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We refer to the earlier announcements on the above.

The Board of Directors of AFFIN is pleased to announce that the Company had on 7 February 2006 entered into a conditional joint venture agreement with AXA (“JVA”) in relation to the Proposed JV.

Set out in the ensuing paragraphs are further details on the Proposed JV.

2.1 Particulars

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    Pursuant to the Proposed JV, a joint venture company (“JVCo”) would be incorporated where AFFIN and AXA shall be the two (2) shareholders to undertake the life insurance business in Malaysia.

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    JVCo shall then assume the rights and obligations of AFFIN and AXA under the business transfer agreement for the proposed acquisition of the life insurance business of Tahan dated 18 November 2005 (“BTA”).

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    The authorised share capital of JVCo will be RM1,000,000,000 comprising 1,000,000,000 ordinary shares of RM1.00 each.

2.2 Salient terms of JVA

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      Among the salient terms of the JVA are as follows:-

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      (i) JVCo will undertake the business of promoting, distributing and selling life insurance products in Malaysia under the name of “AXA AFFIN Life”;

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      (ii) The parties shall increase the initial and paid-up share capital of JVCo to such an amount as is required for JVCo to meet its payment obligations under the BTA and to comply with the capital and minimum solvency and other requirements, and AFFIN and AXA shall subscribe for new shares in JVCo at par value so that, following such subscription and allotment of such shares, AFFIN and AXA shall hold the following percentage holdings in the total number of shares of JVCo:-

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          AFFIN 51.00%
          AXA 49.00%

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      (iii) The parties’ obligations under the JVA are conditional on the following:-

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          (a) the approval of Bank Negara Malaysia for the scheme of transfer of the assets and liabilities of Tahan to JVCo (“Scheme of Transfer”);

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          (b) the confirmation of the High Court of Malaya for the Scheme of Transfer;

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          (c) the approval of the Foreign Investment Committee (“FIC”);

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          (d) the approval of each of the Minister of Finance and BNM in respect of the bancassurance agreement to be entered into by Affin Bank Berhad and the relevant AFFIN Group entities with JVCo; and

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          (e) JVCo having been granted a licence to carry on life insurance business as an insurance company under the Insurance Act, 1996.

The Proposed JV will enable the AFFIN Group to tap into the AXA Group’s vast experience in insurance business globally, in particular, the life insurance business. The Proposed JV will also enable JVCo to leverage on AXA’s brand name which is globally accepted.

Additionally, the Proposed JV will strengthen and complement the existing relationship between AFFIN and AXA which had been fostered through AXA AFFIN Assurance Berhad, a 40% owned associate company of AFFIN involved in general insurance business.

The Proposed JV is conditional upon, inter alia the following approvals:-

(i) FIC;

(ii) BNM (if required); and

(ii) any other authorities, if required.

The Proposed JV is not subject to the approval of the shareholders of AFFIN.

None of the Directors or substantial shareholders of AFFIN or persons connected to them have any interest, direct or indirect, in the Proposed JV.

6.1 On share capital and substantial shareholders’ shareholdings

The Proposed JV will not have any effect on the issued and paid up share capital and substantial shareholders’ shareholdings of AFFIN.

6.2 On earnings

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    The Proposed JV is not expected to have a material effect on the earnings of the AFFIN Group for the financial year ending 31 December 2006.

6.3 On net asset (“NA”)

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    The Proposed JV does not have an immediate effect on the NA of AFFIN Group.

The Board of Directors of AFFIN is of the opinion that the terms of the Proposed JV are fair and reasonable and are in the best interest of the AFFIN Group.

Barring unforeseen circumstances, the Proposed JV is expected to be completed by the second quarter of 2006.

To the best knowledge of the Board, the Proposed JV has not departed from the Securities Commission’s Policies and Guidelines on Issue/ Offer of Securities.

The JVA dated 7 February 2006 will be made available at the Company’s registered office at 1st Floor, Bangunan LTAT, Jalan Bukit Bintang, 55100 Kuala Lumpur from Mondays to Fridays (except public holidays) during business hours for a period of 3 months from the date of this announcement.