c


 




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The financial statements of the Group and of the Company have been prepared
under the historical cost convention, unless otherwise stated in the accounting
policies. The financial statements comply with the provision of the Companies Act,
1965 and applicable Financial Reporting Standards (FRSs) as modified by BNM.

The financial statements of the Group also comply with the Insurance Act and
Regulations, 1996, the Takaful Act, 1984 and Guidelines and Circulars issued by
BNM and where applicable are modified to comply with the principles of Shariah.

Effective 1 April 2009, the Group and the Company had early adopted FRS 139
Financial Instruments: Recognition and Measurement (FRS 139). The early adoption
of FRS 139 has resulted in a change in the accounting policy relating to
theclassification and measurement of financial assets and liabilities of the Group and
of the Company.

In addition, the Risk -Based Capital Framework (RBC Framework) became effective
for all insurers from 1 January 2009. Accordingly, the reinsurance subsidiary,
Malaysian Reinsurance Berhad (Malaysian Re) has measured its insurance liabilities
in accordance with the valuation bases specified under the RBC Framework.

The impact of adopting t he FRS 139 and RBC Framework is disclosed in Note 2.29
to the financial statements. The general reinsurance business assets and liabilities
relate to both the general reinsurance business and shareholders¶
fund.

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

 



 
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at thebalance sheet date. The financial statements
of the subsidiaries are prepared for the same reporting date as
theCompany.Subsidiaries are consolidated from the date of acquisition, being the
date on which the Group obtains control, andcontinue to be cons olidated until the
date that such control ceases. In preparing the consolidated financialstatements,
intragroup balances, transactions and unrealised gains or losses are eliminated in
full. Uniform accountingpolicies are adopted in the consolidated financi al statements
for like transactions and events in similar circumstances.Acquisitions of subsidiaries
are accounted for using the purchase method. The purchase method of
accountinginvolves allocating the cost of the acquisition to the fair value of the asse ts

 

 c

 



acquired and liabilities and contingentliabilities assumed at the date of acquisition.
The cost of

an acquisition ismeasured as the aggregate of the fair values,at the date of

exchange, of the assets given, liabilities incurred or assumed, and equity instruments
issued, plus anycosts directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group¶s interest in the net fair value
of the identifiable assets, liabilitiesand contingent liabilities represents goodwill. Any
excess of the Group¶s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities over the cost of acquisition is recognised immediately in the
incomestatement.Minority interests represent the portion of profit or loss and net
assets in subsidiaries not held by the Group. It ismeasuredat the minorities¶ share of
the fair value of the subsidiaries¶ identifiable assets and liabilities at the acquisition
date and the minorities¶ share of changes in the subsidiaries¶ eq uity since then.

 

 
Goodwill relating to an associate is included in the carrying amount of the investment
and is not amortised. Any excessof the Group¶s share of the net fair value of the
associate¶s identifiable assets, liabilities and contingent liabilities overthe cost of the
investment is excluded from the carrying amount of the investment and is instead
included as income in the determination of the Group¶s share of the associate¶s profit
or loss in the period in which the investment is acquired.


 


 



 !
 "#$"#$




Unquoted shares, at cost:
In Malaysia 795,000 775,000
Outside Malaysia 6,370 6,370
801,370 781,370 

’ Details of the subsidiaries are as follows:



 c

 




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 %



 


   c 
 &



20102009
% %
Malaysian Malaysia Underwriting of all classes 100 100
ReinsuranceBerhad of general reinsurance
business
Takaful IkhlasSdn. Malaysia Management of family, 100 100
Bhd general andtakaful
investment linked business
MNRB Malaysia Management of family and 100 100
RetakafulBerhad general
retakaful business
MMIP Services Malaysia Managing the Malaysian 100 100
Sdn. Bhd Motor Insurance. Pool to
provide motor insurance to
vehicleowners who are
unable to obtain
insuranceprotections for
their vehicles.
Malaysian Re Dubai, Marketing and promotional 100 100
(Dubai) Ltd. United Arab, activitiesand servicing of
Emirate clients on behalf of
Malaysian Re

å Audited by a firm of chartered accountants Ernst & Young