CONTENTS...CONTENTS Overview 1 Insurance Made Easy 2 Vision & About Us 3 Core Values 4 Corporate Structure 5 Corporate Information 6 TPG At-A-Glance 2015 Highlights 10 Chairman’s

CONTENTS

Overview1 Insurance Made Easy 2 Vision & About Us3 Core Values4 Corporate Structure5 Corporate Information 6 TPG At-A-Glance

2015 Highlights10 Chairman’s Statement 14 Financial Highlights 15 Financial Calendar16 Investor Relations

2015 Event Highlights20 Corporate Events Highlights22 Corporate Responsibility

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Performance & Business Review 28 Message from CEO34 Segmental Performance

Highlights 40 Strategy Insights 2016

Leadership44 Board of Directors46 Profile of Board of Directors51 Profile of CEO

Reports & Financial Statements54 Statement on Corporate Governance63 Audit and Risk Committee Report66 Statement on Risk Management and

Internal Control 69 Other Statements and Disclosures73 Directors’ Report81 Financial Statements

Other Information205 Analysis of Shareholdings208 List of Properties 209 Overseas Ventures and List of

Branches212 Message to Our Shareholders

INSURANCE MADE EASy

Buy ProtectClick

Our new tagline is our commitment to simplify the process and customer experience when purchasing insurance.

Our website also doubles as an online channel to make claims. Again, the process to do so has been simplified. Customers who wish to claim on benefits need only take snapshots of their supporting documents and upload these onto the site. This helps to speed up the entire process of receiving compensations.

For those always on the go, we also have a mobile app that facilitates similar transactions.

Similarly, our agency online portal provides agents with quick access to up-to-date information, allowing them to efficiently manage their business and serve their customers better.

Besides the enhancement of customer experience through digital technology, we have also amped our offline channels to cater to the different markets that we serve. From enhancing our branches and agent distribution channels to establishing a presence in new markets, the focus is on increasing face-to-face interaction and providing physical support to customers.

1

The role of insurance has evolved to become one of the most important must-haves to safeguard ourselves from loss and uncertainty. However, there are impending issues commonly associated with insurance. That is why, we are taking a bold move to become the first mover in offering consumers what they need, minus the complexities. Our aim is to break down these barriers and turn the buying and claiming processes of this vital product into as easy as buying a product off-the-shelf.

Leveraging on our strengths, we believe that we are on the verge of creating a new generation of insurance by making insurance easy in all aspects - easy to understand, easy to purchase, easy to claim, easy to access, and easy to reach.

Our new website is easy to understand and navigate, housing complete information on our digital insurance products. Using simple, conversational language and creative icons, it is now no hassle at all for consumers to research and analyse the various plans available and make the most suitable choice to meet their needs.

As for purchasing, nothing could be easier. In just three steps – 1) select the desired plan; 2) fill in particulars; and 3) click the purchase button - customers are instantly protected with a Tune Protect plan of their choice.

TUNE PROTECT / ANNUAL REPORT 2015

TUNE proTEcT / aNNUal rEporT 20152

Vision

Leading Digital InsurerTune Protect Group Berhad will be recognised as THE Leading Digital Insurer, distinctive in its culture, processes and people with a strong customer loyalty proposition. We will operate as a high performing digital champion, consistently striving for innovation and customer service excellence in sales and service.

VISION & ABOUT US

About Us

Tune Protect Group Berhad (“TPG” or “the Company”), formerly known as Tune Ins Holdings Berhad, is a financial holding company that underwrites and reinsures non-life insurance products through its subsidiary companies. Founded in 2011, TPG has been listed on the Main Market of Bursa Malaysia since 2013. True to its vision of becoming the leading digital insurance provider, TPG has been instrumental in changing the national insurance landscape, spearheading efforts in advancing Insurance into the digital space.

From its early days, TPG has revolutionalised the way insurance is made available to consumers, seamlessly integrating travel insurance into airline ticket purchases with partner AirAsia. The Group has since evolved from offering travel insurance to underwriting more than 20 individual and corporate insurance products with the incorporation of Tune Insurance Malaysia Berhad (“TIMB”) in 2012.

After settling in with its new business models – Global Travel and General Insurance – TPG leveraged on its partnership with AirAsia to extend its footprint globally. In 2014, TPG took its first step to becoming a global brand by incorporating a joint-venture company, Tune Protect Commercial Brokerage LLC (“TPCB”), in Dubai United Arab Emirates, catering to travellers through travel management companies, airlines, and airports in Europe, Middle East, Africa and India. TPCB has since partnered a leading low-cost airline in the Middle East, Air Arabia, to offer travel insurance to its travellers through a similar business model with AirAsia.

Within ASEAN, TPG acquired 49% equity interest in an associate company in Thailand to establish Tune Insurance Public Company Limited (“TIPCL”). The company not only manages travel insurance from the second most active market in the Group’s books, but also underwrites general insurance products.

2015 marked a turning point for the Group, as it launched into a comprehensive plan to become a leading digital insurer. In September, under a rebranding initiative, it reintroduced itself as a champion in ‘Insurance Made Easy’ with products under the ‘Tune Protect’ brand name.

TPG concurrently launched its Digital Insurance business with four products on its revamped website, tuneprotect.com. The introduction of Tune Guard, Tune Drive Care, Tune EZ Term and Tune TrIP serves as a launchpad for the Group to digitalise its offerings, providing consumers with a faster and more convenient alternative to purchasing insurance versus conventional channels.

In 2015, TPG closed its books ahead of its markets despite the softened economy. Its Gross Written Premium (“GWP”) grew by 9.2% and Net Earned Premium (“NEP”) rose by 13.8%, contributing to Group profits of RM72.9 million for the full year.

Tune Protect is currently present in over 50 countries and territories worldwide. To date, TPG has grown to become a company with close to 500 employees of diverse backgrounds and nationalities.

TUNE proTEcT / aNNUal rEporT 2015 3

CORE VALUES

Simplicity

ProActiveIntegrity

Innovation

Fun Team+work

Love

Passion


CORPORATE STRUCTURE

Tune Protect Group Berhad (“TPG”)*#

(formerly known as Tune Ins Holdings Berhad)

General Insurance Global Travel Digital

Malaysia Thailand Asia Middle East Online Platform

100%Tune Insurance PCC Ltd (“TIPCC”)

100%Tune Direct Ltd (“TDL”)

100%Tune Direct (M) Sdn Bhd (“TDM”)

83.3%Tune Insurance Malaysia Berhad (“TIMB”)1

49%Tune Insurance Public Co. Ltd (“TIPCL”)2

49%Tune Protect Commercial Brokerage LLC (“TPCB”)3

100%Tune Protect Re Ltd (“TPR”)(formerly known as Tune GenRe Ltd)

Notes:1. The remaining 16.7% is owned by minority and unrelated shareholders2. The remaining 51% is owned by various Thai partners including shareholders of Osotspa Co., Ltd3. The remaining 51% is owned by Cozmo Travel LLC* Tune LifeRe Ltd (“TLR”), 100% is owned by TPG (TLR has surrendered its Labuan reinsurance license on 4 September 2015 and placed under Member’s Voluntary

Winding-up on 16 February 2016)# Tune Insurance (Labuan) Ltd (“TIL”), 80% is owned by TPG and the remaining 20% is owned by Multi-Purpose Capital Holdings Berhad (TIL has surrendered its

Labuan captive insurer’s license on 23 September 2015)


Audit And Risk CommitteeNg Soon Lai @ Ng Siek ChuanRazman Hafidz bin Abu ZarimTan Ming-Li

Nomination and Remuneration CommitteeNg Soon Lai @ Ng Siek ChuanRazman Hafidz bin Abu Zarim Datuk Kamarudin bin Meranun

Investment CommitteeRazman Hafidz bin Abu ZarimNg Soon Lai @ Ng Siek ChuanLee Siang Korn @ Lee Siang Chin

ESOS CommitteeDatuk Kamarudin bin MeranunJunior Namjick ChoTan Ah Moi

Senior Independent DirectorNg Soon Lai @ Ng Siek Chuan

Company SecretaryJasmindar Kaur A/P Sarban Singh (MAICSA 7002687)

AuditorsErnst & youngLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurWilayah Persekutuan, MalaysiaTel : (603)-7495 8000Fax : (603)-2095 5332

Registered OfficeTune Protect Group Berhad (Company No. 948454-K)(formerly known as Tune Ins Holdings Berhad)B-13-15, Level 13Menara Prima Tower BJalan PJU 1/39 Dataran Prima47301 Petaling JayaSelangor Darul Ehsan, MalaysiaTel : (603)-7491 4318Fax : (603)-7887 2318E-Mail : [email protected] : www.tuneprotect.com

Head OfficeLevel 9Wisma TUNE No. 19 Lorong DungunDamansara Heights50490 Kuala LumpurMalaysiaGeneral Line : (603)-2056 6200Fax : (603)-2092 1029

Share RegistrarsSymphony Share Registrars Sdn BhdLevel 6, Symphony HouseBlock D13, Pusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul Ehsan, MalaysiaTel : (603)-7841 8000Fax : (603)-7841 8008

Principal BankersCIMB Bank Berhad HSBC Bank Malaysia Berhad

SolicitorsFoong & Partners13-1 Menara 1MKKompleks 1 Mont’ KiaraNo 1 Jalan Kiara, Mont’ Kiara50480 Kuala LumpurTel : (603)-6419 0822Fax : (603)-6419 0823

Stock Exchange ListingMain Market Of Bursa Malaysia Securities Berhad(Listed Since 20 February 2013)(Stock Code: 5230)

CORPORATEINFORMATION

Board Of Directors

Razman Hafidz bin Abu Zarim Chairman, Independent Non-Executive Director

Tan Sri Dr. Anthony Francis Fernandes (widely known as Tan Sri Dr. Tony Fernandes) Non-Independent Non-Executive Director

Datuk Kamarudin bin Meranun Non-Independent Non-Executive Director

Ng Soon Lai @ Ng Siek Chuan Independent Non-Executive Director

Tan Ming-Li Independent Non-Executive Director


TPGAT-A-GLANCE

Operating Revenue

millionRM 480.2

million

Net Earned Premium

RM 303.8

Global Travel

Asia EMEIA

Digital BusinessLaunched Direct-to-Consumer website & mobile application

General InsuranceOutperformed The Industry

Malaysia (“TIMB”) with a GWP increase of

Thailand (“TIPCL”)more than 100% top line

growth

9%

increase in6.5%

growth in13.8%

227.3thousandmillion

8.4Policies Issued in 2015

of travel search market after launch in September 2015

6%Attracted

10-fold growth

Joint Venture – EMEIA (“TPCB”)More than 100% growth in Profit After Tax partially driven by market expansion to new markets

New channelsNew products

WinterCare

GolfCare

ShopCare

AdventureCare

Baggage Assurance

TPG 2015 Top Line Growth

More than

in digital sales

Visit Assurance


TPG AT-A-GLANCE

We are now Insurance Made Easy

We are easy to reach

Growing global partnershipsAirAsiaAirAsia XAir ArabiaCebu PacificCozmo TravelTune Group

Wide range of channelsWebsiteMobile ApplicationBusiness-to-Business (B2B)DigitalE-Commerce PartnershipsReseller

4 Continents

We are easy to access Our global presencePresent in 50 countries across Asia Pacific, Europe, Middle East, India, and Africa (“EMEIA”) regions.

Tune Protect Lifestyle Assurance Products

Tune Drive Care

Home Owner Insurance

We are easy to understand & purchase

Broad range of products

We are easy to Claim

Submit your claim online with 3 simple S-T-E-P-S

Enter Details

Scan & Upload Documents

Submit Online

1 2

3Submit online claims

Online claims with 3 simple steps E-Customer Experience Portal – enable claim online with 3 simple S-T-E-P-S & Check claim status online.

Tune Protect AirAsia Travel Insurance

50countries

+ more

21 branches across the country

Malaysia (“TIMB”)

We are easy to reachWith a presence in more than 50 countries across the globe and growing, TPG constantly expand into new markets to offer protection that is within the consumer’s reach.


CHAIRMAN’SSTATEMENT

Razman Hafidz bin Abu ZarimChairman,Independent Non-Executive Director

Dear Shareholders,

“Tune Protect has continued to perform well, growing our top and bottom lines while further expanding via new partnerships as well as the launch of a new key business. In some ways, 2015 was a ‘turning point’ for the Company as it marked a fresh beginning for us under a new name and a refreshed focus on what we have always set to do, namely make insurance easier.”

TUNE PROTECT / ANNUAL REPORT 2015 11

CHAIRMAN’S STATEMENT

“This we are doing by leveraging on the digital platform, which truly allows us to break down barriers that have traditionally existed between insurance providers and consumers, bringing us closer to our customers and allowing us to connect in ways that were not possible before.”2015 presented a tough operating environment for insurance players, and those – such as Tune Protect Group Berhad (“TPG”) – with a strong base in the travel space faced additional headwinds in the form of natural disasters such as the volcanic eruption in Bali, concerns of terrorism and the outbreak of MERS in South Korea.

yet, I am pleased to share, TPG has continued to perform well, growing our top and bottom lines while further expanding via new partnerships as well as the launch of a new key business. In some ways, 2015 was a ‘turning point’ for the Company as it marked a fresh beginning for us under a new name – which was changed from Tune Ins Holdings Berhad – and a refreshed focus on what we have always set to do, namely make insurance easier.

During the year, the Company underwent an extensive rebranding exercise which resulted in the name change, as explained above. But rather than change our overarching strategy or goals, the rebranding was a concerted effort to make clearer to the market what we are about, what gives us our edge and differentiates us from other insurance providers. This, simply, is our quest to demystify and simplify insurance; to bring it down from the heights of obscurity and make it a product – like any other – that is properly understood by the man on the street. Our ultimate goal is for everyone to realise that insurance is a basic need, one that we are making available conveniently and at prices that are affordable.

This we are doing by leveraging on the digital platform, which truly allows us to break down barriers that have traditionally existed between insurance providers and consumers, bringing us closer to our customers and allowing us to connect in ways that were not possible before. To do this, however, we first need to break down other barriers – such as the perception that insurance is too expensive in the first place, that it is too complicated to buy online or, worse, that it isn’t really needed.

Digital insurance is still a nascent sector, but we see a huge potential of this business becoming the new way of doing insurance. Furthermore, it aligns perfectly with our vision to become a leading insurance provider and in spearheading the concept of Insurance Made Easy. Naturally, our decision was to invest in digital insurance, making it one of our core businesses, and taking advantage on becoming the first mover. In our efforts to realise the potential of this business, we are investing a substantial portion of our marketing budget in campaigns to raise consumer awareness and increase confidence and acceptance of this new channel for insurance.

The fact is, once we reach tipping point in consumer awareness, the digital business will take off, catering as it does to changing behaviours and preferences of today’s consumers and especially that of Gen y. Market research shows that Gen y – which makes up about 45% of the current Malaysian population – not only prefer to conduct transactions online, they also like to feel in control of decisions, and to do their own research in advance of making purchases. All this fits with the digital model of protection that we are entering into.

Our conventional insurance business remains very important to us as it appeals to large numbers of consumers in some of the markets where we operate. In the Middle East, for example, an approximately 65% of the insurance business is conducted offline while in certain countries in ASEAN, the online penetration is minimal. Here, we continue to partner with insurance companies, travel agents, airports and other related companies to make our products available over the counter as well as online. Our two general insurance businesses – in Malaysia and Thailand – are also primarily offline and, together, contribute significantly to the Group’s revenue.



For the year 2015, I am pleased to share, TPG’s revenue increased 6.5% to RM480.2 million while our profit after tax (“PAT”) was stable at RM72.9 million. Although this is 4.2% lower than our PAT in 2014, it should be noted that in 2014 we had the benefit of one-off earnings from the sale of our Jalan Ampang building, and in 2015 we had the one-off expense related to our rebranding. Without these exceptional items, our PAT would have increased 4.2%.

On behalf of the Board, I would like to reaffirm that we remain committed to ensuring that the Company continues to grow so as to provide greater value to you, our shareholders. Other than maintain a strong financial scorecard, we believe in the importance of adhering to a high level of corporate governance as well as establishing strong relationships with our key stakeholders – our shareholders, business partners, employees and the community at large – in order to grow our brand value and market reputation.

In terms of corporate governance, we fully acknowledge the reporting requirements we need to fulfil as a Financial Holding Company (“FHC”) which came into effect for TPG in July 2015 under the Financial Services Act 2013. As an FHC governed by Bank Negara Malaysia (“BNM”), the status serves to underscore our assurance and commitment to ensure better efficiency in our operations in the months and years to come.

“We are also enhancing our contributions to society via our Corporate Responsibility platform, Tune INSpire. To us, what makes these activities special is that it allows us to get involved personally in community programmes and to contribute in a meaningful way.”

1

3 More than 80 employees and their families participated in the Walk for Autism event held at at Citta Mall in effort to create awareness on autism

1 TPG organised a booth at the ground floor of Wisma Tune to raise funds for Childhood Cancer Awareness

2 Junior Cho brought his family to support the Walk for Autism event



The Group has a healthy balance sheet with no debt. This is integral to our operating principles, and is something we are proud of maintaining.

We are also enhancing our contributions to society via our Corporate Responsibility (“CR”) platform, Tune INSpire, which focuses on children with cancer and autism. To us, what makes these activities special is that it allows us – Board of Directors, Management and employees – to get involved personally in community programmes and to contribute in a meaningful way to the underprivileged or marginalised. Because the spirit of volunteerism is critical to this, during the year we conducted a poll asking our employees how they would like to contribute to society. Using their feedback, we will be reviewing the programmes anchored through Tune INSpire in 2016, ensuring we meet our employees’ expectations while maintaining our ability to connect better with our target communities.

I would like at this juncture to express a heartfelt thanks to all our employees for their tireless efforts to see this Company grow. We have expanded at a tremendous pace since our Initial Public Offering (“IPO”) in 2013, often placing huge pressure on our people to keep the momentum going. yet they have proven their ability to meet these exacting demands, and all our successes to date can be attributed to them. I would also like to thank our very capable management, headed by Junior Cho, and my colleagues on the Board for their steady leadership. To Tan Hong Kheng, who retired from the Board on 31 December 2015, thank you for your contributions which will be missed.

To all our other stakeholders, my sincerest gratitude for your continued support.

2

3


Tune Protect Group Berhad

FINANCIALHIGHLIGHTS

Net Earned Premium( RM million )

Operating Revenue ( RM million )

241.1388.12013 2013

267.0451.12014 2014

303.8480.22015 2015

Combined Ratio( % )

Investment Income*( RM million )

19.377.6%2013 2013

20.084.2%2014 2014

23.184.9%2015 2015

Profit After Tax( RM million )

* Excluding share of Malaysian Motor Insurance Pool (“MMIP”) investment income

72.52013

76.12014

72.92015


FINANCIAL CALENDAR

Quarterly Results

Date Event

19 May 2015 Unaudited consolidated results for the 1st quarter ended 31 March 2015

18 August 2015 Unaudited consolidated results for the 2nd quarter and half-year ended 30 June 2015

16 November 2015 Unaudited consolidated results for the 3rd quarter and 9-months ended 30 September 2015

23 February 2016 Unaudited consolidated results for the 4th quarter and financial year ended 31 December 2015

Dividend

Date Event

5 May 2015 Notice of Book Closure for Final Tax Exempt Dividend under Single Tier System of 4.04 sen per Ordinary Share of RM0.10 each

5 June 2015 Date of Entitlement for Final Tax Exempt Dividend under Single Tier System of 4.04 sen per Ordinary Share of RM0.10 each

3 July 2015 Payment of Final Tax Exempt Dividend under Single Tier System of 4.04 sen per Ordinary Share of RM0.10 each

Annual General Meeting

3 June 20165th

Issuance of Annual Report 2015

29 April 2016


INVESTORRELATIONSShareholding Structure*

Tune Protect Group Berhad(formerly known as Tune Ins Holdings Berhad)

16.64%Tune Group Sdn. Bhd.1

13.65%AirAsia Berhad

5.46%Kumpulan

Wang Persaraan (Diperbadankan)

(“KWAP”)

9.40%CIMB SI II Sdn. Bhd.

54.85%Retail/

Institutional Investors

1 Shareholders: Tan Sri Dr. Anthony Francis Fernandes (50%) and Datuk Kamarudin bin Meranun (50%)* Shareholding Structure as at 4th April 2016


Quarterly Results

The Group conducted four conference calls for analysts on the same day as the announcement of its quarterly financial results. We also ensured the quarterly financial results, analyst presentations and press releases were sent to interested parties and made available immediately on the Group’s Investor Relations website quarterly.

Analyst Coverage & Investor Meetings

Senior Management engaged both domestic and international analysts as well as institutional investors through one-on-one and group meetings, conference calls, conferences as well as road shows in Malaysia and internationally throughout the year of 2015 to ensure dissemination of sound information to the investment community.

Results Announcement Dates

Type of MeetingTeleconference

Publication on Group’s Investor relations Website

IR Presentation & Financial Statements Press Release

19 May 2015Tune Protect Group Berhad 1Q15 Results √ √ √

18 August 2015 Tune Protect Group Berhad 2Q15 Results √ √ √

16 November 2015Tune Protect Group Berhad 3Q15 Results √ √ √

23 February 2016Tune Protect Group Berhad 4Q15 Results √ √ √

INVESTOR RELATIONS

No. of Analyst Recommendations

As at 31ST Dec 2015

6 Months Ago

1 year Ago

Buy/ Outperform 6 6 5

Hold 0 0 0

Sell/ Underperform 0 0 0

Analyst Recommendations

Date Events Venue

8-9 Jan 2015 Annual ASEAN Conference (Credit Suisse)

Singapore

11-12 Mar 2015 CLSA ASEAN Forum Bangkok

23 Mar 2015 18th Annual Asian Investment Conference (“AIC”) (Credit Suisse)

Hong Kong

23 April 2015 Invest Malaysia 2015 Kuala Lumpur

15-19 June 2015 CIMB Non-Deal Roadshow London & Stockholm

Conferences & RoadshowsResearch HousesCompany

CIMB Investment Bank

CLSA Securities

Credit Suisse Securities

KAF-Seagroatt & Campbell Securities

MIDF Amanah Investment Bank

RHB Research

Investor and Analyst Feedback/EnquiriesThe Group appreciates and welcomes feedback or enquiries relating to investor relations and can be contacted at [email protected]

We are easy to accessNo matter where you are in the globe, our website is accessible from any computers, laptops or even tablets. With our moblie app, you can carry us with you whenever you are on the go. We are just a touch away.


Inspiring the Best Campaign

Apr

CORPORATE EVENTS HIGHLIGHTS

“Bok Kao Lao Sib” TV Program

Press Conference ‘Motion’ Insurance

AirAsia Travel Fair 2015 #AATF2015

May

JanMar

Press Conference ‘Discover Thainess 2015’ @ Ministry of Tourism and Sport

Jun

4th Annual General Meeting

Jun


CORPORATE EVENTS HIGHLIGHTS

AirAsia Bali Beach Run 2015 @ Kuta Beach, Bali

RSC Junior Soccer Development Programme

GuangZhou AirAsia Travel Fair

TIMB Road Safety Campaign

Official Insurance Partner to Electric Run Malaysia 2015 @ Selangor Turf Club

Aug

Aug

Oct

Oct

Rebrand to Tune Protect

Sep

Sep


CORPORATERESPONSIBILITyTPG believes that all organisations have a duty to uphold the highest integrity in their dealings with their stakeholders.


CORPORATE RESPONSIBILITy

1

1 Visited to Rumah Kebajikan Anak yatim Mary, delivered 40 KidZania tickets and other small goodies to the kids

We endeavour to build strong relationships with our growing number of partners by working together to create mutually beneficial solutions - not only for us but also for the end users of our products and solutions. We also recognise the immense value that our employees bring to the company and invest in their professional as well as personal development while creating many avenues for two-way communication to nurture a strong sense of belonging and ownership of individual roles and responsibilities.

Going beyond our immediate stakeholders, we believe in giving back to the communities that surround us, particularly to underprivileged or marginalised groups that would benefit tremendously from extra support and care. In 2013, we launched our own brand of corporate social responsibility, Tune INSpire, through which we undertake numerous outreach programmes, often with the aid of volunteer employees. Most of our programmes target children whose lives we feel we can make a significant difference to in a positive and lasting manner.

Care for Children with Cancer and Autism

We have two flagship programmes under Tune INSpire, both focussed on helping children with cancer and autism through our partnerships with the National Cancer Society of Malaysia (“NCSM”) and National Autism Society of Malaysia.

2

2 Walk for Autism Awareness



In March, we invited families from NCSM to a student production of Arabian Nights at Epsom College in Sepang; while in August we donated 40 KidZania tickets to enable the young patients to enjoy a few hours at this popular edutainment spot.

In August, employees and their families participated in Relay for Life, a 16-hour overnight event organised globally to help raise funds to battle cancer. Our team set up a booth where participants were able to make origami stars, which were used to fill up bottles, placed stickers on the bottles and wrote heart-warming messages. These bottles were then given to children fighting cancer as encouragement.

In conjunction with Childhood Cancer Awareness Month in September, a table was set up on the ground floor of Wisma Tune for one day during which donations were collected. A total of RM2,339.25 was raised, which was channelled to NCSM.

Other Outreach Programmes

In addition to our flagship programmes, we support other worthy causes, often in response to suggestions by our employees. On 8 August, a group of volunteers visited an orphanage, Rumah Kebajikan Anak yatim Mary, where they spent time with the children and presented 40 KidZania tickets as well as other small goodies, to the delight of the young wards.

On 13 August, four employees took part in the Bursa Bull Run, an annual charity event organised by Bursa Malaysia through which funds raised are channelled to various deserving organisations.

1

2

2 Four employees participate in Bursa Bull Run organised by Bursa

1 Relay for Life, a 16-hour overnight event to help raise funds to battle cancer



Employee Engagement

Every quarter, management conduct Town Hall sessions to underline our goals as well as to keep employees updated on the company’s performance. Additionally, in September, a mini Town Hall was held to explain the rebranding of Tune Insurance as Tune Protect. Some of the Town Halls are accompanied by fun activities to bring employees of all levels closer together. Our Q4 Town Hall session was a case in point; it was held together with a Christmas Party at the popular karaoke venue.

A more formal endeavour to obtain feedback from employees was conducted in early September, in the form of the your Say Engagement Survey. Data collected was subsequently presented to everyone, following which volunteer employees formed a focus group and led us through a very successful recommendation and review process. Most of the initiatives and suggestions from the focus group is planned for launch in 2016.

Further reinforcing team spirit and a sense of working together towards common goals, we held a teambuilding session at the Asian Aviation Centre of Excellence (“AACE”). In November, the two-day event was attended by 45 employees. We also provide an On-boarding and Culture programme for all new recruits to introduce them to Tune Protect. Three workshops were held during the year, each attended by between six and fifteen employees.

Workforce Diversity Policy

Other than to imbue a sense of belonging to the Group, we take the professional and personal development of our employees seriously to help them realise their potential both in the workplace as well as in their personal sphere. During the year, highlights included: 1) a two-day Communications Workshop attended by 22 employees in August; and 2) a Tea Talk on the Law of Attraction in September. The former aimed to improve our employees’ communication skills while the latter provided a meaningful insight into the power of positive thinking.

2

1

2 Teambuilding to encourage bonding within the team @ AACE

1 First Town Hall As Tune Protect

We are easy to understandWhether through our multilingual websites or our use of conversational language or even the simplified buy and claims processes, Insurance is never complicated with us.


MESSAGE FROM CEO

Junior Namjick ChoChief Executive Officer

TPG continued to grow from strength to strength as we focused on delivering insurance products that are easy, accessible and relevant.


MESSAGE FROM CEO

With the passing of every year, it is only natural to look back at what we have achieved throughout the years. This year in particular, we are inclined to be more critical in evaluating our achievements as we hit a new milestone, completing the 5 year mark since we began operations. Looking back in 2011, we were known only as the insurance provider to AirAsia as that, truly, was our sole business. But how much has changed since then! Today, our business is in Global Travel, General Insurance as well as Digital Insurance. We have served more than 30 million policyholders around the world; our presence is visible in more than 50 countries and territories; and we have even changed our name – from Tune Ins Holdings Berhad to Tune Protect Group Berhad. In 2015, the year under review, we were also acknowledged by BNM as a financial holding company.

Our name change was part of a comprehensive rebranding exercise that took place in September. We introduced the word ‘Protect’ to avoid the negative overtones associated with insurance. It is, moreover, a simple word that captures the essence of our Company, which is to provide simple and relevant products to protect everyone. Our focus is to leverage on digital technology to spur our growth, conveying details of our insurance products to consumers in simplified language and offering affordable prices to become more connected with consumers. We firmly believe that by popularising digital insurance, we are creating a new paradigm in which consumers are directly in control of their insurance decisions, with Tune Protect facilitating the process by providing the products and platform.

1

2

1 Junior Cho addressing employees during the launch of the Tune Protect brand

2 The office was abuzz during the launch of Tune Protect


MESSAGE FROM CEO

Despite rebranding, we did not digress from our initial roadmap. If anything, we have strengthened our resolve to democratise insurance, making it available for and accessible to everyone, offering consumers simple, relevant and affordable products that will enhance their lives. We maintained what we had set out to do at the time of our IPO in early 2013, which was to achieve growth via five key strategies, namely:

Over the years, we have advanced in each of these strategies and we continued to make headway in 2015 which was, by any account, a very challenging year – with a soft economy worldwide, natural and politically-motivated events that dampened travel and a generally subdued consumer sentiment post implementation of the Goods and Services Tax in Malaysia.

Within this less than optimal operating environment, Tune Protect continued to pull in a very encouraging performance, surpassing that of the industry average. Not only did we grow our existing businesses, we also ventured more aggresively into Digital Insurance; entered into more partnerships and collaborations; and further expanded our product portfolio.

Financial Highlights

This year, TPG once again performed well. We increased our operating revenue by 6.5% to RM480.2 million from RM451.1 million in 2014, supported by an 9.2% increase in gross written premiums (“GWP”) and 13.8% increase in net earned premiums (“NEP”). Most of this was derived from our general insurance arm which saw healthy growth in its motor business as well as travel and fire businesses. Although our profit after tax (“PAT”) stood lower, at RM72.9 million, we are still heartened by our results, which would have been stronger if not for the one-off profit gain in 2014 from the sale of a building and expenses incurred on our rebranding during the year under review.

Segmentally, our Global Travel Business continued to contribute most significantly to our bottom line. Strong demand from our Malaysian and Thai markets led to a 22.2% growth in GWP which translated into a 15.8% increase in NEP and 15.0% increase in PAT year-on-year (“yoy”). Total sales of travel policies increased 12.6% yoy to 8.6 million policies, contributing to a 15.7% increase in operating revenue.

Our joint venture in the Middle East accelerated its growth momentum by entering into collaborations with new offline Business-to-Business (“B2B”) agents in markets such as Iraq, Lebanon, Kuwait, Oman, Qatar and the United Arab Emirates. This, coupled with sales from its airline partner Air Arabia contributed to more than double of its PAT from the year 2014.

Compared to Malaysia’s industry average growth of about 2.3%, our general insurance business under Tune Insurance Malaysia Berhad (“TIMB”) outperformed the market with a GWP increase of 9.0%, while enhancing its NEP by 12.5% to RM179.9 million mainly driven by strong top line retention. A higher premium retention ratio, especially from the motor class of business, also contributed to a 28.8% increase in PAT to RM23.0 million yoy, excluding the building sale in 2014.

Our associate company in Thailand also outperformed the industry, by achieving more than 100% top line growth, as compared to the industry average of 1.6%. This came mainly from its motor and travel businesses. However, due to higher investments in marketing and brand building initiatives, it reported a share of loss of RM2.8 million.

1) to continue to grow with our sister company, AirAsia;

2) to become a global player in travel insurance;

3) to strengthen the fundamentals of our digital business;

4) to enhance our distribution channels and optimise retention; and

5) to make strategic acquisitions both to support our online travel business as well as to grow our traditional insurance portfolio.


MESSAGE FROM CEO

Operational Highlights

A key highlight of the year, as I briefly indicated above, was to launch into our Digital business. In September, along with our rebranding, we introduced to the market a revamped Tune Protect website which had been redesigned to focus on superior customer experience. We made the site easier to navigate – for consumers to research the products we have to offer and purchase the protection plans that best meet their needs online. It also facilitates claims submissions. Not only is it quicker and more convenient to submit claims digitally, our new platform also enables us to process claims and make payments faster than before. This is supported by a fast-track claims mechanism that allow customers to submit the bare minimum supporting data to make certain claims, which we will process automatically, under our ‘auto payout’ scheme.

Our mobile app, launched in November, complements the website. In addition to the services offered, it provides consumers with very useful information when they are travelling – such as locations and contact numbers of police stations, embassies and hospitals.

Our Digital business fulfils one of the five strategies that guide Tune Protect. While we are very excited about this new business, we are also making good progress in the other four strategic pillars. In fact, the year marked a milestone in the first pillar, namely growing with AirAsia.

In 2015, we managed to capture 23 out of 24 markets that AirAsia serves, adding to our list inbound passengers from Bangladesh, Korea, Maldives, Nepal, Sri Lanka, and Taiwan. Having grown geographically with AirAsia, we are now set with the task of increasing the insurance take-up rate of its passengers such as through the enhancement of our offline ticket purchases and group chartered flights offerings.

Our business from AirAsia grew by 23% this year, which is very positive, and we would like to maintain this high growth in the years to come.

At the same time, we still seek to reduce our dependence on AirAsia by entering into more partnerships with other airlines and travel related organisations, thus becoming a ‘global player in travel insurance’. Towards this end, we are now working with key insurance partners in the Middle East through which we are expanding our distribution reach. The Europe, Middle East, India and Africa (“EMEIA”) market continues to be exciting for us as, here, we have developed a successful B2B model in which our partners manage the entire insurance infrastructure inclusive of agencies and underwriters.


In terms of enhancing our distribution channels and optimising retention, TIMB has managed to increase its retention ratio from 44% to 48% year-on-year while our Thai subsidiary, TIPCL, is increasing its network of partners to include telcos, property developers, hotels, retail outlets and electrical appliance chains.

Finally, our plans to acquire an Indonesian insurer had reached the final stages – we had entered into a binding offer and in May completed our due diligence – when, by August, we had to mutually terminate the acquisition as it became apparent that certain conditions precedent could not be met. However, we maintain that Indonesia is a very important market for us – representing the third largest contributor to our travel business – and we are still very keen to establish an underwriting presence there.

Connecting With Our Customers

A key differentiator of Tune Protect is our commitment to get closer to our customers, particularly via the digital world. In addition to offering products online we have partnered a number of e-commerce providers to embed our brand – unobtrusively – in this lifestyle of consumers. The idea is to ‘be there’ and actively remind them of insurance when they are shopping online.

We are most encouraged by the fact that, within three months of being launched, TPG attracted 6% of the online travel search market, which is quite remarkable.

Both digitally and non-digitally, we also intend to connect with our customers by providing them the most comprehensive base of benefits available, allowing them to choose products that truly cater to their needs. We are already making headway in this regard, being the first to offer an on-time arrival guarantee as part of our travel insurance benefit, which is something many passengers appreciate.

People Development

We couldn’t have achieved what we have over the years without our greatest asset - our employees. As we continue to grow, our head count increases to manage the needs of our expanding business. Realising the importance of each individual, we have put more focus to keep our people engaged, so that they feel valued by the Company and are continuously motivated to perform optimally.

Towards this end, we conduct Town Hall sessions every quarter to update our employees on our performance and other corporate developments. This year, a special Town Hall session was held specifically to explain our rebranding, its rationale and what we hope to achieve.

We value the opinions of our people and encourage them to share ideas freely. We strongly believe in two-way communication and through our open office concept, we hope to break hierarchical barriers and promote interaction across the floor. This year, for the first time, we ran an employee satisfaction survey and with the feedback received, we formed an employee focus group to put together some key recommendations to improve the office environment. Most of the initiatives suggested will be implemented in 2016.

Our ultimate aim is to create a vibrant yet cohesive work environment in which everyone feels they ‘belong’. We share our corporate culture with all new recruits via on-boarding sessions. We also encourage our employees to better themselves via continuous professional training and development.

MESSAGE FROM CEO


Outlook & Acknowledgements

The economic landscape looks set to be challenging in 2016, with no end in sight to falling oil prices and an outflow of capital due to increased interest rates in the US. All the same, we are confident of being able to pick up from where we left off in 2015 and continue to expand, with each of our businesses focusing on key areas that are critical to its onward journey.

The travel industry has proven to be extremely resilient and we are determined to ride on this burgeoning sector, expanding our presence via more tie-ups within the region, and growing our existing businesses with increased take-up rates.

As I have mentioned, we are very excited with the prospects of our Digital business. We have invested quite significantly in a number of digital marketing efforts during the year, and will continue to establish more tie-ups with e-commerce players and aggregators including those within the travel and lifestyle verticals to ingrain the Tune Protect Brand in consumers’ minds. With heightened recognition, traffic to our site will naturally increase accompanied by a greater conversion rate.

We will also look to optimising other Direct-to-Customer initiatives such as database marketing and customer loyalty programmes.

We have a wealth of customers, exceeding 18 million customers. By enhancing our customer analytics and segmentation, we will be able to offer more relevant and targeted products and promotions to them.

We anticipate the commencement of detariffication. We feel this is a positive move for TPG as the freedom of choice that it will provide to consumers is likely to lead to more product research online, bringing consumers closer to us. In preparation, we will ensure our systems, IT infrastructure and sales platform are ready to meet different segments of the market.

In other words, while 2016 is expected to be challenging, it will also present much opportunity to us and, with the continued efforts of our people, we are ready to capitalise on these. I would like to reiterate my sincere appreciation of all our employees and thank them for their full support as we have evolved in the last five years. I would also like to thank our Board of Directors for their keen oversight, which has helped to keep us on track towards achieving our vision. Finally, I would like to note my appreciation of all our business partners and associates, our shareholders and customers for their trust in us. We truly value your support, and will keep working to deliver the best to you.

MESSAGE FROM CEO


Tune Protect Re Ltd

Global Travel

SEGMENTAL PERFORMANCE HIGHLIGHTS

Tune Protect Commercial Brokerage LLC

Net Earned Premium*( RM million )

Gross Written Premium* ( RM million )

98.32013

123.9129.3 20152015

107.0105.8 20142014

Total Policies Issued (100%) ( thousand )

Profit After Tax (49%) ( RM million )

227.3 0.52015 2015

125.8^ 0.1^2014 2014

Total Policies Issued* ( million )

Profit After Tax ( RM million )

52.68.52013 2013

57.47.92014 2014

65.98.62015 2015

^ Since April 2014* Including travel policies sold via AirAsia, Cebu Pacific Air, Air Arabia, and Cozmo Travel



Global travel refers to business we obtain in partnership with airlines or travel-related agencies. Currently, the business is anchored on our partnerships with AirAsia, Malayan Insurance Company, Inc (“MICO”) for Cebu Pacific Air based in the Philippines, Air Arabia based in the United Arab Emirates (“UAE”) and a number of insurance underwriters as well as travel-related agencies in the ASEAN and EMEIA.

Although we have a geographically dispersed distribution base for our travel protection products, approximately 80% of our business is derived from Malaysia, Thailand and Indonesia. These markets began the year on a rough note, following the QZ8501 incident at the end of 2014, yet travel within the region picked up soon after and regained its momentum despite the volcanic eruption in Bali, Bangkok bombing, haze condition and concerns about terrorism marring the landscape.

If anything, these events coupled with our efforts to educate consumers about the benefits of travel protection are beginning to have a positive effect. Throughout 2015, our Global Travel business showed very healthy top and bottom line growth, ending the year with a 22% increase in Gross Written Premiums (“GWP”) and 15% increase in Profit After Tax.

Policies issued through our AirAsia partnership remain the highest contributor to the Global Travel business, accounting for 90% of total sales. In line with a goal set during our IPO to cover all markets flown by AirAsia, we extended our reach within AirAsia’s route network, launching new inbound markets in 2015 to countries such as Bangladesh, Korea, Maldives, Nepal, Sri Lanka, and Taiwan. In addition to extended geographical coverage, we increased our revenue with an expanded product portfolio, introducing a suite of lifestyle products that cover activities such as shopping, golfing, winter sports and adventure to provide travel protection to travellers with different interest profiles. We also launched a Warrant product, catering specifically to civil servants.

We also initiated a pilot project in August to activate offline channels, selling travel insurance through appointed travel agents. The pilot was a success and has since been integrated as an ongoing project to drive take-up rate.

Complementing these efforts, we have intensified our customer engagement, participating in numerous travel fairs and roadshows to enhance our presence in the travel community. We also drove continuous collaborations with lifestyle companies throughout the year, seamlessly embedding our product in the lives of our customers, to cultivate loyalty towards our travel insurance products and Tune Protect on a whole.

That non-AirAsia travel business contribution has increased to 10% is reflective of concerted and ongoing efforts to diversify the travel business portfolio.

Growth In EMEIA

Our presence in the Middle East started off with providing travel insurance to passengers flying with Air Arabia, the leading low-cost carrier in the Middle East, with routes to over 20 countries in India, MENA as well as Europe. Under our comprehensive travel protection plan, travellers are covered for personal accidents, medical treatment, travel inconvenience, baggage delay or loss, home away protection, mugging, evacuation and repatriation. It also provides for 24-hour emergency assistance. Tune Protect Travel Assurance plans are compliant with Schengen requirements.

During the year, we launched 6 markets under our partnership with Air Arabia namely Armenia, Iraq, Jordan, Kingdom of Saudi Arabia, Lebanon, and Pakistan. Our B2B model or the travel agency segment has also grown significantly since its launch in June 2015. Within the B2B segment we connect to international travellers in 8 markets: Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, and UAE.



Cebu Pacific Expands Its Base

Our partnership with MICO to provide travel insurance to Cebu Pacific Air’s international passengers has grown with the launch of new markets and product enhancement for existing markets. On 1 June 2015, we went live with online products for outbound travelers departing from UAE, Qatar and Kuwait. These initiatives has resulted in 59% increase in sales yoy.

Increasing Our Product Range

We seek to continuously offer new and lifestyle oriented products as this helps us to grow our business. Accordingly, we launched four lifestyle travel protection products that caters to the different reasons people travel – shopping, golfing, winter sports and adventure.

ShopSafe or ShopCare protects shoppers from loss of money from fraudulent credit card transactions and forceful ATM withdrawals, among others. GolfPro or GolfCare is a comprehensive package for golfing enthusiasts, covering all their needs from medical benefits from golfing mishaps to protection against loss of golfing equipment. WinterShield or WinterCare caters specifically to those going on skiing holidays and provides coverage for medical expenses for any injury, reimbursement of ski school fees, and any inconvenience caused due to piste (ski slope) closure. AdventureEz or AdventureCare enables adrenaline junkies to enjoy thrill-seeking adventures without having to worry about the cost of treatment for any injury sustained, or loss of equipment. The plan also covers them for accidental bodily injury to a third party. Taking into account the fact that holidaymakers tend to travel with their families, these benefits can be extended to the insured’s loved ones.

TPG also launched a Family Plan to protect entire families against personal accidents, medical emergencies and travel inconveniences, among others.

Outlook

We expect travel to continue to grow in 2016. The ASEAN travel market is expected to boom supported by open skies policies, mandatory travel insurance, expanded capacity and routes, and aggressive fare pricing strategies. Prospects for Malaysia, in particular, looks very positive as a result of the weak Ringgit and government initiatives to promote tourism, including implementation of the e-Visa for Chinese tourists by mid-2016.

To increase the take-up rate of travel insurance among AirAsia passengers, we plan to embed insurance in business class and Premium flex tickets, as well as in charter flights organised by the airline group. In addition, we are launching a number of initiatives targetted at brick and mortar travel agents who account for 20-30% of sales in markets such as Indonesia and the Philippines. We will continue to collaborate with lifestyle companies as part of our loyalty programme to provide value add to travel policyholders.

At the same time, we will keep a keen eye on growing our non-AirAsia business by expanding our distribution channels, focusing in particular on more B2B partnership. Discussions are ongoing with a few airlines and we hope to be able to bring on board another airline partner next year.

While increasing our distribution channels, we also seek to further expand our product portfolio, and will look into introducing baggage protection in markets outside of EMEIA.



Tune Insurance Malaysia Berhad

General Insurance

Tune Insurance Public Company Limited

Net Earned Premium( RM million )

Gross Written Premium ( RM million )

340.32013

2014

2015

142.72013

380.0 2014 160.0

414.2 2015 179.9

Profit After Tax ( RM million )

2013 26.1

2014 22.2

2015 23.0

Gross Written Premium (100%) (RM million )

Profit/(Loss) After Tax (49%) ( RM million )

2014 19.9* 2014 3.8*

2015 71.8 (2.8)2015

* Since acquisition in May 2014



TPG has two general insurance businesses – Tune Insurance Malaysia Berhad (“TIMB”) as well as an associate company, Tune Insurance Public Company Limited (“TIPCL”), located in Thailand. Both offer a range of products while also underwriting travel businesses in their respective countries.

Despite the soft economy in Malaysia, TIMB continued to perform well, its GWP growth surpassing that of the industry average, driven primarily by fire, engineering, motor, medical, Personal Accident (“PA”) and travel classes of business. The company’s Net Earned Premium also increased, by a substantial 12.5%, due to higher retention within the motor portfolio and growth in the fire and travel businesses.

Further building on its fundamentals, TIMB has increased its business retention ratio from about 40% over the last few years to 48%. It also has plans to negotiate increase in its reinsurance capacity, in order to be able to write for larger businesses.

TIMB managed to grow its topline premiums in tandem with its five-year plan – increasing the total number of policies sold by 20% from 300,000 in 2014 to about 370,000 in 2015. This was achieved while staying true to its targeted portfolio mix.

An important component of the portfolio mix is motor, which contributes to a healthy 30% of its GWP. Within this portfolio itself, TIMB has been able to bring in quality franchise businesses with healthy underwriting margins. In 2015, it successfully negotiated to be on the panel of insurers for three car franchisers, and was allotted a wider piece of business from a local distributor, all focusing on the profitable new car segment.

A key accomplishment during the year was being ranked third best among the panel insurers of the country’s largest automobile player in terms of key performance indicators such as volume of new business, growth of business and penetration rate.

Apart from enhancing its motor franchise business, TIMB launched a PA plan for young footballers aged 7-15 years. Meanwhile, its foreign workers insurance business, introduced in 2014, has increased by 18% in premium to RM10.6 million.

To support its operations, TIMB continued to grow its sales team focusing on productivity rather than volume, recruiting 260 new agents which brought the total agency force to a decent 1,300. At the same time, it further expanded its network by opening new branches in strategic locations in Alor Setar, Kedah and Bukit Mertajam, Penang.

In Thailand, TIPCL continued to grow steadily with the introduction of new products, marketing initiatives and partnerships. While enhancing its agency channel, the company also entered into more collaborations with telco operators, property developers, hotels, well-known retail outlets as well as electrical appliance chains.

A key focus in Thailand was to grow the Tune Protect brand, and a significant budget was devoted to strategic marketing efforts. These were not in vain as evidenced by TIPCL being chosen by the Thai Government to be one of seven non-life insurance companies to offer rice farmers’ protection from losses due to floods, drought, storms, pests and disease. TIPCL was the smallest among the consortium of insurance providers, yet has been given equal responsibility as the others in terms of service delivery, reflecting a high level of trust that the company has attained in the country.

TIPCL also rolled out a travel insurance plan for roaming subscribers through a strategic partnership with Advanced Info Service (“AIS”), Thailand’s leading mobile phone network operator. Under the collaboration, AIS customers who sign up for international roaming services will get flight accident coverage up to 300,000 Baht from TIPCL.

Meanwhile it continued to revolutionise and expand its distribution channel. A key success has been to enable simple mass market products to be made available through Boonterm kiosks. In 2014, TIPCL created a first by making its products accessible to Thais via these kiosks, which number more than 45,000 and can be found throughout the country. Healthy sales and publicity garnered from this channel has prompted TIPCL to explore ways of driving further growth from it.

Outlook

Both our Malaysian and Thai general businesses have their roadmaps charted out for them, and will continue to grow their businesses by expanding their product portfolios and entering into synergistic relationships with a broader range of service, retail and corporate partners.

In Malaysia, the industry is awaiting a milestone change, namely detariffication, which was initially slated to take effect as of 1 January 2016. Although the effective date has been postponed in light of market readability, we have started internal programmes to understand the effects of detarriffication and anticipate its impact on our customers as well as our business. We have commenced an internal improvement exercise, enhancing our systems, platforms and underwriting engines to ensure that we are ready come detarriffication. While bigger players have the advantage of scale to push down their prices, our subsidiaries have an edge of Big Data, particularly from our large travel and partner base. Efforts will be made to analyse and cross-sell the right packages to segments of these customers.



Digital or Direct to ConsumerImagine missing a connecting flight because the first leg of your journey was delayed. Imagine having to spend three hours in the airport with nothing to do. It’s not a very nice thought. But now imagine that you purchased Tune TrIP from Tune Protect prior to your journey and have downloaded our mobile app too. Suddenly, the situation takes on a different slant. you can easily get a letter from the airline responsible for the delay, take a snapshot of it on your mobile phone and submit this to our online portal. Within days, you should be reimbursed for the flight delay.

Easy, isn’t it? That is precisely what our Digital business aims to do. By connecting directly with customers – removing layers of intermediaries – we are able to make protection much more convenient. It is much easier to find a product that fits your needs online, purchase it and make claims, if need be, no matter where you are.

In September 2015, along with our rebranding, we introduced a brand new website which is easier to navigate; and we launched a mobile app to make our products and services more accessible.

The results were clear to see. Within three months, our site was attracting 6% of all travel related searches online, and from selling an average of 10 policies a month before, we started seeing about 600 conversions a month.

Part of the sudden increase in traffic to our portal is the marketing effort that has gone into announcing our new brand. Creative print ads as well as ads on billboards and buses have helped to build a strong image of Tune Protect, and create awareness of the products that we offer online.

To date, four products designed with the Malaysian consumer in mind have been made available – Tune Guard, Tune Drive Care, Tune EZ Term and Tune TrIP – each customised to meet people's most basic needs. Tune Guard caters to victims of snatch theft and robberies; Tune Drive Care provides car passenger coverage; Tune EZ Term provides affordable and simple life insurance protection for a fixed five-year term; and Tune TrIP is a standalone travel insurance that provides ‘before, during and after’ benefits across all countries.

Complementing these products, the mobile app enables customers to locate the nearest police station during their travels, or the nearest hospital, and the local embassy. It also provides numbers to call for emergency assistance.

Various innovative strategies have been deployed to market our online offerings and inculcate loyalty, most of them in partnerships with other online travel-related enterprises. One such partnerships is with a leading national ride sharing provider, Grab. Passengers who use this service to get to the airport receive a link on their smart devices offering them a promotion on TuneTrIP. Although the volume of business from this venture is small, the conversion rate is much higher than the general online advertising conversion rate that averages between 1.5%-2.0%.

Our strategy here is to embed ourselves into the digital lifestyle of our customers. We have formed partnerships with various other online distribution channels, including hotels and shopping portals, as part of our loyalty proposition to our valued customers.

Outlook

We believe there is great potential to further grow the Digital business and are laying the ground for it to truly take off. Various partnerships are on the cards, including popular online travel and accommodation booking agency, to position ourselves more prominently on the digital front. We will also be launching new products that have been carefully thought to meet consumers’ needs, such as standalone protection for baggage and travel insurance on-the-go. The latter, based on a prepaid card concept, will be another first for the market. We started developing the product in 2015 and are currently working through its mechanics.

In creating the blueprint for new products our team looks at trends in markets where digital insurance is more advanced, and explores ways in which some of these service offerings can be adapted successfully to the local market. One emerging trend that excites us is usage-based insurance, which is something we may consider as it fits perfectly with our philosophy of providing consumers with only what they need, without the frills and excesses that increase premiums unnecessarily.

In 2016, we will also be strengthening and revamping our mobile app to make it more useful and relevant. Where it makes business sense, we will continue to work with aggregators and be an innovator/disrupter in the fintech space.

The confidence we have in our Digital market is reflected in the fact that we have put aside a considerable amount of our marketing budget for this business in 2016. We believe that such investment is justified as we expect to see greater contribution from Digital to the Group’s financial performance from next year onwards.


STRATEGy INSIGHTS 2016

Our 5 strategic pillars is reaffirmed as we focus on our deliverables:

Continue to Expand with AirAsia

Strategies:

Deliverables:

A Recognised Global Player in Travel Insurance

• BeinallmarketswhereAirAsiaoperatesand be quick to set up in new markets which the airline ventures into

• Launch impactful global marketingcampaigns coupled with customized localised marketing activities to increase awareness and take up rate across all markets

• Accelerate new airline partnershipsand tie ups with online travel agencies and other travel related channels/partners

• Offer product variation which arelifestyle oriented and embed insurance with flight seats to cater to a more diverse segment of travelers

• Build customer retention and repeatbusiness through loyalty propositions and regular customer touch points

• Diversify geographically and expandinto new territories whether through joint ventures, commercial partnerships or market expansion

• Replicate success of AirAsia TravelInsurance business model, take up rate and marketing initiatives with other airline partners

• AccelerateEMEIAjointventuregrowththrough new market entry, activating and growing offline B2B distribution channels


STRATEGy INSIGHTS 2016

• Focus on innovation cutting acrossnew products, channels and customer experience across ASEAN, to benefit customers, agents, intermediaries and partners, while enhancing value to our stakeholders

• Strengthen sales productivity andexpand distribution networks via agency, branch, franchise, broker and corporate tie-ups

• Collaboratewithstrategice-commercepartners to offer the best propositions to our both customers

• Continueto leverageonsynergiesofAirAsia and Tune Group of Companies as well as with our key shareholders’ network in Thailand.

• ActivelylookforacquisitioninIndonesiaand meaningful partnerships where opportunity arises

• Continuousenhancementofourdirectto consumer platform making it easy, convenient, relevant and value-based with multiple choice of products and offers

• Improveprofitabilityandunderwritingmargins, as well as maintain a well-balanced product portfolio mix

• ThailandandEMEIAbusinessestobeaccretive and contribute decently to Group earnings

The Next ASEAN’s Digital Insurance Leader

Write Profitable General Insurance Lines

Strategic Acquisitions to Grow Our ASEAN Footprint and Support Our Digital Expansion

We are easy to purchaseChoose what you want, when you want it. Our direct-to-consumer platforms help you get protected in just three simple steps - Click, Buy, Protect. Alternatively, reach out to any of our agents and they will help you get protected.


BOARD OFDIRECTORS

Razman Hafidz bin Abu ZarimChairman, Independent Non-Executive Director

Tan Sri Dr. Anthony Francis Fernandes Non-Independent Non-Executive Director


BOARD OF DIRECTORS

Datuk Kamarudin bin MeranunNon-Independent Non-Executive Director

Tan Ming-LiIndependent Non-Executive Director

Ng Soon Lai @ Ng Siek ChuanIndependent Non-Executive Director


Razman Hafidz bin Abu Zarim was appointed to the Board on 5 October 2012 as our Chairman, Independent Non-Executive Director. He is a member of the Audit & Risk Committee, Nomination & Remuneration Committee and Investment Committee.

He graduated with a joint-honours degree in Economics and Accounting, BSc (“Econs”) from University College, Cardiff, Wales, in 1977. He is a fellow member of the Institute of Chartered Accountants in England & Wales and a member of the Malaysian Institute of Accountants. He has more than 35 years of experience in the fields of corporate restructuring, mergers and acquisitions, corporate finance, management consulting and auditing.

He started his career with Touche Ross & Co., Chartered Accountants, London, England in 1977 as an Audit Junior. He later joined Hacker young, Chartered Accountants, London, England, in 1984 as an Audit Assistant Manager, where he was subsequently admitted as an Audit Partner in 1987. He held the position until 1989.

In 1989, he returned to Malaysia as an Audit Partner of Price Waterhouse and later became Partner-in-Charge of Price Waterhouse’s Management Consulting Practice and joined the Executive Committee of the firm. He left his position as the Partner-in-Charge of Price Waterhouse’s Management Consulting Practice at the end of 1993. In 1994 he established Norush Sdn. Bhd., an investment holding and business advisory firm, where he remains as Chairman.

He holds independent directorships in Panasonic Manufacturing Malaysia Berhad and Hartalega Holdings Berhad, public companies listed on Bursa Malaysia Securities Berhad, and in Linde Malaysia Holdings Berhad, a non-listed public entity. He also sits on the boards of several private limited companies.

Razman Hafidz bin Abu Zarim

PROFILE OF BOARD OF DIRECTORS

Malaysian, Aged 60

Chairman, Independent Non-Executive Director


Tan Sri Dr. Tony Fernandes was appointed as a Non-Independent Non-Executive Director of the Company on 5 October 2012.

He graduated with a Bachelor of Science in Accounting and Finance from the London School of Economics in 1987. He was admitted as an Associate Member of the Association of Chartered Certified Accountants in 1991, and became a Fellow Member in 1996. He also received an Honorary Doctorate of Business Innovation from Universiti Teknologi Malaysia (“UTM”) in March 2010 for his role in changing the face of aviation and benefitting travellers and economies locally and in the region. He was also a recipient of the Masterclass Global CEO of the year award at the 2nd Malaysia Business Leadership Award (“MBLA”) 2010 ceremony for his contributions to the country’s economy.

He was the Financial Controller at Virgin Communications Limited in London from 1987 to 1989 and subsequently, the Senior Financial Analyst at Warner Music International Services Limited in London from 1989 to 1992. He was later appointed as the Managing Director at Warner Music (Malaysia) Sdn Bhd in 1992 and held the position until 1996. He was later appointed by Warner Music Group Corp. as the Regional Managing Director, Asean from 1996 to 1999 and subsequently, Vice President, Asean from 1999 to 2001.

In 2001, he joined AirAsia Berhad as the Group Chief Executive Officer until June 2012 when he was re-designated as a Non-Independent Non-Executive Director of AirAsia Berhad and Group Chief Executive Officer of AirAsia ASEAN Inc. On 6 November 2013, he was later re-designated as the Executive Director and Group Chief Executive Officer of AirAsia Berhad.

He is a shareholder of the Company and also the co-founder and director of Tune Group Sdn Bhd. He is a Non-Independent Non-Executive Director of AirAsia X Berhad.

Tan Sri Dr. Anthony Francis Fernandes (“Tan Sri Dr. Tony Fernandes”)

Non-Independent Non-Executive Director


Malaysian, Aged 52


Datuk Kamarudin bin Meranun (“Datuk Kamarudin”)

Non-Independent Non-Executive Director

Malaysian, Aged 54

Datuk Kamarudin was appointed as a Non-Independent Non-Executive Director of the Company on 11 March 2013. He is also the Chairman of Employees’ Share Option Scheme (“ESOS”) Committee and a member of the Nomination & Remuneration Committee.

He received a Diploma in Actuarial Science from Universiti Teknologi MARA (“UiTM”) and was named the “Best Actuarial Student” by the Life Insurance Institute of Malaysia in 1983. He further received a Bachelor of Science with Distinction (Magna Cum Laude) majoring in Finance in 1986, and a Master of Business Administration in 1987 from Central Michigan University.

He worked in Arab-Malaysian Merchant Bank from 1988 to 1993 as a Portfolio Manager, managing both institutional and high net-worth individual clients’ investment funds. In 1994, he was appointed as an Executive Director of Innosabah Capital Management Sdn Bhd, a subsidiary of Innosabah Securities Sdn Bhd. He subsequently acquired the shares of the joint venture partner of Innosabah Capital Management Sdn Bhd, which was later renamed Intrinsic Capital Management Sdn Bhd and remains as an Executive Director to date.

In 2001, he joined AirAsia Berhad as the Deputy Group Chief Executive Officer and President of Group Finance, Treasury Corporate Finance and Legal until June 2012 when he was re-designated as a Non-Independent Non-Executive Director of AirAsia Berhad and appointed as Deputy Group Chief Executive Officer of AirAsia ASEAN Inc. He was later re-designated as a Non-Independent Executive Chairman of AirAsia Berhad on 6 November 2013.

He is a shareholder of the Company and also the co-founder and director of Tune Group Sdn Bhd. He is a Non-Independent Non-Executive Director of AirAsia X Berhad. He is also a Director of yayasan Pendidikan Titiwangsa.



Ng Soon Lai @ Ng Siek Chuan was appointed to the Board on 5 October 2012 as our Independent Non-Executive Director. He is the Chairman of the Audit & Risk and Nomination & Remuneration Committees. He is also a member of the Investment Committee. Other than that, he is also the Senior Independent Director of the Company.

He is a fellow of the Institute of Chartered Accountants in England & Wales. He has had several years of experience in the accounting profession with Coopers & Lybrand in London & Kuala Lumpur before moving on to the financial sector in 1980.

Prior to joining Alliance Bank in July 1991 as General Manager of Credit, he had served in various positions in a leading local merchant Bank & finance company. He was appointed as Chief Executive Director of Alliance Bank Malaysia Berhad on 21 January 1994 and to the Board of Alliance Merchant Bank Berhad on 22 July 2002 until his resignation on 31 August 2005. Mr. Ng is also an Independent Director of Deutsche Bank (Malaysia) Berhad, Hiap Teck Venture Berhad and ELK-Desa Resources Berhad.

Ng Soon Lai @ Ng Siek Chuan

Independent Non-Executive Director

Malaysian, Aged 62



Tan Ming-Li


Notes: (1) None of the Directors has any family relationship with any

other director and/or major shareholder of TPG (2) None of the Directors has any conflict of interest with TPG (3) None of the Directors has been convicted for offences

within the past 10 years other than traffic offences, if any

Tan Ming-Li, was appointed as an Independent Non-Executive Director of the Company on 1 April 2014. She is also a member of the Audit & Risk Committee.

She is a graduate from the University of Melbourne, Australia with a double degree in Law (Hons) and Science.

She is currently a partner in the legal firm of Cheang & Ariff and has been in legal practice since 1994. She specialises in corporate and securities law where she is principally involved in advising on capital market transactions, mergers and acquisitions, corporate restructuring as well as corporate finance related work. Prior to joining Cheang & Ariff in 1997, she practiced law in the firm of Allen & Gledhill, Kuala Lumpur, in the areas of corporate and commercial litigation and intellectual property. She is also an Independent Non-Executive Director of BP Plastics Holding Bhd and Ikhmas Jaya Group Berhad.

Independent Non-Executive Director

Malaysian, Aged 47


PROFILE OF CEO

Junior Namjick Cho (“Junior”) was appointed as the Chief Executive Officer (“CEO”) of TPG on 27 January 2015. He is a member of Employees’ Share Option Scheme Committee and also holds directorships in our subsidiaries - TIL, TPR, and TIMB; associate company - TIPCL; and joint-venture company - TPCB.

He graduated with a Bachelor of Science in Mechanical Engineering from Columbia University in 1993 and a Certificate in Finance and Capital Market from New york Institute of Finance in 1995. Prior to joining TPG, he was the Chief Executive Advisor for AirAsia Philippines, leading the strategic integration of AirAsia Philippines and Zest Airway across Commercial, Operations & Engineering disciplines.

He started his career with Accenture as part of the Financial Services Practice for almost 12 years where he was based in New york, United States of America and Seoul, South Korea. His career subsequently gravitated more towards Asia from 2000 to 2012, within the insurance and financial services specializing in consulting sectors. In 2006, as part of Accenture Life Insurance Solutions Group, he led a team to manage a $20m operational

reengineering change programme across Mexico, China, Korea and Japan for a global financial service client. He worked in MetLife International for 4 years as the Regional Chief Information Officer for Asia and also headed the Strategic Program Office for the large ops re-engineering change programme.

In 2010, he served as the Head of Market Management for Allianz Korea, spear heading their marketing, products, customer strategy and wealth management divisions. In 2011, he assumed the Vice President and Chief Marketing Officer positions at CIGNA International in Korea, leading the marketing/branding strategy, strategic planning and research, product development, e-commerce and direct marketing sales channels, and customer value management teams. This line of business contributed to over 40% of the total premiums for the company.

He does not hold any directorship in public companies and has no family relationship with any other director and/or major shareholder of TPG and has no conflict of interest with TPG. He has not been convicted for any offences within the past 10 years, other than traffic offences, if any. He does not hold any shares in TPG.

JUNIOR NAMJICK CHO

Chief Executive Officer of TPGTrinidad and Tobago, Aged 44

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STATEMENT ON CORPORATE GOVERNANCE The Board of Directors (“Board”) of Tune Protect Group Berhad (“TPG” or “the Company”) is committed to continuously improve the effective implementation of the principles and best practices of Corporate Governance, as provided in the Malaysian Code on Corporate Governance (“MCCG 2012”) and the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

TPG’s policy is to implement all those principles and best practices in all activities undertaken by the Group. The commitment to high standards of corporate governance includes compliance with guidelines and recommendations in the conduct of business activities within the Group. Set out below is a statement on how TPG has applied the principles and adopted best practices of Corporate Governance, as prescribed under MCCG 2012 and Bursa Malaysia’s MMLR during the financial year ended 31 December 2015.

THE TPG BOARDRoles and ResponsibilitiesThe Board is accountable to shareholders for achieving the Group’s strategic objectives, for the delivery of strong and sustainable performance and for ensuring that it operates within its risk limits. It does so by complying with all the relevant Acts and Regulations, including adopting the principles and best practices given in MCCG 2012 and Bursa Malaysia’s MMLR.

The Board of TPG retains full and effective control over the Group’s affairs and is the principal decision-making forum in providing stewardship and entrepreneurial leadership, either directly, through its Board Committees or by delegating authority to the Chief Executive Officer (“CEO”) and his team.

The Group’s regulated entities are responsible to the relevant regulatory bodies of the respective countries, such as the Malaysian Central Bank (“Bank Negara Malaysia” or “BNM”), for entities in Malaysia, except Labuan, the Labuan Financial Services Authority for Labuan based entities, and the Office of Insurance Commission for Thailand entities, for ensuring compliance with the authorities’ regulations. The entities are also responsible to ensure that dealings with the relevant authorities are handled in a constructive and transparent manner.

The Board’s Terms of Reference are listed below:

1. Group strategies, policies and oversight

• Reviewandapprovestrategies,businessplansandsignificantpolicies for TPG and monitor management’s performance in implementing them;

• Set corporate values and clear lines of responsibility andaccountability, including governance systems and processes that are communicated throughout TPG;

• Formaliseethicalstandardsthroughacodeofconductwhichwill be applicable throughout TPG and ensure the compliance of this code of conduct;

• EnsurethatTPG’sstrategiespromotesustainability;• Reviewandapproveproposals for theallocationofcapital

and other resources within TPG;• Establishandensuretheeffectivefunctioningandmonitoring

of the Audit and Risk, Nomination and Remuneration, Investment and Employees’ Share Option Scheme (“ESOS”) committees, and any other committees as deemed necessary by the Board, and to delegate appropriate authority and terms of reference to such committees established by the Board; and

• Reviewandagree to changes in the termsof referenceofTPG’s Board and committees established by the Board.

2. Interests of External Stakeholders

• Ensure full compliance and to carry out the duties of theBoard in accordance with the relevant provisions of the MMLR, BNM’s guidelines on Financial Holding Companies, the Capital Markets and Services Act 2007, the Companies Act, 1965 (“CA 1965”) and all applicable laws, regulations and guidelines including but not limited to the director’s duties contained in Part V, Division 2 of the CA 1965;

• EnsurethatTPGhasabeneficialinfluenceontheeconomicwell-being of its community; and

• Ensure that TPG has in place a policy and/or proceduresto enable effective communication with, and appropriate disclosure to, its shareholders and other stakeholders; and that its shareholders have access to information about TPG.

3. Operations, Risk Management and Internal Control Systems

• OverseetheconductofTPG’sbusinessandensurethatthemanagement of TPG is competent and effective;

• Ensurethatthereshallbeunrestrictedaccesstoindependentadvice or expert advice at TPG’s expense in furtherance of the Board’s duties (whether as a Board or a director in his/her individual capacity);


STATEMENT ON CORPORATE GOVERNANCE

• EnsurethattheoperationsofTPGareconductedprudently,and within the framework of relevant laws and regulations;

• Establish,approve, review,andmonitorTPG’s riskappetiteand comprehensive risk management policies, processes and infrastructure, and receive regular reports therein;

• Approvedelegated authority for expenditure, lending, andother risk exposures;

• Consider emerging issues which may be material to thebusiness and affairs of TPG;

• KeepunderreviewandmaintainTPG’scapitalandliquiditypositions;

• Review and approve TPG’s annual capital and revenuebudgets (and any material changes thereto);

• EnsurethattheBoardhasadequateproceduresinplacetoreceive reports periodically and/or on a timely basis from TPG’s management that would provide the Board with a reasonable basis to make proper judgement on an ongoing basis as to the financial position and business prospects of TPG;

• Approve TPG’s annual reports and unaudited periodicfinancial statements as required by Bursa Malaysia, including but not limited to other published financial statements and material and significant statements issued to shareholders;

• ReviewtheadequacyandintegrityofTPG’sriskmanagementand internal control system and management information systems, including systems for complying with applicable laws, regulations, rules, directives and guidelines;

• Set up a Group internal audit department staffed withqualified personnel to perform internal audit functions, covering financial and management audit as well as regulatory compliance, that reports directly to the Company’s Audit and Risk Committee (“ARC”);

• Establishprocedurestoassessanyrelatedpartytransactionsor conflict of interest situations that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

• PrepareanARCreportattheendofeachfinancialyearthatwill be clearly set out in the Annual Report of TPG;

• Lookatandtoaddresstheirmindtomajorand/ormateriallitigation against the Group as and when they arise;

• Receiveandconsiderhighlevelreportsonmattersmaterialto TPG, in particular:(i) relations with regulatory authorities;(ii) health and safety;(iii) insurance cover;(iv) disaster recovery;(v) litigation and claims;(vi) premises; and(vii) public relations.

• Receivetheminutesofand/orreportsfromthecommitteesestablished by the Board.

4. Board, Human Capital and other Resources

• UndertakeaproperprocessforDirectors’selectionthroughthe Nomination and Remuneration Committee (“NRC”);

• Achieveanoptimumbalanceanddynamicmixofcompetentand diverse skill sets amongst the Board members;

• Undertake an assessment of the independence of itsindependent directors annually in accordance with the assessment criteria to be developed by the NRC;

• Establishformalandtransparentremunerationpoliciesandprocedures to attract and retain directors through the NRC;

• ConductaBoardevaluationthroughNRCcomprisesaBoardAssessment and an Individual (Self & Peer) Assessment. The assessment of the Board is based on specific criteria, covering areas such as the Board composition and structure, principal responsibilities of the Board, the Board process, the CEO’s performance, succession planning and Board governance. For Individual (Self & Peer) Assessment, the assessment criteria include contribution to interaction, role and duties, knowledge and integrity and assessment of independence;

• EnsureadequatetrainingofmembersoftheBoard;and• EnsurethatTPGhasapropersuccessionplanforitssenior

management and Executive Directors.

The Board has adopted a formal schedule of reserved matters, which is reviewed on an annual basis. Matters reserved for Board’s approval include:• The Group’s long term strategy, corporate objectives and

plans;• TheGroup’scapitalstructure;• Operatingandcapitalbudgets;• Anysignificantchangestoaccountingpoliciesandpractices;• Resultsandfinancialreporting;• Dividendpolicyandproposalsfordividendpayments;• Newventures;• Majoracquisitions,disposals,andothertransactionsoutside

delegated limits;• TheGroup’soverallriskappetite;• Review of the Group’s overall corporate governance

arrangements;• Themaintenance and review of the riskmanagement and

internal control system;• Changestothestructure,sizeandcompositionoftheBoard,

including new appointments;


• SuccessionplansfortheBoardandseniormanagement;and• AnnualreviewofitsownperformanceandthatofitsBoard

Committees.

The Board Charter of the Company can be downloaded from the Company’s website (www.tuneprotect.com).

Board Balance and IndependenceThe Board members have a wide range of relevant experience such as insurance and reinsurance, banking, accounting, legal, economic, investment and international business operations to bear on the governance, strategy, resources and performance of the Group.

Our diverse Board includes and makes use of differences in skills, industry experience, background, gender and other attributes of Directors. As at the year end, the Board comprised six members. Five members are Non-Executive Directors (three of whom are Independent) and one is an Executive Director (resigned on 31 December 2015). As the Chairman is Independent there is no requirement to have a majority of Independent Directors on the Board. The number of Independent Directors represent more than one third of the Board. Thus, the Company complies with Paragraph 15.02 of the Bursa Malaysia Securities Berhad’s MMLR which requires at least two Directors or one third of the Board, whichever is the higher, to be Independent Directors.

The Board members at the year-end were:• RazmanHafidzbinAbuZarim,Chairman(IndependentNon-

Executive Director)• Tan Sri Dr. Anthony Francis Fernandes (Non-Independent

Non-Executive Director)• Datuk Kamarudin bin Meranun (Non-Independent Non-

Executive Director)• TanHongKheng(Non-IndependentExecutiveDirector)(1) • NgSoonLai@NgSiekChuan(IndependentNon-Executive

Director)• TanMing-Li(IndependentNon-ExecutiveDirector)

(1) Mr. Tan Hong Kheng resigned as Director on 31 December 2015.

The profiles of the current Directors are provided on Pages 46 to 50 of this Annual Report.

None of the Independent Directors has served on the Board for more than nine years.


Meetings of the BoardThe Board met on six occasions in 2015. The details of attendance of the Directors at Board meetings held during the financial year are as follows:

No. Directors No. of Meetings Attended

1. RAZMAN HAFIDZ BIN ABU ZARIM 6/6

2. TAN SRI DR. ANTHONy FRANCIS FERNANDES

4/6

3. DATUK KAMARUDIN BIN MERANUN 4/6

4. TAN HONG KHENG (1) 5/6

5. NG SOON LAI @ NG SIEK CHUAN 5/6

6. TAN MING-LI 6/6

(1) Mr. Tan Hong Kheng resigned as Director on 31 December 2015

Agendas and papers are circulated to the Board with sufficient time for members to prepare for Board and Committee meetings. These papers include information that may have been specifically requested by Board members. All Board and Committee meetings held during the year were conducted in an open atmosphere which allowed constructive challenge and debate, where all Directors were able to bear independent judgement on issues discussed. Meetings are called as and when required, however, there are frequent contacts amongst Board members and Management to discuss Group matters, in between meetings.

Company SecretaryAll the Directors have access to the Company Secretary who ensures that Board procedures are followed. The Company Secretary advises and provides updates to the Board on Directors’ duties and obligations under current relevant legislation, regulatory requirements and corporate governance guidelines. The Company Secretary is also responsible for advising the Directors of their obligations and duties to disclose their interest in the Company’s securities, disclosure of any conflicts of interest in transactions involving TPG, prohibition on dealing in the Company’s securities and restrictions on disclosure of price-sensitive information. The appointment and removal of the Company Secretary requires Board approval.



Professional DevelopmentThe Group recognizes that continuous education is essential for the Directors to discharge their duties and responsibilities. There is a provision for training fees provided to the Board to encourage their participation in training programmes.

The following are the programmes and seminars attended by the Directors during the year:

Directors Training Programme

Razman Hafidz bin Abu Zarim • An Evening with Jane Goodall: Fund Raising for Social Enterprises, KualaLumpur

• Women'sRepresentationonCorporateBoards,KualaLumpur

• SustainabilitySymposium,KualaLumpur

• ForbesGlobalCEOConference,Philippines

Tan Sri Dr. Anthony Francis Fernandes • WorldEconomicForum,Davos

• RegionalASAMConference,Bangkok

• ASEANAviationSummit2015,Langkawi

• CreditSuisse18th Asian Investment Conference, Hong Kong

• ABCAseanBusinessClubForum,Singapore

• EASA-FAAInternationalAviationSafetyConference,Brussels

• WorldEconomicForum,Dalian

• LCCAirportSummit,Bangkok

• CLSAInvestorsForum,HongKong

• What’sNextConference,Cyberjaya

• GlobalTransformationForum,KualaLumpur

• APECManila

• ASEANSummitManila

• GlobalMalayaleeSymposium,KualaLumpur

• RHBBankingGrpLeadersTalk,KualaLumpur

Datuk Kamarudin bin Meranun • CrisisCommunicationsWorkshop

• BumipreneursofTomorrow(Bahtera)Conference,KualaLumpur

• “TheStory”Conference,Putrajaya

Ng Soon Lai @ Ng Siek Chuan • BoardChairmanSeries(Part2):LeadershipExcellencefromtheChair

• BoardChairmanSeries:TonefromtheChairandEstablishingBoundaries

Tan Ming-Li • FIDEForumbyBNM–ImpactoftheNewAccountingStandardonInsuranceCompanies

• FIDEDirectors’Training(ModuleA:Insurance)

• FIDEDirectors’Training(ModuleB:Insurance)


Apart from the above, all the Directors were also updated by the Company Secretary on changes to the MMLR of Bursa Malaysia and relevant guidelines on the regulatory and statutory requirements. The external auditors also briefed the ARC members on the significant changes in the financial reporting standards as well as tax matters.

Conflict Of InterestThe Board members’ directorships in companies other than the Company and the Group, are well within the restriction of not more than five directorships in public listed companies as stated in the Bursa Malaysia’s MMLR.

Directors have declared their respective shareholdings in the Company and related companies and their interests in any contracts with the Company or any of its related companies. Directors have also declared their directorships in other companies and have or shall abstain from any discussions and decision-making in relation to these companies.

BOARD COMMITTEESThe Board has delegated its authority to several Committees, with clear written terms of references. The Committees of the Board are the ARC, the NRC, the ESOS Committee and Investment Committee. All Committees, except the ESOS committee, are chaired by an Independent Director. All committees have a majority of Independent Directors, save for the ESOS Committee.

New members are properly evaluated before recommendation by the NRC. In assessing the suitability of candidates, the required mix of skills, expertise, competencies, experience, professionalism, integrity and other qualities are taken into account. The candidates would be considered only if they meet the following criteria:• Senior management in a reputable local or international

financial services group, public corporation or professional firm/body;

• posses a diverse range of skills, including in particular,business, legal and financial expertise, professional knowledge and financial industry experience, as well as experience in regional and international markets;

• demonstrateshonestyandintegrity;• abilitytobeindependentandcapableoflateralthinking;• possespeopleskills;• have followed the code of conduct expected by Board

members; and• aware of time commitment required to perform his/her

duties.

The Board will also conduct private interview sessions with the candidates. The NRC then recommends the proposed appointment to the Board for its approval. Sufficient time is devoted to finalize the selection of Committee members by the NRC and the Board. The application for the appointment of the candidates is thereafter submitted to BNM for the requisite approval under the Financial Services Act 2013. The Company Secretary ensures that all appointments are properly done and, relevant legal and regulatory requirements are complied with.

On succession planning, coordinated by the NRC, the curriculum vitae of prospective candidates would from time to time, be discreetly obtained from various internal and external sources, including from institutions which maintain details on directors with experiences in the financial industry. This is to ensure that the Board maintains a steady pool of potential talents to select from should the need to appoint additional members on the Board arise (e.g. to replace a member who is resigning or retiring from the Board.)

All Committees’ written terms of references are established and will be reviewed periodically to ensure that they remain relevant and reflect changes in good practice and governance. The Board is fully informed of Committee proceedings by the respective Committee Chairmen who provide a report at the subsequent Board meeting. Committees are authorized to obtain outside independent professional advice if they deem it to be necessary.

Audit and Risk CommitteeThe Board through its ARC reviews the effectiveness of the Group’s risk management and internal control system where they are intended to manage risks identified and provide reasonable assurance that material downside risks linked to business goals, strategies and objectives are managed within the risks appetite and risks limits approved by the Board. Risk governance is supported by a group-wide risk management organisation structure that delineates the function of risk taking, risk oversight and policy making. The risks reporting lines, authorities, roles and responsibilities, are clearly specified in the risk management framework.

The members as at 31 December 2015 were Ng Soon Lai @ Ng Siek Chuan, Razman Hafidz bin Abu Zarim and Tan Ming-Li. The Company Secretary is the Secretary for the ARC.



Ng Soon Lai @ Ng Siek Chuan (ARC Chairman) and Razman Hafidz bin Abu Zarim, both members of the Malaysian Institute of Accountants, have the relevant financial experience, and all members of the ARC have the appropriate experience and competence to carry out their duties.

The ARC’s meeting calendar and agenda are linked to events in TPG’s financial calendar. The ARC is kept up-to-date with relevant developments, changes in legislation and regulations, and information on external seminars and conferences by the Company Secretary and the Executive team. The CEO, Chief Financial Officer (“CFO”), Heads of Group Internal Audit and Risk Management as well as the external auditors are regularly invited to attend all or part of any meeting as and when appropriate.

The Terms of Reference of the ARC include all Code requirements and were approved by the Board in 2012. This can be found in the ARC Report on Page 63 of this Annual Report.

Nomination and Remuneration CommitteeThe Nomination Committee and Remuneration Committee were set up on 7 December 2012. The two committees were merged into the Nomination and Remuneration Committee on 11 July 2014. The members of NRC are Ng Soon Lai @ Ng Siek Chuan, Razman Hafidz bin Abu Zarim and Datuk Kamarudin bin Meranun. The Company Secretary is the Secretary for the NRC. The NRC may invite other Board members and the CEO to attend meetings when it deems appropriate.

The NRC has assessed annually in a formal and transparent manner, the independence of Independent Directors, the effectiveness of the Board as a whole, its various Committees and Directors in the discharge of their duties and responsibilities. The Board Assessment and an Individual (Self & Peer) Assessment are done using: • AuditCommitteeEvaluationQuestionnaire• AuditCommitteeMembers’SelfandPeerEvaluationForm• IndependentDirectors’Self-AssessmentChecklist• Directors’/KeyOfficers’EvaluationForm• Board&BoardCommitteeEvaluationForm

At the conclusion of the evaluation, the NRC Chairman and the evaluator (e.g. the company secretary or external consultants) will need to consider how the findings should best be communicated to the Board in the interest of improving its effectiveness. The

Chairman will always try to ensure that the Board’s decisions are reached by consensus (and failing this, reflect the will of the majority), and any concern or dissenting view expressed by any Director on any matter deliberated at meetings of the Board, or any of its Committees, as well as the meetings’ decisions, will accordingly be addressed and duly recorded in the relevant minutes of the meeting.

Key matters deliberated during the NRC Meetings are summarised as follows:-• PerformanceevaluationoftheBoardofDirectorsandBoard

Committees;• ReviewthecompositionoftheBoardCommitteesandmake

the required recommendations to the Board for approval;• Review the remuneration packages for the Directors and

Executive Team and make the required recommendation to the Board for approval.

The Remuneration Policy was established to attract, motivate and retain talent from within and outside the insurance industry, and internationally.

All Non-Executive Directors are paid a fixed annual director fees as members of the Board and Board Committees. The level of remuneration reflects the experience and level of responsibilities undertaken by the Non-Executive Director concerned. The Company also reimburses reasonable expenses incurred by these Directors in the course of their duties. The remuneration package for Non-Executive Directors comprises fees and meeting allowances.

For Executive Directors, the NRC considers and recommends to the Board for approval the final remuneration package for the Executive Director. Components of the Executive Director’s remuneration are structured to link rewards to corporate and individual performance. Performance is measured against profits and other targets set in accordance with the Company’s annual budget and plans.



The total remuneration of Directors during the financial year ended 31 December 2015 are as follows:

Directors’ Remuneration Executive (RM ‘000)

Non-Executive(RM ‘000)

Total(RM ‘000)

Fees - 453 453

Salaries and other emoluments 1,008 122 1,130

Total 1,008 575 1,583

Directors’ Remuneration No. of Executive Director

No. of Non-

Executive Director

Below RM50,000 - -

RM50,001 to RM100,000 - 2

RM100,001 to RM150,000 - 2

RM150,001 to RM200,000 - 1

RM1,000,001 to RM1,050,000 1 -

Total 1 5

ESOS CommitteeThe ESOS Committee as at 31 December 2015 comprised Datuk Kamarudin bin Meranun, Junior Namjick Cho, Tan Ah Moi and Cilia Rasasegram (resigned on 10 February 2016). The ESOS Committee was established to administer the ESOS of the Group in accordance with the objectives and regulations thereof and to determine the participation eligibility, option offers and share allocations and to attend to such other matters as may be required.

Investment CommitteeThe members as at 31 December 2015 were Tan Hong Kheng (resigned on 31 December 2015), Razman Hafidz bin Abu Zarim, Ng Soon Lai @ Ng Siek Chuan and Lee Siang Korn @ Lee Siang Chin (“Mr. Lee”). Mr. Lee is an Independent Director of TPG’s subsidiary, Tune Insurance Malaysia Berhad (“TIMB ”).

The Committee may invite other Board members and the CEO or the Head of Investment Department to attend meetings when it deems appropriate.

The Committee was established by the Board to assist in discharging its duties and responsibilities to the management of investments, including drawing up policies and procedures for monitoring, assets allocation, dealing, recording and reporting.

The terms of reference include the following:-(i) ensure investments are properly monitored and managed

according to investment guidelines, statutory and/or regulatory guidelines;

(ii) review and recommend investment policies for all available funds, taking into consideration, key issues pertaining to asset allocation, objective, risk levels and total returns;

(iii) review external and internal fund management relating to eligible investment, diversification, concentration restriction and performance objective for specific fund managers’ portfolio;

(iv) review the appointment and termination of external fund managers at least once a year; and

(v) monitor and review performance of external fund managers.

RELATIONSHIP WITH SHAREHOLDERSThe Group considers communications with shareholders important and has set a Shareholder Communication Policy on 20 May 2013. This policy can be found on the corporate website (www.tuneprotect.com). The CEO has the day-to-day responsibility for communicating with analysts and institutional shareholders, on the Group’s strategy and how it intends to achieve its objectives. Regular dialogue is also to ensure that the Group strategy is properly understood, the status in meeting its objectives is given and that any issues are addressed in a constructive manner.

External analysts’ reports are circulated to all Directors and senior management. Shareholders should direct their questions about their shareholdings to the Share Registrar or the Company Secretary.



Company MeetingThe annual general meeting (“AGM”) and other general meetings of TPG are the primary forum for communication with its shareholders and for shareholders’ participation. TPG will place all notices of general meetings and accompanying explanatory material on its website, www.tuneprotect.com and will advertise the notice in local newspapers and make the necessary announcement to Bursa Malaysia. In addition, the notice of AGM, which forms part of the annual report, and the CD-ROM, will be circulated to its shareholders. The form and content of the notices of general meeting complies with the CA 1965 and any other applicable regulatory under Bursa Malaysia and the Securities Commission Malaysia. Shareholders may deposit their proxy forms for AGMs and general meetings of the Company to the Company Secretary at its registered address.

The Company shall make itself available for meetings with key analysts and shareholders at least once every quarter, either face to face or via conference call.

Annual ReportTPG’s Annual Report to shareholders is a central means of communicating to shareholders on its activities, operations and performance for the financial year under review.

TPG’s Corporate WebsiteTPG’s website (www.tuneprotect.com) publishes all necessary information about TPG for its shareholders. The Company will place on its website all the announcements made to Bursa Malaysia and relevant press releases and any other information that is an official release of material information to the market within a reasonable timeframe after such information is released to Bursa Malaysia.

ACCOUNTABILITY AND AUDITDirectors’ Responsibilities in Financial ReportingThe Board is required by the CA 1965 to prepare the financial statements which reflect a true and fair view of the state of affairs in the Company and the financial results of the Company for the financial year.

The Board is responsible for ensuring that proper accounting records are kept which discloses, with reasonable accuracy at any time, the financial position of the Company and to enable them to ensure that the financial statements comply with the CA 1965. The Board is satisfied that in preparing the financial statements of the Company for the financial year ended 31 December 2015, the Company has used appropriate accounting policies and applied them consistently and prudently. The Board is of the opinion that the financial statements have been prepared in accordance with all relevant approved accounting standards.

Relationship with the External AuditorsThe Board, through the ARC, has maintained an appropriate, formal and transparent relationship with the external auditors. As indicated in the engagement letter, the external auditors confirmed that the auditors are, and have been, independent throughout the conduct of the audit engagement in accordance with relevant professional and regulatory requirements and in accordance with the external auditors’ internal policy. The external auditors also provide a written confirmation that they have reviewed the non-audit services provided to the Group during the year, and that to the best of the external auditor’s knowledge, the non-audit services did not impair the independence of the external auditors. The ARC will conduct the independence assessment of the external auditors before recommending them for the re-appointment to the shareholders.

The ARC meets the external auditors without the presence of the Management, whenever necessary, and at least twice a year. Meetings with external auditors are held to further discuss the Group’s audit plans, audit findings, financial statements as well as to seek their professional advice on related matters. From time to time, the external auditors inform and update the ARC on matters that may require their attention.

Code of EthicsAs a guidance to all Directors, Senior Officers and employees of TPG, the Board has adopted a Code of Ethics (“Code”) that sets out principles and standards of good practice including welfare of society, stakeholders’ interests, compliance, fair business practices and others. This Code can be found on the corporate website (www.tuneprotect.com).



Whistleblowing PolicyThe Whistleblowing Policy was implemented on 18 November 2013 and subsequently updated on 17 November 2014. This Policy applies to all directors, senior officers and employees of TPG and its subsidiaries, whether permanent, temporary or contract basis including trainees and interns. All employees can raise their concerns directly to the Chairman of the ARC regarding any misconduct or wrongdoing committed by another employee. This policy can be found on the corporate website (www.tuneprotect.com).

Sustainability PolicyTPG has put in place the Sustainability Policy on 18 November 2013 as part of its commitment to create a lasting value for the shareholders and stakeholders. This Policy applies to directors and employees of the Group and covers the actions and activities that may impact the market place, work place, environment and community. This policy can be found on the corporate website (www.tuneprotect.com).

Board Diversity PolicyIn view of the Board Diversity policy on gender, ethnicity and age, the NRC is mindful of its responsibilities to ensure that new appointments should provide the appropriate mix of skills, experience, strength and other qualities, which would be relevant to enhance the composition of the Board. This policy can be found on the corporate website (www.tuneprotect.com).

The NRC also conducted an exercise to refresh its pool of potential women directors, and one of its initiatives was to invite the Directors to nominate potential women candidates, taking into account the criteria as determined by the Committee and approved by the Board. This effort could be evidenced by the appointment of Ms. Tan Ming-Li as an Independent Non-Executive Director of the Company on 1 April 2014.

Going ConcernThe Board has reviewed the Group’s financial projections for the next twelve months, including regulatory capital surpluses. Based on this review, the Directors are satisfied that the preparation of the financial statements on a going concern basis is appropriate.

Risk Management and Internal Control SystemThe Board is satisfied that there is an effective and adequate risk management and internal control system in place to manage the Group’s risks for the year ended 31 December 2015; and it is a continuous process in accordance with the guidance for Directors of Listed Issuers up to the date of approval of the annual report by the Board. The Board confirms that there were no significant issues arising during the year under review (Please refer to the Statement on Risk Management and Internal Control on Page 66 for further details).

Statement on Compliance with the Best Practices of MCCG 2012 The Group is committed to achieve high standards of ethics, integrity and corporate governance in all its business dealings. The Board considers that it has complied throughout the financial year with all the Principles and Best Practices as set out in Part 2 of the revised MCCG 2012 and the Bursa Malaysia Corporate Governance Guide.

This Statement on Corporate Governance is made in accordance with the approval of the Board on 24 March 2016.



AUDIT AND RISK COMMITTEE REPORT

MEMBERSHIP AND AUTHORITY The ARC was established on 5 October 2012 and comprises three Independent Non-Executive Directors. Members of the ARC are as follows:

Name Designation Directorship

Ng Soon Lai @ Ng Siek Chuan

Chairman Independent Non-Executive Director

Razman Hafidz bin Abu Zarim

Member Chairman, Independent Non-Executive Director

Tan Ming-Li Member Independent Non-Executive Director

The ARC was established by TPG’s Board in order to assist it in overseeing the internal controls of the Group independent from our management. The ARC oversees the risk management activities of the Group, approving appropriate risk management procedures and methodologies across the organisation as well as to identify business risks of our Group. The ARC has full access to both internal and external auditors and vice versa.

The Chairman of the ARC is an independent Director, appointed by the Board, based on the recommendation of the NRC. The ARC consists of members with a broad spectrum of skills, professional experience and backgrounds with high integrity. In addition, the members fulfil the appropriate criteria for membership to the ARC as prescribed by the relevant regulators, including Malaysian Institute of Accountants, Bursa Malaysia and Bank Negara Malaysia. Two members of the ARC fulfil the necessary audit qualifications and experience, and another member is a practising lawyer.

TERMS OF REFERENCE The salient points in the ARC’s terms of reference include the following:(i) Consider the appointment or re-appointment of the external

auditors, the audit fees, any questions of resignation or dismissal of the external auditors and to recommend the nomination of the external auditors;

(ii) Assess the suitability and independence of the external auditors;

(iii) Review and discuss the annual Audit Plan with the external auditors before the audit commences, covering, amongst other matters, the nature and scope of the audit, and key audit matters;

(iv) Provide a line of communication between the Board and the external auditors;

(v) Review and recommend to the Board for approval, the quarterly and year-end financial statements of the Group and Company, focusing particularly on: (a) any change and appropriateness of accounting policies

and practices; (b) significant adjustments arising from the audit; (c) litigation that could affect the results materially; (d) significant and unusual events; (e) the going concern assumption; (f) compliance with approved accounting standards and

other legal requirements; and (g) ensuring the timely release of such financial statements;

(vi) Review and resolve issues, if any, arising from the interim and final audits, and any matter the external auditors may wish to discuss (in the absence of management where necessary) including the audit report and the level of assistance given by the Group’s employees to the external auditor;

(vii) Review the external auditors’ management letter and management’s response in evaluating our Company’s and our Group’s risk management and internal control system;

(viii) In relation to the internal audit function: (a) mandate the internal audit function to report directly to

the ARC; (b) review the adequacy of the scope, functions, competency

and resources of the internal audit function, and that it has the necessary independence and authority to carry out its work, which should be performed professionally and with impartiality and proficiency;

(c) review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit functions;

(d) review any appraisal or assessment of the performance of members of the internal audit function;

(e) approve any appointment or termination of senior staff members of the internal audit function; and

(f) take cognisance of resignations of internal audit staff and provide the staff an opportunity to submit reasons for resigning;


(ix) Review and monitor the adequacy and integrity of the Company’s risk management and internal control system and management information systems, including systems to ensure compliance with applicable laws, regulations, rules, directives and guidelines;

(x) Consider and evaluate any related party transactions or conflict of interest situations that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(xi) Consider the major findings of internal investigations and management’s response;

(xii) Review the risk management framework of the Group and Company to ensure the existence of effective risk management policies and controls to monitor and manage all financial and non-financial risks;

(xiii) Review the Company’s procedures for detecting fraud and whistle blowing and ensure that arrangements are in place by which staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting, financial control or any other matters (in compliance with provisions made in the CA 1965); and

(xiv) Consider any other matters as directed by the Board.

MEETINGS The details of the attendance of the members at the meetings of the ARC held during the year, were as follows:

No. Directors No. of Meetings Attended

1. Ng Soon Lai @ Ng Siek Chuan 5/5

2. Razman Hafidz bin Abu Zarim 5/5

3. Tan Ming-Li 5/5


SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR The ARC carried out its duties in accordance with its terms of reference during the year. The ARC held four meetings to deliberate on:• Quarterly unaudited financial performance and results

prior to recommending them for approval by the Board. The deliberation with Management on the quarterly results focused on reasons for significant variances between budgeted figures and comparative figures in the quarterly announcement.

• RiskmanagementupdatesanditsimpactontheGroupandcompany’s future performance.

• Relevant technical pronouncements and accountingstandards issued by Malaysian Accounting Standards Board (“MASB”).

• ManagementaccountsandreportsofOperatingSubsidiariesand associate company.

• Circularsinrelationtonewandrevisedauditingstandards,MMLR and related regulations.

• Newinternalauditreportsfindings,recommendationsandManagement’s responses of the company, all subsidiaries and associates. Where necessary, ARC would suggest enhanced policies and greater internal control procedures for respective Management’s implementations on significant areas of weaknesses. Any suggestions are deliberated at the Board before implementation. These suggestions would also apply to our associated companies like Thailand, Tune Insurance Public Co. Ltd..

• RelatedpartytransactionsenteredintotheGrouptoensurecompliance with approved limits set by shareholders and the adequacy of the control procedures in capturing any new such related party transactions and the proper reporting and approval where applicable.

• Implementation of the audit recommendations to ensurethat all key risks and controls have been addressed.

• Resource requirements of the Internal Audit and RiskManagement Function for the year and assessed the performance of the Internal Audit and Risk Management Function.

• Internalauditrecommendationsonpolicyandproceduresto enhance TPG group internal control and risk management system.



In addition to the four quarterly ARC meetings held, an additional (5th) ARC meeting was held to deliberate and advise on:• Audited financial statements for the financial year prior

to submission to the Board for their consideration and approval focusing particularly on any changes of accounting policy, significant and unusual events and compliance with applicable accounting standards approved by MASB and other legal requirements. The external auditors presented a Report to the ARC on their audit of the financial statements for the financial year ended 31 December 2015.

• Statement of Corporate Governance, Statement on RiskManagement and Internal Control and ARC report and recommended to the Board for inclusion in the Annual Report.

• Circularinrelationtoproposedrenewalofexistingandnewmandate for Recurring Related Party Transactions.

• Performanceoftheexternalauditors,MessrsErnst&Youngand made recommendations to the Board on their re-appointment and remuneration.

• Internal annual audit plan to ensure adequate scope andcoverage on the activities of the Group.

• Verify the allocation options pursuant to the criteriadisclosed to the employees of the Group and establish pursuant to the ESOS.

• Non-auditservicesrenderedbyexternalauditorstoensurethe independence of external auditors.

The CEO, CFO and Management personnel, when relevant and appropriate, were invited to attend the ARC meetings to facilitate deliberations, as well as to provide clarifications on the audit issues arising.

The external auditors were also invited to the relevant parts of the ARC meetings, to actively participate in the deliberations and advise as appropriate, on the Audit Planning Memorandum and other matters deemed relevant.

The Head of Group Internal audit also attended the relevant parts of the ARC meetings to present:• Internalauditreportscompletedforthequarter.• Internal audit performance reports on the progress of

internal audit assignments completed against the approved Audit Plan.

• Auditremediationprogressreportsonthestatusofinternalaudit remediation against the approved timeline.

• ReportonRecurringRelatedPartyTransactionsandotherRelated Party Transaction entered into by the Group and the adequacy of the controls and procedures for ensuring that the Related Party Transactions are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders.

INTERNAL AUDIT FUNCTIONS AND SUMMARY OF ACTIVITIES The Group has two in-house Internal Audit Departments; one in TPG and the other in its subsidiary, TIMB. TPG’s Internal Auditor reports directly to the ARC and proactively assists the ARC in discharging its duties and responsibilities. TPG’s Internal Audit oversees and reviews the subsidiaries’ internal audit function, including reports and activities of TIMB in-house internal auditors. Its role is to provide independent assurance on the adequacy and effectiveness of the risk management, internal controls and governance processes, in addition to providing value added services to the Group.

During the business audit planning cycle, high impact risk areas were assessed and incorporated into the Annual Internal Audit Plan. Risk profiling was carried out to examine the Group’s business activities, risks and key governance issues facing TPG. These assessments form the basis for TPG’s risk based audit plan and strategy. Internal audit covers amongst others, the review of the adequacy of risk management, operation controls, compliance with established procedures, guidelines, statutory requirements and business processes improvement. Mandatory and high risk areas are reviewed annually, medium risk areas are reviewed once in every two years, and low risk areas are reviewed once in every three years.

For the financial year 2015, the Group Internal Audit strategy, plan and focus areas were deliberated and approved to provide the Board assurance on: • Ethicalandregulatorycompliance• AccountingandFinance• Information, Communications and Technology asset

management • RiskManagement• BusinessContinuity• QualityAssuranceReview• SpecialProjectsincludingGoodsandServicesTax• Internal controls, risk management and compliance of all

subsidiaries, associates and joint ventures.

A summary of the activities of the internal audit functions is given in the Statement on Risk Management and Internal Control set out on page 66.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL INTRODUCTION

This Statement on Risk Management and Internal Control (“Statement”) is made pursuant to Bursa Malaysia’s MMLR which require the Board to include in its Company Annual Report a statement about the state of its risk management and internal control system (“system”). The revised MCCG 2012 requires all listed companies to establish and maintain a sound risk management and internal control system.

Accordingly, the Board is pleased to provide the Statement that was prepared in accordance with the “Statement on Risk Management and Internal Control – Guidelines for Directors of Public Listed Issuers” issued by Bursa Malaysia, which outlines the process to be adopted by the Board in reviewing the adequacy and effectiveness of the system of the Group.

The Board acknowledges its overall responsibility and is committed to the establishment of sound and effective system within the Group although it recognises that such system may only be able to contain risks within acceptable levels and not totally eliminate all risks. In this respect the Board is periodically updated by the CEO about significant issues pertaining to the system as well as whether the system is operating adequately and effectively in all material aspects.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Risk ManagementThe Board views proactive management of risk exposure as fundamental to the Group’s operation and long term growth. Therefore, the Board recognises its ultimate responsibility in managing the Group’s risk exposure, and its responsibility for the risk management and internal control system of the Group. The Board, through its ARC, reviews the effectiveness of the Group’s risk management and internal control system.

The Group’s risk management framework is designed to ensure that risks which could undermine the Group’s strategies, business goals, objectives, reputation and long-term viability are timely identified, assessed and monitored within the risks appetite and risk tolerance approved by the Board. Risk governance is supported by a group wide risk management organisation structure that delineates the function of risk taking, risk oversight and policymaking. The risk reporting lines, authorities, roles and responsibilities are clearly specified in the risk management framework.

To support the risk management and internal control system, the following elements are in place for the Group: • A formal and regular schedule of Board and Committee

meetings prefixed on an annual basis with the minimum frequencies required under legislation and regulations;

• Identification of matters reserved for Board’s and/or itsCommittees’ decision;

• Identification ofmatters delegated to the Executive team,which has an organisational structure with clearly defined lines of responsibility in line with regulations and best practices of listed issuers. The CEO is to ensure proper discharge of these authorities and responsibilities;

• Group-wide and TIMB Management Committee thatdeliberates on new initiatives, strategies, financial performances, goal achievements, risks and other operational issues on a monthly basis;

• Internal policies and procedures including Code of Ethics,People and Culture policies and procedures, formal performance reviews, Fraud policy, Underwriting policies, Impairment Policy and other operational related policies;

• AGroupriskmanagementpolicysetbytheBoardincludinga framework designed to ensure that risks which could undermine its strategy, reputation and long term viability are identified and addressed, arising from both internal and external risk factors;

• Enforcement of theGroup riskmanagement policy by theCEO;

• Compliance policies that ensures law and regulatorycompliance; and

• Assurance provided by the ARC to the Board that theoperational level decisions take into account risks, how they can be controlled effectively and that the control systems operate effectively to do so.

The ARC is assisted by the Group Risk Management Department, which is in turn supported by working level committees with representation by the CEO of the respective entities. The role of Management includes: • TheCEOoftherespectiveentitiessettingthetoneforthe

culture of risk management. • The Head of Group Risk Management Department is

responsible for recommending to the ARC sustainable risk management strategies and approach for adoption group-wide and communicating them to all staff so to ensure they understand their duties and responsibilities in managing risks in their respective areas. The Head of Group Risk Management Department shall assist in monitoring the risks that have been deliberated and approved by the ARC through Key Risks Indicators.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

• Head of Departments review their departments’ functionrisks on an on-going basis in order to update their Risk Registers with any revisions or reporting of new risks. The Risk Registers are also reviewed annually on a Group-wide basis, and include the required internal controls and processes for managing each respective risk. The overall corporate risk profiles are escalated to the Board in the form of risk dashboards and after taking into consideration formalized Management Action Plans.

• ThisentireprocesshasbeeninplacefortheGroupsincetheacquisition of TIMB in May 2012 and up to the date of approval of this Statement for inclusion in the annual report. Moreover, a risk management function was already established in the Group’s significant subsidiary, TIMB, prior to its acquisition in May 2012.

The Group Risk Management Department is subject to audit by the Group Internal Audit Department, which also reports functionally to the ARC.

As TIMB is licensed and regulated by BNM, the entity is subject to more stringent regulations than our other subsidiaries and requires a separate Risk Management Committee that oversees the design and implementation of the risk management framework specifically for TIMB. The Risk Management Committee reports on the effectiveness of the Risk Management Framework to the Board of TIMB and oversees the reporting of the level of compliance with laws and regulations including key compliance risks. Weaknesses on any aspects of the risk management practices shall form the basis for future enhancements reflecting the Risk Management Framework’s flexibility in adjusting to the dynamics of the Group’s business environment. TIMB has in addition, a separate audit committee, investment committee and nomination and remuneration committee.

Internal Control SystemOur system of internal control comprises various policies, procedures and frameworks, amongst which are: • Clearandstructuredorganisationalreportinglines;• Annualbudgetingandtargetsettingprocesses;• Board approval of all strategic, business and investment

plans; • Adequate monitoring on implementation of strategic,

business and investment plans supported by the Board; and • Timely reviews of strategies, financial performance and

business development at both Management and Board levels.

In addition, the following has been established at TIMB in tandem with BNM’s requirements and best practices: • General InsuranceUnderwritingGuidelines tomanage and

adequately assess risks being underwritten; • Controlsoverclaimshandlingandsettlementprocesses;• Controlsovercreditcontrolprocesses;• Reinsurance programmes where there is a spread of

reinsurers with acceptable ratings from accredited agencies; and

• Departmentalmanualstoguideemployeesintheday-to-dayexecution of their duties.

Internal Audit Function• An effective Internal Audit function is essential to help

a company accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, financial and operational control, and governance processes. In this regard, the Group Internal Audit Department reports functionally to the ARC to facilitate the Committee’s oversight responsibilities for the Group, including local and foreign subsidiaries, joint ventures, associates and new acquisition(s) within the Group. Minutes of every ARC meeting are tabled to the Board. Details of activities undertaken by the Committee are also highlighted in the ARC Report.

• TheARChas activeoversight on theGroup InternalAuditDepartment’s independence, scope of work and resources. It also reviews the Group Internal Audit function, particularly the scope of the annual Group internal audit plan and frequency of the Group internal audit activities. The annual Group risk based internal audit plan detailing audit coverage and scope of work for the forthcoming financial year 2016 was presented for the consideration and approval of the ARC and the Board before the beginning of the year to provide the necessary mandate to the Group Internal Audit department.

• TheobjectiveoftheRiskbasedinternalauditplanistoensure,through regular internal audit reviews, that the Group’s policies and procedures are being complied with in order to provide assurance on the adequacy and effectiveness of the Group’s system of internal controls. Follow up reviews on previous audit reports are carried out to ensure that appropriate actions are taken to address internal control weaknesses highlighted.


• Where applicable, Group Internal Audit Departmentprovides value added recommendations to improve on the effectiveness of risk management, internal control and governance processes within TPG group, including local and foreign subsidiaries, joint ventures, associates and new acquisition(s). Management is tasked to proactively follow through and review the status of actions on recommendations made by the internal and external auditors. Audit reviews are carried out on units that are identified premised on a risk based approach, in cognisance with the Group’s objectives and policies in the context of its evolving business and regulatory environment, taking into consideration input of Senior Management, the ARC and the Board.

• In view that TIMB is subject tomore stringent regulationsthan our other subsidiaries; it has a separate Audit Committee that reports to the Board of TIMB. This Audit Committee designs and implements the Internal Audit framework for TIMB, further evaluates the effectiveness and adequacy of internal control systems as well as reviews internal control issues identified in reports prepared by internal auditors, the external auditors and regulatory authorities.

• ThetotalcostincurredbytheGroupInternalAuditfunctionperformed in-house for the year ended 31 December 2015 was RM517,049.16.

Assurance from ManagementThe Board has received a written assurance from the CEO and CFO that the Company’s and Group’s systems are operating adequately and effectively, in all material aspects.

Limited Assurance Procedures Performed on the Statement by External AuditorsAs required by paragraph 15.23 of the MMLR for Bursa Malaysia, the external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report for the financial year ended 31 December 2015. Their review was performed in accordance with Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants. Based on their review, the external auditors has assured that this Statement is consistent with their understanding of the process that the Board has adopted in the review of the adequacy and effectiveness of the Group’s risk management and internal control system. RPG 5 does not require the external auditors to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control procedures.

ConclusionThe Board is satisfied that there is an effective and adequate risk management and internal control system in place to manage the Group’s risks for the year ended 31 December 2015; and it is a continuous process in accordance with the guidance for Directors of Listed Issuers up to the date of approval of the annual report by the Board. The Board confirms that there were no significant issues arising during the year under review.

This Statement of Risk Management and Internal Control was approved by the Board on 24 March 2016.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


OTHER STATEMENTS AND DISCLOSURES

The CA 1965 requires the Directors to prepare financial statements for each financial year which gives a true and fair view of the state of affairs of the Company and the Group and their results for the financial year under review.

For the preparation of the financial statements for the financial year ended 31 December 2015, the Directors have:- (a) adopted appropriate accounting policies, which are

constantly applied; (b) made judgments and estimations which are prudent and

reasonable; and (c) ensured that applicable approved accounting standards in

Malaysia and the provisions of CA 1965 are complied with.

The Board is responsible for ensuring the Company and Group keep accounting records which disclose the financial position of the Company and Group and also enable them to ensure that the financial statements comply with the CA 1965.

The Board has the responsibility for taking such steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

ADDITIONAL COMPLIANCE INFORMATION The information set out below is disclosed in compliance with the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements:-

1.0 Share Buyback The Company does not have a scheme to buy back its own

share.

2.0 Options, Warrants or Convertible Securities Exercised The Company did not issue any warrants or convertible

securities during the financial year ended 31 December 2015. Please refer to Note 4 below for options granted to employees.

3.0 Depository Receipt Programme The Company did not sponsor any depository receipt

programme during the financial year ended 31 December 2015.

4.0 Employees’ Share Option Scheme The ESOS is the only share scheme of the Company approved

by the shareholders on 2 January 2013 and only came into effect on the date of Listing, 20 February 2013. ESOS were offered to employees on 18 March 2014 and the details of the ESOS offered are as follows:-

During The Financial year ended 31 December 2015

Total number of options or shares offered

11,004,000

Total number of options exercised or shares vested

-

Total number options or shares outstanding

11,004,000

Granted to CEO During The Financial year ended 31 December 2015

Total number of options or shares offered

500,000

Total number of options exercised or shares vested

-

Total number options or shares outstanding

500,000

There were no options granted to both Non-Executive and Executive Directors pursuant to the ESOS since 18 March 2014.

5.0 Sanctions and/or penalties There was no sanctions and/or penalties imposed on the

Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2015.

6.0 Non-Audit Fees The amount of non-audit fees incurred for services rendered

to the Company by Messrs Ernst and young, external auditors during the financial year ended 31 December 2015 was RM173,230.

7.0 Material Contracts involving Directors and Major Shareholders

There were no material contracts entered into by the Company and its subsidiaries involving directors & major shareholders’ interest for the year ended 31 December 2015.


8.0 Utilisation of proceeds There was no corporate proposal to raise proceeds during

the financial year ended 31 December 2015. The proceeds raised from the corporate proposal in 2013 had been fully utilised for repayment of bank borrowings, working capital, strategic investments and listing expense purposes.


9.0 Recurrent Related Party Transactions of a Revenue of Trading Nature

At the AGM held on 5 June 2015, the Company had obtained a shareholders’ mandate to allow the Company and/or its subsidiaries to enter into recurrent related party transactions (“RRPTs”) of a revenue or trading nature.

The breakdown of the aggregate value of the RRPTs entered into by the Group during the financial year is as follows:

No. Transacting Parties Nature of RRPTs Class and relationship of the Related Parties

Actual value (RM’000)

1. AirAsia Berhad Provision of the right to our Company to market insurance products to the customers of AirAsia Berhad via direct marketing initiatives pursuant to the Distribution Agreement entered into between AirAsia Berhad and our Company.

Provision of distribution and marketing services to Tune Insurance Malaysia Berhad (“TIMB”) in relation to the Travel Protection Plan originating in Malaysia to the passengers of AirAsia Berhad pursuant to the Business Collaboration and Marketing Agreement entered into between TIMB and AirAsia Berhad.

Interested DirectorsTan Sri Dr. Anthony Francis FernandesDatuk Kamarudin bin Meranun

16,595

2. AirAsia X Berhad Provision of agency services to TIMB in relation to the Travel Protection Plan originating in Malaysia to the passengers of AirAsia X Berhad pursuant to the Agency Agreement entered into between AirAsia X Berhad and TIMB.

Interested Directors Tan Sri Dr. Anthony Francis FernandesDatuk Kamarudin bin Meranun

Interested Major ShareholderAirAsia Berhad

4,325

3. PT Indonesia AirAsia

Provision of the right to our Company to market insurance products to the customers of PT Indonesia AirAsia via direct marketing initiatives pursuant to the Distribution Agreement entered into between PT Indonesia AirAsia and our Company.

Provision of marketing services to TIMB in relation to the Travel Protection Plan originating in Malaysia to the passengers of PT Indonesia AirAsia pursuant to the Business Collaboration Agreement entered into between TIMB and PT Indonesia AirAsia.



855





4. Thai AirAsia Co. Ltd Provision of the right to our Company to market insurance products to the customers of Thai AirAsia Co. Ltd via direct marketing initiatives pursuant to the Distribution Agreement entered into between Thai AirAsia Co. Ltd and our Company.

Provision of marketing and administration services to TIMB in relation to the Travel Protection Plan originating in Malaysia to the passengers of Thai AirAsia Co. Ltd pursuant to the Business Collaboration Agreement entered into between TIMB and Thai AirAsia Co. Ltd.



435

5. AAE Travel Pte Ltd Provision of the right to our Company to market travel insurance products directly to end-users through certain websites operated by AAE Travel Pte Ltd pursuant to the Travel Insurance Services Agreement between our Company and AAE Travel Pte Ltd.



9

6. Tune Group.com Limited or its assignee Tune Group Sdn Bhd

Provision of the license and right to our Group to use the ‘Tune Insurance’ trademark by Tune Group.com Limited or its assignee Tune Group Sdn Bhd.


10,546

7. Tune Hotels Regional Services Sdn Bhd

Provision of the right to our Company to market retail insurance to the customers of Tune Hotels Regional Services Sdn Bhd via direct marketing initiatives pursuant to the Business Collaboration and Outsourcing Agreement entered into between our Company and Tune Hotels Regional Services Sdn Bhd.


Interested Major ShareholderTune Group Sdn Bhd

3

8. PT CIMB Sunlife Provision of life insurance products of PT CIMB Sunlife by our Company to passengers of AirAsia in Indonesia pursuant to the Cooperation Agreement between our Company and PT CIMB Sunlife.

Interested Major Shareholder CIMB SI II Sdn Bhd

39

9. SP&G Insurance Brokers

Provision of broking services by SP&G Insurance Brokers to TIMB pursuant to the broking arrangement between SP&G Insurance Brokers and TIMB.

Interested Director Datuk Kamarudin bin Meranun

1,524





10. Philippines AirAsia Inc. (formerly known as Zest Airways Inc.)

Provision of marketing and administration services to TIMB in relation to the Travel Protection Plan originating in Malaysia to the passengers of Philippines AirAsia Inc. pursuant to the Business Collaboration Agreement entered into between TIMB and Philippines AirAsia Inc.



113

11. PT Indonesia AirAsia Extra

Provision of the right to our Company to market insurance products to the customers of PT Indonesia AirAsia Extra via direct marketing initiatives pursuant to the Distribution Agreement entered into between PT Indonesia AirAsia Extra and our Company.

Provision of distribution and marketing services to Tune Insurance Malaysia Berhad (“TIMB”) in relation to the Travel Protection Plan originating in Malaysia to the passengers of AirAsia Berhad pursuant to the Business Collaboration Agreement entered into between TIMB and PT Indonesia AirAsia Extra.



35


DIRECTORS’REPORT

Directors’ report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015.

principal activities

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 6 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year other than as disclosed in Note 6 to the financial statements.

results

Group 2015

rM’000

company 2015

rM’000

Net profit for the year 72,883 12,157

Profit attributable to:

Equity holder of the Company 68,972 12,157

Non-controlling interests 3,911 -

72,883 12,157

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DiviDenDs

The amount of dividends paid by the Company since 31 December 2014 were as follows:

rM’000

In respect of the financial year ended 31 December 2014:

Final single tier dividend of 4.04 sen per ordinary share of RM0.10 each on 751,759,980 ordinary shares, declared on 29 April 2015 and paid on 3 July 2015 30,371


DIRECTORS’ REPORT

Directors

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

Razman Hafidz bin Abu ZarimTan Sri Dr. Anthony Francis FernandesDatuk Kamarudin bin MeranunNg Soon Lai @ Ng Siek ChuanTan Ming-Li Tan Hong Kheng (resigned on 31 December 2015)

Directors’ benefits

Neither at the end of the financial year, nor at any time during that financial year, did there subsist any arrangement to which the Company or its subsidiaries were a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors from the Company and related corporations, or the fixed salary of a full-time employee of the Company as shown in Notes 28 and 35(b) to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.


DIRECTORS’ REPORT

Directors’ interests

According to the register of directors’ shareholdings, the interest of directors in office at the end of the financial year in shares in the Company or its related corporations during the financial year were as follows:

no. of ordinary shares of rM0.10 each

as at 1.1.2015

‘000

acquired

‘000 Disposed

‘000

as at 31.12.2015

‘000

Direct interest:

Razman Hafidz bin Abu Zarim 50 - (50) -

Tan Sri Dr. Anthony Francis Fernandes 100 - - 100

Datuk Kamarudin bin Meranun 82 - - 82

Tan Hong Kheng 100 - - 100

Ng Soon Lai @ Ng Siek Chuan 100 - - 100

indirect interest:

Tan Sri Dr. Anthony Francis Fernandes #1 102,609 - - 102,609

Tan Sri Dr. Anthony Francis Fernandes #2 128,373 - (3,290) 125,083

Datuk Kamarudin bin Meranun #1 102,609 - - 102,609

Datuk Kamarudin bin Meranun #2 128,373 - (3,290) 125,083

Ng Soon Lai @ Ng Siek Chuan 30 20 (50) -

Notes:#1 Deemed interested by virtue of his interest in AirAsia Berhad#2 Deemed interested by virtue of his interest in Tune Group Sdn Bhd

Other than as disclosed above, none of the directors in office at the end of the financial year had any interest in shares of the Company or its related corporations during the financial year.


eMployees’ share option scheMe (“esos”)

On 18 March 2014, the Company offered 15,715,000 ESOS shares to eligible employees of the Group. The offer period is from 18 March 2014 to 17 April 2014. The ESOS will be exercisable over a period of 5 years from the grant date of 17 April 2014 at an exercise price of RM1.71 per ESOS share.

The committee administering the ESOS are:

Datuk Kamarudin bin MeranunJunior Namjick ChoTan Ah MoiCilia Rasasegram (resigned on 10 February 2016)

The salient features and other terms of the ESOS are disclosed in Note 29 to the financial statements.

Details of the ESOS as at 31 December 2015 are as follows:

tranche expiry date

term to expiry from grant date

vesting period

from grant date

exercise price

rM number of

options

1 17 April 2016 2 years 1 year 1.71 3,928,750

2 17 April 2017 3 years 2 years 1.71 3,928,750



15,715,000

other statutory inforMation

(a) Before the statements of financial position and statements of comprehensive income of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowances had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

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

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

(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.

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

DIRECTORS’ REPORT


DIRECTORS’ REPORT

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

For the purpose of paragraphs (e)(ii) and (f)(i) above, contingent or other liabilities do not include liabilities arising from insurance contracts underwritten in the ordinary course of business of the Group.

(g) Before the statement of financial position and statement of comprehensive income of the general insurance subsidiary were made out, the directors took reasonable steps to ascertain that there was adequate provision for its insurance liabilities in accordance with the valuation methods prescribed under Part D of the Risk-Based Capital (“RBC”) Framework for insurers issued by BNM.

siGnificant anD subsequent events

The significant and subsequent events are as disclosed in Note 44 to the financial statements.

auDitors

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

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 March 2016.

Ng Soon Lai @ Ng Siek Chuan Razman Hafidz bin Abu Zarim

Kuala Lumpur, Malaysia


STATEMENT BY DIRECTORSPuRSuANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965We, Ng Soon Lai @ Ng Siek Chuan and Razman Hafidz bin Abu Zarim, being two of the directors of Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad), do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 81 to 203 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and of their financial performance and cash flows for the year then ended.

The information set out in Note 45 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 March 2016.

Ng Soon Lai @ Ng Siek Chuan Razman Hafidz bin Abu Zarim

Kuala Lumpur, Malaysia

STATuTORY DECLARATIONPuRSuANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965

I, Junior Namjick Cho being the officer primarily responsible for the financial management of Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad), do solemnly and sincerely declare that the accompanying financial statements set out on pages 81 to 203 are in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed Junior Namjick Cho at )Kuala Lumpur in the Federal Territory )on 24 March 2016 ) Junior Namjick Cho

Before me,

Loo Swee Beng

Commissioner of Oaths


INDEPENDENT AuDITORS’ REPORT

TO THE MEMBERS OF TuNE PROTECT GROuP BERHAD (FORMERLY KNOWN AS TuNE INS HOLDINGS BERHAD) (INCORPORATED IN MALAYSIA)

report on the financial stateMents

We have audited the financial statements of Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad), which comprise the statements of financial position as at 31 December 2015 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 81 to 203.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.


report on other leGal anD reGulatory requireMents

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.

other reportinG responsibilities

The supplementary information set out in Note 45 on page 204 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Yeo Beng YeanAF: 0039 No. 3013/10/16(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia24 March 2016

INDEPENDENT AuDITORS’ REPORTTO THE MEMBERS OF TuNE PROTECT GROuP BERHAD (FORMERLY KNOWN AS TuNE INS HOLDINGS BERHAD) (INCORPORATED IN MALAYSIA)


STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

Group company

note 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

assetsProperty and equipment 3 8,891 9,889 921 1,074

Investment property 4 2,954 2,879 - -

Intangible assets 5 4,884 5,918 846 409

Investments in subsidiaries 6 - - 187,782 187,645

Investments in associates 7 47,788 46,722 40,955 41,233

Investment in a joint venture company 8 1,251 581 433 433

Goodwill 9 24,165 24,165 - -

Investments 10 587,622 551,241 69,038 84,296

Reinsurance assets 11 244,802 259,281 - -

Insurance receivables 12 132,273 87,120 - -

Other receivables 13 123,063 81,862 8,411 4,777

Cash and bank balances 33,293 21,700 7,190 1,367

total assets 1,210,986 1,091,358 315,576 321,234

equityShare capital 15 75,176 75,176 75,176 75,176

Share premium 15 173,343 173,343 173,343 173,343

Merger deficit 16 (13,838) (13,838) - -

Available-for-sale reserves (4,969) (4,012) - -

Employee share option reserves 4,705 2,169 4,705 2,169

Foreign currency translation reserve 5,777 1,461 - -

Retained earnings 211,002 172,401 48,622 66,836

Equity attributable to owners of the parent 451,196 406,700 301,846 317,524

Non-controlling interests 6 40,424 38,511 - -

total equity 491,620 445,211 301,846 317,524

liabilitiesInsurance contract liabilities 17 577,288 539,239 - -

Deferred tax liabilities 18 1,106 620 - -

Insurance payables 19 87,550 66,762 - -

Retirement benefits 20 530 792 - -

Other payables 21 52,892 38,734 13,730 3,710

total liabilities 719,366 646,147 13,730 3,710

total equity and liabilities 1,210,986 1,091,358 315,576 321,234

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


Group company

note 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

operating revenue 22 480,193 451,070 28,789 68,555

Gross earned premiums 23(a) 453,448 423,555 - -

Premiums ceded to reinsurers 23(b) (149,608) (156,538) - -

net earned premiums 23 303,840 267,017 - -

Investment income 24 26,745 27,515 28,789 68,555

Realised gains and losses 25 (28) 5,813 833 126

Fair value gains and losses (375) 356 (940) (162)

Fees and commission income 27,289 28,818 - -

Other operating income 26 6,991 2,174 3,522 2,252

other revenue 60,622 64,676 32,204 70,771

Gross claims paid 27(a) (162,927) (151,611) - -

Claims ceded to reinsurers 27(b) 72,763 59,705 - -

Gross change to contract liabilities 27(c) (17,516) (19,777) - -

Change in contract liabilities ceded to reinsurers 27(d) (14,608) 3,327 - -

net claims 27 (122,288) (108,356) - -

Fee and commission expense (80,823) (75,403) - -

Management expenses 28 (82,235) (69,886) (19,353) (10,559)

Other operating expenses 26 (285) (638) (663) (12,238)

other expenses (163,343) (145,927) (20,016) (22,797)

Share of results of associates (2,835) 3,789 - -

Share of results of a joint venture company 527 103 - -

profit before taxation 76,523 81,302 12,188 47,974

Taxation 30 (3,640) (5,216) (31) (258)

net profit for the year 72,883 76,086 12,157 47,716

STATEMENTS OF COMPREHENSIvE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015



STATEMENTS OF COMPREHENSIvE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

Group company

note 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

other comprehensive income/(loss):

Effect of post-acquisition foreign exchange translation reserve on investment in associates 4,316 1,461 - -

Loss on fair value changes of AFS investments 10(d) (1,002) (862) - -

Realised gain transferred to profit or loss 10(d) (305) (1,677) - -

Cumulative loss reclassified to profit or loss 26 - 506 - -

Share of other comprehensive (loss)/income of associates (198) 284 - -

Deferred tax relating to components of other comprehensive income 18 396 834 - -

Other comprehensive income for the year 3,207 546 - -

total comprehensive income for the year 76,090 76,632 12,157 47,716

profit attributable to:

Owners of the parent 68,972 72,332 12,157 47,716

Non-controlling interests 3,911 3,754 - -

72,883 76,086 12,157 47,716

other comprehensive income/(loss) attributable to:

Owners of the parent 3,359 745 - -

Non-controlling interests (152) (199) - -

3,207 546 - -

total comprehensive income attributable to:

Owners of the parent 72,331 73,077 12,157 47,716

Non-controlling interests 3,759 3,555 - -

76,090 76,632 12,157 47,716

earnings per share attributable to owners of the parent (sen per share)

Basic 31 9.17 9.62

Diluted 31 9.17 9.60



STATEMENTS OF CHANGES IN EquITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

attributable to the owners of the parent non distributable Distributable

Group

share capital

rM’000 (note 15)

share premium rM’000 (note 15)

Mergerdeficit

rM’000 (note 16)

available- for-sale

reserves rM’000

employee share

option reserves rM’000

foreign currency

translation reserves rM’000

retained earnings rM’000

total rM’000

non-controlling

interests rM’000

total equity

rM’000

at 1 January 2014 75,176 173,343 (13,838) (3,296) - - 129,087 360,472 37,133 397,605

Net profit for the year - - - - - - 72,332 72,332 3,754 76,086

Other comprehensive (loss)/income for the year - - - (716) - 1,461 - 745 (199) 546

Total comprehensive (loss)/income for the year - - - (716) - 1,461 72,332 73,077 3,555 76,632

Grant of equity-settled share options to employees - - - - 2,169 - - 2,169 - 2,169

Dividends on ordinary shares (Note 32) - - - - - - (29,018) (29,018) - (29,018)

Dividends paid to non-controlling interests - - - - - - - - (2,177) (2,177)

at 31 December 2014 75,176 173,343 (13,838) (4,012) 2,169 1,461 172,401 406,700 38,511 445,211

at 1 January 2015 75,176 173,343 (13,838) (4,012) 2,169 1,461 172,401 406,700 38,511 445,211

Net profit for the year - - - - - - 68,972 68,972 3,911 72,883

Other comprehensive (loss)/income for the year - - - (957) - 4,316 - 3,359 (152) 3,207

Total comprehensive (loss)/income for the year - - - (957) - 4,316 68,972 72,331 3,759 76,090

Grant of equity-settled share options to employees - - - - 2,536 - - 2,536 - 2,536

Dividends on ordinary shares (Note 32) - - - - - - (30,371) (30,371) - (30,371)

Dividends paid to non-controlling interests - - - - - - - - (1,846) (1,846)

at 31 December 2015 75,176 173,343 (13,838) (4,969) 4,705 5,777 211,002 451,196 40,424 491,620



STATEMENTS OF CHANGES IN EquITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


non- distributable Distributable

company

share capital

rM’000 (note 15)

share premium rM’000 (note 15)

employee share

option reserve

rM’000

retained earnings rM’000

total equity

rM’000

at 1 January 2014 75,176 173,343 - 48,138 296,657

Total comprehensive income for the year - - - 47,716 47,716

Dividends on ordinary shares (Note 32) - - - (29,018) (29,018)

Grant of equity-settled share options to employees - - 2,169 - 2,169

at 31 December 2014 75,176 173,343 2,169 66,836 317,524

at 1 January 2015 75,176 173,343 2,169 66,836 317,524

Total comprehensive income for the year - - - 12,157 12,157

Dividends on ordinary shares (Note 32) - - - (30,371) (30,371)

Grant of equity-settled share options to employees - - 2,536 - 2,536

at 31 December 2015 75,176 173,343 4,705 48,622 301,846


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

Group company

note 2015

rM’000 2014

rM’000 (restated)

2015 rM’000

2014 rM’000

(restated)

cash flows from operating activitiesProfit before taxation 76,523 81,302 12,188 47,974

Adjustments for:

Investment income 24 (26,745) (27,515) (28,789) (68,555)

Net unrealised gains on foreign exchange (1,751) (400) (10) 104

Realised gain on disposal of available-for-sale (“AFS”) and fair value through profit or loss (“FvTPL”) investments (145) (1,677) (1,110) (126)

Realised loss on disposal of investment in an associate 25 73 - 277 -

Fair value losses/(gains) of investments 375 (356) 940 162

Impairment loss of quoted equity securities 26 - 506 - -

Loss/(Gain) on disposal of property and equipment 25 100 (4,136) - -

Depreciation of property and equipment 3 1,950 1,706 393 308

Depreciation of investment property 4 28 27 - -

Amortisation of intangible assets 5 2,068 1,826 205 82

Write-off of property and equipment - 28 - 28

Write-off of intangible assets 26 270 - - -

(Reversal of)/Allowance for impairment losses of insurance receivables 12 (3,112) 263 - -

Grant of equity-settled share options to employees 28(a) 2,536 2,169 497 209

Impairment loss on investment in a subsidiary 26 - - 663 12,106

Share of results of associates 2,835 (3,789) - -

Share of results of a joint venture company (527) (103) - -

Operating profit/(loss) before working capital changes 54,478 49,851 (14,746) (7,708)

Reinsurance assets 14,479 (8,831) - -

Insurance receivables (41,249) 469 - -

Other receivables (39,696) 4,708 (3,168) 4,780

Insurance contract liabilities 38,049 31,566 - -

Insurance payables 20,788 (656) - -

Retirement benefits 10 33 - -

Other payables 14,178 (11,694) (391) 368



Group company

note 2015

rM’000 2014

rM’000 (restated)

2015 rM’000

2014 rM’000

(restated)

cash generated from/(used in) operating activities 61,037 65,446 (18,305) (2,560)

Net interest received 18,959 28,202 140 314

Net dividend received 10,913 1,107 26,160 87,618

Rental received 363 357 - -

Retirement benefits paid (272) (186) - -

Income tax paid (7,469) (9,745) (100) (349)

net cash generated from operating activities 83,531 85,181 7,895 85,023

investing activitiesPurchases of AFS financial assets 10(d) (857) (35,400) - -

Purchases of FvTPL financial assets 10(d) (56,175) (105,734) (27,500) (132,500)

Proceeds from maturities/disposal of AFS financial assets 10(d) 5,885 134,758 - -

Proceeds from disposal of FvTPL financial assets 10(d) 47,700 9,312 40,500 54,500

Increase in loans and receivables (“LAR”) (36,985) (137,619) - -

Proceeds from disposal of property and equipment and assets held for sale 7 13,012 - -

Purchase of property and equipment 3 (1,059) (6,571) (240) (1,260)

Purchase of investment property 4 (103) - - -

Purchase of intangible assets 5 (1,304) (2,328) (642) (491)

Subscription of additional shares in subsidiaries 6 - - (800) -

Net cash outflow on investments in associates 7 - (41,233) - (41,233)

Net cash outflow on investment in a joint venture company 8 - (433) - (433)

net cash (used in)/generated from investing activities (42,891) (172,236) 11,318 (121,417)



Group company 2015

rM’000 2014

rM’000 (restated)

2015 rM’000

2014 rM’000

(restated)

financing activitiesRepayment to former ultimate holding company - (325) - (325)

Advances from subsidiaries - - 12,054 2,541

Dividends paid to equity holder (30,371) (29,018) (30,371) (29,018)

Dividends paid to non-controlling interests (1,846) (2,177) - -

net cash used in financing activities (32,217) (31,520) (18,317) (26,802)

net increase/(decrease) in cash and cash equivalents 8,423 (118,575) 896 (63,196)

effect of exchange rate changes on cash and cash equivalents 959 6 10 6

cash and cash equivalents at beginning of year 70,207 188,776 6,284 69,474

cash and cash equivalents at end of year 79,589 70,207 7,190 6,284

cash and cash equivalents comprise:Fixed and call deposits (with maturity of less than three

months) with licensed financial institutions (Note 10(a)) 46,296 48,507 - 4,917

Cash and bank balances 33,293 21,700 7,190 1,367

79,589 70,207 7,190 6,284



NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 20151. corporate inforMation

Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad) (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 6.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year other than disclosed in Note 6.

The addresses of the principal place of business and registered office of the Company are as follows:

principal place of business Level 9, Wisma TuNE No. 19, Lorong Dungun Damansara Heights 50490 Kuala Lumpur

registered office B-13-15, Level 13, Menara Prima Tower B Jalan PJu 1/39, Dataran Prima 47301 Petaling Jaya Selangor Darul Ehsan

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 24 March 2016.

2. siGnificant accountinG policies

2.1 basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the requirements of the Companies Act, 1965 in Malaysia.

At the beginning of the current financial year, the Group and the Company had fully adopted the amended MFRSs as described fully in Note 2.4.

Notes to the fiNaNcial statemeNtsfor the fiNaNcial year eNded 31 december 2015

tUNe protect / aNNUal report 201590

2. siGnificant accountinG policies (cont’D.)

2.1 basis of preparation (cont’d.)

The financial statements of the Group and the Company have been prepared under the historical cost convention, unless otherwise stated in the accounting policies.

Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position only when there is legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liability simultaneously. Income and expense will not be offset in the statements of comprehensive income unless required or permitted by any accounting standard or interpretation, as specifically disclosed in the accounting policies of the Group and of the Company.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.2 basis of consolidation

(a) basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

- Exposure, or rights, to variable returns from its involvement with the investee; and- The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement with the other vote holders of the investee;- Rights arising from other contractual arrangements; and- The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.


tUNe protect / aNNUal report 2015 91


2.2 basis of consolidation (cont’d.)

(a) basis of consolidation (cont’d.)

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised as fair value.

(b) business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group has an option to measure any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in management expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. No reclassification of insurance contracts is required as part of the accounting for the business combination.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognised either in profit or loss or as a change to OCI. If the contingent consideration is not within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration that is classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposes of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.




2.2 basis of consolidation (cont’d.)

(c) Merger method of accounting

Business combinations involving entities under common control are accounted for by applying the merger method of accounting. Accordingly, the assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any difference between the consideration paid and the share capital of the “acquired” entity is reflected within equity as merger reserve or merger deficit. The statements of comprehensive income reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities have always been combined since the date the entities had come under common control.

2.3 summary of significant accounting policies

(a) investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.

The Group’s investments in its associates and joint ventures are accounted for using the equity method.

under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment individually.

The statement of comprehensive income reflects the Group’s share of the results of operations of the associate or joint venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate or joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. unrealised gains and losses resulting from transactions between the Group and the Company and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of comprehensive income outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.




2.3 summary of significant accounting policies (cont’d.)

(a) investments in associates and joint ventures (cont’d.)

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognises the loss as ‘Share of profit of an associate and a joint venture’ in the statement of comprehensive income.

upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

(b) property and equipment

Property and equipment includes property occupied by the Group, renovation, furniture, fittings, office equipment, computers and motor vehicles. Freehold land is not depreciated and is carried at cost. Other property and equipment are stated at cost less accumulated depreciation and any impairment losses. Residual values, useful life and depreciation method are reviewed, and adjusted if appropriate, at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property and equipment. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(g).

The cost of an item of property and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition for its intended use. Expenditure incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is charged to profit or loss in the period in which it is incurred. Subsequent costs are included in the asset’s carrying amount, or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised.

Depreciation of property and equipment other than freehold land is provided for on a straight-line basis to write off the cost of each asset to its residual value over its estimated useful life at the following annual rates:

Buildings on freehold land 2%Renovation 10%Motor vehicles 20%Furniture, fittings and office equipment 12% - 17%Computers 25%

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. upon the disposal of a property and equipment, the difference between the net disposal proceeds and the net carrying amount is recognised in profit and loss.





(c) investment property

Properties that are held for long-term rental yields or for capital appreciation or both, and that are not significantly occupied by the Group, for use by, or in the operations of the Group, are classified as investment property. If an investment property becomes owner-occupied, it is reclassified to property and equipment at its carrying value on the date of transfer.

Investment properties are initially measured at cost, including related transaction costs. Subsequent to initial recognition, the investment properties are carried at cost less accumulated depreciation and any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(g).

Depreciation is provided for on a straight-line basis over the estimated useful life of 50 years for the investment properties. The residual values and useful lives of the investment properties are reviewed, and adjusted if appropriate, at each reporting date.

Any gains or losses on the retirement or disposal of an investment property are recognised when it has been disposed off or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year of retirement or disposal.

(d) assets held for sale

Non-current assets are classified as assets held for sale and stated at the lower of carrying amount and fair value less cost to sell if their carrying amount is recovered principally through a sale transaction rather than through continuing use.

(e) intangible assets

Intangible assets of the Group and the Company consist of computer software, agency relationship, customer relationship and digital direct marketing platform. These intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets are not capitalised and expenditure is reflected in income statement in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least once annually at each reporting date. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.





(e) intangible assets (cont’d.)

The acquired intangible assets are amortised using the straight line method over the following estimated useful lives:

Computer software 4 yearsAgency relationship 8 yearsCustomer relationship 5 yearsDigital direct marketing platform 4 years

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.

(f) investment in subsidiaries

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts is included in profit or loss.

(g) impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of loss.

For goodwill, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (“CGu”) to which the asset belongs. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGus that is expected to benefit from the synergies of the combination.

An asset’s recoverable amount is the higher of an asset’s or CGu fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGu is allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit on a pro-rata basis.





(g) impairment of non-financial assets (cont’d.)

An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

(h) investments and financial assets

initial recognition and measurement

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss (“FvTPL”), loans and receivables (“LAR”), held-to-maturity (“HTM”) investments , available-for-sale (“AFS”) financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the Group or the Company commits to purchase or sell the asset.

subsequent measurement

financial assets at fvtpl

Financial assets at FvTPL include financial assets held-for-trading and those designated upon initial recognition at FvTPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in profit or loss.

lar

LAR are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, LAR are measured at amortised cost, using the effective interest rate method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate method. Gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.





(h) investments and financial assets (cont’d.)

htM investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as HTM when the Group or the Company have the positive intention and ability to hold until maturity. After initial measurement, HTM financial assets are measured at amortised cost, using the effective interest rate method, less impairment. Gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

afs financial assets

AFS financial assets are non-derivative financial assets that are designated as AFS or are not classified in any of the three preceding categories.

After initial measurement, AFS financial assets are measured at fair value with unrealised gains or losses recognised in other comprehensive income (“OCI”) and credited or debited in the AFS reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the AFS reserve to profit or loss. Fair value gains and losses of monetary securities denominated in a foreign currency are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s or the Company’s statement of financial position) when:

- The rights to receive cash flows from the asset have expired; or

- The Group or the Company have transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group or the Company have transferred substantially all the risks and rewards of the asset, or (b) the Group or the Company have neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group or the Company have transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group or the Company continue to recognise the transferred asset to the extent of the Group’s or the Company’s continuing involvement. In that case, the Group and the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group and the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group and the Company could be required to repay.





(i) impairment of financial assets

The Group and the Company assess, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group and the Company first assess whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group or the Company determine that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in profit or loss. Interest income (recorded in profit or loss) continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group or the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited in profit or loss.

afs financial assets

For AFS financial assets, the Group and the Company assess at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.

In the case of equity investments classified as AFS, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss – is removed from OCI and recognised in profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairment are recognised in OCI.





(i) impairment of financial assets (cont’d.)

afs financial assets (cont’d.)

The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this judgement, the Group and the Company evaluate, among other factors, the duration or extent to which the fair value of an investment is less than its cost.

In the case of debt instruments classified as AFS, the impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

(j) financial liabilities

initial recognition and measurement

Financial liabilities are classified, at initial recognition, according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

All financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.

All financial liabilities of the Group and the Company, comprising insurance payables, retirement benefits and other payables, except for those covered under MFRS 4, are classified as other financial liabilities.

subsequent measurement

Insurance payables, retirement benefits and other payables are subsequently measured at amortised cost using the effective interest rate method.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.





(j) financial liabilities (cont’d.)

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

(k) insurance receivables

Insurance receivables are recognised when due and measured on initial recognition at the fair value of the consideration received or receivable. 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 Group reduces the carrying amount of the insurance receivable accordingly and recognises that impairment loss in profit or loss. The Group gathers the objective evidence that an insurance receivable is impaired using the same process adopted for financial assets carried at amortised cost. The impairment loss is calculated under the same method used for these financial assets. These processes are described in Note 2.3(i).

Insurance receivables are derecognised when the derecognition criteria for financial assets, as described in Note 2.3(h), have been met.

(l) insurance payables

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

Derecognition insurance payables

Insurance payables are derecognised when the obligation under the liability is settled, cancelled or expired.

(m) equity instruments

ordinary share capital

The Company has issued ordinary shares that are classified as equity. Incremental external costs that are directly attributable to the issue of these shares are recognised in equity, net of tax.

Dividends on ordinary share capital

Dividends on ordinary shares are recognised as a liability and deducted from equity when they are approved by the Company’s shareholder. Dividends are deducted from equity when they are paid.

Dividends for the year that are approved after the reporting date are dealt with as an event after the reporting date.





(n) fair value measurement

The Group and the Company measure certain financial instruments at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability; or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group and the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 - valuation techniques for which all input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 - valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market bid prices for assets at the close of business on the reporting date.

For investments in unit and property trusts and collective investment schemes, fair value is determined by reference to published bid values.





(n) fair value measurement (cont’d.)

The fair values of floating rate over-night deposits with financial institutions is their carrying value. The carrying value is the cost of the deposit/placements.

The fair values of Malaysian Government Securities, Cagamas Papers and unquoted corporate bonds are determined by reference to Bond Pricing Agency Malaysia.

If the fair value cannot be measured reliably, these financial instruments are measured at cost, being the fair value of the consideration paid for the acquisition of the instrument or the amount received on issuing the financial liability. All transaction costs directly attributable to the acquisition are also included in the cost of the investment.

(o) product classification

The Group currently only issues contracts that transfer insurance risk.

Insurance contracts are those contracts that transfer significant insurance risk. An insurance contract is a contract under which the Group (the insurer / reinsurer) has accepted significant insurance risk from another party (the cedants/policyholders) by agreeing to compensate the cedants/policyholders if a specified uncertain future event (the insured event) adversely affects the cedants/policyholders. As a general guideline, the Group determines whether it has significant insurance risk, by comparing claims paid with claims payable if the insured event did not occur.

Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its life-time, even if the insurance risk reduces significantly during the period, unless all rights and obligations are extinguished or expired.

When insurance contracts contain both a financial risk component and a significant insurance risk component and the cash flows from the two components are distinct and can be measured reliably, the underlying amounts are unbundled. Any premiums relating to the insurance risk component are accounted for on the same bases as insurance contracts and the remaining element is accounted for as a deposit through the statements of financial position similar to investment contracts.

Investments contracts are those contracts that do not transfer significant insurance risk.

(p) reinsurance

The Group assumes reinsurance risk in the normal course of business for general and life insurance contracts when applicable.

Premiums and claims on assumed reinsurance are recognised as revenue or expenses in the same manner as they would be if the reinsurance were considered direct business, taking into account the product classification of the reinsured business. Reinsurance liabilities represent balances due to reinsurance companies. Amounts payable are estimated in a manner consistent with the related reinsurance contract.

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





(p) reinsurance (cont’d.)

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

Reinsurance assets represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision or settled claims associated with the reinsurer’s policies and are in accordance with the related reinsurance contracts.

Ceded reinsurance arrangements do not relieve the Group from its obligations to policyholders. Premiums and claims are presented on gross basis for both ceded and assumed reinsurance.

Reinsurance assets are reviewed for impairment at each reporting date or more frequently when an indication of impairment arises during the reporting period. Impairment is recognised when there is objective evidence as a result of an event that occurs after initial recognition of the reinsurance asset that the Group may not receive all outstanding amounts due under the terms of contract and the event has a reliably measurable impact on the amounts that the Group will receive from the reinsurer. The impairment loss is recorded in profit or loss.

(q) General insurance/reinsurance underwriting results

The general insurance/reinsurance underwriting results are determined after taking into account premiums, movements in premium liabilities and claims liabilities and commissions.

(i) Gross premiums

Gross premiums are recognised as income in a financial period in respect of risks assumed during that particular financial period.

Inwards facultative reinsurance premiums are recognised in the financial period in respect of the facultative risks assumed during that particular financial period, as in the case of direct policies, following individual risks’ inception dates.

Inward treaty reinsurance premiums comprise both proportional and non-proportional treaties. In respect of reinsurance premiums relating to proportional treaties, it is recognised on the basis of periodic advices received from the cedants given that the periodic advices reflect the individual underlying risks being incepted and reinsured at various inception dates of these risks and contractually accounted for, as such to reinsurers under the terms of the proportional treaties. In respect of reinsurance premiums relating to non-proportional treaties which cover losses occurring during a specified treaty period, the inwards treaty reinsurance premiums are recognised based on the contractual premiums already established at the start of the treaty period under the non-proportional treaty contract.





(q) General insurance/reinsurance underwriting results (cont’d.)

(ii) premium liabilities

Premium liabilities represent the insurance/reinsurance subsidiaries’ future obligations on insurance contracts as represented by premiums received for risks that have not yet expired. The movement in premium liabilities is released over the term of the insurance contracts and is recognised as premium income.

Premium liabilities are reported at the higher of the aggregate of the unearned premium reserves (“uPR”) for all lines of business or the best estimate value of the insurance/reinsurance subsidiaries’ unexpired risk reserves (“uRR”) at the end of the financial period and provision of risk margin for adverse deviation (“PRAD”) calculated at 75% confidence level.

unexpired risk reserves

The uRR is a prospective estimate of the expected future payments arising from future events insured under policies in force as at the end of the financial year and also includes allowance for expenses, including overheads and cost of reinsurance, expected to be incurred during the unexpired period in administering these policies and settling the relevant claims, and expected future premium refunds.

uRR is estimated via an actuarial valuation performed by a qualified actuary, using a mathematical method of estimation similar to incurred but not reported claims (“IBNR”).

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

In determining uPR at reporting date, the method that most accurately reflects the actual unearned premium used is as follows:

- 25% method for marine, aviation cargo and transit business - 1/24th method for all other classes of Malaysian policies reduced by the corresponding percentage of

accounted gross direct business commissions and agency-related expenses not exceeding the limits specified by BNM as follows:

Motor 10%Fire, engineering, aviation and marine hull 15%Medical and health- Standalone individuals 15%- Group of 3 or more 10%Workmen’s compensation and employers’ liability- Foreign workers 10%- Other workers 25%- Employers’ Liability 25%Other classes 25%

- 1/8th method for all other classes of overseas inward treaty business with a deduction of 20% for commission

- Non-annual policies are time apportioned over the period of the risks





(q) General insurance/reinsurance underwriting results (cont’d.)

(iii) claims liabilities

Claim liabilities are recognised as the obligation to make future payments in relation to all claims that have been incurred as at the end of the financial year. The value is the best estimate value of claim liabilities which includes provision for claims reported, claims incurred but not enough reserved (“IBNER”), IBNR and direct and indirect claim-related expenses as well as the PRAD at 75% confidence level. These are based on an actuarial valuation by a qualified actuary, using a mathematical method of estimation based on, among others, actual claims development pattern.

(iv) liability adequacy test

At each reporting date, the insurance/reinsurance subsidiaries review all insurance contract liabilities to ensure that the carrying amount of the liabilities is sufficient or adequate to cover the obligations of the Group, contractual or otherwise, with respect to insurance contracts issued. In performing this review, the Group compares all contractual cash flows against the carrying value of insurance contract liabilities. Any deficiency is recognised in profit or loss.

The estimation of claim and premium liabilities performed at reporting date is part of the liability adequacy tests performed by the insurance/reinsurance subsidiaries. Based on this, all insurance contract liabilities as at the reporting date are deemed to be adequate.

(v) acquisition cost

The gross costs of acquiring and renewing reinsurance policies and income derived from ceding reinsurance premiums are recognised as incurred and properly allocated to the periods in which it is probable they give rise to income.

(r) other revenue recognition

Other revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured.

rental income

Rental income is recognised on an accrual basis in accordance with the substance of the relevant agreements.

interest income

Interest income is recognised using the effective interest method.

Dividend income

Dividend income represents gross dividends and is recognised on a declared basis when the shareholder’s right to receive payment is established.





(r) other revenue recognition (cont’d.)

realised gain and losses on investments

Realised gains and losses recorded in profit or loss on investments include gains and losses on financial assets. Gains and losses on the sale of investments are calculated as the difference between net sales proceeds and the original, revalued or amortised cost and are recorded on occurrence of the sale transaction.

fees and commission income

Fees and commission income derived from reinsurers in the course of ceding of premiums to reinsurers are charged to profit or loss in the period in which they are incurred.

Management fees income

Management fees income from subsidiaries are recognised when services are rendered.

(s) income tax

Income tax expense for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit and surplus for the year and is measured using the tax rates that have been enacted at the reporting date.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised as income or an expense and included in profit or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity.

Labuan income tax represents the amount payable in respect of the chargeable profit for the year and is measured at 3% of the chargeable profit or by election under Section 7 of the Labuan Business Activity Tax Act, 1990, to pay a flat amount of RM20,000.

(t) provisions

Provisions are recognised when the Group and the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made of the obligation. When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.





(t) provisions (cont’d.)

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(u) employee benefits

short-term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group and the Company pay fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in profit or loss as incurred. As required by law, the Group and the Company makes such contributions to the Employees Provident Fund (“EPF”).

staff retirement benefits

Provision for retirement benefits is made for all eligible staff in the Group from the date of employment under an unfunded defined contribution plan. For eligible executive staff, gratuity is calculated based on the last drawn monthly salary of an employee multiplied by years of service up to a maximum of 15 years. For eligible clerical staff, an additional 3% over and above the Group’s and the Company’s monthly statutory EPF contribution is provided. The staff will be entitled to this gratuity upon completion of 5 years of service in the Group.

Other staff are entitled to additional EPF contribution between 1% to 5% over the Group’s and the Company’s monthly statutory EPF contribution rate after completion of 1 year of service. This benefit is charged to profit or loss as incurred.

share-based compensation

employee share option scheme (“esos”)

The ESOS is an equity-settled share-based compensation plan that allows the Group’s employees to acquire shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost or amounts due from subsidiaries, with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.





share-based compensation (cont’d.)

employee share option scheme (“esos”) (cont’d.)

At each reporting date, the Group revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in the income statements and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve.

The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised. The share option reserve is transferred to retained earnings upon expiry of the share option.

(v) foreign currencies

(i) functional and presentation currency

The financial statements of the Group and the Company are recorded using the currency of the primary economic environment in which the entity operates (“the functional currency”). The financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

(ii) foreign currency transactions

In preparing the financial statements of the Group and the Company, transactions in currencies other than the Group and the Company’s functional currencies are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(w) cash and cash equivalents

Cash and cash equivalents consist of cash in hand and deposits held at call with financial institutions with original maturities of three months or less.

(x) transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.





(y) Goods and service tax (“Gst”)

GST, a multistage consumption tax on domestic consumption was implemented nationwide on 1 April 2015.

For the Group and Company, revenues, expenses and assets are recognised net of the amount of GST except where GST incurred on a purchase of assets or services is not recoverable from the tax authority, in which case GST is recognised as part of the expense item as applicable. Receivable and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to the tax authority is included as part of the receivables and payables in the statement of financial position.

2.4 changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2015, the Group and the Company adopted the following new and amended MFRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2015.

Description

effective for annual period

beginning on or after

Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions 1 January 2015

Annual Improvements to MFRS 2010 - 2012 Cycle 1 January 2015

Annual Improvements to MFRS 2011 - 2013 Cycle 1 January 2015

The adoption of the above pronouncements did not have any impact on the financial statements of the Group or the Company.

reclassification of net cash used in investing activities

Investments related cash flow activities were previously included as part of cash flows from operating activities in the statement of cash flows of the Group and the Company. However, for the current year presentation, these investments related cash flow activities are presented as part of cash flows from investing activities.

Investments related cash flow activities included the followings:

Group rM’000

company rM’000

Purchases of AFS financial assets (35,400) -

Purchases of FvTPL financial assets (105,734) (132,500)

Proceeds from maturities/disposal of AFS financial assets 134,758 -

Proceeds from disposal of FvTPL financial assets 9,312 54,500

Increase in LAR (137,619) -

(134,683) (78,000)




2.4 changes in accounting policies (cont’d.)

Reconciliation of statement of cash flows of the Group and the Company:

as previously stated

rM’000

re-classification

rM’000

as restated rM’000

GroupNet cash (used in)/generated from operating activities (49,502) (134,683) 85,181 Net cash (used in)/generated from investing activities (37,553) 134,683 (172,236)

companyNet cash generated from operating activities 7,023 78,000 85,023 Net cash used in investing activities (43,417) (78,000) (121,417)

The above reclassification does not have any impact on the total cash and cash equivalents, financial positions, results and notes to the financial statements of the Group and the Company.

2.5 standards issued but not yet effective

The following are standards and annual improvements to standards issued by Malaysian Accounting Standard Board (“MASB”), but not yet effective, up to the date of issuance of the Group’s and the Company’s financial statements. The Group and the Company intend to adopt these standards and annual improvements to standards, if applicable, when they become effective:

Description

effective forannual period

beginningon or after

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint venture Deferred

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016MFRS 14 Regulatory Deferral Accounts 1 January 2016Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and

Amortisation 1 January 2016Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016Annual Improvements to MFRSs 2012–2014 Cycle 1 January 2016Amendments to MFRS 101 Disclosure Initiative 1 January 2016Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities - Applying the Consolidation

Exception 1 January 2016MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 9 Financial Instruments 1 January 2018




2.5 standards issued but not yet effective (cont’d.)

The directors expect that the adoption of the above standards and interpretations will have no material impact on the financial statements in the period of initial application except as discussed below:

Mfrs 9 financial instruments

In July 2015, the IASB issued the final version of IFRS Financial Instruments which reflects all phases of the financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but restatement of comparative information is not compulsory. Early application of previous versions of IFRS 9 (2009, 2010 and 2014) is permitted if the date of initial application is before 1 February 2015.

MFRS 9 is issued by the MASB in respect of its application in Malaysia. It is equivalent to IFRS 9 as issued by IASB, including the effective and issuance dates. The areas with expected significant impact from application of MFRS 9 are summarized below:

classification and measurement

The classification and measurement of financial assets is determined on the basis of the contractual cash flow characteristics and the objective of the business model associated with holding the asset. Key changes include:

- The held-to-maturity (“HTM”) and available-for-sale (“AFS”) asset categories will be removed;

- A new asset category measured at fair value through other comprehensive income (“FvOCI”) is introduced. This applies to debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a model whose objective is achieved by both collecting contractual cash flows and selling financial assets;

- A new asset category for non-traded equity investments measured at FvOCI is introduced;

- Classification of financial liabilities will remain largely unchanged, other than the fair value gains and losses attributable to changes in ‘own credit risk’ for financial liabilities designated and measured at fair value through profit or loss to be presented in other comprehensive income.

The adoption of MFRS 9 will have an effect on the classification and measurement of the Group’s and the Company’s financial assets, and may have no impact on the classification and measurement of the Group’s and the Company’s financial liabilities.

impairment

The MFRS 9 impairment requirements are based on an expected credit loss model (“ECL”) that replaces the incurred loss model under the current accounting standard. The Group and the Company will be generally required to recognise either a 12-month or lifetime ECL, depending on whether there has been a significant increase in credit risk since initial recognition. The ECL model will apply to financial assets measured at amortised cost or at FvOCI, irrevocable loan commitments and financial guarantee contracts, which will include loans, advances and financing and debt instruments held by the Group and the Company. MFRS 9 will change the Group’s and the Company’s current methodology for calculating allowances for impairment, in particular for individual and collective assessment and provisioning.




2.5 standards issued but not yet effective (cont’d.)

Mfrs 9 financial instruments (cont’d.)

hedge accounting

The requirements for general hedge accounting have been simplified for hedge effectiveness testing and may result in more designations of hedged items for accounting purposes.

However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until the Group and the Company undertakes a detailed review.

The Group and the Company are in the process of assessing the financial implications for adopting the new standard.

2.6 significant accounting judgements, estimates and assumptions

(a) critical judgements made in applying accounting policies

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. These are areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates, by definition, may cause material adjustments to the carrying amounts of assets and liabilities within the next financial year such as those discussed below:

(i) Deferred tax assets (note 18)

Deferred tax assets are recognised for unutilised business losses, unutilised capital allowances, various allowances and provisions to the extent that it is probable that taxable profit will be available against which these losses, allowances and provisions can be utilised. Significant judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing of future taxable profits together with future tax planning strategies.

(ii) income taxes (note 30)

The Group and the Company are subject to income taxes in Malaysia. Significant judgement is required in determining the allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.

(iii) property and equipment and investment property (notes 3 and 4)

Property and equipment and investment property requires the review of the residual value and remaining useful life of an item of property and equipment and investment property at least at each financial year end.

Management estimates that the residual values and remaining useful lives are applicable for the current financial year.




2.6 significant accounting judgements, estimates and assumptions

(a) critical judgements made in applying accounting policies (cont’d.)

(iv) consolidation of investment in collective investment schemes, libra MoneyeXtra fund ii, amcash institutional 9 and affin hwang income fund i (note 6)

Note 6 describes that Libra MoneyEXTRA Fund II, AmCash Institutional 9 and Affin Hwang Income Fund I are subsidiaries of the Group.

The directors of the Company assessed whether or not the Group has control over Libra MoneyEXTRA Fund II, AmCash Institutional 9 and Affin Hwang Income Fund I based on whether the Group has the power to direct relevant activities and has exposure or rights to variable returns of Libra MoneyEXTRA Fund II, AmCash Institutional 9 and Affin Hwang Income Fund I. In making their judgment, the directors considered the Group’s absolute size of holding in Libra MoneyEXTRA Fund II, AmCash Institutional 9 and Affin Hwang Income Fund I and the power to convene a special meeting to remove the trustee or the fund manager without any specific reason.

(b) Key sources of estimation uncertainty and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) valuation of general insurance/reinsurance contract liabilities (note 17)

For general insurance/reinsurance contracts, estimates have to be made for both the expected ultimate cost of claims reported at the reporting date and for the expected ultimate cost of IBNR claims.

It can take a significant period of time before the ultimate claims costs can be established with certainty and for some type of policies, IBNR claims form the majority of the liability at the reporting date. The ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection techniques, such as the Link Ratios.

The main assumption underlying these techniques is that the insurance/reinsurance subsidiaries’ past claims development experience can be used to project future claims development and hence, ultimate claims costs. As such, these methods extrapolate the development of paid and incurred losses, average costs per claim and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years, but can also be further analysed by geographical areas, as well as by significant business lines and claims type. Large claims are usually separately addressed, either by being reserved at the face value of loss adjuster estimates or separately projected in order to reflect their future development. In most cases, no explicit assumptions are made regarding future rates of claims inflation or loss ratios. Instead, the assumptions used are those implicit in the historic claims development data on which the projections are based. Additional qualitative judgement is used to assess the extent to which past trends may not apply in future, (for example, to reflect once-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, level of claims inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.




2.6 significant accounting judgements, estimates and assumptions (cont’d.)

(b) Key sources of estimation uncertainty and assumptions (cont’d.)

(ii) uncertainty in accounting estimates for general insurance/reinsurance business (note 17)

The principal uncertainty in the insurance/reinsurance subsidiaries’ general insurance/reinsurance business arises from the technical provisions which include the premium liabilities and claim liabilities. The premium liabilities comprise unearned premium reserves, unexpired risk reserves and provision for risk margin for adverse deviation while claim liabilities comprise provision for outstanding claims.

Generally, premium and claim liabilities are determined based upon previous claims experience, existing knowledge of events, the terms and conditions of the relevant policies and interpretation of circumstances. Particularly relevant is past experience with similar cases, historical claims development trends, legislative changes, judicial decisions and economic conditions. It is certain that actual future premiums and claims liabilities will not exactly develop as projected and may vary from the insurance/reinsurance subsidiaries’ projections.

The estimates of premium and claim liabilities are therefore sensitive to various factors and uncertainties. The establishment of technical provisions is an inherently uncertain process and, as a consequence of this uncertainty, the eventual settlement of premiums and claims liabilities may vary from the initial estimates.

There may be significant reporting lags between the occurrence of an insured event and the time it is actually reported to the insurance/reinsurance subsidiaries. Following the identification and notification of an insured loss, there may still be uncertainty as to the magnitude of the claim.

There are many factors that will determine the level of uncertainty such as inflation, inconsistent judicial interpretations, legislative changes and claims handling procedures.

At each reporting date, these estimates are reassessed for adequacy and changes will be reflected as adjustments to the liability.



3. property anD equipMent

Group

properties

renovation rM’000

Motor vehicles rM’000

furniture, fittings,

office equipment

and computers

rM’000 total

rM’000

freehold land

rM’000

buildings on

freehold land

rM’000

cost

At 1 January 2014 1,237 2,209 595 155 1,880 6,076

Additions - 1 1,048 - 5,522 6,571

Disposals - - (512) (62) (1,621) (2,195)

Written off - - (56) - (16) (72)

At 31 December 2014 1,237 2,210 1,075 93 5,765 10,380

Additions - - 18 - 1,041 1,059

Disposals - - (76) - (350) (426)

At 31 December 2015 1,237 2,210 1,017 93 6,456 11,013

accumulated depreciation

At 1 January 2014 15 121 129 43 420 728

Charge for the year (Note 28) 15 (47) 175 36 1,527 1,706

Disposals - - (81) (62) (1,756) (1,899)

Written off - - (42) - (2) (44)

At 31 December 2014 30 74 181 17 189 491

Charge for the year (Note 28) 15 25 156 36 1,718 1,950

Disposals - - (26) - (293) (319)

At 31 December 2015 45 99 311 53 1,614 2,122

net carrying amount

At 31 December 2014 1,207 2,136 894 76 5,576 9,889

At 31 December 2015 1,192 2,111 706 40 4,842 8,891



3. property anD equipMent (cont’D.)

company renovation

rM’000

furniture, fittings,

office equipment

and computers

rM’000 total

rM’000

cost

At 1 January 2014 83 202 285

Additions - 1,260 1,260

Disposals - (1) (1)

Written off (56) (16) (72)

At 31 December 2014 27 1,445 1,472

Additions - 240 240

At 31 December 2015 27 1,685 1,712

accumulated depreciation

At 1 January 2014 48 87 135

Charge for the year (Note 28) 21 287 308

Disposals - (1) (1)

Written off (42) (2) (44)

At 31 December 2014 27 371 398

Charge for the year (Note 28) - 393 393

At 31 December 2015 27 764 791

net carrying amount

At 31 December 2014 - 1,074 1,074

At 31 December 2015 - 921 921



4. investMent property

Group 2015

rM’000 2014

rM’000

freehold land and building

costAt 1 January 2,950 2,950 Additions 103 - At 31 December 3,053 2,950

accumulated depreciationAt 1 January 71 44 Charge for the year (Note 28) 28 27 At 31 December 99 71

net carrying amount 2,954 2,879

fair value 2,850 2,825

The fair value is determined based on the discounted cash flow of the expected rental income from the investment property, which has been estimated using a valuation technique based on certain assumptions of rental income and discount rate. Management believes the estimated fair value resulting from the valuation technique are reasonable and the most appropriate at the reporting date.

Group 2015

rM’000 2014

rM’000

Rental income derived from investment properties 384 380 Direct operating expenses (including repairs and maintenance) generating rental income (21) (23)Profit arising from investment properties carried at fair value 363 357

The Group has no restrictions on the realisability of its investment property and no contractual obligations to either purchase, construct or develop investment property or for repairs, maintenance and enhancements.

Fair value hierarchy disclosures for investment properties have been provided in Note 41.



5. intanGible assets

Group

computer software rM’000

agency relationship

rM’000

customer relationship

rM’000

Digital direct marketing

platform rM’000

total rM’000

cost

At 1 January 2014 1,354 3,100 2,500 277 7,231

Additions 2,154 - - 174 2,328

At 31 December 2014 3,508 3,100 2,500 451 9,559

Additions 739 - - 565 1,304

Written off (32) - - (452) (484)

At 31 December 2015 4,215 3,100 2,500 564 10,379

accumulated amortisation

At 1 January 2014 409 614 792 - 1,815

Amortisation for the year (Note 28) 836 388 499 103 1,826

At 31 December 2014 1,245 1,002 1,291 103 3,641

Amortisation for the year (Note 28) 1,004 388 500 176 2,068

Written off (8) - - (206) (214)

At 31 December 2015 2,241 1,390 1,791 73 5,495

net carrying amount

At 31 December 2014 2,263 2,098 1,209 348 5,918

At 31 December 2015 1,974 1,710 709 491 4,884



5. intanGible assets (cont’D.)

company

computer

software rM’000

Digital direct marketing

platform rM’000

total rM’000

cost

At 1 January 2014 - - -

Additions 491 - 491

At 31 December 2014 491 - 491

Additions 78 564 642

At 31 December 2015 569 564 1,133

accumulated amortisation

At 1 January 2014 - - -

Amortisation for the year (Note 28) 82 - 82

At 31 December 2014 82 - 82

Amortisation for the year (Note 28) 132 73 205

At 31 December 2015 214 73 287

net carrying amount

At 31 December 2014 409 - 409

At 31 December 2015 355 491 846

6. investMents in subsiDiaries

company

2015 rM’000

2014 rM’000

unquoted shares, at cost 187,782 187,645

At 1 January 187,645 199,751

Subscription of additional shares in Tune Direct Ltd 800 -

Impairment losses (Note 26) (663) (12,106)

At 31 December 187,782 187,645



6. investMents in subsiDiaries (cont’D)

All subsidiaries are incorporated in Malaysia. Details of subsidiaries are as follows:

% of ownership interest held by the Group

% of ownership held by non-controlling interest

name of company principal activities 2015

% 2014

% 2015

% 2014

%

held by the company:

Tune Protect Re Ltd (formerly known as Tune GenRe Ltd)

Operating a general reinsurance business

100.00 100.00 - -

Tune LifeRe Ltd (“TLR”) ** Operating a life reinsurance business and manager of direct marketing distribution of life insurance products as Database Manager # 100.00 100.00 - -

Tune Insurance (Labuan) Ltd (“TIL”) ***

Operating an offshore captive insurance business 80.00 80.00 20.00 20.00

Tune Insurance Malaysia Berhad

Operating a general insurance business 83.26 83.26 16.74 16.74

Tune Direct Ltd Investment holding and manager of an online distribution platform 100.00 100.00 - -

held through subsidiaries:

Tune Direct (M) Sdn Bhd (“TDM”)

Insurance intermediary for life, general and takaful business 100.00 100.00 - -

Tune Insurance PCC Ltd (“TIPCC”)

Captive insurance business 100.00 100.00 - -

Libra Money EXTRA Fund II Collective investment scheme 90.79 90.55 9.21 9.45

AmCash Institutional 9 Collective investment scheme 87.46 87.24 12.54 12.76

Affin Hwang Income Fund I * Collective investment scheme 83.26 83.26 16.74 16.74

# This subsidiary was appointed to manage the direct marketing distribution of life insurance products with various insurance partners regionally as Database Manager for AirAsia Group.

* Audited by firms of Chartered Accountants other than Ernst & Young.

** TLR has surrendered its Labuan reinsurance license with effect from 4 September 2015. Details have been disclosed in Note 44(b).

*** TIL has surrendered its Labuan captive insurer’s licence with effect from 23 September 2015. Details have been disclosed in Note 44(c).



6. investMents in subsiDiaries (cont’D.)

Material partly-owned subsidiaries

Financial information of subsidiaries that have material non-controlling interests are provided below:

proportion of equity interest held by non-controlling

interests

name of subsidiariescountry of incorporation

and operation 2015

% 2014

%

Tune Insurance (Labuan) Ltd Malaysia 20.00 20.00

Tune Insurance Malaysia Berhad Malaysia 16.74 16.74

Libra MoneyEXTRA Fund II Malaysia 9.21 9.45

AmCash Institutional 9 Malaysia 12.54 12.76

Affin Hwang Income Fund I Malaysia 16.74 16.74

2015 rM’000

2014 rM’000

accumulated balances of non-controlling interests:

Tune Insurance (Labuan) Ltd 515 533

Tune Insurance Malaysia Berhad 39,673 37,870

Collective investment schemes 236 108

40,424 38,511

(loss)/profit allocated to non-controlling interests:

Tune Insurance (Labuan) Ltd (18) (17)

Tune Insurance Malaysia Berhad 3,857 3,713

Collective investment schemes 187 173

Consolidation adjustments (115) (115)

3,911 3,754




Material partly-owned subsidiaries (cont’d.)

The summarised financial information of these subsidiaries are provided below. This information is based on amounts before inter-company eliminations.

tune insurance (labuan) ltd

tune insurance Malaysia berhad

collective investment schemes

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised statements of comprehensive income:

operating revenue - (34) 413,361 387,518 17,386 10,624

Gross earned premiums - - 394,206 366,072 - -

Premiums ceded to reinsurers - - (214,305) (206,090) - -

net earned premiums - - 179,901 159,982 - -

Investment income - (34) 19,155 21,446 17,386 10,624

Realised gains and losses - - 205 5,813 15 -

Fair value gains and losses - - 503 1,295 (118) 12

Fees and commission income - - 44,692 41,472 - -

Other operating income 39 70 2,609 1,515 - -

other revenue 39 36 67,164 71,541 17,283 10,636

Gross claims paid - (140) (161,801) (150,000) - -

Claims ceded to reinsurers - - 74,256 62,334 - -

Gross change to contract liabilities - 78 (18,359) (17,581) - -

Change in contract liabilities ceded to reinsurers - - (11,930) 751 - -

net claims - (62) (117,834) (104,496) - -





The summarised financial information of these subsidiaries are provided below. This information is based on amounts before inter-company eliminations. (cont’d.)




2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised statements of comprehensive income (cont’d.):

Fee and commission expense - - (57,083) (55,555) - - Management expenses (130) (61) (45,298) (43,708) (1,745) (884)Other operating expenses - - (15) (506) - - other expenses (130) (61) (102,396) (99,769) (1,745) (884)

(loss)/profit before taxation (91) (87) 26,835 27,258 15,538 9,752 Taxation - 1 (3,796) (5,077) - - net (loss)/profit for the year (91) (86) 23,039 22,181 15,538 9,752

other comprehensive (loss)/income:

Loss on fair value changes of AFS investments - - (682) (471) - -

Realised gain transferred to profit or loss - - (305) (1,677) - -

Cummulative loss reclassified to profit or loss - - - 506 - -

Deferred tax relating to components of other comprehensive income - - 396 834 - -

Other comprehensive loss for the year - - (591) (808) - -

total comprehensive (loss)/income (91) (86) 22,448 21,373 15,538 9,752

Attributable to non-controlling interests (18) (17) 3,758 3,578 133 173

Dividends paid to non-controlling interests - - 1,846 2,177 - -









2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised statements of financial position as at 31 December:

Property and equipment - - 5,072 5,857 - -

Investment property - - 2,433 2,352 - -

Intangible assets - - 1,451 1,681 - -

Investments - - 459,410 432,242 462,805 416,556

Reinsurance assets - - 248,126 257,515 - -

Insurance receivables - 101 107,317 71,019 - -

Other receivables - - 112,728 80,654 2,987 842

Cash and bank balances 2,593 2,604 8,670 8,396 9 21

Deferred tax assets - - 291 1,007 - -

Insurance contract liabilities - - (564,139) (525,807) - -

Insurance payables - - (107,152) (82,395) - -

Retirement benefits - - (530) (792) - -

Other payables - (37) (41,010) (30,508) (188) (163)

2,593 2,668 232,667 221,221 465,613 417,256

Attributable to:

Equity holders of parent 2,078 2,135 192,994 183,351 465,377 417,148

Non-controlling interest 515 533 39,673 37,870 236 108

2,593 2,668 232,667 221,221 465,613 417,256









2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised cash flow information for year ended 31 December:

Operating activities (50) 1,405 40,426 26,948 (30,850) (304,801)Investing activities - - (26,445) (11,565) - - Financing activities - (4) (11,001) (13,002) 30,838 304,817 net (decrease)/increase in

cash and cash equivalents (50) 1,401 2,980 2,381 (12) 16

7. investMents in associates

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

unquoted shares, at cost 40,955 41,233 40,955 41,233 Share of post-acquisition reserves 1,244 4,073 - -

42,199 45,306 40,955 41,233 Exchange differences 5,589 1,416 - -

47,788 46,722 40,955 41,233

All associates are incorporated in Thailand. Details of the associates are as follows:


name of associates principal activities 2015

% 2014

%

held by the company:

Tune Insurance Public Company Limited (“TIPCL”) Non-life (general) insurance 49.00 49.00

Permpoonsub Broker Company Limited (“PPS”) In-house broker of TIPCL -* 49.00

* The entire shareholdings of PPS has been disposed on 15 December 2015. The realised loss on disposal of investment has been recognised in profit and loss as disclosed in Note 25.

The financial statements of the above associates are coterminous with those of the Group, and were audited by firms other than Ernst & Young, Malaysia.



7. investMents in associates (cont’D.)

The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows:

tipcl pps

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised statement of comprehensive income:

Net earned premiums 34,925 8,165 - -

Commissions and brokerages income 9,430 3,048 9,703 2,033

total underwriting income 44,356 11,213 9,703 2,033

underwriting expenses (37,497) (7,386) (9,042) (1,987)

Operating expenses (10,933) (3,657) (1,503) (682)

total underwriting expenses (48,430) (11,043) (10,545) (2,669)

Investment income 2,263 1,126 - -

Other income 84 7,948 823 239

total other revenue 2,347 9,074 823 239

Other expenses (3,775) (1,017) - -

profit before taxation (5,501) 8,227 (19) (397)

Taxation (49) (96) - -

net profit for the year (5,551) 8,131 (19) (397)

Group share of profits for the financial year (2,720) 3,984 (9) (195)

Amortisation of intangible assets, broker relationship of PPS 107 - - -

Group share of results in other comprehensive income (207) 284 - -

Group share for the financial year (2,820) 4,268 (9) (195)



7. investMents in associates (cont’D.)

The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows: (cont’d.)

tipcl pps

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

summarised statement of financial position as at 31 December:

assets

Property and equipment 572 202 - 23

Intangible assets 63 19 - 901

Investments 66,638 59,559 - 122

Deferred tax assets 1,595 511 - -

Reinsurance assets 20,167 18,622 - -

Insurance receivables 8,889 5,775 - 93

Other receivables 6,434 2,744 - -

Cash and bank balances 23,529 16,430 - 229

127,887 103,862 - 1,368

liabilities

Insurance contract liabilities 31,064 28,698 - 1,019

Insurance payables 21,763 8,735 - -

Other payables 9,281 2,999 - 159

Retirement benefits 775 723 - 67

62,883 41,155 - 1,245

net assets of the associates 65,004 62,707 - 123

Proportion of the Group’s ownership interest in associates 49% 49% - 49%

Share of net assets of the associates 31,852 30,726 - 60

Add: Goodwill 15,424 15,936 - -

Add: Intangible assets 512 - - -

carrying amount of interest in associates as at 31 December 47,788 46,662 - 60



8. investMent in a Joint venture coMpany

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

unquoted shares, at cost 433 433 433 433

Share of post-acquisition reserves 630 103 - -

1,063 536 433 433

Exchange differences 188 45 - -

1,251 581 433 433

The joint venture company is incorporated in Dubai, united Arab Emirates. Other details are as follows:


name of joint venture company principal activities 2015

% 2014

%

Tune Protect Commercial Brokerage LLC Facilitator of online insurance 49.00 49.00

The financial statements of the above joint venture company is coterminous with those of the Group, and were audited by a firm affiliated with Ernst & Young, Malaysia.

The summarised financial information of the joint venture, not adjusted for the proportion of ownership interest held by the Group, is as follows:

2015 rM’000

2014 rM’000

summarised statements of comprehensive income:

Fees and commission income 2,773 1,124

Other operating income - 36

Management expenses (1,697) (952)

profit before taxation 1,076 208

Taxation - -

net profit for the year 1,076 208

Group share of profits for the financial year 527 103



8. investMent in a Joint venture coMpany (cont’D.)

2015 rM’000

2014 rM’000

summarised statements of financial position as at 31 December

assetsProperty and equipment 20 18 Trade and other receivables 1,928 1,356 Cash and bank balances 1,846 1,268

3,794 2,642

liabilitiesTrade payables 1,240 1,457

net assets of the joint venture 2,554 1,185

Proportion of the Group’s ownership interest in joint venture 49% 49%

carrying amount of interest in joint venture as at 31 December 1,251 581

9. GooDwill

Group 2015

rM’000 2014

rM’000

At 1 January/31 December 24,165 24,165

The goodwill above arose from the acquisition of TIMB on 23 May 2012.

Goodwill is allocated to the Group’s CGu which is expected to benefit from the synergies of the acquisition. The recoverable amount of the CGu is assessed based on its value-in-use and compared to the carrying value of the CGu to determine whether any impairment exists. Impairment is recognised in profit or loss if the carrying amount of the CGu exceeds its recoverable amount.

The value-in-use calculations apply discounted cash flow projections prepared and approved by management, covering a five-year period.

The key assumptions for the computation of value-in-use are as follows:

(i) The growth in business volume is expected to be at average of 11% per annum;

(ii) The retention ratio and net claims incurred ratio are estimated to be approximately 53% and 72% per annum;

(iii) The discount rate applied is the internal weighted average cost of capital of TIMB at the time of the assessment, which is estimated to be 9.64% per annum (pre-tax discount rate of 12.86% per annum); and

(iv) Terminal value cash flow growth rate of 5%, which is consistent with the Gross Domestic Product rate.

Management believes that reasonably possible changes in any of the above key assumptions would not cause the carrying value of the CGu to exceed its recoverable amount. Accordingly, there is no evidence of impairment of goodwill as at the financial year end.



10. investMents

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

Debt securities 119,217 114,317 - -

Equity securities - 12,791 - -

unit and property trust funds 23,895 14,397 69,038 79,379

Loans 445 505 - -

Deposits with financial institutions 444,065 409,231 - 4,917

587,622 551,241 69,038 84,296

The Group’s and Company’s financial investments are summarised by categories as follows:

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

LAR (Note (a)) 444,510 409,736 - 4,917

AFS financial assets (Note (b)) 38,394 44,727 - -

Financial assets at FvTPL (Note (c)) 104,718 96,778 69,038 79,379

587,622 551,241 69,038 84,296

(a) lar

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

at amortised cost:Fixed and call deposits with licensed financial institutions 444,065 409,231 - 4,917

Loans receivable:

Staff mortgage loans 435 495 - -

Other staff loans:

unsecured 10 10 - -

445 505 - -

444,510 409,736 - 4,917

Included in fixed and call deposits with licensed financial institutions of the Group and the Company are short term deposits with maturity periods of less than 3 months amounting to RM46,296,000 and Nil respectively (2014: RM48,507,000 and RM4,917,000) which have been classified as cash and cash equivalents for the purpose of the statements of cash flows.

The carrying value of the fixed and call deposits approximates fair value due to the relatively short term maturities.

The carrying value of the staff mortgage loans and other staff loans are reasonable approximation of fair value due to the insignificant impact of discounting.



10. investMents (cont’D.)

(b) afs financial assets

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

at fair value:

Equity securities:

- 6,259 - - quoted in Malaysia

unit and property trust funds:

13,846 13,397 - - quoted in Malaysia

Debt securities:

24,548 25,071 - - unquoted in Malaysia

38,394 44,727 - -

(c) financial assets at fvtpl

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

at fair value:

Equity securities:

- 6,532 - - quoted in Malaysia

Debt securities:

94,669 89,246 - - unquoted in Malaysia

unit trust fund:

10,049 1,000 - - quoted in Malaysia

Collective investment schemes:

quoted in Malaysia:

Libra MoneyEXTRA Fund II - - 43,386 49,729

AmCash Institutional 9 - - 25,652 29,650

104,718 96,778 69,038 79,379




(d) carrying values of investments

Grouplar

rM’000

afs financial

assets rM’000

fvtpl rM’000

total rM’000

at 1 January 2014 388,323 146,248 - 534,571

Purchases 1,938,117 35,400 105,734 2,079,251

Maturities/disposals (1,916,704) (134,758) (9,312) (2,060,774)

Fair value gains/(losses) recorded in:

Profit and loss - - 356 356

Other comprehensive income - (862) - (862)

Realised gain transferred to profit or loss (Note 25) - (1,677) - (1,677)

Impairment loss of quoted equity securities (Note 26) - 506 - 506

Amortisation of premiums (Note 24) - (130) - (130)

at 31 December 2014 409,736 44,727 96,778 551,241

Purchases 2,003,888 857 56,175 2,060,920

Maturities/disposals (1,969,114) (5,885) (47,700) (2,022,699)

Fair value losses recorded in:

Profit and loss - - (375) (375)

Other comprehensive income - (1,002) - (1,002)

Realised gain transferred to profit or loss (Note 25) - (305) - (305)

Realised loss recorded in profit and loss (Note 25) - - (160) (160)

Accretion of discounts(Note 24) - 2 - 2

at 31 December 2015 444,510 38,394 104,718 587,622




(d) carrying values of investments (cont’d.)

company lar

rM’000 fvtpl

rM’000 total

rM’000

at 1 January 2014 69,176 - 69,176

Purchases 4,917 132,500 137,417

Maturities/disposals (69,176) (54,500) (123,676)

Dividend reinvestment - 1,415 1,415

Realised gain recorded in profit or loss (Note 25) - 126 126

Fair value loss recorded in profit or loss - (162) (162)

at 31 December 2014 4,917 79,379 84,296

Purchases - 27,500 27,500

Maturities/disposals (4,917) (40,500) (45,417)

Dividend reinvestment - 2,489 2,489

Realised gain recorded in profit or loss (Note 25) - 1,110 1,110

Fair value loss recorded in profit or loss - (940) (940)

at 31 December 2015 - 69,038 69,038

(e) average effective interest rates

The average effective interest rates and the earlier of the contractual re-pricing or maturity dates for each class of interest-bearing investment and placements with licensed financial institutions, at net carrying amounts are as below:

Group company

2015 %

2014 %

2015 %

2014 %

Debt securities 4.71 4.71 - -

Loans 5.00 5.00 - -

Deposits with financial institutions 4.28 4.04 - 4.80

11. reinsurance assets

Group 2015

rM’000 2014

rM’000

Claims liabilities (Note 17) 178,448 193,056 Premium liabilities (Note 17) 66,354 66,225

244,802 259,281



12. insurance receivables

Group 2015

rM’000 2014

rM’000

Due premiums including agents, brokers and co-insurers balances 76,415 55,428 Due from reinsurers and cedants 46,778 26,692 Deposits paid to reinsurers 597 571

123,790 82,691 Write back of allowance for impairment losses 8,483 4,429

132,273 87,120

Group

individually impaired rM’000

collectively impaired rM’000

total rM’000

At 1 January 2014 1,408 (3,677) (2,269)Written off - (2,423) (2,423)Allowance/(reversal of allowance) for impairment losses (Note 28) 752 (489) 263 At 31 December 2014 2,160 (6,589) (4,429)Written off - (942) (942)Allowance/(reversal of allowance) for impairment losses (Note 28) 154 (3,266) (3,112)At 31 December 2015 2,314 (10,797) (8,483)

The carrying amounts of insurance receivables above approximate their respective fair values due to the relatively short-term maturity of these balances.

13. other receivables

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

financial assets:Amounts due from subsidiaries - - 4,987 4,572 Income due and accrued 1,947 1,688 - 5 Assets held under the Malaysian Motor Insurance Pool

(“MMIP”)* 73,189 63,802 - - Malaysian Institute of Insurance bonds 260 260 - - Other receivables 26,728 2,875 277 144

102,124 68,625 5,264 4,721

non-financial assets:Prepayments 3,257 226 3,096 56 Tax recoverable 17,682 13,011 51 -

20,939 13,237 3,147 56

123,063 81,862 8,411 4,777



13. other receivables (cont’D.)

* As a participating member of MMIP, the Group shares a proportion of the Pool’s net assets/liabilities. At each reporting date, the Group accounts for its share of the assets, liabilities and performance of the Pool. The net assets held under MMIP represents the Group’s share of the Pool’s net assets, before insurance contract liabilities. The Group’s share of the Pool’s insurance contract liabilities arising from its participation in the Pool is disclosed in Note 17.

The net assets held under MMIP of the Group includes cash contribution of RM34,359,477 (2014: RM27,347,901) made to MMIP, following additional cash calls of RM7,011,576 (2014: RM9,358,767) made by the Pool during the current financial year. The cash contributions were made in respect of the Group’s share of MMIP’s accumulated losses up to 31 December 2015.

The carrying amounts of financial assets included under other receivables approximate their respective fair values due to the relatively short-term maturity of these balances.

The amounts due from subsidiaries are unsecured, interest free and are repayable on demand.

14. assets helD for sale

Group 2015

rM’000 2014

rM’000

At beginning of year - 8,580 Disposals - (8,580)At end of year - -

On 2 July 2013, the Company had entered into a conditional Sale and Purchase Agreement for the proposed disposal of the above properties located at Jalan Ampang, Kuala Lumpur at a total cash consideration of RM12.8 million. The disposal has been completed on 29 January 2014.

15. share capital anD share preMiuM

Group and companynumber of ordinary

shares of rM0.10 each amount 2015 ‘000

2014 ‘000

2015 rM’000

2014 rM’000

authorised:At 1 January/31 December 1,500,000 1,500,000 150,000 150,000

Group and companyissued and fully paid

total share capital and

share premium rM’000

number of ordinary shares of

rM0.10 each ‘000

amount rM’000

share premium rM’000

At 31 December 2015/31 December 2014 751,760 75,176 173,343 248,519



16. MerGer Deficit

Group

2015 rM’000

2014 rM’000

Merger deficit (13,838) (13,838)

Merger deficit represents the difference between consideration given and the carrying value of ordinary shares of a subsidiary acquired.

17. insurance contract liabilities

Group 2015

Group 2014

Gross rM’000

reinsurance rM’000

net rM’000

Gross rM’000


net rM’000

General insurance (Note 17(a)) 564,139 (243,545) 320,594 525,807 (256,560) 269,247

General reinsurance (Note 17(b)) 13,149 (1,257) 11,892 13,432 (2,721) 10,711

577,288 (244,802) 332,486 539,239 (259,281) 279,958

Provision for claims reported by policyholders 284,992 (127,587) 157,405 270,790 (129,480) 141,310

Provision for IBNR claims and PRAD 120,784 (50,861) 69,923 117,470 (63,576) 53,894

Claims liabilities 405,776 (178,448) 227,328 388,260 (193,056) 195,204

Premium liabilities 171,512 (66,354) 105,158 150,979 (66,225) 84,754

577,288 (244,802) 332,486 539,239 (259,281) 279,958



17. insurance contract liabilities (cont’D.)

Group 2015

Group 2014

Gross rM’000


net rM’000

Gross rM’000


net rM’000

(a) General insurance


Provision for IBNR claims and PRAD 117,500 (50,861) 66,639 115,766 (63,576) 52,190

Claims liabilities (i) 396,753 (177,381) 219,372 378,394 (190,480) 187,914

Premium liabilities (ii) 167,386 (66,164) 101,222 147,413 (66,080) 81,333

564,139 (243,545) 320,594 525,807 (256,560) 269,247

(i) claims liabilities

At 1 January 378,394 (190,480) 187,914 360,813 (184,471) 176,342

Claims incurred in the current accident

year 256,297 (95,066) 161,231 246,129 (103,957) 142,172

Adjustment to claims incurred in prior

accident years due to changes in assumptions (76,137) 35,402 (40,735) (78,548) 38,243 (40,305)

Claims paid during the year (161,801) 72,763 (89,038) (150,000) 59,705 (90,295)

At 31 December 396,753 (177,381) 219,372 378,394 (190,480) 187,914


At 1 January 147,413 (66,080) 81,333 133,466 (61,677) 71,789

Premiums written in the year 414,179 (147,341) 266,838 380,019 (159,382) 220,637

Premiums earned during the year (394,206) 147,257 (246,949) (366,072) 154,979 (211,093)

At 31 December 167,386 (66,164) 101,222 147,413 (66,080) 81,333



17. insurance contract liabilities (cont’D.)

Group 2015

Group 2014

Gross rM’000


net rM’000

Gross rM’000


net rM’000

(b) General reinsurance


Provision for IBNR claims and PRAD 3,284 - 3,284 1,704 - 1,704

Claims liabilities (i) 9,023 (1,067) 7,956 9,866 (2,576) 7,290

Premium liabilities (ii) 4,126 (190) 3,936 3,566 (145) 3,421

13,149 (1,257) 11,892 13,432 (2,721) 10,711

(i) claims liabilities

At 1 January 9,866 (2,576) 7,290 2,412 - 2,412

Claims incurred in the current accident

year 283 1,509 1,792 9,152 (2,576) 6,576

Movements in claims incurred in prior

years - - - (87) - (87)

Claims paid during the year (1,126) - (1,126) (1,611) - (1,611)

At 31 December 9,023 (1,067) 7,956 9,866 (2,576) 7,290


At 1 January 3,566 (145) 3,421 6,945 (262) 6,683

Premiums written in the year 59,802 (2,397) 57,405 54,104 (1,442) 52,662

Premiums earned during the year (59,242) 2,352 (56,890) (57,483) 1,559 (55,924)

At 31 December 4,126 (190) 3,936 3,566 (145) 3,421

As at 31 December 2015, the insurance contract liabilities above includes the Group’s share of MMIP’s claims and premium liabilities amounting to RM67,673,000 (2014: RM61,143,000) and RM7,649,000 (2014: RM10,471,000).



18. DeferreD taX liabilities

Group 2015

rM’000 2014

rM’000

At 1 January 620 1,851

Recognised in:

Profit or loss (Note 30) 882 (397)

Other comprehensive income (396) (834)

At 31 December 1,106 620

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

Group 2015

rM’000 2014

rM’000

Presented after appropriate offsetting as follows:

Deferred tax liabilities 1,802 1,961

Deferred tax assets (696) (1,341)

1,106 620

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Group

accelerated capital

allowance on property

and equipment

rM’000

premium liabilities rM’000

fair value of financial

assets rM’000

investment property rM’000

intangible assets

rM’000 total

rM’000

Deferred tax liabilities

at 1 January 2014 1,148 - 230 131 1,024 2,533 Recognised in: Profit or loss (118) - - (2) (222) (342) Other comprehensive

income - - (230) - - (230)at 31 December2014 1,030 - - 129 802 1,961 Recognised in: Profit or loss 31 34 - (2) (222) (159) Other comprehensive

income - - - - -

at 31 December2015 1,061 34 - 127 580 1,802



18. DeferreD taX liabilities (cont’D.)

Group

fair value of financial

assets rM’000

premium liabilities rM’000

others rM’000

total rM’000

Deferred tax assets

at 1 January 2014 - (362) (320) (682)

Recognised in:

Profit or loss - 285 (340) (55)

Other comprehensive income (604) - - (604)

at 31 December 2014 (604) (77) (660) (1,341)

Recognised in:

Profit or loss 888 77 76 1,041

Other comprehensive income (396) - - (396)

at 31 December 2015 (112) - (584) (696)

19. insurance payables

Group 2015

rM’000 2014

rM’000

Due to agents, brokers, co-insurers and insureds 29,406 27,371 Due to reinsurers and cedants 58,144 39,391

87,550 66,762

The carrying amounts approximate fair value due to their relatively short-term maturity.

20. retireMent benefits

Group 2015

rM’000 2014

rM’000

At 1 January 792 945 Provision for the year 10 33 Payments during the year (272) (186)At 31 December 530 792

Amount payable after 12 months 530 782



21. other payables

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

financial liabilities:Amount due to a joint venture 3,137 1,257 - - Amounts due to subsidiaries - - 11,635 1,206 Claims payable 5,585 4,199 - - Reinsurance deposits 9,215 6,035 - - Others 25,102 9,104 - -

43,039 20,595 11,635 1,206

non-financial liabilities:Provision for taxation 18 38 - 18 Accrued expenses 9,835 18,101 2,095 2,486

9,853 18,139 2,095 2,504

52,892 38,734 13,730 3,710

The carrying amounts of the financial liabilities approximate fair value due to their relatively short-term maturity.

22. operatinG revenue

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Gross earned premiums (Note 23(a)) 453,448 423,555 - -

Investment income (Note 24) 26,745 27,515 28,789 68,555

480,193 451,070 28,789 68,555



23. net earneD preMiuMs

Group

2015 rM’000

2014 rM’000

(a) Gross earned premiums

Gross written premiums 473,981 434,123

Change in premium liabilities (20,533) (10,568)

453,448 423,555

(b) premiums ceded to reinsurers

Gross premiums ceded to reinsurers 149,737 160,824

Change in premium liabilities (129) (4,286)

149,608 156,538

net earned premiums 303,840 267,017

24. investMent incoMe

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Rental income from investment property 363 357 - -

Interest income:

- AFS financial assets 1,210 931 - -

- LAR 16,466 13,624 140 314

- FvTPL 4,104 1,130 - -

Share of investment income from MMIP 3,677 7,479 - -

Dividend income:

- AFS financial assets 804 4,053 - -

- FvTPL 119 71 2,489 1,415

- Subsidiaries - - 26,160 66,826

26,743 27,645 28,789 68,555

Net accretion of discounts/(amortisation of premiums) on investments (Note 10(d)) 2 (130) - -

26,745 27,515 28,789 68,555



25. realiseD Gains anD losses

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

property and equipment:Realised (loss)/gain on disposal of property and equipment

and assets held for sale (100) 4,136 - -

investment in an associate:Realised loss on disposal of investment in an associate (73) - (277) -

afs financial assets:Realised gains:

Equity securities

- quoted in Malaysia 3,065 2,545 - -

- quoted outside Malaysia 15 - - -

Debts securities

- unquoted in Malaysia - 577 - -

Realised losses:

Equity securities

- quoted in Malaysia (2,775) (1,230) - -

Debts securities

- unquoted in Malaysia - (215) - -

Net realised gains for AFS financial assets (Note 10(d)) 305 1,677 - -

fvtpl financial assets:Realised gains:

Collective investment scheme

- quoted in Malaysia 15 - 1,110 126

Realised losses:

unit trust funds

- quoted in Malaysia (175) - - -

Net realised (losses)/gains for

FvTPL financial assets (Note 10(d)) (160) - 1,110 126

Total net realised (losses)/gains (28) 5,813 833 126



26. other operatinG incoMe/(eXpenses)

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

other operating income:Foreign exchange gain:

- realised 2,276 - 653 -

- unrealised 1,751 504 10 -

Tele-marketing commission income 233 291 156 29

Management fees income (Note 35(a)) - - 2,660 2,173

Sundry income 2,731 1,379 43 50

6,991 2,174 3,522 2,252

other operating expenses:Foreign exchange loss:

- realised (15) - - -

- unrealised - (104) - (104)

Write-off of property and equipment - (28) - (28)

Write-off of intangible assets (270) - - -

Impairment loss of quoted equity securities (Note 10(d)) - (506) - -

Impairment losses on investment in a subsidiary (Note 6) - - (663) (12,106)

(285) (638) (663) (12,238)

27. net claiMs

Group 2015

rM’000 2014

rM’000

(a) Gross claims paid (162,927) (151,611)

(b) Claims ceded to reinsurers 72,763 59,705

Net claims paid (a) (90,164) (91,906)

(c) Gross change to contract liabilities (17,516) (19,777)

(d) Change in contract liabilities ceded to reinsurers (14,608) 3,327

Net change in contract liabilities (b) (32,124) (16,450)

Net claims (a) + (b) (122,288) (108,356)



28. ManaGeMent eXpenses

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

Reimbursement of expenses incurred by the former ultimate holding company, Tune Money Sdn Bhd (“TMSB”): (Note 35(a))

Staff costs:

- Salaries and bonuses - 10 - 10

- Other employee benefits - 22 - -

- 32 - 10

Reimbursement of expenses incurred by subsidiary: (Note 35(a))

Rental of premises - - 202 127

Employee benefits expense (Note 28(a)) 42,847 39,698 6,836 6,054

Directors’ remuneration (Note 28(b)) 2,099 1,399 1,583 926

Auditors’ remuneration:

- statutory audits 343 311 60 62

- regulatory related services 69 67 10 10

- other services 174 85 124 41

Depreciation of property and equipment (Note 3) 1,950 1,706 393 308

Depreciation of investment property (Note 4) 28 27 - -

Amortisation of intangible assets (Note 5) 2,068 1,826 205 82

(Reversal of allowance)/allowance for impairment losses on insurance receivables (Note 12) (3,112) 263 - -

Management fees 1,820 1,112 - -

Marketing expenses 4,467 6,788 2,281 323

Rental of premises 2,240 1,814 - -

Professional fees 2,820 2,326 919 1,146

Printing charges 1,922 1,762 138 106

Publicity expenses 4,375 2,659 189 172

Communication expenses 732 836 35 35

Computer expenses 1,449 892 222 -

Administration and general expenses 15,944 6,283 6,156 1,157

82,235 69,886 19,353 10,559



28. ManaGeMent eXpenses (cont’D.)

(a) employee benefits expense

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

Wages and salaries 33,058 30,761 5,199 4,796

Social security contributions 226 188 12 10

Contributions to defined contribution plan 3,929 3,660 625 491

Share-based compensation (Note 29) 2,536 2,169 497 209

Other benefits 3,098 2,920 503 548

42,847 39,698 6,836 6,054

(b) Directors’ remuneration

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

Directors of the company:

Executive:

Salaries and other emoluments 900 370 900 370

Defined contribution plan 108 44 108 44

1,008 414 1,008 414

Non-executive:

Fees 453 379 453 379

Allowances and other emoluments 122 133 122 133

575 512 575 512

1,583 926 1,583 926

Directors of the subsidiaries:

Non-executive:

Fees 395 386 - -

Allowances and other emoluments 121 87 - -

516 473 - -

total 2,099 1,399 1,583 926




(b) Directors’ remuneration (cont’d.)

fees rM’000

allowances and other

emoluments rM’000

total rM’000

Directors of the company: (cont’d.)

2015:

Non-executive:

Razman Hafidz bin Abu Zarim 119 34 153

Tan Sri Dr. Anthony Francis Fernandes 63 10 73

Datuk Kamarudin bin Meranun 63 15 78

Ng Soon Lai @ Ng Siek Chuan 108 34 142

Tan Ming-Li 100 29 129

453 122 575

2014:

Non-executive:

Razman Hafidz bin Abu Zarim 94 35 129

Tan Sri Dr. Anthony Francis Fernandes 50 10 60

Datuk Kamarudin bin Meranun 50 19 69

Ng Soon Lai @ Ng Siek Chuan 86 35 121

Tan Ming-Li 59 16 75

Tan Hong Kheng - paid directly 13 9 22

Tan Hong Kheng - paid to CIMB Group Sdn Bhd 27 9 36

379 133 512

The executive director’s remuneration for both 2015 and 2014 is for Tan Hong Kheng, who was appointed as a non-independent non-executive director on 5 October 2012. He was later re-designated as the executive director of the Company on 1 July 2014.




(b) Directors’ remuneration (cont’d.)

The number of directors of whose total remuneration received and receivable from the Group during the year that fall within the following bands is analysed below:

number of directors

2015 2014

Directors of the company:

Non-executive directors:

RM50,001 - RM100,000 2 4

RM100,001 - RM150,000 2 2

Above RM150,000 1 -

Executive directors:

RM400,001 - RM450,000 - 1

RM1,000,001 - RM1,050,000 1 -

Directors of the subsidiaries:

Non-executive directors:

RM0 - RM50,000 3 4

RM50,001 - RM100,000 3 3

RM100,001 - RM150,000 1 1

(c) ceo’s remuneration

The details of remuneration received by the CEO of the Company during the financial year are as follows:

Group and company

2015 rM’000

2014 rM’000

Salaries and other emoluments 1,228 918

Bonus 495 -

Defined contribution plan 205 110

Total remuneration (Note 35(b)) 1,928 1,028



29. eMployees’ share option scheMe (“esos”)

On 18 March 2014, the Company offered 15,715,000 ESOS shares to eligible employees of the Group. The offer period is from 18 March 2014 to 17 April 2014. The ESOS will be exercisable over a period of 5 years from the grant date of 17 April 2014 at an exercise price of RM1.71 per ESOS share.

All employees are entitled to a grant of options, under the ESOS, once they are employed by and on the payroll of the Group and whose employement has been confirmed in writing, as at the date of offer. The options granted under ESOS is exercisable only by the employees during their employment with the Group and before the expiry date of 17 April 2019. The exercise price of the options is equal to the market price of the shares on the date of grant. The contractual life of the options is five years. There are no cash settlement.

The expense recognised for employee services received during the year is as follows:

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Expense arising from equity-settled share-based payment transactions (Note 28(a)) 2,536 2,169 497 209

Movements during the year

The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, ESOS during the year:

tranche

outstanding as at

1.1.2015 ‘000

Granted ‘000

vested ‘000

forfeited ‘000

outstanding as at

31.12.2015 ‘000

exercisable as at

31.12.2015 ‘000

1 2,986 125 - (360) 2,751 2,751

2 2,986 125 - (360) 2,751 -

3 2,986 125 - (360) 2,751 -

4 2,986 125 - (360) 2,751 -

11,944 500 - (1,440) 11,004 2,751

waep 1.71 1.71 1.71 1.71 1.71 1.71



29. eMployees’ share option scheMe (“esos”) (cont’D.)

Movements during the year (cont’d.)

The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, ESOS during the year: (cont’d.)

tranche

outstanding as at

1.1.2014 ‘000

Granted ‘000

vested ‘000

forfeited ‘000

outstanding as at

31.12.2014 ‘000

exercisable as at

31.12.2014 ‘000

1 - 3,929 - (943) 2,986 -

2 - 3,929 - (943) 2,986 -

3 - 3,929 - (943) 2,986 -

4 - 3,928 - (942) 2,986 -

- 15,715 - (3,771) 11,944 -

waep 2 1.71 1.71 1.71 1.71 1.71

fair value of share options granted on 17 april 2014

The fair value of share options granted on 17 April 2014 was estimated by an external valuer using the Binomial Model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured, weighted average exercise price and the assumptions were as follows:

Fair value of share options under ESOS:

- Tranche 1 (RM) 0.712583

- Tranche 2 (RM) 0.762420

- Tranche 3 (RM) 0.802048

- Tranche 4 (RM) 0.832102

Dividend yield (%) 1.98% per annum

Expected volatility (%) 33.00% per annum

Risk-free interest rate (%) 3.59% per annum

Expected life of ESOS 5 years

Model used Binomial Model

The expected life of the options was based on historical data, therefore it is not necessarily indicative of exercise patterns that may occur. The expected volatility reflected the assumption that the historical volatility was indicative of future trends, which may also not necessarily be the actual outcome. No other features of the options granted were incorporated into the measurement of fair value.



30. taXation

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Labuan income tax:

Current income tax 26 27 - -

Overprovision in prior year - (8) - -

26 19 - -

Malaysian income tax:

Current income tax 2,809 4,668 62 105

(Over)/underprovision in prior years (77) 926 (31) 153

2,732 5,594 31 258

Deferred tax (Note 18):

Relating to origination and reversal of temporary differences 174 (618) - -

underprovision in prior years 708 221 - -

882 (397) - -

3,640 5,216 31 258

The Labuan subsidiaries are entitled to elect to pay tax of 3% of the chargeable profits or RM20,000 based on the election under Section 7 of the Labuan Business Activity Tax Act, 1990 in respect of its chargeable profits for the period.

The income tax for the Company and other subsidiaries not in Labuan is based on the tax rate of 25% of the estimated assessable profit for the financial year.



30. taXation (cont’D.)

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

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Profit before taxation 76,523 81,302 12,188 47,974

Taxation at Malaysian statutory tax rate of 25% 19,131 20,326 3,047 11,994

Effect of chargeable profits subject to RM20,000 (15,951) (13,803) - -

Income not subject to tax (4,696) (2,932) (7,162) (17,060)

Additional tax deduction in respect of contribution to MMIP * (1,753) (2,340) - -

Expenses not deductible for tax 5,397 3,678 4,177 5,171

Restriction on tax deductible expenses for unit trust and collective investment schemes 296 97 - -

Permitted expenses not used and not available for future year 11 10 - -

Deferred tax assets not recognised on unused tax losses (3) 6 - -

Share of results of associates 709 (947) - -

Share of results of a joint venture company (132) (26) - -

(Over)/underprovision of income tax in prior years (77) 926 (31) 153

underprovision of deferred tax in prior years 708 221 - -

Tax expense for the year 3,640 5,216 31 258

* In accordance with the P.u(A) 419 Income Tax (Deduction for Contribution by Licensed Insurers to the Malaysian Motor Insurance Pool) Rules 2014, cash contributions made to MMIP via cash calls is allowed for as a deduction in the year when such cash is paid to the MMIP. The insurance subsidiary has recognised this benefit as an additional tax deduction in the current year.

31. earninGs per share

Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary equity holder of the Company by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary equity holder of the Company by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares that would be issued under Employees’ Share Option Scheme.



31. earninGs per share (cont’D.)

The following reflect the profit and share data used in the computation of basic and diluted earnings per share for the years ended 31 December:

Group

2015 2014

Profit attributable to ordinary equity holder (RM’000) 68,972 72,332

Weighted average number of ordinary shares in issue during the year (‘000) 751,760 751,760

Effects of dilution - Employees’ Share Option Scheme (‘000) - 1,626

751,760 753,386

Basic earnings per share (sen) 9.17 9.62

Diluted earnings per share (sen) 9.17 9.60

There have been no other transactions involving ordinary shares between the reporting date and the date of completion of these financial statements.

32. DiviDenDs

Group and company

2015 rM’000

2014 rM’000

recognised during the financial year:

Final single tier dividend of 4.04 sen per ordinary share of RM0.10 each on 751,759,980 ordinary shares, declared on 29 April 2015 and paid on 3 July 2015 30,371 -

Final single tier dividend of 3.86 sen per ordinary share of RM0.10 each on 751,759,980 ordinary shares, declared on 25 March 2014 and paid on 4 July 2014 - 29,018



33. operatinG lease arranGeMents

(a) the Group as lessee

The Group has entered into a lease agreement for rental of office premises.

The future aggregate minimum lease payments under operating lease contracted for as at the reporting date but not recognised as liabilities are as follows:

future minimum rental payments:

Group

2015 rM’000

2014 rM’000

rental of office premises:

Payable within one year 880 912

Payable after one year 284 1,164

1,164 2,076

(b) the Group as lessor

The Group has entered into a non-cancellable operating lease arrangement on its investment property. The lease have remaining non-cancellable lease term of 3 years.

The future minimum lease payments receivable under a non-cancellable operating lease contracted for as at the reporting date but not recognised as receivables, are as follows:

Group

2015 rM’000

2014 rM’000

Receivable within one year 2,146 2,017

Receivable after one year 912 2,243

3,058 4,260

Rental income on investment property recognised in profit or loss during the relevant financial years is disclosed in Note 24.



34. capital coMMitMents

The commitments of the Group and of the Company as at the financial year end are as follows:

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

capital expenditure

Approved but not contracted for: Property and equipment 17,784 7,867 1,280 810

35. relateD party Disclosures

(a) significant related party transactions

The Group and the Company had the following significant transactions with related parties during the financial year:

Group company

(expense)/income: 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

transactions with former ultimate holding company,

tMsb

Reimbursement of expenses incurred (Note 28) - (32) - (10)

transactions with subsidiaries:

tpr

Dividend income - - 17,000 56,000

Management fee income (Note 26) - - 2,660 2,173

tiMb

Dividend income - - 9,160 10,826

Reimbursement of expenses incurred (Note 28) - - (202) (127)

transactions with corporate shareholder of the company, airasia berhad:

Fee and commission expense (16,498) (11,741) - -

Data management fee (97) (178) (97) (178)



35. relateD party Disclosures (cont’D.)

(a) significant related party transactions (cont’d.)

The Group and the Company had the following significant transactions with related parties during the financial year: (cont’d.)

Group company


rM’000 2014

rM’000 2015

rM’000 2014

rM’000

transactions with other related companies*:

Mpi Generali insurans berhad (formerly known as Multi-purpose insurans berhad)

Gross claims paid - (140) - -

transactions with related companies:

airasia X berhadFee and commission expense (4,325) (3,021) - -

pt indonesia airasiaTelemarketing commission expense (19) (31) - -

Fee and commission expense (836) (836) - -

thai airasia co. ltdTelemarketing commission expense (81) (77) - -

Fee and commission expense (354) (304) - -

airasia inc. Fee and commission expense - (40) - -

aae travel pte ltdFee and commission expense (9) (7) - -

tune Group sdn bhdRoyalty fee (10,546) (1,000) (10,546) (1,000)

tune hotels regional services sdn bhdData management fee (3) (4) - -



35. relateD party Disclosures (cont’D.)

(a) significant related party transactions (cont’d.)

The Group and the Company had the following significant transactions with related parties during the financial year: (cont’d.)

Group company


rM’000 2014

rM’000 2015

rM’000 2014

rM’000

transactions with related companies: (cont’d.)

pt ciMb sunlife Telemarketing commission expense (39) (63) - -

sp&G insurance brokersBrokerage fee (1,524) (1,508) - -

philippines airasia inc (formerly known as Zest airways inc)

Telemarketing commission expense (113) (143) - -

pt indonesia airasia extraTelemarketing commission expense (35) - - -

Details of balances with related parties at the end of the respective year are disclosed in Notes 13 and 21.

(b) compensation of key management personnel

The remuneration of key management personnel during the year are as follows:

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

Executive director’s remuneration (Note 28(b)) 1,008 414 1,008 414

Non-executive directors’ remuneration: (Note 28(b))

- directors of the Company 575 512 575 512

- directors of the subsidiaries 516 473 - -

1,091 985 575 512

CEO’s remuneration (Note 28(c)) 1,928 1,028 1,928 1,028

4,027 2,427 3,511 1,954

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. The key management personnel of the Group includes the Directors and Chief Executive Officer of the Company.



36. reGulatory capital/worKinG funD anD solvency requireMents of subsiDiaries

(i) tpr, tlr and til

The Guidelines on Application for License - Insurance and Insurance Related Activities (“the Guidelines”) were introduced as the capital adequacy, working fund and solvency requirement for all insurers licensed under the Labuan Financial Services and Securities Act 2010 (“LFSSA 2010”) effective from 13 December 1997. It has been imposed by the Labuan Financial Services Authority (“Labuan FSA”), pursuant to Section 109 of the LFSSA 2010 as a licensing condition for insurance companies.

(a) tpr and tlr

TPR and TLR, as Labuan reinsurers are required to maintain at all times, a minimum paid-up capital/net working funds of RM10.0 million each.

In addition, TPR and TLR are also each required to have minimum solvency margin of:

(1) RM10.0 million; or

(2) 20% of net premium income of the preceding year, whichever is greater for TPR and 3% of the latest actuarial valuation of liabilities, whichever is greater for TLR.

Prior to the surrender of its Labuan reinsurance licence on 4 September 2015, TLR was in compliance with the Guideline. As at 31 December 2015, TPR is in compliance with the Guidelines.

(b) til

TIL, as a Labuan captive insurer is required to maintain at all times a surplus of assets over liabilities, which is:

(a) equivalent to, or more than the amount of TIL’s working fund; or

(b) 20% of the net premium income for the preceding year in respect of the general insurance business, whichever is greater.

Prior to the surrender of its Labuan captive license on 23 September 2015, TIL was in compliance with the Guideline.



36. reGulatory capital/worKinG funD anD solvency requireMents of subsiDiaries (cont’D.)

(ii) tiMb

regulatory capital requirement

The capital structure of the TIMB as at 31 December 2015, as prescribed under the RBC Framework, is provided as below:

2015 rM’000

2014 rM’000

eligible tier 1 capital

Share capital (paid-up) 100,013 100,013

Reserves, including retained earnings 130,702 118,664

230,715 218,677

tier 2 capital

Eligible reserves 1,952 2,543

Amount deducted from capital 1,960 2,883

total capital available 230,707 218,337

TIMB has met the minimum capital adequacy requirements as prescribed by the RBC Framework as at the reporting date.

The Board of the insurance subsidiary has established a Risk Management Committee (“RMC”) of 3 members, comprising two Non-Executive Directors, the Chief Executive Officer and other members of staff. The Committee is responsible for regularly identifying risks, ensuring that adequate risk management policies and procedures are in place, and monitoring compliance with policies and procedures.

The Committee has worked with the Management to develop these policies and both Management and Board have agreed to adopt these policies to govern the running of the business.

37. risK ManaGeMent fraMeworK

risk appetite

The insurance subsidiary’s risk appetite has been established as 3% of shareholders funds i.e. approximately RM4 million on any one event or series of events arising from a single cause.



37. risK ManaGeMent fraMeworK (cont’D.)

overview of risk management policies

The Group and the Company’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group and the Company’s business whilst managing the key risks faced by the Group and the Company.

a. underwriting

i. risk

Acceptance of poor insurance risks, risks with low profit margins and inadequate reinsurance arrangements contribute to low profitability and inadequate capital growth. Insurance risk is also the risk of outstanding insurance contract liabilities being greater than estimated.

ii. policy

The following outlines the Group’s policies to safeguard against these risks:

(a) underwrite only classes of risks which have been approved by the Board;

(b) Accept risks within the approved classes only according to comprehensive underwriting guidelines and within limits of delegated authority;

(c) Expand into new lines only where there is adequate experience within the Group and after management has obtained appropriate Board authority;

(d) Price risks with sufficient margin to ensure ongoing viability of the business, and maintaining a professional approach to this function;

(e) Retain risks according to guidelines on maximum risks to be retained;

(f) Mitigate foreign currency risks on reinsurance by all significant reinsurance arrangements being entered into in Malaysian Ringgit;

(g) Ensure compliance with treaty arrangements in accepting risks;

(h) Maintain a balanced portfolio to yield a reasonable level of profits; and

(i) Review on a regular basis the insurance contract liabilities.

b. reinsurance

Maintain prudent reinsurance arrangements with reputable reinsurers to safeguard the ongoing viability of the business including its capacity to meet obligations to cedants and shareholders.

Assess the credit worthiness of reinsurance counterparties and their ability to service their claims obligations.




overview of risk management policies (cont’d.)

c. claims

i. risk

Exposure to unexpected or excessive losses, fraudulent claims and inadequate provisions for outstanding claims could affect the Group’s profitability, financial position and reputation.

ii. policy

The Group’s policies to guard against these risks are:

(a) Identify claims exposures and properly assess them, and routinely review them upon advent of further information and at least once a year.

(b) Maintain good claims administration and settlement processes to ensure prudent claims estimation and appropriate loss adjustment.

(c) Make adequate provisions for all claims liabilities, especially for long-tail liabilities and the effect of superimposed inflation and adverse foreign exchange movements on such liabilities.

(d) Assess exposure to fraud periodically and employ measures to minimise potential losses through accepting claims outside contractual obligations for fraudulent reasons and for detecting fraudulent claims.

(e) Ensure that losses are mitigated and potential recovery action is followed up in a professional and timely fashion.

D. investments

i. risk

Investment risk is the risk of inadequate investment returns from poor investment strategies and adverse movements in the value of investments. Investment risk is derived from market risk, credit risk, investment concentration risk, liquidity risk, and asset/liability mismatch risk.

ii. policy

Returns from investment of premium income are an important source of income to the Group and the Company and maintenance of the market value of the investments is essential for the financial stability of the Group and the Company. Absence of prudent investment strategies and investment decision framework could result in poor investment return which would affect the Group’s and the Company’s profitability and competitiveness and also result in the Group and the Company not being able to meet its obligations as they fall due. It is the Group’s and the Company’s policy to:

(a) Implement an investment strategy to ensure appropriate asset allocation, concentration of investments and matching of asset and liability portfolios.





D. investments (cont’d.)

ii. policy (cont’d.)

(b) Ensure that investments are held in different classes within limits specified by the Investment Committee.

(c) undertake a thorough analysis before making an investment to minimise market risk and continuously monitor the performance and risk of the investment.

(d) Manage disposal of investments to optimise the returns on realisation.

(e) Limit exposure to interest rate risk by investing in term deposits, corporate bonds and government securities on a long and short-term basis at competitive rates.

(f) Ensure liquidity by maintaining sufficient cash float at any time and regularly matching expected duration of liabilities and investment; and uncertainties arising from timing and amount of cash flows.

(g) Minimise credit risk and investment concentration risk by investing with institutions that have a minimum rating of “B” within specific overall limits for each institution.

(h) Monitor investment portfolio and performance weekly or at other shorter intervals and report investment exposure and performance to the Board monthly.

e. credit quality

i. risk

The Group’s and the Company’s exposure to credit risks are mainly due to uncertainty in counter parties’ (mainly from cedants, reinsurers and intermediaries) ability to meet the financial and contractual obligations to the Group and the Company when they are due.

The Group and the Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment.

ii. policy

Policies to limit credit risks include the following:

(a) Maintain credit control in accordance with appropriate policies and procedures which govern the extension of credit to the cedants and specifies guidelines for setting limits on credit as per the quota share agreement.

(b) Monitor compliance with such established credit limits.





f. operations

i. risk

Non-financial or operational risks the Group and the Company face include technology risk, risk to reputation, fraud, compliance, legal risk, physical damage to property, poor outsourcing arrangements, threats to business continuity and key personnel risk.

ii. policy

The policies to monitor and minimise these risks are as follows:

(a) undertake annual risk audits to identify material operations risks to which the Group are exposed.

(b) Effect appropriate insurance cover for all identified operations risks which can be cost-effectively insured.

(c) Closely monitor the external relationships.

(d) Ensure at all times that compliance with regulatory requirements and fulfilment of material obligations under the legislative framework is maintained.

(e) Maintain an ethics and personal conduct policy to review the affairs of the Group and the Company are conducted in a manner that would avoid any action by the Group and the Company or its officers that would bring disrepute to the Group and the Company.

(f) Implement adequate security procedures to prevent unauthorized access, damage, loss to assets and facilities and harm to employees.

(g) Ensure that division and responsibility is clear and mutually understood where any part of the Group’s and the Company’s business is outsourced to third parties whilst ultimate control over the outsourced operations is retained by the Group and the Company.

(h) Identify the possible types of fraud the Group and the Company is exposed to and develop and maintain effective controls to prevent them and to take appropriate and prompt action if fraud occurs.

G. regulatory compliance and corporate governance

The Management is responsible to follow a systematic approach to the business and effectively manage the risks. The key risks that have been identified are monitored and their status communicated as appropriate throughout all levels of the organisation and are also incorporated in the Group’s and the Company’s performance management reporting.





h. regulations of risk management

In accordance with these policies a framework for management of risks identified has been developed for the effective management of risk.

Effective and efficient operation of the organisation would be ensured through:

(a) Providing a framework for an organisation that enables for activities to be undertaken in a consistent and controlled manner.

(b) A management structure that clearly identifies the roles and responsibilities of the staff.

(c) Development of procedures to ensure that the risk management strategies are implemented.

(d) Retention of a well-qualified level of staff through appropriate recruitment, training and staff development programme.

(e) Improving motivation of staff through a suitable communication, review, feedback and rewards system.

(f) Prompt and comprehensive management reporting systems to assess performance and progress of the business and the utilisation of its resources.

38. insurance risK

The Group has in place comprehensive underwriting guidelines and limits of authority to ensure that risks are accepted in accordance with the authorised limits. The retention of risks is protected by proportional and non-proportional treaties with reputable reinsurers and brokers, and premised on the risk appetite of the Group.

The Group underwrites treaty business on a proportional basis mainly in travel insurance business. Risks can arise from the adverse development of the loss ratio and catastrophic events. These risks vary significantly in relation to economic conditions and territories from which the risk originated.



38. insurance risK (cont’D.)

(a) concentration of risks

(i) General reinsurance

The following table sets out the concentration of travel insurance risks by country/regions based on the geographical location of the primary insurers or reinsurers from which the gross premium are written.

Group

Geographical diversification 2015

rM’000 2014

rM’000

Thailand 14,601 15,362

Indonesia 7,294 8,547

Singapore 6,823 6,021

Australia 3,887 5,602

Shenzhen, China 5,728 6,066

Hong Kong, China 2,084 1,978

Japan 1,721 1,314

Macau, China 1,107 915

Philippines 3,695 2,266

Cambodia 637 368

Laos 46 42

vietnam 746 418

Myanmar 462 303

India 503 398

Taiwan 3 -

Brunei 710 336

united Arab Emirates (uAE) 5,839 2,892

Bahrain 257 101

Egypt 483 183

British (uK) 505 234

Balance c/f 57,131 53,346




(a) concentration of risks (cont’d.)

(i) General reinsurance (cont’d.)

The following table sets out the concentration of travel insurance risks by country/regions based on the geographical location of the primary insurers or reinsurers from which the gross premium are written. (cont’d.)

Group

Geographical diversification 2015

rM’000 2014

rM’000

Balance b/f 57,131 53,346

Kuwait 526 71

Morocco 902 477

Oman 100 60

qatar 677 141

Turkey 129 9

Saudi Arabia 118 -

Lebanon 75 -

Jordan 68 -

Pakistan 42 -

Iraq 27 -

Armenia 7 -

59,802 54,104

(ii) General insurance

The table below shows the concentration of gross written premium by class of business:

Group

class of business diversification 2015

rM’000 2014

rM’000

Motor 123,020 112,128

Fire 58,797 55,136

Marine, aviation and transit 57,416 62,100

Others 174,946 150,655

414,179 380,019




(a) concentration of risks (cont’d.)

(ii) General insurance (cont’d.)

The table below shows the concentration of premium and claim liabilities by class of business at the reporting date:

Group Gross

rM’000 reinsurance

rM’000 net

rM’000

premium liabilities

2015Motor 71,939 (17,203) 54,736 Fire 24,327 (17,247) 7,080 Marine, aviation and transit 10,727 (9,004) 1,723 Others 60,393 (22,710) 37,683

167,386 (66,164) 101,222


147,413 (66,080) 81,333

claims liabilities


396,753 (177,381) 219,372


378,394 (190,480) 187,914




(b) sensitivity analysis

Key assumptions

The principal assumptions underlying the estimation of liabilities is that the Group’s future claims development will follow a similar pattern to past claims development experience. This includes key assumptions such as the adopted ultimate Loss Ratios (“uLR”), risk margin percentages (i.e. PRAD) and provision for claims handling costs.

Additional qualitative judgments are used to assess the extent to which 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, policy conditions and claims handling procedures. Judgement is further used to assess the extent to which external factors, such as judicial decisions and government legislation affect the estimates.

sensitivities

The general reinsurance claim liabilities are sensitive to the key assumptions shown below. It has not been possible to quantify the sensitivity of certain assumptions, such as, legislative changes or uncertainty in the estimation process.

The analysis below is performed for reasonably possible movements in key assumptions with all other assumptions held constant, showing the impact on Gross and Net Liabilities, Profit before Tax and Equity. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, assumptions had to be changed on an individual basis. It should be noted that movements in these assumptions are non-linear.


increase/(decrease)

changes in variable

impact on gross

liabilities rM’000

impact on net


impact on profit

before taxation rM’000

impact on equity

rM’000

2015

Loss ratio +1% 467 467 467 467

-1% (467) (467) (467) (467)

2014

Loss ratio +1% 1,086 1,086 1,086 1,086

-1% (1,086) (1,086) (1,086) (1,086)




(b) sensitivity analysis (cont’d.)

sensitivities (cont’d.)


increase/(decrease)

changes in variable

impact on gross


impact on net


impact on profit

before taxation rM’000

impact on equity

rM’000

2015

Loss ratio +10% 112,659 66,640 (66,640) (49,980)

PRAD +10% 2,281 1,182 (1,182) (887)

Provision for expenses +10% 910 910 (910) (683)

2014

Loss ratio +10% 128,219 70,193 (70,193) (52,645)

PRAD +10% 2,301 1,032 (1,032) (774)

Provision for expenses +10% 625 625 (625) (469)

(c) claims development table


As this is only the fourth financial year since the incorporation of TPR, it is not meaningful to present the claims development table in the financial statements.


The following tables show the estimate of cumulative incurred claims, including both claims notified and IBNR for each successive accident year at each reporting date, together with cumulative payments to-date of TIMB.

In setting provisions for claims, TIMB gives consideration to the probability and magnitude of future experience being more adverse than assumed and exercises a degree of caution in setting reserves when there is considerable uncertainty. In general, the uncertainty associated with the ultimate claims experience in an accident year is greatest when the accident year is at an early stage of development and the margin necessary to provide the necessary confidence in adequacy of provision is relatively at its highest. As claims develop and the ultimate cost of claims becomes more certain, the relative level of margin maintained should decrease.




(c) claims development table (cont’d.)


Gross general insurance contract liabilities for 2015:

accident year 2008

rM’000 2009

rM’000 2010

rM’000 2011

rM’000 2012

rM’000 2013

rM’000 2014

rM’000 2015

rM’000 total

rM’000

At end of accident year 231,999 174,026 170,544 164,136 243,986 211,969 246,130 256,297

One year later 251,136 124,814 168,597 150,123 247,486 173,116 207,343

Two years later 211,179 117,799 146,125 139,573 224,094 154,652

Three years later 206,783 106,592 149,468 131,463 208,847

Four years later 201,353 106,058 148,331 129,325

Five years later 199,700 106,500 146,560

Six years later 194,854 105,697

Seven years later 212,264

current estimate of cumulative claims incurred 212,264 105,697 146,560 129,325 208,847 154,652 207,343 256,297 1,420,985

At end of accident year (43,395) (39,747) (38,182) (30,815) (76,857) (47,381) (54,979) (57,884)

One year later (146,308) (73,127) (95,372) (75,244) (132,823) (91,862) (120,315)

Two years later (173,375) (88,940) (110,466) (109,790) (167,023) (104,766)

Three years later (188,104) (100,378) (127,828) (116,683) (185,774)

Four years later (193,255) (103,762) (133,744) (118,521)

Five years later (194,800) (103,869) (137,006)

Six years later (194,271) (104,010)

Seven years later (195,956)

cumulative payments to-date (195,956) (104,010) (137,006) (118,521) (185,774) (104,766) (120,315) (57,884) (1,024,232)

Gross general insurance contract liabilities per statement of financial position (note 17(a)) 16,308 1,687 9,554 10,804 23,073 49,886 87,028 198,413 396,753






net general insurance contract liabilities for 2015:

accident year 2008

rM’000 2009

rM’000 2010

rM’000 2011

rM’000 2012

rM’000 2013

rM’000 2014

rM’000 2015

rM’000 total

rM’000


One year later 96,959 88,388 106,956 121,263 128,136 103,629 123,661

Two years later 89,334 87,742 98,737 108,850 114,501 96,867


Four years later 83,684 80,220 93,967 103,640

Five years later 82,969 80,445 93,366



current estimate of cumulative claims incurred 85,243 80,015 93,366 103,640 103,145 96,867 123,661 161,231 847,168


One year later (63,502) (62,444) (67,182) (66,529) (76,815) (64,442) (73,221)

Two years later (71,614) (70,711) (77,525) (90,298) (89,842) (72,345)


Four years later (78,497) (77,693) (87,975) (95,673)

Five years later (79,452) (78,056) (89,420)

Six years later (79,804) (78,184)


cumulative payments to-date (80,111) (78,184) (89,420) (95,673) (94,837) (72,345) (73,221) (44,005) (627,796)

net general insurance contract liabilities per statement of financial position (note 17(a)) 5,132 1,831 3,946 7,967 8,308 24,522 50,440 117,226 219,372






Gross general insurance contract liabilities for 2014:

accident year 2007

rM’000 2008

rM’000 2009

rM’000 2010

rM’000 2011

rM’000 2012

rM’000 2013

rM’000 2014

rM’000 total

rM’000


One year later 158,065 251,136 124,814 168,597 150,123 247,486 173,116

Two years later 161,822 211,179 117,799 146,125 139,573 224,094


Four years later 152,896 201,353 106,058 148,331

Five years later 153,684 199,700 106,500



current estimate of cumulative claims incurred 166,484 194,854 106,500 148,331 131,463 224,094 173,116 246,130 1,390,972


One year later (97,631) (146,308) (73,127) (95,372) (75,244) (132,823) (91,862)

Two years later (120,035) (173,375) (88,940) (110,466) (109,790) (167,023)


Four years later (140,857) (193,255) (103,762) (133,744)

Five years later (145,024) (194,800) (103,869)

Six years later (146,193) (194,271)


cumulative payments to-date (150,147) (194,271) (103,869) (133,744) (116,683) (167,023) (91,862) (54,979) (1,012,578)

Gross general insurance contract liabilities per statement of financial position (note 17(a)) 16,337 583 2,631 14,587 14,780 57,071 81,254 191,151 378,394






net general insurance contract liabilities for 2014:

accident year 2007

rM’000 2008

rM’000 2009

rM’000 2010

rM’000 2011

rM’000 2012

rM’000 2013

rM’000 2014

rM’000 total

rM’000


One year later 85,079 96,959 88,388 106,956 121,263 128,136 103,629

Two years later 84,387 89,334 87,742 98,737 108,850 114,501


Four years later 80,836 83,684 80,220 93,967

Five years later 79,412 82,969 80,445



current estimate of cumulative claims incurred 80,600 80,184 80,445 93,967 104,165 114,501 103,629 142,172 799,663


One year later (60,380) (63,502) (62,444) (67,182) (66,529) (76,815) (64,442)

Two years later (66,712) (71,614) (70,711) (77,525) (90,298) (89,842)


Four years later (74,337) (78,497) (77,693) (87,975)

Five years later (75,595) (79,452) (78,056)

Six years later (76,072) (79,804)


cumulative payments to-date (75,621) (79,804) (78,056) (87,975) (93,871) (89,842) (64,442) (42,138) (611,749)

net general insurance contract liabilities per statement of financial position (note 17(a)) 4,979 380 2,389 5,992 10,294 24,659 39,187 100,034 187,914



39. financial instruMents anD insurance assets anD liabilities

Group lar

rM’000 afs

rM’000 fvtpl

rM’000

assets under Mfrs 4

rM’000 total

rM’000

assets

2015

Investments 444,510 38,394 104,718 - 587,622

Reinsurance assets - - - 244,802 244,802

Insurance receivables 132,273 - - - 132,273

Other receivables 102,124 - - - 102,124

Cash and bank balances 33,293 - - - 33,293

total assets 712,200 38,394 104,718 244,802 1,100,114

2014

Investments 409,736 44,727 96,778 - 551,241

Reinsurance assets - - - 259,281 259,281

Insurance receivables 87,120 - - - 87,120

Other receivables 68,625 - - - 68,625

Cash and bank balances 21,700 - - - 21,700

total assets 587,181 44,727 96,778 259,281 987,967



39. financial instruMents anD insurance assets anD liabilities (cont’D.)

Group

other financial


liabilities under

Mfrs 4 rM’000

total rM’000

liabilities

2015

Insurance contract liabilities - 577,288 577,288

Insurance payables 87,550 - 87,550

Other payables 43,039 - 43,039

total liabilities 130,589 577,288 707,877

2014

Insurance contract liabilities - 539,239 539,239




company lar

rM’000 fvtpl

rM’000 total

rM’000

assets

2015

Investments - 69,038 69,038

Other receivables 5,264 - 5,264

Cash and bank balances 7,190 - 7,190

12,454 69,038 81,492

2014

Investments 4,917 79,379 84,296



11,005 79,379 90,384



39. financial instruMents anD insurance assets anD liabilities (cont’D.)

company (cont’d.)

other financial liabilities rM’000

liabilities

2015

Other payables 11,635

2014

Other payables 1,206

40. financial risKs

(a) credit risk

Treaty reinsurers and brokers credit ratings are evaluated prior to entering into treaty arrangements. The Group observes the Bank Negara Malaysia Guidelines and internal Group policies in assessing the credit ratings of reinsurers and brokers.

The settlement risks are also mitigated through prompt reconciliations of records and recovery actions, avoiding at all times delays in collection from cedants and reinsurers and entering into commutations for run off reinsurers. The Group has tightened the credit collection and recovery policies to expedite collections. The Group is unable to avoid any deterioration in credit ratings of reinsurers after inception of treaties.

credit exposure

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the maximum amount of each class of financial and reinsurance assets recognised in the statements of financial position as shown in the table below:

Group company

2015 rM’000

2014 rM’000

2015 rM’000

2014 rM’000

LAR:

Fixed and call deposits with licensed financial institutions 444,065 409,231 - 4,917

Loans receivable:

Staff mortgage loans 435 495 - -

Other staff loans:

unsecured 10 10 - -

AFS financial assets:

Debt securities 24,548 25,071 - -



40. financial risKs (cont’D.)

(a) credit risk (cont’d.)

credit exposure (cont’d.)

Group company 2015

rM’000 2014

rM’000 2015

rM’000 2014

rM’000

FvTPL financial assets: Debt securities 94,669 89,246 - - Reinsurance assets 244,802 259,281 - - Insurance receivables 132,273 87,120 - - Other receivables 102,124 68,625 5,264 4,721 Cash and bank balances 33,293 21,700 7,190 1,367

1,076,219 960,779 12,454 11,005

credit exposure by credit rating

The table below provides information regarding the credit risk exposures of the Group and the Company by classifying assets according to the Group’s credit ratings of counterparties.

neither past-due nor impaired

Groupaaa

rM’000 aa

rM’000 a

rM’000

bbb and lower

rM’000 not rated

rM’000

past-due but not

impaired rM’000

total rM’000

2015LAR: Fixed and call deposits with

licensed financial institutions 215,863 201,759 6,144 - 20,299 - 444,065 Loans receivable:

Staff mortgage loans - - - - 435 - 435 Other staff loans:

unsecured - - - - 10 - 10 AFS financial assets: Debt securities - 24,548 - - - - 24,548 FvTPL financial assets: Debt securities 15,236 76,339 1,021 - 2,073 - 94,669 Reinsurance assets - 27,552 119,125 1,682 96,443 - 244,802 Insurance receivables - 6,268 15,134 2,531 24,060 84,280 132,273 Other receivables 43 251 116 - 101,714 - 102,124 Cash and bank balances 31,262 1,202 771 - 58 - 33,293

262,404 337,919 142,311 4,213 245,092 84,280 1,076,219





credit exposure by credit rating (cont’d.)

The table below provides information regarding the credit risk exposures of the Group and the Company by classifying assets according to the Group’s credit ratings of counterparties. (cont’d.)


Group (cont’d.)aaa

rM’000 aa

rM’000 a

rM’000

bbb and lower

rM’000 not rated

rM’000

past-due but not

impaired rM’000

total rM’000

2014

LAR:

Fixed and call deposits with licensed financial institutions 204,151 160,749 7,694 - 36,637 - 409,231

Loans receivable:

Staff mortgage loans - - - - 495 - 495

Other staff loans:

unsecured - - - - 10 - 10


Debt securities - 25,071 - - - - 25,071

FvTPL financial assets:

Debt securities 30,271 55,790 1,036 - 2,149 - 89,246

Reinsurance assets - - 84,797 2,192 172,292 - 259,281

Insurance receivables - - 11,134 121 24,100 51,765 87,120

Other receivables 65 710 124 - 67,726 - 68,625

Cash and bank balances 19,192 1,441 1,006 - 61 - 21,700

253,679 243,761 105,791 2,313 303,470 51,765 960,779





credit exposure by credit rating (cont’d.)

The table below provides information regarding the credit risk exposures of the Group and the Company by classifying assets according to the Group’s credit ratings of counterparties. (cont’d.)


companyaaa

rM’000 aa

rM’000 a

rM’000

bbb and lower

rM’000 not rated

rM’000

past-due but not

impaired rM’000

total rM’000

2015

Other receivables - - - - 5,264 - 5,264

Cash and bank balances 7,190 - - - - - 7,190

7,190 - - - 5,264 - 12,454

2014

LAR:

Fixed and call deposits with licensed financial institutions - 4,917 - - - - 4,917

Other receivables - - - - 4,721 - 4,721

Cash and bank balances 1,367 - - - - - 1,367

1,367 4,917 - - 4,721 - 11,005





age analysis of financial assets past-due but not impaired

past due but not impaired

Group

< 30 days

rM’000

31 to 60 days rM’000

61 to 90 days

rM’000

91 to 180 days rM’000

More than 180 days rM’000

total rM’000

2015

Insurance receivables:

Due premium including agents, brokers and co-insurers balances 20,633 6,965 6,132 14,972 11,451 60,153

Due from reinsurers and cedants 7,102 499 2,471 5,053 9,002 24,127

27,735 7,464 8,603 20,025 20,453 84,280

2014


Due premium including agents, brokers and co-insurers balances 12,000 11,041 4,509 6,677 5,760 39,987

Due from reinsurers and cedants 4,096 (130) 127 2,838 4,847 11,778

16,096 10,911 4,636 9,515 10,607 51,765

(b) liquidity risk

Liquidity risk is the risk where the Group and the Company is unable to meet its obligations in a timely manner at a reasonable cost at any time. The Group maintains a large tranche of liquid asset instruments, primarily bank deposits and Malaysian Government Securities, to ensure high liquidity.

Maturity profiles

The table below summarises the maturity profile of the financial and insurance assets and financial and insurance contract liabilities of the Group and the Company based on remaining undiscounted contractual obligations, including interest payable and receivable.

For insurance contracts liabilities and reinsurance assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognised insurance liabilities. unearned premiums and reinsurers’ share of unearned premiums have been excluded from the analysis as they are not contractual obligations.




(b) liquidity risk (cont’d.)

Maturity profiles (cont’d.)

Group

carrying value

rM’000

less than 1 year

rM’000

over 1-5 years

rM’000

over 5 years

rM’000

no maturity

date rM’000

total rM’000

2015

LAR:

Fixed and call deposits with licensed financial institutions 444,065 444,065 - - - 444,065

Loans receivable:

Staff mortgage loans 435 3 124 308 - 435

Other staff loans:

unsecured 10 10 - - - 10


unit and property trust funds 13,846 - - - 13,846 13,846

Debt securities 24,548 5,817 21,840 - - 27,657

FvTPL:


Debt securities 94,669 94,669 - - - 94,669

Reinsurance assets 178,448 82,254 85,162 11,032 - 178,448

Insurance receivables 132,273 132,273 - - - 132,273

Other receivables 102,124 102,124 - - - 102,124

Cash and bank balances 33,293 33,293 - - - 33,293

Total financial and insurance assets 1,033,760 894,508 107,126 11,340 23,895 1,036,869






Group (cont’d.)

carrying value

rM’000

less than 1 year

rM’000

over 1-5 years

rM’000

over 5 years

rM’000

no maturity

date rM’000

total rM’000

2015 (cont’d.)

Insurance contract liabilities 405,776 207,436 180,345 17,995 - 405,776

Insurance payables 87,550 87,550 - - - 87,550

Retirement benefits 530 530 - - - 530

Other payables 43,039 42,262 777 - - 43,039

Total financial and insurance liabilities 536,895 337,778 181,122 17,995 - 536,895

Liquidity surplus/(gap) 496,866 556,730 (73,996) (6,655) 23,895 499,974

2014

LAR:


Loans receivable:

Staff mortgage loans 495 - 73 422 - 495

Other staff loans:

unsecured 10 10 - - - 10


Equity securities 6,259 - - - 6,259 6,259


Debt securities 25,071 816 28,049 - - 28,865

FvTPL:

Equity securities 6,532 - - - 6,532 6,532


Debt securities 89,246 89,246 - - - 89,246






Group (cont’d.)

carrying value

rM’000

less than 1 year

rM’000

over 1-5 years

rM’000

over 5 years

rM’000

no maturity

date rM’000

total rM’000

2014 (cont’d)

Reinsurance assets 193,056 93,693 87,560 11,803 - 193,056

Insurance receivables 87,120 86,555 565 - - 87,120



Total financial and insurance assets 921,742 770,489 116,247 12,225 27,188 926,149

Insurance contract liabilities 388,260 201,017 167,692 19,551 - 388,260

Insurance payables 66,762 66,762 - - - 66,762

Retirement benefits 792 792 - - - 792

Other payables 20,595 19,473 1,122 - - 20,595

Total financial and insurance liabilities 476,409 288,044 168,814 19,551 - 476,409

Liquidity surplus/(gap) 445,333 482,445 (52,567) (7,326) 27,188 449,740






company

carrying value

rM’000

less than 1 year

rM’000

over 1-5 years

rM’000

over 5 years

rM’000

no maturity

date rM’000

total rM’000

2015

FvTPL:

Collective investment schemes 69,038 - - - 69,038 69,038



Total financial assets 81,492 12,454 - - 69,038 81,492

Other payables 11,635 11,635 - - - 11,635

Total financial liabilities 11,635 11,635 - - - 11,635

Liquidity surplus 69,857 819 - - 69,038 69,857

2014

LAR:


FvTPL:

Collective investment schemes 79,379 - - - 79,379 79,379



Total financial assets 90,384 11,005 - - 79,379 90,384

Other payables 1,206 1,206 - - - 1,206

Total financial liabilities 1,206 1,206 - - - 1,206

Liquidity surplus 89,178 9,799 - - 79,379 89,178





The table below summarises the expected utilisation or settlement of assets and liabilities:

Group current* rM’000

non-current rM’000

total rM’000

2015

assets

Property and equipment - 8,891 8,891

Investment property - 2,954 2,954

Intangible assets - 4,884 4,884

Investments in associates - 47,788 47,788

Investment in a joint venture company - 1,251 1,251

Goodwill - 24,165 24,165

Investments:

LAR:

Fixed and call deposits with licensed financial institutions 444,065 - 444,065

Loans receivable:

Staff mortgage loans 3 432 435

Other staff loans:

unsecured 10 - 10


unit and property trust funds 13,846 - 13,846

Debt securities 5,817 18,731 24,548

FvTPL:

unit and property trust funds - 10,049 10,049

Debt securities 94,669 - 94,669

Reinsurance assets 148,608 96,194 244,802

Insurance receivables 132,273 - 132,273



total assets 995,647 215,339 1,210,986





The table below summarises the expected utilisation or settlement of assets and liabilities (cont’d.):

Group (cont’d.) current* rM’000


total rM’000

2015 (cont’d.)

liabilities

Insurance contract liabilities 577,288 - 577,288

Deferred tax liabilities 1,106 - 1,106


Retirement benefits - 530 530


total liabilities 718,836 530 719,366

2014

assets


Investment property - 2,879 2,879

Intangible assets - 5,918 5,918


Investment in a joint venture company - 581 581

Goodwill - 24,165 24,165

Investments:

LAR:


Loans receivable:

Staff mortgage loans - 495 495

Other staff loans:

unsecured 10 - 10


Equity securities 6,259 - 6,259

unit and property trust funds 13,397 - 13,397

Debt securities 816 24,255 25,071






Group (cont’d.) current* rM’000


total rM’000

2014 (cont’d.)

assets (cont’d.)

Investments: (cont’d.)

FvTPL:

Equity securities 6,532 - 6,532

unit trust funds 1,000 - 1,000

Debt securities 89,246 - 89,246

Reinsurance assets 159,918 99,363 259,281

Insurance receivables 86,555 565 87,120



total assets 876,526 214,832 1,091,358

liabilities

Insurance contract liabilities 351,996 187,243 539,239

Deferred tax liabilities 620 - 620


Retirement benefits 10 782 792

Other payables 38,040 694 38,734







company current* rM’000


total rM’000

2015

assets

Property and equipment - 921 921

Intangible assets - 846 846

Investments in subsidiaries - 187,782 187,782



Investments:

FvTPL:

Collective investment schemes 69,038 - 69,038



total assets 84,639 230,937 315,576

liabilities


total liabilities 13,730 - 13,730






company (cont’d.) current* rM’000


total rM’000

2014

assets


Intangible assets - 409 409

Investments in subsidiaries - 187,645 187,645



Investments:

LAR:


FvTPL:

Collective investment schemes 79,379 - 79,379



total assets 90,440 230,794 321,234

liabilities


total liabilities 3,710 - 3,710

* Expected utilisation or settlement within 12 months from the reporting date.




(c) Market risk

Market risk arises with changes in equity and bond prices. This risk is mitigated through proper initial and continuous credit evaluation of bonds and shares respectively, purchase of high grade shares and bonds, and constant watch on investment portfolio for adverse changes and opportunities.

Fund managers’ performance are monitored constantly, parameters are prescribed to fund managers according to the Group’s risk appetite on purchase of equity, bonds and unit trusts, and by placing limits on categories of purchase.

Holding of unquoted shares is progressively reduced, with an emphasis on risk and return.

equity price risk

Management’s best estimate of the effect on the net profit for the year and equity due to a reasonably possible change in the FTSE Bursa Malaysia KLCI Index (“FBMKLCI”) with all other variables held constant is indicated in the table below:

Group increase/(decrease)

change in fbMKlci

%

effect on net profit for the year rM’000

effect on equity

rM’000

2015Market indices:

FBMKLCI +10 754 1,038

FBMKLCI -10 (754) (1,038)

2014Market indices:

FBMKLCI +10 565 1,474

FBMKLCI -10 (565) (1,474)




(c) Market risk (cont’d.)

interest rate risk

The Group’s exposure to interest rate risk arises primarily from their variable interest rate borrowings and investments in debt securities classified as available-for-sale and FvTPL. The interest and capital value of the latter may be affected by changes in the interest yield curve. The Group has an investment policy that investments are made at competitive interest rates.

Sensitivity analysis:

The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on profit or loss and impact on equity. The correlation of variables will have a significant effect in determining the ultimate impact on interest rate yield risk but to demonstrate the impact due to changes in variables, variables had to be changed on an individual basis. It should be noted that movements in these variables are non-linear.

Group

increase/(decrease)

changes in basis points

effect on net profit for

the year rM’000

effect on equity

rM’000

2015

Interest rates:

Investments in debt securities classified as available-for-sale + 100 bps (569) (1,041)

Investments in debt securities classified as available-for-sale - 100 bps 569 1,026

Investments in debt securities classified as FvTPL + 100 bps (101) -

Investments in debt securities classified as FvTPL - 100 bps 101 -

2014

Interest rates:

Investments in debt securities classified as available-for-sale + 100 bps (577) (1,294)

Investments in debt securities classified as available-for-sale - 100 bps 577 1,267

Investments in debt securities classified as FvTPL + 100 bps (90) -

Investments in debt securities classified as FvTPL - 100 bps 90 -





foreign currency risk

The Group and the Company is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than Ringgit Malaysia. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.

The Group’s and the Company’s exposure to foreign currency is as follows:

Group

2015 rM’000

2014 rM’000


Thai Baht 3,002 2,629

Indonesian Rupiah 3,607 1,913

Singapore Dollar 806 598

Macau Pataca 1,786 653

Hong Kong Dollar 2,894 1,462

united States Dollar 4,725 2,301

Philippines Peso 557 406

China Yuan Renminbi 3,961 2,734

Japanese Yen 699 617

Indian Rupee 696 535

Australia Dollar 1,607 1,908

Brunei Dollar 162 144

Emirati Dirham 109 -

qatari Riyal 55 -

24,666 15,900





foreign currency risk (cont’d.)

The Group’s and the Company’s exposure to foreign currency is as follows: (cont’d.)

Group

2015 rM’000

2014 rM’000

Cash and bank balances:

united States Dollar 18,163 1,769

China Yuan Renminbi - 1,146

Indonesian Rupiah - 1,143

Thai Baht - 43

18,163 4,101

Fixed and call deposits with licensed financial institutions:

Indonesian Rupiah - 4,917

company

2015 rM’000

2014 rM’000

Cash and bank balances:

united States Dollar 5,970 147

Sensitivity analysis:

A 5% strengthening/weakening of the Ringgit Malaysia against the foreign currencies as at the end of 31 December 2015 would have increased/decreased net profit by approximately RM2,141,000 (2014: RM1,246,000). This assumes that all other variables remain constant.



41. fair value MeasureMent

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data

The following table shows an analysis of financial assets recorded at fair value by level of the fair value hierarchy:

valuation technique using

Group Date of valuation

quoted market price

(level 1) rM’000

observable inputs

(level 2) rM’000

unobservable inputs

(level 3) rM’000

total rM’000

assets measured at fair value:

2015

afs financial assets:

Debt securities:

unquoted in Malaysia 31 December 2015 - 24,548 - 24,548


quoted in Malaysia 31 December 2015 13,846 - - 13,846

13,846 24,548 - 38,394

financial assets at fvtpl:

Debt securities:


unit trust fund:


10,049 94,669 - 104,718



41. fair value MeasureMent (cont’D.)

The following table shows an analysis of financial assets recorded at fair value by level of the fair value hierarchy: (cont’d.)


Group (cont’d.) Date of valuation

quoted market price

(level 1) rM’000

observable inputs

(level 2) rM’000

unobservable inputs

(level 3) rM’000

total rM’000

assets measured at fair value: (cont’d.)

2014

afs financial assets:

Equity securities:




Debt securities:


19,656 25,071 - 44,727


Equity securities:


Debt securities:


unit trust fund:


7,532 89,246 - 96,778



41. fair value MeasureMent (cont’D.)

The following table shows an analysis of financial assets recorded at fair value by level of the fair value hierarchy (cont’d.):


Group (cont’d.) Date of valuation

quoted market price

(level 1) rM’000

observable inputs

(level 2) rM’000

unobservable inputs

(level 3) rM’000

total rM’000

assets for which fair values are disclosed:

2015

Investment property 31 December 2015 - - 2,850 2,850

2014

Investment property 31 December 2014 - - 2,825 2,825


company Date of valuation

quoted market price

(level 1) rM’000

observable inputs

(level 2) rM’000

unobservable inputs

(level 3) rM’000

total rM’000

assets measured at fair value:

2015



quoted in Malaysia 31 December 2015 - 69,038 - 69,038

2014



quoted in Malaysia 31 December 2014 - 79,379 - 79,379



42. seGMental inforMation

The Group is organised into five major business segments, investment holding and others, funds managed through collective investment schemes, general reinsurance, life reinsurance and general insurance business. The Directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business based on negotiated and mutual terms.

investment holding and

others rM’000

collective investment

schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000

General insurance business rM’000

adjustments and

elimination rM’000

consolidated rM’000

for the year ended 31 December 2015

operating revenueExternal 142 17,386 59,420 8 403,237 - 480,193 Inter-segment 28,649 - 68,360 244 10,124 (107,377) -

28,791 17,386 127,780 252 413,361 (107,377) 480,193

resultsGross earned premiums - - 126,291 - 394,206 (67,049) 453,448 Premiums ceded to

reinsurers - - (2,352) - (214,305) 67,049 (149,608)net earned premiums - - 123,939 - 179,901 - 303,840

Investment income 28,791 17,386 1,489 252 19,155 (40,328) 26,745 Realised gains and losses 833 15 (190) 27 205 (918) (28)Fair value gains and losses (940) (118) 105 - 503 75 (375)Fees and commission

income - - - - 44,692 (17,403) 27,289 Other operating income 3,554 - 3,443 45 2,609 (2,660) 6,991 other revenue 32,238 17,283 4,847 324 67,164 (61,234) 60,622

Gross claims paid - - (2,619) - (161,801) 1,493 (162,927)Claims ceded to reinsurers - - - - 74,256 (1,493) 72,763 Gross changes to contract

liabilities - - (326) - (18,359) 1,169 (17,516)Change in contract

liabilities ceded to reinsurers - - (1,509) - (11,930) (1,169) (14,608)

net claims - - (4,454) - (117,834) - (122,288)



42. seGMental inforMation (cont’D.)


others rM’000


schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000


adjustments and



for the year ended 31 December 2015 (cont’d.)

results (cont’d.)

Fee and commission expense - - (41,143) - (57,083) 17,403 (80,823)

Management expenses (19,500) (1,744) (17,281) (153) (45,298) 1,741 (82,235)

Other operating expenses (947) - - (24) (15) 701 (285)

other expenses (20,447) (1,744) (58,424) (177) (102,396) 19,845 (163,343)

share of results of associates - - - - - (2,835) (2,835)

share of results of a joint venture company - - - - - 527 527

profit before taxation 11,791 15,539 65,908 147 26,835 (43,697) 76,523

Taxation (31) - (36) (7) (3,796) 230 (3,640)

net profit for the year 11,760 15,539 65,872 140 23,039 (43,467) 72,883

for the year ended 31 December 2014

operating revenue

Exteral 315 10,624 59,252 377 387,518 (7,016) 451,070

Inter-segment 68,241 - 51,111 - - (119,352) -

68,556 10,624 110,363 377 387,518 (126,368) 451,070

results

Gross earned premiums - - 108,594 - 366,072 (51,111) 423,555

Premiums ceded to reinsurers - - (1,559) - (206,090) 51,111 (156,538)

net earned premiums - - 107,035 - 159,982 - 267,017





others rM’000


schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000


adjustments and



for the year ended 31 December 2014 (cont’d.)

results (cont’d.)

Investment income 68,556 10,624 1,769 377 21,446 (75,257) 27,515

Realised gains and losses 126 - 86 - 5,813 (212) 5,813

Fair value gains and losses (162) 12 (42) (21) 1,295 (726) 356

Fees and commission income - - - - 41,472 (12,654) 28,818

Other operating income 2,253 - 597 262 1,515 (2,453) 2,174

other revenue 70,773 10,636 2,410 618 71,541 (91,302) 64,676

Gross claims paid - - (4,240) - (150,000) 2,629 (151,611)

Claims ceded to reinsurers - - - - 62,334 (2,629) 59,705

Gross changes to contract liabilities - - (2,196) - (17,581) - (19,777)

Change in contract liabilities ceded to reinsurers - - 2,576 - 751 - 3,327

net claims - - (3,860) - (104,496) - (108,356)

Fee and commission expense - - (32,502) - (55,555) 12,654 (75,403)

Management expenses (10,757) (884) (15,706) (366) (43,708) 1,535 (69,886)

Other operating expenses (12,237) - - - (506) 12,105 (638)

other expenses (22,994) (884) (48,208) (366) (99,769) 26,294 (145,927)

share of results of associates - - - - - 3,789 3,789

share of results of a joint venture company - - - - - 103 103

profit before taxation 47,779 9,752 57,377 252 27,258 (61,116) 81,302

Taxation (258) - (94) (17) (5,077) 230 (5,216)

net profit for the year 47,521 9,752 57,283 235 22,181 (60,886) 76,086





others rM’000


schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000


adjustments and



as at 31 December 2015

assetsProperty and equipment 921 - 81 - 5,072 2,817 8,891

Investment property - - - - 2,433 521 2,954

Intangible assets 846 - 168 - 1,451 2,419 4,884

Investment in subsidiaries 187,893 - 729 - - (188,622) -

Investments in associates 40,955 - - - - 6,833 47,788

Investment in a joint venture company 433 - - - - 818 1,251

Goodwill - - - - - 24,165 24,165

Investments 69,038 462,805 61,988 - 459,410 (465,619) 587,622

Deferred tax assets - - - - 291 (291) -

Reinsurance assets - - 1,257 - 248,126 (4,581) 244,802

Insurance receivables - - 46,547 - 107,317 (21,591) 132,273

Other receivables 8,415 2,987 731 10,991 112,728 (12,789) 123,063

Cash and bank balances 7,631 9 16,983 - 8,670 - 33,293

total assets 316,132 465,801 128,484 10,991 945,498 (655,920) 1,210,986

equityShare capital 76,126 461,612 11,229 11,000 100,013 (584,804) 75,176

Share premium 173,343 - - - 3,335 (3,335) 173,343

Merger deficit - - - - - (13,838) (13,838)

Available-for-sale reserves - - - - 1,952 (6,921) (4,969)

Employee share option reserves 4,705 - - - - - 4,705

Foreign currency translation reserve - - - - - 5,777 5,777

Retained earnings 47,997 4,001 87,018 (9) 127,367 (55,372) 211,002

Equity attributable to owners of the parent 302,171 465,613 98,247 10,991 232,667 (658,493) 451,196

Non-controlling interests - - - - - 40,424 40,424

total equity 302,171 465,613 98,247 10,991 232,667 (618,069) 491,620





others rM’000


schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000


adjustments and



as at 31 December 2015 (cont’d.)

liabilities

Insurance contract liabilities - - 17,730 - 564,139 (4,581) 577,288

Deferred tax liabilities - - - - - 1,106 1,106

Insurance payables - - 1,989 - 107,152 (21,591) 87,550

Retirement benefits - - - - 530 - 530

Other payables 13,961 188 10,518 - 41,010 (12,785) 52,892

total liabilities 13,961 188 30,237 - 712,831 (37,851) 719,366

total equity and liabilities 316,132 465,801 128,484 10,991 945,498 (655,920) 1,210,986

as at 31 December 2014

assets

Property and equipment 1,074 - 115 - 5,857 2,843 9,889

Investment property - - - - 2,352 527 2,879

Intangible assets 757 - 158 15 1,681 3,307 5,918

Investment in subsidiaries 187,695 - - - - (187,695) -

Investments in associates 41,233 - - - - 5,489 46,722

Investment in a joint venture company 433 - - - - 148 581

Goodwill - - - - - 24,165 24,165

Investments 84,296 416,556 25,127 10,285 432,242 (417,265) 551,241

Reinsurance assets - - 2,721 - 257,515 (955) 259,281

Insurance receivables - - 32,690 - 71,019 (16,589) 87,120

Other receivables 4,860 842 368 64 80,654 (4,926) 81,862

Cash and bank balances 1,626 21 10,561 1,096 8,396 - 21,700

total assets 321,974 417,419 71,740 11,460 859,716 (590,951) 1,091,358





others rM’000


schemes rM’000

General reinsurance

business rM’000

life reinsurance

business rM’000


adjustments and



as at 31 December 2014 (cont’d.)

equity

Share capital 75,226 414,625 10,500 11,000 100,013 (536,188) 75,176

Share premium 173,343 - - - 3,335 (3,335) 173,343

Merger deficit - - - - - (13,838) (13,838)

Available-for-sale reserves - - - - 2,544 (6,556) (4,012)

Employee share option reserves 2,169 - - - - - 2,169

Foreign currency translation reserve - - - - - 1,461 1,461

Retained earnings 66,608 2,631 38,146 (149) 115,329 (50,164) 172,401

Equity attributable to owners of the parent 317,346 417,256 48,646 10,851 221,221 (608,620) 406,700

Non-controlling interests - - - - - 38,511 38,511

total equity 317,346 417,256 48,646 10,851 221,221 (570,109) 445,211

liabilities

Insurance contract liabilities - - 14,387 - 525,807 (955) 539,239

Deferred tax liabilities - - - - (1,007) 1,627 620

Insurance payables - - 956 - 82,395 (16,589) 66,762

Retirement benefits - - - - 792 - 792

Other payables 4,628 163 7,751 609 30,508 (4,925) 38,734

total liabilities 4,628 163 23,094 609 638,495 (20,842) 646,147

total equity and liabilities 321,974 417,419 71,740 11,460 859,716 (590,951) 1,091,358



43. capital ManaGeMent

The Group’s capital management objective is to ensure that the Group creates value for its shareholders while minimising the potential adverse effects on the performance of the Group.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial year 31 December 2015 and 2014.

The Company is not subject to any externally imposed capital requirements.

The Labuan subsidiaries are required to comply with the capital requirements stipulated under the Guidelines on application for License - Insurance and Insurance Related Activities (“the Guideline”), as issued by the Labuan Financial Services Authority. Whereas, TIMB is required to meet the minimum capital adequacy requirements as prescribed by the RBC Framework. The status of compliance of the subsidiaries with the Guideline and RBC Framework above are disclosed in Note 36.

44. siGnificant anD subsequent events

(a) change of company name

On 27 July 2015, the Board of Directors of the Company announced that the Company is proposing to change its name from “Tune Ins Holdings Berhad” to “Tune Protect Group Berhad” (“Proposed Change of Name”).

The Proposed Change of Name is to create a more distinct corporate identity for the Company to better reflect the dynamic and holistic business activities and branding of the Group.

The use of the proposed name “Tune Protect Group Berhad” has been approved and reserved by the Companies Commission of Malaysia (“CCM”). The Proposed Change of Name has been approved by shareholders of the Company at the Extraordinary General Meeting on 26 August 2015 at Sime Darby Convention Centre.

On 9 September 2015, the Company has received the Certificate of Incorporation on Change of Name of Company (Form 13) dated 8 September 2015 issued by CCM. Accordingly, the Company’s name has been changed to “Tune Protect Group Berhad” with effect from 8 September 2015.

(b) surrender of labuan reinsurance licence by a wholly owned subsidiary, tune lifere ltd (“tlr”)

The Company’s wholly owned subsidiary, TLR, has received a letter from Labuan Financial Services Authority (“LFSA”) that pursuant to Section 169 of the Labuan Financial Services and Securities Act 2010 (“LFSSA”), LFSA has no objection for TLR to surrender its Labuan reinsurance licence bearing certificate number IS2011112 effective from 4 September 2015 and to comply with the requirements as imposed by LFSA.

On 16 February 2016, TLR has been placed under Member’s voluntary Winding-up pursuant to the provision of Section 131(1) of the Labuan Companies Act, 1990 applying Section 254(1)(b) of the Companies Act, 1965.

Mr. Tan Chin Fah of Messrs KBCF Tan, 1st Floor, u0510, Lazenda Commercial Centre, PhaseII, Jalan Tun Mustapha, 87000 Federal Territory of Labuan had been appointed as liquidator of TLR.

(c) surrender of labuan reinsurance licence by a wholly owned subsidiary, tune insurance (labuan) ltd (“til”)

The Company’s wholly owned subsidiary, TIL, has received a letter from Labuan Financial Services Authority (“LFSA”) that pursuant to Section 169(1) of the Labuan Financial Services and Securities Act 2010 (“LFSSA”), LFSA has no objection for TIL to surrender its Labuan captive insurer’s licence bearing certificate number IS200999 effective from 23 September 2015 and to comply with the requirements as imposed by LFSA.

As at the date of this report, there is no further development on this matter.



45. suppleMentary inforMation

realised and unrealised profit/(losses)

Pursuant to the directive and guidance issued by Bursa Securities, the breakdown of the Group’s retained earnings into realised and unrealised earnings is analysed as follows:

2015 rM’000

2014 rM’000

Total retained earnings of the Group:

- Realised 266,923 223,964

- unrealised (549) (1,399)

266,374 222,565

Consolidation adjustments (55,372) (50,164)

Total retained earnings per statements of financial position 211,002 172,401

The analysis of realised and unrealised earnings is made reference to the Guidance On Special Matter No. 1 “Determination of Realised and unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Securities Listing Requirements” issued by the Malaysian Institute of Accountants on 20 December 2010.

The disclosure of realised and unrealised earnings above is solely for complying with the disclosure requirement of Bursa Securities and should not be applied for any other purposes.

This note should be read in conjunction with the Consolidated Statement of Changes in Equity.


Distribution of shareholDinGs

Class of shares : Ordinary shares of RM0.10 each (“Shares”) voting rights : One vote per ordinary share

shareholdings no. of

shareholders % of

shareholders no. of

shares % of issued

share capital

Less than 100 43 0.83 583 0.00

100 – 1,000 727 13.98 596,584 0.08

1,001 – 10,000 3,018 58.03 15,861,864 2.11

10,001 – 100,000 1,154 22.19 35,970,271 4.78

100,001 to less than 5% of issued shares 255 4.90 440,994,555 58.66

5% and above of issued shares 4 0.08 258,336,123 34.36

5,201 100 751,759,980 100

substantial shareholDers

The direct and indirect shareholdings of the shareholders holding more than 5% in TPG based on the Register of Substantial Shareholders are as follows:-

Direct inDirect

name no. of

shares held% of

issued sharesno. of

shares held% of

issued shares

AirAsia Berhad (“AAB”) 102,609,000 13.65 - -

Tan Sri Dr. Anthony Francis Fernandes 100,000 0.01 227,692,150(1) 30.29

Datuk Kamarudin Bin Meranun 81,900 0.01 227,692,150(1) 30.29

CIMB SI II Sdn. Bhd. 70,679,123 9.40 - -

Tune Group Sdn. Bhd. 125,083,150 16.64 - -

Tune Air Sdn. Bhd. - - 102,609,000(2) 13.65

Kumpulan Wang Persaraan (Diperbadankan) 41,048,000 5.46 7,890,800(3) 1.05

CIMB Group Sdn. Bhd. - - 70,679,123(4) 9.40

CIMB Group Holdings Berhad - - 70,679,123(4) 9.40

notes:

(1) Deemed interested by virtue of Section 6A of the Companies Act, 1965 (“the Act”) through shareholding of more than 15% in Tune Group Sdn. Bhd. and AAB. (2) Deemed interested by virtue of Section 6A of the Act through a shareholding of more than 15% in AAB. (3) Held through its Fund Manager. (4) Deemed interested by virtue of Section 6A of the Act through a shareholding of more than 15% in CIMB SI II Sdn. Bhd.

ANALYSIS OF SHAREHOLDINGS

AS AT 4 APRIL 2016


Directors’ anD ceo’s shareholDinGs

The interests of the Directors and CEO of TPG in the Shares and options over shares in the Company and its related corporations based on the Company’s Register of Directors’ Shareholdings are as follows:-

Direct indirect

no. of

shares held% of

issued sharesno. of

shares held% of

issued shares

Directors

Razman Hafidz bin Abu Zarim - - - -

Tan Sri Dr Anthony Francis Fernandes 100,000 0.01 227,692,150(1) 30.29

Datuk Kamarudin bin Meranun 81,900 0.01 227,692,150(1) 30.29

Ng Soon Lai @ Ng Siek Chuan 100,000 0.01 - -

Tan Ming-Li - - - -

ceo

Junior Namjick Cho - - - -

notes:

(1) Deemed interested by virtue of Section 6A of the Act through a shareholding of more than 15% in Tune Group Sdn Bhd. and AirAsia Berhad.

The TPG Employees’ Share Option Scheme of the Company has been offered on 18 March 2014. There were no options exercised by, or shares granted to and vested in Directors during the financial year.

thirty (30) larGest shareholDers

name of shareholdersno. of

shares held% of issued

share capital

1. AirAsia Berhad 102,609,000 13.65

2. CIMB SI II Sdn. Bhd. 70,679,123 9.40

3. CIMB Group Nominees (Tempatan) Sdn. Bhd. - Pledged Securities Account for Tune Group Sdn. Bhd. (GCM CBM-SKY X) 44,000,000 5.85

4. Kumpulan Wang Persaraan (Diperbadankan) 41,048,000 5.46

5. Kenanga Nominees (Tempatan) Sdn. Bhd. - ECM Libra Partners Sdn. Bhd. pledged securities account for Tune Group Sdn. Bhd. 37,532,934 4.99

6. Kenanga Capital Sdn. Bhd. - Pledged Securities Account for Tune Group Sdn. Bhd. 24,776,000 3.30

7. CIMB Group Nominees (Asing) Sdn. Bhd. Exempt An for DBS Bank Ltd (SFS) 22,500,000 2.99

8. Citigroup Nominees (Asing) Sdn. Bhd. - Exempt An for Citibank New York (Norges Bank 12) 16,468,400 2.19

9. Malacca Equity Nominees (Tempatan) Sdn. Bhd. - Exempt An for Phillip Capital Management Sdn. Bhd. (EPF) 14,865,100 1.98

ANALYSIS OF SHAREHOLDINGSAS AT 4 APRIL 2016


ANALYSIS OF SHAREHOLDINGSAS AT 4 APRIL 2016

name of shareholdersno. of

shares held% of issued

share capital

10. Citigroup Nominees (Tempatan) Sdn. Bhd. – Employees Provident Fund Board (Amundi) 11,500,000 1.53

11. CIMSEC Nominees (Tempatan) Sdn. Bhd. - Pledged Securities Account for Tune Group Sdn. Bhd. (EDG&GCM) 10,000,000 1.33

12. HSBC Nominees (Tempatan) Sdn. Bhd – JPMCB for Lim Kian Onn 10,000,000 1.33

13. HSBC Nominees (Asing) Sdn. Bhd – BBH and Co Boston for Smaller Companies Portfolio (GEMOFL) 9,706,600 1.29


15. HSBC Nominees (Asing) Sdn. Bhd. – Exempt An for Credit Suisse Securities (Europe) Limited (CLTAC N-Treaty) 9,393,100 1.25

16. HSBC Nominees (Tempatan) Sdn. Bhd. - HSBC (M) Trustee Bhd. for Affin Hwang Select Opportunity Fund (3969) 8,968,418 1.19

17. Tokio Marine Life Insurance Malaysia Bhd. - As Beneficial Owner (PF) 8,940,900 1.19

18. Citigroup Nominees (Tempatan) Sdn. Bhd. - Employees Provident Fund Board 8,838,400 1.18

19. HSBC Nominees (Asing) Sdn. Bhd. - Exempt An for JPMorgan Chase Bank, National Association (U.K.) 8,163,700 1.09

20. HSBC Nominees (Asing) Sdn. Bhd. - BBH And Co Boston for Deutsche Global Small Cap Fund 7,790,962 1.04

21. HSBC Nominees (Asing) Sdn. Bhd. - BBH And Co Boston for Deutsche Global Growth Fund 7,213,321 0.96

22. Amanahraya Trustees Berhad – Public Strategic Smallcap Fund 7,179,200 0.95

23. Maybank Nominees (Tempatan) Sdn. Bhd. – Etiqa Insurance Berhad (Life Non-Par FD) 7,000,000 0.93

24. Citigroup Nominees (Tempatan) Sdn. Bhd. – Employees Provident Fund Board (F Templeton) 6,697,600 0.89

25. Malacca Equity Nominees (Tempatan) Sdn. Bhd. – Exempt An for Phillip Capital Management Sdn. Bhd. 6,393,700 0.85

26. DB (Malaysia) Nominee (Asing) Sdn. Bhd. – Exempt An for Nomura PB Nominees Ltd 5,800,000 0.77

27. Citigroup Nominees (Tempatan) Sdn. Bhd. - Employees Provident Fund Board (Affin-HWG) 5,548,600 0.74

28. Lim Kian Onn 5,433,533 0.72


30. Alliancegroup Nominees (Tempatan) Sdn. Bhd. - Export-Import Bank of Malaysia Berhad for Tune Group Sdn. Bhd. 5,350,000 0.71


LIST OFPROPERTIES

registered/ beneficial owner title/address Description/existing use tenure

Date of acquisition

land area and built–up area

audited nbv as at 31 December 2015rM’000

TIMB No. 77, Jalan Kapar, 41400 Klang, Selangor

A 4-storey corner shop-office which has been leased to CIMB Bank Berhad for a term of three years commencing 1 August 2014

Freehold 18/05/2000 5,295.83 sq ft with built-up area of 20,209.00 sq ft (main floor) and 987.04 sq ft (ancillary)

2,433

TIMB No. 37, Jalan 3/62A, Bandar Manjalara, 52200 Kepong, Kuala Lumpur

A 4-storey intermediate shop-office which we use as our store save for the ground floor and the first floor measuring an area of 3,492 sq ft. has been leased to Amekim Furnishing Sdn Bhd for a term of two years commencing 1 May 2014 and currently used as home furnishing store dealing with curtains

Leasehold for 99 years ending 25 August 2077

06/04/1996 1,765.27 sq ft with built-up area of 6,765.97 sq ft (main floor) and 220.01 sq ft (ancillary)

485


OvERSEAS vENTuRES AND LIST OF BRANCHES

overseas ventures

overseas ventures address contact

1 Europe, Middle East, India and AfricaTune Protect Commercial Brokerage LLC

Level 8 No. 807, Blue BayTower,Business Bay, Dubai, uAE.P.O Box: 124177

Phone : +971 4 360 6872Fax : +971 4 420 3920Website : www.tune2protect.com

2 Bangkok, ThailandTune Insurance Public Company Limited

540 Mercury Tower 11th Floor, Ploenchit Road Lumpini, Pathumwan, Bangkok 10330

Phone : +662 679 9888Fax : +662 679 9801 +662 679 9802Email : [email protected] : www.tuneinsurance.co.th

tune insurance Malaysia berhad’s (“tiMb”) branches

branches address contact

1 Kuala Lumpur, Malaysia (Head Office) Level 9, Wisma Tune,No. 19, Lorong Dungun,Damansara Heights,50490, Kuala Lumpur

Toll-Free No. : 1 800 885 753Phone : +603 2087 9000Fax : +603 2094 1366Email : [email protected] Website : www.tuneprotect.com/my

2 Shah Alam No.57, Ground Floor & 1st Floor,Jalan Snuker 13/28, Seksyen 13,40100 Shah Alam, Selangor

Phone : +603 5510 3667 +603 5510 3730Fax : +603 5513 5801

3 Puchong No. 12, Jalan Puteri 2/6, Bandar Puteri, 47000 Puchong, Selangor.

Phone : +603 8063 5416 +603 8063 5277Fax : +603 8063 5419

4 Penang Lot 77-2-32 & 33, Level 2, Penang Times Square, Jalan Dato Kramat, 10150 Penang

Phone : +604 228 3288 +604 228 0233Fax : +604 227 8088

5 Bukit Mertajam units 2-11 & 2-12, 2nd FloorKompleks Perniagaan Pauh Jaya @ Frontage, Jalan Baru 13700 Seberang Perai, Pulau Pinang

Phone : + 604 386 6518 + 603 486 6368Fax : + 604 386 6578




6 Alor Setar No. 2174-T Taman Habsah, 05100 Alor Setar, Kedah Darul Aman

Phone : +604 730 7988 +604 732 7987Fax : +604 732 7989

7 Ipoh Ground & 1st Floor, No. 52, Jalan Medan Istana, Bandar Ipoh Raya, 30000 Ipoh, Perak Darul Ridzuan

Phone : +605 254 3305 +605 254 1239 Fax : +605 254 6789

8 Seremban No. 12, Ground Floor, Jalan Dato Lee Fong Yee, 70000 Seremban, Negeri Sembilan

Phone : +606 761 1694 +606 767 6260 Fax : +606 763 3109

9 Melaka No 529 & 530, Ground Floor, Taman Melaka Raya, 75000 Melaka

Phone : +606 284 2828 +606 283 3109 +606 281 2753Fax : +606 283 5110

10 Johor Bahru unit 22-02 Level 22, Menara Zurich,15 Jalan Dato Abdullah Tahir,80300, Johor Bahru, Johor Darul Takzim

Phone : +607 333 1518 +606 330 5603Fax : +607 336 5539

11 Batu Pahat 1st Floor, No. 55-1, Jalan Cengal, Taman Batu Pahat, 83000 Batu Pahat, Johor

Phone : +607 431 3591 +607 431 3752Fax : +607 431 4779

12 Kluang No: 53, 1st & 2nd Floor, Jalan Rambutan, 86000 Kluang, Johor

Phone : +607 776 5468 Fax : +607 776 5473

13 Kuantan A109, Ground Floor, Sri Dagangan, Jalan Tun Ismail, 25000 Kuantan, Pahang Darul Makmur

Phone : +609 513 1914 +609 514 5259 Fax : +609 514 8970




14 Kota Bahru Lot 702 & 703, PT 52, Ground Floor, Seksyen 9, Jalan Tok Hakim, 15000 Kota Bharu, Kelantan

Phone : +609 748 3986 +609 748 4895 Fax : +609 744 5414

15 Kuala Terengganu No 888C, Lot 3886, Tingkat 1, Jalan Sultan Sulaiman, 20000 Kuala Terengganu

Phone : +609 622 9828 +609 622 4828 Fax : +609 622 3151

16 Kuching L.579, Section 10, Kuching Town Land District, Jalan Tun Ahmad Zaidi Adruse, 93400 Kuching, Sarawak

Phone : +6082 241 266 +6082 417 343 Fax : +6082 256 045

17 Miri Lot 788, 1st Floor, Jalan Bintang Jaya 4, Bintang Jaya Commercial Centre, 98000 Miri, Sarawak

Phone : +6085 424 243 +6085 422 344 Fax : +6085 438 904

18 Sibu No. 17C, 1st Floor, Jalan Pedada, 96000 Sibu, Sarawak

Phone : +6084 353 033 +6084 353 055 Fax : +6084 353 022

19 Kota Kinabalu Ground & 1st Floor, No. 15, Jalan Pantai, 88000 Kota Kinabalu, Sabah

Phone : +6088 221 116 / 117 / 257 +6088 253 120 / 218 292 Fax : +6088 218 272

20 Tawau TB4620 Block B, Ba Zhong Commercial Centre, Jalan Tawau Lama, 91000 Tawau, Sabah.

Phone : +6089 763 177 +6089 763 178 Fax : +6089 763 179

21 Sandakan Ground Floor, Lot 3, Block 7, Bandar Indah, Mile 4, Jalan utara, 90000 Sandakan, Sabah

Phone : +6089 224 770 +6089 224 780 Fax : +6089 224 790


Dear shareholders,

The Notice of Annual General Meeting and Proxy Form will be sent separately to you in due course. Kindly contact any of the following should you require further clarifications:-

1. head office Tune Protect Group Berhad (Company No. 948454-K) (formerly known as Tune Ins Holdings Berhad) Level 9 Wisma Tune No. 19 Lorong Dungun Damansara Heights 50490 Kuala Lumpur Malaysia Tel: (603)-2056 6216 or (603)-2056 6200 Fax: (603)-2092 1029

2. share registrars Symphony Share Registrars Sdn Bhd Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Jalan PJu 1A/46 47301 Petaling Jaya Selangor Darul Ehsan, Malaysia Tel: (603)-7849 0777 Fax: (603)-7841 8151

We apologise for any inconvenience caused. Thank you.

MESSAGE TOOuR SHAREHOLDERS