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216 EXIM BANK MALAYSIA
Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS

44. ISLAMIC BUSINESS FUNDS (CONT’D.)
Notes to the financial statements for Islamic business fund and Takaful fund for the financial year ended 31 December
2020 (cont’d.)

(i) (Writeback)/allowances for expected credit losses on advances and financing
Group and Bank
2020 2019
RM’000 RM’000

Allowances for expected credit losses on advances and financing
- 12-month ECL - Stage 1, net (5,497) (29,235)
- Lifetime not impaired ECL - Stage 2, net 15,211 12,994
- Lifetime ECL credit impaired - Stage 3, net 26,036 193,595
- Lifetime ECL written back - Stage 3, net (43,301) (291,543)
- Bad debts written off 4,496 170,113

(3,055) 55,924

(j) Takaful participants fund

2020 2019
RM’000 RM’000

Takaful participants fund
Accumulated deficit (i) (11,483) (9,674)
Qard (ii) 11,483 9,674
- -

The deficit in the Takaful participant fund is covered by the Qard from Shareholders’ funds. Qard represents a benevolent
financing to the Takaful participants fund to make good any underwriting deficit experienced during a financial period. The
amount is unsecured, not subject to any profit elements and has no fixed terms of repayment. The management expects
to recover the balance from future profits of Takaful participants fund.
Measurement and impairment of Qard

Any deficit in the Takaful fund is made good via a benevolent financing, or Qard, granted by the Islamic business fund. Qard
is stated at cost less any accumulated impairment losses in the Islamic business fund. In the Takaful fund, Qard is stated
at cost. The Qard shall be repaid from future surpluses of the Takaful fund.

Qard is tested for impairment on an annual basis via an assessment of the estimated surpluses or cash flows from
the Takaful fund to determine whether there is objective evidence of impairment. If the Qard is impaired, an amount
comprising the difference between its carrying amount and its recoverable amount, less any impairment loss previously
recognised, is recognised in the statements of profit and loss.