amount to itsrecoverable amount, being the estimated future cash flow discounted at the original effectiveinterest rate of the instrument, and continue unwinding the discount as interest income. Interestincome on impaired loan and receivables are recognised using the original effective interest rate.

Interest income is recognised using the effective interest method. The effective interest rate is therate that discounts estimated future cash receipts or payments through the expected life of thefinancial instrument or, when appropriate, a shorter period to its carrying amount. The calculationincludes significant fees and transaction costs that are integral to the effective interest rate, aswell as premiums or discounts.

Deferred tax is recognised in the statement of income except when it arises from a transactionwhich is recognised in other comprehensive income, in which case, the deferred tax is alsocharged or credited to other comprehensive income.

Deferred tax is determined using tax rates that have been enacted or substantively enacted bythe date of the statement of financial position and are expected to apply when the relateddeferred tax asset is realised or deferred tax liability is settled.

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Company No. 23820 W




(q) Employees’ benefits

(i) Short-term employees’ benefits

(ii) Post-employment benefits

(iii) Termination benefits

(iv) Share-based compensation

Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits areaccrued in the financial year in which the associated services are rendered by employees ofthe Group and Company.

The Group and Company contribute to the Employees’ Provident Fund (“EPF”), a definedcontribution plan. The Group’s and Company’s contributions to the defined contribution planare charged to the income statement in the financial year to which they relate. Once thecontributions have been paid, the Group and Company have no further payment obligations.

The Group and Company also operate a defined contribution retirement gratuity schemebased on a percentage of basic staff salary, less contributions made to the EPF.

Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy inexchange for these benefits. The Group and Company recognise termination benefits whenit is demonstrably committed to either terminate the employment of current employeesaccording to a detailed formal plan without possibility of withdrawal or to provide terminationbenefits as a result of an offer made to encourage voluntary redundancy.

AXA, the ultimate holding corporation, offers certain eligible employees of the Group andCompany options to purchase ordinary shares of AXA, pursuant to the share options planmaintained by AXA, at a fixed price. The fair value of the employee services received inexchange for the grant of the options is recognised as an expense. The total amount to beexpensed over the vesting period is determined by reference to the fair value of the optionsgranted, excluding the impact of any non-market vesting conditions (for example,profitability and premium income growth targets). Non-market vesting conditions areincluded in assumptions about the number of options that are expected to becomeexercisable. At each date of the statement of financial position, the Group and Companyrevise the estimates of the number of options that are expected to become exercisable. Itrecognises the impact of the revision of original estimates, if any, in the statement ofincome, and a corresponding adjustment to equity over the remaining vesting period.

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Company No. 23820 W




(r) Foreign currencies

(s) Insurance payables and other payables

(t) Provisions

(u) Operating leases

(v) Dividends

Insurance payables and other payables are recognised when due and measured on initialrecognition at the fair value of the consideration less directly attributable transaction costs.Subsequent to the initial recognition, they are measured at amortised cost using the effectiveyield method.

Provisions are recognised when the Company have a present obligation as a result of a pastevent and it is probable that an outflow of resources embodying economic benefits will berequired to settle the obligation, and a reliable estimate of the amount can be made.

Leases of assets where a significant portion of the risks and rewards of ownership are retainedby the lessor are classified as operating leases. Payments made under operating leases arecharged to the statement of income on a straight line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any paymentrequired to be made to the lessor by way of penalty is recognised as an expense in the financialyear in which termination takes place.

Dividends are recognised as liabilities when the obligation to pay is established in which thedividends are declared and approved by BNM and the Company’s shareholders. No provision ismade for a proposed dividend.

Items included in the financial statements of the Group and Company are measured using thecurrency of the primary economic environment in which the entity operates (the “functionalcurrency”). The financial statements are presented in Ringgit Malaysia, which is the Group’s andCompany’s functional and presentation currency.

All transactions in a currency other than the functional currency (“foreign currency”) are convertedinto Ringgit Malaysia at the rates of exchange prevailing on the transaction dates. Foreigncurrency monetary assets and liabilities at the date of the statement of financial position aretranslated at the rates of exchange prevailing at that date. Exchange differences arising from thesettlement of foreign currency transactions and from the translation of foreign currency monetaryassets and liabilities are included in the statement of income.

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Company No. 23820 W




(w) Contingent liabilities and contingent assets

(x) Fair value estimation for disclosure purpose

The basis of estimation of fair values for financial instruments is as follows:

(i)

(ii)

(iii)

(iv)

Fair value measurements are classified using a fair value hierarchy based on the observability ofthe inputs used in the fair value measurement.

The Company do not recognise a contingent liability but disclose its existence in the financialstatements. A contingent liability is a possible obligation that arises from past events whoseexistence will be confirmed by the occurrence or non-occurrence of one or more uncertain futureevents beyond the control of the Company or a present obligation that is not recognised becauseit is not probable that an outflow of resources will be required to settle the obligation. A contingentliability also arises in the extremely rare case where there is a liability that cannot be recognisedbecause it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events whose existence will beconfirmed by the occurrence or non-occurrence of one or more uncertain future events beyondthe control of the Company. The Company do not recognise a contingent asset but disclose itsexistence where inflows of economic benefits are probable, but not virtually certain.

The carrying amounts for other financial assets and liabilities with a maturity period of lessthan one year are assumed to approximate their fair values.

The fair values of fixed rate loans are estimated by discounting future expected cash flows,taking into consideration market conditions and contractual terms of these loans.

The fair values of Malaysian Government securities and unquoted corporate debt securitiesare based on the indicative market prices.

The fair values of quoted equity securities and real estate investment trusts (“REITs”) arebased on quoted market prices.

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Company No. 23820 W




(x) Fair value estimation for disclosure purpose (continued)

Level 1 -

Level 2 -

Level 3 -

(y) Business combination under common control

A level is assigned to each fair value measurement based on the lowest level input significant tothe fair value measurement in its entirety. The three-level hierarchy is defined as follows:

Fair value measurements that reflect unadjusted, quoted prices in active markets foridentical assets and liabilities that the Company have the ability to access at themeasurement date. Valuations are based on quoted prices reflecting markettransactions involving assets or liabilities identical to those being measured.

Fair value measurements using significant non market observable inputs. Theseinclude valuations for assets and liabilities that are derived using data, some or all ofwhich is not market observable, including assumptions about risk.

Fair value measurements using inputs other than quoted prices included within Level1 that are observable for the asset or liability, either directly or indirectly. Thoseinclude quoted prices for similar assets and liabilities in active market markets, quotedprices for identical assets and liabilities in inactive markets, inputs that are observablethat are not prices (such as interest rates, credit risks, etc) and inputs that are derivedfrom or corroborated by observable market data.

The transfer of business from the subsidiary has been accounted for as business combinationunder common control using the predecessor method of accounting. Under the predecessormethod of accounting, the consolidated statements of income include the results of each of thecombining entities from the date of the combinations. The assets and liabilities of the combiningentities are accounted for based on the carrying amounts from the perspective of the commoncontrolling party or the combining entities if the common controlling party does not prepareconsolidated financial statements. The excess of the cost of acquisition over the aggregatecarrying amounts of assets and liabilities as of the date of the combination is taken to equity.

A similar treatment applies in the Company’s separate financial statements when assets andliabilities representing the underlying businesses under common control are directly acquired bythe Company. In accounting for the business combination in the Company’s separate financialstatements, the excess of the cost of acquisition over the aggregate carrying amounts of assetsand liabilities as of the date of the combination is taken to equity.

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Company No. 23820 W



4 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

(a) Critical accounting estimates and assumptions

Claims liabilities

Impairment of goodwill

The Company assess the impairment of goodwill on an annual basis in accordance with itsaccounting policy in Note 3(d) to the financial statements. The recoverable amount of the goodwillis assessed based on its value-in-use. Value-in-use is determined using the present value ofestimated future cash flows expected to be generated from future new business, using theestimates and key assumptions as disclosed in Note 7 to the financial statements.

Estimates and judgements are continually evaluated by the Directors and are based on historicalexperience and other factors, including expectations of future events that are believed to be reasonableunder the circumstances.

The Company make estimates and assumptions concerning the future. The resulting accountingestimates will, by definition, rarely equal the related actual results. The estimates andassumptions that have a significant risk of causing a material adjustment to the carrying amountsof assets and liabilities within the next financial year are outlined below.

The key assumptions and the sensitivity analysis of claims liabilities are disclosed in Note 31 tothe financial statements.

A risk margin for uncertainty is added to the central estimate of outstanding claims. A centralestimate is an estimate of the level of claims provision that is intended to contain no intentionalunder or over estimation. In simple terms, the central estimate i.e. equally likely to be too high(more than adequate) or too low (inadequate) and is commonly described as providing a 50%probability of adequacy. As the Company require a higher degree of certainty that estimates willbe adequate over time, a risk margin is added to the central estimate of outstanding claims.

Estimation of the ultimate cost of certain liabilities claims is a complex process. The Companyapply the AXA Group “Analyse” tool or use an external actuary, to determine the liability within thechain ladder model. Some factors that affect the liability estimation process are the inconsistentcourt resolutions and jurisprudence that has broadened the intent and scope coverage of theprotections offered in the insurance contracts issued by the Company.

The estimation of the ultimate liability arising from claims made under insurance contracts is theCompany’s most critical accounting estimate. There are several sources of uncertainty that needto be considered in the estimate of the liability that the Company will ultimately pay for suchclaims.

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Company No. 23820 W



4 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

(b) Critical judgement in applying the entity’s accounting policies

In determining and applying accounting policies, judgement is often required in respect of itemswhere the choice of specific accounting policy could materially affect the reported results andfinancial position of the Company. However, the Directors are of the view that there are currentlyno accounting policies which require significant judgement to be exercised in their application.

44

Company No. 23820 W



5 PROPERTY, PLANT AND EQUIPMENT

Office and Furniture,Freehold Freehold Motor computer fixtures and

land building vehicles equipment fittings TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000

CostAt 1 January 2018 16,784 280 521 28,249 9,547 55,381Additions - - - 1,513 341 1,854Disposals - - (6) (59) - (65)Revaluation surplus 6 - - - - 6At 31 December 2018 16,790 280 515 29,703 9,888 57,176

Cost - - 515 29,703 9,888 40,106Valuation 16,790 280 - - - 17,070At 31 December 2018 16,790 280 515 29,703 9,888 57,176

Accummulated depreciationAt 1 January 2018 - 64 60 19,732 4,168 24,024Charge for the financial year

(Note 24(a)) - 6 101 4,320 1,475 5,902Disposals - - (6) (57) - (63)At 31 December 2018 - 70 155 23,995 5,643 29,863

Net book valueAt 31 December 2018 16,790 210 360 5,708 4,245 27,313

45

Company No. 23820 W



5 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Office and Furniture,Freehold Freehold Motor computer fixtures and

land building vehicles equipment fittings TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000

CostAt 1 January 2017 17,270 280 536 23,029 8,973 50,088Additions - - 507 5,290 625 6,422Disposals - - (522) (70) (51) (643)Revaluation deficit (486) - - - - (486)At 31 December 2017 16,784 280 521 28,249 9,547 55,381

Cost - - 521 28,249 9,547 38,317Valuation 16,784 280 - - - 17,064At 31 December 2017 16,784 280 521 28,249 9,547 55,381

Accummulated depreciationAt 1 January 2017 - 50 412 16,072 2,494 19,028Charge for the financial year

(Note 24(a)) - 14 94 3,730 1,725 5,563Disposals - - (446) (70) (51) (567)At 31 December 2017 - 64 60 19,732 4,168 24,024

Net book valueAt 31 December 2017 16,784 216 461 8,517 5,379 31,357

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Company No. 23820 W



5 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Recurring fair value measurements

6 INTANGIBLE ASSET - SOFTWARE

2018 2017RM'000 RM'000

CostAt 1 January 48,163 32,850Additions 11,291 15,313At 31 December 59,454 48,163

Accumulated amortisationAt 1 January 29,447 26,035Amortisation during the financial year (Note 24(a)) 7,093 3,412At 31 December 36,540 29,447

Net book valueAt 31 December 22,914 18,716

7 GOODWILL

2018 2017RM'000 RM'000

Cost/Net book valueAt 31 December 165,822 165,822

The freehold land and freehold building, which are used as the Company’s training facilities, were lastrevalued in 2017 by an independent professional valuer, James Wong Kwong Onn, member of theInstitution of Surveyors, Malaysia of VPC Alliance (KL) Sdn Bhd at open market value on an existinguse basis.

The net book value of the revalued land and building had these assets been carried at cost lessaccumulated depreciation is not disclosed due to the absence of historical records.

The freehold land and building, which fair value is under Level 2 of the fair value hierarchy, is measuredusing the sales comparison approach. Sales prices of comparable land and buildings in close proximityare adjusted for differences in key attributes such as land area and location and time factor. The mostsignificant input into this valuation approach is price per square foot.

The goodwill has been allocated to the cash generating unit, being the combined general insurancebusiness as a whole. The recoverable amount of the goodwill has been determined based on value-in-use calculations using cash flow projections based on the strategic plan 2019 - 2020 approved bysenior management covering a three years period. The projected cash flows beyond 2 years aredetermined on the assumptions that earnings level will remain fairly stable for the period covering 2021to 2027 (2017: 2021 to 2027). The projected cash flows are determined by budgeted profitability basedon past performance and management’s expectations of market developments.

47

Company No. 23820 W



7 GOODWILL (CONTINUED)

The key assumptions used in the value-in-use calculation are as follows:

(a)

(b)

(c)

(d)

(e) Terminal value is determined based on the present value of the net assets at the end of 2018.

Based on the assessment of value-in-use for the cash generating unit, the Company do not expect thatany reasonable change in the key assumptions will cause the carrying amount of the goodwill to exceedits recoverable amount, resulting in impairment of goodwill.

Loss ratios have been projected after taking into account management’s strategy for premiumgrowth as well as past developments with respect to loss development patterns. The loss ratiosare expected to remain at the existing levels.

Premium growth rates have been projected on the basis of management’s expectations of marketdevelopments taking into account the business plan which reflect future expansion plans andsynergies arising from integration of the business of the subsidiary acquired with existingbusiness of the Company.

A discount rate of 9.6% (2017: 9.5%) has been considered based on the weighted cost of capitalof the Company.

The expense projections including projection of acquisition cost/commission have been doneafter taking into account the projected inflation over the strategic business plan period as well asprojected portfolio growth. The projected portfolio mix has also been considered in determiningthe projection of acquisition cost/commission.

48

Company No. 23820 W



8 INVESTMENTS

2018 2017RM'000 RM'000

AFS financial assets 1,569,330 1,695,561LAR 1,023,692 870,304

2,593,022 2,565,865

(a) AFS financial assets

2018 2017RM'000 RM'000

At fair valueMalaysian Government Securities

- unquoted in Malaysia 357,021 479,743Corporate debt securities

- unquoted in Malaysia 768,533 681,234REITs

- quoted in Malaysia - 381Equity securities

- quoted in Malaysia 230 38,604- unquoted in Malaysia 250 250

Wholesale unit trust fund 443,296 495,3491,569,330 1,695,561

Maturing within 12 months 192,260 233,366Maturing after 12 months 933,294 927,611

1,125,554 1,160,977

(b) LAR

2018 2017RM'000 RM'000

At amortised costLoans 862 1,325Fixed and call deposits 1,022,830 868,979

1,023,692 870,304

Loans maturing within 12 months 559 1,010Loans maturing after 12 months 303 315

862 1,325

The fixed and call deposits mature within 12 months and the carrying amounts approximate thefair values at the date of the statements of financial position.

49

Company No. 23820 W



8 INVESTMENTS (CONTINUED)

(c) Carrying value of financial instruments

AFS LAR TotalRM'000 RM'000 RM'000

At 31 December 2016/1 January 2017 1,512,302 821,334 2,333,636Purchases 1,157,439 3,509,227 4,666,666Maturities (159,500) (3,465,828) (3,625,328)Disposals (825,901) - (825,901)Net gain recorded in other comprehensive

income 13,164 - 13,164Net realised gain transferred to income statement (938) - (938)Net gain on foreign exchange - (4,623) (4,623)Movement in impairment allowance (Note 23) (809) - (809)Amortisation adjustment (Note 21) (1,358) - (1,358)Movement in interest income accrued 1,162 10,194 11,356At 31 December 2017/1 January 2018 1,695,561 870,304 2,565,865Purchases 306,052 4,147,188 4,453,240Maturities (230,000) (3,994,863) (4,224,863)Disposals (189,405) - (189,405)Net gain recorded in other comprehensive -

income 3,325 - 3,325Net realised gain transferred to income statement (14,897) - (14,897)Net gain on foreign exchange - 507 507Movement in impairment allowance (Note 23) (462) - (462)Amortisation adjustment (Note 21) (1,288) - (1,288)Movement in interest income accrued 444 556 1,000At 31 December 2018 1,569,330 1,023,692 2,593,022

50

Company No. 23820 W



8 INVESTMENTS (CONTINUED)

(d) Fair value of financial instruments

Recurring fair value measurements

2018 2017RM'000 RM'000

Level 1 230 38,985Level 2 1,568,850 1,656,326Level 3 250 250

1,569,330 1,695,561

9 CONTROLLED STRUCTURED ENTITY

10 REINSURANCE ASSETS

2018 2017RM'000 RM'000

Claims liabilities (Note 15) 262,890 344,471Premium liabilities (Note 15) 58,015 51,608

320,905 396,079

Receivable within 12 months 192,643 233,974Receivable after 12 months 128,261 162,105

320,905 396,079

11 INSURANCE RECEIVABLES

2018 2017RM'000 RM'000

Due premiums including agents, brokers and co-insurers balances 232,808 201,382Due from reinsurers and cedants 73,933 52,266

306,741 253,648Allowance for impairment (23,793) (22,192)

282,948 231,456

During the financial year ended 31 December 2017, the Company disposed off all units in a wholesaleunit trust fund, Affin Hwang AIIMAN Wholesale Fund III. As at 31 December 2018, the Company doesnot have control over any of the wholesale unit trust funds the Company invested in.

The following tables show financial instruments recorded at fair value analysed by the differenthierarchy of fair value:

51

Company No. 23820 W



11 INSURANCE RECEIVABLES (CONTINUED)

2018 2017RM'000 RM'000

Receivable within 12 months 282,948 231,456

Receivable after 12 months - -282,948 231,456

Movement in allowance for impairment:

At 1 January 22,192 21,393Allowance for impairment (Note 24(a)) 1,601 799

At 31 December 23,793 22,192

The carrying amounts approximate the fair values at the date of the statements of financial position.

Offsetting financial assets and financial liabilities

Gross Netamounts of amountsrecognised of financial

financial assetsGross liabilities presented

amounts of set off in the in therecognised statements statements

financial of financial of financialassets position position

RM'000 RM'000 RM'000

2018

Insurance receivables 475,407 (168,666) 306,741

2017

Insurance receivables 382,411 (128,763) 253,648

The following financial assets are subject to offsetting, enforceable master netting arrangements andsimilar agreements:

There are no financial instruments received as collateral, nor any cash collateral pledged or received asat 31 December 2018 (2017: Nil).

52

Company No. 23820 W



12 OTHER RECEIVABLES AND PREPAYMENTS

2018 2017RM'000 RM'000

Malaysian Motor Insurance Pool (“MMIP”) 51,727 57,010- Cash calls paid to MMIP 34,360 34,360- Assets held under MMIP 17,367 22,650

Due from AXA regional offices (Note 29) 6,377 10,336Other receivables, deposits and prepayments 31,692 25,172

89,796 92,518


13 SHARE CAPITAL

No. of No. ofAmount shares Amount sharesRM'000 000 RM'000 000

Issued and fully paid share capital

At 1 January 190,645 190,645 119,048 119,048Conversion of share premium to share

capital - - 71,597 71,597190,645 190,645 190,645 190,645

14 RETAINED EARNINGS

MMIP as at 31 December 2018 is a net receivable of RM12,170,301 (2017: net payable ofRM10,284,033) after setting-off the amount receivable from MMIP against the Company’s share ofclaims and premium liabilities amounting to RM39,557,552 (2017: RM46,725,056) included in Note 15to the financial statements.

2018 2017

The Company may distribute single-tier tax exempt dividends to its shareholders out of its retainedearnings. Pursuant to Section 51(1) of the Financial Services Act, 2013, the Company is required toobtain BNM’s written approval prior to declaring or paying any dividend. Pursuant to the RBCFramework, the Company shall not pay dividends if its Capital Adequacy Ratio position is less than itsinternal target capital level or if the payment of dividends would impair its Capital Adequacy Ratioposition to below its internal target.

The amounts due from AXA regional offices are unsecured, interest free and have no fixed terms ofrepayment.

The New Companies Act, 2016 (“New Act”), which came into operation on 31 January 2017, abolishedthe concept of authorised share capital and par value of share capital. Consequently, any amountstanding to credit of the share premium account of RM71,597,000 becomes part of Company's sharecapital pursuant to the transitional provisions set out in Section 618 (2) of the New Act. There is noimpact on the numbers of ordinary shares in issue or the relative entitlement of any of the members asa result of this transition.

53

Company No. 23820 W



15 INSURANCE CONTRACT LIABILITIES

Gross Reinsurance Net Gross Reinsurance NetRM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Provision for claims reported by policyholders 974,346 (203,031) 771,315 978,146 (297,252) 680,894Provision for IBNR claims 334,027 (59,859) 274,168 389,357 (47,219) 342,138Claims liabilities (a) 1,308,373 (262,890) 1,045,483 1,367,503 (344,471) 1,023,032Premium liabilities (b) 583,905 (58,015) 525,890 558,166 (51,608) 506,558

1,892,278 (320,905) 1,571,373 1,925,669 (396,079) 1,529,590

Within 12 months 1,013,051 (192,643) 820,408 1,102,263 (233,974) 868,289After 12 months 879,227 (128,261) 750,965 823,406 (162,105) 661,301

1,892,278 (320,905) 1,571,373 1,925,669 (396,079) 1,529,590

20172018

54

Company No. 23820 W



15 INSURANCE CONTRACT LIABILITIES (CONTINUED)

(a) Claims liabilities


At 1 January 1,367,503 (344,471) 1,023,032 1,177,777 (183,235) 994,542Claims incurred in the current

accident year before provisionof risk margin for adverse deviation (“PRAD”) and claims handling expenses (“CHE”) 974,048 (154,653) 819,395 1,055,626 (273,264) 782,362

Movements in claims incurred in prior accident years before PRAD and CHE (59,277) 36,687 (22,590) (64,856) 17,644 (47,212)

Movement in PRAD of claimsliabilities at 75% confidence level (3,631) 5,441 1,810 10,092 (8,792) 1,300

Movement in claims handling expenses 1,391 - 1,391 (3,019) - (3,019)

Claims paid during the financial year (971,661) 194,106 (777,555) (808,117) 103,176 (704,941)At 31 December 1,308,373 (262,890) 1,045,483 1,367,503 (344,471) 1,023,032

Within 12 months 849,861 (182,622) 667,239 836,677 (217,550) 619,127After 12 months 458,512 (80,268) 378,244 530,826 (126,921) 403,905

1,308,373 (262,890) 1,045,483 1,367,503 (344,471) 1,023,032

2018 2017

55

Company No. 23820 W



15 INSURANCE CONTRACT LIABILITIES (CONTINUED)

(b) Premium liabilities


At 1 January 558,166 (51,608) 506,558 574,674 (54,245) 520,429Premiums written in the financial

year (Note 20) 1,462,303 (238,754) 1,223,549 1,395,051 (243,313) 1,151,738Premiums earned during the

financial year (Note 20) (1,436,564) 232,347 (1,204,217) (1,411,559) 245,950 (1,165,609)At 31 December 583,905 (58,015) 525,890 558,166 (51,608) 506,558


2018 2017

56

Company No. 23820 W



16 DEFERRED TAXATION

2018Company Group Company

RM'000 RM'000 RM'000

Deferred tax assets 13,846 3,391 3,391

At 1 January 3,391 6,766 7,234Movement during the financial

year recognised in:Statement of income (Note 25) 7,678 (928) (928)Other comprehensive income

- AFS reserve 2,777 (2,470) (2,938)- Revaluation reserve - 23 23

At 31 December 13,846 3,391 3,391

Deferred tax assets:- to be recovered after more than

12 months 821 1,664 1,664- to be recovered within 12 months 17,497 10,309 10,309

18,318 11,973 11,973Deferred tax liabilities:- to be settled after more than

12 months (4,472) (8,582) (8,582)Deferred tax assets (net) 13,846 3,391 3,391

At 1 Charged/ At 31January (credited) DecemberRM'000 RM'000 RM'000

2018

Company

Recognised in statement of incomeExcess of capital allowance over depreciation (2,493) 1,137 (1,356)AFS financial assets 715 (120) 595Impairment on equities 949 (723) 226Provisions and accruals 10,120 7,384 17,504

Recognised in AFS reserveAFS financial assets (5,391) 3,339 (2,052)Unit Trust - Wholesale fund 188 (562) (374)

Recognised in revaluation reserveSelf-occupied property (697) - (697)

3,391 10,455 13,846

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current taxassets against current tax liabilities and when the deferred taxes relate to the same tax authority.

2017

57

Company No. 23820 W



16 DEFERRED TAXATION (CONTINUED)At 1 Charged/ At 31

January (credited) DecemberRM'000 RM'000 RM'000

2017

Group

Recognised in statement of incomeExcess of capital allowance over depreciation (3,145) 652 (2,493)AFS financial assets 1,061 (346) 715Impairment on equities 761 188 949Provisions and accruals 10,697 (577) 10,120Unrealised foreign exchange loss 845 (845) -

Recognised in AFS reserveAFS financial assets (2,733) (2,470) (5,203)

Recognised in revaluation reserveSelf-occupied property (720) 23 (697)

6,766 (3,375) 3,391

Company

Recognised in statement of incomeExcess of capital allowance over depreciation (3,145) 652 (2,493)AFS financial assets 1,061 (346) 715Impairment on equities 761 188 949Provisions and accruals 10,697 (577) 10,120Unrealised foreign exchange loss 845 (845) -

Recognised in AFS reserveAFS financial assets (2,733) (2,658) (5,391)Unit Trust - Wholesale fund 468 (280) 188

Recognised in revaluation reserveSelf-occupied property (720) 23 (697)

7,234 (3,843) 3,391

17 BORROWINGS

2018 2017RM'000 RM'000

Subordinated loan 130,000 200,000Interest payable on loan 100 1,367

130,100 201,367

Payable within 12 months 100 31,367Payable after 12 months 130,000 170,000

130,100 201,367

58

Company No. 23820 W



17 BORROWINGS (CONTINUED)

2018 2017RM'000 RM'000

Fair value 103,660 172,275

Subordinated loan - RM150,000,000

Subordinated loan - RM130,000,000

The fair value is calculated at a discount rate of 9.6% (2017: 9.5%) based on the weighted cost of capital ofthe Company, and is within Level 3 of the fair value hierarchy.

On 28 April 2010, with the approval from BNM, the Company received RM150 million subordinated loanfrom AXA S.A. and Affin Holdings Berhad for its acquisition of AMS.

This subordinated loan has a tenor of not exceeding 10 years from the drawdown date of 28 April 2010.Interest of 8% per annum for 5 years and 10% per annum after the fifth year is charged and deemedpayable every 3 months. An additional charge of 2% per annum above the prescribed rate will be imposedif the interest remained unpaid when it is ought to be paid.

The Company has obtained approval from BNM to make prepayment of the loan in stages over theremaining last 5 years to its shareholders, AXA S.A. and Affin Holdings Berhad.

On 28 March 2017, with the approval from BNM, the Company received RM130 million subordinated loanfrom AXA S.A. and Affin Holdings Berhad for the Company's working capital purposes.

This subordinated loan has a tenor of not exceeding 10 years from the drawdown date of 28 March 2017.Interest on the subordinated loan is at the rate of 6.5% and payable every 3 months.

The subordinated loan was fully settled by the Company on 15 October 2018.

59

Company No. 23820 W



17 BORROWINGS (CONTINUED)

Non-cashAt 1 charges At 31

January 2018 Cash flows Finance cost December 2018RM'000 RM'000 RM'000 RM'000

Subordinated loans 200,000 (70,000) - 130,000Finance cost payable on loan 1,367 (15,494) 14,227 100

201,367 (85,494) 14,227 130,100

Non-cashAt 1 charges At 31

January 2017 Cash flows Finance cost December 2017RM'000 RM'000 RM'000 RM'000

Subordinated loans 100,000 100,000 - 200,000Finance cost payable on loan 1,871 (17,498) 16,994 1,367

101,871 82,502 16,994 201,367

18 INSURANCE PAYABLES

2018 2017RM'000 RM'000

Due to agents and intermediaries 60,478 59,923Due to reinsurers and cedants 152,108 160,193Deposits received from reinsurers (Note 29) 21,306 21,306

233,892 241,422


There were no other issuances, cancellations, repurchases, resale and repayments of debt and equitysecurities by the Company during the financial period under review.

60

Company No. 23820 W



18 INSURANCE PAYABLES (CONTINUED)

Offsetting financial assets and financial liabilities

Gross Netamounts of amountsrecognised of financial

financial liabilitiesGross assets set presented

amounts of off in the in therecognised statements statements

financial of financial of financialliabilities position position

RM'000 RM'000 RM'000

2018Insurance payables 402,558 (168,666) 233,892

2017Insurance payables 370,185 (128,763) 241,422

19 OTHER PAYABLES

2018 2017RM'000 RM'000

Accrued expenses 25,252 33,026Provision for staff bonus 26,443 22,615Other payables 62,714 57,724Due to AXA regional offices (Note 29) 51,512 33,996

165,921 147,361


The following financial liabilities are subject to offsetting, enforceable master netting arrangements andsimilar agreements:

61

Company No. 23820 W



20 NET EARNED PREMIUMS


RM'000 RM'000 RM'000

(a) Gross earned premiums

Gross premiums (Note 15(b)) 1,462,303 1,395,051 1,395,051Change in premium liabilities (25,739) 16,508 16,508Gross earned premiums

(Note 15(b)) 1,436,564 1,411,559 1,411,559

(b) Premiums ceded

Reinsurance premiums ceded (Note 15(b)) (238,754) (243,313) (243,313)

Change in premium liabilities 6,407 (2,637) (2,637)Premiums ceded to reinsurers

(Note 15(b)) (232,347) (245,950) (245,950)

Net earned premiums 1,204,217 1,165,609 1,165,609

2017

62

Company No. 23820 W



21 INVESTMENT INCOME


RM'000 RM'000 RM'000

AFS financial assets- interest income 52,864 49,403 49,403- dividend income 15,550 513 14,578- amortisation of premiums,

net of accretion (Note 8(c)) (1,288) (1,358) (1,358)

LAR - interest income from fixed

and call deposits 33,988 46,386 31,945

Others 2,681 2,795 2,795103,795 97,739 97,363

22 REALISED GAINS AND LOSSES


RM'000 RM'000 RM'000

Property, plant and equipmentRealised gains 4 78 78

AFS financial assetsRealised gains from disposal of- equity securities quoted in

Malaysia 14,688 349 349- debt securities unquoted

in Malaysia - 6 6- wholesale unit trust fund 209 2,573 583

14,901 3,006 1,016

23 FAIR VALUE LOSSES


RM'000 RM'000 RM'000

AFS financial assets- impairment loss on equities

quoted in Malaysia (Note 8(c)) 462 809 809

2017

2017

2017

63

Company No. 23820 W



24 MANAGEMENT EXPENSES AND FINANCE COSTS

(a) Management expenses


RM'000 RM'000 RM'000

Staff salaries and bonus 94,392 86,616 86,616 Defined contribution plans 13,613 14,386 14,386 Other employee benefits 9,797 10,997 10,997 Staff costs 117,802 111,999 111,999

Chief Executive Officer- salaries and bonus 1,603 1,557 1,557 - other emoluments 524 438 438 Non-Executive Directors- fees 351 329 329 - other emoluments 70 88 88 Directors' remuneration 2,548 2,412 2,412

Auditor's remuneration*- statutory audit 304 308 308 - audit related services 9 49 49 - tax related service 73 59 59 Depreciation of property, plant and equipment (Note 5) 5,902 5,563 5,563 Amortisation of intangible asset- software (Note 6) 7,093 3,412 3,412 Rental of offices 5,759 5,551 5,551 EDP expenses 32,499 20,047 20,047 Bad debts written off 45 25 25 Allowance for impairment of

insurance receivables (Note 11) 1,601 799 799 Advertising and promotion 14,227 12,687 12,687 Bank charges 9,845 10,941 10,941 Telemarketing 1,099 2,954 2,954 Administrative service fee 2,770 9,674 9,674 Management fees 4,100 27,882 27,882 Other expenses 42,846 44,071 43,941

128,172 144,022 143,892

Total management expenses 248,522 258,433 258,303

2017

The total staff costs including the remuneration of Executive Director of the Group and Companyduring the financial year amounted to RM120,350,000 (2017: RM114,411,000).

* There was no indemnity given or insurance effected for any auditor of the Group and Companyduring the current financial year and its comparative financial year.

64

Company No. 23820 W



24 MANAGEMENT EXPENSES AND FINANCE COSTS (CONTINUED)

(a) Management expenses (continued)

Key management personnel compensation

The total remuneration (including benefits-in-kind) of the Chief Executive Officer & Directors are as follows:-

Benefits-in-Company Fees Salary Bonus Others kind Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'0002018

Chief Executive Officer- Emmanuel Jean Louis Nivet - 1,068 535 493 31 2,127

Non-Executive Directors- Tan Sri Hashim bin Meon 97 - - 18 - 115- Gen. Tan Sri Ahmad Saruji bin Che Rose 83 - - 17 - 100- Datin Zaimah binti Zakaria 87 - - 17 - 104- Yu Choong Cheong 84 - - 18 - 102

351 1,068 535 563 31 2,548

65

Company No. 23820 W




(a) Management expenses (continued)

Key management personnel compensation (continued)

Benefits-in-Group and Company Fees Salary Bonus Others kind Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'0002017

Chief Executive Officer- Emmanuel Jean Louis Nivet - 1,004 553 407 31 1,995

Non-Executive Directors- Admiral Tan Sri Mohd Ramly bin Abu Bakar 38 - - 6 - 44- Gen. Tan Sri Ahmad Saruji bin Che Rose 83 - - 26 - 109- Tan Sri Hashim bin Meon 70 - - 20 - 90- Kang Beng Hoe 54 - - 14 - 68- Yu Choong Cheong 84 - - 22 - 106

329 1,004 553 495 31 2,412

There were no indemnity given or insurance effected for any Director and officer during the current financial year and its comparative financial year.

The remuneration, including benefits-in-kind, attributable to the Chief Executive Officer of the Group and Company during the financial year amountedto RM2,127,000.00 (2017: RM1,995,000.00).

66

Company No. 23820 W




(b) Finance costs


RM'000 RM'000 RM'000

Interest expense on subordinated loan 14,227 16,994 16,994

(c) AXA Share Option Scheme

-

- valid for a maximum term of 10 years; and

-

(i) In respect of the employees of the Company

Average Averageexercise exercise

price in Euro price in Europer share Options per share Options

At 1 January 14.09 7,896 12.51 13,363Granted - - - -Exercised/expired - (3,396) - (5,467)At 31 December 14.35 4,500 14.09 7,896

2017

Pursuant to the Share Option Scheme operated by AXA, the ultimate holding corporation of theCompany, Directors and eligible employees of the Company are granted options to purchaseordinary shares of AXA. While the precise terms and conditions of each option grant may vary,current options are:

granted at a price not less than the average closing price of the ordinary share on the ParisStock Exchange during the 20 trading days preceding the date of grant;

becomes exercisable in instalments of 33.33% per year on each of the second, third andfourth anniversaries of the grant date which is generally end of March.

The Black-Scholes option pricing model was used by AXA in determining the fair values of theAXA share options.

Movements in the number of share options held by the employees of the Company and theirrelated weighted average exercise prices are as follows:

2018 2017

67

Company No. 23820 W




(c) AXA Share Option Scheme (continued)

(i) In respect of employees of the Company (continued)

Exerciseprice in Euro

Expiry date per share 2018 2017

01.4.2018 21.00 - 53820.3.2019 9.76 - 1,40821.3.2020 15.43 1,125 1,57518.3.2021 14.73 2,375 3,37516.3.2022 12.22 1,000 1,000

Total number of options 4,500 7,896

Expiry date 2018 2017

01.4.2018 - 53820.3.2019 - 1,40821.3.2020 1,125 1,57518.3.2021 2,375 3,37516.3.2022 1,000 1,000

Total number of options 4,500 7,896

Weighted average exercise price in Euro per share 14.35 14.09

Exercisable options

Share options outstanding at the end of the financial year held by the employees of theCompany have the following expiry dates and exercise prices:

Outstanding options

Exercisable share options at the end of the financial year held by the employees of theCompany have the following expiry dates:

68

Company No. 23820 W





(ii) In respect of the Executive Director of the Company only

Averageexercise

price in Europer share Options

At 1 January 18.66 4,683Exercised - -Expired - (1,281)At 31 December 13.28 3,402

Exerciseprice in Euro

Expiry date per share 2017

20.3.2019 9.76 1,15221.3.2020 15.43 1,12518.3.2021 14.73 1,125

Total number of options 3,402

The Executive Director has resigned on 23 May 2018. There is no related share optionscheme to be reported as at end of 2018.

Outstanding options

Movements in the number of share options held by the Executive Director of the Companyand the related weighted average prices are as follows:

2017

Share options outstanding at the end of the financial year held by the Executive Director ofthe Company have the following expiry dates and exercise prices:

69

Company No. 23820 W





(ii) In respect of the Executive Director of the Company only (continued)

Expiry date 2017

20.3.2019 1,15221.3.2020 1,12518.3.2021 1,125

Total number of options 3,402

Weighted average exercise price in Euro per share 13.28

(d) AXA Miles

Exercisable options

The cumulative fair value of AXA Miles for eligible employees as at 31 December 2018 amountedto RM2,284,000.00 (2017: RM2,284,000.00).

These 50 AXA Miles will be converted to 50 AXA shares at the end of the acquisition period whichfor the grant made on 16 March 2012 will be 16 March 2016 (4 years from the grant of AXAMiles), i.e. 4 years vesting period with no subsequent restriction period.

Exercisable share options outstanding at the end of the financial year held by the ExecutiveDirector of the Company have the following expiry dates:

In 2007, AXA, the ultimate holding corporation of the Company introduced the “AXA MilesProgram”. The AXA Miles Program entitles all eligible employees of AXA worldwide as at 1 July2007 to 50 AXA Miles subject to the employee meeting certain eligibility conditions.

70

Company No. 23820 W



25 TAXATION


RM'000 RM'000 RM'000

Current taxCurrent financial year 45,349 40,186 39,883Under / (Over) provision in

prior financial years 1,981 (577) (577)47,330 39,609 39,306

Deferred tax (Note 16)Origination and reversal of

temporary differences (7,678) 928 92839,652 40,537 40,234


RM'000 RM'000 RM'000

Profit before taxation 139,997 144,437 142,201

Tax calculated at the statutory rate of 24% (2017: 24%) 33,599 34,665 34,129

Tax effect of expenses not deductible for tax purposes 10,405 12,120 12,353

Non-taxable income (5,464) (3,157) (3,157)Different tax rate for offshore

insurance business (869) (2,514) (2,514)Over provision of tax

in prior financial years 1,981 (577) (577)39,652 40,537 40,234

2017

The income tax for the Shareholders’ and General funds are calculated based on the tax rate of 24%(2017: 24%) of the estimated assessable profit for the financial year.

A reconciliation of taxation applicable to profit before taxation at the statutory income tax rate to tax atthe effective tax rate is as follows:

On 1 January 2017, the Company early adopted IC Interpretation 23 for financial year beginning on orafter 1 January 2017. The IFRS Interpretations Committee developed IFRIC 23 to clarify the accounting for uncertainties in income taxes. This interpretation is to be applied to the determination of taxableprofit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there isuncertainty over income tax treatments under MFRS 112. This interpretation is effective for annualreporting periods beginning on or after 1 January 2019. However, earlier application is permitted.

2017

71

Company No. 23820 W



25 TAXATION (CONTINUED)

i)ii)iii)iv)

26 EARNINGS PER SHARE


RM'000 RM'000 RM'000

Net profit for the financial year 100,345 103,900 101,967Weighted average number of

ordinary shares in issue 119,048 119,048 119,048

Basic earnings per share (sen) 84 87 86

Disallowing the tax deduction on interest expenses;Disallowing the tax deduction on Risk-Based Capital (RBC) certification; andDisallowing the tax deduction on movement of Provision of Risk Margin for Adverse Deviation(PRAD) as part of the net claims incurred.

The amount payable to the IRB, inclusive of penalty, of RM6,843,909 has been made in January 2019.

The amount payable to the IRB of RM9,909,147 has been made in January 2018.

The Inland Revenue Board (“IRB”) had on 22 December 2017, issued to the Company notices ofadditional assessment (Form JA) for the years of assessment (“YA”) 2011 and 2012, taxing thedividend income received under section 60(8) instead of Section 4(c) of the Income Tax Act (“ITA”) anddisallowing the tax deduction on interest expenses and management expenses. The additional taxpayable by the Company, inclusive of penalty, was RM9,909,147 and similarly accrued in the financialstatements.

Subsequently on 8 January 2019, the Company received another Form JA dated 28 December 2018for YA 2013 from the IRB for the following tax adjustments:

Basic earnings per share is calculated by dividing the net profit for the financial year attributable toordinary equity holders of the Group and Company by the weighted average number of ordinary sharesin issue during the financial year:

Upon consulting its legal counsel, the Company is of the view that there are reasonable grounds andstrong justifications to challenge the basis and validity of the notices of additional assessment raisedand the penalty imposed by the IRB. The tax recoverable amount of RM15,993,549 was similarlyaccounted for as a tax recoverable, offsetting the accrued position above.

Taxing the dividend income received under section 60(8) instead of Section 4(c) of the ITA;

2017

72

Company No. 23820 W



27 OPERATING LEASE COMMITMENTS

2018 2017RM'000 RM'000

Not later than 1 year 5,539 5,072Later than 1 year and not later than 5 years 524 5,896

6,063 10,968

28 CAPITAL COMMITMENTS

2018 2017RM'000 RM'000

Capital expenditure approved but not contracted for:Property, plant and equipment - 1,854Intangible asset – software 8,121 11,291

8,121 13,145

29 RELATED PARTY TRANSACTIONS

The related parties of, and their relationship with the Group and Company, are as follows:

Country ofName of company incorporation Relationship

AXA S.A. France Ultimate holding corporationAffin Holdings Berhad Malaysia Entity which has significant influence

in the CompanyAXA Asia/Axa

Technology Services Asia France Immediate holding corporationAXA Global P&C France Subsidiary of Ultimate holding corporationGIE AXA France Subsidiary of Ultimate holding corporationMaxis GBN S.A.S. France AffiliateAXA Regional Services SAU Spain Company within AXA GroupAXA Group Solutions Asia

Limited Hong Kong Company within AXA GroupAXA Group Solutions SAS France Company within AXA Group

The Company (as lessee) have entered into non-cancellable operating lease agreements on the rentalof offices for branch operations. These leases have remaining non-cancellable lease terms not laterthan 5 years.

In addition to related party disclosures mentioned elsewhere in the financial statements, set out beloware other related party disclosures. In the normal course of business, the Group and Companyundertake various transactions with other companies deemed related parties by virtue of them beingmembers of Affin Holdings Berhad group of companies (“Affin Group”) and AXA group of companies(“AXA Group”) on agreed terms and conditions.

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29 RELATED PARTY TRANSACTIONS (CONTINUED)

Related party balances

2018 2017RM'000 RM'000

ReceivablesOutstanding premiums due from Affin Group 10,368 8,760Other receivables due from other subsidiaries of AXA Group

(Note 12) 6,377 10,336Reinsurance balances due from AXA Global P&C 16,621 -

Cash and bank balancesBank balances with a licensed bank of Affin Group 3,951 8,917

Investments Fixed deposits placed with a licensed bank of Affin Group 168,724 107,520

PayablesReinsurance balances due to:- AXA Global P&C - (61,156)- Other subsidiaries of AXA Group (9,948) (25,648)Reinsurance deposits due to AXA Global P&C (Note 18) (21,306) (21,306)Other payables due to other subsidiaries of AXA Group (Note 19) (51,512) (33,996)

Significant related party transactions

2018 2017RM'000 RM'000

Transactions with AXA Global P&C:Reinsurance premiums ceded (67,148) (74,833)Reinsurance claims recovered 78,259 20,293Commissions received 17,563 21,466

Transactions with other subsidiaries of AXA Group:Reinsurance premiums ceded (27,647) (52,346)Reinsurance claims recovered 7,059 37,038Commissions received 4,046 7,827

Transactions with GIE AXA:Management expenses incurred (502) (317)

The following is a summary of significant related party balances, which were carried out in the normalcourse of the business:

Significant related party transactions of the Group and Company with the related parties during thefinancial year are as follows:

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Significant related party transactions (continued)

2018 2017RM'000 RM'000

Transactions with AXA Regional Services SAU:Management expenses incurred (6,553) -

Transactions with AXA Group Solutions Asia Limited:Management expenses incurred (1,525) -

Transactions with AXA Group Solutions SAS:Management expenses incurred (1,113) -

Transactions with AXA Asia:Interest expense on subordinated loan (4,718) (3,555)Management expenses incurred 2,971 (38,930)

Transactions with AXA Technology Services Asia (HK) Limited:Management expenses incurred (26,093) -

Transactions with AXA S.A:Interest expense on subordinated loan (2,917) (5,439)

Transactions with Affin Group:Interest expense on subordinated loan (5,977) (6,900)Interest income earned 4,591 3,814Gross premiums received 42,333 39,096Commissions paid (4,546) (7,249)

(a)

(b)

(c)

The total remuneration of the Directors is disclosed in Note 24 to the financial statements.

The Company has reinsurance agreements (treaty and facultative) with a number of fellowsubsidiaries of AXA under which the Company agrees to cede and assume premiums andliabilities in accordance with specific reinsurance schedules. Commissions are paid and receivedon such arrangements. Such reinsurance agreements with fellow subsidiaries are entered into inthe Company’s normal course of business.

The Company entered into management service agreements with fellow subsidiaries, AXA Asiaand GIE AXA, an economic interest group whereby the fellow subsidiaries undertake to providecertain management services set out in the service agreements.

Key management personnel are those people defined as having authority and responsibility forplanning, directing and controlling the activities of the Group and Company, either directly or indirectly,including any director (Executive or Non-Executive).

The Company has a credit facility with Affin Bank Berhad. This facility has not been drawn downduring the current financial year ended 31 December 2018.

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2018 2017RM'000 RM'000

Salaries and other remuneration 8,839 9,513Benefits-in-kind 31 41

8,870 9,554

30 RISK MANAGEMENT FRAMEWORK

Insurance risks

(i) Underestimation of the frequency and/or severity of the claims;(ii) Change in legal/economic environment;(iii) Change in insured’s behavior; or(iv) Change in reinsurance rates etc.

(i) Documented underwriting guidelines and underwriting authorities;(ii) Risk management engineering and risk accumulation limits;(iii) Reinsurance is placed to minimize certain insurance risks within approved limits and security;(iv)

(v)

The Company issue contracts that transfer Insurance risk. This section summarises these risks andthe way the Company manage them.

The compensation of the other key management personnel (including Executive Directors) is asfollows:

Regular internal audit reviews are performed to ensure compliance with the Company'sguidelines and standards.

The Company underwrite various types of general insurance contracts, where majority of contracts arehaving annual coverage and premium, with the exception of short term policies in Travel and MarineCargo (single trip and single shipment policies respectively) and multi-year policies in Construction andContractor’s All Risks (project policies).

For the current financial year ended 31 December 2018, Motor and Fire classes constitute 65.50%(2017: 65.50%) of the Company’s business.

Insurance contracts transfer the risk from the policyholders to the Company. The Company receive apremium and are then liable for all the claims (as per wording) occurring between the inception dateand the expiry date of the insurance contract arising from random events.

Underestimation of this insurance risk leads to financial consequences for the Company as thepremium might not be enough to cover the costs. The causes of underestimation can be various suchas:

Due to the nature of the business, all the above mentioned elements are assessed and the followingprocedures are in place to mitigate the risks:

Claims approval and settlement authorities are clearly defined for prudent control on financialexposure; and

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30 RISK MANAGEMENT FRAMEWORK (CONTINUED)

Insurance risks (continued)

The table below sets out the concentration of the Company’s premiums by classes of business:


Motor 741,456 (25,089) 716,367 Fire

784,212

(26,540)

757,672 172,908 (94,316) 78,592

Marine, aviation and transit 57,767 (29,500) 28,267 57,231 (27,327) 29,904 Miscellaneous 446,003 (90,770) 355,233 423,456 (96,581) 326,875

1,462,303 (238,754) 1,223,549 1,395,051 (243,313) 1,151,738

(a) Key assumptions

2018 2017

The principal assumption underlying the estimation of liabilities is the future claims development will follow a similar pattern to the past claimsdevelopment experience. This includes assumptions in respect of ultimate loss ratios, case reserve, provision of risk margin for adverse deviation(“PRAD”) and claims handling expenses.

Additional qualitative judgements are used to assess the extent to which the past trends may not apply in the future, for example, isolated occurrence,changes in market factors such as public attitude to claiming, economic conditions, as well as internal factors, such as, portfolio mix, policy conditionsand claims handling procedures. Judgement is further used to assess the extent to which external factors, such as judicial decisions and governmentlegislation affect the estimates.

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(b) Sensitivity analysis

Impact on Impact on Impact onChange in gross net profit Impact on

assumptions liabilities liabilities before tax equityRM'000 RM'000 RM'000 RM'000

2018

Loss ratios for last 3 years +10% 319,164 264,950 (264,950) (201,362)Case reserve +10% 101,469 79,711 (79,711) (60,580)PRAD +10% 8,406 6,648 (6,648) (5,052)Claims handling expenses +10% 1,479 1,479 (1,479) (1,124)

2017

Loss ratios for last 3 years +10% 288,624 239,063 (239,063) (181,688)Case reserve +10% 101,182 69,325 (69,325) (52,687)PRAD +10% 8,768 6,464 (6,464) (4,913)Claims handling expenses +10% 1,340 1,340 (1,340) (1,018)

The insurance claim liabilities calculation is based on key assumptions. Variation of theseassumptions may vary the amount of claim liabilities and impact significantly the results. Asillustrated below, sensitivity analyses are carried out in order to understand how key assumptions(i.e. ultimate loss ratios of the last 3 accident years, case reserve, PRAD and claims handlingexpenses) impact the claim liability. It is worth mentioning that these 4 assumptions do notrepresent an exhaustive list but are likely to be the most important.

The analysis below is performed for reasonably possible movements in key assumptions with allother assumptions held constant, showing the impact on gross liabilities, net liabilities, profitbefore tax and equity (profit after tax).

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(c) Claims development tables

The following tables show estimates of cumulative incurred claims including both claims notified(settled or not yet settled) and IBNR for each successive accident year at each date of thestatement of financial position, together with cumulative payments to-date. The past year claimspattern is used to assess future claims pattern and therefore estimating the ultimate claims foreach accident year. Actuarial methods such as Chain Ladder but also other quantitativeinformation (such as market loss ratio benchmarks) and qualitative information (such asunderwriter’s and claim manager’s feedback) are taken into account in the assessments.

In setting provisions for claims, the Company assess the future experience and adjust the level ofreserve to cover future uncertainties such as civil law changes and general claims inflation. Riskmargin is also provided to cope with this uncertainty. The higher the uncertainty, the higher therisk margin is. This uncertainty depend on the line of business (short tail or long tail), the natureof the risks (high sum insured or low sum insured) as well as the accident year (the more recentthe accident year is, the higher the uncertainty associated with the ultimate claims experience is).

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(c) Claims development tables

Gross claims liabilities for 2018:Accident Year 2011 & prior 2012 2013 2014 2015 2016 2017 2018 Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000At the end of accident year 4,028,969 484,595 567,571 658,522 772,979 915,328 1,109,642 1,023,437 1 Year Later 4,011,619 489,768 599,057 733,577 861,265 880,322 1,091,576 2 Years Later 3,962,897 443,461 512,581 654,133 811,504 890,519 3 Years Later 3,933,369 430,949 488,362 639,181 768,086 4 Years Later 3,883,105 412,156 489,567 610,448 5 Years Later 3,851,157 409,859 479,151 6 Years Later 3,840,170 396,466 7 Years Later 3,833,086

3,833,086 396,466 479,151 610,448 768,086 890,519 1,091,576 1,023,437

2011 & prior 2012 2013 2014 2015 2016 2017 2018At the end of accident year (3,505,459) (163,615) (178,996) (235,090) (266,619) (324,455) (378,897) (369,645) 1 Year Later (3,715,680) (304,717) (347,515) (468,230) (532,526) (608,803) (782,648) 2 Years Later (3,775,621) (358,185) (394,959) (530,475) (631,676) (733,530) 3 Years Later (3,801,751) (373,143) (418,419) (555,993) (679,305) 4 Years Later (3,811,463) (381,575) (433,796) (571,344) 5 Years Later (3,817,172) (386,447) (440,149) 6 Years Later (3,817,130) (387,938) 7 Years Later (3,819,837) Cumulative payments to-date (3,819,837) (387,938) (440,149) (571,344) (679,305) (733,530) (782,648) (369,645)

13,249 8,528 39,002 39,104 88,781 156,989 308,928 653,792 1,308,373 Gross claims liabilities as per balance sheet

Current Estimate of Cumulative Claims Incurred

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(c) Claims development tables (continued)

Net claims liabilities for 2018:

Accident Year 2011 & prior 2012 2013 2014 2015 2016 2017 2018 TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At the end of accident year 2,877,204 398,493 455,531 546,602 677,873 799,911 818,888 860,3951 Year Later 2,875,299 411,824 498,415 627,210 759,168 765,359 840,8062 Years Later 2,834,500 360,512 417,280 552,285 733,969 782,1313 Years Later 2,811,477 350,361 398,120 539,904 690,5974 Years Later 2,786,157 333,741 395,559 512,3995 Years Later 2,765,247 331,565 385,3536 Years Later 2,756,658 318,7757 Years Later 2,751,457

2,751,457 318,775 385,353 512,399 690,597 782,131 840,806 860,395

2011 & prior 2012 2013 2014 2015 2016 2017 2018At the end of accident year (2,500,414) (137,889) (151,435) (201,022) (242,826) (301,954) (340,175) (332,941)1 Year Later (2,665,433) (254,939) (291,651) (385,926) (474,713) (552,030) (605,769)2 Years Later (2,709,776) (287,423) (326,529) (441,889) (553,253) (666,310)3 Years Later (2,729,206) (300,269) (344,777) (464,722) (596,734)4 Years Later (2,737,126) (309,033) (354,318) (477,771)5 Years Later (2,741,562) (312,712) (359,461)6 Years Later (2,741,660) (314,112)7 Years Later (2,743,332)Cumulative payments to-date (2,743,332) (314,112) (359,461) (477,771) (596,734) (666,310) (605,769) (332,941)

8,125 4,663 25,892 34,628 93,863 115,821 235,037 527,454 1,045,483Net claims liabilities as per balance sheet


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Gross claims liabilities for 2017:


At the end of accident year 3,123,426 418,084 484,595 567,571 658,522 772,979 915,328 1,109,6421 Year Later 3,610,885 418,248 489,768 599,057 733,577 861,265 880,3222 Years Later 3,593,371 402,104 443,461 512,581 654,133 811,5043 Years Later 3,560,793 391,488 430,949 488,362 639,1814 Years Later 3,541,881 380,667 412,156 489,5675 Years Later 3,502,438 370,484 409,8596 Years Later 3,480,673 366,2437 Years Later 3,473,927

3,473,927 366,243 409,859 489,567 639,181 811,504 880,322 1,109,642


13,686 9,354 23,412 55,771 83,188 179,828 271,519 730,745 1,367,503Gross claims liabilities as per balance sheet


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Net claims liabilities for 2017:


At the end of accident year 2,253,428 332,697 398,493 455,531 546,602 677,873 799,911 818,8881 Year Later 2,544,507 336,798 411,824 498,415 627,210 759,168 765,3592 Years Later 2,538,501 318,313 360,512 417,280 552,285 733,9693 Years Later 2,516,187 305,651 350,361 398,120 539,9044 Years Later 2,505,826 298,767 333,741 395,5595 Years Later 2,487,390 289,956 331,5656 Years Later 2,475,291 286,4287 Years Later 2,470,230

2,470,230 286,428 331,565 395,559 539,904 733,969 765,359 818,888


7,454 7,544 18,853 41,241 75,182 180,716 213,329 478,713 1,023,032


Net claims liabilities as per balance sheet

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Financial risks

Credit risk

- Reinsurer’s share of insurance liabilities- Amounts due from reinsurers’ in respect of claims already paid- Amounts due from insurance contract holders- Amounts due from insurance intermediaries, and- Counterparty risk with respect to derivative transactions and custodian

Concentration of credit risk exists when changes in geographic, economic or industry factors similarlyaffect groups of counterparties whose aggregate credit exposure is material in relation to theCompany’s total exposures. The Company’s portfolio of financial assets is diversified alonggeographic, industry and product sectors. The Company have been monitoring the concentration riskby adopting appropriate risk control measures, such as setting limit on exposures to individualcounterparty.

The Company are exposed to financial risks through their financial assets, reinsurance assets andinsurance liabilities. In particular, the key financial risk is that the proceeds from the financial assetsand reinsurance assets are not sufficient to fund the obligations arising from the insurance contracts.The important components of these financial risks are interest rate risk, equity price risk, credit risk,liquidity risk and currency risk.

The Company have exposures to credit risk, which is the risk that a counterparty will not be able to payamounts in full when due. Key areas where the Company are exposed to credit risks are:

The Company structure the levels of credit risk they accept by placing limits on the exposure to asingle counterparty, or group of counterparties. Such risks are subject to regular review by themanagement.

The Company entered into custodial agreements with Standard Chartered Bank Malaysia Berhad andAmFunds Management Berhad, whose credit rating is AAA and AA respectively whereby bothcompanies provide safekeeping services for the Company’s investment assets (equities and bonds).

Reinsurance is used to manage insurance risk. This does not, however, discharge the Company’sliability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remain liablefor the payment to the policyholder. The creditworthiness of reinsurers is considered on a regular basisby reviewing their financial strength prior to finalisation of any contract.

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Credit risk (continued)

Notsubject to

AAA AA A BBB BB to B Non-rated credit risk TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2018AFS financial assets 259,617 483,345 - - - 825,888 480 1,569,330Loans and receivables - 351,496 296,523 371,672 3,139 862 - 1,023,692Reinsurance assets 10 88,771 152,896 630 1,724 76,874 - 320,905Insurance receivables 11 15,420 51,125 1,009 287 215,096 - 282,948Other receivables - - - - - 82,198 - 82,198Cash and cash equivalents - 398 40,289 3,951 3,888 16 - 48,542

259,638 939,430 540,833 377,262 9,038 1,200,934 480 3,327,615

2017AFS financial assets 192,449 453,377 10,176 - - 1,000,574 38,985 1,695,561Loans and receivables - 277,612 403,407 184,924 3,036 1,325 - 870,304Reinsurance assets 39 19,521 251,338 1,662 1,006 122,513 - 396,079Insurance receivables 34 3,041 60,743 4 - 167,634 - 231,456Other receivables - - - - - 85,423 - 85,423Cash and cash equivalents - 379 91,596 7,747 7,084 11 - 106,817

192,522 753,930 817,260 194,337 11,126 1,377,480 38,985 3,385,640

The table below provides information regarding the credit risk exposure of the Company by classifying assets according to the recognised local orinternational rating agencies’ credit ratings of counterparties. AAA is the highest possible rating. Rated assets that fall outside the range of AAA to BBB areclassified as speculative grade and thus are considered as non-investment grade.

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Neither past Not past Past Notdue nor due but due and subject to

impaired impaired impaired credit risk TotalRM'000 RM'000 RM'000 RM'000 RM'000

2018

AFS financial assets 1,568,850 - - 480 1,569,330Loans and receivables 1,023,692 - - - 1,023,692Reinsurance assets 320,905 - - - 320,905Insurance receivables 91,495 88,599 126,647 - 306,741Allowance for impairment - (91) (23,702) - (23,793)Other receivables 82,198 - - - 82,198Cash and cash

equivalents 48,542 - - - 48,5423,135,682 88,508 102,945 480 3,327,615

2017

AFS financial assets 1,656,326 - - 39,235 1,695,561Loans and receivables 870,304 - - - 870,304Reinsurance assets 396,079 - - - 396,079Insurance receivables 58,885 85,589 109,174 - 253,648Allowance for impairment - (67) (22,125) - (22,192)Other receivables 85,423 - - - 85,423Cash and cash

equivalents 65,123 - - - 65,1233,132,140 85,522 87,049 39,235 3,343,946

To manage the credit risks of insurance receivables, the Company have established credit policies thatgovern credit approval, review and monitoring processes and impairment assessment processes. Thecredit policies also lay down the actions to be taken to handle debts overdue for a certain period oftime. There are also monthly management reports showing the ageing analysis of balance overdue,and the management will monitor the ageing analysis on a regular basis.

The following table summarizes the credit quality of financial assets and reinsurance assets at the dateof the statement of financial position.

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The ageing analysis of insurance receivables is as follows:

Neither past Not past Past Pastdue nor due but due and due and

impaired impaired impaired impaired0-2 months 0-2 months 2-6 months >6 months Total

RM'000 RM'000 RM'000 RM'000 RM'000

2018

Insurance receivables 91,495 88,599 39,158 87,489 306,741Allowance for impairment - (91) (1,438) (22,264) (23,793)

91,495 88,508 37,720 65,225 282,948

2017

Insurance receivables 58,885 85,589 42,297 66,877 253,648Allowance for impairment - (67) (1,003) (21,122) (22,192)

58,885 85,522 41,294 45,755 231,456

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Liquidity risk

Carrying Up to More than No maturityValue a year 1 - 3 years 3 - 5 years 5 years date Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'0002018AFS financial assets 1,569,330 683,458 173,750 330,391 610,116 480 1,798,195Loans and receivables 1,023,692 1,023,389 23 - 280 - 1,023,692Reinsurance assets - claims liabilities 262,890 182,622 72,415 7,307 546 - 262,890Insurance receivables 282,948 282,948 - - - - 282,948Other receivables 82,198 82,198 - - - - 82,198Cash and cash equivalents 48,542 48,542 - - - - 48,542Total 3,269,600 2,303,157 246,188 337,698 610,942 480 3,498,465

Insurance contract liabilities - claims liabilities 1,308,373 849,861 395,575 57,556 5,381 - 1,308,373Borrowings 130,100 8,450 16,923 16,900 157,456 - 199,729Insurance payables 233,892 233,892 - - - - 233,892Other payables 165,921 165,921 - - - - 165,921Total 1,838,286 1,258,124 412,498 74,456 162,837 - 1,907,915

The Company are exposed to daily calls on its available cash resources mainly from claims arising from short-term insurance contracts. Liquidity risk is therisk that cash may not be available to pay obligations when due at a reasonable time.

The Company manage liquidity risk by holding sufficient liquid assets (e.g. cash and debt securities) of appropriate quality to ensure that short term fundingrequirements are covered within prudent times. In addition, the Company regularly conduct stress-tests on its liquidity position.

The tables below summarise the estimated maturity profile of the financial assets, financial liabilities, reinsurance assets and claim liabilities based onremaining undiscounted contractual obligations.

For insurance contract liabilities and reinsurance assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognisedinsurance liabilities. Premium liabilities and the reinsurers’ share of premium liabilities have been excluded from the analysis as they do not contain anycontractual obligations.

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Liquidity risk (continued)

Carrying Up to More than No maturityValue a year 1 - 3 years 3 - 5 years 5 years date Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'0002017AFS financial assets 1,695,561 735,407 255,957 130,376 768,108 39,235 1,929,083Loans and receivables 870,304 898,023 101 - 208 - 898,332Reinsurance assets - claims liabilities 344,471 217,550 111,575 14,274 1,072 - 344,471Insurance receivables 231,456 231,456 - - - - 231,456Other receivables 85,423 85,423 - - - - 85,423Cash and cash equivalents 65,123 65,123 - - - - 65,123Total 3,292,338 2,232,982 367,633 144,650 769,388 39,235 3,553,888

Insurance contract liabilities - claims liabilities 1,367,503 836,677 462,179 59,526 9,121 - 1,367,503Borrowings 201,367 44,949 60,966 16,900 165,907 - 288,722Insurance payables 241,422 241,422 - - - - 241,422Other payables 147,361 147,361 - - - - 147,361Total 1,957,653 1,270,409 523,145 76,426 175,028 - 2,045,008

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Equity price risk

Impact on Impact Impact on Impactstatement on statement onof income equity* of income equity*

RM'000 RM'000 RM'000 RM'000

Change in market price+10% - 17 - 2,963-10% - (17) - (2,963)

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

Interest-rate risk

Foreign currency risk

The Company’s equity risk position arises from the holdings of certain equity securities listed in theBursa Malaysia Securities Berhad. The Company have been monitoring its concentration risk byadopting appropriate risk control measures.

The analysis below is performed for reasonably possible movements in equity price with all othervariables held constant, showing the impact of statement of income and equity (due to changes in fairvalue of AFS financial assets).

2018 2017

Short term insurance liabilities are not directly sensitive to the level of market interest rates, as theyare undiscounted and contractually non-interest-bearing. However, due to the time value of money andimpact of interest rates on the level of bodily injury and certain liability claims incurred by theCompany’s insurance contract holders (where an increase of interest rates would normally produce ahigher insurance liability), the Company match the liabilities by using portfolios of debt securities withmean duration of 2 - 3 years.

The Company’s interest rate risk mainly arises from investment in AFS debt securities which arerecorded at fair value. The impact on profit before tax at +/- 50 basis point change in the interest rate,with all other variables held consistent, is insignificant to the Company given that there are minimalfloating rate financial instruments.

As the Company’s business is conducted primarily in Malaysia, the financial assets are also primarilymaintained in Malaysia and denominated in the local currency as its insurance contract liabilities.

As the Company’s main foreign currency risk from recognised assets and liabilities arises fromreinsurance transactions for which the balances are expected to be settled and realised in less than ayear, the impact arising from sensitivity in foreign currency exchange rates is deemed minimal as theCompany have no significant concentration of foreign currency risk.

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31 CAPITAL MANAGEMENT PLAN AND STRUCTURE

Capital Management Plan (“CMP”)

Stress testing

The results and proposed action plan would be incorporated into the Company’s capital managementplan and be used to determine the extent by which capital will be eroded by the threats identified andthe impact on the Company’s financial health, the actions that will be required to mitigate the threatsidentified and the future financial resilience of the Company.

As per the RBC Framework issued by BNM, the Company are required to assess their capital profilesand develop appropriate plans towards developing internal capital target/plans. In line with thisrequirement, management had developed a CMP that takes into account the Company’s strategicbusiness direction and changing business environment, and adequate processes to monitor andensure the maintenance of an appropriate level of capital which commensurate with the current riskprofile of the Company. The Board had approved and adopted the CMP for implementation with effectfrom 1 January 2009.

The Risk Management Committee is responsible for the oversight of the Company’s capitalmanagement. All proposals for any deviation from capital targets or capital raising exercise must beapproved by the Risk Management Committee prior to recommendation to the Board of Directors forapproval and implementation.

Stress tests and scenario analyses are important components of a risk management framework. TheCompany are required to perform stress tests at least twice a year on the financial performance of theCompany to detect possible sources of vulnerability. The objective is to ensure that management canidentify problems early so that pre-emptive measures can be implemented at an early stage.

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31 CAPITAL MANAGEMENT PLAN AND STRUCTURE (CONTINUED)

Capital structure (continued)

2018 2017RM'000 RM'000

Eligible Tier 1 capitalShare capital (paid-up) 190,645 119,048Share premiums - 71,597Retained earnings 921,388 821,043

1,112,033 1,011,688

Tier 2 capitalAFS reserve 7,813 16,608Revaluation reserve 13,175 13,169Share option reserve 4,801 4,801Subordinated loan * 130,000 200,000

155,789 234,578

DeductionsGoodwill and intangible assets (188,736) (184,537)Deferred tax assets (13,846) (3,864)

(202,582) (188,401)

Total capital available 1,065,240 1,057,865

* Excluded accrued interest of RM100,000 (2017: RM1,367,000).

The capital structure of the Company as at 31 December 2018, as prescribed under the RBCFramework is provided below:

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32 CONTINGENT LIABILITY

33 ADDITIONAL DISCLOSURES ON MFRS 9

As a % oftotal liabilities RM'000

(a) Liabilities arising from contracts within the scopeof MFRS 4 87.8% 1,777,148

(b) Liabilities that arise from issuance or fulfilment of obligations arising from contracts above:- Subordinated loan included as Tier 2 capital underthe RBC Framework

6.4% 130,00094.2% 1,907,148

The Company’s business activity is predominantly insurance as the liabilities connected with theCompany’s insurance businesses made up of more than 90% of the Company’s total liabilities. Hence,the Company qualifies for the temporary exemption from applying MFRS 9 and will defer and adoptMFRS 9 together with MFRS 17, Insurance Contracts for the financial year beginning on or after 1January 2021.

The details of the Company's liabilities connected with insurance as at 31 December 2015 are asfollows:

In August 2016, Malaysia Competition Commission (“MyCC”) had commenced investigation underSection 15(1) of the Competition Act 2010 (“the Act”) against PIAM (Malaysian General InsuranceAssociation) and 22 member companies with regards to an alleged infringement of Section 4(2)(a) ofthe Act in relation to an agreement to fix parts trade discount and labour rates for 6 vehicle makes. On22 February 2017, MyCC issued a proposed decision to all 22 member companies, proposing toimpose collective penalty of RM213 million on the general insurance industry. PIAM and its members(including the Company) had submitted their respective Written Representation to MyCC in April 2017.The first oral representation was completed in January 2018. However, there was a change ofgovernment after the 14th general election. The Competition Committee (new Chairman wasappointed) decided to review this case. A new oral representation was agreed to be held. The casemanagement was held on 21 February 2019 and it was agreed that the oral representation from allrelevant insurers (represented by counsels) will be held on 13 and 14 May 2019 and 17 and 18 June2019 respectively.

93

Company No. 23820 W



33 ADDITIONAL DISCLOSURES ON MFRS 9 (CONTINUED)

Fair value Fair valueas at movement

31.12.2018RM'000

(a) Financial assets with contractual termsthat give rise on specified dates tocash flows that are solely payments of principal and interest on the principal amount outstanding

At fair valueMalaysian Government Securities- unquoted in Malaysia 357,021 (1,365)Corporate debt securities- unquoted in Malaysia 768,533 2,826

At amortised costLoans 862 -Fixed and call deposits 1,022,830 -Cash and cash equivalents 48,542 -

(b) Financial assets other than the above

At fair valueREITs- quoted in Malaysia - -Equity securities- quoted in Malaysia 230 (712)- unquoted in Malaysia 250 -Wholesale unit trust fund 443,296 2,576

The fair value of the Company's financial assets as at 31 December 2018 and the amount of changein the fair value during that period are as follows:

94

Company No. 23820 W



33 ADDITIONAL DISCLOSURES ON MFRS 9 (CONTINUED)

AAA AA A BBB BB to B Non-rated TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At fair valueMalaysian Government Securities- unquoted in Malaysia - - - - - 357,021 357,021Corporate debt securities- unquoted in Malaysia 259,617 483,345 - - - 25,571 768,533Equity securities- quoted in Malaysia - - - - - 230 230- unquoted in Malaysia - - - - - 250 250Wholesale unit trust fund - - - - - 443,296 443,296

At amortised costLoans - - - - - 862 862Fixed and call deposits - 351,496 296,523 371,672 3,139 - 1,022,830Cash and cash equivalents - 398 40,289 3,951 3,888 16 48,542

259,617 835,239 336,812 375,623 7,027 827,245 2,641,563

95

Head Office

AXA Affin General Insurance Berhad (23820-W)

Ground Floor Wisma Boustead 71 Jalan Raja Chulan 50200 Kuala Lumpur

Tel: (603) 2170 8282 Fax: (603) 2031 7282 E-mail: [email protected]

Website: www.axa.com.my

Branch Offices

Cheras181-4 Jalan Lancang

Taman Seri Bahtera

56100 Cheras Kuala Lumpur

Tel: (603) 9130 5688

Fax: (603) 9130 5788

Subang Jaya

Klang28 Jalan Tiara 2A/KU1

Pusat Perniagaan Bandar Baru Klang

41150 Klang Selangor

Tel: (603) 3341 7808

(603) 3342 7808

Fax: (603) 3341 6505

Petaling Jaya46B Jalan SS21/35

Damansara Utama

47400 Petaling Jaya Selangor

Tel: (603) 7727 8962

Fax: (603) 7727 9057

PuchongGF-09 IOI Business Park

Persiaran Puchong Jaya Selatan

47170 Puchong Jaya Selangor

Tel: (603) 8079 0892

(603) 8079 0893

Fax: (603) 8079 0901

PenangGround & 1st Floor Wisma AXA

1E Lebuh Penang 10200 Penang

Tel: (604) 261 6935

(604) 261 1595

(604) 261 1981

Fax: (604) 261 0688

Bukit Mertajam2996 Jalan Maju

Taman Sri Maju

14000 Bukit Mertajam

Penang

Tel: (604) 539 6808

(604) 539 7808

Fax: (604) 530 6308

Sungai Petani86 1st Floor Jalan Legenda 1

Legenda Heights

08000 Sungai Petani Kedah

Tel: (604) 423 8680

Fax: (604) 423 8660

Ipoh7 & 9 Persiaran Greentown 5

Greentown Business Centre

30450 Ipoh Perak

Tel: (605) 254 8034

(605) 241 3477

Fax: (605) 253 7078

Seremban77B & 77B-1 Lorong Haruan 5/3

Oakland Commerce Square

70300 Seremban Negeri Sembilan

Tel: (606) 633 3366

Fax: (606) 633 2882

MelakaGround Floor 61 Jalan Melaka Raya 8

Taman Melaka Raya 75000 Melaka

Tel: (606) 283 6026

(606) 281 9116

Fax: (606) 283 6023

Johor Bahru67 Jalan Molek 1/29 Taman Molek

81100 Johor Bahru Johor

Tel: (607) 352 7551

(607) 352 7552

(607) 352 7553

Fax: (607) 352 7554

Kuantan B-8008 2nd & 3rd Floor

Sri Kuantan Square

Jalan Telok Sisek

25000 Kuantan Pahang

Tel: (609) 517 7509

(609) 516 3708

Fax: (609) 514 3489

Batu Pahat35 Ground Floor Jalan Flora Utama 5

Taman Flora Utama

83000 Batu Pahat Johor

Tel: (607) 431 3569

(607) 431 3577

(607) 431 3598

Fax: (607) 431 3605

Mentakab66 1st Floor Jalan Orkid

28400 Mentakab Pahang

Tel: (609) 277 2002 / (609) 277 2003

Fax: (609) 277 2008

Kota BharuPT227 Ground & 1st Floor

Jalan Kebun Sultan

15350 Kota Bharu Kelantan

Tel: (609) 748 2054

Fax: (609) 744 4585

Kuala Terengganu18-A Dataran Panji Panji Curve

Business Park Jalan Panji Alam

21100 Kuala Terengganu Terengganu

Tel: (609) 628 5340

Fax: ( 609) 628 5345

KuchingGround & 1st Floor Sublot 3

Lot 68-71 Jalan Green

93150 Kuching Sarawak

Tel: (6082) 24 8300

Fax: (6082) 42 8148

MiriLot 582 Ground & 1st Floor

Pelita Commercial Centre

Miri Pujut Road 98000 Miri Sarawak

Tel: (6085) 41 6661

Fax: (6085) 41 9600

Sibu20 Ground Floor Jalan Wong King Huo

96000 Sibu Sarawak

Tel: (6084) 32 6993 / (6084) 32 6992

Fax: (6084) 31 0128

Kota KinabaluGround & 1st Floor Block D

Kepayan Perdana Commercial

Jalan Lintas 88200 Kota Kinabalu

Sabah

Tel: (6088) 41 3240

Fax: (6088) 41 3270

TawauTB 281 Tingkat 1 Blok 29

Fajar Komplex Jalan Haji Karim

Town Extension II 91000 Tawau Sabah

Tel: (6089) 75 6475 / (6089) 75 6476

Fax: (6089) 75 6473

113 Ground Floor Jalan SS15/5A

47500 Subang Jaya Selangor

Tel: (603) 5632 3535

Fax: (603) 5632 7177

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