REACHING NEW HEIGHTS MNRB HOLDINGS BERHAD annual report 2011 (13487-A) Reaching New Heights MNRB Holdings Berhad (MNRB) today benefit its clients. Vast experience and represents a solid combination of various strong leadership form a unified Group that subsidiaries with diverse strengths to will continuosly soar to a greater height. contents MNRB HOLDINGS BERHAD MALAYSIAN REINSURANCE MALAYSIAN RE (DUBAI) LTD. BERHAD 4 Corporate Profile 98 Corporate Profile 5 Corporate Milestones 58 Corporate Profile 99 Corporate Information 7 Notice of 38th Annual General 59 Corporate Information 100 Directors’ Profile Meeting 60 Directors’ Profile 101 Senior Management Team’s Profile 10 Statement Accompanying Notice 63 Management Team of Annual General Meeting 64 Senior Management Team’s Profile MMIP SERVICES SDN.BHD. 11 Corporate Information 67 Corporate Activities and Services 12 Directors’ Profile 69 Malaysian Re’s Portfolio of Business 102 Corporate Profile 15 Management Team 103 Corporate Information 16 Senior Management Team’s Profile TAKAFUL IKHLAS SDN. BHD. 19 Group Structure 20 Chairman’s Statement 72 Corporate Profile 26 Corporate Social Responsibility 73 Corporate Information 34 Statement on Corporate 74 Directors’ Profile Governance 77 Shariah Committee Members’ 44 Audit Committee Report Profile 47 Statement on Internal Control 79 Management Team 49 Statement of Directors’ 80 Senior Management Team’s Profile Responsibility in Relation to the Financial Statements MNRB RETAKAFUL BERHAD 50 Statement on Risk Management 52 Five-Year Financial Highlights 86 Corporate Profile 53 Financial Calendar 87 Corporate Information 54 MNRB’s Growth 88 Directors’ Profile 55 Investors’ Information 91 Shariah Committee Members’ 104 Calendar of Significant Events Profile 109 Financial Statements 93 Management Team 278 Additional Compliance Information 94 Senior Management Team’s Profile 279 Analysis of Shareholdings 95 MRT’s Portfolio of Business 283 List of Properties • Proxy Form • Complaint Form of Bursa Malaysia Like the tree, our growth does not happen only in favourable circumstances. We have seen good times and challenging times, and have emerged out of both situations stronger and more confident. MNRB HOLDINGS BERHAD CORPORATE PROFILE In early 1965, the Malaysian Government conceived the idea of forming a national reinsurance company in order to curtail the ever increasing outflow of reinsurance premium overseas. A feasibility study on the formation of such company was done in 1971 and on 30 December 1972, Malaysian National Reinsurance Berhad was incorporated under the Companies Act, 1965. It commenced operations on 19 February 1973. Effective 1 April 2005, as part of the restructuring exercise of the MNRB Group, the reinsurance business, reinsurance license and reinsurance assets, up to a net amount of RM400 million, were transferred from Malaysian National Reinsurance Berhad to Malaysian Reinsurance Berhad (Malaysian Re). Pursuant to the restructuring, Malaysian National Reinsurance Berhad became an investment holding company and was renamed MNRB Holdings Berhad (MNRB). MNRB is listed on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities). Its wholly-owned subsidiaries are Malaysian Reinsurance Berhad (Malaysian Re), a general reinsurance company, Takaful Ikhlas Sdn. Bhd. (Takaful IKHLAS), a Takaful operator, MNRB Retakaful Berhad (MRT), a general and family retakaful operator and Malaysian Re (Dubai) Ltd. (MRDL), a company incorporated in Dubai, UAE, to underwrite the reinsurance business for Malaysian Re and to service Malaysian Re’s business partners in the Middle East and North Africa (MENA) regions. Another subsidiary company is MMIP Services Sdn. Bhd. (MSSB), the manager of the Malaysian Motor Insurance Pool (MMIP), a pool established by the local insurance industry to provide insurance coverage for vehicle owners who have difficulty in obtaining motor insurance coverage. In addition, Motordata Research Consortium Sdn. Bhd. (MRC), a company that manages database for standard motor parts, prices and repairs, is an associate company of MNRB whilst Labuan Reinsurance (L) Ltd. (Labuan Re), an offshore reinsurance company incorporated in the Labuan International Offshore Financial Centre (IOFC), is an associate company of Malaysian Re. Backed by a wealth of experience and knowledge in the reinsurance, takaful and retakaful businesses, sound financial position and the strong support from its substantial shareholders, namely, Permodalan Nasional Berhad (PNB) and the various unit trust schemes of PNB, the MNRB Group will continue to grow as a renowned corporation, both locally and internationally. CAPITAL STRUCTURE The Company has an Authorised Capital of RM500 million, divided into 500 million ordinary shares of RM1.00 each and a Paid-up Capital of RM213 million, divided into 213 million ordinary shares of RM1.00 each. 4 MNRB Holdings Berhad CORPORATE MILESTONES 1973-1975 * Rating Committee - to • Appointed as Manager of the Malaysian MNRB • Malaysian National Reinsurance determine special rate under Aviation Pool Berhad commenced operations on the Fire Tariff for Fire and • Malaysian National Reinsurance 19 February 1973 Industrial All Risks Insurances Berhad was listed on the Main Board of • Voluntary Cessions (VC) to Malaysian the Kuala Lumpur Stock Exchange National Reinsurance Berhad 1988-1990 (now known as Bursa Malaysia commenced four (4) months later • Increased level of retrocession from Securities Berhad) • Began to offer Excess of Loss fifty percent (50%) to fifty-five percent Treaties to local insurance companies (55%) to shareholding companies of 1997-1999 • Began to write Local Facultative Malaysian National Reinsurance • Commencement of Overseas Facultative business and non-reciprocal inwards Berhad business overseas business • Implementation of Stage 1 - new • Launching of Malaysian National levels of VC, Retrocessions and other Reinsurance Berhad Homepage 1976-1978 market reinsurance arrangements (http://www.malaysian-re.com.my) • Retroceded part of the VC cessions • Began to organise Annual Golf • Launching of MNRB Scholarship Fund to the local insurance companies for Tournaments and Outward Bound of RM1 million their net account School for the insurance industry • Malaysian National Reinsurance • Sponsored the 1st Kuala Lumpur Berhad moved to its own building, Insurance Seminar, attended by over 1991-1993 Bangunan Malaysian Re 400 delegates • Implementation of automatic cessions • Implementation of new levels of VC, • Commenced writing ten percent on Facultative and Treaty business Retrocessions and other market (10%) Quota Share of the • Appointed as the Administration reinsurance arrangements Miscellaneous Accidents and Motor Manager of Malaysian Motor businesses Insurance Pool 2000-2001 • Increased level of retrocessions from • Malaysian-Re International Insurance • Awarded the MS ISO 9002:1994 twenty-five percent (25%) to thirty (L) Ltd. (MIIL) was set up as a wholly- certification percent (30%) for Fire and Personal owned subsidiary • Appointed as Account Manager for the Accident businesses • Implementation of Stage II - new Sihat Malaysia Scheme levels of VC, Retrocessions and other • Injected additional RM1 million to the 1979-1981 market reinsurance arrangements MNRB Scholarship Fund • Increased paid-up capital from • Malaysian National Reinsurance • Acquired another building, Wisma KT RM5,200,002 to RM6,240,003 Berhad and MNI jointly hosted and (now known as Bangunan Takaful • Commenced reciprocal exchange organised the 13th General Meeting IKHLAS), Petaling Jaya, Selangor with overseas companies of the Federation of Afro - Asian • Perbadanan Nasional Berhad’s Insurers and Reinsurers (F.A.I.R.) 2002 (PERNAS) fifty percent (50%) share in attended by over 350 international • Arrangement of terrorism insurance via Malaysian National Reinsurance and local participants the Malaysian Terrorism Facility Berhad was transferred to PNB • Received approval in principle from 1994-1996 BNM to set up a takaful operation 1982-1984 • Bank Negara Malaysia (BNM) • Paid-up capital increased to appointed Malaysian National 2003 RM8,216,004 Reinsurance Berhad to manage the • BNM approved the registration of • Published the 1st edition of the Scheme for Insurance of Large and Takaful Ikhlas Sdn. Bhd. (Takaful Malaysian Insurance Directory Specialised Risks IKHLAS) on 21 April 2003 and it • Introduced Common Account Excess • Appointed as Manager for the commenced operations on 2 July 2003 of Loss for retrocessionaires Malaysian Energy Risks Consortium • MNRB was granted the approval on • Launching of the Central Certification to the new ISO Standard, 1985-1987 Administration Bureau MS ISO 9001:2000 • Formation of the following: • Implementation of Stage III - new • Implementation of new levels of VC, * Technical Services Department levels of VC, Retrocessions and other Retrocessions to the industry ceased - to conduct fire surveys market reinsurance arrangements with effect from 1 January 2003 including advisory services on • MIIL, now known as Labuan • Acquired another building, Block A, risk management with the cost Reinsurance (L) Ltd. (Labuan Re), Plaza Damansara, Kuala Lumpur mostly borne by Malaysian ceased to be a wholly-owned National Reinsurance Berhad subsidiary of Malaysian National * Inspection Department - to Reinsurance Berhad with the equity ensure companies’ adherence interest being diluted to twenty to the various Inter-Company percent (20%) Agreements 5 CORPORATE MILESTONES 2004 2007 • MRT’s