LPI Capital : Annual General Meeting 2023

LPI External - Confidential

Draft as at 14/4/23

LPI CAPITAL BHD 196201000175 (4688-D)

(Incorporated in Malaysia)

Minutes of the 62nd Annual General Meeting (AGM) conducted as a virtual AGM at the Broadcast Venue at 29th Floor, Menara Public Bank, 146 Jalan Ampang, 50450 Kuala Lumpur, Malaysia on Wednesday, 12 April 2023 at 11.00 a.m.

PRESENT AT	DIRECTORS
BROADCAST	Mr Tee Choon Yeow - Chairman of Meeting
VENUE :	(Independent Non-Executive Chairman)
	Mr Tan Kok Guan
	(Executive Director/ Chief Executive Officer)
	IN ATTENDANCE
	Ms Kong Thian Mee
	(Company Secretary)
PARTICIPATED	DIRECTORS
REMOTELY :	Mr Lee Chin Guan
	(Independent Non-Executive Director)
	Mr Quah Poh Keat
	(Non-IndependentNon-Executive Director)
	Ms Chan Kwai Hoe
	(Independent Non-Executive Director)
	Ms Soo Chow Lai
	(Independent Non-Executive Director)
	Dato' Chia Lee Kee
	(Independent Non-Executive Director)
	SHAREHOLDERS AND PROXIES
	The attendance of shareholders, corporate
	representative and proxies via https://tiih.online
	as per Attendance List in Appendix I.
	BY INVITATION - AUDITORS
	Ms Lee Yeit Yeen
	(External Auditors, Messrs. KPMG PLT)

1

LPI External - Confidential

WELCOME ADDRESS

On behalf of the Board, Mr Tee Choon Yeow, the Chairman of Meeting welcomed all the participants to the Meeting.

INTRODUCTION

The Chairman of Meeting informed the Meeting of the following :-

1. The Board had resolved that the 62nd AGM of the Company be convened as a virtual meeting, and be carried out in the manner as guided by the Securities Commission Malaysia Guidance on the Conduct of General Meetings for Listed Issuers and the Companies Act 2016.
2. Shareholders and proxies were not allowed to be physically present for the 62nd AGM as this was a virtual meeting. Instead, shareholders and proxies were invited to participate remotely by using the Remote Participation and Voting (RPV) facilities.
3. This AGM was conducted with only the essential individuals present at the broadcast venue.

The Chairman of Meeting introduced himself and those who were present at the broadcast venue, namely the Executive Director cum Chief Executive Officer (CEO), Mr Tan Kok Guan, and the Company Secretary, Ms Kong Thian Mee. He further introduced the following Directors who had participated in the AGM remotely :-

1. Mr Lee Chin Guan - Independent Non-Executive Director
2. Mr Quah Poh Keat - Non-IndependentNon-Executive Director
3. Ms Chan Kwai Hoe - Independent Non-Executive Director
4. Ms Soo Chow Lai - Independent Non-Executive Director
5. Dato' Chia Lee Kee - Independent Non-Executive Director

REMOTE PARTICIPATION AND VOTING PROCEDURE (RPV)

The Chairman of Meeting explained that pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Company must ensure that all resolutions set out in the Notice of the 62nd AGM be voted by poll.

2

LPI External - Confidential

The Chairman of Meeting further informed that the Company had appointed the Share Registrar, Tricor Investor & Issuing House Services Sdn Bhd (Tricor), as Poll Administrator to conduct the online remote voting, while Deloitte Business Advisory Sdn Bhd (Deloitte) had been appointed as Scrutineers to validate the votes cast at the 62nd AGM.

The online remote voting for the resolutions had commenced at the beginning of the Meeting.

The RPV procedure was briefed by Tricor.

QUORUM

The Company Secretary confirmed that the requisite quorum for 62nd AGM was met, and the Meeting was called to order at 11.00 a.m. by the Chairman of Meeting.

NOTICE OF MEETING

In accordance with Best Practices of the Malaysian Code on Corporate Governance by Securities Commission, the Company had given at least 28 days' Notice of the Company's 62nd AGM to the shareholders. The notice convening the Meeting, having been circulated to all the members of the Company well within the regulatory requirements, was taken as read.

ORDINARY BUSINESS

AUDITED FINANCIAL STATEMENTS

AND REPORTS OF DIRECTORS AND AUDITORS

The Audited Financial Statements of the Company and the Group for the financial year ended 31st December 2022 and the Reports of the Directors and Auditors having been despatched to shareholders in accordance with the Company's Constitution and Bursa Malaysia Listing Requirements, were laid before the Meeting.

Shareholders' approval was not required for the Audited Financial Statements pursuant to Sections 248(2) and 340(1)(a) of the Companies Act 2016. Hence, this matter was not put for voting.

3

LPI External - Confidential

The Chairman of Meeting invited Mr Tan Kok Guan (Mr Tan KG), the Executive Director cum CEO to present the LPI Group's performance in 2022 to shareholders, which was reflected as below :-

Financial Performance

Malaysia relaxed its COVID-19 rules following a dip in infections in early 2022. Driven by the reopening of all economic sectors, Malaysia registered impressive Gross Domestic Product growth for the first nine (9) months of 2022. However, geopolitical tensions and inflationary pressures have disrupted the global economic recovery. The global slowdown had affected Malaysia's growth momentum in the final Quarter of 2022.

In financial year 2022, LPI Group's performance was affected by significant changes to the operating environment as the domestic economy reopened following two years of pandemic-related restrictions under the Movement Control Order (MCO). While the resumption of business and social activities catalysed a return to growth, it also gives rise to insurance claims returning to pre-pandemic level following a significant decline over the past two years. As a result of the normalisation of claims, the Group's profitability had deteriorated on a year-on- year basis.

For the twelve (12) months ended 31 December 2022, LPI registered its Revenue at RM1.66 billion, 3.5% lower as compared to RM1.72 billion achieved in financial year 2021, mainly due to lower Gross Earned Premium reported by Lonpac Insurance Bhd (Lonpac).

The LPI Group registered a 14.6% lower Profit Before Tax at RM373.5 million as compared to RM437.3 million recorded in financial year 2021 contributed by lower underwriting profit reported by Lonpac. Net Profit Attributable to Shareholders came in at RM276.6 million, 19.8% lower from RM344.7 million achieved in financial year 2021, partly affected by the implementation of a one-off Prosperity Tax for 2022.

For the financial year 2022, LPI's Net Return in Equity was reported at 12.7%, reduced from 16.1% in financial year 2021. Its Earnings Per Share for the year under review, registered at 69.43 sen, as compared to 86.52 sen achieved in financial year 2021.

Lonpac, the wholly-owned insurance subsidiary of LPI, reported a 14.9% lower Profit Before Tax at RM338.0 million for financial year 2022 as compared to RM397.0 million achieved in financial year 2021. The lower profitability of Lonpac was mainly due to the poorer performance of its underwriting operations.

4

LPI External - Confidential

For the twelve (12) months ended 31 December 2022, Lonpac's Claims Incurred Ratio increased to 44.0% from 36.5% reported in financial year 2021. Higher claims frequency and increased claims costs arising from inflationary pressures contributed to the higher claims ratio. Motor, Engineering and Medical classes of insurance reported deteriorating claims experience for the period under review.

With Management Expenses Ratio at 21.2% and Commission Ratio at 6.0%, Lonpac's Combined Ratio for financial year 2022 jumped to 71.2% from 62.5% reported in financial year 2021 mainly due to claims normalisation process in 2022. As a result, its Underwriting Profit was 24.9% lower at RM285.1 million from RM379.7 million achieved in the previous corresponding period.

Despite the competitive market environment, Lonpac managed to improve its Gross Premium Income by 4.3% to RM1.63 billion from RM1.56 billion written in the financial year of 2021, in line with the country's economic performance.

Fire Insurance remained the core portfolio of business of Lonpac contributing 40.5% of its total Gross Written Premiums while Motor Insurance contributed 22.8%, Miscellaneous class of insurance 30.7% and Marine & Aviation 6.0%. Fire Insurance remained the biggest contributor to Lonpac's underwriting profit.

Despite the lower profitability reported by the Group in financial year 2022 as compared to 2021, the Board of Directors had declared a second interim dividend of 35 sen per share which was paid on 2nd March 2023. This second interim dividend payment which amounts to RM139.4 million was part of the Group's efforts to reward shareholders for their continued support. Together with the first interim dividend of 25 sen per share amounting to RM99.6 million which was paid in August 2022, the total dividend payout for financial year 2022 was RM239 million representing 86.4% of the Group's Net Profit Attributable to Shareholders.

Questions from Minority Shareholder Watch Group (MSWG)

On behalf of the Board, the CEO answered the questions raised by MSWG as per their letter dated 16 March 2023. The questions from MSWG and the answers provided by the Board were as follow :-

Operational & Financial Matters

Question 1

LPI recorded lower operating revenue after ten years of consecutive growth to RM1.66 billion compared to RM1.72 billion in FY2021. The decline was due to lower gross earned premiums and dividend income received.

5