Annual Report (POST MSIA)2011-2012 (2)

March 25, 2018 | Author: Rehairah Munirah | Category: Board Of Directors, Corporate Governance, Governance, Sustainability, Corporate Social Responsibility
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CORPORATE INFORMATIONBoard Committees Audit Committee Datuk Low Seng Kuan Chairman/Senior Independent Non-Executive Director Dato’ Wee Hoe Soon @ Gooi Hoe Soon Independent Non-Executive Director Dato’ Lukman bin Ibrahim Non-Independent Non-Executive Director Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director Datuk Low Seng Kuan Senior Independent Non-Executive Director Dato’ Krishnan a/l Chinapan Independent Non-Executive Director Eshah binti Meor Suleiman Non-Independent Non-Executive Director Information and Communications Technology Committee Dato’ Lukman bin Ibrahim Chairman/Non-Independent Non-Executive Director Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director Datuk Low Seng Kuan Senior Independent Non-Executive Director Share Registrar Tricor Investor Services Sdn Bhd (Company No: 118401-V) Level 17, The Gardens Nor th Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 603-22643883 Fax : 603-22821886 Tender Board Committee Eshah binti Meor Suleiman Chairperson/Non-Independent NonExecutive Director Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director Dato’ Lukman bin Ibrahim Non-Independent Non-Executive Director Dato’ Krishnan a/l Chinapan Independent Non-Executive Director Auditors KPMG (AF 0758) Char tered Accountants Company Secretary Dato’ Sabrina Albakri binti Abu Bakar (LS 8508) Bankers HSBC Amanah Malaysia Berhad Malayan Banking Berhad CIMB Bank Berhad Board Nomination and Remuneration Committee Dato’ Sri Haji Mohd Khamil bin Jamil Non-Independent Non-Executive Chairman Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director Registered Office Tingkat 8, Ibu Pejabat Pos Kompleks Dayabumi 50670 Kuala Lumpur Tel : 603-22672267 Fax : 603-22672266 Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad Pos Malaysia Berhad annual report 2012 pg 61 GROUP STRUCTURE SUBSIDIARIES No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Prestige Future Sdn Bhd PSH Venture Capital Sdn Bhd PSH Express Sdn Bhd PSH Capital Par tners Sdn Bhd PSH Allied Berhad PSH Proper ties Sdn Bhd Effivation Sdn Bhd Real Riviera Sdn Bhd Datapos (M) Sdn Bhd Pos Takaful Agency Sdn Bhd PMB Proper ties Sdn Bhd Digicer t Sdn Bhd Pos Malaysia & Services Holdings Berhad Poslaju (M) Sdn Bhd PSH Investment Holdings (BVI) Ltd Pos Ar-Rahnu Sdn Bhd (formerly known as Bright Emerald Sdn Bhd) Name of Company Shareholder (s) PSH Capital Par tners Sdn Bhd Pos Malaysia Berhad PSH Venture Capital Sdn Bhd Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad PSH Proper ties Sdn Bhd PSH Proper ties Sdn Bhd Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia Berhad Pos Malaysia & Services Holdings Berhad Pos Malaysia Berhad Bank Muamalat Malaysia Berhad Percentage of Shareholding 100% 100% 100% 100% 100% 100% 99.99% 0.01% 100% 100% 100% 100% 100% 100% 100% 100% 80% 20% ASSOCIATES No. 1 2 3 4 5 CEN Sdn Bhd PosPay Exchange Sdn Bhd Elpos Print Sdn Bhd CEN Worldwide Sdn Bhd CEN Technology Sdn Bhd Name of Company Shareholder (s) Pos Malaysia Berhad Transmile Group Berhad Pos Malaysia Berhad Fask Capital Sdn Bhd Econlink Sdn Bhd Pos Malaysia Berhad CEN Sdn Bhd CEN Sdn Bhd Chay Wai Lan Percentage of Shareholding 42.5% 57.5% 50% 50% 60% 40% 100% 50% 50% pg 62 Pos Malaysia Berhad annual report 2012 Pos Malaysia Berhad annual report 2012 pg 63 Asia General Insurance Berhad Uni. following which.BOARD OF DIRECTORS Dato’ Sri Haji Mohd Khamil bin Jamil Non-Independent Non-Executive Chairman Dato’ Sri Haji Mohd Khamil bin Jamil. Dato’ Sri Haji Mohd Khamil is a Director of Etika Strategi Sdn Bhd.Asia Life Assurance Berhad Dato’ Sri Haji Mohd Khamil attended all seven (7) Board meetings held subsequent to his appointment during the financial period under review. pg 64 Pos Malaysia Berhad annual report 2012 . a Malaysian. He was called to the Malaysian Bar in September 1990. Dato’ Sri Haji Mohd Khamil is also the Chairman of the Board Nomination and Remuneration Committee. where he served until December 1989. was appointed to the Board on 4 July 2011 as Non-Independent Non-Executive Director and was thereafter re-designated as Non-Independent Non-Executive Chairman on 15 July 2011. Par ticulars of other directorships in public companies: DRB-HICOM Berhad (Group Managing Director) Proton Holdings Berhad (Executive Chairman) Edaran Otomobil Nasional Berhad Bank Muamalat Malaysia Berhad HICOM Berhad HICOM Holdings Berhad Horsedale Development Berhad Uni. 56. He has not been convicted of any offence within the past 10 years. He was recently appointed Executive Chairman of Proton Holdings Berhad and Chairman of Lotus Group International Limited and Group Lotus Plc. England. the holding company of DRB-HICOM Berhad in which he has a 10% shareholding. he became a practising partner of several legal firms before venturing into business in 2001. He was called to the English Bar in 1983. Dato’ Sri Haji Mohd Khamil began his executive career at Bank Bumiputra Malaysia Berhad in August 1980. Dato’ Sri Haji Mohd Khamil holds a Bachelor of Laws (Honours) from the University of London and is a Barristerat-Law at Gray’s Inn. Dato’ Sri Haji Mohd Khamil does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He also holds directorships in several subsidiaries and associate companies of DRB-HICOM Berhad and several private limited companies. Dato’ Sri Haji Mohd Khamil is currently the Group Managing Director of DRB-HICOM Berhad. Prior to that. United Kingdom. He has not been convicted of any offence within the past 10 years. the Tender Board Committee and the Information and Communications Technology Committee. Dato’ Ibrahim holds a Bachelor of Arts (Honours) degree from the University of Malaya and a Master of Business Administration degree from the Manchester Business School. Dato’ Ibrahim is a member of the Board Nomination and Remuneration Committee. a Malaysian. Dato’ Ibrahim is currently the Chairman of Indah Water Konsor tium Sdn Bhd. was appointed to the Board on 22 August 2007 as Non-Independent Non-Executive Director. Pos Malaysia Berhad annual report 2012 pg 65 .BOARD OF DIRECTORS Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director Dato’ Ibrahim Mahaludin bin Puteh. the Audit Committee. he was re-designated as Independent Non-Executive Director. Dato’ Ibrahim had served in various divisions at the Ministry of Finance since 1974 including as Senior Adviser to the Executive Director for South East Asia at the World Bank Group in Washington D. He is also the Chairman of Computer Forms (Malaysia) Berhad since 1 December 2008. Dato’ Ibrahim does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company.C. 60. University of Manchester. His last post prior to his retirement in 2008 was Deputy Secretary General (Policy) in the Ministry of Finance. a position which he held since 1 September 2009. On 25 February 2009. Prasarana Negara Berhad. and former Chairman of Syarikat Par ticulars of other directorships in public companies: Computer Forms (Malaysia) Berhad (Chairman) Dato’ Ibrahim attended eleven (11) out of twelve (12) Board meetings held during the financial period under review. when the Company was corporatised from Jabatan Perkhidmatan Pos. He is also the current President of Transparency International Malaysia. also serves on the Board of a number of private and government-linked corporations. He is currently the Vice-President of the Federation of Malaysian Manufacturers (FMM) and is formerly its President.BOARD OF DIRECTORS Datuk Low Seng Kuan Senior Independent Non-Executive Director Datuk Low Seng Kuan. He graduated from the Footscray Institute of Technology (Victoria University) in Business Studies (Accountancy) and the Royal Melbourne Institute of Technology (RMIT) in Industrial Accountancy. Datuk Low had served as a Board member of the Malaysian Industrial Development Authority (MIDA) and the Malaysian Institute of Economic Research (MIER). a Malaysian. He Datuk Low attended eleven (11) out of twelve (12) Board meetings held during the financial period under review. Earlier. 65. He was the Managing Director of Malaysian Sheet Glass Sdn Bhd until 31 March 2010. Datuk Low is the Chairman of the Audit Committee. He has not been convicted of any offence within the past 10 years. pg 66 Pos Malaysia Berhad annual report 2012 . a member of the Board Nomination and Remuneration Committee as well as the Information and Communications Technology Committee. was appointed Director of the Company on 1 July 1992. Par ticulars of other directorships in public companies: Sunway Berhad Be in Health Berhad Datuk Low does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. Datuk Low was re-designated as Independent NonExecutive Director and was simultaneously appointed Senior Independent Director with effect from 21 August 2007. Following the reorganisation exercise of the Pos Malaysia Group in 2007. Datuk Low has more than 30 years of experience in the manufacturing industry. Datuk Low is a Char tered Accountant by profession and is a member of the Malaysian Institute of Accountants. BOARD OF DIRECTORS Dato’ Krishnan a/l Chinapan Independent Non-Executive Director Dato’ Krishnan a/l Chinapan. He has not been convicted of any offence within the past 10 years. Dato’ Krishnan was re-designated as Independent Non-Executive Director of the Company with effect from 21 August 2007. Dato’ Krishnan is a member of the Board Nomination and Remuneration Committee and the Tender Board Committee. was appointed Director of the Company on 1 July 1992 when the Company was corporatised from Jabatan Perkhidmatan Pos. Dato’ Krishnan does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. Dato’ Krishnan does not hold any directorship in any public company. Dato’ Krishnan is currently a Director of National Land Finance Co-Operative Society Limited. Pos Malaysia Berhad annual report 2012 pg 67 . 65. a Malaysian. Dato’ Krishnan was a Senator in the Parliament from 1986 to 1992. Following the reorganisation exercise of the Pos Malaysia Group in 2007. Nalfin Realities Sdn Bhd and Status Point Sdn Bhd. Dato’ Krishnan attended all twelve (12) Board meetings held during the financial period under review. holding this last post until 2006. He has more than 30 years of experience in the fields of accounting and corporate finance and was Finance Director of several private and public listed companies. in 2001 and Deputy Chairman in 2004. which included mergers and acquisitions as well as corporate debt restructuring exercises undertaken by public listed companies. Dato’ Gooi had been instrumental in the successful implementation of several corporate exercises. He has not been convicted of any offence within the past ten (10) years. was appointed to the Board on 13 August 2007 as Independent Non-Executive Director. In 1999. Dato’ Gooi does not have any family relationship with any Dato’ Gooi is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. Dato’ Gooi was appointed to the Board of Avenue Capital Resources Berhad as a Non-Executive Director and was subsequently appointed Group Managing Director Dato’ Gooi attended eleven (11) out of twelve (12) Board meetings held during the financial period under review. He is a member of the Audit Committee.BOARD OF DIRECTORS Dato’ Wee Hoe Soon @ Gooi Hoe Soon Independent Non-Executive Director Dato’ Wee Hoe Soon @ Gooi Hoe Soon. Par ticulars of other directorships in public companies: EON Capital Berhad (Chairman) MIMB Investment Bank Berhad (Chairman) Weida (M) Bhd (Chairman) Hup Seng Industries Berhad American International Assurance Bhd director and/or substantial shareholder of the Company or any conflict of interest with the Company. He was also the CEO/Executive Director (Dealing) of Avenue Securities Sdn Bhd. 51. a Malaysian. pg 68 Pos Malaysia Berhad annual report 2012 . A. U. Bhd. Dato’ Lukman joined DRB-HICOM in 2008 as Group Chief of Finance Par ticulars of other directorships in public companies: Bank Muamalat Malaysia Berhad meetings held subsequent to his appointment during the financial period under review. Dato’ Lukman was appointed Deputy Chief Executive Officer of Proton Holdings Berhad.S. Dato’ Lukman does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. and the position was later re-designated to Group Chief Financial Officer. on a secondment arrangement from Proton. 46. Pos Malaysia Berhad annual report 2012 pg 69 . Dato’ Lukman is the Chairman of the Information and Communications Technology Committee and a member of the Audit Committee and the Tender Board Committee. Bhd. Dato’ Lukman was the Managing Director of PHN Industry Sdn. Philadelphia. Immediately prior to him joining DRB-HICOM Berhad. he was promoted as Group Chief Operating Officer of DRB-HICOM Berhad. before joining Automotive Corporation (Malaysia) Sdn. Dato’ Lukman also holds directorships in several subsidiaries and associate companies of DRB-HICOM Berhad. He has not been convicted of any offence within the past ten (10) years. in 1990. Dato’ Lukman obtained his Bachelor of Business Administration degree (Magna Cum Laude) in 1989 and Master of Business Administration degree in 1990 from the Temple University. On 1 May 2012. Dato’ Lukman attended six (6) out of seven (7) Board Dato’ Lukman star ted his career in 1989 with Sun Refining and Marketing. was appointed to the Board on 4 July 2011 as NonIndependent Non-Executive Director. a position which he is currently holding. a Malaysian.S. Philadelphia.BOARD OF DIRECTORS Dato’ Lukman bin Ibrahim Non-Independent Non-Executive Director Dato’ Lukman bin Ibrahim.A. He then joined Proton Berhad in 1991 and established his career with Proton where he spent 17 years of his working life. U. In June 2011. He is a Fellow of the Association of Char tered Cer tified Accountants (ACCA). a member of the Malaysian Institute of Cer tified Public Accountants (CPA) and the Malaysian Institute of Accountants (MIA). Puan Eshah attended ten (10) out of twelve (12) Board Puan Eshah obtained her Bachelor of Economics (Honours) degree from the University of Malaya in 1980 and obtained her Master in Business Administration (Finance) degree from the Oklahoma City University. U. In September 2006. was appointed to the Board on 25 February 2009 as Non-Independent Non-Executive Director. She star ted her career in 1981 as Assistant Director (Macro Economic Section) Economic Planning Unit of the Prime Minister’s Department before serving as Assistant Secretary at the Government Procurement Division. Puan Eshah later held various positions in the Ministry of Finance and other Government Agencies.BOARD OF DIRECTORS Eshah binti Meor Suleiman Non-Independent Non-Executive Director Puan Eshah binti Meor Suleiman.S. Par ticulars of other directorships in public companies: Global Maritime Ventures Berhad Telekom Malaysia Berhad (Alternate Director) Malaysia Airpor ts Holdings Berhad Malaysian Airline System Berhad (Alternate Director) meetings held during the financial period under review. Minister of Finance (Incorporated) and Privatisation Division of the Ministry of Finance Malaysia. 57.A in 1994. Puan Eshah does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. a Malaysian. she was promoted to her current position as Under Secretary of Investment. She is the Chairperson of the Tender Board Committee and a member of the Board Nomination and Remuneration Committee. She has not been convicted of any offence within the past 10 years. pg 70 Pos Malaysia Berhad annual report 2012 . Ministry of Finance in the middle of 1991. Pos Malaysia Berhad annual report 2012 pg 71 . pg 72 Pos Malaysia Berhad annual report 2012 . S.A. Perdana Merchant Bankers Bhd and MARA Holdings Sdn Bhd in various capacities primarily in corporate finance field. Dato’ Khalid holds a Diploma in Accountancy from MARA University of Technology (UiTM). Bachelor of Science (Finance) from the Indiana State University. When he returned in 1986. Dato’ Khalid does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. Corporate Planning on 1 June 2011. Dato’ Khalid does not have any interest in the securities of the Company and he does not hold any directorship in any public company. a Malaysian. He joined DRB-HICOM Berhad in August 2006 as Senior General Manager. Subsequently. he served as Corporate Finance Manager with Rakyat Merchant Bankers Bhd until 1990. Corporate Planning. U. he was under the employment of Malaysian Mining Corporation Berhad.S. Dato’ Khalid was appointed Group Director. 56. Pos Malaysia Berhad annual report 2012 pg 73 . and Haven.GROUP CEO’S PROFILE Dato’ Khalid Bin Abdol Rahman Group Chief Executive Officer Dato’ Khalid Bin Abdol Rahman. Corporate Planning and Business Development of Tradewinds Corporation Berhad from January 1997 to July 2006. He has not been convicted of any offence within the past ten (10) years. was appointed Group Chief Executive Officer of the Company on 1 January 2012. Corporate & Services of DRBHICOM Berhad on 1 August 2009 and the position was later re-designated to Group Director.A. Master of Business Administration (Marketing) degree from the University of New Dato’ Khalid was the Group General Manager. U. Dato’ Khalid star ted his career as Assistant Leasing Manager with Leasing Corporation Sdn Bhd from 1979 to 1982 prior to pursuing fur ther studies. Between 1991 and 1996. LEADERSHIP TEAM 1 • Dato’ Sabrina Albakri binti Abu Bakar 1 2 3 4 5 6 7 8 9 10 11 12 Group Head, Legal, Secretarial & Regulatory Counsel 5• Dato’ Rohaiza binti Hashim 6 • Mohd Rizal bin Hamzah 7 • Mohd Yusri bin Dolah Chief Marketing Officer 2• Radin Asrul Adza bin Radin Soenarno Chief Information Officer Group Head, Corporate Communications & Customer Care Group Head, Strategic Procurement 9• Aziz bin Manas Chief Internal Auditor 10• Raja Nor Izah binti Raja Jaafar Group Head, Sales 3 • Dato’ Khalid bin Abdol Rahman Group Chief Executive Officer Group Head, Transformation Management Office 11• Nik Ahmad Fauzan bin Nik Mohamed Group Head, Corporate Services 4 • Mohd Shukrie bin Mohd Salleh Group Chief Operating Officer 8 • Mimi Megawati binti Abdul Wahid 12• Bahaman bin Kamaruzzaman Chief Operating Officer, PosMel pg 74 Pos Malaysia Berhad annual report 2012 LEADERSHIP TEAM 13• Hj Nor Azizan bin Tarja @ Tarjo Chief Operating Officer, PosLaju 17• Fikri bin Ahmad Group Head, Human Resource 21• Zaidi bin Hussain 22• 23• Hasnul bin Haniff Group Head, Programme Management Office 13 14 15 16 17 18 19 20 21 22 23 24 14• Chum Choy Han Group Head, International Business & Regulatory Management Chief Executive Officer, Digicert 15• Mohd Lutfi bin Mat Lazim 16• Ahmad Faisal bin Murad Group Chief Financial Officer 18• 19• Chiang Cheng Guan 20• Balqais binti Yusoff Dato’ Mearia binti Hamzah Chief Operating Officer, PosNiaga Dato’ Shahri bin Jikun Group Head, Facilities Management Group Head, Transport Management Chief Executive Officer, Datapos Group Head, Corporate Planning 24• Mohd Amin bin Nallah Yahya Group Head, Risk Management Pos Malaysia Berhad annual report 2012 pg 75 UNVEILING STRENGTHS pg 76 Pos Malaysia Berhad annual report 2012 Pos Malaysia Berhad annual report 2012 pg 77 . pg 78 Pos Malaysia Berhad annual report 2012 . Encourage vendors to adapt ethical and suitable approach in their business practices (i. As an organisation that operates its business directly within the various communities all over Malaysia from all walks of life. CR programmes and activities in Pos Malaysia are developed to create and deliver sustainable value in relations to the 4 focus areas as described below : Workplace • • • • • • Facilitating equal opportunities for employment and for professional and personal development for all staff.e green procurement). CR has proven to provide many advantages to organisations who believe. seek ways in which we can contribute to enhance the environment and its biodiversity.CORPORATE RESPONSIBILITY STATEMENT POS MALAYSIA’S CORPORATE RESPONSIBILITY INITIATIVES FOR YEAR 2011/ 2012 Corporate Responsibility (CR) is widely embraced by organisations who seek to demonstrate their roles and functions beyond the provision of products and services and this includes Pos Malaysia. Providing healthy. contributing towards the development of the society and conducting our business responsibly. engage and dedicate themselves to become ethical and socially responsible corporate citizens. vendor and contractors. quality. Understanding our effect and respecting the environment by minimizing the impact from our energy use and reducing our consumption. loyalty and suppor t from the workforce. respectful and safe working conditions to ensure high performance of our staff. Maintaining high standards of transparency. provide competitive edge and sustainability of the business as well as increased trust. corporate governance and ethics. Building fair and honest relationship with suppliers. Committed to being a responsible corporate citizen and making positive contribution to society through participation in com munities where we operate in. Using resources as efficiently as possible and for further development. Marketplace Community • Environment • Pos Malaysia Berhad annual report 2012 pg 79 . we perceive CR as an extension of our normal day to day business and we focus our CR effor ts on positively enhancing the quality of life and culture of our stakeholders. This includes enhancement of corporate image and reputation. In the long term. Community pg 80 Pos Malaysia Berhad annual report 2012 . external speakers are invited to give spiritual and motivational talks to the staff. Performance Now”. • Our Motivated people Unity is the key element in building and strengthening the company. With that. we never fail to organize an induction programme to ensure that they understand the strategic and operational aspects of the Company as well as embracing the culture and ethos of Pos Malaysia. The Keepers of The Flame Program was introduced and conducted to all management and executive staff. we have embarked on a major renovation exercise at the headquar ters building to ensure that we provide a safe and comfor table working area to the staff. Whilst working with a peace of mind and soul.a monthly religious programme as well as a series of afternoon religious talks (tazkirah). we always remind each other to be successful in career while not forgetting the creator. • Training and Development Pos Malaysia through its training centre. Pos Malaysia propagates its philosophy through programmes such as Annual Dinner. With the right direction and by capitalizing on various oppor tunities. This program has also been seen as a way of creating competitiveness.CORPORATE RESPONSIBILITY STATEMENT Workplace Our people are assets to the company and we are committed to run our business in a way that meets the needs of the present without taking cognisance the ability of future generations.000 employees enjoy flexible career path and career growth as the company believes in investing in its people. Through our extensive presence countrywide. Through ‘Sinar Zohor’ . • Workplace Pos Malaysia believes that a conducive working environment is essential to inspire a high performance culture. Buka Puasa. we believe we would be able to give back to the community as a responsible corporate citizen by focusing on enhancing education and enriching the communities. we are able to contribute to the community as well as suppor t the Prime Minister‘s 1Malaysia aspiration of “People First. As for the new staff. manages the staff training from the postmen level up to the executive level. As testament. Sahur and Hari Raya Open House for the employees. creativity and teamwork amongst the staff. • Our Talented Staff ‘Pos Malaysia All-Starz’ is a program created as a platform for the staff to showcase their talents in singing and performing ar ts. At Pos Malaysia. our 16. Institut Latihan Pos (ILP). This is to ensure the future leaders will be well groomed and prepared in leading the company mentally and physically. and the Ministry of Education. Pos Malaysia Berhad annual report 2012 pg 81 . Penilaian Menengah Rendah (PMR). Last year also witnessed the launch of the Pos Malaysia Education Scheme. as well as Community Postal Representatives to serve the rural areas of Sabah and Sarawak. Sijil Pelajaran Malaysia (SPM) and Sijil Tinggi Pelajaran Malaysia (STPM). Pos Malaysia also collaborated with the Ministry of Health in providing the medicine delivery service or Ubat Melalui Pos 1Malaysia (UMP1M). appointed 225 Posmen Komuniti each for Sabah and Sarawak. Our collaboration with the Ministry of Information. Under the rural service improvement programme. we have provided 5 PoWs each for Sabah and Sarawak. PosLaju will deliver medicine from the hospitals right to the customers’ doorstep at only RM5 per delivery. This competition is a joint collaboration with the Malaysian Communications and Multimedia Commission. We have awarded financial assistance to students enrolled in Limkokwing University of Creative Technology during the FYE 2012 and students registered for International College of Automotive Malaysia in June 2012. Under this service. out of which 10% of the proceeds will be donated to the National Cancer Fund. and suppor ted by the Ministry of Information. Posmen Komuniti.CORPORATE RESPONSIBILITY STATEMENT • Education ‘1Malaysia Letter Writing Competition’ is an annual initiative to encourage school children on the interest of letter writing and inculcate positive values via the spirit of 1Malaysia.000 post boxes each to the residents in Kuala Kubu Baru and Sibu. we aspire to enrich the lives of the needy and less for tunate through our sponsorship initiatives to the people at the rural areas. Pos Malaysia via its courier business. but has been enlarged by the introduction of Post-on-Wheels/ PoW (mobile post office). where. We also contributed 1. As of now. our vast coverage and physical communication network does not stop at just providing more than 700 Pos Malaysia Outlets. a total of 69 employees’ children from all over the country were awarded with scholarships to enrol in a diploma programme at Limkokwing University of Creative Technology. and appointed 300 Community Postal Representatives each for Sabah and Sarawak. • Nation Building In our continuous effor ts to connect people. Communications and Culture. Communication and Culture has enabled Pos Malaysia to contribute desktop computers to schools as well as local Community Centres at Kuala Kubu Bharu and Sibu. cash rewards were also contributed to children of staff who achieved excellent results in major exams for Primary and Secondary School such as Ujian Penilaian Sekolah Rendah (UPSR). Cash rewards were also granted to employees’ children who achieved excellent results in major school exams. In addition to that. skills and enthusiasm of its committed staff to create greater value and return to our shareholders while at the same time offer superior products and reliable services to the customers at large. this is also an initiative to show our appreciation to the support given by our corporate partners and media friends. Shah Alam. our customers’ interest and shareholders’ return are always at the top of our priority. we have about 7 postmen delivering letters on bicycles in the Kuala Lumpur city centre. This minimises the impact of carbon monoxide pollution in the city. our parcel boxes and PosEkspres prepaid envelopes are no longer made of plastic but instead are made of recyclable materials. we are committed to reducing the environmental impact of our operations. we have renovated another 2 GPOs that is Melaka GPO and Kota Bharu GPO in 2011. Therefore as an integral par t of our business strategy and operating methods. Every year. To achieve that objective. Seremban.CORPORATE RESPONSIBILITY STATEMENT Marketplace Pos Malaysia brings together the knowledge. We also reach out to our customers by par ticipating in various public events and activities which include Permodalan Nasional Berhad’s annual Minggu Saham Amanah Malaysia (MSAM) as well as our own annual Stamp Week and World Postal Day Celebration. Ipoh and Alor Setar. we never missed to share the joy and spirit of Hari Raya Aidilfitri celebration by organising our Aidilfitri Open House for corporate clients and the media. we encourage our staff to be fully responsible in saving the energy by switching off the lights. as well as electrical and electronic devices when not in use and during the lunch break. Our reach to the customers at large does not rely only on the vast network of our post offices. For a star t. we have modernised our post offices in line with the new brand and corporate identity. Under the Retail Design Strategy we are targeting to renovate another 5 GPOs in 2012 namely Johor Bahru. reduce the unnecessary usage of non-recyclable materials. We are also dedicated to producing environmental friendly products and As a continuation from the modernised Kuala Lumpur and Kuantan General Post Office (GPO) in 2010. of letters by bicycle. As of 2011. A shared por tal for Pos Malaysia staff has also been established as a platform for staff to communicate internally which helps the company to reduce the consumption of paper. pg 82 Pos Malaysia Berhad annual report 2012 . At the working level. Besides enhancing relationships. Therefore. One of the energy saving initiatives in our operations include the delivery We believe that providing better facilities and attractive ambience are one of the factors to enhance our customers’ experience at our outlets. Environment We recognise the impact and implications that businesses have on the environment. Pos Malaysia Berhad annual report 2012 pg 83 . pg 84 Pos Malaysia Berhad annual report 2012 . YB Dato’ Seri Utama Dr.000 entries received. 2011 in Kota Kinabalu. Rais Yatim. 4) Launching Ceremony of Komuniti 1Malaysia and Mobile Post Office This event was jointly organised by KPKK. and secondary school students from Year 1 to 6 (category A) and Form 1 to 5 (category B) throughout Malaysia star ting from May 1. YB Senator Datuk Maglin Dennis D’Cruz. Communication and Culture. It was launched by the Minister of KPKK. The ceremony was launched by Minister of Information. YB Senator Datuk Maglin Dennis D’Cruz on January 18. 2011 in conjunction with the World Postal Day and presented by the Deputy Minister (II) of KPKK. Pos Malaysia has participated in several 1Malaysia activities as part of our initiative to build better relationship with our stakeholders and highlight the values that Pos Malaysia brings to the community : 1Malaysia Letter Writing Competition 2011 was jointly organised by Pos Malaysia Berhad and MCMC in collaboration with KPKK and the Ministry of Education Malaysia. Pos Malaysia. Depar tment of Museums Malaysia. Communication and Culture (KPKK). 2011. Kuala Lumpur. The Malaysian Communications and Multimedia Commission (MCMC) and the Philatelic Society of Malaysia. 3) 1Malaysia Letter Writing Competition 2011 1) ‘1Malaysia 1Dunia’ Stamp Exhibition 1Malaysia Letter Writing Competition 2011 was open to all primary This exhibition was organised for the first time by the Ministry of Information. The launching ceremony was officiated by the Deputy Minister (II) of KPKK. Malaysia and Pos Malaysia. 1Malaysia 1Dunia Stamp Exhibition was organised to increase awareness and interest amongst the public on the hobby of stamp collecting and was held from 15 December 2010 to 15 March 2011. Prize Giving Ceremony for the winners was held on October 10.1MALAYSIA INITIATIVES In suppor t of the government’s 1Malaysia efforts. 2011 at the National Museum. The competition received an overwhelming response with a total of more than 50. Rais Yatim on 26 April 2011 at Menara Telekom Malaysia. The ceremony was held on June 11. Kuala Lumpur. Sarawak. 2011 to June 30. Information Depar tment of 2) Penyerlahan Gagasan 1Malaysia Program Penyerlahan Gagasan 1Malaysia Program is an ongoing program of KPKK and Special Affairs Department (JASA) that aims to increase understanding and awareness of people about the 1Malaysia Concept inspired by the Prime Minister of Malaysia. 2011 in Kuching. Sabah and July 12. YB Dato’ Seri Utama Dr. The carnival was officiated by YAB Dato’ Sri Mohd Najib bin Tun Abdul Razak. Pos Malaysia suppor ted the U-Pustaka Pilot Project together with the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU).1MALAYSIA INITIATIVES 5) Pustaka 1Malaysia Pustaka 1Malaysia or better known as U-Pustaka Service is a collaborative effor t by KPKK. KPKK organized the 1Malaysia Community Carnival in Hulu Selangor for three days star ting from January 6 to January 8. FPX Gateway Sdn Bhd. Malaysian National Registration Depar tment (JPN). Pos Malaysia Berhad annual report 2012 pg 85 . and MCMC with the suppor t of the National Library of Malaysia (PNM). Johor for three days star ting on March 2 to March 4. 2012. Pos Malaysia State Offices also participated in their respective states’ 1Malaysia Community Carnival throughout 2011. Bank Islam Malaysia Berhad and Touch ‘n Go Sdn Bhd. Economic Planning Unit (EPU). 2011 and officiated by YB Dato’ Seri Utama Dr. 6) 1Malaysia Community Carnival In line with the 1Malaysia Community’s mission in empowering people for unity through information. The launching ceremony of Pustaka 1Malaysia was held successfully at the National Library of Malaysia. 2012. Pos Malaysia also par ticipated in the 1Malaysia Community Carnival in Muar. Kuala Lumpur on March 31. Minister of Information. Communication and Culture. 2012. Centre of Excellence for Sensor Technology (NEST). Rais Yatim. Pos Malaysia opened a sales and stamp exhibition booth throughout the three days of the carnival and received an overwhelming response from the visitors at the carnival. the Prime Minister of Malaysia on January 7. Universiti Putra Malaysia. pg 86 Pos Malaysia Berhad annual report 2012 . The Board is now pleased to repor t to the shareholders in greater detail on the manner by which the Group has applied the principles of the Code and the extent of compliance with the best practice provisions of the Code. The duties. and regulatory guidelines that pg Board Effectiveness Assessment The Board Nomination and Remuneration Committee (“BNRC”) is tasked under its Terms of Reference with carrying out the necessary evaluation of the effectiveness of the Board and Board Committees on an annual basis. Pos Malaysia Berhad annual report 2012 87 . The Board subscribes to the belief that improving the effectiveness of the Board to best practice standards is a continuous journey. As a fundamental par t of discharging the Board’s responsibilities in order to protect and enhance stakeholders’ value and financial performance of the Group. rules. The Board realises that to be effective. which includes optimising long-term financial returns and shareholders’ wealth creation. the BNRC had carried out the necessary assessment as an effor t to continuously monitor the level of effectiveness of the Board. remain committed to upholding and continuously improving good corporate governance practices throughout the Pos Malaysia Group of Companies (“Group”) for the protection of and greater creation of shareholders’ and other stakeholders’ value and for maintaining integrity. the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR of Bursa Securities”) and other relevant laws. Pos Malaysia has applied the principles and best practices as set out in the Malaysian Code on Corporate Governance (“the Code”) and the Corporate Governance Guide issued by Bursa Malaysia Berhad. which is appointed by the shareholders.CORPORATE GOVERNANCE STATEMENT The Board of Directors (“Board”) and Management of Pos Malaysia Berhad (“Pos Malaysia” or “the Company”). The foundation for good governance lies in having an effective Board in place. trust and confidence in the Company. including comments and suggestions made were deliberated by the BNRC and the necessary action plans for improvement were suggested to be put in place. For the period under review. the Board and its members must progress to be continuously performing rather than just conforming. the Board of Directors continuously acts to improve and refine management practices and systems and ensures that the Group has strong internal controls and processes in place to implement the principles and concepts of good governance. Board of Directors Principal Responsibilities of the Board The Board. responsibilities. This includes ensuring that the Board has the appropriate mix of skills and experiences and discharges its duties effectively. the Companies Act 1965 and Companies (Amendment) Act 2007 (collectively the “Companies Act”). The results of the assessment and evaluation of the members of the Board. powers and functions of the Board are governed by the Ar ticles of Association of the Company (“Company Articles”). A. the Board Committees as well as the Board members. is entrusted with dealing and controlling the Group and overseeing the business of the Group. technology. new products and development of business capital. With an appropriate understanding of its role. initiative. The Board directs and oversees the management of the business and affairs of the Group and do the following:(viii) Ensure that there is in place an appropriate succession planning (i) Ensure that the Group’s objectives are clearly established and that a strategic plan is in place to achieve those objectives. (vi) Appoint Board Committees to address specific issues. (ix) Ensure that the Group adheres to high standards of ethics and corporate behaviour including transparency in the conduct of business. strategies. (xi) Ensure there is a Schedule of Matters reserved for collective (iv) Oversee the conduct of the Group’s business to evaluate whether the business is being properly managed. as well as an investor relations programme. (x) Ensure that there is in place an appropriate public relations and (iii) Adopt performance measures to monitor implementation and performance of the Group’s objectives. decision of the Board. the Board is better equipped to meet its responsibilities in ensuring that the long-term objectives of the Group are met. consider recommendations of the Board Committees and discuss problems and reservations arising from the Committees’ deliberations. pg 88 Pos Malaysia Berhad annual report 2012 . and mechanism for members of the Board and for Senior Management positions. action plans and policies. The Board is also governed by its Pos Malaysia Board Policy Manual. (ii) Establish policies for strengthening the performance of the Group including ensuring that Management proactively seeks to build the business through innovation. is enshrined in the Company’s Discretionary Authority Limits (“DAL”) document. which assists Board members to better appreciate their roles and responsibilities. management information systems and systems for compliance with applicable laws. The Schedule of Matters reserved for collective decision of the Board (v) Ensure that the Group has appropriate business and enterprisewide risk management processes. rules and regulations. including an adequate control environment based on internal control systems. (vii) Ensure that the statutory accounts of the Group are fairly stated and conform with the relevant regulations including acceptable accounting policies. which comprises the overall internal authority limits applicable to the Company and its principal officers. communications programme.CORPORATE GOVERNANCE STATEMENT are in force. The Chairman of the Board is responsible for representing the Board to the shareholders. Dato’ Sri Haji Mohd Khamil bin Jamil and Dato’ Lukman bin Ibrahim are the nominee Directors of DRB-HICOM Berhad. the Company has exceeded the compliance level set under the MMLR of Bursa Securities. Datuk Low has been a Director of the Company since 1 July 1992 i. including conduct and discipline. comprising a Non-Independent NonExecutive Chairman. pursuant pg 89 . On 21 August 2007. Datuk Low Seng Kuan is the Company’s Senior Independent NonExecutive Director to whom concerns may be conveyed by shareholders and/or members of the public. the Company’s largest shareholder while Puan Eshah binti Meor Suleiman is the Appointed Director of the Minister of Finance (Incorporated). two (2) Non-Independent Non-Executive Directors and four (4) Independent Non-Executive Directors. which will lead to appropriate and considered decisions by the Board. There is a clear separation of responsibilities between the Chairman and the Group Chief Executive Officer (“GCEO”) and a balance of power is maintained in the Company so that no one individual has unfettered powers of decision. The Board is of the opinion that the current size and composition of the Board is well balanced and the Board is able to properly discharge its responsibilities in an effective manner. They also play a pivotal role in the provision of unbiased and independent views. whether executive or non-executive. Details of the Board members’ skills and experience are outlined in the Board of Directors’ profile contained in this Annual Repor t. The four (4) Independent Non-Executive Directors of the Company are independent from Management and are able to exercise independent judgement and provide positive par ticipation in all the Board’s deliberations. management and staffing of the Group and for its procedures in financial and operational matters. The authority limits of the GCEO are enshrined in the Company’s Discretionary Authority Limits duly approved by the Board. The overall business and day-to-day operations of the Group is managed by the GCEO who does not sit on the Board. The Chairman fur ther ensures that discussions result in logical and understandable outcomes. which requires one-third of the Board to consist Independent Directors. dominates the Pos Malaysia Berhad annual report 2012 discussion. The Chairman will act as facilitator at meetings of the Board to ensure that no Board member. With half of the Board members comprising Independent Directors. The Chairman also ensures that appropriate discussions take place and that relevant opinions among Board members are for thcoming. The Board currently consists of seven (7) members.e.The GCEO is accountable to the Board for the overall organisation. the Company’s Special Shareholder. The Board members’ varied skills and breadth of experience are relevant and impor tant for effective management of the Group’s business. advice and judgement as well as safeguard the interests of other par ties such as minority shareholders and other stakeholders.CORPORATE GOVERNANCE STATEMENT Board Balance and Composition of the Board The Company Ar ticles stipulate that the Board shall not comprise less than two (2) nor more than twelve (12) members. The profile of the GCEO is as contained in this Annual Repor t. The Chairman is responsible for ensuring integrity and effectiveness of the governance process of the Board and will consult the Board promptly over any matter that gives him cause for concern. pursuant to the corporatisation of the Company from being a Government agency. 1 January 2012) Dato’ Sri Haji Mohd Khamil bin Jamil (Appointed w. The Senior Independent Non-Executive Director represents the interest of minority shareholders and the general public by exercising independent judgement as well as promoting good governance practices within the Company and the Board. of meetings atended 7 out of 7 10 out of 10 7 out of 7 6 out of 7 11 out of 12 11 out of 12 12 out of 12 9 out of 9 11 out of 12 4 out of 5 10 out of 10 10 out of 12 8 out of 8 Percentage 100% 100% 100% 86% 92% 92% 100% 100% 92% 80% 100% 83% 100% A schedule for Board Meetings and Board Committee meetings for a whole financial year is prepared in advance and tabled to the Board for approval before the commencement of a new financial year. pg 90 Pos Malaysia Berhad annual report 2012 .f.f. 13 December 2011) Eshah binti Meor Suleiman Tan Sri Dato’ Ir. 4 July 2011) Dato’ Ibrahim Mahaludin bin Puteh Datuk Low Seng Kuan Dato’ Krishnan a/l Chinapan Puan Sri Datuk Nazariah binti Mohd Khalid (Resigned w.e.f.CORPORATE GOVERNANCE STATEMENT to the reorganisation exercise of the Pos Malaysia Group which had resulted in the transfer of the listing status to Pos Malaysia Berhad. 4 July 2011) Dato’ Lukman bin Ibrahim (Appointed w. Datuk Low is also the Company’s Audit Committee Chairman.e. twelve (12) Board meetings were held and the attendance of the Board members were as follows:- Directors Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat (Ceased w.f. Datuk Low was redesignated as the Company’s Independent Director and simultaneously was appointed the Company’s Senior Independent Director.e. 1 July 2011) Abdul Hamid bin Sh Mohamed (Resigned w.e. Board Meetings and Supply of Information to the Board During the financial period ended 31 March 2012.f. Muhammad Radzi bin Haji Mansor (Ceased w.e. the Board is scheduled to meet at least once in every quarter with additional meetings convened as and when necessary. Generally. 9 November 2011) Dato’ Wee Hoe Soon @ Gooi Hoe Soon Tunku Dato’ Mahmood Fawzy bin Tunku Muhiyiddin (Resigned w.R Albar (Ceased w.f. 21 October 2011) No.f.e.e.e. 15 July 2011) Dato’ Syed Faisal Albar bin Syed A.f. In an effor t to fur ther enhance the services of the Company Secretary to the Board. Each Board member is to provide constructive feedback on the quality of information and analysis contained in the Board papers and presentations through a Board Paper Evaluation Form which is to be filled out by each Board member at the end of each Board meeting. as well as clear actions to be taken by Management are clearly and accurately recorded in the minutes. In order to ensure the Board is consistently and promptly updated on the Group’s performance. the Board has adopted a process for rating of papers and presentations prepared by Management at each Board meeting. All Board deliberations including views of the respective Board members. the Board receives a Corporate Performance Repor t from Management on a periodical basis. The Directors also have access to all information within the Group to the extent that the information required is per tinent to the discharge of their duties as Directors and is for the benefit of the Group. rationale for each decision. in order to be properly and adequately informed before the meetings. Board decisions. The Board papers are issued in advance to enable the Directors to be better prepared for the meeting as well as to allow the Directors more time to obtain fur ther information. other options for consideration. In order to facilitate the process of the Board providing feedback to Management on the quality In addition. Each repor t contains information on the Group’s year-to-date performance and updates on action plans under the Company’s Strategic and Business Plans. During meetings. the Board members provide their respective feedback on the quality of services of the Company Secretary through an Internal Customer Satisfaction Survey designed specifically for the Company Secretary. background information. This process helps Management in continuously improving the quality of Board papers and presentations. Pos Malaysia Berhad annual report 2012 pg 91 . Management and/ or advisors (as and when necessary) make presentations on the papers tabled to the Board to fur ther facilitate the Board in its decision-making. if necessary. Relevant Board and Board Committee decisions are also communicated to Management for thwith after each meeting. the meeting agenda together with the relevant papers and suppor ting documents relating to the agenda items are circulated to Board members and/or Board Committee members five (5) to seven (7) days before each meeting. disclosure of interest of a Director or a major shareholder (if applicable). financial effects of the proposal made. of Board papers prepared. Each Board paper for approval contains comprehensive information on the objective of the paper. issues for consideration including issues on risk management. Board papers are prepared based on a standard format to ensure consistency in the presentation of facts and to ensure all necessary information are adequately provided to the Board. recommendations from Management and action sought from the Board. all Directors have access to the advice and services of the Company Secretary and may seek independent professional advice should the need arise. The Board is also apprised on the Mid-Term Performance of the Group against the Business Plan for the said financial year at the beginning of the second half of the financial year. The quality of information received by the Board has a direct impact on the quality of decisions made by the Board.CORPORATE GOVERNANCE STATEMENT For each Board and Board Committee meeting. Luncheon Talk on Corruption in Malaysia. Institute of Internal Auditors International Conference 2011. Cranfield Executive Leadership Forum-The Making of a Global Leader. each new Director will undergo an orientation programme to better understand the business of the Group. Corporate Directors ConferenceThe Resurgence of Corporate Malaysia. working experience. Director’s Training The Board recognises the impor tance of training as a continuous education process for the Directors in order to ensure that the Directors stay abreast of the latest developments and changes in laws and regulations. experience. exper tise. Training programmes and/or forums attended by the Directors during the financial period under review included Sustainability Programme for Corporate Malaysia-Industrial Products. Talk on Competition Act 2010. All the Directors have also attended the Mandatory Accreditation Programme. GCEO and Executive Directors (if any) in Pos Malaysia. the BNRC would consider the candidates’ skills. Bursa Malaysia Corporate Governance Week 2011. The BNRC is also tasked with reviewing the performance evaluation of the GCEO and Chief Level Officers of the Company. Details of the Directors seeking re-election at the for thcoming AGM such as their age. When considering new appointment(s). Re-election of Directors The Company Ar ticles require all Directors of the Company to retire by rotation at least once in every three (3) years and the Directors are then eligible for re-election at the Company’s Annual General Meeting (“AGM”). In the case of candidate for the position of Independent Directors. all Directors will retire from office at least once in every three (3) years and at least one-third of the number of Directors is subject to retirement by rotation at each AGM and they are then eligible to offer themselves for re-election.CORPORATE GOVERNANCE STATEMENT Appointment of Board Members One of the functions of the BNRC is to propose to the Board for consideration suitable candidates for appointment as Directors. professionalism and integrity. other directorships of public companies and position in the Company are disclosed in the Board of Directors’ profile contained in this Annual Report. business environment and new challenges and to equip the Directors with the necessary knowledge and skills to enable them to fulfill their responsibilities and effectively discharge their duties. qualification. the BNRC would consider the candidate’s ability to discharge such responsibilities/ functions as expected from Independent Directors. The BNRC also ensures that the level and composition of remuneration are structured so as to link rewards with corporate and individual performance. As an integral par t of the process of recruiting new Board members. Confronting the Bribery and Corruption Nexus in the Private Sector. Financial Institutions Directors’ Education Programme. In accordance with the Company Articles. pg 92 Pos Malaysia Berhad annual report 2012 . Directors’ Duties Conference 2011 and ACCA Malaysia Sustainability Repor ting Awards (MASRA) 2011. knowledge. three (3) members including the Chairman of the Committee are Independent Directors. he has vast experience having served in various divisions at the Ministry of Finance including as Senior Adviser to the Executive Director for South East Asia at the World Bank Group in Washington D. He was also the Group Chief Financial Officer and Group Chief Operating Officer of DRB-HICOM Berhad. the Tender Board Committee and the Information and Communication Technology Committee. the Audit Committee. The principal functions and duties of the Audit Committee are as follows:• Review the quar terly results and annual financial statements of the Company and Group prior to the approval of the Board. the Board delegates cer tain responsibilities to the Board Committees with clear terms of reference and scope of responsibilities. Institute of Accountants (MIA) and has vast experience in the fields of accounting and corporate finance. there were four (4) Board Committees namely. Datuk Low Seng Kuan. a member of the Malaysian Institute of Cer tified Public Accountants (CPA) and the Malaysian Institute of Accountants (MIA). (1) Audit Committee The Audit Committee comprises four (4) Non-Executive Directors. • • Assess the quality and effectiveness of the systems of internal control and the efficiency of the Group’s operations. Chairman of the Committee is a Char tered Accountant with the Malaysian Institute of Accountants (MIA) and he was the Managing Director of Malaysian Sheet Glass Sdn Bhd. particularly those relating to areas of significant risk. • Most of the Audit Committee members are financially literate and/or have strong management experience.C. Review the evaluation by the internal and external auditors of the Group’s system of internal control and thereafter repor t the evaluation to the Board. Assess the internal process for determining and managing key risks other than those that are dealt with by other specific Board committees. As for Dato’ Ibrahim. of which. Dato’ Wee Hoe Soon is a member of the Malaysian Institute of Cer tified Public Accountants (MICPA) and the Malaysian Fur ther details on the Audit Committee including its activities during the period under review are disclosed in the Audit Committee Repor t contained in this Annual Repor t. In the financial period under review. the BNRC.CORPORATE GOVERNANCE STATEMENT Board Committees In accordance with the Company Ar ticles. Dato’ Lukman is a Fellow of the Association of Char tered Certified Accountants (ACCA). The members are as follows:(a) Datuk Low Seng Kuan (Chairman/Senior Independent Non-Executive Director) (b) Dato’ Wee Hoe Soon @ Gooi Hoe Soon (Independent Non-Executive Director) (c) Dato’ Lukman bin Ibrahim (Non-Independent Non-Executive Director) (d) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director) Pos Malaysia Berhad annual report 2012 pg 93 . Executive Directors (if any) and Chief Level Officers and to fur ther recommend remuneration package and terms of employment of the GCEO. three (3) members of the Committee are Independent Directors. The members are as follows:(a) Dato’ Sri Haji Mohd Khamil bin Jamil (Non-Independent Non-Executive Chairman) (b) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director) (c) Datuk Low Seng Kuan (Senior Independent Non-Executive Director) (d) Dato’ Krishnan a/l Chinapan (Independent Non-Executive Director) (e) Puan Eshah binti Meor Suleiman (Non-Independent Non-Executive Director) The principal functions and duties of the BNRC are as follows:• Propose to the Board suitable candidates for appointment as Directors including membership and chairmanship of Board Committees. • • Review on an annual basis the Board structure. of which two (2) members are Independent Directors. Propose Succession Planning for the GCEO. the Board Committees and the contribution of each individual Director. size and composition. Executive Directors (if any) and Chief Level Officers of the Company. Executive Directors (if any) and Chief Level Officers of the Company. of which. The Tender Board Committee comprises four (4) Non-Executive Directors.CORPORATE GOVERNANCE STATEMENT (2) Board Nomination and Remuneration Committee The BNRC comprises five (5) Non-Executive Directors. (3) Tender Board Committee pg 94 Pos Malaysia Berhad annual report 2012 . Executive Directors (if any) and Chief Level Officers of the Company. • Assess on an annual basis the effectiveness of the Board as a whole. The members are as follows:(a) Puan Eshah binti Meor Suleiman (Chairperson/Non-Independent Non-Executive Director) (b) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director) (c) Dato’ Lukman bin Ibrahim (Non-Independent Non-Executive Director) (d) Dato’ Krishnan a/l Chinapan (Independent Non-Executive Director) • Recommend to the Board Key Performance Indicators (“KPIs”) for the GCEO. • Recommend to the Board the remuneration framework for the GCEO. of which two (2) are Independent Directors. (4) Information and Communication Technology Committee Deliberate on significant ICT issues affecting delivery of the Group’s flagship projects and thereafter make the necessary recommendations to the Board on action plans to address and mitigate the same. The BNRC pg 95 . • Review and approve the Company’s procurement policies and procedures including general evaluation criteria. B. • The Information and Communication Technology Committee comprises three (3) Non-Executive Directors. anti-corruption policy and codes of conduct. Review and assess the business case of the Group’s flagship ICT projects and its costing to ensure that decisions are properly made on ICT related investments and projects. Directors’ Remuneration The Board through the BNRC ensures that the level of remuneration of the GCEO and/or Executive Director(s) (if any) is sufficient to attract and retain the GCEO and/or Executive Director(s) to manage the Group successfully. • Deliberate on Management’s ICT strategic and operational plans to ensure its alignment with the Group’s Corporate Strategy and direction. The level and make up of the remuneration are structured so as to link rewards with corporate and individual performance. deliberate and thereafter recommend to the Board of Directors for approval proposals made by Management on the Group’s flagship ICT related projects. approve awards of contracts for supply of goods. • Oversee and monitor the overall implementation of the Company’s Procurement Policy Guidelines and review the efficiency and effectiveness of the Company’s procurement processes.CORPORATE GOVERNANCE STATEMENT The principal functions and duties of the Tender Board Committee are as follows:• Examine and where appropriate. • Review selection for the appointment of successful tenderers for both close and open tender applications. works or services within the limits authorised in the DAL. • Review on an annual basis key emerging ICT trends and aler t the Board on the same including potential significant changes to the trend. The members are as follows:(a) Dato’ Lukman bin Ibrahim (Chairman/Non-Independent Non-Executive Director) (b) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director) (c) Datuk Low Seng Kuan (Senior Independent Non-Executive Director) Pos Malaysia Berhad annual report 2012 The principal functions and duties of the Information and Communication Technology Committee are as follows:• • Review. 000 RM1. The Non-Executive Directors are paid meeting allowances for every Board Meeting that they attend and the Company also reimburses reasonable expenses incurred by the Directors in the course of their performance of duties as Directors.212 * 1.360.523. pg 96 Pos Malaysia Berhad annual report 2012 . 1 January 2012 which included the Company’s contribution to EPF.474 Salaries & bonus (RM) 1. the Board as a whole determines the fees payable to Non-Executive Directors and any increase in Directors’ fees shall be subject to shareholders’ approval at the Company’s AGM. Details of the remuneration of the Directors of Pos Malaysia for the financial period under review are as follows:Category (Director) Executive Non-Executive Total Fees (RM) 538.015 848. bonus.524 Allowance (RM) 162. gratuity and allowances.CORPORATE GOVERNANCE STATEMENT determines the performance contracts and targets and structures the rewards for the GCEO and/or the Executive Director(s)’ performance against these targets.001 – RM150.500. Meanwhile.703 Total (RM) 1.000 RM50.360.524 1.747.001 – RM1.489 2.000 Note : Number of Directors Executive 1** Non-Executive 1 6 3 2 - * This was the total remuneration received by the former Group Managing Director/ Chief Executive Officer (“GMD/CEO”) of Pos Malaysia Group until his cessation w.001 – RM100. salary.688 686.e.000 RM100.224. The performance of the GCEO and/or Executive Director(s) and key senior management positions are measured via KPIs that are structured early in the year to measure the performance of key personnel.701 The remuneration band of the Directors of Pos Malaysia for the financial period under review are as shown below:Range of Remuneration Below RM50.f.550.001 – RM200. ** This was the remuneration band of the former GMD/CEO of Pos Malaysia Group.000 RM150.474 538. www. the Board aims to present a balanced and understandable assessment of the Group’s position and prospects. accuracy and validity prior to adoption of the statements by the Board and subsequent release to Bursa The Company’s general meetings serve as the principal forum for communicating with the shareholders of the Company. newsletters. Accountability and Audit Financial Repor ting General Meetings Malaysia Securities Berhad. the Senior Management team and the external auditors of the Company are present at the meetings to assist in providing the necessary responses to queries from the shareholders. The Directors’ Responsibility Statement in respect of the Audited Financial Statement as required under Paragraph 15. In addition.my also provides an avenue for keeping the general public updated on the activities of the Group.CORPORATE GOVERNANCE STATEMENT C. announcements.com. distribution of annual repor ts. The Group’s website. shareholders have direct access to the Directors. the shareholders are presented with a summary of the Group’s performance on the financial period under review. media highlights and other relevant information. The shareholders are given ample oppor tunity and time to raise questions or seek fur ther information from the Directors regarding the Group’s activities.26(a) of the MMLR of Bursa Securities is contained in this Annual Repor t. Prior to the tabling of proposed resolutions at an Pos Malaysia Berhad annual report 2012 AGM. The website is a source of information on the Group’s financial results. press releases. the Board also ensures that the Group uses acceptable accounting policies for its financial statements. financial performance and prospects as well as raise any issues of concern regarding the Group. events. annual repor ts. The Company’s financial statements are drawn up in accordance with the provisions of the Companies Act and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board. The Audit Committee assists the Board by first reviewing the financial statements to ensure completeness. In presenting the annual financial statements and quar terly announcements of results to shareholders. Besides the Directors. D. meetings. the Company conducts briefings and dialogues with financial analysts via Investors’ Briefings on a quar terly basis to keep investors informed of the Group’s activities and developments. At general The Board also approves the Company’s Annual Budget and Business Plans and carries out periodic review on the progress made by the business units. consistently applied and suppor ted by reasonable and prudent judgement and estimates. The Group has been communicating with stakeholders and investors via quar terly financial repor ts. services and products. Relationship and Communications with Investors and Shareholders Investor Relations and Shareholder Communication The Board acknowledges the impor tance of communication with investors and other stakeholders. In this regard.pos. circulars and press releases. pg 97 . has an appropriate and transparent relationship with the external auditors.17 of the MMLR of Bursa Securities. Depar tment conducts regular audit checks on the Strategic Business Units and other suppor t depar tments on a periodical basis and tables its audit repor ts to the Audit Committee for deliberation. As and when necessary. the Board is pleased to repor t that the Company has 98 Pos Malaysia Berhad annual report 2012 . The Group’s Statement on Internal Control is detailed out in this Annual Repor t. the necessary action plans are formulated and implemented by Management. The Internal Audit pg Relationship with Auditors The Company.CORPORATE GOVERNANCE STATEMENT Internal Control The Board has an overall responsibility for maintaining a sound system of internal control to provide reasonable assurance of the effectiveness of the Group’s business operations and risk management. rules and regulations from time to time and their application to the Company and/ or the Board. rules and regulations. Fur ther. the external auditors highlight to the Audit Committee and the Board matters that require the Board’s attention. the external auditors met the Audit Committee members without the presence of Management or other employees pursuant to Paragraph 15. Apart from being subject to the provisions of the Postal Services Act 1991 and all related rules and regulations on the postal services. The Company Secretary assists the Board in ensuring compliance by the Company and the Board of Directors with the Companies Act. The Board is apprised of the latest amendments to these laws. In the course of audit of the Group’s operations. through the Audit Committee. rules and regulations applicable to the operations of the Company and the Company’s internal policies and procedures.25 of the MMLR of Bursa Securities. Thereafter. Thereafter. rules and regulations especially when they concern the duties and responsibilities of the directors. Pursuant to the requirement under Paragraph 15. the Company also seeks clarification through professional opinions on the extent of application of the said laws. Compliance Pos Malaysia is licensed under the Postal Services Act 1991 to carry out postal services in Malaysia. which is the regulator of postal services in Malaysia and other relevant authorities and/or government bodies to establish and develop the postal regulatory framework for Malaysia. the MMLR of Bursa Securities and other securities laws. The external auditors also repor t to the Audit Committee on their findings per taining to their annual audit. The Company’s Internal Audit Department assists the Board and Management in ensuring compliance by the Company with other relevant laws. The International Business and Regulatory Management Depar tment of the Company serves as a contact point for the Company to engage with the Malaysian Communications and Multimedia Commission. the Audit Committee shares and discusses with Management all concerns raised by the external auditors (if any). the Company is also subject to the terms and conditions of the postal services license issued to it as well as all relevant Universal Postal Union Conventions and Regulations. Initiatives During the financial period under review. The five(5)-year Strategic Plan was the follow-up to the earlier Transformation Masterplan which main emphasis was to keep the house in order through improving the Company’s core businesses and processes. in light of the many challenges which the Company needed to embrace and address.CORPORATE GOVERNANCE STATEMENT applied the principles set out in Par t 1 of the Code and that the Board continues to adopt and comply with the best practices in corporate governance set out in Par t 2 of the Code. (This Statement is made in accordance with a resolution of the Board of Directors dated 18 June 2012). the Board has approved a five(5)-year Strategic Plan to define the path and direction of Pos Malaysia in the next five(5) years. Pos Malaysia Berhad annual report 2012 pg 99 . pg 100 Pos Malaysia Berhad annual report 2012 . • Nik Ahmad Fauzan bin Nik Mohamed Group Head. The Board affirms its overall responsibility for the Group’s system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. and • To require that an effective and formalised Enterprise Risk Management (“ERM”) Policy and Procedure Manual framework is established and maintained by the Group. the members are as follows: Chairman: Dato’ Khalid bin Abdol Rahman Group Chief Executive Officer Members: • Mohd Shukrie bin Mohd Salleh Group Chief Operating Officer Risk Management Framework Policy The Board subscribes to the fact that an effective risk management practice is a critical component of a sound system of internal control. In view of this. Accordingly. Reporting Structure The Risk Management Committee (“RMC”) of the Group is chaired by the Group Chief Executive Officer (“GCEO”) and during the period under review. evaluate and manage significant risks faced by the Group that may impede the achievement of the Group’s objectives during the period under review. it can only provide reasonable but not absolute assurance against material misstatement or loss. Corporate Services • Ahmad Faisal bin Murad Group Chief Financial Officer Pos Malaysia Berhad annual report 2012 pg 101 . this system is designed to manage rather than eliminate risks that may hinder the achievement of the Group’s business objectives. communicating the requirements of this policy and to guide the organisation in dealing with these risks. • To manage risk routinely and in an integrated and transparent way in accordance with good governance practices. Responsibility The Board is responsible for ensuring that a sound system of internal control to safeguard shareholder’s interest and Company’s assets is maintained. The policy of the Board is: • To manage risks proactively. The Bursa Securities’ Statement on Internal Control: Guidance for Directors of Public Listed Companies (“Guidance”) provides guidance for compliance with these requirements. to acceptable levels given the par ticular circumstance of each situation. The Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements requires directors of public listed companies to include a statement on the state of their internal controls. compliance controls and risk management procedures. there is a formal process to identify. Set out below is the Board’s Statement on Internal Control.STATEMENT ON INTERNAL CONTROL Introduction The Malaysian Code on Corporate Governance (Revised 2007) requires listed companies to maintain a sound system of internal controls to safeguard shareholders’ investments and the Group’s assets. As there are limitations that are inherent in any system of internal control. which has been prepared in accordance with the Guidance. The Board has a stewardship responsibility to understand these risks. operational. financial. The system of internal control includes strategic. • To manage risks pragmatically. PosLaju • Dato’ Mearia binti Hamzah Chief Operating Officer. • Hj. The documents are updated as and when necessary to meet the continually changing operational needs. • Operating policies and procedures. RMD evaluates the risk policy and procedures. and initiates improvements by maintaining awareness of trends and developments in risk management that may have significant impact to the organisation. Risk Management Committee. • Implement the processes and source for suitable personnel for the depar tment. The Board and the Management review and enhance the ERM framework to ensure that ERM practices are aligned with the latest ERM development and best practices. • Initiate and conduct business within agreed risk constraints and business rules. PosMel The Risk Management Depar tment (“RMD”) acts as a suppor t for the RMC in monitoring. which are stipulated in the ERM. Azizan bin Tarja Chief Operating Officer. Business and Support Units and State offices in respect of Risk Management are defined in the Risk Management Policy. processes and structures to meet the risk management implementation needs. which incorporate regulatory and internal requirements. • Approve risk parameters and controls. depar tment and the main subsidiary company are updated quarterly and the consolidated repor ts are tabled to the RMC and the Audit Committee. The risk registers and risk profiles of each Strategic Business Unit (“SBU”). Other Key Elements of Internal Control The other key elements of the Group’s internal control systems are described below: • The roles and responsibilities of the Board of Directors. • Ensure that periodical risk reports are submitted accurately and in a timely manner to the Audit Committee and the Board: and • The lines of responsibility and frequency of repor ting of risks are also defined in the Risk Management Policy.STATEMENT ON INTERNAL CONTROL • Bahaman bin Kamaruzzaman Chief Operating Officer. analysing and reporting of the risks identified enterprise-wide and as the facilitator in the risk assessment process. The IA function examines the risk management systems for its effectiveness. are prescribed in Operating Procedures and Circulars. business rules. controls and elements of best practice and also offers suppor t and advice. The Group Internal Audit (“IA”) is involved in validating the results of the ERM processes. are as follows: • Formulate policy. Risk owners and co-owners have been identified to ensure that the risk registers and risk profiles are updated accordingly. • Ar ticulate and challenge the key risks. PosNiaga • Radin Asrul bin Adza Chief Information Officer The RMC’s principal roles and responsibilities. pg 102 Pos Malaysia Berhad annual report 2012 . • Monitor policy implementation and the continuous development of the risk management in the organization. STATEMENT ON INTERNAL CONTROL • The Board meets at least quarterly to review the Group’s operational and financial performance against approved budgets. Management continues to take measures to improve and strengthen the internal control environment. review and repor ting arrangements in place give reasonable assurance that the structure of controls and its operations are appropriate to the Group’s operations and that risks are at an acceptable level throughout the Group. the arrangements do not eliminate the possibility of human error or deliberate circumvention of control procedures by employees. the Board is also updated on the changes in the business environment that may adversely affect business performance and relevant actions taken. together with the IA Depar tment provides an assessment on the adequacy. The monitoring. efficiency and effectiveness of the Group’s internal control system. approved quar terly report to Bursa Malaysia Securities Berhad (“Bursa Securities”) and deliberate on issues that require the Board’s approval. However. In addition. Weakness in Internal Control that Result in Material Losses To the best of the Board’s knowledge. The IA Depar tment recommends improvements where necessary. there were no material losses incurred during the period under review as a result of weaknesses in internal control. The Board believes that the development of the system of internal control is an ongoing process and has taken steps throughout the year to improve its internal control system and will continue to do so. • The Audit Committee. This Statement on Internal Control was approved by the Board of Directors on 18 June 2012. Pos Malaysia Berhad annual report 2012 pg 103 . pg 104 Pos Malaysia Berhad annual report 2012 . (This Statement is made in accordance with a resolution of the Board of Directors dated 18 June 2012). In addition. In preparing the financial statements of the Company and the Group for the financial period ended 31 March 2012. consistently applied and supported by reasonable and prudent judgments and estimates.DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Paragraph 15. The Directors are responsible for ensuring that the Company and companies within the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and of the Group. 1965 have been complied. the Directors are satisfied that the Company and the Group have used appropriate accounting policies. the Board of Directors is required to include a statement in the Company’s Annual Report explaining its responsibility for preparing the annual audited financial statements. the Directors are responsible to take such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Pos Malaysia Berhad annual report 2012 pg 105 . The Directors are also satisfied that all applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act. pg 106 Pos Malaysia Berhad annual report 2012 . ADDITIONAL COMPLIANCE INFORMATION 1. Utilisation of Proceeds During the financial period ended 31 March 2012, there were no proceeds raised by the Company from any corporate proposals. 6. Variation in Results There is no variance in the Company’s audited financial results for the financial period ended 31 March 2012 from the unaudited results as previously announced. The Company has not released or announced any estimated profit, financial forecast and projection in the financial period ended 31 March 2012. 2. Share buy-back During the financial period ended 31 March 2012, the Company has not exercised any share buy-back permitted by Section 67A of the Companies Act, 1965. 7. Profit Guarantee During the financial period ended 31 March 2012, the Company did not give any profit guarantee. 3. Options, Warrants or Convertible Securities During the financial period ended 31 March 2012, the Company did not issue or exercise any ESOS, warrants or convertible securities. 8. Material Contracts There were no material contracts entered into by the Company or its subsidiaries involving the directors and substantial shareholders, either still subsisting at the end of the financial period ended 31 March 2012 or entered into since the end of the previous financial year. 4. American Depository Receipt (ADR) / Global Depository Receipt (GDR) During the financial period ended 31 March 2012, the Company did not sponsor any ADR and GDR. 9. Non-Audit Fees The amount of non-audit fees paid and payable to external auditors by the Group for the financial period ended 31 March 2012 is RM67,000. 5. Sanctions and/ or Penalties During the financial period ended 31 March 2012, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies. Pos Malaysia Berhad annual report 2012 pg 107 AUDIT COMMITTEE REPORT The Board of Directors of Pos Malaysia is pleased to present the repor t on the Audit Committee of the Board for the financial period ended 31 March 2012. e) Puan Sri Datuk Nazariah binti Mohd Khalid Independent Non-Executive Director (Member) (Resigned w.e.f. 9 November 2011) f) Dato’ Lukman bin Ibrahim Non-Independent Non-Executive Director (Member) (Appointed w.e.f.15 September 2011) g) Dato’ Ibrahim Mahaludin bin Puteh Independent Non-Executive Director (Appointed w.e.f. 15 February 2012) Members and Meetings The Audit Committee of Pos Malaysia had convened twelve (12) meetings during the financial period under review. The details of the Pos Malaysia’s Audit Committee members and the attendance are as follows: Members a) Datuk Low Seng Kuan Senior Independent Non-Executive Director (Chairman) Attendance of Meetings b) Dato’ Wee Hoe Soon @ Gooi Hoe Soon Independent Non-Executive Director (Member) c) YM Tunku Dato’ Mahmood Fawzy bin Tunku Muhiyiddin Non-Independent Non-Executive Director (Member) (Resigned w.e.f. 1 July 2011) d) Abdul Hamid bin Sh Mohamed Independent Non-Executive Director (Member) (Resigned w.e.f. 13 December 2011) Members Datuk Low Seng Kuan Dato’ Wee Hoe Soon @ Gooi Hoe Soon YM Tunku Dato’ Mahmood Fawzy bin Tunku Muhiyiddin Abdul Hamid bin Sh Mohamed Puan Sri Datuk Nazariah binti Mohd Khalid Dato’ Lukman bin Ibrahim Dato’ Ibrahim Mahaludin bin Puteh Total 12/12 10/12 4/5 11/11 10/10 3/3 1/1 pg 108 Pos Malaysia Berhad annual report 2012 AUDIT COMMITTEE REPORT Terms of Reference The Terms of Reference of the Audit Committee are in line with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR of Bursa Securities”) and the Malaysian Code on Corporate Governance (Revised 2007)(“the Code”). The Terms of Reference of the Audit Committee are as follows:• In the event of any vacancy in the Audit Committee resulting in he non-compliance of the t MMLR of Bursa Securities per taining to composition of the Audit Committee, the Board of Directors shall within three (3) months of that event fill the vacancy; • The Audit Committee members shall collectively:- a) b) Have knowledge of the industries in which the Group operates; and Have the ability to understand key business and financial risks as well as related controls and control processes; • All members of the Audit Committee shall also be financially literate i.e. have the ability to read and understand fundamental financial statements, including a Company’s balance sheet, income statement, statement of cash flow and key performance indicators. Composition of Committee The Audit Committee shall be appointed by the Board of Directors upon recommendation of the Board Nomination and Remuneration Committee which meets the following requirements:• The Audit Committee shall consist of not less than three (3) members; • All the members of the Audit Committee must be non-executive directors, with a majority of them being independent directors as defined under the MMLR of Bursa Securities; Audit Committee Meetings The Audit Committee Meetings shall be held not less than four (4) times a year. In addition to the members of the Audit Committee, the meeting shall be attended by the Group Managing Director/Chief Executive Officer, Chief Financial Officer and Chief Internal Auditor. Other members of the Board, senior management and external auditors’ representatives may attend the meetings upon invitation of the Audit Committee. The auditors, both internal and external, may request a meeting if they deem necessary. The quorum for a meeting of the Audit Committee shall comprise a majority of Independent Directors from among its members. In the absence of the Chairman, the members present shall elect a chairman for the meeting from among the members present. Minutes of each meeting shall be kept and distributed to each member of the Audit Committee and of the Board. The Audit Committee shall repor t on each meeting to the Board. The Secretary to the Audit Committee shall be the Company Secretary or any other person as the Committee may decide. • At least one (1) member of the Audit Committee must meet the criteria set by the MMLR of Bursa Securities as follows: • • • • Must be a member of the Malaysian Institute of Accountants; or If he/she is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience; and He/she must have passed the examinations specified in Par t I of the 1st Schedule of the Accountants Act 1967; or he/she must be a member of one (1) of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or Fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”);. • The members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent Director ; • No alternate director should be appointed as a member of the Audit Committee; Pos Malaysia Berhad annual report 2012 pg 109 AUDIT COMMITTEE REPORT Rights and Authority The duties of the Audit Committee shall be in accordance with the same procedures adopted by the Board:• Have authority to investigate any activity within its Terms of Reference; • Have the resources which are required to perform its duties; • Have full and unrestricted access to any employee and information per taining to the Group. All documents of the Group shall be made accessible to the Audit Committee and all employees are directed to co-operate with the request made by the Audit Committee; • Have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity for the Group; and • Be able to engage independent professional advisers or other advisers and to secure attendance of other third parties with relevant experience and exper tise if it considers necessary. Notwithstanding anything to the contrary, the Audit Committee does not have executive powers and shall report to the Board of Directors on matters considered and its recommendation thereon, relating to the Group and the Company. • • • • Responsibilities and Duties The responsibilities and duties of the Audit Committee are as follows: a) Risk Management To review the adequacy and effectiveness of Enterprise Risk Management (“ERM”), repor ting structures, risk profiles and governance processes. b) Internal Audit • To approve the appointment, replacement and dismissal of the Chief Internal Auditor and his/her deputy; To review the adequacy of the scope, functions, competency and resources of Internal Audit Department (“IAD”) and that it has the necessary authority to carry out its work; To review and approve the Annual Risk Based Audit Plan, Key Performance Indicators and subsequently appraise the performance of the IAD; • To monitor the effectiveness in the implementation of the Whistle Blowing Policy and procedure and other related governance processes; To review the internal audit repor ts on significant/ major audit findings and Management’s responses to ensure that appropriate and adequate remedial actions are taken by the Management; and To review the systems of internal controls with the auditors. Review of the Audit Committee The performance of the Audit Committee and each of the members shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with the Terms of Reference as set out in the Corporate Governance Statement in this Annual Repor t. c) External Audit • • To review the external auditors’ audit plan, scope of their audits and their Management letters and ensure appropriate and adequate remedial actions are taken by Management on significant lapses in controls and procedures that are identified; To assess the performance of the external auditors and make recommendations to the Board of Directors on their appointment and removal; • To recommend the nomination of external auditors, their audit fees and resignation or dismissal of external auditors and thereafter repor t the same to the Board; Pos Malaysia Berhad annual report 2012 pg 110 and • Other legal and regulatory requirements. • MMLR of Bursa Securities. To discuss problems and reservations arising from the interim and final audits and any matter the external auditors may wish to discuss. the accounting principles and standards that were applied and their judgment of the items that may affect the financial statements. c. the Committee has the responsibility to properly repor t such matter to Bursa Securities. Pos Malaysia Berhad annual report 2012 pg 111 . significant and unusual events. Major judgmental areas. d.AUDIT COMMITTEE REPORT • To review the quarterly and annual financial statements of the Group and the Company focusing on the matters set out below. Reviewed the risk-based annual audit plan to ensure adequacy of the scope and coverage of major risk areas of the Group. Reviewed the internal audit repor ts which were tabled during the period. and thereafter submit the same to the Board: • • • • • • Any changes in or implementation of major accounting policies and practices. the Audit Committee carried out the following activities:- Summary of Activities Financial Reporting Reviewed quar terly and annual financial repor ts of the Group and the Company prior to submission to the Board of Directors for approval. d) Other Matters • To review related par ty transactions entered into by the Group and the Company and to ensure that such transactions are undertaken on the Group’s normal commercial terms and that the internal control procedures with regards to such transactions are • • sufficient. Significant adjustments arising from the audit. The review was to ensure that the financial repor ting and disclosure are in compliance with: • Provisions of the Companies Act 1965. Internal Audit a. In the review of the annual audited financial statements. Any other functions as may be agreed to by the Committee and the Board. Reviewed the effectiveness of the audit process. resource requirements for the year . Reviewed the Key Performance Indicators of the IAD and appraised the depar tment’s performance and competency level. • Applicable approved accounting standards in Malaysia. the committee would direct Management to rectify and improve internal controls and Standard Operating Procedures based on the internal auditor’s recommendations and suggestions for improvement. b. During the period under review. and Compliance with Accounting Standards and regulatory requirements. Going concern assumption. the Audit Committee discussed with Management and the external auditors. the audit recommendations made and management’s responses to these recommendations and where appropriate. Where the Audit Committee is of the view that a matter repor ted to the Board of Directors has not been satisfactorily resolved resulting in a breach of the MMLR of Bursa Securities. 4. and f. In view of scarce resources. the effectiveness of on-going key project implementation and deliverables. In ensuring effective communication of audit issues to all operational areas and prompt closing of audit issues. Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses had been addressed. there were twelve (12) Audit Committee meetings held to deliberate on major audit findings. b. Evaluated the performance and the effectiveness of the external auditors and made recommendations to the Board of Directors on their appointment and remuneration. Internal Audit Function The Audit Committee is assisted by the IAD to effectively discharge its duties and responsibilities. In the financial period ended 2012. the accuracy of financial and operational information. who consistently show their competency through the high quality and usefulness of the audit product over time. the IAD prepares a risk based audit plan and presents to the Audit Committee for approval. the effectiveness of risk management processes and the implementation of controls by management to mitigate company’s major risks. audit strategy and scope of work for the period. 7. the risk based audit plan gives priority and focuses on the Company’s top risks identified by the Management. The audit scope includes performing audit reviews at Strategic Business Units (“SBUs”). corporate risk management and overall governance processes. 6. the adequacy and effectiveness of IT systems in suppor ting operations. and 8 the compliance with the Code and the MMLR of Bursa Securities. Fur ther. 5. The IAD reports directly to the Audit Committee. Annually. skills and the core competency of the Internal Auditors. Monitored internal audit activities and the staffing requirements. the IAD conducts regular follow-up(s) on the closing of audit issues with input from the Management. Management is responsible for ensuring that corrective actions on repor ted weaknesses and suggested improvements as recommended are taken within the required time frame. Related Party Transactions The IAD shows a high level of professional exper tise. Suppor t Services Depar tments and subsidiaries. meetings were held with the Management on a regular basis.AUDIT COMMITTEE REPORT e. The audits cover the reviews on:1. External Auditors a. 2. 3. their audit reports and management letter together with management’s response to the findings of the external auditors. the IAD provides an independent assurance on the adequacy and effectiveness of internal controls. with qualified and experienced auditors Review related par ty transactions entered into by the Group and the Company and the disclosure of such transactions as per the regulatory requirements. the effectiveness and efficiency of operations. In general. the compliance with internal policy & procedure. The IAD also conducted ad-hoc assignments and investigation audits requested by the Audit Committee and Management. the adequacy of internal controls. regulatory and statutory requirements. States Management Offices. pg 112 Pos Malaysia Berhad annual report 2012 . Reviewed the external auditors on: • • their audit plan. and the results of the annual audit. The IAD continues to assist Management in suppor ting the Whistle Blowing Policy and the Integrity Pact established in 2008 to ensure transparency and integrity throughout the tendering process. The IAD independently reviews the risk management governance processes to ensure their adequacy and effectiveness and repor ts to the Audit Committee on a periodical basis.AUDIT COMMITTEE REPORT The IAD also provides consultancy services to the Management in evaluating the risk exposures of new business products and projects prior to implementation and ensures that controls are in place to mitigate risks identified. Pos Malaysia Berhad annual report 2012 pg 113 . The total budget for the Internal Audit function at Pos Malaysia in respect of the financial period ended 31 March 2012 was RM6.4 million. The IAD also performs a full scope of investigation functions and produces investigation repor t to the management for subsequent internal disciplinary action. UNVEILING FOR GROWTH pg 114 Pos Malaysia Berhad annual report 2012 . Pos Malaysia Berhad annual report 2012 pg 115 . 886 The Directors recommend the payment of a first and final dividend of 17. the Company paid a first and final dividend of 10.f. subject to the approval of the shareholders at the for thcoming Annual General Meeting.2011) • Datuk Low Seng Kuan • Dato’ Krishnan a/l Chinapan • Dato’ Ibrahim Mahaludin bin Puteh • Dato’ Wee Hoe Soon @ Gooi Hoe Soon • Eshah binti Meor Suleiman • Dato’ Syed Faisal Albar bin Syed A. Principal activities The principal activities of the Company during the financial period are to provide postal and its related services which include receiving and dispatching of postal ar ticles.07.000 on 3 June 2011 in respect of the financial year ended 31 December 2010. Financial Results Group RM’000 Profit for the financial period attributable to the owners of the Company 138. 13.e.01.2011) • Tan Sri Dato’ Ir Muhammad Radzi bin Haji Mansor (resigned w.e.000 in respect of the financial period ended 31 March 2012.f.1 sen net per ordinary share) totalling to RM70.f.f. The principal activities of the subsidiaries are stated in Note 13 to the financial statements. pg 116 Pos Malaysia Berhad annual report 2012 . Change of year end On 23 November 2011.07.e.2011 and redesignated as Chairman w.485.485.2011) • Tan Sri Dato’ Seri (Dr. There has been no significant change in the nature of these activities during the financial period.2011) • Tunku Dato’ Mahmood Fawzy bin Tunku Muhiyiddin (resigned w. the Group changed its financial year end from 31 December to 31 March.DIRECTORS’ REPORT FOR THE PERIOD ENDED 31 MARCH 2012 The Directors of Pos Malaysia Berhad have pleasure in submitting their repor t together with the audited financial statements of the Group and of the Company for the financial period ended 31 March 2012.6 sen net per ordinary share) totalling RM70.e.R Albar (ceased w.11. 04.07. 21.) Aseh bin Haji Che Mat (resigned w.e. Directors of the Company The Directors who have held office during the period since the date of the last repor t are as follows: • Dato’ Sri Haji Mohd Khamil bin Jamil (appointed as Director w. dealing in philatelic products and sale of postage stamps.e.5 sen per ordinary share less tax at 25% (5. 15.2011) Dividends Since the end of the previous financial year.841 Company RM’000 115.e.5 sen net per ordinary share) and a special dividend of 7.5 sen per ordinary share less tax at 25% (13.07.e.12. 01. postal financial services.2012) • Abdul Hamid bin Sh.2011) There were no material transfers to or from reserves and provisions during the period under review other than as disclosed in the financial statements.f.10. 15.e.0 sen per ordinary share less tax at 25% (7. 09.07. 01.f. Mohamed (resigned w. 04.f.2011) • Dato’ Lukman bin Ibrahim (appointed w.f. • Puan Sri Datuk Nazariah binti Mohd Khalid (resigned w.f. There were no changes in the authorised.50 each At date of appoinment Dato’ Sri Haji Mohd Khamil bin Jamil 57 Bought Sold At 31. i) all known bad debts have been written off and adequate provision made for doubtful debts. none of the Directors in office at the end of the financial period held any interest in the shares of the Company and of its related corporations during the financial period.DIRECTORS’ REPORT FOR THE PERIOD ENDED 31 MARCH 2012 Directors’ interests According to the Register of Directors’ Shareholdings. the Directors took reasonable steps to ascer tain that: No options were granted to any person to take up unissued shares of the Company during the financial period. the Company or any other body corporate. Since the end of the previous financial period. • Dato’ Sri Haji Mohd Khamil bin Jamil • Dato’ Ibrahim Mahaludin bin Puteh • Datuk Low Seng Kuan • Dato’ Krishnan a/l Chinapan • Eshah binti Meor Suleiman (Chairman/Non-Independent Non-Executive Director) (Independent Non-Executive Director) (Senior Independent Non-Executive Director) (Independent Non-Executive Director) (Non-Independent Non-Executive Director) The Nomination and Remuneration Committee consists of the following Directors: Pos Malaysia Berhad annual report 2012 pg 117 . no Director has received nor become entitled to receive a benefit (other than emoluments disclosed in Note 6 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member. and Other statutory information Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out. no arrangements subsisted to which the Company is a par ty. Nomination and remuneration committee The Nomination and Remuneration Committee establishes and recommends the remuneration structure and policy for the Directors and Key Management Officers whereupon such recommendations are made to the Board of Directors for approval. issued and paid-up capital of the Company during the financial period.3. ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise. or with a company in which the Director has a substantial financial interest. par ticulars of the interests of a Director who held office at the end of financial period. Options granted over unissued shares Directors’ benefits During and at the end of the financial period. in shares of the Company were as follows: Number of ordinary shares of RM0. or debentures of.2012 57 Issue of shares Other than as disclosed above. being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in. according to the Register of Directors. transaction or event of a material and unusual nature nor has any such item. transaction or event occurred in the interval between the end of that financial period and the date of this repor t.DIRECTORS’ REPORT FOR THE PERIOD ENDED 31 MARCH 2012 At the date of this report. that would render any amount stated in the financial statements of the Group and of the Company misleading. in the opinion of the Directors. Other statutory information (continued) No contingent liability or other liability of any company in the Group has become enforceable. the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts. have indicated their willingness to accept re-appointment. the financial performance of the Group and of the Company for the financial period ended 31 March 2012 have not been substantially affected by any item. or the amount of the provision for doubtful debts. will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. Dato’ Sri Haji Mohd Khamil bin Jamil Kuala Lumpur. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: In the opinion of the Directors. Auditors The auditors. or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial period. or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. or is likely to become enforceable within the period of twelve months after the end of the financial period which. except for impairment losses as disclosed in Note 5 of the financial statements. or iv) not otherwise dealt with in this report or the financial statements. Date : 18 June 2012 Datuk Low Seng Kuan pg 118 Pos Malaysia Berhad annual report 2012 . At the date of this report. in the Group and in the Company inadequate to any substantial extent. Messrs KPMG. or ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading. there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial period and which secures the liabilities of any other person. 385) (45.1.037) 175.437 1.561 1.751) (86.2010 RM’000 982.227 (7.121 12.457) (83.537 (25.098) (2.3.2011 to 31.606) (49.403) (54.713) (81.126) (52.164) (10. plant and equipment Results from operating activities Finance income Other income Fair value through profit or loss: held for trading Reversal of impairment loss on other receivables Impairment loss on investment in a subsidiary Impairment loss on financial assets designated as available-for-sale Change in fair value of investment properties Finance cost Profit before tax Tax expense Profit for the period/year attributable to owners of the Company 5 7 13 15 11 10 10 4 31.019) (118.958) 67.545) (119.12.395) (55.576 (59.322) (2.098) (2.099) (49.1.2012 RM’000 1.810) 54.975 (16.845) (91.202 (61.273) 86.038) 200.841 Year ended 31.435.339) 170.2010 RM’000 1.897 283 (10.153 17.026) (559.916) (167.709 337 (17.361) 138.3.660 (24.531) (2.928) 99.273) 83.886 Year ended 31.695) (22.600) (22.529 (30.158) (84.108 Company 1.415) 177. plant and equipment Other operating expenses Impairment loss on property.234 13.153 17.395 13.489 (25.421) (57.308) (70.026 (6.926) 85.12.014.952) (780.388) (70. 2011 to Note Revenue Cost of materials and consumables Staff costs Rental .956) (87.356) (764. communication and utilities Transportations Maintenance and supplies Depreciation of property.673) (166.158) (546.461) (53.900 16.481.2012 RM’000 1.STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 MARCH 2012 Group 1.719 Pos Malaysia Berhad annual report 2012 pg 119 .489 15.382 13.690) 115.066 (31.322) (2.760 19. 5 31.985 25.1. plant and equipment upon transfer of properties to investment properties Total comprehensive income for the period/year attributable to owners of the Company Basic earnings per ordinary share (sen) 8 1.3.2010 RM’000 115.12.2012 RM’000 Year ended 31.STATEMENTS OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 MARCH 2012 Group 1.144 139.9 67. pg 120 Pos Malaysia Berhad annual report 2012 . net of tax Revaluation of property.3.2011 to Note Other comprehensive income.2011 to 31.719 The notes on pages 128 to 196 are an integral part of these financial statements.1.2010 RM’000 Company 1.12.108 12.2012 RM’000 Year ended 31.886 54. 071 4.546 543.132 153.630 120.857 190 104.2012 RM’000 31.855 257.755 722.468 417 668.193 710.761 187.2010 RM’000 Other investments Inventories Trade and other receivables Prepayment and other assets Current tax assets Cash and cash equivalents Assets classified as held for sale Total current assets Total assets 15 16 17 3.882 8.648 1.498.443 714.975 1. plant and equipment Investment properties Goodwill Investments in subsidiaries Investments in associates Other investments Deferred tax assets Total non-current assets 10 11 12 13 14 15 22 622.457 242.164 5.630 96.180 121.305 459.641 551.2010 RM’000 Company 31.533 706.503 395.309 27.344 96.12.STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2012 Group 31.076 Pos Malaysia Berhad annual report 2012 pg 121 .079 618.375.323 6.332.420.219 2.673 1.994 4.157 9.160 1.3.744 775.960 15.2012 Note Assets Property.243 436.958 4.306 8.755 709.12.242 RM’000 31.123 103.435 1.214 354.076 1.932 45.819 62.268 10.402 18 19 544.818 1.3.595 8. 093 268.641 623.164 599.195 898.819 12.3.083 268.626 1.185 797.110 20 20 21 268.682 RM’000 31.076 The notes on pages 128 to 196 are an integral part of these financial statements.STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2012 Group 31.513 385 629.849 503.372 30.420.784 751.375.2010 RM’000 Hire purchase liabilities Current tax liabilities Trade and other payables Total current liabilities Total liabilities Total equity and liabilities 23 5 17.236 18.983 1.12. pg 122 Pos Malaysia Berhad annual report 2012 .282 30.123 13.377 538.332.011 506.2010 RM’000 Company 31.040 1.402 24 564.222 19.593 268.2012 Note Equity Share capital Share premium Reserves Total equity Liabilities Deferred tax liabilities Hire purchase liabilities Total non-current liabilities 22 23 17.513 385 482.219 17.3.399 17.695 828.513 385 559.610 580.12.497 471.498.399 11.044 17.804 15 17.513 385 528.695 605.2012 RM’000 31.538 13.762 43.720 1.621 582.582 546.946 587.738 42. 513 Note 20 385 Note 20 1.093 The notes on pages 128 to 196 are an integral par t of these financial statements.144 1.841 1.144 542.485) 628.144 RM’000 Share premium RM’000 Revaluation reserve RM’000 Distributable Retained earnings RM’000 Total RM’000 268.593 138.513 385 385 1.513 268.051 Note 21 139.841 (70. Pos Malaysia Berhad annual report 2012 pg 123 .695 138.933 67.108 (50.346) 559.346) 828.108 (50.144 Note 20 138. plant and equipment upon transfer of properties to investment properties Total comprehensive income for the period Dividends to owners of the Company At 31 March 2012 9 9 268.831 67.841 811.985 (70.STATEMENTS OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2012 Attributable to owners of the Company Non distributable Share capital* Note Group At 1 January 2010 Profit and total comprehensive income for the year Dividends to owners of the Company At 31 December 2010/ 1 January 2011 Profit for the period Revaluation of property.485) 898. 411 54. Refer to Note 20(a) the financial statements for details of the terms and rights attached to Special Rights Redeemable Preference Share.886 (70.185 Note 21 747.513 268.719 (50. pg 124 Pos Malaysia Berhad annual report 2012 .083 RM’000 Share premium RM’000 Distributable Retained earnings RM’000 Total RM’000 * Share capital includes the Special Rights Redeemable Preference Share of RM1.346) 751.513 268.886 (70.682 115. The notes on pages 128 to 196 are an integral part of these financial statements.719 (50.STATEMENTS OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2012 (CONTINUED) Attributable to owners of the Company Non distributable Share capital* Note Company At 1 January 2010 Profit and total comprehensive income for the year Dividends to owners of the Company At 31 December 2010/ 1 January 2011 Profit and total comprehensive income for the period Dividends to owners of the Company At 31 March 2012 9 9 268.346) 482.513 Note 20 385 385 385 Note 20 478.485) 528.784 115.309 54.00.485) 797. 126 (132) (1.456 11 10 2.2010 RM’000 RM’000 Company 1.489) (13. prepayments and other assets Change in trade and other payables Cash generated from operations Income tax paid Income tax refund Net cash generated from operating activities 10 13 10.396 (25.322 17.399) 5.088 (1.202 99.153) 2.896 239.2012 Year ended 31.583 25.273 (93) 184.240 (721) (14.773) 57.STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2012 Group Note Cash flows from operating activities Profit before tax Adjusments for: Change in fair value of investment properties Depreciation of property.569 (27. plant and equipment Impairment loss on: .281 198. plant and equipment Dividend income Fair value through profit or loss: held for trading Finance income Finance costs Gain on disposal of property.153) 2. plant and equipment .254 220.2011 to 31.311 (54.646 336.12.2011 to 31.096) 200.273 (93) 169.234) 2.12.1.529 1.322 16 281.038 (1.382) 2.556 89.281 219.371) 33.447 (69) (19.141) 77.2012 RM’000 Year ended 31.3.Property.531 87.063) 55.373 (41) (337) (16.728) 281.Financial asset designated as available-for-sale .098 22.928 (7.576 85.3.305 25.398) (11.204 (1.753) 54.096) 84.098 22.926 (7.100 402.221) 5.2010 RM’000 Pos Malaysia Berhad annual report 2012 pg 125 .373 (55.037 (1.Investment in a subsidiary Loss/(Gain) on disposal of other investments Operating profit before changes in working capital Change in inventories Change in trade and other receivables.068) 347.1.066 175.606 (132) (1.164 16 271.262 (74) (283) (19.451 10.019) 84.489) (12. 482) 78.477 265.353 1.492 (76.501) 144.821) (2.960) (2.869) 1.2011 to 31.3.492 (78.926) (50.809) (2.890) 16.978) (2.2012 RM’000 Year ended 31.485) (116.037) (70.933) 3.447 132 (50.723) (35.509 (8.976 (ii) 102.2012 RM’000 Year ended 31.1.346) (62.853 1.533 223.890) 19.12.485) (116.038) (70.694 8.346) (62.332) (200) 13.976 302. plant and equipment Purchase of property. plant and equipment Acquisition of other investments Interest received Dividend received Increase in investment in a subsidiary Net cash used in investing activities Cash flows from financing activities Repayment of hire purchase Interest paid Dividend paid to owners of the Company Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 31 March/31 December (i) (i) (43.324) (35.568) 3.060) (73.087) 12.12.928) (50.066 (43.871 265.856 (173.937 (8.2010 RM’000 Company 1.694 8.3.836 (170.STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2012 (CONTINUED) Group Note Cash flows from investing activities Proceeds from disposal of other investments Proceeds from disposal of property.066 409.397 74 (85.2010 RM’000 pg 126 Pos Malaysia Berhad annual report 2012 .1.2011 to 31.960 132 (21.506 140.470 223.095) 85.767) 100.916 41 (86.589 179.081) 83. STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2012 (CONTINUED) (i) Cash and cash equivalents Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts: Group Note Cash and bank balances Liquid investments Deposits placed with licensed banks 18 18 18 31.3.2012 RM’000 97,903 280,838 165,335 544,076 31.12.2010 RM’000 119,781 118,700 157,052 395,533 Company 31.3.2012 RM’000 77,748 198,900 160,000 436,648 31.12.2010 RM’000 84,136 118,700 151,607 354,443 Less: Cash held for the purpose of distribution of fuel rebate for the government Collections on behalf of agency creditors 18 (134,139) 409,937 (4,338) (126,129) 265,066 (134,139) 302,509 (4,338) (126,129) 223,976 (ii) Purchase of property, plant and equipment During the period, the Group and Company acquired proper ty, plant and equipment with an aggregate cost of RM173,723,000 (31.12.2010: RM96,926,000) and RM170,324,000 (31.12.2010: RM98,681,000) of which Nil (31.12.2010: RM20,594,000) and Nil (31.12.2010: RM20,594,000) respectively, were acquired by means of hire purchases. The notes on pages 128 to 196 are an integral par t of these financial statements. Pos Malaysia Berhad annual report 2012 pg 127 NOTES TO THE FINANCIAL STATEMENTS Pos Malaysia Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of the Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follows: Registered office/Principal place of business Tingkat 8, Ibu Pejabat Pos Kompleks Dayabumi 50050 Kuala Lumpur The consolidated financial statements of the Company as at and for the period ended 31 March 2012 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in associates. The financial statements of the Company as at and for the period ended 31 March 2012 do not include other entities. The principal activities of the Company during the financial period are to provide postal and its related services which include receiving and dispatching of postal ar ticles, postal financial services, dealing in philatelic products and sale of postage stamps. The principal activities of the subsidiaries are stated in Notes 13 to the financial statements. These financial statements were authorised for issue by the Board of Directors on 18 June 2012. FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2012 • Amendments to FRS 101, Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013 (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (FRSs), generally accepted accounting principles and the Companies Act, 1965 in Malaysia. • • • • • FRS 10, Consolidated Financial Statements FRS 11, Joint Arrangements FRS 12, Disclosure of Interests in Other Entities FRS 13, Fair Value Measurement FRS 119, Employee Benefits (2011) The following are the accounting standards, amendments and interpretations of the FRS framework that have been issued by the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and the Company: FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2011 • • IC Interpretation 19, Extinguishing Financial Liabilities with Equity Instruments Amendments to IC Interpretation 14, Prepayments of a Minimum Funding Requirement FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2012 • FRS 124, Related Par ty Disclosures (revised) • Amendments to FRS 1, First-time Adoption of Financial Repor ting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters • Amendments to FRS 7, Financial Instruments: Disclosures - Transfers of Financial Assets • Amendments to FRS 112, Income Taxes - Deferred Tax: Recovery of Underlying Assets 1. BASIS OF PREPARATION pg 128 Pos Malaysia Berhad annual report 2012 NOTES TO THE FINANCIAL STATEMENTS • • • • • FRS 127, Separate Financial Statements (2011) FRS 128, Investments in Associates and Joint Ventures (2011) IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine Amendments to FRS 7, Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities Amendments to FRS 1, First-time Adoption of Financial Repor ting Standards - Government Loans FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014 • Amendments to FRS 132, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015 • • • FRS 9, Financial Instruments (2009) FRS 9, Financial Instruments (2010) Amendments to FRS 7, Financial Instruments: Disclosures - Mandatory Date of FRS 9 and Transition Disclosures • The Group’s and the Company’s financial statements for annual period beginning on 1 April 2012 will be prepared in accordance with the Malaysian Financial Repor ting Standards (MFRSs) issued by the MASB and International Financial Repor ting Standards (IFRSs). As a result, the Group and the Company will not be adopting the above FRSs, Interpretations and amendments. The accounting policies set out below have been applied consistently to the periods (b) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the Note 2 to the financial statements. presented in these financial statements, and have been applied consistently by Group entities, unless otherwise stated. • • Note 11 Note 12 Note 22 - Valuation of investment proper ties - Measurement of the recoverable amounts of cash-generating units - Recognition of unutilised tax losses and capital allowances There are no significant areas of estimation uncer tainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes: Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. (d) Use of estimates and judgements The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the repor ted amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. 2. SIGNIFICANT ACCOUNTING POLICIES Pos Malaysia Berhad annual report 2012 pg 129 If the contingent consideration is classified as equity. that the Group incurs in connection with a business combination are expensed as incurred. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Any contingent consideration payable is recognised at fair value at the acquisition date. From 1 January 2011. the Group measures goodwill at the acquisition date as: For acquisitions between 1 January 2006 and 1 January 2011. a bargain purchase gain is recognised immediately in profit or loss. Acquisitions between 1 January 2006 and 1 January 2011 Costs related to the acquisition. a bargain purchase gain was recognised immediately in profit or loss. the fair value of the existing equity interest in the acquiree. the Group has applied FRS 3. Acquisitions on or after 1 January 2011 For acquisitions on or after 1 January 2011. • • • • the fair value of the consideration transferred. other than those associated with the issue of debt or equity securities. The Group has changed its accounting policy with respect to accounting for business combinations. potential voting rights that presently are exercisable are taken into account. plus if the business combination is achieved in stages. including unincorporated entities. pg 130 Pos Malaysia Berhad annual report 2012 . The change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the standard and does not have impact on earnings per share. it is not remeasured and settlement is accounted for within equity. which is the date on which control is transferred to the Group. goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognised amount (generally fair value) of the identifiable assets. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.NOTES TO THE FINANCIAL STATEMENTS (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities. subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. Otherwise. The cost of investments includes transaction costs. liabilities and contingent liabilities of the acquiree. plus the recognised amount of any non-controlling interests in the acquiree. Business Combinations (revised) in accounting for business combinations. (ii) Accounting for business combinations Business combinations are accounted for using the acquisition method from the acquisition date. less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. In assessing control. controlled by the Group. Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses. When the excess is negative. Such amounts are generally recognised in profit or loss. When the excess was negative. The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group. if the Group retained any interest in the previous subsidiary. and any unrealised income and expenses arising from intra-group transactions. eliminated against the investment to the extent of the Group’s interest in the investees. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted associates. Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses. over the financial and operating policies. Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses. Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. that the Group incurred in connection with business combinations were capitalised as par t of the cost of the acquisition. If the Group retains any interest in the previous subsidiary. are eliminated in preparing the consolidated financial statements. including unincorporated entities. and the recognition of fur ther losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investees. such interest was measured at the carrying amount at the date that control was lost and this carrying amount would be regarded as cost on initial measurement of the investment. the carrying amount of that interest including any long-term investments is reduced to zero. any non-controlling interests and the other components of equity related to the subsidiary. Acquisitions prior to 1 January 2006 For acquisitions prior to 1 January 2006. When the Group’s share of losses exceeds its interest in an associate. Unrealised losses are eliminated in the same way as unrealised gains. other than those associated with the issue of debt or equity securities. (iv) Associates Associates are entities. goodwill represents the excess of the cost of the acquisition over the Group’s interest in the fair values of the net identifiable assets and liabilities. Unrealised gains arising from transactions with equity accounted investees are In the previous financial years. (iii) Loss of control The Group applied FRS 127. after adjustments if any. Any surplus or deficit arising on the loss of control is recognised in profit or loss. but only to the extent that there is no evidence of impairment. to align the accounting policies with those of the Group. Upon the loss of control of a subsidiary. in which the Group has significant influence.NOTES TO THE FINANCIAL STATEMENTS Transaction costs. from the date that significant influence commences until the date that significant influence ceases. The cost of the investment includes transaction costs. The cost of the investment includes transaction costs. but not control. then such interest is measured at fair value at the date that control is lost. (b) Foreign currency (v) Transactions eliminated on consolidation Intra-group balances and transactions. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained. the Group derecognises the assets and liabilities of the subsidiary. Consolidated and Separate Financial Statements (revised) since the beginning of the reporting period in accordance with the transitional provisions provided by the standard and does not have impact on earnings per share. Pos Malaysia Berhad annual report 2012 pg 131 . (a) Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.NOTES TO THE FINANCIAL STATEMENTS Monetary assets and liabilities denominated in foreign currencies at the repor ting period are retranslated to the functional currency at the exchange rate at that date. the Group or the Company becomes a par ty to the contractual provisions of the instrument. Loans and receivables Loans and receivables category comprises debts instruments that are not quoted in an active market. * (ii) Financial instrument categorises and subsequent measurement The Group and the Company categorises financial instruments as follows: (d) (c) Financial assets categorised as held to maturity investments are subsequently measured at amortised cost using the effective interest method. Held-to-maturity investments Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity. (b) (c) Financial instruments (i) Initial recognition and measurement A financial asset or a financial liability is recognised in the statement of financial position when. Other financial assets classified as fair value through profit or loss is subsequently measured at their fair values with the gain or loss recognised in profit or loss. A financial instrument is recognised initially. including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method. Available-for–sale financial assets Available-for-sale category comprises investments in equity and debt securities instruments that are not held for trading. at its fair value plus. Financial assets pg 132 Pos Malaysia Berhad annual report 2012 . Foreign currency differences arising on retranslation are recognised in profit or loss. Financial assets at fair value through profit or loss Fair value through profit or loss category comprises financial assets that are held for trading. and only when. except for differences arising on the retranslation of available-for-sale equity instruments which are recognised in other comprehensive income. in the case of a financial instrument not at fair value through profit or loss. transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial liabilities All financial liabilities are subsequently measured at amor tised cost other than those categorised as fair value through profit and loss. including any non-cash assets transferred or liabilities assumed. All financial assets. except for impairment losses. plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses. and only when. Cost includes expenditures that are directly attributable to the acquisition of the asset pg 133 . Trade date accounting refers to: (a) (b) the recognition of an asset to be received and the liability to pay for it on the trade date. (i) (iii) Regular way purchase or sale of financial assets A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.NOTES TO THE FINANCIAL STATEMENTS Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. On derecognition of a financial asset. the obligation specified in the contract is discharged or cancelled or expires. are subject to review for impairment (see note 2(k)(i)). Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. On derecognition. the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. On derecognition of a financial liability. the difference between the carrying amount of the financial liability extinguished or transferred to another par ty and the consideration paid. Pos Malaysia Berhad annual report 2012 A regular way purchase or sale of financial assets is recognised and derecognised. using trade date accounting. Fair value through profit and loss category comprises of financial liabilities that are held for trading. (iv) Derecognition A financial asset or par t of it is derecognised when. as applicable. plant and equipment Recognition and measurement Items of proper ty. A financial liability or par t of it is derecognised when. and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another par ty without retaining control or substantially all risks and rewards of the asset. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income. the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit and loss. except for those measured at fair value through profit or loss. (d) Property. Other financial liabilities categorised as fair value though profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated to this category upon initial recognition. is recognised in the profit and loss. foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. and derecognition of an asset that is sold. When significant parts of an item of proper ty. (e) Leased assets (i) Finance lease Leases in terms of which the Group and the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The carrying amount of the replaced par t is derecognised to profit or loss. which is the cost of an asset. On initial recognition of the leased asset is measured at an amount equal to the lower of its fair value and the pg (iii) Depreciation Depreciation is calculated over the depreciable amount. they are accounted for as separate items (major components) of proper ty. plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of proper ty. Depreciation is recognised in profit or loss on a straight-line basis over the estimated The cost of property. The costs of the day-to-day servicing of proper ty. plant and equipment. plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. useful lives and residual values are reviewed. (ii) Subsequent costs The cost of replacing part of an item of proper ty. less its residual value. plant and equipment and is recognised net within “other income” or “other operating expenses” respectively in profit or loss. Freehold land is not depreciated. plant and equipment under construction are not depreciated until the assets are ready for their intended use. plant and equipment. office and computer equipment 3 . Depreciation methods. useful lives of each par t of an item of proper ty. plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group or the Company. and adjusted as appropriate at the end of the repor ting period.10 years 134 Pos Malaysia Berhad annual report 2012 . prudently and without compulsion. plant and equipment have different useful lives.99 years 50 years 2 .20 years 5 years Furniture and fittings. The fair value of proper ty is the estimated amount for which a property could be exchanged between knowledgeable willing par ties in an arm’s length transaction after proper marketing wherein the par ties had each acted knowledgeably. The estimated useful lives for the current and comparative periods are as follows: Leasehold land Buildings Building improvements and renovations Plant and machinery Motor vehicles 30 . and its cost can be measured reliably. plant and equipment are recognised in profit or loss as incurred. Leased assets are depreciated over the shor ter of the lease term and their useful lives unless it is reasonably cer tain that the Group will obtain ownership by the end of the lease term. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. The fair value of other items of plant and equipment is based on the quoted market prices for similar items when available and replacement cost when appropriate. The gain or loss on disposal of an item of property.NOTES TO THE FINANCIAL STATEMENTS and any other costs directly attributable to bringing the asset to working condition for its intended use. Proper ty. or other amount substituted for cost. and the costs of dismantling and removing the items and restoring the site on which they are located.10 years 10 . the gain is recognised in Cost includes expenditure that is directly attributable to the acquisition of the investment proper ty. but not for sale in the ordinary course of business. plant and equipment. However. Contingent rentals are charged to profit or loss in the repor ting period in which they are incurred. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised. the investment proper ty under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete. (f) Investment properties Pos Malaysia Berhad annual report 2012 pg 135 . The cost of self-constructed investment proper ty includes the cost of materials and direct labour.NOTES TO THE FINANCIAL STATEMENTS present value of the minimum lease payments. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. An investment property is derecognised on its disposal. plant and equipment is transferred to investment proper ty following a change in its use. Investment proper ties are measured initially at cost and subsequently at fair value with any change therein recognised in profit or loss for the period in which they arise. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. whichever is earlier. any other costs directly attributable to bringing the investment proper ty to a working condition for their intended use and capitalised borrowing costs. Lease incentives received are recognised in profit or loss as an integral par t of the total lease expense. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Leasehold land which in substance is a finance lease is classified as proper ty. Where the fair value of the investment proper ty under construction is not reliably determinable. over the term of the lease. the leased assets are not recognised in the Group’s statements of financial position. Investment proper ties are proper ties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases except for proper ty interest held under operating lease. Leasehold land which in substance is an operating lease is classified as prepaid lease payments. (ii) Reclassification to/from investment property When an item of proper ty. any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised in other comprehensive income and accumulated in equity as revaluation reserve. (i) Investment properties carried at fair value Minimum lease payments made under finance leases are appor tioned between the finance expense and the reduction of the outstanding liability. Subsequent to initial recognition. use in the production or supply of goods or services or for administrative purposes. (ii) Operating lease Leases. the asset is accounted for in accordance with the accounting policy applicable to that asset. if a fair value gain reverses a previous impairment loss. any surplus previously recorded in equity is transferred to retained earnings. and the market’s general perception of their creditworthiness. (h) Inventories Inventories are measured at the lower of cost and net realisable value. estimated costs of completion and the estimated costs necessary to make the sale. the transfer is not made through profit or loss. its fair value at the date of reclassification becomes its deemed cost for subsequent accounting. The cost of inventories is measured based on weighted average cost formula. A market yield is applied to the estimated rental value to arrive at the gross property valuation. (iii) Determination of fair value An external. (g) Goodwill Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. values the Group’s investment property portfolio annually. plant and equipment or inventories. Investment property under construction is valued by estimating the fair value of the completed investment property and then deducting from that amount the estimated costs to complete construction. adjustments are made to reflect actual rents. When the use of a property changes such that it is reclassified as proper ty. the valuations are prepared by considering the estimated rental value of the property. Non-current assets comprising assets or disposal group comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use. are classified as held for sale or distribution. independent valuation firm. being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.NOTES TO THE FINANCIAL STATEMENTS profit or loss. financing costs and a reasonable profit margin. • the allocation of maintenance and insurance responsibilities between the Group and the lessee. The fair values are based on market values. and • the remaining economic life of the property. Goodwill with indefinite useful lives is allocated to cash-generating unit and is tested for impairment annually and more frequently if events or changes in circumstances indicate that it might be impaired. where appropriate: Net realisable value is the estimated selling price in the ordinary course of business. In the absence of current prices in an active market. pg When rent reviews or lease renewals are pending with anticipated reversionary increases. (i) Non-current assets held for sale or distribution to owners 136 Pos Malaysia Berhad annual report 2012 . it is assumed that all notices and where appropriate counter-notices. Valuations reflect. less the • the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation. When actual rents differ materially from the estimated rental value. Upon disposal of an investment proper ty. and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. having appropriate recognised professional qualifications and recent experience in the location and category of property being valued. have been served validly and within the appropriate time. Gains are not recognised in excess of any cumulative impairment loss. are remeasured in accordance with the Group’s accounting policies. For the purpose of the statements of cash flows. The carrying amount of the asset is reduced through the use of an allowance account. the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss. the assets. which continue to be measured in accordance with the Group’s accounting policies. except that no loss is allocated to inventories. An impairment loss in respect of loans and receivables and held-to-maturity investments Intangible assets and property. equity accounting of equity-accounted investees ceases once classified as held for sale or distribution. (j) Cash and cash equivalents An impairment loss in respect of available-for-sale financial assets is recognised in profit Cash and cash equivalents consist of cash on hand. is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. or disposal group are measured at the lower of their carrying amount and fair value less costs to sell. investments in subsidiaries and investments in associates) are assessed at each repor ting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. cash and cash equivalents are presented net of cash held for the purpose of distribution of fuel rebate for the government and collections on behalf of agency creditors. (i) Financial assets All financial assets (except for financial assets categorised as fair value through profit or loss. less any impairment loss previously recognised. a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. For an equity instrument. no matter how likely. employee benefit assets and investment property. (k) Impairment Pos Malaysia Berhad annual report 2012 pg 137 . or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amor tisation) and the asset’s current fair value. financial assets. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income. or components of a disposal group. plant and equipment once classified as held for sale or distribution are not amortised or depreciated. are not recognised. Any impairment loss on a disposal group is first allocated to goodwill. Losses expected as a result of future events. and then to remaining assets and liabilities on pro rata basis.NOTES TO THE FINANCIAL STATEMENTS Immediately before classification as held for sale or distribution. deferred tax assets. balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value with original maturities of three months or less. An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Impairment losses on initial classification as held for sale or distribution and subsequent gains or losses on remeasurement are recognised in profit or loss. In addition. Thereafter generally the assets. NOTES TO THE FINANCIAL STATEMENTS Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. The amount of the reversal is recognised in profit or loss. Costs directly attributable to issue of equity instruments are recognised as a deduction from equity. (ii) Other assets The carrying amounts of other assets (except for inventories. assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (known as cashgenerating unit). for the purpose of impairment testing. (i) Issue expenses The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. If any such indication exists. the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. All equity instruments are stated at cost on initial recognition and are not re-assessed subsequently. Impairment losses are recognised in profit or loss. impairment losses recognised in prior periods are assessed at the end of each repor ting period for any indications that the loss has decreased or no longer exists. net of depreciation or amor tisation. investment properties that is measured at fair value and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each repor ting period to determine whether there is any indication of impairment. deferred tax assets. the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss. the impairment loss is reversed. in a subsequent period. An impairment loss is recognised if the carrying amount of an asset or its related cashgenerating unit exceeds its estimated recoverable amount. In assessing value in use. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis. (l) Equity instruments An impairment loss in respect of goodwill is not reversed. to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. pg 138 Pos Malaysia Berhad annual report 2012 . If. if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the period in which the reversals are recognised. The goodwill acquired in a business combination. is allocated to cash-generating units or a group of cash-generating units that are expected to benefit from the synergies of the combination. then the asset’s recoverable amount is estimated. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. In respect of other assets. For the purpose of impairment testing. annual bonuses. using the effective interest method in profit or loss. Interest income Interest income is recognised as it accrues. Dividends thereon are recognised as distributions within equity. (ii) Other income (i) Revenue Revenue from mail. as a result of a past event. remittances and agency services and other services are recognised in profit or loss upon performance of services. A provision is recognised if. (n) Provisions Pos Malaysia Berhad annual report 2012 pg 139 . Dividends thereon are recognised as interest expense in profit and loss as accrued. A liability is recognised for the amount expected to be paid under shor t term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. or the (i) Short-term employee benefits Shor t-term employee benefit obligations in respect of salaries. or is redeemable but only at the Company’s option.NOTES TO THE FINANCIAL STATEMENTS (ii) Preference share capital Preference share capital is classified as equity if it is non-redeemable. Possible obligations. Contingent liabilities (m) Employee benefits Where it is not probable that an outflow of economic benefits will be required. and it is probable that an outflow of economic benefits will be required to settle the obligation. (ii) State plans The Group’s contributions to Employees’ Provident Fund are charged to profit or loss in the period to which they relate. or if dividend payments are not discretionary. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. the Group has a present legal or constructive obligation that can be estimated reliably. the obligation is disclosed as a contingent liability. Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders. whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events. the Group has no fur ther payment obligations. and any dividends are discretionary. Once the contributions have been paid. (o) Revenue and other income amount cannot be estimated reliably. paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. courier services. unless the probability of outflow of economic benefits is remote. The unwinding of the discount is recognised as finance cost. are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Rental income from subleased proper ty is recognised as other income. Deferred tax is recognised using the liability method. based on the laws that have been enacted or substantively enacted by the end of the repor ting period. or on different tax entities. Current tax is the expected tax payable on the taxable income for the period. Deferred tax assets are reviewed at the end of each repor ting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Income tax expense comprises current and deferred tax. (q) Tax expense pg 140 Pos Malaysia Berhad annual report 2012 . Grants that compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset. construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Tax expense is recognised in profit Rental income Rental income is recognised in profit or loss on a straight-line basis over the term of the lease. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets. and the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised. using tax rates enacted or substantively enacted by the end of the repor ting period. providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. Lease incentives granted are recognised as an integral par t of the total rental income. and any adjustment to tax payable in respect of previous years. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill. but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. (p) Borrowing costs Borrowing costs that are not directly attributable to the acquisition. over the term of the lease.NOTES TO THE FINANCIAL STATEMENTS Dividend income Dividend income is recognised when the right to receive payment is established. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse. and they relate to income taxes levied by the same tax authority on the same taxable entity. Government grant Government grant is recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant and is then recognised in profit or loss as other income on a systematic basis over the useful life of the asset. 527 308. In accordance with Section 7(4) of the said Act. the amount to be included in respect of any item shall be determined as if anything done by JPPM whether by way of acquiring.026 Pos Malaysia Berhad annual report 2012 pg 141 .12.NOTES TO THE FINANCIAL STATEMENTS A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as and when it is granted and claimed.338 226.687 202.2011 to 31. became the proper ty. rights and liabilities of the Company by vir tue of Section 3 of the Postal Services (Successor Company) Act 1991.488 982. or by carrying any amount to any provision of reserve.975 Company 1.643 148.1.660 Year ended 31.481.124 6.124 34. to make decision about resources to be allocated to the segments and assess its performance and for which discrete financial information is available.849 1. The value of assets and the amount of liabilities of JPPM transferred to and vested in the Company were those stated in the financial statements of JPPM as at 31 December 1991. rights and liabilities.435. to which Jabatan Perkhidmatan Pos Malaysia (“JPPM”) was entitled or subject to immediately before that vesting date. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.12.597 48.014. cer tain assets. or otherwise. revaluing or discharging any liability.3. VESTING OF BUSINESS 4. which in this case is the Managing Director/Chief Executive Officer of the Group.2012 RM’000 Mail Courier Retail Others 921. other than land and buildings and (r) Earnings per ordinary share The Group presents basic earnings per share (EPS) data for its ordinary shares. REVENUE Group 1. for the purposes of any statutory financial statements of the Group and of the Company.897 202.597 8.1.870 1. including revenues and expenses that relate to transactions with any of the Group’s other components. revaluing or disposing of any assets or incurring. On 1 January 1992.2010 RM’000 605.2010 RM’000 603.2011 to 31.407 224.2012 RM’000 918.007 148. had been done by the Company. (s) Operating segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. all proper ty.243 1.3.227 Year ended 31. An operating segment’s operating results are reviewed regularly by the chief operating decision maker.490 305. 3. 786 25.052 Pos Malaysia Berhad annual report 2012 142 .2012 RM’000 Year ended 31.978 170 264 483.Property.2010 RM’000 333 67 535 11 10 2. plant and equipment .396 333 90 164 57.322 758 16 6.126 2.Contributions to state plans pg Company 1.273 25.262 2.617 94.928 465 22.Trade receivables .Investment in a subsidiary Loss on disposal of other investments Operating licence fee Rental .976 10.Audit fees to KPMG Malaysia .013 658.322 758 17.2010 RM’000 1.3.607 15.450 92.2011 to 31.273 347 25.2011 to 31.098 4.Financial assets designated as available-for-sale .Other receivables .037 2 11. plant and equipment Finance costs Inventories written off Impairment loss: .145 68.373 2.531 87.164 16 6.Salaries. bonuses and allowances .644 183 1.343 12.Non-audit fees : KPMG Malaysia : Local affiliates of KPMG Malaysia Change in fair value of investment properties Depreciation for property.098 4.038 2 10 26 15 12 13.12.NOTES TO THE FINANCIAL STATEMENTS 5.410 230 67 472 84.919 4.3.919 5.1. PROFIT BEFORE TAX Group Note Profit before tax is arrived at after charging: Auditors’ remuneration .Office and computer equipment .586 15.759 170 218 472.606 2.Machinery .1.128 225 1.926 22.343 10.689 230 90 86 54.12.114 20.Motor vehicles Staff costs (excluding key management personnel) .594 10.066 672.007 69.Land and buildings .2012 RM’000 Year ended 31. 2010 RM’000 Pos Malaysia Berhad annual report 2012 pg 143 .521 4.2012 RM’000 Year ended 31.3.1.575 4.489 7.Others Reversal of impairment loss on financial assets: .2010 RM’000 Amortisation of government grants Dividend income (gross) Fair value through profit or loss: held for trading Gain on disposal of property.537 819 790 1.Unquoted debentures in Malaysia .Investment properties .799 120 Group and Company Included in profit before tax is zakat assessment as follows: Zakat assessment based on net current assets or results of the period/year .884 799 1.Other receivables Realised foreign exchange gain Rental income: .12.1.924 1.653 2.2012 RM’000 Year ended 31.773 8.520 74 283 1.2011 to 31.1.799 120 4.2011 to 31.Current 4.12.852 22 731 132 1.807 5.2012 RM’000 Year ended 31.3.064 2.096 93 6.520 41 337 1.Trade receivables .020 11.500 8.2010 RM’000 Company 1. PROFIT BEFORE TAX (continued) Group Note and after crediting: 1.852 22 731 132 1.12.3.019 2.077 15. plant and equipment Gain on disposal of other investments Interest income : .096 93 7.NOTES TO THE FINANCIAL STATEMENTS 5.753 7.489 7.2011 to 31.Operating lease other than those relating to investment properties Unrealised foreign exchange gain 26 4.077 824 1.133 44 1.713 5. 1.042) 33.2011 to 31.12.3.2011 to 31.810 61.586 6.2012 RM’000 Current tax expense: Current year Over provision in prior periods/years Deferred tax expense: Reversal of temporary differences Under provision in prior periods/years Total tax expense (2.620 (2.1.280 6.12.678 Year ended 31.2010 RM’000 Company 1.975) 55.553) 31.2012 RM’000 Year ended 31.067) 8.207 1.1.663 43.019 4.3.700 5.2011 to 31.2011 to 31.770 489 1. 7.209 2.690 (6.698 538 2.095 Year ended 31.12.12.553 (10.2010 RM’000 Company 1.Remuneration Other key management personnel .787 (2.2010 RM’000 pg 144 Pos Malaysia Berhad annual report 2012 . TAX EXPENSE Group 1.957) 53.747 471 1.930 13.422 44.213 2.2012 RM’000 Year ended 31.137 (10.094 6.361 (6.3.3. directing and controlling the activities of the entity either directly or indirectly.958 (2.NOTES TO THE FINANCIAL STATEMENTS 6.511 59.173) 3.Remuneration 10.285) 30.209 1.2012 RM’000 Directors .397 (5.1. having authority and responsibility for planning.170 5.231) 8.978 10.264 557 2. KEY MANAGEMENT PERSONNEL COMPENSATION The key management personnel compensation are as follows: Group 1.072) 3.272 13.042) 34.Fees .027 59.2010 RM’000 Other key management personnel comprises persons other than the Directors of Group entities.620 (5.939 61. 1.000 (31.12.000).164.2010 RM’000 85.12.787 30.361 (10.2010: Nil) and RM10.1.042) 3.620 31.098.553 21.000 (31.801 (122) 59.564) 10.810 24.9531.065 200.000) respectively.12.051 (1.066 Company 1. TAX EXPENSE (continued) A reconciliation of tax expense applicable to profit before taxation at the statutory income tax rate to tax expense at the effective tax rate of the Group and of the Company are as follows: Group 1.NOTES TO THE FINANCIAL STATEMENTS 7. Pos Malaysia Berhad annual report 2012 pg 145 .3.3.042) 3.2010: RM25.716 57.158 (168) 38.975) 8.767 (377) 14.957) 8.529 Included in the amount of expenses not deductible for tax purposes of the Group is the tax effect on the impairment losses in relation to financial assets designated as available-for-sale of RM10.958 (5. Included in the expenses not deductible for tax purposes of the Company is the tax effect on the impairment loss of investment in a subsidiary and impairment loss in relation to financial assets designated as available-for-sale of RM17.690 (10.2010 : 25%) Tax exempt income Expenses not deductible for tax purposes Utilisation of previously unrecognised deferred tax assets 50.12.2011 to 31.Deferred tax Tax expense (5.098.202 Year ended 31.170 61.576 Year ended 31.2010 RM’000 99.12.000 (31.958 31.166 Under/(Over) provision in prior periods/years .094 59.057) 14.380 43.2012 RM’000 175.322.382 (377) 16.2012 RM’000 Profit before tax Tax calculated using Malaysian tax rate of 25% (31.12.2010: RM25.322.Current tax .2011 to 31.894 (1.060 37. 12.277 30.026.2012 First and final dividend in respect of financial year ended 31 December 2010 Special dividend in respect of financial year ended 31 December 2010 7.12.5 5.6 40.3.485 31.000) and a weighted average number of ordinary shares in issue during the financial period of 537. Sen per share (net of tax) First and final dividend 13.208 70.085).2010: 537. 2010: RM67.108.000 (31.NOTES TO THE FINANCIAL STATEMENTS 8.2010 Final dividend in respect of financial year ended 31 December 2009 9. However.1 Total amount RM’000 70. 9.4 50.12.485 pg 146 Pos Malaysia Berhad annual report 2012 . subsequent to the repor ting period the following dividend was proposed by the Directors.841. DIVIDENDS Dividends recognised in the current year by the Company are: Sen per share (net of tax) 31.026. EARNINGS PER SHARE Basic earnings per share The earnings per ordinary share for the financial period has been calculated based on the profit attributable to ordinary shareholders of RM138.085 (31. This dividend will be recognised in subsequent financial period upon approval by the owners of the Company.346 Total amount RM’000 The Company did not declare and pay any interim dividends in respect of the financial period ended 31 March 2012. 799 210.993 10 (9.307 193.688) 1.467 (1.353 889. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 144.653) 11.188) 28.103 (728) 22.961 3.258) (1.NOTES TO THE FINANCIAL STATEMENTS 10.065 134.678 18.289 173.447 154.751) 183.308) (7.276 2.349 210.144 (8.160) 25.444 1.418) (1.875 167.804 608 2.579 254.894 (111) 18.908 3.046 155.262 479 (7.301 68.801) 1.114 35.241 158.799 2.868 Pos Malaysia Berhad annual report 2012 pg 147 .799 210.344 147.381) (4.555 90.380) 1.723 (8.015) 106.276 35. PROPERTY.926 (11.276 2.329 RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.114 (2.Offset of accumulated depreciation .413 96.765 (228.050) 975.702 32 47.331 69.403 93.Revaluation of property transferred -Transfer of carrying amount Transfer to assets classified as held for sale At 31 March 2012 185.458) 33. PLANT AND EQUIPMENT Group Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Cost At 1 January 2010 Additions Disposals Transfers At 31 December 2010/ 1 January 2011 Additions Disposals Transfers Transfer to investment properties: .119.290 21.755 13.716 (2.619 4.506 (53.144 (15.801) 172.718 88. 588) 33.631 3.631 14.273 (9.298) (4.575 13.624 96.654) 97.020 Depreciation for the period Disposals Offset of accumulated depreciation on property transferred to investment properties Transfer to assets classified as held for sale 3.872 97.273 22.018 (469) 100.929 693 30.624 25.344 7.422 8.708 7.757 14.713 (7.NOTES TO THE FINANCIAL STATEMENTS 10.329 87.056 22.262 (8.091) RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.180 (710) - 22.273 - 353.622 8.280 16. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 81.283 18.584 57. PROPERTY.688) (46) pg 148 Pos Malaysia Berhad annual report 2012 .283 38.308) (46) 110. PLANT AND EQUIPMENT (continued) Group Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Depreciation and impairment loss At 1 January 2010 Depreciation for the year Impairment loss for the year Disposals At 31 December 2010/ 1 January 2011: Accumulated depreciation Accumulated impairment loss 35.471 2.077 (9.898 733 85.622 629 (2.004 110.004 11.638 20.399 (2.686 (94) 22.273 423.380) 38.872 24.273 - 401.126 22.020 35.162 96.660 9. 847 57.284 110.793 114.580 121.681 69.749 RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.273 475.960 622.747 71.276 2.373 2.286 22.342 22.NOTES TO THE FINANCIAL STATEMENTS 10.555 83.472 197.906 7.426 121.638 4.139 100.355 57.276 2.040 17.696 136.871 57.829 551.795 89.080 535.185 26.736 55.273 497.559 63.426 6.749 114.040 57. PLANT AND EQUIPMENT (continued) Group Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Depreciation and impairment loss (continued) At 31 March 2012: Accumulated depreciation Accumulated impairment loss 36.065 36.276 27.638 43.342 121.272 49.492 18. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 121.773 11.793 17.273 22.065 Carrying amounts At 1 January 2010 At 31 December 2010/ 1 January 2011 At 31 March 2012 151.071 51. PROPERTY.959 68.309 Pos Malaysia Berhad annual report 2012 pg 149 .871 6.996 148. 801) 97.482 192 (7.415 (50.634 (1. PROPERTY.627 94.751) 99.875 147.354 125.290) (1.158 53.886 757.276 25.434 134.562) 11.969) 32.324 (8.044) 845.276 47.718 82. PLANT AND EQUIPMENT (continued) Company Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Cost At 1 January 2010 Additions Disposals Transfers At 31 December 2010/ 1 January 2011 Additions Disposals Transfers Transfer to assets classified as held for sale At 31 March 2012 101.876 3.718 25.108 170.535 13.NOTES TO THE FINANCIAL STATEMENTS 10.317 152.005.276 2.989 176.447 153.452 (728) 25.188) 28.403 87. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 pg 150 Pos Malaysia Berhad annual report 2012 .242 157.213 10 (9.681 (11.784 68.725) 112.801) 1.799 2.538 (231.921 2.071 4.380 (105) 18.256 1.385 (1.580 248.142 147.718 25.276 6.257 6.799 210.341 RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.471 98.833 210.276 2.799 210. PROPERTY.938 95.426 121.004 110.777 95.Accumulated depreciation .873 53.116 103.497) 80.416 103.286 Depreciation for the period Disposals Transfer to assets classified as held for sale At 31 March 2012: .888 6.111 4.004 11.273 439.034 (9.907 53.300 (93) 22.426 6.136 22.740 504 28.244 6.990 20.116 114.510 121.416 22.244 629 35.888 114.273 461.016 22.810 23.938 25.110 1.510 Pos Malaysia Berhad annual report 2012 pg 151 .810 80.273 385.086) 65.387 7.Accumulated impairment loss 32.270 (46) 110.660 9.603 15.645 (469) 100.207) (46) 29.289 84.675 (7.284 4.344 5.273 (9.273 318.568 543 84.058 54.273 363.373 (8.NOTES TO THE FINANCIAL STATEMENTS 10.623 35.409 2.273 22.273 22.286 30.316 (710) 22.873 6.236 3.648) RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.606 22.Accumulated depreciation .422 6.907 6. PLANT AND EQUIPMENT (continued) Company Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Depreciation and impairment loss At 1 January 2010 Depreciation for the year Impairment loss for the year Disposals At 31 December 2010/ 1 January 2011 : .623 18.111 2.Accumulated impairment loss 30. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 32. 318 66.413 459.627 90. office and computer equipment RM’000 Capital work-inprogress RM’000 Total RM’000 60. PLANT AND EQUIPMENT (continued) Company Leasehold Government land and leasehold land buildings and buildings Freehold land RM’000 Carrying amounts At 1 January 2010 At 31 December 2010/ 1 January 2011 At 31 March 2012 72.368 68.912 194.275 69.544 43.708 2.044 10.276 2.978 19.223 57.139 100.323 110.546 49.350 2.276 19.795 89. PROPERTY.NOTES TO THE FINANCIAL STATEMENTS 10.613 439.348 65.819 543.238 RM’000 RM’000 Building Improvements and Buildings renovations RM’000 RM’000 Plant and Machinery RM’000 Motor Vechicles RM’000 Furniture and fittings.373 2.165 46.261 73.932 pg 152 Pos Malaysia Berhad annual report 2012 .474 18.276 2.869 51.845 53. 845 417 87.2010: RM2.000) are for a lease period of sixty (60) periods commencing from 1 January 1992.262 2010 RM’000 57. PROPERTY.126 Company 2012 RM’000 83. which are at present carried at nil values in the statement of financial position.601.606 10.000 (31.2 Leasehold land and buildings The title deeds for certain landed properties with net carrying value amounting to RM1. These Government 10. In the previous financial year. no later than 31 December 2020. 10.126 57. The Company is also in the process of finalising lease agreements with the authorities for additional Government leasehold land and buildings currently used by the Company.333. this cost will be agreed upon finalisation of the agreement with the authorities. an upgrade of a postal counter system was discontinued and the 10.000) respectively. • Depreciation has been netted off against other income as the assets were purchased in relation to government grant received by the Group and Company.956 417 84. and thereafter will be recognised accordingly. PLANT AND EQUIPMENT (continued) Depreciation for the period has been allocated as follows: Group 2012 RM’000 Depreciation of property.373 2010 RM’000 54.000 based on nil recoverable amounts.561.000 (31.NOTES TO THE FINANCIAL STATEMENTS 10.2010 : RM210.12. the vesting date as stated in Note 3 to the financial statements.3 Government leasehold land and buildings The cost of government leasehold land and buildings for the Group and the Company of RM210. The cost capitalised is in respect of the lease for the first thir ty (30) years period as stipulated in the agreement signed between the Company and the Government. plant and equipment Other income* 86.799.12.2010: RM29.2010: RM29. The cost in respect of the remaining thir ty (30) years lease period has not been agreed.600.1 Hire purchase arrangements The carrying amount of motor vehicles purchased under hire purchase arrangements for the Group and the Company amounted to RM20. Group and the Company wrote down the carrying amount of these assets by RM22.12.4 Impairment loss leasehold land and buildings will be recognised in the statement of financial position upon the valuations being finalised by the authorities.273.000 (31. However. Pos Malaysia Berhad annual report 2012 pg 153 .12.799.000) and nil (31.606 54.000) have yet to be issued in the name of the Company as at 31 March 2012 by the relevant authorities. 071 15.2010 RM’000 790 518 pg 154 Pos Malaysia Berhad annual report 2012 .3.income generating investment properties 1. Few proper ties have been transferred from proper ty. The following are recognised in profit or loss in respect of investment proper ties: Group 31.12.2012 RM’000 At 1 January Transfer from property. since the buildings were no longer used by the Group and leased to third par ties.12. The fair values of all investment properties are determined based on market values.311 11.3.958 3.760 15.064 286 31.531) 27.2012 RM’000 Rental income Direct operating expenses: .071 Investment properties comprise a number of commercial proper ties that are leased to third par ties.2010 RM’000 15. plant and equipment (see Note 10) to investment properties.418 (2.NOTES TO THE FINANCIAL STATEMENTS 11.071 15. plant and equipment Change in fair value recognised in profit or loss At 31 March/31 December Included in the above are: At fair value : .142 27.958 31. INVESTMENT PROPERTIES Group Group 31.816 16.Freehold land and buildings .071 15.Leasehold land and buildings with unexpired lease period of more than 50 years 11. The anticipated growth rate of 15%. A discount rate used of 13. was applied.NOTES TO THE FINANCIAL STATEMENTS 12. adjusted for projected market and economic conditions and internal resource efficiency. The size of operations will remain with at least or not lower than the current results.630 - 4. The projected gross margin which reflects the average historical gross margin. Value in use was determined by discounting the future cash flows generated from the continuing operation of the business as a licensed digital certificate provider and was based on the following key assumptions: (i) (ii) (iii) (iv) (v) (vi) Cash flows were projected based on actual operating results and financial budget approved by management covering a 5-year business plan.630 The goodwill relates to the Group’s licensed digital certificate authority business unit. GOODWILL Group RM’000 Cost At 1 January 2010/31 December 2010/ 1 January 2011/31 March 2012 Amortisation and impairment losses At 1 January 2010/31 December 2010/ 1 January 2011/31 March 2012 Carrying amount At 1 January 2010/31 December 2010/ 1 January 2011/31 March 2012 4. Impairment testing for goodwill The recoverable amounts of the business unit is higher than its carrying amount and was based its value in use. Pos Malaysia Berhad annual report 2012 pg 155 . The unit will continue its operations indefinitely.30% which approximates the Group’s average cost of funds. there is a sudden change in the demand patterns. However. unless. INVESTMENTS IN SUBSIDIARIES Company 31.3.870) 45. 13.050 (2.2012 RM’000 Unquoted shares. the Group should be able to sustain its growth rate.NOTES TO THE FINANCIAL STATEMENTS Sensitivity to changes in assumptions Management recognises that the changes in demand patterns and the possibility of new entrants could have a significant impact on growth rate assumptions.706) 62. at cost Less : Accumulated impairment losses 65.180 31.12.344 pg 156 Pos Malaysia Berhad annual report 2012 .050 (19.2010 RM’000 65. Bhd. Effivation Sdn. Prestige Future Sdn. Bhd.3. PSH Properties Sdn. Bhd. Digicert Sdn. Held by PSH Venture Capital Sdn. Bhd. * British Virgin Islands Dormant 100 100 Malaysia Air courier services & fulfilment business 100 100 Malaysia Property investment 100 100 Malaysia Dormant 100 100 Country of incorporation Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Principal activities Printing and insertion of documents for mailing Licensed digital certification authority Property investment Dormant Dormant Investment holding Investment holding Investment holding Property investment Dormant Property investment 100 100 100 100 100 100 100 100 100 100 100 Effective ownership interest 31. INVESTMENTS IN SUBSIDIARIES (continued) Details of the subsidiaries are as follows: Name of subsidiary Datapos (M) Sdn. PSH Express Sdn.NOTES TO THE FINANCIAL STATEMENTS 13.2012 (%) 31. PSH Venture Capital Sdn. Bhd. Held by PSH Properties Sdn.12. Bhd. Bhd. Bhd. Bhd. PSH Allied Berhad PMB Properties Sdn. Real Riviera Sdn. Bhd. Bhd. Pos Malaysia & Services Holdings Berhad PSH Capital Partners Sdn. Bhd. Held by Pos Malaysia & Services Holdings Berhad PSH Investment Holding (BVI) Ltd. Pos Takaful Agency Sdn. Poslaju (M) Sdn. Bhd. Held by PSH Capital Partners Sdn. Bhd. Bhd.2010 (%) 100 100 100 100 100 100 100 100 100 100 100 Pos Malaysia Berhad annual report 2012 pg 157 . 461.3. 14.000 (31. the share of losses in those associates for the financial period and share of losses cumulatively not accounted for was RM2. at cost Less: Accumulated impairment losses 7.12.2010 RM’000 7.000 was recognised in current period.650) Company 31.000) and RM38.2010: RM38.164. the recoverable amounts are lower than the carrying amounts of the investments in the subsidiaries. pg 158 Pos Malaysia Berhad annual report 2012 . INVESTMENTS IN ASSOCIATES Group 31.2012 RM’000 7. As at 31 March 2012.2012 RM’000 Unquoted shares.650) 31. INVESTMENTS IN SUBSIDIARIES (continued) * The investment in PSH Investment Holding (BVI) Ltd.12.650) - The Group discontinued equity accounting of loss in associates as the loss exceeded the carrying amount of the investments. The recoverable amounts of the investment in subsidiaries are determined based on the value in use of the subsidiaries.650 (7.2010 RM’000 7. and accordingly.650 (7.458.000 (31.2010: loss of RM508. Impairment loss The carrying amounts of the investment in subsidiaries were assessed for impairment during the period.12.650 (7.NOTES TO THE FINANCIAL STATEMENTS 13.3.12.650) 31. Based on the assessment of the value in use. an allowance for impairment loss of RM17. has been consolidated based on the management financial statements for the financial period ended 31 March 2012 as a statutory audit is not required in the British Virgin Islands. The Group has no obligation in respect of these losses.650 (7.000) respectively. 465 (152) (1.503 709 19.309 81.5 50.12. Bhd.5 50. # CEN Sdn.848 3. # CEN Sdn.567 65.2010 Elpos Print Sdn. # Malaysia Malaysia Malaysia 40.169 717 21. Bhd.799 7 18. INVESTMENTS IN ASSOCIATES (continued) Summary financial information for associates.0 12.030) (994) 8.470 66. Pos Malaysia Berhad annual report 2012 pg 159 . # # Based on management accounts as at 31 March 2012/31 December 2010. not adjusted for the percentage ownership held by the Group: Effective ownership interest % Malaysia Malaysia # Country of incorporation Group 31.984 Total liabilities (100%) RM’000 9.724 Pospay Exchange Sdn.2012 Elpos Print Sdn.772 12. # Revenue (100%) RM’000 15.047 12.805 2.188 Profit /(Loss) (100%) RM’000 1.501 5.0 42.3.441 81. Bhd. Bhd.0 42. Bhd.0 Pospay Exchange Sdn.NOTES TO THE FINANCIAL STATEMENTS 14.307 341 (305) (1.294 40.383 18.161 12.047) 266 Total assets (100%) RM’000 6. Bhd. Malaysia 31.383 5. 146 86.562 (239.744 120.468 - 249.356 4.562 (239.950 104. OTHER INVESTMENTS Shares Group 31.774 pg 160 Pos Malaysia Berhad annual report 2012 .562 (249.678 86.744 3.744 3.NOTES TO THE FINANCIAL STATEMENTS 15.012 249.744 - Representing items: At amortised cost At fair value 120.012 3.562) - 3.240) 10.268 3.268 120.950 186.12.268 Market value of quoted investments 31.146 96.322 4.268 3.146 99.2012 Non-current Available-for-sale financial assets Less: Impairment loss Held to maturity investments Current Financial assets at fair value through profit or loss: held for trading Debentures Total RM’000 Unquoted in Malaysia RM’000 Quoted in Malaysia RM’000 Unquoted in Malaysia RM’000 249.562 (249.306 200.2010 Non-current Available-for-sale financial assets Less: Impairment loss Held-to-maturity investments 249.268 124.744 120.268 3.950 99.240) 10.268 3.3.322 86.744 120.562) 120.096 Current Financial assets at fair value through profit or loss: held-for-trading Held-to-maturity investments 4.322 10.268 124.356 99.356 14. 03.323 2.343 (357.678 200.193 121.323 123.096 14. OTHER INVESTMENTS (continued) Shares Group 31.2010 Representing items: At amortised cost At fair value Market value of quoted investments Company 31.323 2.343) 121.2012 Non-current Available-for-sale financial assets Less: Impairment loss Held-to-maturity investments Current Financial assets at fair value through profit or loss: held-for-trading Representing items At amortised cost At fair value Debentures Total RM’000 Unquoted in Malaysia RM’000 Quoted in Malaysia RM’000 Unquoted in Malaysia RM’000 186.678 186.323 2.774 14.096 186.193 2.678 - 14.096 - 357.12.193 121.516 121.323 121.193 121.193 - Market value of quoted investments Pos Malaysia Berhad annual report 2012 pg 161 .343 (357.323 123.323 2.678 14.323 357.678 14.516 2.343) - 2.NOTES TO THE FINANCIAL STATEMENTS 15.193 2. 021) 10.065 13.12.021) 10. These quoted shares were delisted from Bursa Malaysia Securities Berhad on 24 May 2011.2010: RM25.178 13.343 (347.079 - 357.065 Representing items: At amortised cost At fair value 186.322 10.000 (31.322.NOTES TO THE FINANCIAL STATEMENTS 15.757 85.308 186.164 199.757 Current Financial assets at fair value through profit or loss: held-for-trading Held-to-maturity investments 2.243 - 2.178 100.065 - Market value of quoted investments Available-for-sale financial assets During the financial period.308 103. OTHER INVESTMENTS (continued) Shares Company 31.856 13.000) for its unquoted equity instruments classified as available-for-sale financial assets as there was “significant” and “prolonged” decline in the fair value of the investments.856 100. the Group recognised impairment loss of RM10.178 13. 2010 Non-current Available-for-sale financial assets Less: Impairment loss Held-to-maturity investments Debentures Total RM’000 Unquoted in Malaysia RM’000 Quoted in Malaysia RM’000 Unquoted in Malaysia RM’000 357.308 100.178 - 13. pg 162 Pos Malaysia Berhad annual report 2012 .178 199.065 186.343 (347.178 186.098.243 13.322 85.322 - 85.757 96.856 2.12. 218 8.059 556 1.000) and RM32.205.2012 RM’000 31.855 31.12.590 24.983.12.3.2010 RM’000 5.NOTES TO THE FINANCIAL STATEMENTS 16.490 108. inventories recognised as expenses in profit or loss of the Group and of the Company amounted to RM42.492 10. 17.2012 RM’000 31.396 28.12.761 Company 31.000 (31.2010 RM’000 4.051 64.457 During the financial period.000 (31.3.2012 RM’000 6.168 83.2010: RM18.2010 RM’000 Company 31.901 556 5.12.928 1.3.2012 RM’000 Postal uniforms and consumables Pos 2020 merchandise Insertion and mailing materials Digital certificates.000) respectively.2010 RM’000 Pos Malaysia Berhad annual report 2012 pg 163 .393 31.260 648 1.658 149.132 31.3.801 83.732 1. INVENTORIES Group 31. CD ROM and smart cards 6.848.2010: RM26.493 117.12.097 121.633 19.558.080 31. TRADE AND OTHER RECEIVABLES Group Note Trade Trade receivables Accrued receivables a 93.12.207 648 6. 833 8.000 due from related companies of a significant investor that has an influence over the Group.772 174.601 8.802 242.019 11. interest free and repayable on demand.199 145. Amount due from subsidiaries The amount due from subsidiaries is unsecured.704 10.683 4.377 38.3. The credit terms for international mail receivables range from six (6) months to eighteen (18) months in accordance with the Universal Postal Union guidelines.2012 RM’000 31.12.195 106.586 13. management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.753 3.12. Trade receivables Credit terms of trade receivables other than international mail receivables range from thir ty (30) days to sixty (60) days.193 257.664 153.248 11.625 8.994 5.157 9. pg 164 Pos Malaysia Berhad annual report 2012 . b.2010 RM’000 Company 31.573 8. Due to these factors.685 6.NOTES TO THE FINANCIAL STATEMENTS 17. TRADE AND OTHER RECEIVABLES (Continued) Group Note Non-trade Other receivables Amount due from subsidiaries Deposits Investment income receivables Staff advances b 2.882 31.852 31.028.595 a.544 187. the Group has adopted a credit evaluation policy for all trade receivables. Included in trade receivables of the Group and Company is RM2. In addition.262 134.2012 RM’000 31.236 2. Concentration of credit risk with respect to trade receivables are limited due to the Group’s large number of customers whereby sufficient allowance has been made for debts that are doubtful in collection.3.2010 RM’000 11. Pos Malaysia Berhad annual report 2012 pg 165 .2010: RM4.2012 RM’000 Company 31. CASH AND CASH EQUIVALENTS Group 31.648 151.700 119.346 165.12.000) and collections on behalf of agency payables amounting to RM134.443 31.903 544.338.607 151.2010 RM’000 31.533 160.900 77.2012 RM’000 Deposits are placed with : Licensed banks Other financial institutions Liquid investments Cash and bank balances 989 164.748 436.000 160.2010: RM126.12.129.781 395.139.707 157. The Directors regard liquid investments as cash and cash equivalents when they are highly liquid investments that are readily conver tible to known amounts of cash and which are subject to an insignificant risk of changes in value.000 198.076 1.12.136 354.052 118.NOTES TO THE FINANCIAL STATEMENTS 18.838 97.607 118.000).3.700 84.12.000 (31.2010 RM’000 Included in deposits with licensed banks and other financial institutions of the Group and the Company are cash held for the purpose of distribution of fuel rebate for the government amounting to Nil (31.345 155.3.335 280. plant and equipment: Cost Accumulated depreciation Carrying amount 1.NOTES TO THE FINANCIAL STATEMENTS 19.755 pg 166 Pos Malaysia Berhad annual report 2012 . The completion of the sale is expected within the next 12 months. ASSETS CLASSIFIED AS HELD FOR SALE The Group and the Company entered into a sale and purchase agreement to dispose of a proper ty on 10 May 2011. As at 31 March 2012.801 (46) 1. the details of the property are as follows: Group and Company Leasehold land RM’000 Property. 513 537.000.2012 RM’000 Amount 31.513 537.513 * 268.50 each Balance at 31 March Ordinary shares of RM0.000 * 2.NOTES TO THE FINANCIAL STATEMENTS 20.000.2010 RM’000 * Share capital includes the Special Rights Redeemable Preference Share of RM1.000 * 2. Pos Malaysia Berhad annual report 2012 pg 167 .12.50 Special Rights Redeemable Preference shares of RM1 each Issued and fully paid: Ordinary shares of RM0.026 268.000.026 * 537.2010 RM’000 Number of shares 31.12.026 1.000 * 1.3.00.513 537.3.513 537.2012 RM’000 Authorised: Ordinary shares of RM0.513 * 268. SHARE CAPITAL AND RESERVES Group and Company Amount 31.026 268.026 268.000 * Number of shares 31.000.026 * 537.50 each Balance at 31 March Special Rights Redeemable Preference shares of RM1 each 268. merger and takeover. The Special Rights Redeemable Preference shareholder is entitled to receive notices of meetings but does not carry any right to vote at such meetings of the Company. He also has the right to require the Company to redeem the Special Rights Redeemable Preference Share at par at any time. require prior consent of the Special Rights Redeemable Preference shareholder.000 (31. the alteration of the Ar ticles of Association of the Company relating to the rights of the Special Rights Redeemable Preference shareholder. (iii) In a distribution of capital or a winding-up of the Company. pg 168 Pos Malaysia Berhad annual report 2012 . SHARE CAPITAL AND RESERVES (continued) (a) The Special Rights Redeemable Preference Share confers the following rights: (i) The Special Rights Redeemable Preference Share issued to the Government of Malaysia would enable the Government of Malaysia through Minister of Finance (Incorporated). The movements in each category of the reserves are disclosed in the statements of changes in equity. creation or issue of any shares which when aggregated with all other existing issued shares. (b) Share premium reserve This reserve comprises the premium paid on subscription of shares in the Company over and above the par value of the shares. SECTION 108 TAX CREDIT Under the single-tier tax system which came into effect from the year of assessment 2008. or its successors or any Minister.000.000 (31. Dividends paid under this system are tax exempt in the hands of shareholders.12. the Special Rights Redeemable Preference shareholder is entitled to the repayment of the capital paid-up on the Special Rights Redeemable Preference Share in priority to any repayment of capital to any other member. available to frank as tax exempt dividends.000. 21.000.12. Companies with Section 108 tax credit as at 31 December 2007 may continue to pay franked dividends until the Section 108 tax credit are exhausted or 31 December 2013 whichever is earlier unless they opt to disregard the Section 108 credits to pay single-tier dividends under the special transitional provisions of the Finance Act 2007. plant and equipment immediately prior to its reclassification as investment proper ty.2010: RM388. As at 31 March 2012. The Special Rights Redeemable Preference Share does not confer any right to participate in the capital or profits of the Company.000.000) as at 31 March 2012. companies are not required to have tax credits under Section 108 of the Income Tax Act. in particular. amalgamation. appointment of foreign directors. (ii) Cer tain matters. representative or any person acting on behalf.000) of the retained earnings of the Company as franked dividends. any substantial acquisitions and disposal of assets. the Company has sufficient Section 108 tax credits (which expires on 31 December 2013) to pay approximately RM317.NOTES TO THE FINANCIAL STATEMENTS 20. In addition. (c) Revaluation reserve The revaluation reserve relates to the revaluation of proper ty. the dissolution of the Company. carry ten percent of total voting rights.2010: RM72. 1967 for dividend payment purposes. the Company has tax exempt income of approximately RM72. to ensure that cer tain major decisions affecting the operation of the Company are consistent with the Government’s policy. 489 (27.399) (28.804 (17.804) (43.293) 27.804 (11.399) (29. Pos Malaysia Berhad annual report 2012 pg 169 .2012 RM’000 Group Property.176) (29.12. DEFERRED TAX ASSETS AND LIABILITIES Deferred tax assets and liabilities are attributable to the following: Assets 31.12.502 (26.489) 556 17.622 (12.548 24.904) (30.610 873 (11.548 25.502) 556 17.282) (43.3.865) (11.293) (45.039 (18.804) (17.NOTES TO THE FINANCIAL STATEMENTS 22.2010 RM’000 Net 31.248 17.745) 25.904) 18.804) (30.353) 24.372) (42.804) (30.2010 RM’000 Liabilities 31.954 26. plant and equipment Provisions Unabsorbed tax losses Tax assets/ (liabilities) Set-off Net tax assets/ (liabilities) Company Property.2010 RM’000 - Deferred tax assets and liabilities are offset above when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority.12.176) 17.901) (43.399) (17.934 7 27.3.620) 17.348) 17. plant and equipment Provisions Tax assets/ (liabilities) Set-off Net tax assets/ (liabilities) 1.2012 RM’000 31.610 873 19.3.372) (11.489 (17.502 (17.2012 RM’000 31.954 (17.901) 26.372) 1.248 (11.622) 417 (45.865) 31.934 7 (17. 607 Principal 31.2012 RM’000 Group Less than one year Between one and five years 5 15 20 Company Less than one year Between one and five years 15.000.222 30.942 The deductible temporary differences do not expire under the current tax legislation.454 31.12.042 32.2010 RM’000 13.3.2012 RM’000 5 15 20 Gross 31.12.801 3.998 * Interest amounts to less than RM1.897 51.NOTES TO THE FINANCIAL STATEMENTS 22.3.605 13.557 1.539 47.072 1.2010 RM’000 15.12. pg 170 Pos Malaysia Berhad annual report 2012 .2012 RM’000 * * * Principal 31. Deferred tax assets were not recognised in respect of these items because it was not probable that future taxable profit will be available against which the Group can utilise the benefits there from.2010 RM’000 50.2010 RM’000 1.2012 RM’000 Unutilised tax losses Unabsorbed capital allowances 49.806 1.236 30.762 43.801 3.12.738 43.3. 23.565 1.563 47.605 Interest 31.960 Interest 31.870 51. DEFERRED TAX ASSETS AND LIABILITIES (continued) Unrecognised deferred tax assets Deferred tax assets have not been recognised for the following items: Group 31.804 1.026 32.3. HIRE PURCHASE LIABILITIES Hire purchase liabilities are payable as follows: Gross 31. 329 1.328 27.973 471.690 a b b 239 86.3.3.467 12.138 21.2012 RM’000 40. Pos Malaysia Berhad annual report 2012 pg 171 .076 228.138 21.492 130.924 521.645 587.994 14.423 506.2010 RM’000 38.954 31.084 161.NOTES TO THE FINANCIAL STATEMENTS 24.2010: 6 months to 18 months) in accordance with the Universal Postal Union guidelines.208 151.539 432. TRADE AND OTHER PAYABLES Group Note Trade Trade payables Non-trade Amount due to subsidiaries Amount due to associates Other payables and accruals: Unpresented postal and money orders Agency payables Money order payables Service payables Other accruals Deposits received d Company 31.328 24. Included in trade payables of the Group and of the Company is RM9.12.249 134.069 85.492 130.2012 RM’000 42.412 12.876 31.392 233. Trade payables Credit terms of international mail payables of the Group and of the Company range from six (6) months to eighteen (18) months (31.377 c 134.075 470.467 12.968 14.12. interest free and repayable on demand. b.460 547.021 28.621 a.931 564.000 due to related companies of a significant investor that has an influence over the Group.021 31.2010 RM’000 35.12.455 13. Amount due to subsidiaries and associates The amount due to subsidiaries and associates are unsecured.695 52.069 85.050 239 86.249 1.050 31.849 37. 000 (31. air and land to both national and international destinations.000.12. business of internet security products.296. The grant related to assets is amor tised over the useful life of the assets. • operating decision maker) and the Board of Directors review internal management repor ts at least on a quar terly basis. Agency payables Included in agency payables is cash held for the purpose of distribution of fuel rebate for the government amounting to Nil (31.000) respectively. None of these segments meets any of the quantitative thresholds for determining repor table segments in 31 December 2010 and 31 March 2012.338.2010: RM4.000) has been recognised as other income. OPERATING SEGMENTS The Group has three reportable segments.000.NOTES TO THE FINANCIAL STATEMENTS 24.Includes courier solutions by sea.2010: RM1.000 (31. Segment results is used to measure There are varying levels of integration between the Mail repor table segment and the Courier repor table segments.12. air and land to both national and international destinations.463. pg 172 Pos Malaysia Berhad annual report 2012 . the grant amounting to RM4. • Retail . on a systematic basis.12. solutions and services and rental income from investment proper ties held by the Group. which are the Group’s strategic business units. Inter-segment pricing is determined on a negotiated basis. The grant received was both related to income and assets and was conditional upon the execution of post transformation plan on the expenditures spent and the acquisition of certain motor vehicles. logistics solutions by sea.2010: RM21. TRADE AND OTHER PAYABLES (continued) c.Includes over-the-counter services for payment of bills and cer tain financial products and services.819. This integration includes shared distribution services. The Group and Company have been awarded a RM8.12. The strategic business units offer different products and services and are managed separately because they require different business processes and customer needs.Includes the provision of basic mail services for corporate and individual customers and customised solutions such as Mailroom Management and Direct Mail.2010: RM2. The grant related to income is recognised as other income in profit or loss to match with the expenditures spent.000).000 (31. the Group’s Chief Executive Officer (the chief performance as management believes that such information is the most relevant in evaluating the results of cer tain segments relative to other entities that operate within these industries.776.12.000) government grant which was received during the period.000) and RM25.2010: RM731.000 (31. The following summary describes the operations in each of the Group’s repor table segments: • Mail .520. Other operations include the hybrid mail which provides data and document processing services. For each of the strategic business units. as described below. During the period. Performance is measured based on segment results. d. Other accruals Included in other accruals of the Group and the Company are deferred government grant received and deferred income in relation to prepaid mail amounting to RM4. Courier . 25. Accordingly. Segment capital expenditure Segment capital expenditure is the total cost incurred during the financial year to acquire proper ty. Geographical segments The Group operates in Malaysia. as included in the internal management repor ts that are reviewed by the Group’s Chief Executive Officer. Segment total liabilities are used to measure the gearing of each segment. plant and equipment. Pos Malaysia Berhad annual report 2012 pg 173 . information by geographical segment is not presented. Major customers The Group has a diversified range of customers varying from retail customers and wholesale customers. There is no significant concentration of revenue from any customers. Segment total asset is used to measure the return of assets of each segment. as included in the internal management repor ts that are reviewed by the Group’s Chief Executive Officer.NOTES TO THE FINANCIAL STATEMENTS Segment assets The total of segment asset is measured based on all assets (including goodwill) of a segment. Segment liabilities The total segment liabilities is measured based on all liabilities of a segment. 743 - Elimination RM’000 (69.687 1. plant and equipment Depreciation of property.306 - Courier RM’000 308.998 (20.346 924.Property.062 122.481.660 177.783 - Other operations RM’000 48.076 176.760 22.660 1.425 310. plant and equipment Finance income Finance expense Impairment loss on financial assets designated as available-for-sale Change in fair value of investment properties Fair value through profit or loss: held for trading Tax expense 130.253) (190) 3.873 183.866 (4.359) (2) 173.209 1.361) Pos Malaysia Berhad annual report 2012 Mail RM’000 921.597 64.845) 19.381) 14.050) - Group RM’000 1.112 34. OPERATING SEGMENTS (Continued) Period Ended 31 March 2012 Revenue Total external revenue Intersegment revenue Total revenue for reportable segments Reportable segment results Other unallocated results Profit before taxation Reportable segments assets Other unallocated assets Total assets Reportable segment liabilities Other unallocated liabilities Total liabilities Other information Capital expenditure .442 200.279 266.366 (16.531) 283 (61.876 (46.983 pg 174 .170 133.033 1.843 423.618 7.210) (1.416 118.011 - Retail RM’000 202.527 3.481.408 347.202 743.043 755.046 34.023) (465) 24.322) (2.723 (86.849 6.050) (69.140 599.038) (10.153 (2.493 (46.498.849 48.NOTES TO THE FINANCIAL STATEMENTS 25.126) 155. 338 2.039) 146.781 (28.870 34.472) (4) 96.619 (2.124 49.330) 1.516 148.303) 144.643 1.950) 9.431 (24.643 19.973 9.111 58. plant and equipment Finance income Finance expense Reversal of impairment loss on financial assets Impairment loss on financial assets designated as available-for-sale Impairment loss on property.469 135.537 (25.288 546.184 (13.602) 99.NOTES TO THE FINANCIAL STATEMENTS 25.126) 13.Property.273) 1.078 674.718 226.668 (6.361 112.870 (2.219 213.152) (811) 9. OPERATING SEGMENTS (Continued) Year Ended 31 December 2010 Revenue Total external revenue Intersegment revenue Total revenue for reportable segments Reportable segment results Other unallocated results Profit before taxation Reportable segments assets Other unallocated assets Total assets Reportable segment liabilities Other unallocated liabilities Total liabilities Other information Capital expenditure .033) (163) 3.926 (57.066 701.338 333.098) (22.234 (2.626 Mail RM’000 Courier RM’000 Retail RM’000 Other operations RM’000 Elimination RM’000 Group RM’000 Pos Malaysia Berhad annual report 2012 pg 175 .958) 605.928) 15.731 287.489 (31.014.469) (1.537 34.330) (52.023 607.375.279 122.975 1.000 227.141 1. plant and equipment Depreciation of property.567 (52.342 (13.014. plant and equipment Fair value through profit or loss: held for trading Tax expense 74.975 105.307 197.525 9. and (e) Other financial liabilities measured at amortised cost (OL).648 694.641) (20) (564.323 2.994 436.642 2. FINANCIAL INSTRUMENTS 26. (b) Fair value through profit or loss (FVTPL): Held for trading (HFT) (c) Available-for-sale financial assets (AFS).695) (20) (564.621) (564.193 121.641) 123. (d) Held-to-maturity investments (HTM).695) (587.1 Categories of financial instruments The table below provides an analysis of financial instruments categorised as follows: (a) Loans and receivables (L&R).516 257.157 544.621) (564.2012 Financial assets Group Other investments Trade and other receivables Cash and cash equivalents Company Other investments Trade and other receivables Cash and cash equivalents Financial liabilities Group Hire purchase liabilities Trade and other payables Company Trade and other payables (587.268 3.157 544.012 153.323 121.3. Carrying amount RM’000 31.158 257.744 120.994 436.076 821.245 153.268 120.193 124.NOTES TO THE FINANCIAL STATEMENTS 26.648 818.744 L&R /(OL) RM’000 FVTPL-HFT RM’000 AFS RM’000 HTM RM’000 pg 176 Pos Malaysia Berhad annual report 2012 .076 697.233 3. 243 242.960) (506.533 783.065 186.856 10.595 395.065 (43.1 Categories of financial instruments (continued) Carrying amount RM’000 31.902 L&R /(OL) RM’000 FVTPL-HFT RM’000 AFS RM’000 HTM RM’000 187.847) 199.595 395.377) (550.322 10.849) (515.774 187.NOTES TO THE FINANCIAL STATEMENTS 26.12.322 10.533 583.337) (43.856 2.356 4.2010 Financial assets Group Other investments Trade and other receivables Cash and cash equivalents Company Other investments Trade and other receivables Cash and cash equivalents Financial liabilities Group Hire purchase liabilities Trade and other payables Company Hire purchase liabilities Trade and other payables (43.377) (550.128 242.882 354.443 796.882 354.325 4.322 186.998) (471.356 2. FINANCIAL INSTRUMENTS (Continued) 26.847) (43.096 186.960) (506.443 597.849) (515.322 10.998) (471.096 186.568 200.337) - - - Pos Malaysia Berhad annual report 2012 pg 177 . 731) Year ended 31.926) (9.2012 RM’000 Year ended 31.322) 8. At the same time.NOTES TO THE FINANCIAL STATEMENTS 26.714 (25.3.928) 6.2012 RM’000 Net gains/(losses) on : Fair value through profit or loss : .1.12.Financial liabilities measured at amortised cost 341 (10.714 (25.2 Net gains and losses arising from financial instruments Group 1.772 (2.556) 1.908 (2.12.020 (3.2011 to 31. FINANCIAL INSTRUMENTS (Continued) 26.2010 RM’000 26.Available-for-sale financial assets . The Group has exposure to the following risks from its use of financial instruments: • • • Credit risk Liquidity risk Market risk pg 178 Pos Malaysia Berhad annual report 2012 .500 (4.3.2011 to 31.322) 7.1.309 362 (10.Held for trading .098) 6.059) (2.Held-to-maturity investments .3 Financial risk management The Group’s overall financial risk management objective is to ensure the continuous growth in profitability and enhance shareholders’ value in a competitive and changing environment. the Group is focused in performing its Universal Service Obligation as a provider of postal service throughout the country and to international destinations in an efficient and effective manner.2010 RM’000 Company 1.038) (7.098) 7.713 24.153) (2.807 9.152) 1.Loans and receivables .037) (8. The Group seeks to control credit risk by setting counterpar ty limits and ensuring that services are made to customers with an appropriate credit history. are monitored individually. which are deemed to have higher credit risk. Concentration of credit risk with respect to receivables is limited due to the Group’s large number of customers. The Company also has exposure to credit risk from loans and advances to subsidiaries.NOTES TO THE FINANCIAL STATEMENTS 26. Pos Malaysia Berhad annual report 2012 pg 179 . The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant more than 120 days. Exposure to credit risk. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their realisable values. credit quality and collateral As at the end of the reporting period. Receivables Risk management objectives. the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position. policies and processes for managing the risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.4 Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterpar ty to a financial instrument fails to meet its contractual obligations. are monitored individually. The Group’s exposure to credit risk arises principally from its receivables from customers and investment securities. A significant por tion of these receivables are regular customers that have been transacting with the Group. Any receivables having significant balances past due more than 120 days. which are deemed to have higher credit risk. 874 12.2010 Not past due Past due 1-30 days Past due 31-120 days Past due more than 120 days 63.553 7.827 115.553 7.4 Credit risk (continued) Receivables (continued) Impairment losses The ageing of trade receivables as at the end of the repor ting period was: Gross Group 31.863) 49.413) (8.962 13.NOTES TO THE FINANCIAL STATEMENTS 26.396 63.3.962 12.323 18.967 15.863) (8.589 38.256 49. FINANCIAL INSTRUMENTS (continued) 26.454 30.590) (22.419 117.282 126.2012 Not past due Past due 1-30 days Past due 31-120 days Past due more than 120 days 31.431 13.266) (20.809 RM’000 Impairment RM’000 Net RM’000 (557) (1.237 93.12.967 15.393 pg 180 Pos Malaysia Berhad annual report 2012 .454 39. 806 6.724 9.537 44.947) (7.NOTES TO THE FINANCIAL STATEMENTS 26.806 6.995 83.081 23.2010 Not past due Past due 1-30 days Past due 31-120 days Past due more than 120 days 41.167 7.945 84.033 13.211 5. Pos Malaysia Berhad annual report 2012 pg 181 .351 23.3.947) 44.556 RM’000 Impairment RM’000 Net RM’000 (557) (1.266) (18.815 5. FINANCIAL INSTRUMENTS (continued) 26.351 31.590 Allowance for impairment losses of trade receivables has been made for the remaining past due receivables as the Group monitors the repayments of these customers regularly and are confident of ability of the customers to repay the balances owing.2012 Not past due Past due 1-30 days Past due 31-120 days Past due more than 120 days 31.845 64.12.100) (19.633 41.033 13.942 91.4 Credit risk (continued) Receivables (continued) Impairment losses (continued) Gross Company 31.211 5.923) (7. management does not expect any counterpar ty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying amounts in the statements of financial position.594 (44) 22.2010 RM’000 12.077) 7.2012 RM’000 At 1 January Impairment loss recognised Impairment loss reversed At 31 March/31 December 8.12.976 19.077) 8. the Group has only invested principally in domestic securities. Unless the Group is satisfied that recovery of the amount is possible.12.593 347 (4.2012 RM’000 7. policies and processes for managing the risk Investments are allowed only in liquid securities and only with counterpar ties that have a credit rating equal to or better than the Group. FINANCIAL INSTRUMENTS (continued) 26. In view of the sound credit rating of counterpar ties.4 Credit risk (continued) Receivables (continued) The movements in the allowance for impairment losses of trade receivables during the financial period were: Group 31. credit quality and collateral As at the end of the reporting period. pg 182 Pos Malaysia Berhad annual report 2012 .024 (4.2010 RM’000 12.947 11.3.3.413 31. Exposure to credit risk.863 13.NOTES TO THE FINANCIAL STATEMENTS 26.923 31. Investments and other financial assets Risk management objectives.863 Company 31. the amount considered irrecoverable is written off against the receivable directly.947 The allowance account in respect of receivables is used to record impairment losses. The investments and other financial assets are unsecured. The amounts due from subsidiaries are repayable on demand.2012 RM’000 At 1 January Impairment loss recognised At 31 March/31 December Inter company balances Risk management objectives. policies and processes for managing the risk The Company provides unsecured advances to subsidiaries.NOTES TO THE FINANCIAL STATEMENTS 26.098 239. FINANCIAL INSTRUMENTS (continued) 26. The movements in the allowance for impairment loss during the financial year were: Group 31.098 347.3.322.142 25.322 249.2010 RM’000 321.322 357.240 31.021 239.000 (31.343 31.562 pg 183 .4 Credit risk (continued) Investments and other financial assets (continued) Impairment losses An impairment loss of RM10. Exposure to credit risk.12.2010 RM’000 214. These quoted shares were delisted from Bursa Malaysia Securities Berhad on 24 May 2011. the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.2012 RM’000 347.12.021 10.2010: Nil) in respect of a quoted equity instrument classified as available-for-sale financial assets was recognised as there was significant and prolonged decline in fair value of the investment. The Company monitors the results of the subsidiaries regularly.923 25. Pos Malaysia Berhad annual report 2012 Company 31.12.240 10. Loans and advances are only provided to subsidiaries which are wholly owned by the Company. credit quality and collateral As at the end of the reporting period.3. 776.641 Company Trade and other payables 587.000 (31. the inter company balance that is assessed to be irrecoverable had been impaired amounting to RM45.NOTES TO THE FINANCIAL STATEMENTS 26. 26.2010: RM45.641 5 564. FINANCIAL INSTRUMENTS (continued) 26. The Company does not specifically monitor the ageing of current advances to the subsidiaries.695 2.3% 20 564.000). The Group’s exposure to liquidity risk arises principally from its various payables. as far as possible. The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure.621 564.3.776. Maturity analysis The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the repor ting period based on undiscounted contractual payments: Carrying amount RM’000 31.5 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.4 Credit risk (continued) Inter company balances (continued) Impairment losses As at the end of the reporting period.621 564.12.2012 Group Hire purchase liabilities Trade and other payables 20 564.621 564.695 587.695 587. that it will have sufficient liquidity to meet its liabilities when they fall due.626 15 15 Contractual interest rate Contractual cash flows RM’000 Under 1 year RM’000 1-5 years RM’000 pg 184 Pos Malaysia Berhad annual report 2012 . 960 506.026 506.849 515.847 2.565 506. FINANCIAL INSTRUMENTS (continued) 26.454 15.3.377 553.605 471.849 519.2010 Group Hire purchase liabilities Trade and other payables Company Hire purchase liabilities Trade and other payables 43.942 15.NOTES TO THE FINANCIAL STATEMENTS 26.539 32.563 Pos Malaysia Berhad annual report 2012 pg 185 .891 32.3% .042 471.337 2.998 471.539 43.3% .6% 47.12.5 Liquidity risk (continue) Maturity analysis (continued) Carrying amount RM’000 Contractual interest rate Contractual cash flows RM’000 Under 1 year RM’000 1-5 years RM’000 31.377 550.377 521.849 486.6% 47.403 32.3.563 32. 26.3.941 pg 186 Pos Malaysia Berhad annual report 2012 . based on carrying amounts as at the end of the repor ting period was: Group 31.2012 Trade and other receivables Trade and other payables Exposure in the statement of financial position 31. interest rates and other prices will affect the Group’s financial position or cash flows.NOTES TO THE FINANCIAL STATEMENTS 26.372) Denominated in USD RM’000 9.12.6. such as foreign exchange rates. The currency giving rise to this risk is primarily US Dollar (USD). Risk management objectives. policies and processes for managing the risk The Group does not use any forward contracts to hedge against its exposure to foreign currency.1 Currency risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. FINANCIAL INSTRUMENTS (continued) 26.985) 1.2010 Trade and other receivables Trade and other payables Exposure in the statement of financial position 9. as a result of providing foreign mail exchange service and remittance service. The Group ensures that the net exposure is kept to an acceptable level by monitoring the fluctuation of the foreign currency.924 (16. Exposure to foreign currency risk The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk.926 (7.6 Market risk Market risk is the risk that changes in market prices.296) (6. As for investments in fixed rate debt securities. 26. remained constant and ignores any impact of forecasted sales and purchases.12. policies and processes for managing the risk The Group adopts a policy of investing and borrowing mainly in fixed rate instruments to avoid the risk of fluctuation in interest rates.2012 RM’000 Group USD 146 (477) 31. Risk management objectives.2012 RM’000 146 31. FINANCIAL INSTRUMENTS (continued) 26.2 Interest rate risk The Group’s investments in fixed rate debt securities. the Group will only invest in debt securities that have a rating of A and above. Equity 31. in par ticular interest rates.6. investments in equity securities and shor t term receivables and payables are not significantly exposed to interest rate risk.3.2010 RM’000 (477) A 10% weakening of RM against the USD at the end of the repor ting period would have had equal but opposite effect on the above currencies to the amounts shown above. This analysis assumes that all other variables. fixed rate borrowings. Pos Malaysia Berhad annual report 2012 pg 187 .3. on the basis that all other variables remained constant. A 10% strengthening of the RM against the USD at the end of the repor ting period would have increased (decreased) equity and post-tax profit or loss by the amounts shown below. deposits placed with licensed banks.1 Currency risk (continued) Currency risk sensitivity analysis Foreign currency risk arises from Group entities which have a USD functional currency.6 Market risk (continued) 26.12.NOTES TO THE FINANCIAL STATEMENTS 26.6.2010 RM’000 Profit or loss 31. Hence.6. 120.744 165.998) 299.12.096 157.2012 RM’000 31.2 Interest rate risk (continued) Exposure to interest rate risk The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments.3. based on carrying amounts as at the end of the repor ting period was: Group 31.2010 RM’000 pg 188 Pos Malaysia Berhad annual report 2012 .712 31.000 281.607 (43. Therefore. (b) Cash flow sensitivity analysis for variable rate instruments The Group does not have any financial assets and liabilities based on variable rate instruments.12.NOTES TO THE FINANCIAL STATEMENTS 26.335 (20) 286.193 160. FINANCIAL INSTRUMENTS (continued) 26.065 151.150 121. a change in interest rates at the end of the reporting period would not affect profit or loss.059 186.2012 RM’000 Fixed rate instruments Financial assets Held-to-maturity investments Deposits placed with licensed banks Financial liabilities Hire purchase liabilities Interest rate risk sensitivity analysis (a) Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. no sensitivity analysis was performed.6 Market risk (continued) 26.3.193 186.960) 293.052 (43.2010 RM’000 Company 31. 000).NOTES TO THE FINANCIAL STATEMENTS 26.2010: RM327.2010: 10%) weakening in FBMKLCI would have had equal but opposite effect on equity and profit or loss respectively. are as follows : Pos Malaysia Berhad annual report 2012 pg 189 .000 for investment classified as fair value through profit or loss (31. policies and processes for managing the risk Management of the Group monitors the equity investments on a por tfolio basis. Risk management objectives.6 Market risk (continued) 26.6.12. The fair values of other financial assets and liabilities. shor t term receivables and payables approximate fair values due to the relatively shor t term nature of these financial instruments.12. Equity price risk sensitivity analysis This analysis assumes that all other variables remained constant and the Group’s equity investments moved in correlation with FTSE Bursa Malaysia KLCI (FBMKLCI). A 10% (31. A 10% (31.7 Fair value of financial instruments The carrying amounts of cash and cash equivalents. Material investments within the por tfolio are managed on an individual basis and all buy and sell decisions are approved by the Directors. together with the carrying amounts shown in the statements of financial position. 26.12.2010: 10%) strengthening in FBMKLCI at the end of the repor ting period would have increased post-tax profit or loss by RM245.3 Other price risk Equity price risk arises from the Group’s investments in equity securities. FINANCIAL INSTRUMENTS (continued) 26. discounted at the market rate of interest at the end of the reporting period.2012 Carrying amount RM’000 Group Unquoted held-to-maturity investments Quoted shares Hire purchase liabilities Company Unquoted held-to-maturity investments Quoted shares Hire purchase liabilities 121.7 Fair value of financial instruments (continued) 31.856 47. pg 190 Pos Malaysia Berhad annual report 2012 .268 20 186.356 47.696 2.605 Fair value RM’000 31.2010 Carrying amount RM’000 Fair value RM’000 - - The following summarises the methods used in determining the fair value of financial instruments reflected in the above table.323 186.NOTES TO THE FINANCIAL STATEMENTS 26.960 186. which is determined for disclosure purposes.390 3. the market rate of interest is determined by reference to similar hire purchase arrangements.268 20 121.356 43.12.696 4.856 43. Investments in equity and debt securities The fair values of financial assets that are quoted in an active market are determined by reference to their quoted closing bid price at the end of the repor ting period.565 120. For hire purchase liabilities. FINANCIAL INSTRUMENTS (continued) 26.065 2.323 121.193 2.096 4. Non-derivative financial liabilities Fair value.3.390 2. is calculated based on the present value of future principal and interest cash flows.998 186.744 3. The table below analysis financial instruments carried at fair value.9% 2. when applicable.12. as prices) or indirectly (i. by valuation method.9% 2.5% .e.e.8 Fair value hierarchy Comparative figures have not been presented for 31 December 2010 by vir tue of the exemption provided in paragraph 44G of FRS 7. The different levels have been defined as follows: • • • Level 1: Level 2: Level 3: Quoted prices (unadjusted) in active markets for identical assets or liabilities. FINANCIAL INSTRUMENTS (continued) 26. derived from prices).NOTES TO THE FINANCIAL STATEMENTS 26.7 Fair value of financial instruments (continued) Interest rates used to determine fair value The interest rates used to discount estimated cash flows.6% 26. Inputs for the asset or liability that are not based on observable market data (unobservable inputs). are as follows: 31.3.2012 Unquoted held-to-maturity investments Hire purchase liabilities 3. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.4% . either directly (i.2010 3.3.3% 31.3.3. Pos Malaysia Berhad annual report 2012 pg 191 .3% . 535) 828.12.744 120.056) 898. The Company has complied with this requirement.2012 Group Financial assets Investment in unquoted held-to-maturity Investment in quoted shares 3. Under the requirement of Bursa Malaysia Practice Note No.3. the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million.744 120. The Directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with regulatory requirements. pg 192 Pos Malaysia Berhad annual report 2012 . Group 31. creditor and market confidence and to sustain future development of the business.744 3.268 120.012 Level 2 RM’000 Level 3 RM’000 Total RM’000 27.076) (544.268 124.093 31. 17/2005.3.268 3.2010 RM’000 43.533) (351. so as to maintain investor.593 There were no changes in the Group’s approach to capital management during the financial period.NOTES TO THE FINANCIAL STATEMENTS Level 1 RM’000 31.998 (395. CAPITAL MANAGEMENT The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern.2012 RM’000 Total borrowings (Note 23) Less: Cash and cash equivalents (Note 18) Net cash Total equity 20 (544. or where the Group or the Company and the par ty are subject to common control or common significant influence. Transactions with government departments and agencies or with entities providing public utilities are entered at arm’s length by vir tue of their normal dealings as a public utility or a government depar tment and agency.807 29. The key management personnel include all the Directors of the Group.378 55.12. Related parties may be individuals or other entities. directly or indirectly.309 273.3. plant and equipment Authorised but not contracted for Contracted but not provided for 15.2012 RM’000 31. par ties are considered to be related to the Group or the Company if the Group or the Company has the ability. and cer tain members of senior management of the Group.3.309 281.2010 RM’000 Property.685 42. SIGNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these financial statements. to control the par ty or exercise significant influence over the par ty in making financial and operating decisions. or vice versa.2010 RM’000 Company 31.879 8.339 55. directing and controlling the activities of the Group either directly or indirectly.252 42. Pos Malaysia Berhad annual report 2012 pg 193 .2012 RM’000 31.NOTES TO THE FINANCIAL STATEMENTS 28. CAPITAL COMMITMENTS Group 31. Key management personnel are defined as those persons having authority and responsibility for planning.12. The outstanding net amounts due from/to subsidiaries.2012 RM’000 Year ended 31.692) - 61.196 (9.3.1. Associates Purchase of goods 6.2011 to 31. pg 194 Pos Malaysia Berhad annual report 2012 .2012 RM’000 A.263 784 314 (1.008) (14) 1.173) 35.2010 RM’000 Company 1. Subsidiaries Sales of services Purchase of services Rental expense C. There were allowance for impairment losses being provided in respect of these balances outstanding at period/year end at 31 March 2012 and 31 December 2010.12.008) (14) Year ended 31.1. SIGNIFICANT RELATED PARTY TRANSACTIONS (continued) The significant related party relationships of the Group and the Company.2011 to 31.327) (858) (10.NOTES TO THE FINANCIAL STATEMENTS 29. Related companies of a significant investor that has an influence over the Group Sales of services Commissions on services Rental income Purchase of services Rental expense B. are as follows: Group 1.2010 RM’000 (10.272 (2.278) The above transactions have been entered into the natural course of business and have been established under negotiated terms. other than key management personnel compensation (see Note 6).3.278) (10.12. related companies of a significant investor that has an influence over the Group and associates as at 31 March 2012 and 31 December 2010 are disclosed in Note 17 and Note 24 respectively.692) (10.426) (6.955 784 314 (1. into realised and unrealised profits.214 251.975 196.06 and 2. pursuant to the directive are as follows: Pos Malaysia Berhad annual report 2012 pg 195 . The directive requires all listed issuers to disclose the breakdown of the unappropriated profits of accumulated losses as at the end of the repor ting period. The breakdown of the retained earnings of the Group and of the Company as at 31 March 2012.NOTES TO THE FINANCIAL STATEMENTS 30. Group As restated RM’000 As previously stated RM’000 Company As restated RM’000 As previously stated RM’000 Trade and other receivables Prepayments and other assets 187.570 - 242. into realised and unrealised profits or losses.882 8. Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.096 - 31. COMPARATIVE FIGURES Cer tain comparative figures have been reclassified to conform with the current year’s presentation.595 8. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS On 25 March 2010. Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.23 of Bursa Malaysia Main Market Listing Requirements. On 20 December 2010. 405 503.1.12.3. issued by Malaysian Institute of Accountants on 20 December 2010.959 (13.784 31.650) 482.763) 482.185 482.2012 RM’000 31.Realised .269 (17.755 98.474) 490.051 (7. pg 196 Pos Malaysia Berhad annual report 2012 .12. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS (continued) Group 31.695 528.650) 529.296 628.2012 RM’000 Total retained earnings of the Company and its subsidiaries: .Realised Add: Consolidation adjustments Total retained earnings (7.Unrealised Total share of retained earnings of associates: .784 554.450) 537.185 492. Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements.2010 RM’000 The determination of realised and unrealised profits is based on the Guidance of Special Matter No.NOTES TO THE FINANCIAL STATEMENTS 31.855 (17.084) 528.2010 RM’000 Company 31.835 76.485 545.3.547 (9.860 559. THIS SECTION IS INTENTIONALLY LEFT BLANK Pos Malaysia Berhad annual report 2012 pg 197 . 1. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: ………………………………………………………… Dato’ Sri Haji Mohd Khamil bin Jamil ………………………………………………………… Datuk Low Seng Kuan Kuala Lumpur.STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT. Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements. 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2012 and of their financial performance and cash flows for the period then ended. the information set out in Note 31 on page 195 to the financial statements had been complied in accordance with the Guidance on Special Matter No. the financial statements set out on pages 119 to 196 are drawn up in accordance with Financial Repor ting Standards and the Companies Act. 1965 In the opinion of the Directors. issued by the Malaysian Institute of Accountants. In the opinion of Directors. Date: 18 June 2012 pg 198 Pos Malaysia Berhad annual report 2012 . and presented based on the format prescribed by Bursa Malaysia Securities Berhad. 1965 I. 1960. and by vir tue of the provisions of the Statutory Declarations Act. ………………………………………………. do solemnly and sincerely declare that the financial statements set out on pages 119 to 196 are. Ahmad Faisal bin Murad Before me: Pos Malaysia Berhad annual report 2012 pg 199 . to the best of my knowledge and belief. Subscribed and solemnly declared by the above named in Kuala Lumpur on 18 June 2012. correct and I make this solemn declaration conscientiously believing the same to be true.STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT. the officer primarily responsible for the financial management of Pos Malaysia Berhad. Ahmad Faisal bin Murad. which is indicated in Note 13 to the financial statements. as set out on pages 119 to 196. an opinion on the effectiveness of the entity’s internal control. but not for the purpose of expressing a) In our opinion. pg 200 Pos Malaysia Berhad annual report 2012 . we also repor t the following: Repor ting Standards and the Companies Act.INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF POS MALAYSIA BERHAD Report on the Financial Statements We have audited the financial statements of Pos Malaysia Berhad. We conducted our audit in accordance with approved standards on auditing in Malaysia. as well as evaluating the overall presentation of the financial statements. c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. d) The audit repor ts on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. and a summary of significant accounting policies and other explanatory information. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. changes in equity and cash flows of the Group and of the Company for the period then ended. whether due to fraud or error. Opinion Directors’ Responsibility for the Financial Statements In our opinion. and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement. b) We have considered the accounts of a subsidiary of which we have not acted as auditors. 1965 in Malaysia. The procedures selected depend on our judgement. and the statements of comprehensive income. In making those risk assessments. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors. which comprise the statements of financial position as at 31 March 2012 of the Group and of the Company. including the assessment of risks of material misstatement of the financial statements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 1965 in Malaysia. the financial statements have been properly drawn up in accordance with Financial The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Repor ting Standards and the Companies Act. 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2012 and of their financial performance and cash flows for the period then ended. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act. whether due to fraud or error. we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. in all material respects. In our opinion. We have extended our audit procedures to repor t on the process of compilation of such information. Date: 18 June 2012 Pos Malaysia Berhad annual report 2012 pg 201 .INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF POS MALAYSIA BERHAD Other Reporting Responsibilities Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements. in accordance with Section 174 of the Companies Act. the information has been properly compiled. The information set out in Note 31 on page 195 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements. KPMG Firm Number : AF 0758 Char tered Accountants Chong Dee Shiang Approval Number : 2782/09/12(J) Chartered Accountant Petaling Jaya.1. issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad. 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. in accordance with the Guidance of Special Matter No. as a body. Other Matters This repor t is made solely to the members of the Company. KL International Airport. Alienated Land Pejabat Pos Besar Kuala Lumpur Pesuruhjaya Tanah Persekutuan 3. Daerah Kinta. State of Wilayah Persekutuan. Daerah Kinta. District of Sepang. State of Perak Pajakan Negeri 155073 for Lot 2740N. Town of Ipoh. District of Kuala Lumpur. State of Selangor. State of Selangor HS(D) 56783. PT 27615. State of Perak GRN 55283 for lot 31449 Town of Ipoh. Town of Ipoh. Pajakan Negeri 155068 for Lot 2436N. Daerah Kinta. State of Perak Pajakan Negeri 155069 for Lot 2437N. State of Perak Registered / Beneficial Owner PMB Properties Sdn Bhd Exisiting Use / Description MPC Section 21 Shah Alam/Double Storey Office Building. State of Perak Pajakan Negeri 153721 for Lot 2351N. Type Alienated Land Location Shah Alam Subject Property HS(D) 98478. Daerah Kinta. Kuala Lumpur PT27 (Landside). Bandar Shah Alam. Daerah Kinta. Daerah Kinta. State of Perak Pajakan Negeri 4738 for Lot 31448. Building KLIA Malaysia Airports (Properties) Sdn Bhd Pos Malaysia Berhad Effivation Sdn Bhd Pos Malaysia International Hub 4. 2 units of 1 1⁄2 Storey Factory Buidling General Post Office / Eight Storey Building 2. Mukim of Kapar. District of Klang. Town of Ipoh.TOP 10 PROPERTIES No 1. 5. State of Selangor Pajakan Negeri 33472. Lot 46 Sek 70. Daerah Kinta. Bandar Kuala Lumpur. Town of Ipoh. Registered Land Alienated Land Bukit Raja Ipoh Delivery Branch / Warehouse with attached three storey office Vacant Land Alienated Land Ipoh Effivation Sdn Bhd Vacant Land Alienated Land Alienated Land Ipoh Ipoh Effivation Sdn Bhd Effivation Sdn Bhd Vacant Land Vacant Land Alienated Land Ipoh Effivation Sdn Bhd Vacant Land Alienated Land Ipoh Effivation Sdn Bhd Vacant Land Alienated Land Ipoh Effivation Sdn Bhd Vacant Land pg 202 Pos Malaysia Berhad annual report 2012 . PT No 1 Sek 21.Town of Ipoh. Town of Ipoh. District of Petaling Jaya. Mukim of Sepang. State of Perak Pajakan Negeri 153337 for Lot 35120. 950 18.980.617 Not applicable 10.939 Leasehold 999 Years (expiring on 30/12/2893) Leasehold 999 Years (expiring on 24/03/2895) 2.000 Net Book Value (RM) as of 31 March 2012 70.000.809 1.072 Gross Floor Area ( sq mt ) 46.000 25.129.010 Not applicable 2.424 Not applicable 2.460.722 2.741.000.228 Not applicable Not applicable 4.040 Leasehold 99 years (expiring 27/01/2079) 8.831 Leasehold 999 Years (expiring on 30/12/2883) 1.300.540.729 34.593 Leasehold 999 Years (expiring on 30/12/2893) 1.811 Freehold Leasehold 999 Years (expiring on 30/12/2893) 8.660 13.451 Cost of Purchase / Lease Amount (RM) 69.000 Leasehold 999 Years (expiring on 30/12/2893) 1.496 44.897 Concession 36.310 5.804.300 12.TOP 10 PROPERTIES Tenure / Age of Building Leasehold 99 years (expiring 19/7/2094) Land Area ( sq mt ) 90.077.739.550.500 Not applicable 3.507 Not applicable 3.519 60.000 Freehold 3.262.277.000 3.932 20.369.742 Pos Malaysia Berhad annual report 2012 pg 203 . Leasehold 99 years (expiring 20/12/2078) *PN 101760 Lot 8619 N. Jalan Damansara. PT TLO 682. Leasehold 99 years (expiring 20/12/2078) *HS(D) Ka 7534/79 PT 18022. State of Selangor Refer notes* HS(D) 52880. District of Ulu Langat. F110. Johor Bahru/ a Single Storey detached Warehouse with a double storey office annex and a Single storey detached office block and detached warehouse Office and Commercial units 7. State of Perak. Town of Ipoh.TOP 10 PROPERTIES (CONTINUED) No 6. Leasehold 999 years (expiring 21/09/2894) *PN 101762 Lot 8621 N. State of Perak. State of Perak. F111. Petaling Jaya. F112. Bandar Johor Bahru. Town of Ipoh. F212 & F213. F113. Type Registered Land Location Larkin Subject Property HS(D) 109201. PT 41030. District of Ulu Langat. Phileo Damansara. Town District of Kota Kinabalu. PT 41029. Bandar Baru Bangi. Town of Ipoh. Leasehold 999 years (expiring 21/09/2894) pg 204 Pos Malaysia Berhad annual report 2012 . F210. F108. Alienated Land Kota Kinabalu Pesuruhjaya Tanah Persekutuan Post Office / Eleven Storey Building Notes:*HS(D) Ka 21276 PT 18020. Leasehold 999 years (expiring 21/09/2894) *PN 101761 Lot 8620 N. District of Johor Bahru. State of Perak.Bhd Real Riviera Sdn Bhd Pos Malaysia Berhad 8. Town of Ipoh. F208. 9. State of Perak. State of Sabah PSH Properties Sdn . State of Selangor HS(D) 52881. State of Johor Registered / Beneficial Owner Pos Malaysia Berhad Existing Use / Description Mail Centre. Town of Ipoh. F211. Building Registered Land Persiaran Greenhill Bangi Office Building / Seven Storey Building Delivery Branch / Warehouse with attached office Registered Land Bangi Pos Malaysia Berhad Delivery Branch / Warehouse with attached office 10. Bandar Baru Bangi. State of Selangor Town Lease 017542746 Lot 017542746 Location of Kota Kinabalu. Building Jalan Damansara Unit Nos. Leasehold 99 years (expiring 20/12/2078) *HS(D) Ka 7533/79 PT 18021. Town of Ipoh. State of Perak. 234 Gross Floor Area ( sq mt ) 6.300.176 2.601 Cost of Purchase / Lease Amount (RM) 10.526 Freehold / Approximately 15 years - 1.800.566.000 Net Book Value (RM) as of 31 March 2012 12.000 7.267 3.146.662.258.160.000 5.718 13.123 5.694.044 2.400.135.206 2.830.712 Pos Malaysia Berhad annual report 2012 pg 205 .441 7.005 8.TOP 10 PROPERTIES (CONTINUED) Tenure / Age of Building Leasehold 60 years (expiring 15/12/2021) Land Area ( sq mt ) 20.571 Leasehold 99 years (expiring 19/08/2098) 4.000 Refer notes* Leasehold 99 years (expiring 19/08/2098) 635 6.000 Leasehold 99 years (expiring 31/12/2074) 6.461 2.479 12.044 9. Etika Strategi Sdn Bhd 6.026. 1965 by virtue of his interest in DRB-HICOM Berhad.997.000.50 each and 1 Special Rights Redeemable Preference Share of RM1.997.399(b) 38. Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor 5.ANALYSIS OF SHAREHOLDINGS AS AT 12 JUNE 2012 Authorised Capital : RM1. Mitsubishi UFJ Financial Group. DRB-HICOM Berhad 2.00 Voting Rights : One vote for every ordinary share (The Special Rights Redeemable Preference Share does not carry any voting right except in circumstances set out in the Company’s Ar ticles of Association) Number of Shareholders Substantial Shareholders Shareholders 1.00 Issued and full paid-up capital : RM268. Direct No. 1965 by virtue of its interest in DRB-HICOM Berhad.997.001.00 divided into 2. Aberdeen Asset Management PLC and its subsidiaries 4. of shares 172. Deemed interested in the shares by virtue of Mitsubishi UFJ Financial Group. Inc Notes: * (a) (b) (c) Includes holdings of mandates delegated from other subsidiaries of Aberdeen Asset Management PLC.709.513. Mitsubishi UFJ Trust & Banking Corp holding more than 15% in Aberdeen Asset Management PLC and Mitsubishi UFJ Financial Group.024 (c) : 24.000. Employees Provident Fund Board 3. Inc’s wholly-owned subsidiary.399(a) 172. Deemed interested pursuant to Section 6A of the Companies Act. Deemed interested pursuant to Section 6A of the Companies Act.50 comprising 537.000 ordinary shares of RM0.08 Indirect No.50 each and one (1) Special Rights Redeemable Preference Share of RM1. Inc holding more than 15% interest in shares of Morgan Stanley Group.08 pg 206 Pos Malaysia Berhad annual report 2012 .616 % 32.005.085 ordinary shares of RM0.21 32.600 38.21 7.000.30 7.043.21 11.399 60.005.000. of shares 172.000* % 32. 309 44.997.200 15.79 1.99 40.000 Percentage (%) 32.500. of Shares 235.00 30 Largest Registered Shareholders No. 1 2 3 4 5 6 7 8 9 10 Name Maybank Nominees (Tempatan) Sdn Bhd Pledged Securities Account for DRB-HICOM Berhad (414011604790) Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board Lembaga Tabung Haji HSBC Nominees (Asing) Sdn Bhd BNP Paribas Secs Svs Lux for Aberdeen Global AmanahRaya Trustees Berhad Skim Amanah Saham Bumiputera Citigroup Nominees (Tempatan) Sdn Bhd ING Insurance Berhad (INV-IL PAR) AmanahRaya Trustees Berhad Public Islamic Select Treasures Fund AMSEC Nominees (Tempatan) Sdn Bhd AmTrustee Berhad for CIMB Islamic Dali Equity Growth Fund (UT-CIMB-DALI) HSBC Nominees (Asing) Sdn Bhd Coutts & Co Ltd Sg for Glenmorgan Company Inc HSBC Nominees (Asing) Sdn Bhd BNP Paribas Secs Svs Paris for Aberdeen Asian Smaller Companies Investment Trust Plc No.03 37.777.399 46.764.45 2.00 No.355 36.304 1.322.900 6.304 and above Total No.085 % of Issued Share Capital 0.82 1.04 0.000 100.699 537.356.ANALYSIS OF SHAREHOLDINGS AS AT 12 JUNE 2012 Distribution of Shareholdings Holdings Less than 100 100 to 1.172 219.68 33.59 0.337 8.300 8.000 9.300 23.359.001 to 10.001 to 26.000 10.63 4.500.851.21 8. of Shareholders/ Depositors 5.404 230.76 8.303.400 6.971.26 1. of Shares 172.52 1.89 0.000.623 220 2 24.146 5.85 2.001 to 100.21 1.02 pg Pos Malaysia Berhad annual report 2012 207 .851.37 42.000 1.312.800 15.85 100.01 100.000 5.828.159.130 9.80 6.616 % of Shareholders/ Depositors 21.905.026.303 26.99 6. 708.917 2.584.689.200 4.50 0.700 3.59 0.97 0. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Name Valuecap Sdn Bhd Citigroup Nominees (Tempatan) Sdn Bhd Kumpulan Wang Persaraan (Diperbadankan) (Aberdeen) AmanahRaya Trustees Berhad Public Islamic Optimal Growth Fund Pertubuhan Keselamatan Sosial HSBC Nominees (Asing) Sdn Bhd Exempt An For BNP Paribas Securities Services (Jersey GBP) AmanahRaya Trustees Berhad Public Islamic Dividend Fund Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board (CIMB PRIN) Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board (Aberdeen) CIMB Group Nominees (Tempatan) Sdn Bhd CIMB Bank Berhad (EDP 2) HSBC Nominees (Asing) Sdn Bhd Exempt An for Credit Suisse Securities (USA) LLC (PB Client) Citigroup Nominees (Asing) Sdn Bhd CBNY for Dimensional Emerging Markets Value Fund Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board (Alliance INV) AmanahRaya Trustees Berhad Public Islamic Opportunities Fund AmanahRaya Trustees Berhad Public Islamic Equity Fund No. of Shares 5.585.144.71 0.ANALYSIS OF SHAREHOLDINGS AS AT 12 JUNE 2012 30 Largest Registered Shareholders (continued) No.000 3.200 3.700 4.000 4.790.74 0.000 Percentage (%) 0.67 0.500 3.209.000 2.800 5.200.000.88 0.71 0.500 3.65 0.97 0.669.257.801.50 0.500 2.66 0.79 0.000 3.500.564.48 pg 208 Pos Malaysia Berhad annual report 2012 . 37 0.ANALYSIS OF SHAREHOLDINGS AS AT 12 JUNE 2012 30 Largest Registered Shareholders (continued) No. (Hong Kong AC CL) HSBC Nominees (Asing) Sdn Bhd BNY Brussels for Wisdomtree Emerging Markets Smallcap Dividend Fund HSBC Nominees (Asing) Sdn Bhd Exempt An For JPMorgan Chase Bank.34 0. 25 26 27 28 29 30 Name HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for Pertubuhan Keselamatan Sosial (CIMB-P 6939-404) Citigroup Nominees (Tempatan) Sdn Bhd Kumpulan Wang Persaraan (Diperbadankan)(RHB INV) Citigroup Nominees (Tempatan) Sdn Bhd Kumpulan Wang Persaraan (Diperbadankan)(CIMB Equities) HSBC Nominees (Asing) Sdn Bhd Exempt An For HSBC Private Bank (Suisse) S.000 1.33 69.800 374.829.213.771.973.339.500 2.000 1. National Association (Bermuda) Total No. of Shares 2.000 1.82 Directors’ Shareholdings as per the Register of Directors’ Shareholdings as at 12 June 2012 Name of Directors Dato’ Sri Haji Mohd Khamil bin Jamil Dato’ Ibrahim Mahaludin bin Puteh Datuk Low Seng Kuan Dato’ Krishnan a/l Chinapan Dato’ Wee Hoe Soon @ Gooi Hoe Soon Dato’ Lukman bin Ibrahim Eshah binti Meor Suleiman Notes: + Negligible Direct Interest 57 % + Indirect Interest % - Pos Malaysia Berhad annual report 2012 pg 209 .A.35 0.44 0.500 1.116 Percentage (%) 0.982.41 0.865. approval be and is hereby given to the Company and its subsidiaries (“Pos Malaysia Group”) to enter into any of the category of recurrent transactions of a revenue or trading nature as set out in Par t A.” (Ordinary Resolution 7) “That the following increase in the Directors’ Fees with effect from 1 April 2012 be hereby approved:(i) Fees payable to each of the Non-Executive Directors (save for the NonExecutive Chairman) be increased from RM30. To re-elect the following Directors who retire by rotation pursuant to Ar ticle 115 of the Company’s Articles of Association.000.474.NOTICE OF 20TH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the 20th Annual General Meeting (“AGM”) of Pos Malaysia Berhad (“Pos Malaysia” or “the Company”) will be held at Grand Mahkota Ballroom. offered themselves for re-election: (a) Dato’ Sri Haji Mohd Khamil bin Jamil (b) Dato’ Lukman bin Ibrahim (Ordinary Resolution 4) (Ordinary Resolution 5) 5.00 per annum respectively. To re-appoint Messrs KPMG as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. the Memorandum and Ar ticles of Association of the Company and the Main Market Listing Requirements (“the Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).00 per annum to RM80. To approve the following Directors’ Fees:(a) “That the payment of the Directors’ Fees of RM538.00 per annum and RM6. and To re-elect the following Directors who retire pursuant to Ar ticle 110 of the Company’s Ar ticles of Association. and who being eligible.2.00 for the financial period ended 31 March 2012 be hereby approved.3 of the Company’s Circular to Shareholders dated 18 July 2012 with the related par ties mentioned therein which are necessary for the Pos Malaysia Group’s day-today operations subject to the following:(a) the transactions are in the ordinary course of business and are on terms not more favourable to the related par ties than those generally available to the public. to pass the following resolutions: 6. 1965 (“the Act”). 2. offered themselves for reelection : (a) Datuk Low Seng Kuan (b) Eshah binti Meor Suleiman 4. and who being eligible. Proposed Shareholders’ Mandate for Recurrent Related Par ty Transactions (“Proposed Shareholders’ Mandate”) “THAT subject to the Companies Act.000. Istana Hotel.m. 9 August 2012 at 9.000. Level BR.000.” (Ordinary Resolution 8) 7.00 per annum. if thought fit. for the following purposes: As Ordinary Business: 1. 73 Jalan Raja Chulan. Please refer to Note A. and Additional fees payable to the Chairman and each member of each of the Board Committees (save for the Audit Committee) amounting to RM8. 50200 Kuala Lumpur on Thursday. (Ordinary Resolution 6) pg 210 Pos Malaysia Berhad annual report 2012 .00 a. (Ordinary Resolution 2) (Ordinary Resolution 3) (b) As Special Business: To consider and.5 sen per ordinary share less 25% tax in respect of the financial period ended 31 March 2012. Section 2. To declare a first and final dividend of 17. (Ordinary Resolution 1) (ii) 3. To receive the Audited Financial Statements for the financial period ended 31 March 2012 and the Repor ts of the Directors and Auditors thereon. ” (Special Resolution 1) (a) shares deposited into the Depositor’s securities account before 12. if approved by the shareholders at the 20th AGM. whichever is earlier . the Company shall be requesting Bursa Malaysia Depository Sdn Bhd. at which time it will lapse. on 15 August 2012 in respect of securities exempted from mandatory deposit.30 p. on 17 August 2012 in respect of ordinary transfers. or (c) revoked or varied by resolution passed by the shareholders in general meeting.5 sen per ordinary share less 25% tax in respect of the financial period ended 31 March 2012. if approved by shareholders at the for thcoming AGM. unless by a resolution passed at the meeting. or (b) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act).NOTICE OF 20TH ANNUAL GENERAL MEETING (b) the shareholders’ mandate is subject to annual renewal and disclosure is made in the annual report of the Company of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year. in accordance with Ar ticle 89(3) of the Company’s Ar ticles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991.m. to issue a General Meeting Record of Depositors as at 1 August 2012. AND THAT the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this resolution. To transact any other business of which due notice has been given in accordance with the Act and the Company’s Ar ticles of Association. In this respect. and (c) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad. the authority is renewed. 9. Notice of Book Closure and Notice of Dividend Entitlement and Payment : Pos Malaysia Berhad annual report 2012 pg 211 . Only Depositor whose name appears on the Record of Depositors as at 1 August 2012 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.m. FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member AND THAT the Proposed Shareholders’ Mandate. will be subject to annual renewal.00 p. will be paid on 10 September 2012 to shareholders whose names appear in the Register of Members or Record of Depositors at the close of business on 17 August 2012. (b) shares transferred into the Depositor’s securities account before 4. NOTICE IS ALSO HEREBY GIVEN THAT the first and final dividend of 17. Proposed Amendments to the Articles of Association of the Company “THAT the amendments to the Articles of Association of the Company as set out in Appendix A of Par t B of the Circular to Shareholders dated 18 July 2012 be and is hereby approved and adopted AND THAT the Board of Directors be and is hereby authorised to give effect to the said amendments.” (Ordinary Resolution 9) 8. A Depositor shall qualify for entitlement to the dividend only in respect of: who shall be entitled to attend this 20th AGM. any authority conferred by the Proposed Shareholders’ Mandate shall only continue to be in force until: (a) the conclusion of the next AGM of the Company. (ii) The proposed Ordinary Resolution 8 is in respect of the proposed increase in Directors’ 2. Fees with effect from new financial year commencing 1 April 2012. A member may appoint a maximum of two (2) proxies to attend the meeting provided that such member holds not less than the minimum board lot as specified under the Rules and the Listing Requirements. either under the corporation’s seal or under the hand of an officer or attorney duly appointed under a power of attorney. 1991. Level 17. the member shall specify the propor tion of his/her shareholding to be represented by each proxy.00 per annum. Where a member appoints two (2) proxies to attend the meeting.00 per annum.00 per annum to RM80. Mid Valley City. will authorise the payment of Directors’ Fees to Directors of the Company for their services during the financial period ended 31 March 2012. Lingkaran Syed Putra.00 per annum.000. Dato’ Sabrina Albakri binti Abu Bakar (LS8508) Company Secretary Kuala Lumpur. Additional Directors’ fees are also proposed for the Chairman and each member of each Board Committees (save for the Audit Committee) amounting to RM8. Pursuant to the Listing Requirements. 59200 Kuala Lumpur not less than for ty-eight (48) hours before the time set for holding the meeting or any adjournment thereof. 3. shareholders’ approval had been procured for payment of additional Directors’ fees for the Chairman of the Audit Committee amounting to RM20.00 per annum and RM6. The Gardens Nor th Tower.000. 4. Additional Notes on Special Business Notes: 1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his/her stead. For information. 5.000.NOTICE OF 20TH ANNUAL GENERAL MEETING By Order of the Board. as defined under the Securities Industry (Central Depositories) Act. 18 July 2012 Note A: This agenda item is meant for discussion only as the provision of Section 169(1) of the Act does not require a formal approval of the shareholders and hence is not put forward for voting. (i) The proposed Ordinary Resolution 7 is in accordance with the Company’s Ar ticles of Association and if passed. a member of the Company which is an exempt authorised nominee. at the previous AGM of the Company held on 5 May 2011. who holds ordinary shares in the Company for multiple beneficial owners in one securities amount (“omnibus account”) is allowed to appoint multiple proxies in respect of each omnibus account it holds. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company. pg 212 Pos Malaysia Berhad annual report 2012 . The proposal is to increase Directors’ fees for each of the Non-Executive Director (save for the NonExecutive Chairman) from RM30. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly appointed under a power of attorney or if such appointor is a corporation. The instrument appointing a proxy or representative shall be deposited at the Company’s Share Registrar’s office at Tricor Investor Services Sdn Bhd.000.000. subject to the transactions being in the ordinary course of business and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. Pos Malaysia Berhad annual report 2012 pg 213 . The details are as set out in Par t A of the Circular to Shareholders dated 18 July 2012. The details of the proposed amendments are as set out in Part B of the Circular to Shareholders dated 18 July 2012.NOTICE OF 20TH ANNUAL GENERAL MEETING (iii) The proposed Ordinary Resolution 9 will enable the Pos Malaysia Group to enter into any of the recurrent related party transactions of a revenue or trading nature which are necessary for the Pos Malaysia Group’s day to day operations. (iv) The proposed Special Resolution 1 is in relation to the proposed amendments to cer tain provisions of the Company’s Articles of Association. THIS SECTION IS INTENTIONALLY LEFT BLANK pg 214 Pos Malaysia Berhad annual report 2012 . 73 Jalan Raja Chulan. IN BLOCK LETTERS FULL NAME OF PROXY “A” AS PER NRIC/PASSPORT NO. 9 August 2012 at 9. Level BR. IN BLOCK LETTERS NRIC/Passport No.POS MALAYSIA BERHAD (229990-M) Total Number of Shares Held PROXY FORM 20TH ANNUAL GENERAL MEETING CDS Account No. If you do not do so. of Authorised Nominee * I/We Address: FULL NAME OF SHAREHOLDER AS PER NRIC/PASSPORT NO.: Please indicate with an (“X”) in the appropriate spaces as to how you wish your votes to be cast on the Ordinary Resolutions and Special Resolution specified in the Notice of the 20th Annual General Meeting. and at any adjournment thereof. the CHAIRMAN OF THE MEETING (if no proxy named above). The propor tion of my/our holding to be represented by my/our proxies are as follows: Proxy A No. Istana Hotel. IN BLOCK LETTERS NRIC/Passport/Company No. My/our proxy is to vote as indicated below.: NRIC/Passport No.: being a member of Pos Malaysia Berhad (229990-M).: NRIC/Passport No.00 a. hereby appoint the following: (1) Proxy “A” : Address: or failing him/her Address: (2) Proxy “B” (If Applicable): Address: or failing him/her Address: OR. 1 2 3 4 5 6 7 8 9 Ordinary Resolution Declaration of Dividend Re-election of Datuk Low Seng Kuan as Director Re-election of Eshah binti Meor Suleiman as Director Re-election of Dato’ Sri Haji Mohd Khamil bin Jamil as Director Re-election of Dato’ Lukman bin Ibrahim as Director Re-appointment of Messrs KPMG as the Company’s Auditors for the ensuing year Approval of Directors’ Fees Approval of Increase in Directors’ Fees Proposed Shareholders’ Mandate for Recurrent Related Par ty Transactions Special Resolution 1 Proposed Amendments to the Ar ticles of Association of the Company % Proxy B % Total 100 % For Against FULL NAME AS PER NRIC/PASSPORT NO. at the 20th Annual General Meeting of the Company. the Proxy may vote or abstain from voting at his/ her discretion.: NRIC/Passport No. as my/our proxy to vote for me/us and on my/our behalf. IN BLOCK LETTERS FULL NAME OF PROXY “B” AS PER NRIC/PASSPORT NO. IN BLOCK LETTERS FULL NAME AS PER NRIC/PASSPORT NO. to be held at Grand Mahkota Ballroom. 50200 Kuala Lumpur on Thursday. * Applicable to shares held through an Authorised Nominee Account Pos Malaysia Berhad annual report 2012 Signed this day of 2012 Signature(s)/Common Seal of Shareholder(s) pg 215 .m. The Gardens Nor th Tower. place in envelope and post to: The Share Registrar TRICOR INVESTOR SERVICES SDN BHD (118401-V) Level 17. a member of the Company which is an exempt authorised nominee. 3. who holds ordinary shares in the Company for multiple beneficial owners in one securities amount (“omnibus account”) is allowed to appoint multiple proxies in respect of each omnibus account it holds. as defined under the Securities Industry (Central Depositories) Act. Lingkaran Syed Putra. the member shall specify the propor tion of his/her shareholding to be represented by each proxy. 59200 Kuala Lumpur not less than for ty-eight (48) hours before the time set for holding the meeting or any adjournment thereof. Level 17. Where a member appoints two (2) proxies to attend the meeting. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his/her stead. Complete this form where applicable. Pursuant to the Listing Requirements. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company. 4. The Gardens North Tower Mid Valley City. Lingkaran Syed Putra 59200 Kuala Lumpur pg 216 Pos Malaysia Berhad annual report 2012 . either under the corporation’s seal or under the hand of an officer or attorney duly appointed under a power of attorney. The instrument appointing a proxy or representative shall be deposited at the Company’s Share Registrar’s office at Tricor Investor Services Sdn Bhd. 2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly appointed under a power of attorney or if such appointor is a corporation.Notes: 1. 1991. A member may appoint a maximum of two (2) proxies to attend the meeting provided that such member holds not less than the minimum board lot as specified under the Rules and the Listing Requirements. Mid Valley City.
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