Keeping Christians of all denomination in Malaysia informed of events happening in the country affecting the Christian faith and other political issues. Encouraging Christians to get more involved in politics so His will be done on earth as it is in heaven.
Tuesday, 16 October 2012
Updated : RM1 billion in profits, dividends not paid to gov't
The Auditor-General’s Report 2011 notices that these companies have reported a total accumulated profit after tax of RM943.46 million, but that no dividend has been paid or proposed to the government.
The regulations stipulate that government-owned companies must pay a minimum of 10 percent annual dividend from their profit after tax to the government as shareholder.
Should they record higher profit, the percentage of the dividend will be increased as long as it does not affect the companies’ financial status.
The auditor-general audited the financial statements of 47 companies of which the government owns over 50 percent equity, from 2008 to 2010.
He has found that 23 have reported profit before tax for three consecutive years amounting to RM255.834 billion, while nine suffered consecutive losses amounting to RM2.446 billion.
However, as at May 2012, only 14 of the 47 companies had paid a total of RM49.49 billion in dividends to the government for the 2010 financial year.
“Of that number, 10 companies obtained profit and paid dividends for three consecutive years amounting to RM109.36 billion,” reads the report.
“Only Pembinaan BLT Sdn Bhd stated the reasons and excuses for not paying dividend in 2010 to Ministry of Finance Inc, while Rangkaian Hotel Seri Malaysia Sdn Bhd only submitted reasons for not paying dividend up to 2008.”
Of the RM109.36 billion dividend, national oil company Petronas contributed RM109 billion or 99.67 percent.
Responding, the Ministry of Finance Inc said the policy and guidelines of dividend payment are still being studied before these are submitted for approval.
Reasons cited to justify the non-payment include high accumulated loss, profit used to purchase working capital, profit was just interest from fixed deposits, dividend had been paid in 2011, and that the companies are non-profit in nature.
The auditor-general has advised that the Ministry of Finance Inc to ensure that profitable companies come up with a strong justification for not paying dividends.
Bonuses paid out
The report also finds that 35 of the 47 companies had obtained the finance minister's approval to issue bonus, incentive or ex-gratia payments to employees in 2010, although nine suffered loss that year.
"Of that number, two paid bonus while (the other) seven paid incentives and ex-gratia," it says.
A further audit has revealed that there were no written guidelines or policy on approval of ex gratia payment.
However, the Ministry of Finance Inc responded that profitability is just one of the criteria in approving bonus payments by its companies.
The approvals are subject to their performance measured against Key Performance Indicators (KPIs) which include financial parameters, social obligations, national development and other parameters according to the purpose of the companies.
"Hence the bonus payments made by the nine companies which suffered losses were based on other KPI parameters (that they had) achieved."
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