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Download 2017 Annual Report 12th Annual General Meeting The Board Room, 19th Floor, Menara Affin 80, Jalan Raja Chulan, 50200 Kuala Lumpur Monday, 14 May 2018 at 10.00 a.m. COVER RATIONALE In 2017, AFFIN ISLAMIC continued to make good progress towards realising a greater AFFIN. Our growth continued to be propelled by the Group’s Priority Islamic Policy, and by AFFINBANK’s strategic AFFINITY thrusts. The building blocks reflect the synergised values and culture that are integrating strengths within the Group towards enhanced performance. 1 AFFIN ISLAMIC BANK BERHAD (709506-V) TABLE OF CONTENTS ORGANISATION 3 Corporate Information 4 Corporate Structure 5 Board of Directors 6 Profile of Directors 10 Management Team 12 Shariah Committee Profile EXECUTIVE SUMMARY 15 Management Discussion & Analysis 22 Corporate Diary 29 Financial Highlights CORPORATE GOVERNANCE 30 Corporate Governance Overview Statement FINANCIAL STATEMENTS 45 Financial Statements OTHER INFORMATION 183 Network of Branches 184 Notice of Annual General Meeting OUR VISION OUR MISSION To provide innovative financial solutions and A premier partner for services to target customers in order to generate Financial Growth and profits and create value for our shareholders and other stakeholders. Innovative Services. By doing so, we provide opportunities for employees to contribute and excel; and be competitive in providing our solutions and services to our valued customers. We shall conduct our business with integrity and professionalism in compliance with good corporate governance, principles and practices. 3 AFFIN ISLAMIC BANK BERHAD (709506-V) CORPORATE INFORMATION BOARD OF DIRECTORS CHAIRMAN DIRECTORS Encik Mohd Suffian Bin Haji Haron Yang Berbahagia Laksamana Madya (Non-Independent Non-Executive Director) Tan Sri Dato’ Seri Ahmad Ramli Bin Mohd Nor (Bersara) (Non-Independent Non-Executive Director) Associate Professor Dr Said Bouheraoua (Independent Non-Executive Director) Yang Berbahagia Dato’ Bakarudin Bin Ishak Independent Non-Executive Director (Appointed w.e.f. 2 January 2018) CHIEF EXECUTIVE OFFICER AUDITORS WEBSITE Encik Nazlee Bin Khalifah PricewaterhouseCoopers PLT www.affinislamic.com.my LLP0014401-LCA & AF1146 SECRETARY Level 10, 1 Sentral Jalan Rakyat Nimma Safira Binti Khalid Kuala Lumpur Sentral LS0009015 50470 Kuala Lumpur Tel : 603 2055 9019 Malaysia Email : [email protected] HEAD OFFICE REGISTERED OFFICE Menara AFFIN 17th Floor, Menara AFFIN 80, Jalan Raja Chulan 80, Jalan Raja Chulan 50200 Kuala Lumpur 50200 Kuala Lumpur. Malaysia Malaysia Tel : 603 2055 9000 Fax : 603 2026 1415 4 AFFIN ISLAMIC BANK BERHAD (709506-V) CORPORATE STRUCTURE as at 22 March 2018 61.37% Lembaga Tabung Angkatan Tentera OTHERS Boustead Holdings Berhad The Bank of East Asia, Limited 35.42% 20.69% 23.52% 20.37% AFFIN Bank Berhad 100% AFFIN Islamic Bank Berhad 50% AFFIN-i Nadayu Sdn Bhd 30% KL South Development Sdn Bhd 16.7% Raeed Holdings Sdn Bhd 100% 100% AFFIN Hwang Nominees (Tempatan) Sdn Bhd AFFIN Hwang Investment Bank Berhad 100% 100% AFFIN Hwang Nominees (Asing) Sdn Bhd AFFIN Moneybrokers Sdn Bhd 100% AFFIN Hwang Trustee Berhad * 100% PAB Properties Sdn Bhd 100% AHC Associates Sdn Bhd 100% ABB Nominee (Tempatan) Sdn Bhd 100% AHC Global Sdn Bhd 51% 70% AXA AFFIN Life Insurance Berhad 49.95% AXA AFFIN General Insurance Berhad AFFIN Hwang Asset Management Berhad 100% 100% AFFIN Holdings Berhad AIIMAN Asset Management Sdn Bhd 100% AFFIN Capital Services Berhad 51% Accelvantage Academy Sdn Bhd 99% Notes: AFFIN Hwang AIIMAN Global Sukuk Fund • The companies reflected above are AFFIN Bank operating subsidiaries, associates and joint ventures. 62% * Held by the following companies with direct TradePlus Shariah Gold Tracker shareholdings of 20% each i. AFFIN Hwang Investment Bank Berhad ii. AFFIN Hwang Nominees (Tempatan) Sdn Bhd iii. AFFIN Hwang Nominees (Asing) Sdn Bhd iv. AHC Associates Sdn Bhd v. AHC Global Sdn Bhd 5 AFFIN ISLAMIC BANK BERHAD (709506-V) BOARD OF DIRECTORS YBHG. LAKSAMANA MADYA EN. MOHD SUFFIAN BIN ASSOC. PROF. DR. SAID DATO’ BAKARUDIN BIN ISHAK TAN SRI DATO’ SERI AHMAD RAMLI HAJI HARON BOUHERAOUA BIN MOHD NOR (BERSARA) 6 AFFIN ISLAMIC BANK BERHAD (709506-V) PROFILE OF DIRECTORS ENCIK MOHD SUFFIAN BIN HAJI HARON Chairman/Non-Independent Non-Executive Director Nationality/Age/ Malaysian/72 years old/Male Gender Date of Appointment 1 July 2006 and appointed as Chairman on 1 June 2017 Academic/ • Bachelor of Economics, University of Malaya Professional • Master of Business Administration, University of Oregon, USA Qualification(s) Past Working • Managing Director of an Insurance Broking Company Experience • Director of Far East Computers (India) • Director of Affin Discount Berhad • Director of Fraser’s Hill Development Corporation • Director of the State Development Corporations of Perak, Pahang and Terengganu • Director of Bank Pembangunan Malaysia Berhad • Director of Kompleks Kewangan Malaysia Berhad • Director of HICOM • Council Member of Majlis Amanah Rakyat (MARA) • Diplomatic and Administrative Officer, attached to the Prime Minister’s Department and the Ministry of Public Enterprises • Assistant to the Special Economic Adviser to the Government • Vast experience in general trading, power generation and transmission, aircraft maintenance as well as the oil and gas services sectors Directorship of Other • Director of Affin Bank Berhad Public Companies • Director of Pharmaniaga Berhad • Director of Lonpac Insurance Berhad Membership of • Member of Board Nomination and Remuneration Committee Board Committees • Member of Group Board Credit Review and Recovery Committee in AFFINBANK • Member of Board Oversight Transformation Committee Attendance for the All the 11 scheduled monthly Board Meetings and 4 Special Board Meetings financial year ended 31 December 2017 * Encik Mohd Suffian is a nominee of Lembaga Tabung Angkatan Tentera, a major shareholder of AFFINBANK, the parent Company of AFFIN ISLAMIC. 7 AFFIN ISLAMIC BANK BERHAD (709506-V) PROFILE OF DIRECTORS YBHG. LAKSAMANA MADYA TAN SRI DATO’ SERI AHMAD RAMLI BIN MOHD NOR (BERSARA) Non-Independent Non-Executive Director Nationality/Age/ Malaysian/73 years old/Male Gender Date of Appointment 1 July 2006 Academic/ • Graduate of Brittania Royal Naval College Dartmouth, United Kingdom Professional • Graduate of Indonesia Naval Staff College Qualification(s) • Graduate of the United States Naval War College and Naval Post-Graduate School Monterey • Master’s Degree in Public Administration from the Harvard University, United States of America Past Working • Chief of Royal Malaysian Navy in 1999. Served Royal Malaysian Navy for 35 years Experience Directorship of Other • Executive Deputy Chairman/Managing Director of Boustead Heavy Industries Corporation Berhad Public Companies • Director of Favelle Favco Berhad Membership of • Member of Group Board Credit Review and Recovery Committee Board Committees • Member of Group Board Risk Management and Compliance Committee in AFFINBANK Attendance for the All the 11 scheduled monthly Board Meetings and 4 Special Board Meetings financial year ended 31 December 2017 8 AFFIN ISLAMIC BANK BERHAD (709506-V) PROFILE OF DIRECTORS ASSOC. PROF. DR. SAID BOUHERAOUA Independent Non-Executive Director Nationality/Age/ Algerian/50 years old /Male Gender Date of Appointment 19 June 2014 Academic/ Ph.D in Fiqh/UsulFiqh (Shariah) from International Islamic University Malaysia Professional Qualification(s) Past Working • Associate Professor at Department of Islamic Law, Ahmad Ibrahim Kulliyyah of Laws, Experience International Islamic University Malaysia • Director of Research at the International Shariah Research Academy for Islamic Finance (ISRA) • Editor-in-chief of ISRA International Journal of Islamic Finance Directorship of Other -nil- Public Companies Membership of • Chairman of Shariah Committee Board Committees • Member of Board Nomination and Remuneration Committee in AFFINBANK • Member of Group Board Audit Committee Attendance for the All the 11 scheduled monthly Board Meetings and 4 Special Board Meetings financial year ended 31 December 2017 9 AFFIN ISLAMIC BANK BERHAD (709506-V) PROFILE OF DIRECTORS YBHG. DATO’ BAKARUDIN BIN ISHAK Independent Non-Executive Director Nationality/Age/ Malaysian/57 years old /Male Gender Date of Appointment 2 January 2018 Academic/ Bachelor of Economics (Honours) University of Malaya Professional Qualification(s) Past Working • Assistant Governor of Bank Negara Malaysia (BNM) and has retired from BNM on 20 January 2017 Experience • Director of Foreign Exchange Administration Department, BNM • Director of the Islamic Banking and Takaful Department, BNM • Chief Executive Officer of Malaysian Electronic Clearing Corporation Sdn. Bhd. (MyClear) • Member of BNM Financial Sector Stability Committee • Member of the International Centre for Education in Islamic Finance (INCEIF) EXCO and Governing Council • Member of Investment Panel of the Employees Provident Fund Directorship of Other -nil- Public Companies Membership of • Chairman of Board Nomination and Remuneration Committee Board Committees • Member of Board Oversight Transformation Committee in AFFINBANK • Member of Group Board Risk Management and Compliance Committee Attendance for the -n/a- financial year ended 31 December 2017 10 AFFIN ISLAMIC BANK BERHAD (709506-V) MANAGEMENT TEAM EN MOHD FIZAR EN HAZLAN EN NAZLEE EN FERDAUS TOH EN MOHD FAIZ BIN MOHIDIN BIN HASAN BIN KHALIFAH BIN ABDULLAH BIN RAHIM 11 AFFIN ISLAMIC BANK BERHAD (709506-V) PN RADZIAH PN JOZAIMAH EN MOHD RUSLEE PN ZURINA AYU CIK NORAZLINDA BINTI
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