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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

17 INTANGIBLE ASSETS (CONTINUED)
the intangible assets, other than software, are in relation to the followings:
(i) bancatakaful Service agreement with rhb islamic bank (rhb) pursuant to the term of the bancatakaful Service agreement
(the agreement) entered on 26 august 2015, whereby the company can distribute its family takaful products via rhb
islamic bank’s distribution channel.
the term of the agreement is divided over two periods, where the first Period is for the five years of the term commencing

inteGrated annUal rePort 2020 (ii) the agreement at the expiry of the first Period. the first Period of the agreement has expired on 31 July 2020 and the
on the agreement date and the Second Period is for the subsequent five years. either Party has the right to terminate
agreement is terminated thereafter.
bancatakaful Service agreement with affin islamic bank berhad which is effective from 15 September 2017 to distribute
family takaful products via their distribution channel.
bancatakaful Service agreement with bank Kerjasama rakyat malaysia berhad which is effective from 1 July 2018 to
(iii)
distribute family takaful products via their distribution channel.
(iv) bancatakaful Service agreement with aeon credit Service (m) berhad which is effective from 1 august 2019 to distribute
234 family takaful products via their distribution channel.
(v) two bancatakaful Service agreement with rhb which are effective from 1 august 2020 to distribute family credit takaful
products and General takaful products via their distribution channel.
bimb holdinGS berhad 199701008362 (423858-X) bancatakaful Service agreement was valued at the present value of projected future cash flows to be derived from the tenure
the intangible assets are amortised over its useful life of five years using the straight-line method or units-of-production
method respectively. in the impairment assessment conducted, the future economic benefits that are attributable to all of the

of the agreement using the discounting cash flow model.

the following key assumptions have been used in cash flow projections in respect of the bancatakaful Service agreement:
Key assumptions
2019
2020
discount rate – pre tax

Sensitivity to changes in key assumptions 11% 11%
management considers that it is not reasonably possible for the abovementioned key assumptions to change so significantly
that would result in impairment.