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Great Eastern Takaful Berhad Investment-Linked Funds: Audited Financial Information - 31 December 2018

IM Insights
By IM Insights
5 years ago
Great Eastern Takaful Berhad Investment-Linked Funds: Audited Financial Information - 31 December 2018

Shariah, Sukuk, Takaful, Islamic Private Debt Securities, Provision, Receivables

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  1. Great Eastern Takaful Berhad Investment-Linked Funds Statement by the Manager and Audited Financial Information 31 December 2018
  2. 1 3 4 5 8 9 15 16 17 CEO ’s Message Asset Liability Committee Fund Objectives Investment Review and Outlook 2018 Fund Performance Funds’ Comparative Performance Statement by the Manager Shariah Committee’s Report Independent Auditors’ Report 21 22 23 24 Statements of Assets and Liabilities Statements of Income and Expenditure Statements of Changes in Net Asset Value Notes to the Financial Information
  3. CEO ’S MESSAGE SHAHRUL AZLAN SHAHRIMAN Chief Executive Officer Dear Valued Unitholders, The year 2018 was a very challenging year amidst an unprecedented change in Malaysia’s political landscape. Malaysia voted for change in government for the first time since its independence in 1957. On top of that, on the global front, trade conflict between the two biggest economies USA and China rattled global financial markets and raised concerns about sustainability of global economic growth. 1
  4. 2 Great Eastern Takaful Berhad Investment-Linked Funds CEO ’S MESSAGE (cont’d) As a result, our Dana i-Mekar generated a return of -11.2% albeit outperforming FBM Emas Shariah (FBMS) Index by 233bps. Meanwhile Dana i-Majmuk, a balanced fund, fared better, producing -4.4% return where it outperformed the weighted benchmark (FBMS & 12 month deposit) by 91bps. Nevertheless, Dana i-Makmur, a fixed income fund, generated a return of +5.4% vs its benchmark (12-month Mudharabah Deposit) return of 2.9%. In today’s technology-driven world, demand for new innovations and fast technology adoption increases. Technology has handed consumers unprecedented power to dictate the rules in purchasing goods and services. Three-quarters of all research finds, expect “now” service within minutes of making contact online. With this in mind, Great Eastern Takaful Berhad (GETB) seeks a pivotal role in this change and aims to become the trusted partner and your first choice for your protection. 2018 witnessed the launch of i-Get In Touch, the all-new online portal dedicated to GETB’s customers. You may now access and check your certificate details, update personal information, as well as applying for a new plan by logging on to this brand new portal. In fact, you may download this Annual Investment-Linked Fund Performance report from the portal, which is in line with the company’s Go Green initiative. The year 2019 will see GETB continuing to embrace decisions that will deliver more innovative products and services. We are determined to deliver on the trust bestowed upon us to enhance GETB’s leadership position in the local Takaful sector. GETB’s purpose – “We help people help each other in times of need. Because we can” – captures the essence of our business philosophy and affirms the integral relationship we have in contributing to your health and financial protection, our employees and local communities. On behalf of Great Eastern Takaful Berhad, I would like to take this opportunity to offer you my greatest appreciation for your continued support. The year ahead will bring its own challenges but I’m sure by working together and keeping focused on our priorities, we will realise our ambitions. May Allah SWT give us His guidance in all our future undertakings, Aamiin. Wassalamualaikum warahmatullahi wabarakatuh. Thank you For Great Eastern Takaful Berhad, SHAHRUL AZLAN SHAHRIMAN Chief Executive Officer
  5. ASSET LIABILITY COMMITTEE Members of The Committee Shahrul Azlan bin Shahriman (Chairman) Chief Executive Officer, Great Eastern Takaful Berhad Jasveen Kaur Marne Chief Financial Officer, Great Eastern Takaful Berhad Mohd Khalid bin Khairullah Appointed Actuary, Great Eastern Takaful Berhad Goh Pei Kuan Vice President, Equity Fund Manager, Great Eastern Life (Malaysia) Berhad Teo Chun Seng Vice President, Risk Management and Compliance, Great Eastern Life (Malaysia) Berhad Nurul Sheila Khalib Assistant Vice President, Head of Product Management, Great Eastern Takaful Berhad Shariah Committee Members of The Committee Dr. Akhtarzaite binti Abdul Aziz (Chairman) Prof. Dato’ Dr. Wan Sabri bin Wan Yusof Dr. Mohamad Sabri bin Zakaria Assoc. Prof. Dr. Siti Salwani binti Razali Assoc. Prof. Dr. Suhaimi bin Ab Rahman Dr. Mohammad Firdaus bin Mohammad Hatta 3
  6. 4 Great Eastern Takaful Berhad Investment-Linked Funds FUND OBJECTIVES i-Makmur Fund A fund which invests in Islamic fixed income securities , for example government and corporate sukuk (ranging from 40% to 100%) as well as Islamic deposits. This fund seeks to provide consistent return at low levels of volatility. Although the fund invests mainly in Malaysia, it may also partially invest in foreign Shariah approved fixed income securities (up to 50%) to enhance the fund’s returns. Dana i-Makmur only invests in Shariah-compliant securities. i-Mekar Fund A fund where investments are in Shariah-compliant equities (ranging from 80% to 100%), which may be volatile in the short term, as well as Islamic deposits. This fund seeks to achieve medium to long-term capital appreciation. Although the fund invests mainly in Malaysia, it may partially invest in Singapore (up to 25%) and Hong Kong (up to 25%), if and when necessary, to enhance the fund’s returns. Dana i-Mekar only invests in Shariah-compliant securities. i-Majmuk Fund A fund which invests in a mixture of Shariah-compliant equities, Islamic fixed income securities and Islamic deposits. There is flexibility in asset allocation as this fund may invest solely in Islamic fixed income securities or Shariah-compliant equities. This fund seeks to provide medium to long-term capital appreciation, with a moderate level of volatility. Dana i-Majmuk only invests in Shariah-compliant securities.
  7. INVESTMENT REVIEW AND OUTLOOK 2018 Equity Market Review 2018 was a challenging year for equities with the MSCI World Index Total Return (USD) posting a loss of 8.2%. The continued escalation of trade tensions between China and US appeared to be one of the key drivers for the poor performance for equity markets in the year. For the first eight months, markets were buoyed by a relatively positive US market riding on strong economic data, a confident Federal reserve and improving corporate earnings. This was despite relative weakness in Asia Ex-Japan driven by China, sparked by growing pressures from the trade war with the US and a slowing local economy. European markets showed benign performance with decent economic data balanced by changes in governments and looming concerns over Brexit. Global markets however, took a turn for the worse in September when the US imposed a 10% tariff on USD200.0 billion worth of Chinese imports. A synchronised fall in global markets ensued as global growth was called into question. Despite a deal to temporarily freeze further tariffs was achieved in December, equity markets never recovered. Over in Asia, the Morgan Stanley Capital International Asia Ex Japan (“MSCI Asia Ex Japan”) Total Return Index (USD) fell by 14.4%, underperforming the MSCI World. China led the decline with the Shanghai Composite Total Return index closing the year down 22.7% as its economy continued to moderate from local economic reforms, property measures, and deleveraging of the economy. In addition, the US-China trade war brought further uncertainty and negativity to the growth outlook for the entire region. Domestically, the FTSE Bursa Malaysia EMAS Shariah Index (FBMS) and FBMS Total Return delivered a decline of 13.5% and 11.3% respectively. The market performed relatively well in the first half of the year, riding on a build-up in positive sentiment, and strong growth data from both the local and regional front, while improvement in oil prices and strengthening MYR continued to fuel market optimism. However, market took a turn in the second half as the market took a synchronised fall with the rest of the world as US-China tensions escalated. Among other factors were the disappointing corporate earnings, policy uncertainties while economic indicators were weak. The best performing sectors for the year were oil and gas, gloves and consumer staples. The worst performing indices are those in the telecommunications and construction. 5
  8. 6 Great Eastern Takaful Berhad Investment-Linked Funds Investment Review and Outlook (cont’d) 2019 Equity Market Outlook We expect the domestic equities market to be lacklustre with mid-single digit return for 2019 on the back of a synchronised global economic slowdown and a lack of domestic growth catalysts. Given the fiscal tightening and lack of pro-growth economic policies in the near term, domestic corporate earnings are expected to register unexciting low single digit growth this year. Meantime, the external headwinds remain the US China trade war and a slowing Chinese economy. Key themes driving the market are (1) beneficiaries of a weaker USD, (2) beneficiaries and losers of trade war, (3) GLCs restructuring and divestment, and (4) domestic policy risk. Meantime, the domestic market valuation is not expensive, and has retraced to mean price earnings ratio after a negative return in 2018. In terms of strategy, we are targeting a neutral weighting for life funds and Investment-Linked Funds. Key risks are the escalation of a trade war and geo-political tension. 2018 Fixed Income Market Review Market volatility returned in 2018 across asset classes across the globe. While the US central bank, the Federal Reserve (“Fed”) delivered four interest rate hikes in 2018 as the economy continued the growth trajectory, the Fed members revised down projections of further rate hikes from three to two in 2019. Market has taken the revision as a signal of the Fed nearing the end of its rate hike cycle. As latest global economic data is starting to show some weakness, coupled with the unsettling trade tensions between the two biggest world economies, some are trying to find reasons to justify if global growth is at some inflection points and if recession will follow. Dollar strength was another major theme in 2018, in tandem with continual interest rate hikes in the US. While other economies were showing slowing growth momentum, emerging market currencies depreciated against the USD. This intensified selling of financial assets from emerging markets, including Malaysia. Foreign holdings in Malaysian Government Islamic Securities (“MGII”) declined by RM2.6 billion for the year. However, the prices of MGII were supported due to strong local buying. Ringgit fared better compared to regional peers in 2018, reflecting Malaysia’s healthy economic fundamentals and stable banking system. Meanwhile, the momentous GE14 results brought along uncertainties in terms of potential major policy changes and concerns on the effectiveness and efficiencies of the new government. Post GE14, the market then looked to Budget 2019 for direction. The budget turned out to be less punitive than feared, despite earlier hints that the people had to make sacrifices. Nonetheless, the larger than expected fiscal deficits and perceived higher reliance on the country’s oil revenue at a time when oil prices were declining below the government’s forecasted level, intensified fears of potential negative rating reactions by the international rating agencies. While both S&P and Moody’s have since reaffirmed Malaysia’s rating at Aand A3 respectively, oil prices and demonstration of fiscal discipline by the new government will continue to be scrutinised.
  9. Investment Review and Outlook (cont’d) 2019 Fixed Income Market Outlook With the Fed likely close to the end of its rate-hike cycle, coupled with a moderating global growth outlook, including that of Malaysia, sukuk investors are looking at potentially a lower interest rate environment going forward, which is positive for sukuk prices. Nonetheless, uncertainties remain, given the ongoing China-US trade tensions, geo-political issues in the oil industry, slowing growth in China, the unsealed Brexit deal, and idiosyncratic risks coming from Euro Zone, such as Italy. Meanwhile, emerging market currencies may enjoy some relief if US economic outperformance begins to fade, leading to weaker USD. On the domestic front, only a modest slowdown is expected with growth projected to still be a decent 4.90%, supported by robust domestic demand. Inflation is also expected to remain manageable in 2019. Hence, consensus is for the OPR to remain unchanged. One risk to watch out for in 2019 will be oil prices. Given the country’s fiscal position, concerns over potential downgrades of the sovereign rating by international rating agencies could resurface if oil prices continue to fall and stay low for a longer period. However, domestic liquidity, as observed from the orders received in auctions of government securities and the number of private placements lined up, will continue to be a source of support for the Malaysian sukuk market. 7
  10. 8 Great Eastern Takaful Berhad Investment-Linked Funds 2018 FUND PERFORMANCE i-Makmur Fund 6 % – – i-Makmur Fund – Benchmark 12 month Mudharabah Deposit 5% – 4% – 3% – 2% – 1% – 0% – Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 i-Mekar Fund 15% – – i-Mekar Fund – Benchmark FTSE Bursa Malaysia Emas Syariah 10% – 5% – 0% – -5% – -10% – -15% – -20% – Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 i-Majmuk Fund 4% – – i-Majmuk Fund – Weighted Benchmark 2% – 0% – Note: Weighted Benchmark is derived from 50% weight on 12 months Islamic Deposit Rate and 50% weight on FBME Shariah Index -2% – -4% – -6% – -8% – Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018
  11. (I) 30.24% 3,000,000 0.36% 149,713 2.10% 140,047 16,000,000 189,422 1,113,200 52,910,260 Total 1,441,230 4,049,105 6,353,116 - - - - - 5,025,950 1,239,960 3,926,578 997,870 7.79% 4,950,000 0.39% 67,300 0.36% 679,692 18.54% 1,914,420 72.92% 23,033,809 3.88% 10.59% 2.23% 19.74% 2.60% - 9.76% - - 13.66% - 10.46% 1,489,425 5,501,005 4,315,741 - - 508,560 500,100 1,502,385 - 1,199,988 4,058,000 - 16.15% 0.22% 2.22% 6.25% 900,000 47,385 (24,931) - 75.16% 19,075,204 4.70% 13.21% 20.73% - - - - - 16.40% 4.05% 12.81% 3.26% 1,495,200 2,814,385 485,583 1,309,482 - 2,519,465 1,108,548 - - 1,303,861 888,051 - - 4.50% 2,240,000 0.24% 45,500 -0.12% (35,837) - 95.40% 11,924,575 7.45% 27.51% 21.58% - - 2.54% 2.50% 7.51% - 6.00% 20.29% - 100.00% 38,501,090 100.00% 30,645,221 100.00% 19,997,658 100.00% 14,174,238 - 7,138,670 - 1,493,700 4,078,340 856,816 7,599,604 1,001,500 - 3,756,620 - - 5,257,760 - 4,028,320 67.30% 28,072,660 11.45% 36.24% 1.32% 4.96% 1.89% - 7.32% - 1.71% 2.41% - - 35,607,638 6,055,890 19,174,715 696,088 2,622,958 1,002,460 - 3,872,802 - 904,977 1,277,748 - - 100.00% 15.80% 0.32% -0.26% - 84.14% 10.55% 19.86% 3.43% 9.24% 17.77% 7.82% 9.20% 6.27% - 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) Low risk assets Government investment issues Islamic investment accounts with licensed Islamic Banks Bank balances Other assets/(liabilities) Composition of fund according to industry sectors and category of investments: Corporate Sukuks & Hybrid Capital Market Instruments Construction Financial Highway Properties Retail Plantation Power Telecommunication Investment Holding Transport Utilities Motor i-Makmur Fund FUNDS COMPARATIVE PERFORMANCE 9
  12. Performance of relevant benchmark indices - 12 Months One-year Three-years Five-years - - - - - - (VIII) Total return (%) One-year Three-years Five-years (IX) - 1.508 (VI) Lowest NAV per unit during the financial year (VII) Total annual return of the fund (%) Capital growth 1.621 Highest NAV per unit during the financial year (V) 1.621 NAV Per Unit 32,643,493 (III) Number of Units (IV) 52,910,260 2.94% 9.27% 16.39% 5.37% 21.67% 35.12% 5.37% - - - - - - - - - - 1.453 1.520 1.520 - 25,329,967 - 38,501,090 2.94% 9.56% 16.70% 6.27% 22.50% 32.51% 6.27% - - - - - - - - - - 1.314 1.461 1.461 - 20,969,146 - 30,645,221 3.12% 9.84% 17.00% 8.65% 20.66% 33.87% 8.65% - - - - - - - - - - 1.246 1.327 1.314 - 15,215,146 - 19,997,658 3.21% 9.93% 16.97% 6.09% 14.76% 30.47% 6.09% - - - - - - - - - - 1.180 1.295 1.246 - 11,379,976 - 14,174,238 3.21% 9.94% n/a 4.50% 14.63% n/a 4.50% - - - - - 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) Total NAV (II) i-Makmur Fund (cont’d) Funds Comparative Performance (cont’d) 10 Great Eastern Takaful Berhad Investment-Linked Funds
  13. I ) 81.29% 28,895,669 80.74% 100.00% 93,324,657 100.00% 59,186,668 100.00% 39,245,899 100.00% 35,787,208 100.00% 82.15% 31,899,301 119,996,016 85.98% 48,615,976 Total 83.07% 80,251,616 22,900,000 19.08% 15,600,000 16.72% 11,900,000 20.11% 8,170,000 20.82% 8,220,000 22.97% 485,389 0.40% 338,298 0.36% 85,237 0.14% 41,898 0.11% 75,724 0.21% (3,073,118)-2.55% (2,865,257)-3.06% (1,414,545)-2.40% (865,300)-2.22% (1,404,185)-3.92% 99,683,746 12,660,309 10.55% 3,257,020 3.49% 6,006,440 10.15% 3,213,700 8.19% - 2,272,998 1.89% 1,490,335 1.60% 1,731,510 2.93% - - 4,885,000 13.65% 7,247,585 6.04% 2,980,236 3.19% 6,859,137 11.59% 1,191,518 3.04% 1,516,350 4.24% 3,031,554 2.53% 7,481,066 8.02% 4,411,081 7.45% 4,684,000 11.94% - 1,753,300 1.46%-------736,274 0.61%-------1,432,995 1.19%-------8,816,226 7.35% 3,466,960 3.71% - - - - - 18,276,721 15.23% 13,274,437 14.22% 7,155,620 12.09% 5,203,550 13.26% 3,548,134 9.91% - - - - - - - - 2,688,000 7.51% 1,567,500 1.31% 10,182,110 10.91% 3,733,091 6.31% 3,643,400 9.28% - 12,103,490 10.09% 9,261,802 9.92% 6,188,524 10.46% 1,073,928 2.74% 4,699,500 13.13% - - 6,903,658 7.40% - - 458,000 1.17% - 9,844,184 8.20% 11,003,609 11.79% 4,780,569 8.08% 7,055,805 17.98% 4,104,935 11.47% 2,827,400 2.36% - - - - 2,061,400 5.25% 2,308,500 6.45% 13,981,620 11.65% 10,157,525 10.88% 5,091,570 8.60% 1,998,000 5.09% 3,580,750 10.01% 3,131,590 2.61% 792,858 0.85% 2,658,434 4.49% 1,316,000 3.35% 1,564,500 4.37% 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) Islamic investment accounts with licensed Islamic Banks Bank balances Other assets/(liabilities) Composition of fund according to industry sectors and category of investments: Shariah-approved equities Agriculture & Mining Building Materials Conglomerate Construction Financial Services IT Services Infrastructure Motor Oil & Gas Resource-based Others - Mfg Property Technology Telecommunication Transport Utilities Others i-Mekar Fund Funds Comparative Performance (cont’d) 11
  14. Lowest NAV per unit during the financial year (VI) 1.407 1.689 (IX) Performance of relevant benchmark indices - FBMS (%) One-year Three-years Five-years - - - - - - Highest NAV per unit during the financial year (V) 1.455 (VIII) Total return (%) One-year Three-years Five-years NAV Per Unit (IV) 82,486,914 - Number of Units (III) 119,996,016 -13.52% -10.13% -11.85% -11.19% 0.35% 0.84% -11.19% - - - - - - - - - - 1.446 1.637 1.637 - 57,005,278 - 93,324,657 10.72% 6.36% 15.47% 14.27% 20.00% 45.57% 14.27% - - - - - - - - - - 1.392 1.476 1.446 - 40,932,991 - 59,186,668 -6.14% -7.95% 16.64% -1.11% -0.63% 43.59% -1.11% - - - - - - - - - - 1.309 1.442 1.442 - 27,222,102 - 39,245,899 2.35% 11.11% 27.27% 6.20% 28.83% 44.19% 6.20% - - - - - - - - - - 1.359 1.668 1.359 - 26,328,038 - 35,787,208 -4.17% 21.42% n/a -5.38% 36.73% n/a -5.40% - - - - - 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) (VII) Total annual return of the fund (%) Capital growth Total NAV (II) i-Mekar Fund (cont’d) Funds Comparative Performance (cont’d) 12 Great Eastern Takaful Berhad Investment-Linked Funds
  15. (I) Total Low Risk Assets Others Islamic investment accounts with licensed Islamic Banks Bank balances Other assets/(liabilities) Corporate Sukuks & Hybrid Capital Market Intruments Highway Utilities Property Motor Composition of fund according to industry sectors and category of investments: Shariah-approved equities Agriculture & Mining Building Materials Conglomerate Construction Financial Services IT Services Motor Oil & Gas Resource-based Others Others - Mfg Property Technology Telecommunication Trading & Retailing Transport Utilities i-Majmuk Fund 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) 2.09% 1,021,550 1,021,550 2.63% 1,017,050 10.59% 6,052,350 5.43% 2,085,900 - 1,974,060 2.56% 994,520 2.60% 997,870 3.84% 22.87% 7.88% 7.46% 3.76% 3.77% - - - - - - - - - - - - - - - - - - - - - 48,920,538 100% 38,795,940100.00% 26,458,573100.00% 18,638,350100.00% 17,790,142100.00% 19,600,000 40.06% 8,200,000 21.14% 6,850,000 25.89% 5,060,000 27.15% 4,980,000 27.99% 238,213 0.49% 124,182 0.32% 90,609 0.34% 31,252 0.17% 146,839 0.83% (2,352,211)-4.81%(986,486)-2.54%(346,014)-1.31%(177,459)-0.95%(287,977)-1.62% 6.37% 4,107,530 4.32% 2,105,660 - - 2.04% 994,790 - 1,007,080 3,110,910 2,110,640 - 1,000,270 - 27,302,07655.81% 26,329,16367.87% 12,794,57848.36% 13,724,55773.64% 12,951,28072.80% 2,107,700 4.31% 905,400 2.33% 493,000 1.86% 972,350 5.22% - 410,550 0.84% 625,348 1.61% 694,067 2.62% - - 2,119,500 11.91% 1,233,2502.52% 1,164,1893.00% 2,148,8758.12% 392,7472.11% 551,4003.10% 2,340,7304.79% 1,749,9334.51% 847,8843.20% 1,823,8009.79% - 356,000 0.73%-------173,250 0.35%-------2,653,000 5.42% - - - - - - - 5,908,896 12.08%2,692,796 6.94%1,367,740 5.17%2,024,500 10.86%1,609,510 9.05% - - - - - - - - 555,578 3.12% 1,130,400 2.31% 1,555,660 4.01% - - 756,700 4.06% 951,700 5.35% - - 2,689,987 6.93% 1,352,379 5.11% 1,894,500 10.16% - 1,684,1503.44% 3,855,6419.94% 1,901,6017.19% 633,0743.40% 2,053,99211.55% 225,0000.46% 2,861,1007.37% 464,9201.76% 227,5001.22% - 3,438,450 7.03%4,276,124 11.02%1,457,183 5.51%3,290,286 17.65%2,504,400 14.08% 245,700 0.50%-------804,000 1.64% - - - - 843,300 4.52% 841,700 4.73% 4,591,0009.39% 3,952,98510.19% 2,066,9297.81% 865,8004.65% 1,763,5009.91% Funds Comparative Performance (cont’d) 13
  16. Performance of relevant benchmark indices - Weighted Benchmark (%) One-year Two to three-years Five-years - - - - - - VIII) Total return One-year Two to three-years Five-years IX) - 1.355 (VI) Lowest NAV per unit during the financial year (VII) Total annual return of the fund (%) Capital growth 1.478 Highest NAV per unit during the financial year (V) 1.383 NAV Per Unit 35,373,529 (III) Number of Units (IV) 48,920,538 -5.29% -0.43% 2.27% -4.38% 6.00% 6.91% -4.38% - - - - - - - - - - 1.290 1.444 1.444 - 26,874,550 - 38,795,940 6.83% 7.96% 16.08% 11.98% 18.42% 35.21% 11.98% - - - - - - - - - - 1.257 1.309 1.290 - 20,510,812 - 26,458,573 -1.51% 0.95% 16.82% -1.00% -0.16% 31.22% -1.00% - - - - - - - - - - 1.195 1.306 1.306 - 14,271,398 - 18,638,350 2.78% 10.52% 22.12% 6.83% 21.97% 30.16% 6.83% - - - - - - - - - - 1.218 1.450 1.218 - 14,611,519 - 17,790,142 -0.48% 15.68% n/a -5.59% 24.08% n/a -5.59% - - - - - 20182018201720172016201620152015 20142014 (RM) (%) (RM) (%) (RM) (%) (RM) (%) (RM) (%) Total NAV (II) i-Majmuk Fund (cont’d) Funds Comparative Performance (cont’d) 14 Great Eastern Takaful Berhad Investment-Linked Funds
  17. STATEMENT BY THE MANAGER We , Shahrul Azlan Bin Shahriman and Jasveen Kaur Marne, do hereby state that, in the opinion of Great Eastern Takaful Berhad (“the Manager”), the accompanying financial information of the investment-linked funds of Great Eastern Takaful Berhad, comprising the i-Makmur Fund, i-Mekar Fund and i-Majmuk Fund set out on pages 21 to 51 have been prepared in accordance with the accounting policies as described in Note 2.2 to the financial information and the Guidelines on Investment-Linked Insurance/Takaful Business issued by Bank Negara Malaysia. On behalf of the Manager, Shahrul Azlan Bin Shahriman Jasveen Kaur Marne Kuala Lumpur, Malaysia 1 April 2019 15
  18. 16 Great Eastern Takaful Berhad Investment-Linked Funds SHARIAH COMMITTEE ’S REPORT To the unit holders of the investment-linked funds of Great Eastern Takaful Berhad, We, Dr. Akhtarzaite binti Abdul Aziz and Dr. Mohamad Sabri bin Zakaria, being two of the members of the Shariah Committee of the i-Makmur Fund, i-Mekar Fund and i-Majmuk Fund (collectively known as “the Funds”) are of the opinion that Great Eastern Takaful Berhad (“the Manager”), has fulfilled their duties in the following manner for the financial year from 1 January 2018 to 31 December 2018. In our opinion, for the year under review: a. The i-Makmur fund was invested in accordance with the list of Shariah-approved sukuk rated by Rating Agency Malaysia Berhad and Malaysian Rating Corporation Berhad; b. The i-Mekar fund was invested in accordance with the list of Shariah-approved equities published by Securities Commission Malaysia; c. The i-Majmuk fund was invested in accordance with the list of Shariah-approved equities published by Securities Commission Malaysia and the list of Shariah-approved sukuk rated by Rating Agency Malaysia Berhad and Malaysian Rating Corporation Berhad; and d. All earnings that have been realised from invested assets or by means prohibited by the Shariah principles have been considered for disposal to charitable causes. Signed on behalf of the Shariah Committee, Dr. Akhtarzaite binti Abdul Aziz Kuala Lumpur, Malaysia Dr. Mohamad Sabri bin Zakaria
  19. INDEPENDENT AUDITORS ’ REPORT to the unitholders of the Investment-linked Funds of Great Eastern Takaful Berhad (Incorporated in Malaysia) Report on the Audit of the Financial Information Opinion We have audited the financial information of i-Makmur Fund, i-Mekar Fund and i-Majmuk Fund (collectively referred to as “the Funds”), which comprise the statements of assets and liabilities as at 31 December 2018, and the statements of income and expenditure, statements of changes in net asset value of the Funds for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 21 to 51. In our opinion, the accompanying financial information of the Funds for the year ended 31 December 2018 are prepared, in all material respects, in accordance with the accounting policies as described in Note 2 to the financial information and the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Information section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter We draw attention to Note 2.1 to the financial information of the Funds, which describes the basis of accounting. The financial information of the Funds are prepared to assist the Funds in complying with the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. As a result, the financial information of the Funds may not be suitable for another purpose. Our report is intended solely for the unitholders of the Funds, as a body and should not be distributed to or used by parties other than the unitholders of the Funds. Our opinion is not modified in respect of this matter. Independence and other ethical responsibilities We are independent of the Funds in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. 17
  20. 18 Great Eastern Takaful Berhad Investment-Linked Funds Independent Auditors ’ Report (cont’d) to the unitholders of the Investment-linked funds of Great Eastern Takaful Berhad (Incorporated in Malaysia) Information other than the financial information and auditors’ report thereon The directors of the Manager (“the directors”) are responsible for the other information. The other information comprises the information contained in the Annual Report of the Funds, but does not include the financial information of the Funds and our auditors’ report thereon. Our opinion on the financial information of the Funds does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial information of the Funds, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial information of the Funds or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. The directors are responsible for the preparation of financial information of the Funds that give a true and fair view in accordance with the accounting policies as described in Note 2 to the financial information and the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial information of the Funds that are free from material misstatement, whether due to fraud or error. In preparing the financial information of the Funds, the directors are responsible for assessing the Funds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Funds or to cease operations, or have no realistic alternative but to do so.
  21. Independent Auditors ’ Report (cont’d) to the unitholders of the Investment-linked funds of Great Eastern Takaful Berhad (Incorporated in Malaysia) Auditors’ responsibilities for the audit of the financial information Our objectives are to obtain reasonable assurance about whether the financial information of the Funds as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial information. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial information of the Funds, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Funds’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial information of the Funds or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Funds to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements of the Company, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 19
  22. 20 Great Eastern Takaful Berhad Investment-Linked Funds Independent Auditors ’ Report (cont’d) to the unitholders of the Investment-linked funds of Great Eastern Takaful Berhad (Incorporated in Malaysia) Auditors’ responsibilities for the audit of the financial information (cont’d) We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Ernst & Young AF: 0039 Chartered Accountants Kuala Lumpur, Malaysia 1 April 2019 Yeo Beng Yean No. 03013/10/2020 J Chartered Accountant
  23. STATEMENTS OF ASSETS AND LIABILITIES as at 31 December 2018 20182017 Note i-Makmur fund RM i-Mekar i-Majmuk fund fund RM RM i-Makmur fund RM i-Mekar i-Majmuk fund fund RM RM Assets Investments 3 51 ,607,638122,583,746 51,034,636 38,211,330 95,851,616 39,658,243 Tax recoverable - 562,618- --Deferred tax assets 4 - 120,980 102,109 - - Other receivables 6 2,430,217 1,290,297 1,134,239 1,327,067 631,718 904,744 Cash and bank balances 189,422 485,389 238,213 149,713 338,298 124,182 Total assets 54,227,277 125,043,030 52,509,197 39,688,110 96,821,632 40,687,169 Liabilities Provision for taxation Deferred tax liabilities 4 Other payables 7 192,817 - 84,961 25,868 - - 1,098,332 5,047,014 3,503,698 188,049 224,149 81,731 14,497 594,458 212,697 984,474 2,678,368 1,596,801 Total liabilities 1,317,017 5,047,014 3,588,659 1,187,020 3,496,975 1,891,229 Net asset value of funds (“NAV”) 52,910,260 119,996,016 48,920,538 38,501,090 93,324,657 38,795,940 Represented by: Unitholders’ capital Undistributed income 45,567,344 124,792,712 46,921,038 7,342,916 (4,796,696) 1,999,500 33,227,154 85,085,344 34,723,235 5,273,936 8,239,313 4,072,705 Total unitholders’ account 5 52,910,260 119,996,016 48,920,538 38,501,090 93,324,657 38,795,940 Units in circulation 5 32,643,493 82,486,914 35,373,529 25,329,967 57,005,278 26,874,550 NAV per unit 5 1.621 1.455 1.383 1.520 1.637 1.444 The accompanying notes form an integral part of the financial information. 21
  24. 22 Great Eastern Takaful Berhad Investment-Linked Funds STATEMENTS OF INCOME AND EXPENDITURE for the Financial Year Ended 31 December 2018 20182017 Note Net investment income : Profit from Islamic deposits Profit from Islamic private debt securities Profit from government investment issues Dividend income Investment expenses i-Makmur fund RM i-Mekar i-Majmuk fund fund RM RM i-Makmur fund RM i-Mekar i-Majmuk fund fund RM RM 229,303 661,071 405,473 119,541 357,469 176,175 1,370,891 - 172,740 1,344,248 - 215,591 491,907 - - 2,735,517 (6,749) (729,044) 44,139 910,541 (270,038) 179,811 - - 1,826,381 (6,720) (433,271) 43,781 637,848 (159,052) Net gain on disposal of investments Net unrealised investment gain Other operating income 2,085,352 2,667,544 1,262,855 537,576 - 1,239,251 142,134 - - 414 743 599 1,636,880 1,750,579 914,343 886,636 3,963,977 1,149,640 - 5,576,789 2,032,158 269 655 450 Total income 2,765,476 2,668,287 2,502,705 2,523,785 11,292,000 4,096,591 Net loss on disposal of investments Net unrealised investment loss Asset management charges Other outgo 8 - (5,474,581) - - (8,942,971) (3,935,080) (213,163) (1,490,992) (530,129) (272,599) (974,734) (304,142) - - (200,720) - (171,402) (1,072,564) (570,203) (1,980,699) Total outgo (485,762)(16,883,278) (4,769,351) (942,325) (3,053,263) (1,029,879) Excess of income over outgo/ (excess of outgo over income) before taxation Taxation 9 2,279,714 (14,214,991) (2,266,646) (210,734) 1,178,982 193,441 1,581,460 8,238,737 3,066,712 (159,981) (716,341) (258,993) Net income/(loss) for the year 2,068,980 (13,036,009) (2,073,205) 1,421,479 7,522,396 2,807,719 Distributable income brought forward Net income/(loss) for the year 5,273,936 8,239,313 4,072,705 2,068,980(13,036,009) (2,073,205) 3,852,457 716,917 1,264,986 1,421,479 7,522,396 2,807,719 Distributable income carried forward 7,342,916 (4,796,696) 1,999,500 5,273,936 8,239,313 4,072,705 The accompanying notes form an integral part of the financial information. (398,529) (631,350)
  25. STATEMENTS OF CHANGES IN NET ASSET VALUE for the Financial Year Ended 31 December 2018 20182017 Unitholders ’Distributable capitalincome Total RM RM RM Unitholders’Distributable capitalincome Total RM RM RM i-Makmur Fund NAV at the beginning of the financial year Net income for the year Amounts received from units created Amounts paid for units cancelled 33,227,154 5,273,936 38,501,090 - 2,068,980 2,068,980 16,633,462 - 16,633,462 (4,293,272) - (4,293,272) 26,792,764 3,852,457 30,645,221 - 1,421,479 1,421,479 10,982,295 - 10,982,295 (4,547,905) - (4,547,905) NAV at the end of the financial year 45,567,344 7,342,916 52,910,260 33,227,154 5,273,936 38,501,090 20182017 Unitholders’Distributable capitalincome Total RM RM RM Unitholders’Distributable capitalincome Total RM RM RM i-Mekar Fund NAV at the beginning of the financial year Net (loss)/income for the year Amounts received from units created Amounts paid for units cancelled 85,085,344 8,239,313 93,324,657 - (13,036,009) (13,036,009) 49,282,889 - 49,282,889 (9,575,521) - (9,575,521) 58,469,751 716,917 59,186,668 - 7,522,396 7,522,396 32,344,954 - 32,344,954 (5,729,361) - (5,729,361) NAV at the end of the financial year 124,792,712 (4,796,696) 1 19,996,016 85,085,344 8,239,313 93,324,657 20182017 Unitholders’Distributable capitalincome Total RM RM RM Unitholders’Distributable capitalincome Total RM RM RM i-Majmuk Fund NAV at the beginning of the financial year Net (loss)/income for the year Amounts received from units created Amounts paid for units cancelled 34,723,235 4,072,705 38,795,940 - (2,073,205) (2,073,205) 15,039,630 - 15,039,630 (2,841,827) - (2,841,827) 25,193,587 1,264,986 26,458,573 - 2,807,719 2,807,719 11,661,061 - 11,661,061 (2,131,413) - (2,131,413) NAV at the end of the financial year 46,921,038 1,999,500 48,920,538 34,723,235 4,072,705 38,795,940 The accompanying notes form an integral part of the financial information. 23
  26. 24 Great Eastern Takaful Berhad Investment-Linked Funds NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 1 . The Manager and its Principal Activities The i-Makmur fund, i-Mekar fund and i-Majmuk fund (collectively known as “the Funds”) are managed by Great Eastern Takaful Berhad (“the Manager”). The Manager is a public limited liability company, incorporated under the Companies Act, 2016 and domiciled in Malaysia. Its principal activity is the managing of family takaful business including takaful investment-linked business. The financial information were authorised for issue by the Asset Liability Committee of the Manager in accordance with a resolution on 1 April 2019. 2. Significant Accounting Policies 2.1 Basis of Preparation The financial information of the Funds have been prepared in accordance with the accounting policies described in Note 2.2 to the financial information and the Guidelines on Investmentlinked Insurance/Takaful Business issued by Bank Negara Malaysia (“BNM”). The financial information have been prepared under the historical cost convention except as disclosed in the significant accounting policies in Note 2.2 to the financial information. The financial information are presented in Ringgit Malaysia (“RM”), which is the Funds’ functional currency. 2.2 Summary of Significant Accounting Policies (a) Revenue Recognition Prior to 1 January 2018, revenue is recognised to the extent it is probable that the economic benefits will flow to the Funds, and the amount of the revenue can be measured reliably, Subsequent to 1 January 2018, revenue is recognised at an amount that reflects the consideration to which the Funds expects to be entitled when a performance obligations is satisfied. Revenue is measured at the fair value of consideration received or receivable. i. Profit income is recognised on a time proportion basis that takes into account the effective yield of the asset. ii. Dividend is recognised when the right to receive payment is established. iii Net proceeds arising from the disposal of investments are set off against the weighted average cost of investments. The resulting gains or losses are taken to statements of income and expenditure.
  27. Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (b) Investment Charges Investment charges are calculated in accordance with the provisions of the certificate document. (c) Net Creation of Units Net creation of units represents contribution paid by unitholders as payment for a new contract or subsequent payments to increase the amount of that contract. Net creation of units is recognised on a receipt basis. (d) Net Cancellation of Units Net cancellation of units represents cancellation of units arising from surrenders and withdrawals. Net cancellation of unit is recognised upon surrendering of or withdrawal from the related takaful contract. (e) Income Tax Income tax in the statements of income and expenditure for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit 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 on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the statement of assets and liabilities. 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 profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. 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 in the statements of income and expenditure. 25
  28. 26 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (f) Financial Assets Financial assets are recognised in the statement of financial position when, and only when, the Company has become a party to the contractual obligations of the instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss (“FVTPL”), directly attributable transaction costs. Prior to 1 January 2018, the Funds determine the classification of the financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held to maturity financial assets and available-for-sale financial assets. Subsequent to 1 January 2018, the Funds determine the classification of the financial assets at inital recognition, and the categories include financial assets at FVTPL, fair value through other comprehensive income (“FVOCI”) or at amortised cost. Financial assets that are held for trading or managed, and whose performance is evaluated on a fair value basis, are measured at FVTPL because they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets. All other financial assets of the Funds have been classified as financial assets carried at amortised cost. Subsequent to initial recognition, asset carried at amortised cost are measured at amortised cost using the effective profit method, less allowance for impairment. Gains and losses are recognised in the statements of income and expenditure when the asset is derecognised or impaired, and through the amortisation process. A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in the statements of income and expenditure.
  29. Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (g) Financial liabilities Financial liabilities are classified 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 assets and liabilities when the Funds become a party to the contractual obligations of the financial instrument. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities. All financial liabilities of the Funds have been classified as other financial liabilities. Other financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective yield method. The gains and losses for other financial liabilities are recognised in the statements of income and expenditure when the liabilities are derecognised, and through the amortisation process. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. The gains or losses are recognised in the income statement. (h) Impairment of financial assets (Policy applicable before 1 January 2018) The Funds assess at each reporting date whether there is any objective evidence that a financial asset or group of financial assets is impaired. Impairment loss is recognised when there is objective evidence that an impairment loss on financial assets has been incurred. The Funds consider such factors such as the probability of insolvency or significant financial difficulties of the contracting party and default or significant delays in payments. If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective profite rate. The impairment loss is recognised in the statements of income and expenditure. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in statements of income and expenditure. 27
  30. 28 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (i) Impairment of financial assets (Policy applicable after 1 January 2018) The Funds recognise loss allowances for expected credit losses (“ECL”) on the following financial instruments that are not measured at FVTPL: (i) Islamic private debt instruments measured at FVOCI; (ii) Loans and receivables measured at amortised cost; and (iii) Financing commitments. The Funds assess on a forward looking basis the ECL associated with its financing and Islamic debt instruments carried at amortised cost and FVOCI and its financing commitments. For trade and takaful receivables, the Funds measure the loss allowance at an amount equal to the lifetime ECL. The Funds recognise a loss allowance for ECL at each reporting date. The measurement of ECL reflects: • An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes; • The time value of money; and • Reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. The Funds measure loss allowances at an amount equal to lifetime ECL, except for financial instruments on which credit risk has not increased significantly since their initial recognition. 12-month ECL represents the portion of lifetime ECL that result from default events on a financial instrument that are possible within the 12 months after the reporting date.
  31. Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (i) Impairment of financial assets (Policy applicable after 1 January 2018) Modified financial assets If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a new one due to financial difficulties of the borrower, then an assessment is made whether the financial asset should be derecognised and ECL are measured as follows: • If the expected modification will not result in derecognition of the existing asset, and then the expected cash flows arising from the modified financial asset are included in calculating the cash shortfalls from the existing asset. • If the expected modification will result in derecognition of the existing asset, then the expected fair value of the new asset is treated as the final cash flow from the existing financial asset at the time of its derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset that are discounted from the expected date of derecognition to the reporting date using the original effective profit rate of the existing financial asset. Credit-impaired financial assets At each reporting date, the Funds assess whether financial assets measured at amortised cost and debt financial assets measured at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. The Funds consider factors as evidence that a financial instrument is credit impaired: • A breach of contract such as default or past due event; • The disappearance of an active market for a security because of financial difficulties. 29
  32. 30 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 2. Significant Accounting Policies (cont’d) 2.2 Summary of Significant Accounting Policies (cont’d) (j) Other Receivables Other receivables are non-derivative financial assets with fixed or determinable payments. These include balances due from brokers and other investment receivables. Receivables are recognised initially at fair value. Receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. (k) Other Payables Other payables are recognised initially at fair value plus directly attributable transaction costs, and are subsequently measured at amortised cost using the effective profit rate method. Payables are derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in the statements of income and expenditure when the liabilities are derecognised, and through the amortisation process. (l) Unitholders’ Account Unitholders’ account of the Funds represent equity instruments in the statements of assets and liabilities. (m) Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term, highly liquid investments with original maturity of three months or less that are readily convertible to a known amounts of cash and which are subject to an insignificant risk of changes in value. (n) Foreign Currency Transactions In preparing the financial statements of the Funds, transactions in currencies other than the Funds’ functional currency (“foreign currencies”) are recorded in the functional currency using the exchange rates prevailing at the dates of transactions. At each reporting date, monetary items denominated in foreign currencies are translated at the rates prevailing at the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items are included in the statements of income and expenditure for the year. The principal exchange rate for every unit of Singapore Dollar ruling at the reporting date used is RM3.03 (2017: RM3.03).
  33. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments 2018 (a) Financial assets at amortised cost Islamic investment accounts with licensed Islamic banks i-Makmur i-Mekar i-Majmuk fund fund fund RMRMRM 16,000,000 22,900,000 19,600,000 (b)FVTPL Quoted Shariah-approved equities - Quoted in Malaysia - 94,854,934 Financial instruments with embedded derivatives - - Unit trusts - REITS - 4,828,812 Government investment issues - - Unquoted Islamic private debt securities 35,607,638 - 26,828,202 5,874 468,000 1,021,650 3,110,910 35,607,638 51,607,638 122,583,746 51,034,636 2017 (a)LAR Islamic investment accounts with licensed Islamic banks (b)FVTPL Quoted Shariah-approved equities - Quoted in Malaysia Unit trusts - REITS Government investment issues Unquoted Islamic private debt securities 99,683,746 31,434,636 i-Makmur i-Mekar i-Majmuk fund fund fund RMRMRM 3,000,000 15,600,000 8,200,000 - 77,953,158 25,693,068 - 2,298,458 636,095 7,138,670 - 1,021,550 28,072,660 - 4,107,530 35,211,330 80,251,616 31,458,243 38,211,330 95,851,616 39,658,243 31
  34. 32 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments Market Market value 2018 Quantity Cost value as a % of i-Makmur fund held RM RM NAV (%) FVTPL Government Investment Issues Government Investment Issues Government Investment Issues Government Investment Issues 700,000 5,000,000 1,500,000 701,351 4,978,550 1,491,330 704,270 4,937,400 1,497,000 1.33% 9.33% 2.83% Total Government Investment Issues 7,200,000 7,171,231 7,138,670 13.49% Unquoted Islamic Private Debt Securities Construction WCT Holdings Berhad WCT Holdings Berhad WCT Holdings Berhad 1,500,000 1,500,000 3,000,000 1,504,305 1,504,890 3,030,000 1,519,830 1,502,400 3,033,660 2.87% 2.84% 5.73% Total Construction 6,000,0006,039,1956,055,890 11.44% Financial Purple Boulevard Bhd Affin Islamic Bank Berhad AmIslamic Bank Berhad AmIslamic Bank Berhad Bank Islam Malaysia Berhad Public Islamic Bank Bhd 1,500,000 5,000,000 1,000,000 500,000 1,000,000 10,000,000 Total Financial 19,000,00019,007,16519,174,715 1,495,695 5,000,000 1,000,000 503,470 1,000,000 10,008,000 1,543,365 5,094,100 1,002,080 501,040 1,018,230 10,015,900 2.92% 9.63% 1.89% 0.95% 1.92% 18.93% 36.24% Highway Projek Smart Holdings Sdn Bhd 800,000 Total Highway 800,000804,240696,088 1.32% Investment Holding Rantau Abang Capital Bhd 900,000 Total Investment Holding 900,000895,590904,977 1.71% 804,240 895,590 696,088 904,977 Power Southern Power Generation Tadau Energy Sdn Bhd 1,200,000 2,500,000 Total Power 3,700,0003,738,1003,872,802 1,200,000 2,538,100 1,233,852 2,638,950 1.32% 1.71% 2.33% 4.99% 7.32%
  35. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Makmur fund (cont’d) heldRMRM NAV (%) FVTPL (cont’d) Unquoted Islamic Private Debt Securities (cont’d) Properties Putrajaya Holdings Sdn Bhd 2,600,000 Total Properties 2,600,0002,600,0002,622,958 4.96% Retail Mydin Mohamed Holdings 1,000,000 1.89% Total Retail 1,000,0001,000,0001,002,460 1.89% Telecommunications Samalaju Industrial Port 1,200,000 2.41% Total Telecommunications 1,200,0001,200,0001,277,748 2,600,000 1,000,000 1,200,000 2,622,958 1,002,460 1,277,748 4.96% 2.41% Total Unquoted Islamic Private Debt Securities 35,200,00035,284,29035,607,638 67.29% Total FVTPL 42,400,00042,455,52142,746,308 80.78% 33
  36. 34 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Mekar fund held RM RM NAV (%) FVTPL Quoted Shariah-approved Equities in Malaysia Agriculture & Mining Genting Plantations Bhd IOI Corporation Bhd Kuala Lumpur Kepong Bhd Sime Darby Plantation Bhd TA Ann Holdings Bhd Total Agriculture & Mining 96,200 590,000 163,900 713,170 607,400 909,410 2,672,829 4,014,893 3,816,300 1,219,328 948,532 2,625,500 4,051,608 3,394,689 1,639,980 2,170,67012,632,76012,660,309 0.79% 2.19% 3.38% 2.83% 1.37% 10.56% Building Materials Press Metal Aluminium Holdings 470,600 Total Building Materials 470,6001,944,0792,272,998 1.89% Conglomerate Cahya Mata Sarawak Bhd 1,300,000 3,469,539 3,497,000 Malaysian Resources Corporation 2,344,800 1,683,534 1,442,052 Sime Darby Bhd 461,170 1,067,638 1,106,808 Sunway Berhad 817,5001,274,1601,201,725 2.91% 1.20% 0.92% 1.00% Total Conglomerate 4,923,4707,494,8717,247,585 6.03% Construction GDB Holdings Bhd Muhibbah Engineering (M) Bhd Vizione Holdings Bhd 1,829,000 421,400 1,678,571 0.35% 0.98% 1.20% Total Construction 3,928,9713,405,1133,031,554 1,944,079 611,929 1,203,334 1,589,850 2,272,998 420,670 1,175,706 1,435,178 1.89% 2.53%
  37. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Mekar fund (cont’d) heldRMRM NAV (%) FVTPL (cont’d) Quoted Shariah-approved Equities in Malaysia (cont’d) Financial Services BIMB Holdings Bhd 492,500 Total Financial Services 492,5001,853,3721,753,300 1,853,372 1,753,300 1.46% 1.46% IT Services Mexter Technology Bhd 1,912,400813,809736,274 0.61% Total IT Services 1,912,400813,809736,274 0.61% Infrastructure Lingkaran Trans Kota Holdings 345,300 Total Infrastructure 345,3001,555,4591,432,995 1.19% Motor Bermaz Auto Bhd MBM Resources Bhd Tan Chong Motor Holdings Bhd UMW Holdings Bhd 1,369,9002,939,7852,945,285 996,400 2,222,849 2,192,080 882,300 1,594,948 1,191,105 454,800 2,600,354 2,487,756 2.45% 1.83% 0.99% 2.07% Total Motor 3,703,4009,357,9368,816,226 7.34% 1,555,459 1,432,995 1.19% 35
  38. 36 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Mekar fund (cont’d) heldRMRM NAV (%) FVTPL (cont’d) Quoted Shariah-approved Equities in Malaysia (cont’d) Oil & Gas Dialog Group Bhd Gas Malaysia Berhad Perdana Petroleum Bhd Petronas Chemicals Group Bhd Petronas Dagangan Bhd Petronas Gas Bhd Velesto Enerby Bhd Yinson Holdings Bhd 658,900 900,400 982 759,100 122,800 14,000 4,650,000 539,800 Total Oil & Gas 7,645,98215,911,00418,276,721 1,154,937 2,554,895 - 5,847,943 3,004,702 265,440 1,108,750 1,974,337 2,049,179 2,548,132 211 7,052,039 3,254,200 268,800 837,000 2,267,160 1.71% 2.12% 0.00% 5.88% 2.71% 0.22% 0.70% 1.89% 15.23% Others IHH Healthcare Berhad 581,000 Total Others 581,0003,387,9623,131,590 2.61% Others - Manufacturing ATA IMS Berhad 950,000 1.31% 3,387,962 1,431,610 3,131,590 1,567,500 2.61% Total Others - Manufacturing 950,0001,431,6101,567,500 1.31% Property Gabungan AQRS Berhad LBS Bina Group Bhd Paramount Corporation Bhd S P Setia Bhd UEM Edgenta Bhd UOA Development Bhd 1,139,000973,574973,845 135,920 149,512 139,998 640,300 1,154,264 1,306,212 385,000 1,208,764 897,050 969,100 2,922,512 2,635,952 1,987,400 1,403,142 1,321,621 0.81% 0.12% 1.09% 0.75% 2.20% 1.10% Total Property 5,256,7207,811,7687,274,678 6.07%
  39. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Mekar fund (cont’d) heldRMRM NAV (%) FVTPL (cont’d) Quoted Shariah-approved Equities in Malaysia (cont’d) Telecommunication Axiata Group Bhd Digi.Com Bhd Maxis Bhd OCK Group Berhad Time Dotcom Bhd 980,249 4,464,410 3,852,379 490,6002,232,1202,207,700 228,4001,294,6821,221,940 2,457,000 2,060,736 1,044,225 187,400 1,526,754 1,517,940 3.21% 1.84% 1.02% 0.87% 1.26% Total Telecommunication 4,343,64911,578,702 9,844,184 8.20% Transport MISC Bhd 422,0002,482,0832,827,400 2.36% Total Transport 422,0002,482,0832,827,400 2.36% Utilities Cypark Resources Berhad Malakoff Corporation Berhad Ranhill Holdings Bhd Tenaga Nasional Bhd 873,000 1,494,300 1,665,300 691,800 Total Utilities 4,724,40014,801,17713,981,620 11.66% Total Quoted Shariah-approved Equities in Malaysia 41,871,06296,461,70594,854,934 79.05% 1,510,327 1,226,750 1,967,356 10,096,744 1,379,340 1,195,440 1,998,360 9,408,480 1.15% 1.00% 1.67% 7.84% 37
  40. 38 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Mekar fund (cont’d) heldRMRM NAV (%) FVTPL (cont’d) Unit trusts - REITS Property Al-AQAR Healthcare REIT 549,400 AXIS Real Estate Investment Trust 1,405,000 KLCC Property & KLCC REITs 250,300 780,480 2,085,730 1,869,358 719,714 2,191,800 1,917,298 0.60% 1.83% 1.60% Total Property 2,204,7004,735,5684,828,812 4.03% Total Unit trusts - REITS 2,204,7004,735,5684,828,812 4.03% Total FVTPL 44,075,762101,197,273 99,683,746 83.08%
  41. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Majmuk fund held RM RM NAV (%) FVTPL Quoted Shariah-approved Equities in Malaysia Agriculture & Mining Genting Plantations Bhd IOI Corporation Bhd Sime Darby Plantation Bhd 45,000 160,000 200,000 Total Agriculture & Mining 405,0002,154,5752,107,700 437,933 689,696 1,026,946 443,700 712,000 952,000 0.91% 1.46% 1.95% 4.32% Building Materials Press Metal Aluminium Holdings 85,000 Total Building Materials 85,000177,948410,550 0.84% 177,948 410,550 0.84% Conglomerate Cahya Mata Sarawak Bhd Malaysian Resources Corporation Sime Darby Bhd 200,000 350,000 200,000 Total Conglomerate 750,0001,438,6231,233,250 2.52% Financial Services BIMB Holdings Bhd 100,000 0.73% Total Financial Services 100,000414,137356,000 0.73% Construction Gamuda Berhad IJM Corporation Bhd JAKS Resources Bhd Muhibbah Engineering (M) Bhd Sunway Contruction Group Bhd Vizione Holdings Bhd 240,000986,202561,600 300,000 663,306 486,000 180,000 214,200 86,400 180,000 511,516 502,200 360,000 606,006 478,800 257,142 225,000 219,856 Total Construction 778,685 223,265 436,673 414,137 538,000 215,250 480,000 356,000 1,517,1423,206,2302,334,856 1.10% 0.44% 0.98% 1.15% 0.99% 0.18% 1.03% 0.98% 0.45% 4.78% 39
  42. 40 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Majmuk fund (cont’d) held RM RM NAV (%) FVTPL (cont’d) Quoted Shariah-approved Equities in Malaysia (cont’d) IT Services Mexter Technology Bhd 450,000204,750173,250 0.35% Total IT Services 450,000204,750173,250 0.35% Motor Bermaz Auto Bhd MBM Resources Bhd UMW Holdings Bhd 500,0001,099,8801,075,000 220,000 512,430 484,000 200,000 1,002,637 1,094,000 2.20% 0.99% 2.24% Total Motor 920,0002,614,9472,653,000 5.43% Oil & Gas Dialog Group Bhd Gas Malaysia Berhad Perdana Petroleum Bhd Petronas Chemicals Group Bhd Petronas Dagangan Bhd Petronas Gas Bhd Velesto Energy Bhd Yinson Holdings Bhd 356,000 350,000 165 180,000 18,000 25,000 2,600,000 170,000 Total Oil & Gas 3,699,1655,204,8785,908,896 12.08% 545,740 988,746 - 1,434,044 474,030 471,955 625,448 664,915 1,107,160 990,500 36 1,672,200 477,000 480,000 468,000 714,000 2.26% 2.02% 0.00% 3.42% 0.98% 0.98% 0.96% 1.46% Others Fraser & Neave Holdings Bhd IHH Healthcare Bhd 8,000 160,000 Total Others 168,0001,130,7631,130,400 2.31% Property Paramount Corporation Bhd S P Setia Bhd Sime Darby Property Bhd UEM Edgenta Bhd 120,000 100,000 250,000 180,000 0.50% 0.48% 0.51% 1.00% Total Property 650,0001,323,0631,216,150 242,236 888,527 220,449 302,803 282,409 517,402 268,000 862,400 244,800 233,000 248,750 489,600 0.55% 1.76% 2.49%
  43. Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Majmuk fund (cont’d) held RM RM NAV (%) FVTPL (cont’d) Quoted Shariah-approved Equities in Malaysia (cont’d) Technology Inari Amertron Bhd 150,000246,000225,000 0.46% Total Technology 150,000246,000225,000 0.46% Telecommunication Axiata Group Bhd Digi.Com Bhd Maxis Bhd OCK Group Berhad Telekom Malaysia Bhd 300,000 1,436,018 1,179,000 165,000694,725742,500 150,000786,765802,500 930,000 765,204 395,250 120,000 654,005 319,200 Total Telecommunication 1,665,0004,336,7173,438,450 2.41% 1.52% 1.64% 0.81% 0.65% 7.03% Trading & Retailing PADINI Holdings Berhad 70,000 Total Trading & Retailing 70,000259,758245,700 0.50% 259,758 245,700 0.50% Transport MISC Bhd 120,000714,734804,000 1.64% Total Transport 120,000714,734804,000 1.64% Utilities Cypark Resources Berhad Malakoff Corporation Berhad Tenaga Nasional Bhd 450,000 600,000 250,000 Total Utilities 692,104 502,554 3,481,317 711,000 480,000 3,400,000 1,300,0004,675,9754,591,000 Total Quoted Shariah-approved Equities in Malaysia 12,049,30728,103,09826,828,202 1.45% 0.98% 6.95% 9.38% 54.86% 41
  44. 42 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 3.Investments (cont’d) (c) Details of investments (cont’d) Market Market value 2018 Quantity Cost value as a % of i-Majmuk fund (cont’d) held RM RM NAV (%) FVTPL (cont’d) Financial Instruments with Embedded Derivatives Telecommunication Protasco Bhd 130,525 - 5,874 0.01% Total Telecommunication 130,525 - 5,874 0.01% Total Financial Instruments with Embedded Derivatives 130,525 - 5,874 0.01% Unit trusts - REITS Property AXIS Real Estate Investment Trust Total Property 300,000 438,000 468,000 0.96% 300,000438,000468,000 0.96% Total Unit trusts - REITS 300,000438,000468,000 0.96% Government Investment Issues Government Investment Issues 1,000,000 Total Government Investment Issues 1,000,0001,044,5001,021,650 2.09% Unquoted Islamic Private Debt Securities Highway Lebuhraya Duke Fasa 3 Sdn Bhd 2,000,000 4.31% Total Highway 2,000,0002,125,4002,110,640 4.31% Property Putrajaya Holdings Sdn Bhd 1,000,000 2.04% Total Property 1,000,0001,000,0001,000,270 2.04% Total Unquoted Islamic Private Debt Securities 3,000,0003,125,4003,110,910 6.35% Total FVTPL 1,044,500 2,125,400 1,000,000 1,021,650 2,110,640 1,000,270 16,479,83232,710,99831,434,636 2.09% 64.27%
  45. Notes to the Financial Statements (cont’d) 31 December 2018 4. Deferred Tax Liabilities/(Assets) 2018 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM At 1 January 2018 Recognised in the statements of income and expenditure (Note 9) 14,497 594,458 212,697 11,371 (715,438) (314,806) At 31 December 2018 25,868 (120,980) (102,109) i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM 2017 At 1 January 2017 Recognised in the statements of income and expenditure (Note 9) 30,555 148,318 50,125 (16,058) 446,140 162,572 At 31 December 2017 14,497 594,458 212,697 The deferred tax liabilities relate to the unrealised gains on investments of the Funds. 43
  46. 44 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 5. Unitholders’ Accounts 2018 i-Makmur fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 9,857,973 16,633,462 (2,544,447) (4,293,272) Unitholders’ account brought forward Net income for the year 7,313,52612,340,190 25,329,967 38,501,090 - 2,068,980 At end of the year 32,643,493 52,910,260 Net asset value per unit at 31 December 2018 1.621 2017 i-Makmur fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 7,443,102 10,982,295 (3,082,281) (4,547,905) Unitholders’ account brought forward Net income for the year 4,360,8216,434,390 20,969,146 30,645,221 - 1,421,479 At end of the year 25,329,967 38,501,090 Net asset value per unit at 31 December 2017 1.520
  47. Notes to the Financial Statements (cont’d) 31 December 2018 5. Unitholders’ Accounts (cont’d) 2018 i-Mekar fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 31,626,590 49,282,889 (6,144,954) (9,575,521) Unitholders’ account brought forward Net loss for the year 25,481,63639,707,368 57,005,278 93,324,657 – (13,036,009) At end of the year 82,486,914 119,996,016 Net asset value per unit at 31 December 2018 1.455 2017 i-Mekar fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 19,532,061 32,344,954 (3,459,774) (5,729,361) Unitholders’ account brought forward Net income for the year 16,072,28726,615,593 40,932,991 59,186,668 – 7,522,396 At end of the year 57,005,278 93,324,657 1.637 Net asset value per unit at 31 December 2017 45
  48. 46 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 5. Unitholders’ Accounts (cont’d) 2018 i-Majmuk fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 10,479,059 15,039,630 (1,980,080) (2,841,827) Unitholders’ account brought forward Net loss for the year 8,498,97912,197,803 26,874,550 38,795,940 – (2,073,205) At end of the year 35,373,529 48,920,538 Net asset value per unit at 31 December 2018 1.383 2017 i-Majmuk fund No. of Units RM Amount received for creations during the year Amount paid for cancellations during the year 7,787,060 11,661,061 (1,423,322) (2,131,413) Unitholders’ account brought forward Net income for the year 6,363,738 9,529,648 20,510,812 26,458,573 – 2,807,719 At end of the year 26,874,550 38,795,940 Net asset value per unit at 31 December 2017 1.444
  49. Notes to the Financial Statements (cont’d) 31 December 2018 6. Other Receivables 2018 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Amount due from shareholders’ fund* Amount due from family takaful fund* Profits receivable Sundry receivables 679,226 1,247,158 503,833 - - 693,500 241,608 355,189 347,793 134,120 652,326 2,430,217 1,290,297 1,134,239 2017 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM 869,926 - 457,141 - - - 277,644 354,074 180,858 194,932 528,954 1,327,067 631,718 904,744 Amount due from shareholders’ fund* Amount due from family takaful fund* Profits receivable Sundry receivables * The amount due from shareholders’ fund and family takaful fund are trade in nature, unsecured, profit-free and repayable on demand. 47
  50. 48 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 7. Other Payables 2018 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Amount due to shareholders’ fund* Amount due to family takaful fund* Sundry creditors - 1,835,127 - - 1,335,437 1,098,3323,211,8872,168,261 1,098,332 5,047,014 3,503,698 2017 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Amount due to shareholders’ fund* Amount due to family takaful fund* Sundry creditors - 95,623 888,851 536,371 823,632 1,318,365 1,264,589 332,212 984,474 2,678,368 1,596,801 * The amount due to shareholders’ fund and family takaful fund are trade in nature, unsecured, profit-free and repayable on demand.
  51. Notes to the Financial Statements (cont’d) 31 December 2018 8. Other Outgo 2018 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Audit fee Goods and services tax Other expenses 2,715 269,132 752 6,618 966,017 2,099 2,733 299,946 1,463 272,599 974,734 304,142 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Audit fee Goods and services tax Other expenses 2,917 566,894 392 6,322 1,972,963 1,414 2,728 627,781 841 570,203 1,980,699 631,350 2017 49
  52. 50 Great Eastern Takaful Berhad Investment-Linked Funds Notes to the Financial Statements (cont’d) 31 December 2018 9. Taxation The Malaysian tax charge on family takaful business (including investment-linked business) is based on the method prescribed under the Income Tax Act, 1967 for family takaful business. The tax rate for family takaful business is 8% (2017: 8%) and is charged on investment income net of allowable deductions for the year. 2018 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Income tax: Current year provision Under provision in prior year 192,817 6,546 (562,618) 99,074 84,961 36,404 199,363(463,544)121,365 Deferred tax (Note 4): Relating to origination and reversal of temporary differences 11,371 11,371 (715,438)(314,806) 210,734 (715,438) (1,178,982) (314,806) (193,441) A reconciliation of income tax expense applicable to the excess of income over outgo/(outgo over income) before taxation at the tax rate applicable to the Funds, to tax expense at the effective tax rate is as follows: 2018 i-Makmur fund RM i-Mekar fund RM Excess of income over outgo/ (Excess of outgo over income) taxation income 2,279,714 (14,214,991) (2,266,646) (1,137,199) (218,841) 77,984 99,074 i-Majmuk fund RM Tax rate of 8% Income not subject to tax Expenses not deductible for tax purposes Under provision in prior year 182,377 - 21,811 6,546 (181,332) (72,843) 24,330 36,404 210,734(1,178,982) (193,441)
  53. Notes to the Financial Statements (cont’d) 31 December 2018 9. Taxation (cont’d) 2017 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Income tax: Current year provision (Over)/under provision in prior year 188,190 (12,151) 225,310 44,891 82,246 14,175 176,039 270,201 96,421 Deferred tax (Note 4): Relating to origination and reversal of temporary differences (16,058) 446,140 162,572 (16,058) 446,140 162,572 159,981 716,341 258,993 A reconciliation of income tax expense applicable to the excess of income over outgo/(outgo over income) before taxation at the tax rate applicable to the Funds, to tax expense at the effective tax rate is as follows: 2017 i-Makmur fund RM i-Mekar fund RM i-Majmuk fund RM Excess of income over outgo before taxation 1,581,460 8,238,737 3,066,712 Tax rate of 8% Income not subject to tax Expenses not deductible for tax purposes (Over)/under provision in prior year 126,517 - 45,615 (12,151) 659,099 (146,111) 158,462 44,891 245,337 (51,027) 50,508 14,175 159,981 716,341 258,993 51
  54. Great Eastern Takaful Berhad (916257-H) Level 3, Menara Great Eastern 303 Jalan Ampang, 50450 Kuala Lumpur. T (603) 4259 8338 F (603) 4259 8808 C 1 300 13 8338 www.greateasterntakaful.com