Financial Statements. 130 Directors Report 134 Statement by Directors 134 Statutory Declaration 135 Independent Auditors Report 137 Income Statements

Financial Statements 130 Directors Report 134 Statement by Directors 134 Statutory Declaration 135 Independent Auditors Report 137 Income Statements 138 Statements of Comprehensive Income 139 Statements of Financial Position 140 Statements of Changes in Equity 141 Statements of Cash Flows 143 Notes to the Financial Statements

DIRECTORS REPORT The Directors have pleasure in presenting their report together with the audited inancial statements of the Group and of the Company for the inancial year ended 31 March 2014. PRINCIPAL ACTIVITIES The Company is an investment holding company, principally engaged in the provision of management services to its subsidiaries. The principal activities of the subsidiaries have been disclosed in Note 17 to the inancial statements. There have been no signiicant changes in the nature of the principal activities of the Group and of the Company during the inancial year. 130 RESULTS 2 0 1 4 A N N U A L R E P O R T Group RM 000 Company RM 000 Net proit for the year 155,986 25,039 There were no material transfers to or from reserves or provisions during the inancial year other than as disclosed in the inancial statements. In the opinion of the Directors, the results of the operations of the Group and of the Company during the inancial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the effects arising from the revision of the claim liabilities of its retakaful subsidiary as disclosed in Note 3.3 to the inancial statements. DIVIDEND The amount of dividend paid by the Company since the end of the previous inancial year was as follows: RM 000 In respect of the inancial year ended 31 March 2013: First and inal dividend of 32% less 25% tax, paid on 28 October 2013 51,137 At the forthcoming Annual General Meeting, a irst and inal single-tier dividend in respect of the current inancial year ended 31 March 2014 of 16.5% based on the issued and paid-up share capital of 213,069,500 ordinary shares at the date of this report, amounting to a total dividend of RM35,156,468, will be proposed for shareholders approval. The inancial statements for the current inancial year do not relect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the shareholders equity as an appropriation of retained proits in the next inancial year ending 31 March 2015.

DIRECTORS The names of the Directors of the Company in ofice since the date of the last report and at the date of this report are: Sharkawi bin Alis Mohd Din bin Merican P. Raveenderen Dato Syed Ariff Fadzillah bin Syed Awalluddin Yusoff bin Yaacob Datuk Mohd Khalil bin Dato Mohd Noor Megat Dziauddin bin Megat Mahmud Paisol bin Ahmad In accordance with Article 86 of the Company s Articles of Association, Sharkawi bin Alis and Mohd Din bin Merican retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. 131 Datuk Mohd Khalil bin Dato Mohd Noor and Dato Syed Ariff Fadzillah bin Syed Awalluddin who will be retiring pursuant to Section 129 of the Companies Act, 1965 at the forthcoming Annual General Meeting offer themselves for re-appointment as Directors in accordance with Section 129 of the said Act to hold ofice until the conclusion of the next Annual General Meeting of the Company. DIRECTORS BENEFITS Neither at the end of the inancial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the Directors might acquire beneits by means of acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous inancial year, no Director has received or become entitled to receive any beneit (other than beneits included in the aggregate amount of emoluments received or due and receivable by the Directors from the Company or the ixed salary and beneits receivable as a full-time employee of the Company as disclosed in Notes 9, 10 and 33 to the inancial statements or beneits receivable from related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a irm of which the Director is a member, or with a company in which the Director has a substantial inancial interest. DIRECTORS INTERESTS M N R B H O L D I N G S B E R H A D According to the register of Directors shareholdings, the interest of Directors in ofice at the end of the inancial year in shares of the Company during the inancial year are as follows: Number of ordinary shares of RM1.00 each As at As at 1 April 2013 Acquired Sold 31 March 2014 Direct Interests: P. Raveenderen 10,000 10,000 Datuk Mohd Khalil bin Dato Mohd Noor 5,000 5,000 Other than as stated above, none of the Directors in ofice at the end of the inancial year had any interest in shares of the Company or its related corporations during the inancial year.

DIRECTORS REPORT (CONT D) SIGNIFICANT AND SUBSEQUENT EVENTS The signiicant events during the inancial year are as disclosed in Note 40 to the inancial statements. There were no material subsequent events after the end of the inancial year. OTHER STATUTORY INFORMATION (a) Before the income statements and statements of inancial position of the Group and of the Company were made out, the Directors took reasonable steps: 132 (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts; and 2 0 1 4 A N N U A L R E P O R T (ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the Directors are not aware of any circumstances which would render: (c) (i) (ii) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the inancial statements of the Group and of the Company inadequate to any substantial extent; and the values attributed to the current assets in the inancial statements of the Group and of the Company misleading. At the date of this report, the Directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. (d) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt within this report or in the inancial statements of the Group and of the Company which would render any amount stated in the inancial statements misleading. (e) As at the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the inancial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the inancial year other than those arising in the normal course of business of the Group and of the Company.

OTHER STATUTORY INFORMATION (CONT D) (f) In the opinion of the Directors: (i) (ii) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the inancial year which will or may affect the ability of the Group or of the Company to meet its obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the inancial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the inancial year in which this report is made. For the purpose of paragraphs (e) (ii) and (f) (i) above, contingent or other liabilities do not include liabilities arising from reinsurance, takaful and retakaful contracts underwritten in the ordinary course of business of the reinsurance, takaful and retakaful subsidiaries and associate companies. 133 AUDITORS The retiring auditors, Messrs. Ernst & Young, have expressed their willingness to accept re-appointment. Signed on behalf of the Board in accordance with a resolution of the Directors dated 30 July 2014. Sharkawi bin Alis Mohd Din bin Merican Kuala Lumpur, Malaysia M N R B H O L D I N G S B E R H A D

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965 We, Sharkawi bin Alis and Mohd Din bin Merican, being two of the Directors of MNRB Holdings Berhad, do hereby state that, in the opinion of the Directors, the accompanying inancial statements set out on pages 137 to 252 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the inancial position of the Group and of the Company as at 31 March 2014 and of the results and the cash lows of the Group and of the Company for the year then ended. In the opinion of the Directors, the information set out in Note 42 and page 253 of the inancial statements has been compiled in accordance with the Guidance On Special Matter No.1 Determination of Realised and Unrealised Proits or Losses in the Context of Disclosures Pursuant to Bursa Securities Malaysia Berhad Listing Requirements issued by the Malaysian Institute of Accountants on 20 December 2010, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board in accordance with a resolution of the Directors dated 30 July 2014. 134 2 0 1 4 A N N U A L R E P O R T Sharkawi bin Alis Kuala Lumpur, Malaysia STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 Mohd Din bin Merican I, Norazman bin Hashim, being the oficer primarily responsible for the inancial management of MNRB Holdings Berhad, do solemnly and sincerely declare that the accompanying inancial statements set out on pages 137 to 253 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by ) the abovenamed Norazman bin Hashim ) at Kuala Lumpur in Wilayah Persekutuan ) on 30 July 2014 ) Norazman bin Hashim Before me,

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MNRB HOLDINGS BERHAD (INCORPORATED IN MALAYSIA) REPORT ON THE FINANCIAL STATEMENTS We have audited the inancial statements of MNRB Holdings Berhad, which comprise the statements of inancial position as at 31 March 2014 of the Group and of the Company, the income statements, the statements of comprehensive income, the statements of changes in equity and the statements of cash lows of the Group and of the Company for the year then ended, and a summary of signiicant accounting policies and other explanatory information, as set out on pages 137 to 252. Directors responsibility for the financial statements The directors of the Company are responsible for the preparation of inancial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of inancial statements that are free from material misstatement, whether due to fraud or error. 135 Auditors responsibility Our responsibility is to express an opinion on these inancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the inancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the inancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the inancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of inancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the inancial statements. We believe that the audit evidence we have obtained is suficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the inancial statements give a true and fair view of the inancial position of the Group and of the Company as at 31 March 2014 and of their inancial performance and cash lows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. M N R B H O L D I N G S B E R H A D

INDEPENDENT AUDITORS REPORT (CONT D) TO THE MEMBERS OF MNRB HOLDINGS BERHAD REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act, 1965 ( the Act ) in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. (b) We have considered the inancial statements and the auditors report of the subsidiary of which we have not acted as auditors, which are indicated in Note 17 to the inancial statements, being inancial statements that have been included in the consolidated inancial statements. 136 (c) We are satisied that the inancial statements of the subsidiaries that have been consolidated with the inancial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated inancial statements and we have received satisfactory information and explanations required by us for those purposes. 2 0 1 4 A N N U A L R E P O R T (d) The auditors reports on the inancial statements of the subsidiaries were not subject to any qualiication and in respect of the subsidiaries incorporated in Malaysia, did not include any comment required to be made under Section 174(3) of the Act. OTHER REPORTING RESPONSIBILITIES The supplementary information set out in Note 42 on page 253 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the inancial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Proits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Ernst & Young AF: 0039 Chartered Accountants Gloria Goh Ewe Gim No. 1685/04/15(J) Chartered Accountant Kuala Lumpur, Malaysia 30 July 2014

INCOME STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014 Group Company Note 2014 2013 2014 2013 RM 000 RM 000 RM 000 RM 000 Gross earned premiums/contributions 4(a) 2,182,962 2,090,350 Premiums/contributions ceded to reinsurers/retakaful operators 4(b) (199,524) (251,477) Net earned premiums/contributions 1,983,438 1,838,873 Investment income 5 174,235 151,922 105,787 48,184 Net realised gains and losses 6 21,056 30,458 (763) (394) Net fair value gains 7 3,796 4,824 794 2,745 Fee and commission income 8 24,574 25,076 31,072 27,715 Other operating revenue 12,241 5,968 53 64 137 Other revenue 235,902 218,248 136,943 78,314 Gross claims and beneits paid (1,058,761) (1,088,643) Claims ceded to reinsurers/retakaful operators 145,783 243,339 Gross change in contract liabilities (380,014) (244,293) Change in contract liabilities ceded to reinsurers/retakaful operators 11,737 (67,536) Net claims and benefits (1,281,255) (1,157,133) Fee and commission expense 8 (451,224) (445,853) Management expenses 9 (195,411) (172,813) (35,898) (31,093) Finance cost (17,916) (14,422) (17,916) (16,063) Other operating expenses 11 (5,154) (21,592) (32,474) (15) Change in expense liabilities (18,637) (3,709) Tax borne by participants 12 (13,992) (12,079) Other expenses (702,334) (670,468) (86,288) (47,171) Share of results of associates 2,437 1,308 M N R B H O L D I N G S B E R H A D Operating profit before surplus attributable to takaful participants, zakat and taxation 238,188 230,828 50,655 31,143 Surplus attributable to takaful participants 23(a) (23,460) (71,496) Operating profit before zakat and taxation 214,728 159,332 50,655 31,143 Zakat (400) (400) Taxation 12 (58,342) (46,267) (25,616) (6,611) Net profit for the year attributable to equity holders of the Parent 155,986 112,665 25,039 24,532 Basic and diluted earnings per share attributable to equity holders of the Parent (sen): 30 73.2 52.9 The accompanying accounting policies and explanatory notes form an integral part of the inancial statements.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2014 Group Company 2014 2013 2014 2013 RM 000 RM 000 RM 000 RM 000 Net profit for the year 155,986 112,665 25,039 24,532 Other comprehensive income/(losses) Other comprehensive income/(losses) to be reclassified to income statement in subsequent periods: 138 Effects of post acquisition foreign exchange translation reserve on investment in associate 5,160 765 Effects of foreign exchange translation reserve on investment in subsidiary 369 (463) 2 0 1 4 A N N U A L R E P O R T Net loss on Available-for-sale ( AFS ) inancial assets: Loss on fair value changes (50,487) (3,082) (770) (574) Realised (gains)/losses transferred to income statement (Note 6) (13,626) (19,699) 763 395 Deferred tax relating to net loss on AFS inancial assets (Note 23(b)) 8,646 2,919 2 45 Other comprehensive loss attributable to participants 34,915 7,517 Other comprehensive income not to be reclassified to income statement in subsequent periods: Revaluation of land and buildings 4,749 5,284 Deferred tax relating to revaluation of land and buildings (141) (423) Other comprehensive income attributable to participants (Note 23(c)) (2,909) (4,861) Total comprehensive income for the year 142,662 100,622 25,034 24,398 The accompanying accounting policies and explanatory notes form an integral part of the inancial statements.

STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2014 Assets Group Company Note 2014 2013 2014 2013 RM 000 RM 000 RM 000 RM 000 Property, plant and equipment 13 236,936 237,965 2,610 2,206 Investment property 14 6,900 6,200 Intangible assets 15 14,519 13,189 2,497 2,239 Deferred tax assets 16 24,595 9,842 1,503 1,469 Investments in subsidiaries 17 872,032 904,501 Investments in associates 18 96,053 88,456 1,957 1,957 Financial assets: Financial assets at fair value through proit or loss ( FVTPL ) 19(a) 139,478 129,167 Held-to-maturity ( HTM ) investments 19(b) 718,597 786,653 AFS inancial assets 19(c) 2,303,023 1,789,502 50 494 Loans and receivables ( LAR ) 19(d) 1,783,211 1,698,605 26,927 16,464 Reinsurance/retakaful assets 20 399,787 387,976 Insurance/takaful receivables 21 369,611 404,059 Tax recoverable 5,462 15,923 5,461 9,623 Cash and bank balances 36,644 74,728 2,904 2,932 Non-current assets held for sale 22 1,696 Total assets 6,136,512 5,642,265 915,941 941,885 Liabilities and Participants funds Participants funds 23 217,476 234,155 Borrowings 24 320,000 320,000 320,000 320,000 Insurance/takaful contract liabilities 20 4,012,263 3,592,961 Insurance/takaful payables 25 169,865 211,724 Other payables 26 157,393 116,975 8,933 8,774 Deferred tax liabilities 16 8,713 11,466 Provision for taxation 26,965 22,525 Provision for zakat 368 515 Total liabilities and participants funds 4,913,043 4,510,321 328,933 328,774 M N R B H O L D I N G S B E R H A D 139 Equity Share capital 27 213,070 213,070 213,070 213,070 Reserves 1,010,399 918,874 373,938 400,041 Total equity attributable to equity holders of the Parent 1,223,469 1,131,944 587,008 613,111 Total liabilities, participants funds and equity 6,136,512 5,642,265 915,941 941,885 The accompanying accounting policies and explanatory notes form an integral part of the inancial statements.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2014 Attributable to equity holders of the company Reserves Non distributable Distributable Foreign exchange Avalaible Share Share translation for-sale Revaluation Retained capital premium reserve reserve reserve profits Total Group RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 140 2 0 1 4 A N N U A L R E P O R T At 1 April 2012 213,070 105,051 16,426 20,817 33,844 669,280 1,058,488 Total comprehensive income/ (loss) for the year 302 (12,345) 112,665 100,622 Dividend paid during the year (Note 29) (27,166) (27,166) Reclassiication upon disposal of property (3,184) 3,184 At 31 March 2013 213,070 105,051 16,728 8,472 30,660 757,963 1,131,944 Total comprehensive income/ (loss) for the year 5,529 (20,552) 1,699 155,986 142,662 Dividend paid during the year (Note 29) (51,137) (51,137) Reclassiication upon disposal of property (115) 115 At 31 March 2014 213,070 105,051 22,257 (12,080) 32,244 862,927 1,223,469 Company At 1 April 2012 213,070 105,051 139 297,619 615,879 Total comprehensive (loss)/ income for the year (134) 24,532 24,398 Dividend paid during the year (Note 29) (27,166) (27,166) At 31 March 2013 213,070 105,051 5 294,985 613,111 Total comprehensive (loss)/ income for the year (5) 25,039 25,034 Dividend paid during the year (Note 29) (51,137) (51,137) At 31 March 2014 213,070 105,051 268,887 587,008 The accompanying accounting policies and explanatory notes form an integral part of the inancial statements.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2014 Cash flows from operating activities Group Company 2014 2013 2014 2013 RM 000 RM 000 RM 000 RM 000 Proit before zakat and taxation 214,728 159,332 50,655 31,143 Adjustments for: Net fair value gains on inancial assets at FVTPL (3,987) (4,702) Impairment loss/(reversal of impairment loss) on AFS inancial assets 1,229 819 (794) (2,745) Impairment loss/(reversal of impairment loss) on HTM investments 139 (31) Reversal of impairment loss on properties (477) (310) Impairment loss on other receivables 425 (Reversal of impairment loss)/impairment loss on insurance/takaful receivables (2,575) 14,068 Depreciation of property, plant and equipment 10,726 9,850 955 784 Amortisation of intangible assets 3,352 3,045 552 350 Fair value gains on investment properties (700) (600) Gains on disposal of property, plant and equipment (149) (83) (1) Increase in gross premium and contribution liabilities 20,651 46,897 Impairment loss on investment in subsidiary 32,469 Interest/proit income (162,749) (142,078) (789) (3,168) Dividend income (11,578) (6,504) (105,000) (45,018) Rental income (5,436) (7,398) Finance cost 17,916 14,422 17,916 16,063 (Gain)/loss on disposal of investments (20,907) (26,293) 763 395 Gain on disposal of non-current assets held for sale (4,082) Net amortisation of premiums on investments 3,315 1,169 Share of results of associates (2,437) (1,308) Proit/(loss) from operations before changes in operating assets and liabilities 61,486 56,213 (3,273) (2,197) (Increase)/decrease in placements with licensed inancial institutions, Islamic investment accounts and marketable securities (68,751) (230,478) (10,042) 11,111 Net (purchase)/disposal of investments (508,060) (377,127) 453 7,909 (Increase)/decrease in staff loans (1,976) 2,001 (1,447) 430 Decrease/(increase) in insurance/takaful receivables 37,023 (85,252) (Increase)/decrease in other receivables (12,439) (12,513) 280 (1,606) Net change in balances with subsidiaries 1,312 (10,639) Increase in gross claims and actuarial liabilities 380,014 315,610 Increase in expense liabilities 18,637 3,709 Increase in participants funds 23,459 71,496 (Increase)/decrease in reinsurance/retakaful assets (11,811) 44,905 (Decrease)/increase in insurance/takaful payables (41,859) 33,623 Increase/(decrease) in other payables 40,418 6,401 (382) 506 Taxes and zakat (paid)/refunded (52,884) (43,492) 2,514 5,865 Interest/proit received 162,327 132,265 764 3,217 Dividend received 11,536 6,378 81,000 35,337 Rental received 4,534 7,798 M N R B H O L D I N G S B E R H A D 141 Net cash generated from/(used in) operating activities 41,654 (68,463) 71,179 49,933

STATEMENTS OF CASH FLOWS (CONT D) FOR THE YEAR ENDED 31 MARCH 2014 Group Company 2014 2013 2014 2013 RM 000 RM 000 RM 000 RM 000 Cash flows from investing activities Purchase of property, plant and equipment (6,438) (4,315) (1,359) (1,432) Purchase of intangible assets (4,682) (2,264) (810) (515) Proceeds from disposal of non-current assets held for sale 60,683 Proceeds from disposal of property, plant and equipment 420 104 1 Net cash (used in)/generated from investing activities (10,700) 54,208 (2,169) (1,946) 142 Cash flow from financing activities 2 0 1 4 A N N U A L R E P O R T Proceeds from borrowings 320,000 320,000 Repayment of borrowings (270,000) (320,000) Interest paid (17,901) (14,422) (17,901) (17,900) Dividend paid (51,137) (27,166) (51,137) (27,166) Net cash (used in)/generated from inancing activities (69,038) 8,412 (69,038) (45,066) Cash and bank balances Net (decrease)/increase during the year (38,084) (5,843) (28) 2,921 At beginning of year 74,728 80,571 2,932 11 At end of year 36,644 74,728 2,904 2,932 The accompanying accounting policies and explanatory notes form an integral part of the inancial statements.

NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2014 1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered ofice of the Company is located at 12th Floor, Bangunan Malaysian Re, No. 17, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia. The Company is an investment holding company, principally engaged in the provision of management services to its subsidiaries. The principal activities of the subsidiaries have been disclosed in Note 17 to the inancial statements. There have been no signiicant changes in the nature of the principal activities of the Group and of the Company during the inancial year. The number of employees in the Group and in the Company at the end of the inancial year were 862 and 196 (2013: 814 and 191) respectively. 143 The inancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 30 July 2014. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation The inancial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards ( IFRSs ) and the requirements of the Companies Act, 1965 in Malaysia. The inancial statements of the Group and of the Company have been prepared under the historical cost convention, unless otherwise stated in the accounting policies. The inancial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM 000) except when otherwise indicated. 2.2 Accounting period For the general reinsurance business, the Group adopts quarterly accounting periods ending on 31 March, 30 June, 30 September and 31 December, insofar as the underwriting income and outgo for Market Cessions business is concerned. This is to correspond with the ceding companies accounting periods. Underwriting income and outgo in respect of other business classes and all other income and expenditure are for the 12 months ended 31 March 2014. M N R B H O L D I N G S B E R H A D 2.3 Subsidiaries, associates and basis of consolidation (i) Subsidiaries A subsidiary is an entity over which the Group has all the following: (a) power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); (b) exposure, or rights, to variable returns from its investment with the investee; and (c) the ability to use its power over the investee to affect its returns. In the Company s separate inancial statements, investments in subsidiaries are stated at cost less any accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in the income statement.

NOTES TO THE FINANCIAL STATEMENTS (CONT D) - 31 MARCH 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.3 Subsidiaries, associates and basis of consolidation (cont d) (ii) Basis of consolidation The consolidated inancial statements comprise the inancial statements of the Company and its subsidiaries as at the reporting date. The inancial statements of the subsidiaries used in the preparation of the consolidated inancial statements are prepared for the same reporting date as the Company. 144 Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated inancial statements, intragroup balances, transactions and unrealised gains or losses resulting from intragroup transactions are eliminated in full. Uniform accounting policies are adopted in the consolidated inancial statements for like transactions and events in similar circumstances. 2 0 1 4 A N N U A L R E P O R T Acquisitions of subsidiaries are accounted for using the acquisition method. The acquisition method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition. Any excess of the cost of the acquisition over the Group s interest in the net fair value of the identiiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group s interest in the net fair value of the identiiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in the income statement. (iii) Takaful and retakaful operations and funds Under the concept of takaful/retakaful, individuals/cedants make contributions to a pool which is managed by a third party with the overall aim of using the monies to aid fellow participants in times of need. Accordingly, the takaful and retakaful subsidiaries of the Company manage the general and family takaful and retakaful funds in line with the principles of Wakalah (agency), which is the main business model used by the takaful and retakaful subsidiaries. Under the Wakalah model, the takaful/retakaful operator is not a participant in the fund but manages the funds (including the relevant assets and liabilities) towards the purpose outlined above. In accordance with the Islamic Financial Services Act ( IFSA ) 2013 and, previously, the Takaful Act 1984, the assets and liabilities of the takaful funds are segregated from those of the takaful operator: a concept known as segregation of funds. However, in compliance with MFRS 10 Consolidated Financial Statements, the assets, liabilities, income and expenses of the takaful and retakaful funds are consolidated with those of the takaful and retakaful subsidiaries to represent the control possessed by the takaful/retakaful operator over the respective funds. In preparing the Group inancial statements, the balances and transactions of the shareholders funds of the takaful and retakaful subsidiaries were amalgamated and combined with those of the takaful and retakaful funds respectively. Interfund balances, transactions and unrealised gains or losses are eliminated in full during amalgamation and consolidation. The takaful and retakaful funds of the takaful and retakaful subsidiaries are consolidated and amalgamated from the date of control and continue to be consolidated until the date such control ceases which will occur when the takaful and retakaful subsidiaries licences to manage takaful and retakaful businesses respectively are withdrawn or surrendered.

2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.3 Subsidiaries, associates and basis of consolidation (cont d) (iv) Associates Associates are entities in which the Group has signiicant inluence and that is neither a subsidiary nor an interest in a joint venture. Signiicant inluence is the power to participate in the inancial and operating policy decisions of the investee but not in control or joint control over those policies. Investments in associates are accounted for in the consolidated inancial statements using the equity method of accounting. Under the equity method, the investment in associate is carried in the consolidated statement of inancial position at cost adjusted for post-acquisition changes in the Group s share of net assets of the associate. The Group s share of the net proit or loss of the associate is recognised in the consolidated income statement. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes. In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group s interest in the associate. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group s net investment in the associate. The investment in associate is accounted for using the equity method from the date the Group obtains signiicant inluence until the date the Group ceases to have signiicant inluence over the associate or the investment becomes a subsidiary. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Group s share of the net fair value of the associate s identiiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group s share of the associate s proit or loss in the period in which the investment is acquired. When the Group s share of losses in associates equals or exceeds its interest in the associate, including any longterm interests that, in substance, form part of the Group s net investment in the associates, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associates. The most recent available audited inancial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited inancial statements used are not coterminous with those of the Group, the share of results is derived from the last audited inancial statements available and management inancial statements to the end of the accounting period. Uniform accounting polices are adopted for like transactions and events in similar circumstances. M N R B H O L D I N G S B E R H A D 145 In the Company s separate inancial statements, investments in associates are stated at cost less any accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and the carrying amount is included in the income statement.

NOTES TO THE FINANCIAL STATEMENTS (CONT D) - 31 MARCH 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.4 General reinsurance underwriting results The general reinsurance underwriting results are determined for each class of business after taking into account premiums, movements in premium liabilities and claims liabilities and acquisition costs. (i) Premium recognition Gross premiums are recognised in a inancial period in respect of risks assumed during the particular inancial period. Gross premium income include premiums in relation to inwards facultative business, inwards proportional treaty reinsurance and inwards non-proportional treaty reinsurance. 146 Inwards facultative reinsurance premiums are recognised in the inancial period in respect of the facultative risk assumed during the particular inancial period following individual risks inception dates. 2 0 1 4 A N N U A L R E P O R T Inwards proportional treaty reinsurance premiums are recognised on the basis of periodic advices received from cedants given that the periodic advices relect the individual underlying risks being incepted and reinsured at various inception dates of these risks and contractually accounted for under the terms of the proportional reinsurance treaty. Premium income on inward non-proportional treaties, which cover losses occurring during a speciied treaty period, are recognised based on the contractual premiums already established at the start of the treaty period under the terms and conditions of each contract. (ii) Premium liabilities Premium liabilities represent the reinsurance subsidiary s future obligations on insurance contracts as represented by premiums received for risks that have not yet expired. The movement in premium liabilities is released over the term of the insurance contracts and is recognised as premium income. Premium liabilities are reported at the higher of the aggregate of the unearned premium reserves ( UPR ) for all lines of business or the best estimate value of the reinsurance subsidiary s unexpired risk reserves ( URR ) and a provision of risk margin for adverse deviation ( PRAD ) calculated at 75% conidence level at the end of the inancial year. (a) Unexpired risk reserves The URR is a prospective estimate of the expected future payments arising from future events insured under policies in force as at the end of the inancial year and also includes allowance for expenses, including overheads and cost of reinsurance, expected to be incurred during the unexpired period in administering these policies and settling the relevant claims, and shall allow for expected future premium refunds. URR is estimated via an actuarial valuation performed by a qualiied actuary, using a mathematical method of estimation similar to incurred but not reported ( IBNR ) claims.

2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.4 General reinsurance underwriting results (cont d) (ii) Premium liabilities (cont d) (b) Unearned premium reserves The UPR represent the portion of the net premiums of reinsurance policies written that relate to the unexpired periods of the policies at the end of the inancial year. The methods of computation of UPR are as follows: For inwards proportional treaty business, UPR is computed on the 1/8th method commencing from the quarter corresponding to the reporting quarter of the treaty statement; 147 For inwards non proportional treaty business, UPR is computed at 1/2 of the last quarter Minimum Deposit Premiums received; and For inwards facultative policies, UPR is computed on the 1/8th method commencing from the date of inception. (iii) Claim liabilities The amount of outstanding claims is the best estimate value of claim liabilities, which include provision for claims reported, claims incurred but not enough reserved ( IBNER ), IBNR claims together with related expenses less recoveries to settle the present obligation as well as a PRAD calculated at 75% conidence level at the end of the inancial year. Liabilities for outstanding claims are recognised as advised by the ceding companies. IBNER and IBNR claims are based on an actuarial valuation by a qualiied actuary, using a mathematical method of estimation based on, amongst others, actual claims development pattern. (iv) Liability adequacy test At each reporting date, the Group reviews all insurance contract liabilities to ensure that the carrying amount of the liabilities is suficient or adequate to cover the obligations of the Group, contractual or otherwise, with respect to insurance contracts issued. In performing this review, the Group compares all contractual cash lows against the carrying value of insurance contract liabilities. Any deiciency is recognised in the income statement. The estimation of claim and premium liabilities performed at reporting date is part of the liability adequacy tests performed by the Group. M N R B H O L D I N G S B E R H A D (v) Acquisition cost The cost of acquiring and renewing reinsurance business net of income derived from ceding reinsurance premiums are recognised as incurred and properly allocated to the periods in which it is probable they give rise to income.

NOTES TO THE FINANCIAL STATEMENTS (CONT D) - 31 MARCH 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.5 General takaful fund The general takaful fund is maintained in accordance with the IFSA 2013 and consists of AFS reserves and the accumulated surplus/deicit in the fund. Underwriting deicit will be made good by the shareholder s fund via a loan or Qard. 148 Surplus distributable to the participants is determined after deducting retakaful costs, net claims incurred, wakalah fees, other operating expenses, taxation and surplus administration charges transferred to the shareholder s fund of the takaful subsidiary, and adjusting for contribution liabilities and impairment of takaful receivables. The surplus may be distributed to the shareholder and participants in accordance with the terms and conditions prescribed by the Shariah Committee of the takaful subsidiary. 2 0 1 4 A N N U A L R E P O R T General takaful revenue consists of gross takaful contributions and investment income. Revenue is accounted for on an accrual basis as approved by the takaful subsidiary s Shariah Committee. Unrealised income is deferred and receipts in advance are treated as liabilities in the statement of inancial position. (i) Takaful contribution income Contribution from direct and facultative inwards businesses are recognised as soon as the amount of contribution can be reliably measured in accordance with the principles of Shariah. Contributions are recognised in a inancial period in respect of risks assumed during that particular inancial period. (ii) Takaful contribution liabilities Contribution liabilities represent the general takaful fund s future obligations on takaful contracts as represented by contributions received for risks that have not yet expired. The movement in contribution liabilities is released over the terms of the takaful contracts and recognised as earned contribution income. Contribution liabilities are reported at the higher of the aggregate of the unearned contribution reserves ( UCR ) for all lines of business or the best estimate value of the takaful fund s URR and PRAD calculated at 75% conidence level at the end of the inancial year. (a) Unexpired risk reserves URR is a prospective estimate of the expected future payments arising from future events expected to be incurred as at the end of the inancial year and also includes allowance for expenses, including cost of retakaful, expected to be incurred during the unexpired period in administering these contracts and settling the relevant claims, and shall allow for expected future contribution refunds. URR is estimated via an actuarial valuation performed by a qualiied actuary, using a mathematical method of estimation similar to IBNR claims.

2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.5 General takaful fund (cont d) (ii) Takaful contribution liabilities (cont d) (b) Unearned contribution reserves The UCR represent the portion of net contribution income of takaful contracts written that relate to the unexpired periods of the contracts at the end of the reporting period. The UCR is calculated on net contribution income with a further deduction for Wakalah fee expenses to relect the Wakalah business principle. In determining the UCR at the end of the inancial year, the method that most accurately relects the actual unearned contribution is used as follows: 149 Time apportionment method for all classes of general takaful business within Malaysia except Marine and Aviation Cargo; and 25% method for Marine and Aviation Cargo. (iii) Claim liabilities Claims and settlement costs that are incurred during the inancial year are recognised when a claimable event occurs and/or the takaful subsidiary is notiied. The amount of outstanding claims is the best estimate of the expenditure required together with related expenses less recoveries to settle the obligation at the end of the inancial year. Claim liabilities are valued at the best estimate which include provision for claims reported, IBNER claims and IBNR claims together with related claims handling costs and reduction for the expected value of salvage and other recoveries and a PRAD which is calculated at 75% conidence level. IBNER and IBNR claims are based on an actuarial valuation by a qualiied actuary, using a mathematical method of estimation based on, amongst others, actual claims development patterns. (iv) Liability adequacy test At each reporting date, the Group reviews all general takaful contract liabilities to ensure that the carrying amount of the liabilities is suficient or adequate to cover the obligations of the Group, contractual or otherwise, with respect to general takaful contract issued. In performing this review, the Group compares all contractual cash lows against the carrying value of general takaful contract liabilities. Any deiciency is recognised in the income statement. M N R B H O L D I N G S B E R H A D (v) Commission earned Commission earned, net of expense paid, from retakaful in the course of ceding/accepting contributions to/from retakaful operators are recognised in the income statement, as incurred and properly allocated to the periods in which it is probable they give rise to income. This is in accordance with the principles of Wakalah as approved by the Shariah Committee and as agreed between the participants and the takaful subsidiary.

NOTES TO THE FINANCIAL STATEMENTS (CONT D) - 31 MARCH 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.6 Family takaful fund The family takaful fund is maintained in accordance with the IFSA 2013 and consists of AFS reserves, revaluation surplus and the accumulated surplus/deicit in the fund. 150 The family takaful fund surplus/deicit is determined by an annual actuarial valuation of the family takaful fund. Any actuarial deicit in the family takaful fund will be made good by the shareholder s fund via a loan or Qard. Surplus distributable to the participants is determined after deducting beneits paid and payable, retakaful, provisions, reserves, wakalah fees, taxation and surplus administration charges transferred to the shareholder s fund. The surplus may be distributed to the shareholder and participants in accordance with the terms and conditions prescribed by the Shariah Committee of the takaful subsidiary. 2 0 1 4 A N N U A L R E P O R T Family takaful revenue consists of gross takaful contributions and investment income. Revenue is accounted for on an accrual basis and as approved by the takaful subsidiary s Shariah Committee. Unrealised income is deferred and receipts in advance are treated as liabilities on the statement of inancial position. (i) Takaful contribution income Takaful contribution is recognised as soon as the amount of contribution can be reliably measured in accordance with the principles of Shariah. First year contribution is recognised on assumption of risks and subsequent takaful contributions are recognised on due dates. Takaful contributions outstanding at the reporting date is recognised as income for the period provided they are within the grace period allowed for payment and there are suficient funds available in the participants accounts to cover such contributions due. (ii) Provision for outstanding claims Claims and settlement costs that are incurred during the inancial year are recognised when a claimable event occurs and/or the takaful subsidiary is notiied. Claims and provisions for claims arising on family takaful contracts, including settlement costs, are accounted for using the case basis method, and for this purpose, the beneits payable under a takaful contract are recognised as follows: (a) maturity or other contract beneit payments due on speciied dates are treated as claims payable on due dates; and (b) death, surrender and other beneits without due dates are treated as claims payable on receipt of intimation of death of the contract holder or occurrence of contingency covered. (iii) Creation/cancellation of units Amounts received for units created represent contributions paid by participants or unitholders as payment for new contracts or subsequent payments to increase the amount of the contracts. Creation/cancellation of units are recognised in the inancial statements at the next valuation date, after the request to purchase/sell units are received from the participants or unitholders.