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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

57 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) COVID-19 effects
the World health organisation declared the outbreak of coronavirus disease (covid-19) as a global pandemic in march
2020. the direct and indirect effects of the covid-19 outbreak have impacted the global economy, markets and the
Group’s counterparties and clients.
the covid-19 effects have a material negative impact on the Group’s results of operations. in particular, the process to
inteGrated annUal rePort 2020 degree of judgement. changes in the estimates and assumptions can result in significant changes in ecl. the Group
determine expected credit losses (‘ecl’) requires numerous estimates and assumptions, some of which require a high

is not able to predict the covid-19’s potential future direct or indirect effects other than as disclosed in note 49.3 (iii).
however, the Group is taking actions to mitigate the impacts, and will continue to closely monitor the impact and the
related risks as they evolve.
proposed placement, proposed Scheme of Arrangement (“SOA”), proposed Internal Reorganisation,
(b)
proposed Distribution and Capital Repayment and proposed Transfer of Listing Status (collectively referred to
as the ‘proposals’)
on 11 december 2019, bimb holdings berhad (“bhb”) had announced and proposed to undertake the following
336
proposals:
(i) proposed placement
bimb holdinGS berhad 199701008362 (423858-X) (ii) proposed Scheme of Arrangement
Proposed Placement of new ordinary shares in bhb to raise gross proceeds of up to rm800 million. the proceeds
together with internal cash will be used to fully settle bhb’s outstanding sukuk.

Proposed payment to the warrantholder of the outstanding warrants 2013/2023 of bhb by way of a scheme of
arrangement under section 366 of the companies act 2016 (“the act”). the total warrants consideration to be
paid by bhb will be funded using internally generated funds of bhb.
proposed Internal Reorganisation
(iii)
bhb proposes to undertake the Proposed internal reorganisation which will entail the disposal by bhb of its entire
shareholdings in the identified subsidiaries namely bimb Securities (holdings) Sdn. bhd., bimb Securities Sdn. bhd.
and Syarikat al-ijarah Sdn. bhd. to its wholly owned subsidiary, bank islam malaysia berhad (“bank islam” or “the
bank”) to be fully settled in cash. the consideration for these disposals will be based on the latest audited net asset
value of these subsidiaries at the time of the signing of the share sale agreement with the bank and will be funded
using internally generated funds of the bank.
(iv) proposed Distribution and Capital Repayment
Proposed distribution of the entire shareholdings of bhb in the bank and Syarikat takaful malaysia Keluarga
berhad (“StmKb”) by way of distribution-in-specie via a reduction and repayment of the entire share capital of
bhb in accordance with Section 115 and Section 116 of the act as well as using the retained earnings of bhb.

Prior to the Proposed distribution and capital repayment, bhb will undergo a capital reduction and the bank will
undertake a share consolidation. this is to match bhb’s outstanding shares so that the distribution of the bank
shares will be on a one-for-one basis.
Upon completion of the proposed distribution and capital repayment, bhb’s shareholders will hold direct equity
interest in the bank and StmKb shares in proportion to their shareholding in bhb and bhb will cease to be a
shareholder of the bank and StmKb. the shareholders through their direct exposure in bank islam and StmKb
can manage their investment exposure or rebalance their portfolios in banking and takaful industries according to
their own investment objectives.
concurrently with the completion of the proposed distribution and capital repayment, bhb will issue two (2) new
bhb shares to the bank such that bhb will become a wholly-owned subsidiary of bank islam.