BIMB Integrated Annual Report 2017

17. INTANGIBLE ASSETS BANCATAKAFUL SERVICE FEES RM’000 Takaful Cost At 1 January 2016/31 December 2016/1 January 2017 61,321 Additions 17,000 At 31 December 2017 78,321 Amortisation At 1 January 2016 (5,110) Amortisation during the year (12,264) At 31 December 2016/1 January 2017 (17,374) Amortisation during the year (13,115) At 31 December 2017 (30,489) Carrying amounts At 1 January 2016 56,211 At 31 December 2016/1 January 2017 43,947 At 31 December 2017 47,832 Bancatakaful Service Agreement with RHB Islamic Bank Berhad On 26 August 2015, Takaful Malaysia and RHB Islamic Bank (“RHB”) entered into a Bancatakaful Service Agreement to distribute Family and General Takaful products via RHB’s distribution channels. The term of the Agreement is divided over two periods, where the First Period is for the first five years of the term commenced 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. The intangible asset is amortised over its useful life of five years using the straight-line method. Bancatakaful Service Agreement with Affin Islamic Bank Berhad On 4 October 2017, Takaful Malaysia and Affin Islamic Bank Berhad (“Affin”) have entered into a five year term Bancatakaful Service Agreement to distribute Family and General takaful products via the Affin’s distribution channels. The intangible asset is amortised over its useful life of five years using the straight-line method. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 214 BIMB HOLDINGS BERHAD Integrated Annual Report 2017