BIMB Integrated Annual Report 2019

17 INTANGIBLE ASSETS (CONTINUED) The intangible assets are in relation to the followings: (i) Bancatakaful Service Agreement with RHB Islamic Bank (RHB) pursuant to the termof 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 on the agreement date and the Second Period is for the subsequent five years. Either Party has the right to terminate the Agreement at the expiry of the First Period. Subject to the commencement of the Second Period, a service fee of RM45,000,000 (inclusive of Goods and Services Tax) will be payable to RHB. (ii) Bancatakaful Service Agreement with Affin Islamic Bank Berhad which is effective from 15 September 2017 to distribute Family takaful products via their distribution channel. (iii) Bancatakaful Service Agreement with Bank Kerjasama Rakyat Malaysia Berhad which is effective from 1 July 2018 to 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 Family takaful products via their distribution channel. The intangible assets are amortised over its useful life of five years using the straight-line method. In the impairment assessment conducted, the future economic benefits that are attributable to all of the Bancassurance Service Agreement was valued at the present value of projected future cash flows to be derived from the tenure 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 2018 Discount rate – pre tax 11% 11% Sensitivity to changes in key assumptions Management considers that it is not reasonably possible for the abovementioned key assumptions to change so significantly that would result in impairment. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 234 Integrated Annual Report 2019 Group Overview Sustaining The Group Management Discussion & Analysis Group Governance