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31 DECEMBER 2018

KHAZANAH NASIONAL BERHAD


(275505-K)
(Incorporated in Malaysia)

Directors’ Report and Audited Financial Statements


31 December 2018
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Contents Page

Directors' report 1-6

Statement by directors 7

Statutory declaration 7

Independent auditors' report 8 - 11

Corporate information and significant accounting policies 12 - 91

Statement of comprehensive income 92

Statement of financial position 93

Statement of changes in equity 94

Statement of cash flows 95 - 96

Notes to the Company financial statements 97 - 156

Consolidated statement of comprehensive income 157 - 158

Consolidated statement of financial position 159 - 160

Consolidated statement of changes in equity 161 - 162

Consolidated statement of cash flows 163 - 165

Notes to the Consolidated financial statements 166 - 392


275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Directors' report

The Directors hereby present their report together with the audited financial statements of the
Group and of the Company for the financial year ended 31 December 2018.

Principal activities

The principal activity of the Company is that of investment holding. The principal activities of the
subsidiaries, associates and joint ventures of the Company and of the Group are described in
Note 78 and Note 79 to the financial statements, respectively.

Results

Group Company
RM’000 RM’000

Loss from continuing operations, net of tax (8,330,156) (6,047,918)


Loss from discontinued operation, net of tax (321,510) -
Loss net of tax (8,651,666) (6,047,918)

Loss attributable to:


Owners of the Company (8,676,373) (6,047,918)
Non-controlling interests 24,707 -
(8,651,666) (6,047,918)

There were no material transfers to or from reserves or provisions during the financial year, other
than as disclosed in the financial statements.

In the opinion of the Directors, the results of the operations of the Group and of the Company
during the financial year were not substantially affected by any item, transaction or event of a
material and unusual nature, other than as disclosed in the notes to the financial statements.

1
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Dividends

The amounts of dividends declared or paid by the Company since 31 December 2017 were as
follows:

In respect of the financial year ended 31 December 2017: RM’000

Interim single-tier dividend on 5,443,953,229 ordinary shares, declared on 11


December 2017 and paid on 22 December 2017 600,000

Special single-tier dividend on 5,443,953,229 ordinary shares, declared on 11


December 2017 and paid on 12 December 2018 130,000

Special single-tier dividend of RM100 per share on 1,000,000 redeemable


cummulative convertible preference shares ("RCCPS"), declared on 11
December 2017 and paid on 30 January 2018 100,000

Special single-tier dividend of RM170 per share on 1,000,000 RCCPS, declared


on 11 December 2017 and paid on 12 December 2018 170,000

1,000,000

In respect of the financial year ended 31 December 2018:

Interim single-tier dividend on 5,443,953,229 ordinary shares, declared on 24


November 2018 and paid on 12 December 2018 1,000,000

Special single-tier dividend on 5,443,953,229 ordinary shares, declared on 24


November 2018 and paid on 12 December 2018 500,000

1,500,000

The Directors do not recommend the payment of any final dividend for the financial year ended
31 December 2018.

2
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Directors

The names of the Directors of the Company in office since the beginning of the financial year to
the date of this report are:

Y.A.B. Tun Dr. Mahathir bin Mohamad (appointed on 30 July 2018)


Y.B. Dato' Seri Mohamed Azmin bin Ali (appointed on 30 July 2018)
Y. Bhg. Tan Sri Mohd Hassan bin Marican (appointed on 9 September 2018)
Dr. Sukudhew Singh (appointed on 30 July 2018)
Mr. Goh Ching Yin (appointed on 31 July 2018)
Y. Bhg. Datuk Shahril Ridza bin Ridzuan (appointed on 20 August 2018)
Y.B. Dato’ Sri Mohd Najib bin Tun Haji Abd Razak (resigned on 31 May 2018)
Y. Bhg. Datuk Seri Johari Abdul Ghani (resigned on 30 May 2018)
Y. Bhg. Tan Sri Dr. Mohd Irwan Serigar Abdullah (resigned on 23 May 2018)
Y. Bhg. Tan Sri Md Nor bin Md Yusof (resigned on 31 July 2018)
Y. Bhg. Tan Sri Mohamed Azman bin Yahya (resigned on 31 July 2018)
Y. Bhg. Dato’ Mohammed Azlan bin Hashim (resigned on 31 July 2018)
Y.M. Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda (resigned on 31 July 2018)
Y. Bhg. Tan Sri Sheng Len Tao (resigned on 31 July 2018)
Y. Bhg. Dato’ Sri Mohamed Nazir bin Tun Haji Abdul Razak (resigned on 31 July 2018)
Y. Bhg. Tan Sri Datuk Wira Azman bin Hj. Mokhtar (resigned on 31 July 2018)
Y. Bhg. Dato’ Dr Nirmala Menon A/P Y B Menon (resigned on 31 July 2018)
Madam Yeo Kar Peng (resigned on 31 July 2018)

The names of the directors of the Group's subsidiaries who served on the respective boards of
the subsidiaries since the beginning of the current financial year to the date of this report are
disclosed in Note 80 to the financial statements.

Directors' benefits

Neither at the end of the financial year, nor at any time during the year, did there subsist any
arrangement to which the Company was a party, whereby the Directors might acquire benefits
by means of the acquisition of shares in or debentures of the Company or any other body
corporate.

Since the end of the previous financial year, no Director has received or become entitled to
receive a benefit (other than benefits included in the aggregate amount of emoluments received
or due and receivable by the Directors or the fixed salary of a full time employee of the Company
as shown in Note 9 and Note 39 to the financial statements), by reason of a contract made by
the Company or a related corporation with any Director, or with a firm of which he is a member,
or with a company in which he has a substantial financial interest.

Directors' interests

According to the register of Directors' shareholdings, none of the Directors in office at the end of
the financial year had any interest in shares in the Company or its related corporations during the
financial year.
3
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Indemnity and insurance costs

During the financial year, the total insurance premium paid for Directors and Officers of the
Group and Company were RM1,209,230 and RM593,610 respectively.

Holding company

The holding and ultimate holding body is the Minister of Finance Incorporated, a body corporate,
incorporated pursuant to the Minister of Finance (Incorporation) Act, 1957 ("MoF Inc.").

Other statutory information

(a) Before the statements of comprehensive income and statements of financial position of the
Group and of the Company were made out, the Directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts
and the making of provision for doubtful debts and satisfied themselves that all known
bad debts had been written off and that adequate provision had been made for doubtful
debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in
the accounting records in the ordinary course of business had been written down to an
amount which they might be expected so to realise.

(b) At the date of this report, the Directors are not aware of any circumstances which would
render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in
the financial statements of the Group and of the Company inadequate to any
substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and
of the Company misleading.

(c) At the date of this report, the Directors are not aware of any circumstances which have
arisen which would render adherence to the existing method of valuation of assets or
liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the Directors are not aware of any circumstances not otherwise
dealt with in this report or the financial statements of the Group and of the Company which
would render any amount stated in the financial statements misleading.

4
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Other statutory information (cont'd.)

(e) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the
end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end
of the financial year.

(f) In the opinion of the Directors:

(i) no contingent or other liability has become enforceable or is likely to become


enforceable within the period of twelve months after the end of the financial year which
will or may affect the ability of the Group or of the Company to meet their obligations
when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval
between the end of the financial year and the date of this report which is likely to affect
substantially the results of the operations of the Group or of the Company for the
financial year in which this report is made.

Significant events during the financial year

In addition to the significant events disclosed elsewhere in this report, details of other significant
events during the financial year are described in Note 73 to the financial statements.

Subsequent events after the reporting date

Details of significant subsequent events after the reporting date are as disclosed in Note 35 and
Note 74 to the financial statements.

5
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Auditors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Auditors’ remuneration are disclosed in Note 7 and Note 37 to the financial statements.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst &
Young, as part of the terms of its audit engagement against claims by third parties arising from
the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young
during the financial year.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 19 April
2019.

Goh Ching Yin Shahril Ridza bin Ridzuan

Kuala Lumpur, Malaysia

6
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Statement by directors
Pursuant to Section 251(2) of the Companies Act, 2016

We, Goh Ching Yin and Shahril Ridza bin Ridzuan, being two of the Directors of Khazanah
Nasional Berhad, do hereby state that, in the opinion of the Directors, the accompanying
financial statements set out on pages 12 to 392 are drawn up in accordance with the applicable
Malaysian Financial Reporting Standards and the requirements of the Companies Act, 2016 in
Malaysia and so as to give a true and fair view of the financial position of the Group and of the
Company as at 31 December 2018 and of their financial performance and cash flows for the
year then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 19 April
2019.

Goh Ching Yin Shahril Ridza bin Ridzuan

Kuala Lumpur, Malaysia

Statutory declaration
Pursuant to Section 251(1)(b) of the Companies Act, 2016

I, Faridah Bakar Ali, being the officer primarily responsible for the financial management of
Khazanah Nasional Berhad, do solemnly and sincerely declare that the accompanying financial
statements set out on pages 12 to 392 are in my opinion correct, and I make this solemn
declaration conscientiously believing the same to be true and by virtue of the provisions of the
Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the


abovenamed Faridah Bakar Ali
at Kuala Lumpur in the Federal Territory
on 19 April 2019. Faridah Bakar Ali
MIA 20744
Chartered Accountant

7
Ernst & Young AF: 0039 Tel: +603 7495 8000
GST Reg no: 001556430848 Fax: +603 2095 5332 (General line)
Chartered Accountants +603 2095 9076
Level 23A, Menara Milenium +603 2095 9078
Jalan Damanlela, Pusat Bandar Damansara
50490 Kuala Lumpur, Malaysia

275505-K

Independent auditors’ report to the members of


Khazanah Nasional Berhad
(Incorporated in Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Khazanah Nasional Berhad, which comprise the
statements of financial position as at 31 December 2018 of the Group and of the Company,
and statements of comprehensive income, statements of changes in equity and statements of
cash flows of the Group and of the Company for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, as set out on pages 12 to
392.

In our opinion, the accompanying financial statements give a true and fair view of the financial
position of the Group and of the Company as at 31 December 2018, and of their financial
performance and their cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing. Our responsibilities under those standards are further
described in the Auditors' responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on
Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ("Bylaws")
and the International Ethics Standards Board for Accountants' Code of Ethics for
Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical
responsibilities in accordance with the By-Laws and the IESBA Code.

Information other than the financial statements and auditors' report thereon

The directors of the Company are responsible for the other information. The other information
comprises the Directors' Report, but does not include the financial statements of the Group
and of the Company and our auditors' report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the
other information and we do not express any form of assurance conclusion thereon.

8
A member firm of Ernst & Young Global Limited
275505-K

Independent auditors’ report to the members of


Khazanah Nasional Berhad (cont'd.)
(Incorporated in Malaysia)

Information other than the financial statements and auditors' report thereon (cont'd.)

In connection with our audit of the financial statements of the Group and of the Company, our
responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements of the Group and of the
Company or our knowledge obtained in the audit or otherwise appears to be materially
misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.

Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of
the Group and of the Company that give a true and fair view in accordance with Financial
Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The
directors are also responsible for such internal control as the directors determine is necessary
to enable the preparation of financial statements of the Group and of the Company that are
free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are
responsible for assessing the Group's and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of
the Group and of the Company as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditors' report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with approved standards on auditing in Malaysia and International Standards on
Auditing will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

9
A member firm of Ernst & Young Global Limited
275505-K

Independent auditors’ report to the members of


Khazanah Nasional Berhad (cont'd.)
(Incorporated in Malaysia)

Auditors' responsibilities for the audit of the financial statements (cont’d.)

As part of an audit in accordance with approved standards on auditing in Malaysia and


International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the
Group and of the Company, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's and the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of


accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's or the Company's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditors' report to the related disclosures in the financial statements of the Group and of the
Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditors' report. However, future events or
conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the Group and
of the Company, including the disclosures, and whether the financial statements of the Group and of
the Company represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
statements of the Group. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

10
A member firm of Ernst & Young Global Limited
275505-K

Independent auditors’ report to the members of


Khazanah Nasional Berhad (cont'd.)
(Incorporated in Malaysia)

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act, 2016 in Malaysia, we report that
the subsidiaries of which we have not acted as auditors, are disclosed in Note 78 and Note 79
to the financial statements.

Other matters

1. As stated in Notes 2, 31 and 76 to the financial statements, Khazanah Nasional Berhad adopted
Malaysian Financial Reporting Standards and International Financial Reporting Standards on 1
January 2018 with a transition date of 1 January 2017. These standards were applied retrospectively
by directors to the comparative information in these financial statements, including the statements
of financial position of the Group and of the Company as at 31 December 2017 and 1 January 2017,
and the statements of comprehensive income, statements of changes in equity and statements of
cash flows of the Group and of the Company for the year ended 31 December 2017 and related
disclosures. We were not engaged to report on the restated comparative information and it is
unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of
the Company for the year ended 31 December 2018, in these circumstances, included obtaining
sufficient appropriate audit evidence that the opening balances as at 1 January 2018 do not contain
misstatements that materially affect the financial position as at 31 December 2018 and financial
performance and cash f lows for the year then ended.

2. This report is made solely to the members of the Company, as a body, in accordance with Section
266 of the Companies Act, 2016 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.

Ernst & Young Dato' Abdul Rauf Bin Rashid


AF:0039 No. 2305/05/20(J)
Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia


19 April 2019

11
A member firm of Ernst & Young Global Limited
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

1. Corporate information

The principal activity of the Company is that of investment holding. The principal activities of
the subsidiaries, associates and joint ventures of the Company and of the Group are
described in Note 78 and Note 79 to the financial statements, respectively.

There have been no significant changes in the nature of the principal activities during the
financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia.
The registered office of the Company is located at Level 33, Tower 2, Petronas Twin Towers,
Kuala Lumpur City Centre, 50088 Kuala Lumpur.

The Company's holding and ultimate holding body is the Minister of Finance Incorporated, a
body corporate, incorporated pursuant to the Minister of Finance (Incorporation) Act, 1957
("MoF Inc.").

The financial statements were authorised for issue by the Board of Directors in accordance
with a resolution of the Directors on 19 April 2019.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company are prepared in accordance
with the provisions of the Companies Act, 2016 and comply with the Malaysian Financial
Reporting Standards ("MFRS").

The financial statements have been prepared under the historical cost basis unless
otherwise disclosed in the respective significant accounting policies below.

The financial statements are presented in Ringgit Malaysia ("RM") which is also the
Company's functional currency and all values are rounded to the nearest thousand
(RM'000), except when otherwise indicated.

The financial statements of the Group and of the Company for financial year ended 31
December 2018 are the first set of financial statements prepared in accordance with the
MFRS Framework, hence MFRS 1: First-time Adoption of Malaysian Financial Standards
has been applied. The MFRS Framework is effective for the Group from 1 January 2018
and the date of transition to the MFRS Framework for the purpose of preparation of the
MFRS compliant financial report is 1 January 2017.

12
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.1 Basis of preparation (cont'd.)

In preparing its opening MFRS Statements of Financial Position as at 1 January 2017


(which is also the date of transition), the Group and the Company have adjusted the
amounts previously reported in financial statements prepared in accordance with
Financial Reporting Standards ("FRS"). An explanation of how the transition from FRS to
MFRS has affected the Group and the Company's financial position and financial
performance is set out in Note 31 and Note 76 to the financial statements. These notes
include reconciliations of equity, and total comprehensive income for comparative
periods and of equity at the date of transition reported under FRS to those reported
under MFRS.

The Company presents its statement of financial position in order of liquidity.

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS")

The audited financial statements of the Group and of the Company for the previous year
ended 31 December 2017 were prepared in accordance with FRS. Except for certain
differences, the requirements under FRS and MFRS are similar. The significant
accounting policies adopted in preparing these financial statements are consistent with
those of the audited financial statements for the year ended 31 December 2017, except
as discussed below:

(a) MFRS 3 : Business combinations

The Group has elected to apply MFRS 3 : Business Combinations prospectively to


business combinations that occurred after 1 January 2017 and business
combinations that occurred prior to 1 January 2017 has not been restated. The
Group has continued to deem the carrying amount of investment in each
subsidiary, joint venture and associate to the cost of investment in the separate
financial statements as at the date of transition to MFRSs.

(b) MFRS 9 : Financial instruments

MFRS 9 replaces MFRS 139 : Financial Instruments: Recognition and


Measurement for annual periods beginning on or after 1 January 2018, bringing
together all three aspects of the accounting for financial instruments: classification
and measurement, impairment, and hedge accounting.

13
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(b) MFRS 9 : Financial instruments (cont'd.)

The Group and the Company have applied MFRS 9 retrospectively, with the initial
application date of 1 January 2018 and adjusting the comparative information for
the period beginning 1 January 2017.

(aa) Classification and measurement

MFRS 9 contains three principal classification categories for financial assets:


measured at amortised costs, fair value through other comprehensive income
("FVOCI") and fair value through profit or loss ("FVTPL"). The classification of
financial assets under MFRS 9 is generally based on the business model in
which a financial asset is managed and its contractual cash flow
charateristics. MFRS 9 eliminates the previous MFRS 139 categories of held-
to-maturity, loans and receivables and available-for-sale. MFRS 9 largely
retains the existing requirements in MFRS 139 for the classification and
measurement of financial liabilities.

The assessment of the Group and the Company's business model was made
as of the date of initial application, 1 January 2018, and then applied
retrospectively to those financial assets that were not derecognised before 1
January 2018. The assessment of whether contractual cash flows are solely
comprised of principal and interest was made based on facts and
circumstances as at the initial recognition of the assets.

14
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(b) MFRS 9 : Financial instruments (cont'd.)

(aa) Classification and measurement (cont'd.)

The classification and measurement requirements of MFRS 9 did not have a


significant impact on the Group and the Company. The Group and the
Company continued measuring at fair value all financial assets previously
held at fair value under FRS 139. The following are the changes in the
classification of the Group's and the Company's financial assets:

- Receivables (including amount due from associates, holding company


and joint ventures) previously classified as Loans and receivables are
held to collect contractual cash flows and give rise to cash flows
representing solely payments of principal and interest. These are now
classified and measured as Debt instruments at amortised cost .

- Unquoted equity investments previously classified as Available-for-sale


financial assets are now classified and measured as Equity instruments
designated at FVOCI . The Group and the Company have elected to
classify irrevocably its unquoted equity investments under this category
as they intend to hold these investments for the foreseeable future.

- Quoted equity investments previously classified as Available-for-sale


financial assets are now classified and measured as Equity instruments
designated at FVOCI . The Group and the Company have elected to
classify irrevocably their listed equity investments under this category.

- Financial assets previously classified as Held-to-maturity investments


are now classified and measured as FVTPL.

The impact upon adoption of MFRS 9 for the Group and the Company are
dislosed in Note 31 and Note 76 to the financial statements.

15
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(b) MFRS 9 : Financial instruments (cont'd.)

(bb) Impairment

The adoption of MFRS 9 has fundamentally changed the Group and the
Company's accounting for impairment losses for financial assets by replacing
MFRS 139's incurred losses approach with a forward-looking expected credit
loss approach. The ECL approach requires impairment to be recognised on
initial recognition including expected future credit losses whilst the incurred
loss impairment model only requires recognition of credit losses incurred as
at reporting date. This is required for all debt instruments not held at FVTPL
and contract assets.

The impact upon adoption of MFRS 9 for the Group and the Company are
dislosed in Note 31 and Note 76 to the financial statements.

(c) MFRS 15 : Revenue from contracts with customers

MFRS 15 supersedes MFRS 111: Construction Contracts, MFRS 118: Revenue


and related Interpretations and it applies, with limited exceptions, to all revenue
arising from contracts with its customers. MFRS 15 establishes a five-step model
to account for revenue arising from contracts with customers and requires that
revenue be recognised at an amount which depicts the transfer of promised goods
or services to the customer that reflects the consideration to which an entity
expects to be entitled in exchange for transferring goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance
obligation is satisfied, i.e. when “control” of the goods or services underlying the
particular performance obligation is transferred to the customer.

MFRS 15 require entities to exercise judgement, taking into consideration all of the
relevant facts and circumstances when applying each step of the model to
contracts with their customers. The standard also specifies the accounting for the
incremental costs of obtaining a contract and the costs directly related to fulfilling a
contract. In addition, the standard requires extensive disclosures.

The Group and the Company have adopted MFRS 15 using the full retrospective
method. The impact upon adoption of MFRS 15 for the Group and the Company
are dislosed in Note 31 and Note 76 to the financial statements.

16
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(c) MFRS 15 : Revenue from contracts with customers (cont'd.)

(aa) Property development activities

Under FRS, the Group recognised property development revenue from


property development activities over time based on the enforceability of the
sales contract with the customers. Upon adoption of MFRS 15, revenue is
recognised upon settlement, being the date at which control is transferred to
customers.

(bb) Land sales

Under FRS, the Group recognised revenue from land sale upon completion of
conditions precedent as stipulated in the sale and purchase agreement with
the customers. Upon adoption of MFRS 15, revenue is recognised when
control is substantially transferred.

(cc) Multiple promises from the sale of development properties

Contracts with customers may include multiple promises to customers and


therefore accounted for as separate performance obligations. Under FRS, the
Group accounted for the bundled sales as one deliverables and recognised
revenue over time. Upon adoption of MFRS 15, revenue from contracts with
customers is recognised by reference to each distinct performance
obligations in the contract with customer. The sale of development properties
and the multiple promises are separate deliverables of bundled sales.

The transaction price is allocated to each performance obligation based on


the standalone selling prices. If these are not directly observable, they are
estimated based on expected cost plus margin. Depending on the substance
of the contract, revenue is recognised when the performance obligation is
satisfied, either at a point in time or over time.

(dd) Consideration payable to the customers and incremental costs of obtaining a


contract

Under FRS, sales commissions and free legal fees for property development
were expensed off. Upon adoption of MFRS 15, free legal fees represents
consideration payable to the customers and is accounted for as a reduction of
the transaction price. Sales commissions relate directly to contracts are the
incremental costs of obtaining a contract and are expected to be recovered in
future. These costs are capitalised and subsequently recognised in profit or
loss when the performance obligation is satisfied.

17
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(c) MFRS 15 : Revenue from contracts with customers (cont'd.)

(ee) LAD

Under FRS, the Group recognised provision for LAD arising from the late
delivery of construction and development projects as cost of sales in the profit
or loss.

Upon adoption of MFRS 15, LAD which represents penalties to the property
developers or the contractors, is reflected as a reduction in transaction price
rather than as a separate cost in the profit or loss. Accordingly, LAD is
accounted for in deriving the carrying amount of contract asset or contract
liability.

LAD from contractors previously recognised as other income is now netted of


against cost of sales.

(ff) Recognition of provision for foreseeable losses for affordable housing and
public infrastructure

Under FRS, the Group recognised upfront and capitalised as part of property
development costs, the provision for foreseeable losses for anticipated losses
to be incurred on the development of involuntary low cost housing as required
by approving authorities. The application of the above was in accordance to
FRSIC Consensus 17: Development of Affordable Housing ("FRSIC 17")
issued by Malaysian Institute of Accountants ("MIA"). The Group recognised
the costs for public infrastructure as and when it is incurred.

Upon adoption of MFRS Framework, FRSIC 17 is no longer relevant. The


Group is of the view that the expected costs for infrastructure attributable to a
project should be accrued progressively as and when the inventories are
constructed. The same treatment would apply for the cost incurred in excess
of the net realisable value of the affordable houses which is to be included in
the measurement of premium housing progressively as it relates to the
obligation to the local government authorities.

Accordingly, the initial full provision for foreseeable losses recognised based
on the previous FRS is no longer applicable.

Accordingly, the provision for foreseeable losses and public infrastructure


made on unlaunched phases are reversed and provision is recognised based
on current progress of the ongoing projects.

18
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont'd.)

(c) MFRS 15 : Revenue from contracts with customers (cont'd.)

(gg) Contract assets and contract liabilities

Under FRS, the Group and the Company recognised trade receivables, even
if the receipt of the total consideration was conditional on succesful delivery of
goods or services. The excess of revenue over billings to purchasers was
classified as accrued billing within trade receivables and the excess of billings
to purchasers over revenue was classified as advance billing within trade
payables.

Upon adoption of MFRS 15, any earned consideration that is conditional is


recognised as a contract asset, the excess of revenue over billings to
purchasers is classified as contracts assets and the excess of billings to
purchasers over revenue, deferred income and customer deposit are
classified as contract liabilities.

(hh) Deductions imposed on revenue from healthcare services

Under FRS, deductions imposed by the customers on revenue from


healthcare services were recorded as an expense as part of the cost of sales.
Upon adoption of MFRS 15, such deductions represent a variable
consideration which is to be deducted against the revenue.

(ii) Significant financing component in a contract

MFRS 15 requires an entity to assess whether a contract contains significant


financing component if it receives consideration more than one year before or
after it transfers goods or services to the customer. Upon adoption of MFRS
15, the effect of financing is reflected as interest income.

(jj) Other adjustments

In addition to the adjustments described above, upon the adoption of MFRS


15, other items of the primary financial statements such as deferred taxes,
interests in joint ventures and associates, share of results of associates and
joint ventures, income tax expenses, non-controlling interests and retained
earnings, are adjusted as necessary.

19
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.3 Basis of consolidation

The consolidated financial statements comprise the financial statements of the


Company and its subsidiaries as at the reporting date.

A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (i.e existing rights that give it the current ability to direct
the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its involvement with the investee;
and

(iii) The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights results in control. To


support this presumption and when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant facts and circumstances
in assessing whether it has power over an investee, including:

(i) The contractual arrangement(s) with the other vote holders of the investee;

(ii) Rights arising from other contractual arrangements; and

(iii) The Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and


circumstances indicate that there are changes to one or more of the three elements of
control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income ("OCI") are
attributed to the equity holders of parent of the Group and to the non-controlling
interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies in line with the Group's accounting policies. All intra-
group assets, liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is


accounted for as an equity transaction.

20
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.3 Basis of consolidation (cont'd.)

If the Group losses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interests and other components of equity,
while any resultant gain or loss is recognised in profit or loss. Any investment retained
is recognised at fair value.

2.4 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, which is
measured at acquisition date fair value, and the amount of any non-controlling interests
in the acquiree. For each business combination, the Group elects whether to measure
the non-controlling interests in the acquiree at fair value or at the proportionate share
of the acquiree’s identifiable net assets. Acquisition related costs are expensed as
incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair


value at the acquisition date. Contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability that is a financial instrument and within
the scope of MFRS 9 Financial Instruments, is measured at fair value with the changes
in fair value recognised in the statements of profit or loss in accordance with MFRS 9.
Other contingent consideration that is not within the scope of MFRS 9 is measured at
fair value at each reporting date with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquirer’s previously held equity
interest in the acquiree is remeasured at fair value at the acquisition date through profit
or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the
consideration transferred and the amount recognised for non-controlling interests over
the net identifiable assets acquired and liabilities assumed. If the fair value of the net
assets acquired is in excess of the aggregate consideration transferred, the Group re-
assesses whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still results in an excess of the
fair value of net assets acquired over the aggregate consideration transferred, then the
gain is recognised in profit or loss.

21
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.4 Business combinations and goodwill (cont'd.)

After the initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the Group's
cash-generating units that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit ("CGU") and part of the
operation within that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when determining the gain
or loss on disposal. Goodwill disposed in these circumstances is measured based on
the relative values of the disposed operation and the portion of the CGU retained.

2.5 Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control over those policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control
of the arrangement have rights to the net assets of the joint arrangement. Joint control
is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous consent of the
parties sharing control.

The Group as a joint operator recognises in relation to its interest in a joint operation:

(i) its assets, including its share of any assets held jointly;

(ii) its liabilities, including its share of any liabilities incurred jointly;

(iii) its revenue from the sale of its share of the output arising from the joint
operation;

(iv) its share of the revenue from the sale of the output by the joint operation; and

(v) its expenses, including its share of any expenses incurred jointly.

The consideration made in determining significant influence or joint control are similar
to those necessary to determine control over subsidiaries.

The Group's investments in its associate and joint venture are accounted for using the
equity method.

22
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.5 Investments in associates and joint ventures (cont'd.)

Under the equity method, on initial recognition the investment in an associate or a joint
venture is recognised at cost. The carrying amount is adjusted to recognise the
Group's share of net assets of the associate or joint venture since the acquisition date.
Goodwill relating to the associate or joint venture is included in the carrying amount of
the investment and is not tested for impairment separately.

The statements of profit or loss reflects the Group's share of the results of operations
of the associate or joint venture. Any change in other comprehensive income ("OCI") of
those investees is presented as part of the Group's OCI. In addition, when there has
been a change recognised directly in the equity of the associate or joint venture, the
Group recognises its share of any changes, when applicable, in the statement of
changes in equity. Unrealised gains and losses resulting from transactions between the
Group and the associate or joint venture are eliminated to the extent of the interest in
the associate or joint venture.

The aggregate of the Group’s share of profit or loss of an associate and a joint venture
is shown on the face of the statements of profit or loss outside operating profit and
represents profit or loss after tax and non-controlling interests in the subsidiaries of the
associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same
reporting period as the Group. When necessary, adjustments are made to bring the
accounting policies in line with those of the Group.

After application of the equity method, the Group applies MFRS 136 Impairment of
Assets ("MFRS 136") to determine whether it is necessary to recognise any additional
impairment loss with respect to its net investment in the associate or joint venture.
When necessary, the entire carrying amount of the investment is tested for impairment
in accordance with MFRS 136 as a single asset, by comparing its recoverable amount
(higher of value in use and fair value less costs to sell) with its carrying amount. Any
impairment loss is recognised in profit or loss. Reversal of an impairment loss is
recognised to the extent that the recoverable amount of the investment subsequently
increases.

Upon loss of significant influence over the associate or joint control over the joint
venture, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the associate or joint venture upon loss
of significant influence or joint control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.

23
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.6 Intangible assets

(a) Research and development costs

Research and development costs are recognised as an expense except that


costs incurred on individual development projects are recognised as
development asset to the extent that such expenditure is expected to generate
future economic benefits. Development costs are only recognised as an asset
when it is probable that future economic benefits will be realised as a result of
the specific expenditure and the costs can be measured reliably.

Following the initial recognition of the development expenditure, the asset is


carried at cost less any accumulated amortisation and any accumulated
impairment losses. The policy for the recognition and measurement of
impairment losses is in accordance with Note 2.28. These costs are
derecognised upon disposal or when no future economic benefits are expected
from its use.

Development costs that have been capitalised are amortised over the period of
expected future sales from the related project.

(b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of
intangible assets acquired in a business combination is their fair values as at the
date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated impairment
losses. The useful lives of intangible assets are assessed to be either finite or
indefinite. Intangible assets with finite lives are amortised on a straight-line basis
over the estimated economic useful lives and assessed for impairment
whenever there is an indication that the intangible assets may be impaired. The
amortisation period and the amortisation method for an intangible asset with a
finite useful life are reviewed at least at each reporting date.

Changes in the expected useful life or the expected pattern of consumption of


future economic benefits embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on intangible assets with
finite lives is recognised in profit or loss.

24
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.6 Intangible assets (cont'd.)

(b) Other intangible assets (cont'd.)

Intangible assets with indefinite useful lives or not yet available for use are
tested for impairment annually, or more frequently if the events and
circumstances indicate that the carrying value may be impaired either
individually or at the CGU level. Such intangible assets are not amortised. The
useful life of an intangible asset with an indefinite life is reviewed annually to
determine whether the useful life assessment continues to be supportable. If
not, the change in useful life from indefinite to finite is made on a prospective
basis.

Gains or losses arising from derecognition of an intangible asset are measured


as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognised in profit or loss when the asset is derecognised.

Other intangible assets comprise the following, and are amortised over the
following useful lives:

Intangible asset Nature Useful life

Aircraft landing slots Landing rights for aircraft Indefinite

Computer software Computer software and licenses 3 - 15 years

Brands Brand name Indefinite

Value of business In-force contracts for insurance and 5 years


acquired ("VOBA") takaful businesses acquired

Bancassurance Bancassurance agreement entered into 20 years


with an associate company

Licenses License to operate Themed parks 15 - 20 years

25
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.7 Aircraft, property, plant and equipment

All items of aircraft, property, plant and equipment are initially recorded at cost. The
cost of an item of aircraft, property, plant and equipment is recognised as an asset if,
and only if, it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, aircraft, property, plant and equipment are stated at cost
less accumulated depreciation and any accumulated impairment losses.

When significant parts of aircraft, property, plant and equipment are required to be
replaced in intervals, the Group recognises such parts as individual assets with specific
useful lives and depreciation, respectively. Likewise, when a major inspection is
performed, its cost is recognised in the carrying amount of the plant and equipment as
a replacement if the recognition criteria are satisfied. All other repair and maintenance
costs are recognised in profit or loss as incurred.

Freehold land, which is stated at cost less impairment loss, has an unlimited useful life
and therefore is not depreciated except for land held for scheduled waste treatment
plant and disposal site in Port Dickson, Negeri Sembilan by a subsidiary of the Group,
Kualiti Alam Sdn. Bhd. ("KASB").

Depreciation of other aircraft, property, plant and equipment is provided for on a


straight-line basis to write off the cost of each asset to its residual value based on the
following:

Freehold land held for scheduled waste treatment and


disposal site 6.25%
Leasehold land 15 - 99 years
Hotel properties 37 years
Buildings 5 - 50 years
Roads, bridges, renovation, restoration costs and
capital improvements 3 - 50 years
Plant and machinery 2 - 25 years
Furniture and fittings, motor vehicles and other equipments 3 - 30 years
Aircraft (from the age at the time of purchase) 18 - 25 years
Aircraft modifications/retrofits and spare engines 7 - 25 years

26
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.7 Aircraft, property, plant and equipment (cont'd.)

Capital work-in-progress consist of, amongst others, progress payments on aircrafts,


simulators and properties under construction. These capital work-in-progress are
stated at cost and are not depreciated until the respective assets are ready for their
intended use.

The carrying values of aircraft, property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying value
may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial
year-end, and adjusted prospectively, if appropriate.

An item of aircraft, property, plant and equipment is derecognised upon disposal or


when no future economic benefits are expected from its use or disposal. Any gain or
loss on derecognition of the asset is included in profit or loss in the year the asset is
derecognised.

2.8 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity.

i) Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, and subsequently measured


at amortised cost, fair value through other comprehensive income ("OCI"), and
fair value through profit or loss.

The classification of financial assets at initial recognition depends on the


financial asset’s contractual cash flow characteristics and the Company's and
the Group’s business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which
the Company and Group have applied the practical expedient, the Company
and Group initially measure a financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing component or for which
the Company and Group applied the practical expedient are measured at the
transaction price determined under MFRS 15. Refer to the accounting policies in
section 2.25 (e) Construction contracts, contracts for sale of land and property
development costs.

27
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Initial recognition and measurement (cont'd.)

In order for a financial asset to be classified and measured at amortised cost or


fair value through OCI, it needs to give rise to cash flows that are ‘solely
payments of principal and interest' ("SPPI") on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an
instrument level.

The Company and Group’s business model for managing financial assets refers
to how it manages its financial assets in order to generate cash flows. The
business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a


time frame established by regulation or convention in the market place (regular
way trades) are recognised on the trade date, i.e., the date that the Company
and Group commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four


categories:

• Financial assets at amortised cost (debt instruments);


• Financial assets at fair value through OCI with recycling of cumulative
gains and losses (debt instruments);
• Financial assets designated at fair value through OCI with no recycling of
cumulative gains and losses upon derecognition (equity instruments); and
• Financial assets at fair value through profit or loss.

Financial assets at amortised cost (debt instruments)

The Company and Group measure financial assets at amortised cost if both of
the following conditions are met:

• The financial assets is held within a business model with the objective to
hold financial assets in order to collect contractual cash flows; and

• The contractual terms of the financial assets give rise on specified dates to
cash flows that are solely payments of principal and interest on the
principal amount outstanding.

28
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Subsequent measurement (cont'd.)

Financial assets at amortised cost (debt instruments) (cont'd.)

Financial assets at amortised cost are subsequently measured using the


effective interest ("EIR") method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised, modified
or impaired.

Financial assets at fair value through OCI (debt instruments)

The Company and Group measure debt instruments at fair value through OCI if
both of the following conditions are met:

• The financial asset is held within a business model with the objective of
both holding to collect contractual cash flows and selling; and

• The contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the
principal amount outstanding.

For debt instruments at fair value through OCI, interest income, foreign
exchange revaluation and impairment losses or reversals are recognised in the
statement of profit or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair value changes are
recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.

The Company and Group’s debt instruments at fair value through OCI include
investments in quoted debt instruments included under other non-current
financial assets.

29
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Subsequent measurement (cont'd.)

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Company and Group can elect to classify
irrevocably its equity investments as equity instruments designated at fair value
through OCI when they meet the definition of equity under MFRS 132: Financial
Instruments: Presentation and are not held for trading. The classification is
determined on an instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss.
Dividends are recognised as other income in the statement of profit or loss
when the right of payment has been established, except when the Company and
Group benefit from such proceeds as a recovery of part of the cost of the
financial asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not subject to impairment
assessment.

The Company and Group elected to classify irrevocably its not held for trading
instruments under this category.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held
for trading, financial assets designated upon initial recognition at fair value
through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired
for the purpose of selling or repurchasing in the near term. Derivatives, including
separated embedded derivatives, are also classified as held for trading unless
they are designated as effective hedging instruments. Financial assets with
cash flows that are not solely payments of principal and interest are classified
and measured at fair value through profit or loss, irrespective of the business
model. Notwithstanding the criteria for debt instruments to be classified at
amortised cost or at fair value through OCI, as described above, debt
instruments may be designated at fair value through profit or loss on initial
recognition if doing so eliminates, or significantly reduces, an accounting
mismatch.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Subsequent measurement (cont'd.)

Financial assets at fair value through profit or loss (cont'd.)

Financial assets at fair value through profit or loss are carried in the statements
of financial position at fair value with net changes in fair value recognised in the
statement of profit or loss.

This category includes derivative instruments and listed equity investments


which the Company and Group had not irrevocably elected to classify at fair
value through OCI. Dividends on listed equity investments are also recognised
as dividend income in the statement of profit or loss when the right of payment
has been established.

A derivative embedded in a hybrid contract, with a financial liability or non-


financial host, is separated from the host and accounted for as a separate
derivative if: the economic characteristics and risks are not closely related to the
host; a separate instrument with the same terms as the embedded derivative
would meet the definition of a derivative; and the hybrid contract is not
measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in profit or loss.
Reassessment only occurs if there is either a change in the terms of the
contract that significantly modifies the cash flows that would otherwise be
required or a reclassification of a financial asset out of the fair value through
profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host


is not accounted for separately. The financial asset host together with the
embedded derivative is required to be classified in its entirety as a financial
asset at fair value through profit or loss.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a


group of similar financial assets) is primarily derecognised (i.e., removed from
the Group’s consolidated statement of financial position) when:

• The rights to receive cash flows from the asset have expired; or

• The Company and Group have transferred its rights to receive cash flows
from the asset or have assumed an obligation to pay the received cash
flows in full to a third party under a ‘pass-through’ arrangement; and either
(a) the Company and Group have transferred substantially all the risks and
rewards of the asset, or (b) the Company and Group have neither
transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.

When the Company and Group have transferred its rights to receive cash
flows from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control of the asset, the
Company and Group continue to recognise the transferred asset to the
extent of its continuing involvement. In that case, the Company and Group
also recognise an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and
obligations that the Company and Group have retained.

Continuing involvement that takes the form of a guarantee over the


transferred asset is measured at the lower of the original carrying amount
of the asset and the maximum amount of consideration that the Company
and Group could be required to repay.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided


in the following notes:

• Disclosures for significant assumptions


• Debt instruments at fair value through OCI
• Trade receivables, including contract assets

The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at
an approximation of the original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not
been a significant increase in credit risk since initial recognition, ECLs are
provided for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Company and Group apply a
simplified approach in calculating ECLs. Therefore, the Company and Group do
not track changes in credit risk, but instead recognises a loss allowance based
on lifetime ECLs at each reporting date. The Company and Group have
established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.

33
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

i) Financial assets (cont'd.)

Impairment of financial assets (cont'd.)

For debt instruments at fair value through OCI, the Company and Group apply
the low credit risk simplification. At every reporting date, the Company and
Group evaluate whether the debt instrument is considered to have low credit risk
using all reasonable and supportable information that is available without undue
cost or effort. In making that evaluation, the Company and Group reassess the
internal credit rating of the debt instrument. In addition, the Company and Group
consider that there has been a significant increase in credit risk when
contractual payments are more than 30 days past due.

The Company and Group consider a financial asset in default when contractual
payments are 90 days past due. However, in certain cases, the Company and
Group may also consider a financial asset to be in default when internal or
external information indicates that the Company and Group is unlikely to receive
the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group. A financial asset is written off when there is
no reasonable expectation of recovering the contractual cash flows.

ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at


fair value through profit or loss, loans and borrowings, payables, or as
derivatives designated as hedging instruments in an effective hedge, as
appropriate.

All financial liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable transaction costs.

The Company and Group’s financial liabilities include trade and other payables,
loans and borrowings including bank overdrafts, and derivative financial
instruments.

34
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

ii) Financial liabilities (cont'd.)

Subsequent measurement

The measurement of financial liabilities depends on their classification, as


described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities
held for trading and financial liabilities designated upon initial recognition as at
fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Company and Group that are not
designated as hedging instruments in hedge relationships as defined by MFRS
9. Separated embedded derivatives are also classified as held for trading unless
they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of
profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit
or loss are designated at the initial date of recognition, and only if the criteria in
MFRS 9 are satisfied. The Company and Group have not designated any
financial liability as at fair value through profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently


measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as
through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on


acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss.

This category generally applies to interest-bearing loans and borrowings. For


more information, refer to Note 26 and Note 61 to the financial statements.

35
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.8 Financial instruments (cont'd.)

ii) Financial liabilities (cont'd.)

Derecognition

A financial liability is derecognised when the obligation under the liability is


discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts
is recognised in the statement of profit or loss.

iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported
in the consolidated statement of financial position if there is a currently
enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.

2.9 Hedge accounting

The Group uses derivatives to manage its exposure to foreign currency risk, interest
rate risk, liquidity risk and fuel hedging contracts. The Group apply hedge accounting
for certain hedging relationships which qualify for hedge accounting.

For the purpose of hedge accounting, hedging relationship are classified as:

- Fair value hedges, when hedging the exposure to changes in the fair value of a
recognised asset or liability or an unrecognised firm commitment (except for
foreign currency risk); or

- Cash flow hedges, when hedging the exposure to variability in cash flows that is
either attributable to a particular risk associated with a recognised asset or
liability or a highly probably forecast transaction or the foreign currency risk in
an unrecognised firm commitment; or

- Hedges of a net investment in a foreign operation.

36
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.9 Hedge accounting (cont'd.)

At the inception of a hedge relationship, the Group formally designates and documents
the hedge relationship and the risk management objective and strategy for undertaking
the hedge. The documentation includes identification of the hedging instrument, the
hedged item or transaction, the nature of the risk being hedged and how the entity will
assess the hedging instrument’s effectiveness in offsetting the exposure to changes in
the hedged item’s fair value or cash flows attributable to the hedged risk. Hedges are
expected to be highly effective and are assessed on an ongoing basis to determine
that they actually have been highly effective throughout the financial reporting periods
for which they were designated.

Hedges which meet the strict criteria for hedge accounting are accounted for as
follows:

(a) Fair value hedges

The changes in the fair value of a derivative hedging instrument is recognised in


profit or loss, together with any gain or loss on the hedged item attributable to
the hedged risk, which is adjusted to the carrying amount of the hedged item.

For fair value hedges relating to items carried at amortised cost, the adjustment
to carrying value is amortised through profit or loss over the remaining term to
maturity. Effective interest rate amortisation may begin as soon as an
adjustment exists and shall begin no later than when the hedged item ceases to
be adjusted for changes in its fair value attributable to the risk being hedged.

If the hedge item is derecognised, the unamortised fair value is recognised


immediately in profit or loss.

When an unrecognised firm commitment is designated as a hedged item, the


subsequent cumulative change in the fair value of the firm commitment
attributable to the hedged risk is recognised as an asset or liability with a
corresponding gain or loss recognised in profit or loss. The changes in the fair
value of the hedging instrument are also recognised in profit or loss.

The Group discontinues fair value hedge accounting if the hedging instrument
expires or is sold, terminated or exercised, the hedge no longer meets the
criteria for hedge accounting or the Group revokes the designation.

37
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.9 Hedge accounting (cont'd.)

(b) Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised
directly in other comprehensive income, while any ineffective portion is
recognised in profit or loss.

If a hedge of a forecast transaction subsequently results in the recognition of a


financial asset or a financial liability, the associated gains or losses that were
recognised directly in equity are reclassified into profit or loss in the same period
or periods during which the asset acquired or liability assumed affects profit or
loss.

If a hedge of a forecast transaction subsequently results in the recognition of a


non-financial asset or a non-financial liability, or a forecast transaction for a non-
financial asset or non-financial liability becomes a firm commitment for which fair
value hedge accounting is applied, then the Group removes the associated
gains and losses that were recognised directly in other comprehensive income,
and includes them in the initial cost or other carrying amount of the asset or
liability.

For other cash flow hedges, amounts recognised directly in other


comprehensive income are recognised in profit or loss in the same period or
periods during which the forecast transaction affects profit or loss.

Cash flow hedge accounting shall be discontinued prospectively if the hedging


instrument is sold, terminated or exercised or the hedge no longer meets the
criteria for hedge accounting. The cumulative gain or loss on the hedging
instrument remains separately recognised in equity until the forecast transaction
occurs at which stage it is accounted for in accordance with the guidance given
above depending on whether or not the forecast transaction results in the
recognition of a financial or non-financial asset or liability. If the forecast
transaction is no longer expected to occur, any related cumulative gain or loss
on the hedging instrument that remains in equity is recognised immediately in
profit or loss.

If the Group revokes the designation for a hedge of a forecast transaction, the
cumulative gain or loss recognised in equity remains separately recognised in
equity until the forecast transaction occurs or is no longer expected to occur. If
the transaction occurs, the cumulative gain is accounted for in accordance with
the guidance given above depending on whether or not the forecast transaction
results in the recognition of a financial or non-financial asset or liability. If the
forecast transaction is no longer expected to occur, any related cumulative gain
or loss on the hedging instrument that remains in equity is recognised
immediately in profit or loss.

38
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.9 Hedge accounting (cont'd.)

(c) Hedges of a net investment

Hedges of a net investment in a foreign operation, including a hedge of a


monetary item that is accounted for as part of the net investment are accounted
for in a way similar to cash flow hedges. Gains or losses on the hedging
instrument relating to the effective portion of the hedge are recognised in other
comprehensive income while any gains or losses relating to the ineffective
portion are recognised in profit or loss.

On disposal of the foreign operation, the cumulative gain or loss on the hedging
instrument relating to the effective portion of the hedge which was recognised in
other comprehensive income is reclassified from equity to profit or loss.

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash at bank and deposits with
financial institutions that are readily convertible to known amount of cash and which are
subject to an insignificant risk of changes in value, net of bank overdrafts.

2.11 Leases

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and
rewards incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also
added to the amount capitalised. Lease payments are apportioned between
finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are
charged to profit or loss. Contingent rents, if any, are charged as expenses in
the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset.
However, if there is no reasonable certainty that the Group will obtain ownership
by the end of the lease term, the asset is depreciated over the shorter of the
estimated useful life and the lease term.

39
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.11 Leases (cont'd.)

(a) As lessee (cont'd.)

Operating lease payments are recognised as an expense in profit or loss on a


straight-line basis over the lease term. The aggregate benefit of incentives
provided by the lessor is recognised as a reduction of rental expense over the
lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of
ownership of the asset are classified as operating leases. Initial direct costs
incurred in negotiating an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on the same basis as
rental income.

2.12 Concession assets

(a) Concession intangible assets

In order to fall within the scope of concession contract, a contract must satisfy
the following two criterias:

- the grantor controls or regulates what services the operator must provide
with the insfrastructure/assets, to whom it must provide them, and at what
price; and

- the grantor controls the significant residual interest in the


infrastructure/assets at the end of the term of the arrangement.

Concession intangible assets comprise Expressway Development Expenditure


("EDE"), Capital Work-In-Progress, Concession rights and Other Concession
Assets.

Such assets are not recognised by the Group as property, plant and equipment
but as concession intangible assets. The intangible asset model applies where
the operator is paid by the users or where the concession grantor has not
provided a contractual guarantee in respect of the amount recoverable. The
intangible asset corresponds to the right granted by the concession grantor to
the operator to charge users of the public service. Under the intangible asset
model, revenue includes revenue from the construction of the
infrastructure/assets and operating revenue of the infrastructure.

40
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.12 Concession assets (cont'd.)

(a) Concession intangible assets (cont'd.)

(i) Expressway Development Expenditure ("EDE")

EDE, comprises construction development and upgrading expenditure


(including borrowing costs relating to the financing of the development)
incurred in connection with the concession intangible assets.

EDE is stated at cost less accumulated amortisation and accumulated


impairment losses. The policy for the recognition and measurement of
impairment losses is in accordance with Note 2.28.

EDE is amortised over its concession period. The amortisation formula


applied in the preparation of the financial statements to arrive at the annual
amortisation charge for each financial year is as follows:

Traffic volume for the year X (Net book value of EDE


(Actual traffic volume for the year + brought forward + net
Projected total traffic volume additions for the year)
for the subsequent years
to end of concession period)

The projected total traffic volume is based on the latest available traffic
volume projections prepared by independent traffic consultants. The traffic
volume projections are independently reviewed on a periodic basis.

(ii) Capital work-in-progress

Capital work-in-progress is not depreciated until the asset is fully


completed and brought into use.

(iii) Concession rights

Concession rights relate to the rights to build, own and operate the asset
for solar panel and biogas activities in accordance with the Renewable
Energy Power Purchase Agreements ("REPPA") entered with Tenaga
Nasional Berhad ("TNB").

These concession rights, with finite useful lives, are amortised on a straight
line basis over the estimated economic useful lives and assessed for
impairment whenever there are indications that the concession rights may
be impaired.

41
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.12 Concession assets (cont'd.)

(a) Concession intangible assets (cont'd.)

(iv) Other concession assets

Other concession assets comprise toll equipment, video surveillance


equipment, telecommunication networks, centralised lighting, and toll
operation computer hardware and software, and are stated at cost less
accumulated amortisation and impairment losses. The policy for
recognition and measurement of impairment losses is in accordance with
Note 2.28. The annual amortisation in respect of these assets is computed
on a straight line basis over their estimated useful lives at the following
rates:

Software and computers 12.5% to 14.3%


Others 10%

2.13 Investment properties

Investment properties consist of land, completed properties and properties under


construction ("IPUC") which are held for capital appreciation or rental purpose or both,
and generally are not occupied for use or in the operations of the Group. Investment
properties are treated as long term investments and are measured initially at cost,
including transaction costs.

Following initial recognition, investment properties are carried at cost less any
accumulated depreciation and accumulated impairment losses, except for freehold
land which has an unlimited useful life and therefore is not depreciated. Other
investment properties are depreciated over the estimated economic useful lives of 5 -
80 years. IPUC are not depreciated as they are not ready for their intended use. The
policy for the recognition and measurement of impairment losses is in accordance with
Note 2.28.

The residual value, useful life and depreciation method are reviewed at each financial
year-end, and adjusted prospectively, if appropriate.

Investment properties are derecognised when either they have been disposed of or
when they are permanently withdrawn from use and no future economic benefit is
expected from their disposal. Any gain or loss on the retirement or disposal of an
investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use.
For a transfer from investment property to owner-occupied property, the deemed cost
for subsequent accounting is the fair value at the date of change in use. For a transfer
from owner-occupied property to investment property, the property is accounted for in
accordance with the accounting policy for property, plant and equipment set out in Note
2.7 up to the date of change in use.
42
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.14 Land held for property development and property development costs

(a) Land held for property development

Land held for property development consists of land where no development


activities have been carried out or where development activities are not
expected to be completed within the normal operating cycle. Such land is
classified within non-current assets and is stated at lower cost and net realisable
value. Cost consists of land and development expenditure (including borrowing
costs relating to the financing of active development).

Land held for property development is reclassified as property development


costs at the point when development activities have commenced and where it
can be demonstrated that the development activities can be completed within
the normal operating cycle.

Profit on sale of land held for property development, including any infrastructure
development, is recognised only when it is probable that the economic benefits
associated with the transaction will flow to the Group.

(b) Property development costs

Property development costs are those assets on which significant works have
been undertaken and are expected to be completed within the normal operating
cycle.

Property development costs are initially stated at cost. Cost includes:

- Freehold and leasehold rights for land;


- Amounts paid to contractors for construction;
- Borrowing costs, planning and design costs, costs of site preparation,
professional fees for legal services, property transfer taxes, construction
overheads and other related costs; and
- Non-refundable commission cost.

Property development cost is recognised as an expense when the


corresponding revenue is recognised as per accounting policy in Notes
2.25(e)(ii) and 2.25(e)(iii).

Any expected loss on a development project, including costs to be incurred over


the defects liability period, is recognised as an expense immediately.

43
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.14 Land held for property development and property development costs (cont'd.)

(b) Property development costs (cont'd.)

Property development cost not recognised as an expense is recognised as an


asset, which is measured at the lower of cost or net realisable value.

Property development cost of unsold units or units pending transfer of control is


transferred to inventories held for sale or inventories under contract of sale once
the development is completed.

2.15 Inventories

(a) Inventories

Inventories are stated at lower of cost and net realisable value. Cost of
inventories are assigned on a weighted average cost basis, except for trading
inventories which are determined on a First-In-First-Out ("FIFO") basis and are
valued on the basis of lower of cost and net realisable value after making
allowance for obsolete and slow-moving inventories.

The cost of raw materials comprise costs of purchase. The cost of finished
goods comprise costs of direct materials, direct labour, a proportion of overhead
expenses and all incidental costs incurred in bringing the inventories into store.
Net realisable value is the estimated selling price in the ordinary course of
business less all estimated costs of completion and the estimated costs to make
the sale.

The amount of any write down of inventories to net realisable value and
subsequent reversals of any write down, if any, is recognised in profit or loss.

Developed properties held for sale are stated at the lower of cost and net
realisable value. Cost is determined on the specific identification basis and
includes cost of land, construction and appropriate development overheads.

(b) Work-in-progress

Work-in-progress and manufactured finished goods are stated at lower of cost


and net realisable value. Cost is made up of direct materials, labour and a
proportion of overhead expenses. Net realisable value represents the estimated
selling price less all estimated costs to completion and costs to be incurred in
marketing, selling and distribution. Allowance is made for all anticipated losses
on work-in-progress.

44
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.16 Contract assets and contract liabilities

A contract asset is the right to consideration in exchange for goods or services


transferred to the customer. If the Group performs by transferring goods or services to
a customer before the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that is conditional.

Contract assets are subject to impairment assessment based on ECL model. The
amount of impairment losses is determined by comparing the contract asset's carrying
amount and the present value of estimated future cash flows to be generated by the
contract asset.

A contract asset becomes a receivable when the Group and the Company's right to
consideration is unconditional.

A contract liability is the obligation to transfer goods or services to a customer for which
the Group has received consideration (or an amount of consideration is due) from the
customer. If a customer pays consideration before the Group transfers goods or
services to the customer, a contract liability is recognised when the payment is made or
the payment is due (whichever is earlier). Contract liabilities are recognised as revenue
when the Group performs under the contract.

Contract liability is recognised as revenue when the Group and the Company perform
the obligations under the contract.

2.17 Government grants

Government grants are recognised at their fair value where there is reasonable
assurance that the grant will be received and all conditions attached will be met.
Government grants relating to income shall be recognised in profit or loss on a
systematic basis over the periods in which the entity recognises as expenses the
related costs for which the grants are intended to compensate. Government grants
relating to an asset are amortised to profit or loss over the expected useful life of the
relevant asset by equal annual instalments or presented in the statements of financial
position by deducting the grants in arriving at the carrying amount of the asset.

2.18 Customer loyalty programme

Award credits/points granted by certain subsidiaries of the Group are a separately


identifiable component of the sales transaction and represent rights granted to the
customer. The consideration allocated to the points is measured at the fair value of the
points. It is recognised as a deferred revenue in the consolidated statement of financial
position and recognised as revenue when the points are redeemed, have expired or
are no longer expected to be redeemed.

45
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.19 Provisions

Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of economic
resources will be required to settle the obligation and the amount of the obligation can
be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be
required to settle the obligation, the provision is reversed. If the effect of the time value
of money is material, provisions are discounted using a current pre tax rate that
reflects, where appropriate, the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a finance
cost.

2.20 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due. Financial guarantee contracts are recognised initially as a
liability at fair value, net of transaction costs. Subsequent to initial recognition, financial
guarantee contracts are recognised as income in profit or loss over the period of the
guarantee.

If the debtor fails to make payment relating to financial guarantee contract when it is
due and the Group, as the issuer, is required to reimburse the holder for the associated
loss, the liability is measured at the higher of the best estimate of the expenditure
required to settle the present obligation at the reporting date and the amount initially
recognised less cumulative amortisation.

2.21 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are
directly attributable to the acquisition, construction or production of that asset.
Capitalisation of borrowing costs commences when the activities to prepare the asset
for its intended use or sale are in progress and the expenditures and borrowing costs
are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale.

When the carrying amount of an asset inclusive of capitalised borrowing costs exceeds
its recoverable amount, capitalisation is discontinued and such excess is written down
or adjusted for an allowance for impairment, through an appropriate charge to profit or
loss.

46
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.21 Borrowing costs (cont'd.)

All other borrowing costs are recognised in profit or loss in the period they are incurred.
Borrowing costs consist of interest and other costs that the Group and the Company
incurred in connection with the borrowing of funds.

2.22 Employee benefits

(a) Short term benefits

Wages, salaries, bonuses and social security contribution are recognised as an


expense in the year in which the associated services are rendered by
employees of the Group. Short term accumulating compensated absences such
as paid annual leave are recognised when services are rendered by employees
that increase their entitlement to future compensated absences, and short term
non-accumulating compensated absences such as sick leave are recognised
when the absences occur.

(b) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the
Group pays fixed contributions into separate entities or funds and will have no
legal or constructive obligation to pay further contributions if any of the funds do
not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years. Such contributions are
recognised as an expense in the profit or loss as incurred. As required by law,
companies in Malaysia make contributions to the state pension scheme, the
Employees Provident Fund ("EPF"). Some of the Group’s foreign subsidiaries
also make contributions to their respective countries’ statutory pension
schemes.

(c) Termination benefits

Employees of a subsidiary of the Group, Malaysia Aviation Group Berhad


("MAGB") receive termination benefits which are payable when employment is
terminated by MAGB before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these benefits. MAGB
recognises termination benefits at the earlier of the following dates: (a) when
MAGB can no longer withdraw the offer of those benefits; and (b) when the
entity recognises costs for a restructuring that is within the scope of MFRS 137:
Provisions, Contingent Liabilities and Contingent Assets and involves the
payment of termination benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Benefits falling due more
than 12 months after the end of the reporting period are discounted to their
present value.
47
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.22 Employee benefits (cont'd.)

(d) Defined benefit plans

Certain subsidiaries of the Group operate a funded and unfunded defined


benefit, Retirement Benefit Scheme (“the Scheme”), for their eligible employees.
The Group’s obligations under the Scheme are determined based on actuarial
valuation where the amount of benefit that employees have earned in return for
their service in the current and prior years is estimated. That benefit is
discounted using the Projected Unit Credit Method in order to determine its
present value. The fair value of plan assets for a funded scheme is determined
by discounting expected future cash flows. The discount rate is the market yield
at the reporting date on high quality corporate bonds or government bonds.
Actuarial gains and losses for the defined benefit plans are recognised in full in
the period in which they occur in other comprehensive income. Such actuarial
gains and losses are also immediately recognised in retained earnings and are
not reclassified to profit or loss in subsequent periods. Past service cost is
recognised immediately to the extent that the benefits are already vested, and
otherwise is amortised on a straight-line basis over the average period until the
amended benefits become vested.

The amount recognised in the statements of financial position represents the


present value of the defined benefit obligations less unrecognised past service
costs, reduced by the fair value of the plan assets. The value of any defined
benefit asset recognised is restricted to the sum of any unrecognised past
service costs and the present value of any economic benefits available in the
form of refunds from the plan or reductions in the future contributions to the
plan.

(e) Employee entitlements

An indirect subsidiary makes provision for employees' compensation for future


leave in relation to the length of service rendered by employees and relates to
rights which have been vested and unvested. These have been recognised
based on independent actuarial valuation. These valuations determine the
present value of estimated future cash flows to be made to these employees at
balance date. Actuarial gains and losses on employee entitlements are
recognised in the profit or loss at the time of valuation.

48
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.23 Share-based compensation

(a) Equity-settled

(i) UEM Group Berhad

The share option programmes include UEM Group Berhad ("UEM")'s


Employee Share Ownership Plan, and Long Term Incentive Plan ("LTIP").
These equity-settled share-based compensation plans, allow certain
employees of respective subsidiaries to be entitled to ordinary shares of
these companies. The cost of these equity-settled transactions with
employees is measured by reference to the fair value of the options at the
date on which the options are granted. This cost is recognised in profit or
loss, with a corresponding increase in the employee share option reserve
over the vesting period. The cumulative expense recognised at each
reporting date until this vesting date reflects the extent to which the
vesting period has expired and the Group's best estimate of the number of
options that will ultimately vest. The charge or credit to profit or loss for a
period represents the movement in cumulative expense recognised at the
beginning and end of that period.

No expense is recognised for options that do not ultimately vest, except for
options where vesting is conditional upon a market or non-vesting
condition, which are treated as vested irrespective of whether or not the
market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied. The employee share
option reserve is transferred to retained earnings upon expiry of the share
options. When the options are exercised, the employee share option
reserve is transferred to share capital if new shares are issued or to
treasury shares if the options are satisfied by the reinsurance of treasury
shares.

(ii) Avicennia Capital Sdn. Bhd.

Employees of the Avicennia Capital Sdn. Bhd. ("ACSB") receive


remuneration in the form of Restricted Shares Unit ("RSU") under the
Company's Long Term Incentive Plan ("LTIP") as consideration for
services rendered. The cost of these equity-settled transactions with
employees is measured by reference to the fair value of the RSU at the
date on which the RSUs are granted. This cost is recognised in profit or
loss, with corresponding increase in the LTIP reserve over the vesting
period. The cumulative expense recognised at each reporting date until the
vesting date reflects the extent to which the vesting period as expired and
the Group's best estimate of the number of RSU that will ultimately vest.
The charge or credit to profit or loss for a period represents the movement
in cumulative expense recognised at the beginning and end of that period.

49
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.23 Share-based compensation (cont'd.)

(a) Equity-settled (cont'd.)

(ii) Avicennia Capital Sdn. Bhd. (cont'd.)

No expense is recognised for RSUs that do not ultimately vest, except for
RSUs where vesting is conditions upon a market or non-vesting condition,
which are treated as vested irrespective of whether or not the market or
non-vesting condition is satisfied, provided that all other performance
and/or service condition is satisfied. The LTIP reserve is transferred to
retained earnings upon expiry of the LTIP. When the RSUs are exercised,
the LTIP reserve is transferred to share capital if new shares are issued.

(b) Cash-settled - Company

The Company grants a Shadow Share Option Scheme, a Long Term Incentive
Plan ("LTIP"), to the employees of the Company, as part of the remuneration
package, whereby the employees will be entitled to future cash payments based
on the increase in the Company's investment portfolio.

The cost of services rendered under the scheme is measured at the fair value of
the liability. Over the vesting period, the fair value of the Shadow Share Option
Scheme is recognised in profit or loss as staff costs.

Until the liability is settled, at each reporting date the liability is remeasured with
changes in fair value recognised in profit or loss.

The total fair value of the outstanding exercisable shadow share options granted
to the employees, is recognised as staff costs with a corresponding increase in
the liability, over the vesting period.

The fair value is computed based on the volume weighted average price
("VWAP") of the Company's investment portfolio, and taking into account the
probability that the options will vest and be exercised.

Following the Board of Directors’ meeting on 6 September 2018, the Board has
exercised its right to terminate the LTIP Scheme and cancel all existing options.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.23 Share-based compensation (cont'd.)

(c) Cash-settled - Group

A subsidiary of the Company, UEM Group Berhad ("UEM or UEM Group")


grants Shadow Share Option Scheme, a LTIP, to the employees of UEM Group,
as part of the remuneration package, whereby the employees will be entitled to
the future cash payments subject to meeting the UEM Group's predetermined
financial performance and value growth targets over a specific performance
vesting period.

Liability arising from long term incentives is measured and reviewed at each
reporting date, based on the management’s estimates on the achievement of
the predetermined targets, and is recognised as an expense over the
performance period.

2.24 Discontinued operation

A component of the Group is classified as a “discontinued operation” when the criteria


to be classified as held for sale have been met or it has been disposed of and such a
component represents a separate major line of business or geographical area of
operations or is part of a single coordinated major line of business or geographical
area of operations. A component is deemed to be held for sale if its carrying amounts
will be recovered principally through a sale transaction rather than through continuing
use.

Upon classification as held for sale, non-current assets and disposal groups are not
depreciated and are measured at the lower of carrying amount and fair value less costs
to sell. Any differences are recognised in profit or loss.

2.25 Revenue and income recognition

Revenue and income are recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue and income can be reliably measured.
Revenue and income are measured at the fair value of consideration received or
receivable.

(a) Dividend income

Dividend income is recognised when the shareholders' right to receive payment


is established and no significant uncertainty exist with regard to its receipts.

(b) Interest income

Interest income is recognised on an accrual basis using the effective interest


method.
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275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.25 Revenue and income recognition (cont'd.)

(c) Gain or loss on disposal of investment

Gain or loss on disposal of investment is recognised upon satisfaction of all


terms of the agreement leading to sale of the investment.

(d) Sales of goods and rendering of services

Revenue from the sale of goods is recognised at the point in time when control
of the goods is transferred to the customers.

Revenue from sale of services is recognised at the point in time or over time
as the services are provided.

(e) Construction contracts, contracts for sale of land and property


development costs

(i) Construction contracts

Revenue is recognised over time by reference to the progress towards


completion, which is determined based on input method, i.e. cost incurred
to date against the expected total construction costs. Revenue from
construction contracts is recognised net of Liquidated Ascertained
Damages ("LAD").

For those construction contracts that contain significant financing


component, the amount of consideration is discounted, using the rate that
would be reflected in a separate financing transaction between the Group
and its customer at contract inception, to take into consideration the
significant financing component.

(ii) Sale of land

Revenue from sale of land is recognised as a point in time when control is


transferred to the customer and it is probable that the Group will collect
the consideration to which it will be entitled in exchange for the asset that
will be transferred to the customer.

52
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.25 Revenue and income recognition (cont'd.)

(e) Construction contracts, contracts for sale of land and property


development costs (cont'd.)

(iii) Sale of development properties

Revenue from sale of development properties is recognised as and when


the control of the asset is transferred to the customer and it is probable
that the Group will collect the consideration to which it will be entitled in
exchange for the asset that will be transferred to tue customer.
Depending on the terms of the contract and the laws that apply to the
contract, control of the asset may transfer over time or at a point in time.
Control of the asset is transferred over time if the Group's performance
does not create an asset with an alternative use to the Group and the
Group has an enforceable right to pament for performance completed to
date.

If control of the asset transfers over time, revenue is recognised over the
period of the contract by reference to the progress towards complete
satisfaction of that performance obligation. Otherwise, revenue is
recognised at a point in time when the customer in substance obtains
control of the asset.

The Group recognise revenue over time using the input method, which is
based on the level of completion in proportion of cost incurred to date
against the expected total construction costs. Revenue from sale of
development properties is recognised net of incremental costs of
obtaining a contract and variable considerations.

(iv) Multiple promises from sale of development properties and land

Multiple promises from sale of development properties and land are


accounted for as separate performance obligations. The transaction price
is allocated to each performance obligation based on the standalone
selling prices, and if not directly observable, based on expected cost plus
margin.

(f) Rental income

Rental income is recognised on a straight-line basis over the terms of the


lease. The aggregate cost of incentives provided to lessees is recognised as a
reduction of rental income over the lease term on a straight line basis.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.25 Revenue and income recognition (cont'd.)

(g) Toll collection and toll compensation

Toll collection revenue is recognised based on the net collection from tolls
designated under the Concession and Novation Agreement between the
expressway companies and the Government.

Pursuant to the Concession and Novation Agreement, the Government


reserves its rights to restructure or to restrict the imposition of unit toll rate
increases by the concession company. The Government shall compensate the
concession company for any reduction in toll revenue as a consequence of
such restructuring or restriction imposed, subject to negotiation and other
considerations that the Government may deem fit.

Toll compensation for any concession year is recognised in the financial


statements as revenue when receipt is probable and the amount that is
receivable can be reliably measured.

(h) Airlines services

Passenger ticket and cargo space sales or airway bill sales (belly and feighter)
including the related administration fees and various surcharges are
recognised as revenue, net of discount, in profit or loss when the
transportation services are rendered. The value of unutilised tickets is included
in current liabilities as sales in advance of carriage.

Tickets, other service fees and surcharges that remain unutilised after 12
months subsequent to their respective date of issue are recognised in profit or
loss as unavailed credits on sales in advance of carriage.

Revenue from other services such as charter revenue, airport handling,


engineering services, catering, warehousing services, passenger handling
services, provision of computerised reservation services, trucking and retailing
of goods are recognised in profit or loss when services are rendered.

Revenue from reissuance fees is recognised upon flown.

54
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.25 Revenue and income recognition (cont'd.)

(i) Airport handling and engineering services

Airport handling and engineering services are recognised based on the


number of man-hours incurred and the cost of materials and spare parts
supplied.

Power-by-the-hour ("PBTH") revenue is recognised based on the percentage


of completion of the projects. The percentage of completion of the projects is
determined based on the number of man-hours incurred to-date against the
estimated man-hours needed to complete the projects.

(j) Frequent flyer programme

The Group operates a frequent flyer programme where points are purchased
by partners or awarded to programme members based on accumulated miles
travelled.

The award points are recognised as a separately identifiable component of the


initial sale transaction, by allocating the fair value of the consideration received
between the award points and the other components of sale, such that the
award miles are recognised at fair value. The points sold to partners and a
portion of passenger revenue attributable to the award of frequent flyer
benefits is accounted as a current liability (“deferred revenue”) in the
consolidated statement of financial position until they are utilised. Revenue
from the award points is recognised when the points are redeemed or expired.
The amount of revenue recognised when the points are redeemed is based on
the number of points redeemed relative to the total number expected to be
redeemed.

(k) Hotel, themed parks and golf operations

Revenue from hotel, themed parks and golf operations are recognised in profit
or loss when services are rendered.

55
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.25 Revenue and income recognition (cont'd.)

(l) Revenue on public-private service arrangements

Revenue on public-to-private service arrangements is recognised and


measured based on the services performed/provided during the period.

The consideration received/receivable shall be allocated by reference to the


relative fair values of the services delivered, if more than one service (ie.
construction of/or upgrade services and operation services) are performed
under a single contract or arrangement.

(i) Construction or upgrade service

Revenue is recognised in accordance with Note 2.25(e)(i).

The consideration receivable shall be recognised as:

(i) a financial asset to the extent that it has an unconditional contractual


right to receive cash or another financial asset; or

(ii) an intangible asset to the extent that it receives a right (a licence) to


charge users of the public service.

(ii) Operation services

Revenue is recognised in accordance with Note 2.25(d).

2.26 Income tax

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively
enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax
relates to items recognised outside profit or loss, either in other comprehensive
income or directly in equity.

56
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.26 Income tax (cont'd.)

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at


the reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in


subsidiaries, associates and interests in joint ventures, where the timing
of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable
future.

Deferred tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that it
is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary


difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss;
and

- in respect of deductible temporary differences associated with


investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences
can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and
are recognised to the extent that it has become probable that future taxable
profit will allow the deferred tax assets to be utilised.

57
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.26 Income tax (cont'd.)

(b) Deferred tax (cont'd.)

Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised


outside profit or loss. Deferred tax items are recognised in correlation to the
underlying transaction either in other comprehensive income or directly in
equity and deferred tax arising from a business combination is adjusted
against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current tax
liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

2.27 Foreign currencies

(a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured
using the currency of the primary economic environment in which the entity
operates ("the functional currency"). The consolidated financial statements are
presented in Ringgit Malaysia ("RM"), which is also the Company’s functional
currency.

(b) Foreign currency transaction

Transactions in foreign currencies are measured in the respective functional


currencies of the Company and its subsidiaries and are recorded on initial
recognition in the functional currencies at exchange rates approximating those
ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at the rate of exchange ruling at the reporting
date. Non-monetary items denominated in foreign currencies that are
measured at historical cost are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items denominated in foreign
currencies measured at fair value are translated using the exchange rates at
the date when the fair value was determined.

58
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.27 Foreign currencies (cont'd.)

(b) Foreign currency transaction (cont'd.)

Exchange differences arising on the settlement of monetary items or on


translating monetary items at the reporting date are recognised in profit or loss
except for exchange differences arising on monetary items that form part of
the Group’s net investment in foreign operations, which are recognised initially
in other comprehensive income and accumulated under foreign currency
translation reserve in equity. The foreign currency translation reserve is
reclassified from equity to profit or loss of the Group on disposal of the foreign
operation.

Exchange differences arising on the translation of non-monetary items carried


at fair value are included in profit or loss for the period except for the
differences arising on the translation of non-monetary items in respect of which
gains and losses are recognised directly in equity. Exchange differences
arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the
rate of exchange ruling at the reporting date and income and expenses are
translated at exchange rates at the dates of the transactions. The exchange
differences arising on the translation are taken directly to other comprehensive
income. On disposal of a foreign operation, the cumulative amount recognised
in other comprehensive income and accumulated in equity under foreign
currency translation reserve relating to that particular foreign operation is
recognised in profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign


operations are treated as assets and liabilities of the foreign operations and
are recorded in the functional currency of the foreign operations and translated
at the closing rate at the reporting date.

2.28 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when an annual impairment
assessment for an asset is required, the Group makes an estimate of the asset’s
recoverable amount.

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275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.28 Impairment of non-financial assets (cont'd.)

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell
and its value in use. For the purpose of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows (cash-
generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated
by the asset are discounted to their present value using a pretax discount rate that
reflects current market assessments of the time value of money and the risks specific
to the asset. Where the carrying amount of an asset exceeds its recoverable amount,
the asset is written down to its recoverable amount. Impairment losses recognised in
respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount
of any goodwill allocated to those units or groups of units and then, to reduce the
carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss.

An assessment is made at each reporting date as to whether there is any indication


that previously recognised impairment losses may no longer exist or may have
decreased. A previously recognised impairment loss is reversed only if there has
been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If that is the case, the carrying amount
of the asset is increased to its recoverable amount. That increase cannot exceed the
carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised previously. Such reversal is recognised in profit or
loss. Impairment loss on goodwill is not reversed in a subsequent period.

2.29 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of
the Group and the Company after deducting all of its liabilities.

(a) Ordinary shares

Ordinary shares are recorded at the proceeds received, net of directly


attributable incremental transaction costs. Ordinary shares are classified as
equity.

(b) Redeemable cumulative convertible preference shares ("RCCPS")

RCCPS are recorded at the proceeds received, net of directly attributable


incremental transaction costs. RCCPS are classified as equity.

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275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.29 Share capital and share issuance expenses (cont'd.)

(c) Dividends

Dividends on ordinary shares and RCCPS are recognised in equity in the


period in which they are declared.

(d) Capital contribution from shareholders

The capital contribution relates to contribution from the holding company,


where no repayment is expected.

2.30 Insurance business

(a) Product classification

The insurance and takaful subsidiaries of the Group issue contracts that
contain insurance/takaful risk or both insurance/takaful underwriting risk and
financial risk.

Financial risk is the risk of a possible future change in one or more of a


specified interest/profit rate, financial instrument price, commodity price,
foreign exchange rate, index of price or rate, credit rating or credit index or
other variable, provided in the case of a non-financial variable that the variable
is not specific to a party to the contract. Insurance/takaful underwriting risk is
risk other than financial risk.

Insurance/takaful contracts are those contracts that transfer significant


insurance/takaful risks.

An insurance/takaful contract is a contract under which the Group (the insurer)


has accepted significant insurance/takaful risk from another party (the
policyholders) by agreeing to compensate the policyholders if a specified
uncertain future event (the insured event) adversely affects the policyholders.
As a general guideline, the insurance and takaful subsidiaries of the Group
define whether significant insurance/takaful risk has been accepted by
comparing benefits paid or payable on the occurrence of an insured event
against benefits paid or payable if the insured event does not occur.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(a) Product classification (cont'd.)

A takaful contract is a contract under which the takaful operator (the provider)
has agreed to administer takaful risk faced by participants by agreeing to
compensate the participants from the Tabarru' Fund if a specified uncertain
future event (the insured event) adversely affects the participants. As a general
guideline, the Group's takaful subsidiary defines significant takaful risk to be
the possibility of having to pay benefits on the occurrence of a takaful event
that are at least 5% more than the benefits payable if the takaful event did not
occur.

Investment contracts are those contracts that do not transfer significant


insurance/takaful risks.

Once a contract has been classified as insurance/takaful contract, it remains


an insurance/takaful contract for the remainder of its life-time, even if the
insurance/takaful risks reduce significantly during this period, unless all rights
and obligations are extinguished or expire. Investment contracts can, however,
be reclassified as insurance/takaful contracts after inception if
insurance/takaful risks thereon becomes significant.

Insurance/takaful contracts are further classified as being either with or without


discretionary participation features ("DPF"). DPF is a contractual right to
receive, as a supplement to guaranteed benefits, additional benefits that are:

(a) likely to be a significant portion of the total contractual benefits;


(b) whose amount or timing is contractually at the discretion of the issuer;
(c) that are contractually based on the:

- performance of a specified pool of contracts or a specified type of


contract;
- realised and/or unrealised investment returns on a specified pool of
assets held by the issuer; or
- the profit or loss of the Group, fund or other entity that issues the
contract.

Surpluses in the DPF fund are distributable to policy holders/participants and


shareholders/the Group's subsidiaries in accordance with the relevant terms
under the insurance/takaful contracts. The Group's insurance and takaful
subsidiaries however have the discretion over the amount and timing of the
distribution of these surpluses to policyholders and shareholders and subject to
the advice of the subsidiaries' Appointed Actuaries.

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275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(a) Product classification (cont'd.)

Surpluses in the non-DPF fund arising during the year are recognised in the
statement of comprehensive income and the unallocated surplus where the
amount of surplus allocation to shareholders has yet to be determined by the
end of the financial period is held in equity.

Unallocated surpluses of the DPF funds where the amount of surplus


allocation to either policyholders or shareholders has yet to be determined by
the end of the financial period are held within insurance contract liabilities.

For financial options and guarantees which are not closely related to the host
insurance/takaful contract, bifurcation is required to measure these embedded
derivatives separately at fair value through profit or loss. However, bifurcation
is not required if the embedded derivative is itself an insurance/takaful
contract, or if the host insurance/takaful contract is measured at fair value
through profit or loss.

An investment-linked insurance/takaful contract is an insurance/takaful


contract with an embedded derivative linking payments on the contract to units
of an internal investment fund setup by the Group's insurance/takaful
subsidiary with the consideration received from the contract holders. This
embedded derivative meets the definition of an insurance/takaful contract and
is therefore not accounted for separately from the host insurance/takaful
contract. The liability for such contracts is adjusted for all changes in the fair
value of the underlying assets.

When insurance/takaful contracts contain both financial risk component and


significant insurance/takaful risk component and the cash flows from the two
components are distinct and can be measured reliably, the underlying amounts
are unbundled. Any premium/contributions relating to the insurance/takaful risk
component are accounted for on the same basis as insurance/takaful
contracts and the remaining element is accounted for as a deposit through the
statement of financial position similar to investment contracts.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(b) Reinsurance/Retakaful assets

The insurance and takaful subsidiaries of the Group cedes insurance/takaful


risk in the normal course of business for their businesses.
Reinsurance/retakaful assets represent balances due from
reinsurance/retakaful operators respectively. Amounts recoverable from
reinsurers/retakaful operators are estimated in a manner consistent with the
outstanding claims provision or settled claims associated with the
reinsurer's/retakaful's policies and are in accordance with the related
reinsurance/retakaful contracts.

Reinsurance/retakaful arrangements, entered into by the insurance and takaful


subsidiaries of the Group, that meet the classification requirements of
insurance/takaful contracts are accounted for as above. Arrangements that do
not meet these classification requirements are accounted for as financial
assets.

Reinsurance/retakaful assets represent amounts recoverable from reinsurers


or retakaful operators for insurance/takaful contract liabilities which have yet to
be settled at the reporting date. Amounts recoverable from reinsurers and
retakaful operators are measured consistently with the amounts associated
with the underlying insurance/takaful contracts and the terms of the relevant
reinsurance/retakaful arrangements.

At each reporting date, or more frequently, the insurance and takaful


subsidiaries of the Group assess whether objective evidence exists that
reinsurance/retakaful assets are impaired. Objective evidence of impairment
for reinsurance/retakaful assets are similar to those noted for insurance/takaful
receivables as above.

If any such evidence exists, the amount of the impairment loss is measured as
the difference between the asset's carrying amount and the present value of
estimated future cash flows discounted at the financial asset's original effective
interest rate. The impairment loss is recognised in profit or loss.

Reinsurance assets and retakaful assets or liabilities are derecognised when


the contractual rights are extinguished or expire or when the contract is
transferred to another party.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(c) Insurance/Takaful receivables

Insurance receivables are recognised when due and measured on initial


recognition at the fair value of the consideration received or receivable.
Subsequent to initial recognition, insurance receivables are measured at
amortised cost, using the effective yield method.

If there is objective evidence that the insurance and takaful receivables are
impaired, the Group reduces the carrying amount as described in Note 2.30(b).

Insurance/takaful receivables are derecognised when the derecognition criteria


for financial assets.

(d) General insurance/General takaful contract liabilities

General insurance/general takaful contract liabilities are recognised when


contracts are entered into and premiums/contributions are charged. The
general insurance/general takaful contract liabilities comprise claim liabilities
and premium/contribution liabilities.

(i) Claim liabilities

Claim liabilities represent the insurance and takaful subsidiaries of the


Group's obligations, whether contractual or otherwise, to make future
payments in relation to all claims that have been incurred as at reporting
date. Claim liabilities include provision for claims reported, claims incurred
but not reported ("IBNR"), claims incurred but not enough reserved
("IBNER") and related claims handling costs. These comprised the best
estimate value of claim liabilities and a provision of risk margin for
adverse deviation ("PRAD") as prescribed by Bank Negara Malaysia
("BNM").

Liabilities for outstanding claims are recognised upon notification by


policyholders/participants.

Claim liabilities are determined based on valuations performed by the


Signing Actuary, using a range of actuarial claims projection techniques
based on, amongst others, actual claims development patterns. Claim
liabilities are not discounted.

65
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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(d) General insurance/General takaful contract liabilities (cont'd.)

(ii) Premium/contribution liabilities

Premium/contribution liabilities represent the insurance and takaful


subsidiaries of the Group's future obligations on insurance/takaful
contracts as represented by premiums/contributions received for risks
that have not yet expired. The movement in premium/contribution
liabilities is released over the term of the insurance/takaful contracts and
is recognised as premium/contribution income.

(1) General takaful/reinsurance


takaful/Reinsurancebusiness
business

Premium/contribution liabilities are reported at the higher of the


aggregate of the unearned premium reserves /unearned contribution
reserves for all lines of business or the best estimate of the
unexpired risk reserves at the required risk margin for adverse
deviation.

(2) UPR/UCR
Unearned Premium Reserves ("UPR")/Unearned Contribution
Reserves ("UCR")

UPR/UCR represents the portion of the gross premiums or


contributions of insurance or takaful certificates written net of the
related reinsurance premiums or retakafuls contribution ceded to
qualified reinsurer or retakaful operators that relate to the unexpired
periods of the policies or certificates at the end of the financial year.

In determining the UPR/UCR at the reporting date, the method that


most accurately reflects the actual unearned premium/contribution is
used as follows:

- 1/365th method for all classes of general insurance/takaful


business and non-annual policies/certificates are time-
apportioned over the period of the risks; and

- 1/8th method for all classes of General reinsurance business


and is further adjusted for reinsurance ceded to foreign
reinsurers by deducting the lower of the premium ceded to
foreign reinsurers as required under the guidelines issued by
Bank Negara Malaysia and the deposits retained from foreign
reinsurers for which premiums are accounted during the
preceding twelve months.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(d) General insurance/general takaful contract liabilities (cont'd.)

(ii) Premium/contribution liabilities (cont'd.)

(3) URR
Unexpired Risk Reserves ("URR")

The URR is the prospective estimate of the expected future


payments arising from future events insured under policies or
certificates in force as at the end of reporting date and also includes
allowance for expenses, including overheads and cost of
reinsurance or retakaful, expected to be incurred during the
unexpired period in administering these policies or certificates and
settling the relevant claims, and expected future premium or
contribution refunds. URR is estimated via an actuarial valuation
performed by the Signing Actuary.

(e) Life insurance contract liabilities

The life insurance contract liabilities of the Group comprise actuarial liabilities,
unallocated surplus and net asset value attributable to unit holders.

(i) Actuarial liabilities

Actuarial liabilities are recognised when contracts are entered into and
premiums are charged.

These liabilities are measured by using a prospective actuarial valuation


method. The liability is determined as the sum of the present value of
future guaranteed benefits and, in the case of a participating life policy,
appropriate level of non-guaranteed benefits, and the expected future
management and distribution expenses, less the present value of future
gross considerations arising from the policy discounted at the appropriate
risk discount rate.

The liability is based on best estimate assumptions and with due regard
to significant recent experience. An appropriate allowance for provision of
risk margin for adverse deviation from expected experience is made in
the valuation of non-participating life policies, the guaranteed benefits
liabilities of participating life policies, and the non-unit liabilities of
investment-linked policies. The valuation basis, including the
determination of the appropriate risk discount rate, is in accordance with
Part D of the Risk-Based Capital Framework ("RBC Framework") and
Appendix VII: Valuation Basis for Life Insurance Liabilities of the RBC
Framework, and any related Circulars issued by BNM relevant to the
guidelines.
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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(e) Life insurance contract liabilities (cont'd.)

(i) Actuarial liabilities (cont'd.)

The liability in respect of policies of a participating insurance contract is


taken as the higher of the guaranteed benefit liabilities or the total benefit
liabilities at the contract level derived as stated above.

In the case of a life policy where a part of, or the whole of the premiums
are accumulated in a fund, the accumulated amount, as declared to the
policy owners, are set as the liabilities if the accumulated amount is
higher than the figure as calculated using the prospective actuarial
valuation method.

Where policies or extensions of a policy are collectively treated as an


asset at the fund level under the valuation method adopted, the value of
such asset is eliminated through zerorisation.

In the case of a 1-year life policy or a 1-year extension to a life policy


covering contingencies other than death or survival, the liability for such
life insurance contracts comprises the provision for unearned premiums
and unexpired risks, as well as for claims outstanding, which includes an
estimate of the incurred claims that have not yet been reported to the
insurance and takaful subsidiaries of the Group.

Adjustments to the liabilities at each reporting date are recorded in the


Life fund. Profits originated from margins of adverse deviations on run-off
contracts, are recognised in the Life fund over the life of the contract,
whereas losses are fully recognised in the Life fund during the first year of
run-off.

The liability is derecognised when the contract expires, is discharged or is


cancelled.

As the valuation methods used to value liabilities are in accordance with


the RBC Framework for insurers, the insurance and takaful subsidiaries
of the Group is deemed to have complied with the requirements of a
liability adequacy test under MFRS 4: Insurance Contracts.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(e) Life insurance contract liabilities (cont'd.)

(i) Actuarial liabilities (cont'd.)

With respect to the subsidiary of the Group in Turkey, life mathematical


provisions are recorded to reflect the liability of the Group against the
policyholders for long-term life policies and calculated as the differences
between the net present value of premiums collected in return of the risk
covered by the subsidiary and the liabilities to policyholders. Life
mathematical provisions are the sum of the remainder of collected
premiums. Life mathematical provisions are computed on the basis of
actuarial mortality assumptions which are applicable for Turkish insurance
companies.

(ii) Unallocated surplus

Surpluses of contracts under the Participating Life fund are attributable to


policyholders and shareholders and the amount and timing of distribution
to both the policyholders and shareholders are determined by an actuarial
valuation of the long term liabilities to policyholders at the reporting date
and is made in accordance with the provision of the Financial Services
Act, 2013 and related regulation by the insurance and takaful subsidiaries
of the Group's Appointed Actuary.

Surpluses in the non-DPF fund arising during the year are recognised in
the statement of comprehensive income and the unallocated surplus
where the amount of surplus allocation to shareholders has yet to be
determined by the end of the financial year is held in equity.

Unallocated surpluses of the DPF funds where the amount of surplus


allocation to either policyholders or shareholders has yet to be
determined by the end of the financial year are held within insurance
contract liabilities.

For financial options and guarantees which are not closely related to the
host insurance contract and/or investment contract with DPF, bifurcation
is required to measure these embedded derivatives separately at fair
value through profit or loss. However, bifurcation is not required if the
embedded derivative is itself an insurance contract and/or investment
contract with DPF, or if the host insurance contract and/or investment
contract itself is measured at fair value through profit or loss.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(e) Life insurance contract liabilities (cont'd.)

(iii) Net asset value attributable to unit holders

The unit liability of investment-linked policy is equal to the net asset value
of the Investment-linked funds, which represents net premium received
and investment returns credited to the policy less deduction for mortality,
morbidity costs and expense charges.

(f) Family takaful contract liabilities

Family takaful contract liabilities comprise liabilities attributable to the


certificate holders, claims liabilities and FVOCI reserve.

(i) Liabilities attributable to the certificate holders

Actuarial liabilities are recognised when contracts are entered into and
contributions are charged as determined by the annual actuarial valuation
are based on the Islamic Financial Services Act, 2013 as well as the
relevant statutory requirements stated in the Guidelines on Valuation
Basis for Liabilities of Family Takaful Business. The actuarial liabilities are
derecognised when the takaful contract expires, is discharged or is
cancelled. The liabilities are based on best estimate assumptions and
with due regard to significant recent experience. An appropriate
allowance for provision of risk margin for adverse deviation from expected
experience is made in the valuation of these liabilities.

(ii) Claims liabilities

The amounts payable under a family takaful certificate in respect of


benefits and claims, including settlement costs, are accounted for using
the case-by-case method as further set out in the accounting policy for
benefits and claims expenses for family takaful contracts.

(iii) Fair value adjustment on fair value through other comprehensive


income ("FVOCI") financial assets

Where unrealised gains or losses arise on FVOCI financial assets of the


non-surplus sharing family takaful fund, the adjustment to the takaful
contract liabilities equal to the effect that the realisation of those gains or
losses at the end of the reporting period would have on those liabilities is
recognised directly in the other comprehensive income.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(g) Expense liabilities

Expense liabilities are maintained in the Shareholders' fund in accordance with


the requirements stated in the Guidelines on Valuation Basis for Liabilities of
General Takaful and Family Takaful Business issued by BNM. The expense
liabilities with respect to General Takaful business are calculated at the higher
of aggregate of the provision for unearned wakalah fee or the unexpired
expense risk and for family takaful business, the expense liabilities are
determined by taking the present value of projected future deficits, discounted
at appropriate spot rates. Future deficits are defined as the excess of future
expense stream over future income cash flows, in aggregate basis. An
appropriate allowance for provision of risk margin for adverse deviation is
made in the valuation of these liabilities.

(h) Liability adequacy test

At each financial year end, the insurance and takaful subsidiaries of the Group
reviews the expense liabilities of the Shareholders' fund to ensure that the
carrying amount is sufficient or adequate to cover the obligations of the
shareholder's fund for all managed takaful certificates. In performing this
review, the insurance and takaful subsidiaries of the Group considers all
contractual cash flows and compares this against the carrying value of
expense liabilities. Any deficiency is recognised in profit or loss.

(i) Measurement and impairment of Qard

In the event where the assets of the takaful funds are insufficient to meet the
liabilities, the shareholder is required to rectify the deficit of the takaful funds
via a Qard, which is a profit free loan. The Qard shall be repaid from future
surpluses of the affected takaful funds. In the Shareholders' fund, the Qard is
stated at cost less impairment losses, if any, whereas in the takaful funds, the
Qard is stated at cost.

At each reporting date, the Qard position and the ability of the affected fund to
generate sufficient surplus to repay the shareholder is monitored and
measured. The likehood that the Qard will be repaid and the duration of time
that will be required to repay the Qard is determined and ascertained via
projected cash flows which take into account past experience of the affected
fund. The projected cash flows are then discounted to determine the
recoverable value of the Qard.

If the Qard is impaired, an amount comprising the difference between its cost
and its recoverable amount, less any impairment loss previously recognised is
recognised in profit or loss. Impairment losses are subsequently reversed in
the income statement if objective evidence exists that the Qard is no longer
impaired.
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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(j) Insurance/takaful payables

Insurance/takaful payables are recognised when due and measured on initial


recognition at fair value of the consideration payable less directly attributable
transaction costs. Subsequent to initial recognition, they are measured at
amortised cost using the effective yield method.

(k) Investment contract liabilities

Certain contracts of the Turkish subsidiary entitle the policyholders to a


minimum guaranteed crediting rate per annum or, when higher, a bonus rate
declared by the subsidiary from the eligible surplus available to date. To these
holders, the Group's subsidiary in Turkey has an obligation to eventually pay to
the contract holders at least 90% - 95% of the eligible surplus (i.e. all interest
earned from the assets backing these contracts) and holds 5% - 10% as fee
for administration of the operations.

The Group classifies these assets backing liabilities as financial assets and
since the Group is obliged to pay all eligible surplus obtained from these
assets to the policyholders, the Group recognises 90% - 95% (5% - 10% is
decreased as policy administration fees) of eligible surplus as investment
contract liabilities. In relation to the unrealised gains and losses arising from
the assets backing these contracts, the Group establishes a liability equal to
90% - 95% of these net gains, whereas the shareholder's and non-controlling
interest's portions are recognised in equity.

(l) Premium/contribution income

Premiums/contributions represent consideration paid for an insurance


contract/takaful certificate and is accounted for as follows:

(i) General takaful business

Contributions are recognised as soon as the amount of the contributions


can be reliably measured in accordance with the principles of Shariah.
Gross contributions are recognised in a financial year in respect of risks
assumed during that particular financial year. Gross contributions from
direct business are recognised during the financial year upon the
issuance of certificates. Gross contributions in respect of risks incepted
for which certificates have not been issued as of the reporting date are
accrued at that date.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(l) Premium/contribution income (cont'd.)

(ii) General reinsurance business

Premiums are disclosed gross of commission payable to cedants and


intermediaries. Premium from facultative business including premium in
the pipeline is recognised as income on the inception date basis.
Premium from treaty business including premium in the pipeline is
recognised on an accrual basis. The management of the insurance and
takaful subsidiaries of the Group is of the view that the policy gives a true
and fair view of the financial position and the results of its operations as it
accords with the accrual basis of accounting, resulting in consistently four
quarters of treaty business being recognised in a particular financial year.

(iii) Life insurance/family takaful business

Premium or contribution income includes premiums recognised in the


life/family takaful funds and the Investment-linked funds. Premiums or
contributions of the life/family takaful fund are recognised as soon as the
amount of the premiums or contributions can be reliably measured. First
premium or initial contribution is recognised from inception date and
subsequent premium or contribution is recognised when it is due.

Premium/contribution of the Investment-linked fund is in respect of the


net creation of units, which represents premiums/contributions paid by
policyholders/participants as payment for a new contract or subsequent
payments to increase the amount of that contract. Net creation of units is
recognised on a receipt basis.

At the end of the financial year, all due premiums are accounted for to the
extent that they can be reliably measured and it is still within the grace
period allowed for payment or covered by the cash surrender value of the
policies.

(m) Benefits and claims expenses

(i) General insurance/takaful business

Claim expenses represent compensation paid or payable on behalf of the


insured in relation a specific loss event that has occurred. They include
claims, handling costs and settlement costs and arise from events that
have occurred up to the end of the reporting date even if they had not
been reported to the insurance and takaful subsidiaries of the Group.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(m) Benefits and claims expenses (cont'd.)

(ii) Life insurance/family takaful business

Benefits and claims that are incurred during the financial year are
recognised when a claimable event occurs and/or the insurer/takaful
operator is notified.

Benefits and claims including settlement costs, are accounted for using
the case-by-case method and for this purpose, the amounts payable
under a life insurance policy/family takaful certificates are recognised as
follows:

- maturity and other policy/certificate benefit payments due on


specified dates are treated as claims payable on the due dates; and

- death, surrender and other benefits without due dates are treated as
claims payable on the date of receipt of intimation of death of the
assured or occurrence of contingency covered;

- benefits payable under the Investment-linked funds are in respect of


net cancellation of units and are recognised as surrender;

- bonus on DPF policy upon its declaration; and

- profit sharing of takaful certificates at maturity and in the financial


year the profit arises.

(n) Commission expenses and acquisition costs

(i) General insurance business

The gross cost of acquiring and renewing insurance policies net of


income derived from ceding reinsurance premiums is recognised as
incurred and properly allocated to the periods in which it is probable they
give rise to income.

(ii) Life insurance business

Gross commission and agency expenses, which are costs directly


incurred in securing premiums on insurance policies, and income derived
from reinsurers in the course of ceding of premiums to reinsurers, are
charged/credited to profit or loss in the financial year in which they are
incurred.

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.30 Insurance business (cont'd.)

(n) Commission expenses and acquisition costs (cont'd.)

(iii) General/Family takaful business

Acquisition costs, commissions and management expenses are borne by


the general/family takaful fund in the profit or loss at an agreed
percentage of the gross contribution, in accordance with the principles of
“Wakalah” as approved by the insurance and takaful subsidiaries of the
Group's Shariah Committee and agreed between the participants and the
insurance and takaful subsidiaries of the Group. These expenses are
transferred to the Shareholders' fund via Wakalah fee and are recognised
as incurred and properly allocated to the period in which it is probable that
give rise to income.

2.31 Deferred liabilities

Fees received from third parties as advance payments of future maintenance


expenditure, in consideration for right-of-way access were classified as deferred
liabilities. Deferred liabilities were amortised over the period of the individual
contracts.

2.32 Fair value measurement

The Group measures financial instruments, such as, derivatives, and financial
investments, at fair value at each reporting date. Fair values of financial instruments
measured at amortised cost are disclosed in Note 29 and Note 68 to the financial
statements.

Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date. The fair value measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or

(b) In the absence of a principal market, in the most advantageous market for the
asset or liability

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(Incorporated in Malaysia)

2. Summary of significant accounting policies (cont'd.)

2.32 Fair value measurement (cont'd.)

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market


participant's ability to generate economic benefits by using the asset in its highest and
best use or by selling it to another market participant that would use the asset in its
highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and
for which sufficient data are available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the fair value measurement as a
whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets
or liabilities

Level 2: Valuation techniques for which the lowest level input that is significant to
the fair value measurement is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level input that is significant to
the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring
basis, the Group determines whether transfers have occurred between Levels in the
hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting
date.

2.33 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past
events and whose existence will be confirmed only by the occurrence or non
occurrence of uncertain future events not wholly within the control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial
position.

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(Incorporated in Malaysia)

3. Standards issued but not yet effective

At the date of authorisation of the financial statements, the following were issued but not
yet effective and have not been adopted by the Group and the Company.

Effective for financial


periods beginning
Description on or after

MFRS 16: Leases 1 January 2019


IC Interpretation 23: Uncertainty over Income Tax 1 January 2019
Amendments to MFRS 3: Business Combinations (Annual 1 January 2019
Improvements to MFRS Standards 2015-2017 cycle)
Amendments to MFRS 11: Joint Arrangements (Annual 1 January 2019
Improvements to MFRS Standards 2015-2017 cycle)
Amendments to MFRS 112: Income Taxes (Annual 1 January 2019
Improvements to MFRS Standards 2015-2017 cycle)
Amendments to MFRS 123: Borrowing Costs (Annual 1 January 2019
Improvements to MFRS Standards 2015-2017 cycle)

Amendments to MFRS 9: Financial Instruments: Prepayment 1 January 2019


Features with Negative Compensation

Amendments to MFRS 119: Employee Benefits - Plan 1 January 2019


Amendment, Curtailment or Settlement

Amendments to MFRS 128: Investments in Associates and Joint 1 January 2019


Ventures - Long-term Interests in Associates & Joint Ventures
MFRS 2: Share-Based Payment 1 January 2020
Amendments to MFRS 3: Business Combinations 1 January 2020
Amendments to MFRS 6: Exploration for and Evaluation of 1 January 2020
Mineral Resources
Amendments to MFRS 14: Regulatory Deferral Accounts 1 January 2020
Amendments to MFRS 101: Presentation of Financial 1 January 2020
Statements

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(Incorporated in Malaysia)

3. Standards issued but not yet effective (cont'd.)

Effective for financial


periods beginning
Description on or after
Amendments to MFRS 108: Accounting Policies, Changes in 1 January 2020
Accounting Policies Estimates and Errors
Amendments to MFRS 134: Interim Financial Reporting 1 January 2020
Amendments to MFRS 137: Provisions, Contingent Liabilities 1 January 2020
and Contingent Liabilities and Contingent Assets
Amendments to MFRS 138: Intangible Assets 1 January 2020
Amendments to IC Interpretation 12: Service Concession 1 January 2020
Arrangement
Amendments to IC Interpretation 19: Extinguishing Financial 1 January 2020
Liabilities with Equity Instruments
Amendments to IC Interpretation 20: Stripping Cost in the 1 January 2020
Production Phase of a Surface Mine
Amendments to IC Interpretation 22: Foreign Currency 1 January 2020
Transaction and Advance Consideration
Amendments to IC Interpretation 132: Intangible Assets - Web 1 January 2020
Site Costs
MFRS 17: Insurance Contracts 1 January 2021
Amendments to MFRS 10 and MFRS 128: Sales or Contribution Deferred
of Assets between and Investor and its Associates or Joint
Venture

Adoption of the above MFRSs, Amendments to MFRSs and IC Interpretation will not have
any material impact on the financial performance or position of the Company, other than as
described below :

(i) MFRS 16: Leases

MFRS 16 will replace MFRS 117: Leases, IC Interpretation 4: Determining whether an


Arrangement contains a Lease, IC Interpretation 115: Operating Lease-Incentives
and IC Interpretation 127: Evaluating the Substance of Transactions Involving the
Legal Form of a Lease. MFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires lessees to account
for all leases under a single on-balance sheet model similar to the accounting for
finance leases under MFRS 117.

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(Incorporated in Malaysia)

3. Standards issued but not yet effective (cont'd.)

(i) MFRS 16: Leases (cont'd.)

At the commencement date of a lease, a lessee will recognise a liability to make


lease payments and an asset representing the right to use the underlying asset
during the lease term. The right-of-use asset is initially measured at cost and
subsequently measured at cost (subject to certain exceptions), less accumulated
depreciation and impairment losses, adjusted for any remeasurement of the lease
liability. The lease liability is initially measured at present value of the lease payments
that are not paid at that date. Subsequently, the lease liability is adjusted for interest
and lease payments, as well as the impact of lease modifications.

Classification of cash flows will also be affected as operating lease payments under
MFRS 117 are presented as operating cash flows, whereas under MFRS 16, the
lease payments will be split into a principal (which will be presented as financing cash
flows) and an interest portion (which will be presented as operating cash flows).

Lessor accounting under MFRS 16 is substantially the same as the accounting under
MFRS 117. Lessors will continue to classify all leases using the same classification
principle as in MFRS 117 and distinguish between two types of leases: operating and
finance leases. MFRS 16 also requires lessees and lessors to make more extensive
disclosures than under MFRS 117.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early
application is permitted but not before an entity applies MFRS 15. A lessee can
choose to apply the standard using either a full retrospective or a modified
retrospective approach. The Group and the Company are currently assessing the
impact of adopting MFRS 16.

(ii) Amendments to MFRS 123: Borrowing Costs

Amendments to MFRS 123 (effective from 1 January 2019) clarify that if a specific
borrowing remains outstanding after the related qualifying asset is ready for its
intended use or sale, it becomes part of general borrowings.

The Group and the Company will apply the amendments prospectively.

(iii) Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture

The effective date for the amendment to Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (Amendments to MFRS 10 and MFRS
128) has been deferred to a date to be determined by MASB.

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(Incorporated in Malaysia)

4. Significant accounting judgements

The preparation of the Group's financial statements requires management to make


judgements that affect the reported amounts of revenues, expenses, assets and liabilities,
and the disclosure of contingent liabilities at the reporting date are disclosed as below:

(a) Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying
the Group's accounting policies that have the most significant effect on the amounts
recognised in the financial statements.

(i) Impairment of investments

The Group determines whether its investments are impaired following certain
indications of impairment such as, amongst others, prolonged shortfall
between market value and carrying amount, significant changes with adverse
effects on the investment and deteriorating financial performance of the
investment.

Depending on their nature and the industries in which the investments relate
to, judgements are made by management to select suitable methods of
valuation such as, amongst others, discounted cash flow, realisable net asset
value and sector average price-earning ratio methods.

(ii) Recognition of expected losses on construction contracts

Any expected loss on construction contract is recognised by the Group as an


expense immediately when it is probable that the total contract costs will
exceed the total contract revenue, even though the project had yet to be
completed. In determining the expected loss, the Group takes into account the
total contract costs to be incurred to the completion of the project and the
probability of claims to be approved by clients for specific items of cost
escalation and variation order.

(iii) Contingent liabilities

As disclosed in Note 34 and Note 72 to the financial statements, a contingent


liability is a possible obligation that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of
uncertain future events not wholly within the control of the Group. Contingent
liabilities are not recognised in the statements of financial position of the
Group, except for contingent liabilities assumed in a business combination that
are present obligations and which the fair values can be reliably determined.

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(Incorporated in Malaysia)

4. Significant accounting judgements (cont'd.)

(a) Critical judgements made in applying accounting policies (cont'd.)

(iv) Contingent liabilities - litigation

As disclosed in Note 72 to the financial statements, the Group has several


pending litigations with various parties as at current financial year end. The
Group, after due consultation with the Group's solicitors, assesses the merit of
each case, and makes the necessary provision for liabilities in the financial
statements if their crystallisation are deemed as probable.

(v) Operating lease commitments

The Group entered into commercial lease arrangements with third parties with
regards to the passenger aircraft and freighters. The Group has determined
that it does not retain all the significant risks and rewards of ownership of these
assets and hence the passenger and freighters aircrafts do not form part of the
aircraft, property, plant and equipment of the Group.

(vi) Income taxes

Judgement is involved in determining the provision for income taxes. There are
certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Group recognises
liabilities for expected tax based on estimates of whether additional taxes will
be due. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, such differences will impact the income
tax and deferred tax provisions in the year in which such determination is
made.

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5. Significant accounting estimates

(a) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below;

(i) Impairment on investments and receivables

(1) Impairment on investments

Once a suitable method of valuation is selected, management makes


certain assumptions concerning the future to estimate the recoverable
amount of the investment. Depending on the specific individual
investment, assumptions made by management may include, amongst
others, assumptions on expected future cash flows, revenue growth,
discount rate used for purposes of discounting future cash flows which
incorporates the relevant risks, and expected future outcome of certain
past events.

Sensitivity to changes in assumptions

Management believes that no reasonably possible change in the key


assumptions described above would cause the carrying amounts of the
investments to materially exceed their recoverable amounts.

(2) Impairment on receivables

The Group recognises an allowance for expected credit losses ("ECLs")


for all debt instruments not held at fair value through profit or loss. ECLs
are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are
integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there
has not been a significant increase in credit risk since initial recognition,
ECLs are provided for credit losses that result from default events that
are possible within the next 12-months (a 12-month ECL). For those
credit exposures for which there has been a significant increase in credit
risk since initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).

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5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(i) Impairment on investments and receivables (cont'd.)

(2) Impairment on receivables (cont'd.)

For trade receivables and contract assets, the Group applies a simplified
approach in calculating ECLs. Therefore, the Group does not track
changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group has established a
provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the
economic environment.

Impairment review

The impairment review of those investments and receivables with


indications of impairment carried out by management during the year led
to the recognition of impairment losses on investments and receivables of
approximately RM3,878 million (2017: RM1,101 million) and RM5,203
million (2017: RM1,261 million) for the Group and the Company,
respectively.

(ii) Impairment of goodwill

The Group determines whether goodwill is impaired at least once annually.


This requires an estimation of the value-in-use of the cash generating units to
which the goodwill is allocated. Estimating the value-in-use requires the Group
to make an estimate of the expected future cash flows from the cash
generating unit and also to apply a suitable discount rate in order to calculate
the present value of those cash flows. The carrying amount of the Group’s
goodwill as at 31 December 2018 is RM2,047,588,000 (2017:
RM1,922,871,000). Further details are disclosed in Note 47 to the financial
statements.

(iii) Impairment of aircraft included in property, plant and equipment

The Group assesses whether there are any indicators of impairment for
aircraft included in property, plant and equipment at each reporting date. If any
such indication exists, the asset's recoverable amount is estimated to
determine the amount of impairment loss.

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(Incorporated in Malaysia)

5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(iii) Impairment of aircraft included in property, plant and equipment (cont'd.)

Management performed a review of the recoverable amounts based on a


variety of estimations including the value in use of the cash generating unit
("CGU") to which the aircraft included in property, plant and equipment is
allocated and fair value less cost to sell. Value-in-use was determined by an
estimate of the expected future cash flows from the CGU using a suitable
discount rate in order to calculate the present value of those cash flows.

(iv) Deferred tax assets

Deferred tax assets of the Group are recognised for all unused tax losses and
unabsorbed capital allowances to the extent that it is probable that taxable
profit will be available against which the losses and capital allowances can be
utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely
timing and level of future taxable profits together with future tax planning
strategies. The details are as disclosed in Note 55 to the financial statements.

(v) Provision for aircraft related direct operating expenses

The operation of air transportation services inevitably involve the making of


various provisions on direct expenses, such as fuel, ground handling charges,
landing and parking charges, inflight meals, computer reservation systems
booking fees and information technology related expenses. The estimates and
associated assumptions used are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the provisions about carrying values
of liabilities as at the financial year end.

(vi) Provision for aircraft maintenance and overhaul costs

The Group is obligated to carry out heavy duty maintenance checks on the
airframe, engines, landing gears and auxiliary power units, being part of the
return conditions of its leased aircraft under contract. Provision for heavy duty
maintenance cost is made progressively in the financial statements based on
the number of flight hours or cycles. In arriving at the provision, assumptions
are made on the estimated condition of the asset at the time of check, the
material and overhead costs to be incurred, and the timing of when the check
is to be carried out. These assumptions are formed based on past experience,
and are regularly reviewed to ensure they approximate to the actual. Any
revision in assumptions and estimations that causes a material effect to the
provision would be adjusted prospectively in the financial statements.

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(Incorporated in Malaysia)

5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(vii) Unutilised tickets

Unutilised tickets are subsequently recognised as revenue using estimates


regarding the timing of recognition based on the terms and conditions of the
tickets and historical trends. Changes in travel patterns, economic
environment, variables and estimations used have an impact on the financial
statements of the Group.

(viii) Frequent flyer programme

The consideration allocated to the mileage awards issued is measured at their


fair value. In determining the fair value of the mileage awards, estimation
techniques were used and reflect the weighted average of the contractual price
with partners adjusted by the miles not expected to be redeemed by members.

(ix) Construction and consultancy contracts and property development

The Group recognises construction contracts and certain property


development revenue and costs in the income statement over time by
reference to the progress towards completion of the performance obligation
based on input method.

Significant judgement is required in determining the percentage of completion,


the extent of the costs incurred and the estimated total revenue and costs, as
well as recoverability of the construction, consultancy and property
development projects. In making the judgement, the Group evaluates based
on past experience, external economic factors and by relying on the work of
specialists.

The construction, consultancy and property development revenue and costs


recognised in the current and prior years are disclosed in Note 52(iii) and Note
56 to the financial statements, respectively.

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5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(x) Amortisation of concession intangible assets

The cost of EDE is amortised over the concession period by applying the
formula in Note 2.12 (a)(i). The projected toll revenue used for the purpose of
the amortisation calculation is based on the latest available traffic volume
projections prepared by independent traffic consultants (independently
reviewed on a periodic basis) and applying the toll rate structures as set out in
the Concession and Novation Agreement. The assumptions to arrive at the
traffic volume projections take into consideration the growth rate based on the
current assessment of market and economical conditions.

Changes in the expected traffic volume could impact future amortisation


charges.

(xi) Depreciation of aircraft, property, plant and equipment

The cost of aircraft, aircraft modifications/retrofits, spare engines, property,


plant and equipment are depreciated on a straight line basis over the assets'
useful lives up to its residual value. Management reviews the residual values,
useful lives and depreciation method at the end of each financial year and
ensures consistency with previous estimates and patterns of consumption of
the economic benefits that embodies the items in these assets. Changes in
useful lives and residual values of these assets may result in a revision of
future depreciation charges.

(xii) Provision for liquidated ascertained damages ("LAD")

LAD is a possible obligation that arise from the late delivery of construction
and development projects.

In assessing the probability that an outflow of resources will be required to


settle the obligation, management considers the outcome of the extension of
time application based on circumstances of the projects, past experiences and
expert advice for construction projects; and the estimated date of completion
for development projects.

(xiii) Provision for construction costs

The Group recognises a provision for construction costs relating to estimated


final claims by contractors which have not been finalised and provision for
property development, infrastructure and land related costs relating to portions
of land sold.

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(Incorporated in Malaysia)

5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(xiii) Provision for construction costs (cont'd.)

Significant judgement is required in determining the extent of the costs to be


incurred and in making the judgement, the Group conducts feasibility studies
and estimates based on past experience, external economic factors and by
relying on the work of specialists.

(xiv) Provision for foreseeable losses for affordable housing

Provision for foreseeable losses is recognised for anticipated losses to be


incurred for the development of affordable housing as a condition imposed by
the authorities for the approval of the master development plan.

Significant judgement is required in estimating the construction costs and the


anticipated losses for the affordable housing.

(xv) Deferred consideration payable

Deferred consideration payable arose from the acquisition of investment


completed by the end of reporting date with consideration payable in future
periods which is contingent upon meeting certain criteria and performance
target. At each reporting date, the Group assesses the fair value of the
deferred consideration payable based on the projected probability of the
investee company meeting the criteria and performance target after
considering the current and projected market conditions.

The amount recognised as deferred consideration payable is the net present


value of the assessed fair value, using a discount rate appropriate to the cash
flow risks associated with the liability.

(xvi) Valuation of embedded derivatives

As the fair value of the embedded derivatives cannot be derived from active
markets, fair value is determined using valuation techniques including the
binomial model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgment is
required in establishing fair values. The judgments include considerations of
inputs such as credit risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial instruments.

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(Incorporated in Malaysia)

5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(xvii) Fair value of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either in
the principal market for the asset or liability, or in the absence of a principal
market, in the most advantageous market for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming that
market participants act in their economic best interest.

For financial instruments where there is no active market, fair value is


determined using valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

(xviii) Impairment of intangible assets - landing slots for air transportation

The Group determines whether the landing slots which have indefinite useful
lives, are tested for impairment either annually or on a more frequent interval,
depending on events or changes in circumstances that indicate the carrying
value may be impaired. This requires an estimation of the “value in use” of the
CGU to which the landing slots belong.

In assessing value in use, the management is required to make an estimate of


the expected future cash flows from the CGU and also to choose a suitable
discount rate in order to calculate the present value of those cash flows.

(xix) Insurance business

(i) Life insurance and family takaful businesses

Life insurance contract liabilities are determined in accordance with


regulatory framework. All life insurance liabilities are valued using a
prospective actuarial valuation based on the sum of the present value of
future benefits and expenses less future gross considerations arising
from the policies discounted at the appropriate risk discount rate.

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5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(xix) Insurance business (cont'd.)

(i) Life insurance and family takaful businesses (cont'd.)

The main assumptions used for life insurance/family takaful business


relate to mortality, morbidity, investment returns, expenses, lapse and
surrender rates and discount rates. The Group's life insurance
subsidiaries base mortality and morbidity on established industry and
Malaysian and Turkish tables which reflect historical experiences,
adjusted when appropriate to reflect the Group's unique risk exposure,
product characteristics, target markets and own claims severity and
frequency experiences.

There may be significant reporting lags between the occurrence of an


insured event and the time it is actually reported. Following the
identification and notification of an insured loss, there may still be
uncertainty as to the magnitude of the claim. There are many factors that
will determine the level of uncertainty such as inflation, judicial
interpretations, legislative changes and claims handling procedures.

Estimates are also made as to future investment income arising from the
assets backing the life insurance contracts. These estimates are based
on current market returns as well as expectations about future economic
and financial developments.

Assumptions on future expenses are based on current expense levels,


adjusted for expected expense inflation adjustments, if appropriate.

Lapse and surrender rates are based on the Group's life and family
takaful businesses' historical experience of lapses and surrenders.

(ii) General insurance and takaful businesses

The Group's general insurance and general takaful subsidiaries estimated


IBNR claims based on computation by an in-house actuary and an
independent actuarial firm respectively. Different methods can be used to
analyse past data and project past patterns into the future. The actuarial
firm had considered the Ultimate Loss Ratio ("ULR") method for the
estimation of IBNR claims for the Motor Act class which was completely
run-off this year, while the Link Ratio method with a Bornhuetter-
Ferguson ("BF") adjustment on a paid claims basis was considered for
the rest of the business classes.

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5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(xix) Insurance business (cont'd.)

(ii) General insurance and takaful businesses (cont'd.)

The ULR method requires a selected ULR to be applied to the net earned
contribution in order to project the amount of ultimate claims incurred for
each loss year. Then claims incurred for known claims are subtracted
from the projected ultimate claims incurred for each loss year in order to
estimate the amount of IBNR claims. Assumptions regarding the ULR
vary by class of business and take into account the following:

(i) The Group's claims incurred development to-date;

(ii) Net contribution remaining after deducting Wakalah fee; and

(iii) The industry loss experience.

The BF method can be seen as a combination of the ULR and unadjusted


Link Ratio methods. An adopted ULR is selected based on the resultant
loss ratios from the Link Ratio method, where appropriate, taking into
consideration historical experience, industry loss ratios as well as incurred
claims ratios to-date. The outstanding claims are calculated using the
expected payment pattern (based on the average grossing up factors
over the most recent three years) and an externally determined estimate
of ultimate claims incurred for each loss year (determined by multiplying
the adopted ULR with the net earned contribution). The IBNR is
determined by subtracting the case estimate from the estimated
outstanding claims.

For estimation of future benefit payments and premium arising from long-
term insurance contracts for the Turkish business, four parameters have
significant impacts:

(i) The lapse and surrender rates: The estimated rates are derived from
past experience. In its estimation, the Group also takes into
consideration the economic crisis or positive economic
developments that will affect the rates either in a positive or a
negative way.

(ii) Number of deaths: While estimating number of deaths in a year, the


historical mortality experiences are used.

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(Incorporated in Malaysia)

5. Significant accounting estimates (cont'd.)

(a) Key sources of estimation uncertainty (cont'd.)

(xix) Insurance business (cont'd.)

(ii) General insurance and takaful businesses (cont'd.)

For estimation of future benefit payments and premium arising from long-
term insurance contracts for the Turkish business, four parameters have
significant impacts (cont'd.):

(iii) Future investment income: This estimate is based on current market


returns as well as expectations about future economic and financial
developments.

(iv) Average premium per insured: The assumption is based on


historical trends in average premium amounts per insured and
economic expectations that may affect the average premium
amount.

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Statement of comprehensive income


For the year ended 31 December 2018

Company
Note 2018 2017
RM'000 RM'000
(Restated)

Income 6 2,743,479 5,039,219


Dividend income 2,245,533 2,721,270
Gain from divestments 319,954 2,175,135
Other operating income 177,992 142,814

Operating expenses (546,099) (696,413)


Net unrealised (loss)/gain on financial assets
designated as fair value through profit or loss (746,179) 583,066
Net gain on revaluation of derivatives 329,597 264,802
Unrealised foreign exchange (loss)/gain, net (67,522) 837,497
Allowance for impairment losses on investments
and receivables, net of writebacks (5,202,716) (1,261,292)
Operating (loss)/profit 7 (3,489,440) 4,766,879
Finance costs 11 (2,322,636) (1,940,330)
(Loss)/profit before taxation (5,812,076) 2,826,549
Taxation 12 (235,842) (74,706)
Net (loss)/profit for the year (6,047,918) 2,751,843

Other comprehensive income ("OCI")


Items that will not be reclassified subsequently
to profit or loss
Net loss on fair value through other comprehensive income
financial assets
- Loss on fair value changes, net of tax representing
other comprehensive income for the year (537,500) (137,000)

Total comprehensive (loss)/income for the year (6,585,418) 2,614,843

The accompanying notes form an integral part of the financial statements.


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Statement of financial position


As at 31 December 2018

Company
As at 1
Note 2018 2017 January 2017
RM'000 RM'000 RM'000
(Restated) (Restated)

Assets
Cash and bank balances 14 867,544 1,232,708 1,899,907
Investment in money market
instruments 15 9,903 - 19,968
Other financial assets 16 4,380,354 6,355,984 4,764,365
Other receivables 17 1,078,115 1,246,788 326,554
Tax recoverable 18 1,765 45,706 36,769
Interest in subsidiaries 19 34,883,927 38,737,180 37,921,460
Interest in associates 20 25,405,218 24,704,920 25,146,787
Property and equipment 22 9,945 13,697 11,927
Computer software 23 1,579 2,332 3,177
Deferred tax asset 24 - 170,972 225,972
66,638,350 72,510,287 70,356,886
Asset classified as held for sale - - 1,534,669
Total assets 66,638,350 72,510,287 71,891,555

Liabilities
Provision and other payables 25 2,305,633 1,469,753 2,538,825
Borrowings 26 45,353,588 43,780,852 42,244,089
Derivative liabilities 21 46,431 241,566 506,368
Total liabilities 47,705,652 45,492,171 45,289,282

Equity attributable to Owners of


the Company
Share capital 12,284,201 12,284,201 12,284,201
Ordinary and preference shares 27 12,284,201 12,284,201 6,643,953
Share premium - - 3,840,248
Capital redemption reserve - - 1,800,000
Capital contribution from
shareholders 2,324,423 2,324,423 2,324,423
Fair value adjustment reserve 10,500 548,000 685,000
Retained profits 4,313,574 11,861,492 11,308,649
Total equity 18,932,698 27,018,116 26,602,273

Total equity and liabilities 66,638,350 72,510,287 71,891,555

The accompanying notes form an integral part of the financial statements.


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(Incorporated in Malaysia)

Statement of changes in equity


For the year ended 31 December 2018

Ordinary and Capital


preference Capital contribution Fair value Distributable
shares Share redemption Total from adjustment retained Total
(Note 27) premium reserve share capital shareholders reserve profits equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2017 6,643,953 3,840,248 1,800,000 12,284,201 2,324,423 685,000 11,308,649 26,602,273
Transition to non-par
regime 5,640,248 (3,840,248) (1,800,000) - - - - -
Redemption of RCCPS - - - - - - (1,199,000) (1,199,000)
Total comprehensive income
for the year - - - - - (137,000) 2,751,843 2,614,843
Dividends (Note 13) - - - - - - (1,000,000) (1,000,000)
At 31 December 2017 12,284,201 - - 12,284,201 2,324,423 548,000 11,861,492 27,018,116

At 1 January 2018 12,284,201 - - 12,284,201 2,324,423 548,000 11,861,492 27,018,116


Total comprehensive loss -
for the year - - - - - (537,500) (6,047,918) (6,585,418)
Dividends (Note 13) - - - - - - (1,500,000) (1,500,000)
At 31 December 2018 12,284,201 - - 12,284,201 2,324,423 10,500 4,313,574 18,932,698

The accompanying notes form an integral part of the financial statements.


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Statement of cash flows


For the year ended 31 December 2018

Company
2018 2017
RM'000 RM'000

Cash flows from operating activities


(Loss)/profit before taxation (5,812,076) 2,826,549
Adjustments for:
Gain from divestments
- gain from divestments of subsidiaries and associates (224,485) (2,026,081)
- net fair value gain on financial assets at fair value
through profit or loss (95,469) (149,054)
Dividend income (2,245,533) (2,721,270)
Interest income (167,885) (132,408)
Unrealised loss/(gain) on foreign exchange, net 67,522 (837,497)
Depreciation 3,883 5,347
Amortisation of computer software 1,495 1,265
Allowance for impairment losses in investments and
receivables, net of writebacks 5,202,716 1,261,292
Reversal of LTIP provision (126,700) -
Gain on disposal of property and equipment (264) (14)
Amortisation of discounts on Khazanah bonds 613,243 639,541
Amortisation of discounts on Exchangeable Trust Certificates 311,951 149,856
Interest expense on Term Loans, Medium Term Notes and
others 1,397,442 1,150,933
Net loss/(gain) on financial assets designated as fair value
through profit or loss 746,179 (583,066)
Net gain on revaluation of derivatives (329,597) (264,802)
Operating loss before working capital changes (657,578) (679,409)
Changes in receivables (1,098,196) (1,051,831)
Changes in payables 896,046 (1,110,290)
Income tax paid (17,751) (29,994)
Net cash used in operating activities (877,479) (2,871,524)

Cash flows from investing activities


Proceeds from sale of investments, net 778,602 663,884
Purchase of property and equipment (494) (7,307)
Purchase of computer software (742) (420)
Proceeds from sale of property and equipment 627 204
Dividend received 2,260,273 2,884,480
Interest received 167,885 111,312
Net cash generated from investing activities 3,206,151 3,652,153

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(Incorporated in Malaysia)

Statement of cash flows


For the year ended 31 December 2018 (cont'd.)

Company
2018 2017
RM'000 RM'000

Cash flows from financing activities


Redemption of Exchangeable Trust Certificates (3,007,644) -
Redemption of Khazanah Bonds (2,000,000) (1,000,000)
Redemption of RCCPS - (1,199,000)
Proceeds from issuance of Exchangeable Trust Certificates 1,284,662 -
Proceeds from issuance of Ihsan Sukuk - 100,000
Proceeds from issuance of Islamic MTN 3,500,000 1,500,000
Proceeds from issuance of MTN - 1,000,000
Drawdown of Revolving Credit Facility 1,100,000 -
Dividends paid (1,900,000) (750,000)
Interest paid (1,670,854) (1,098,828)
Net cash used in financing activities (2,693,836) (1,447,828)

Net changes in cash and cash equivalents (365,164) (667,199)


Cash and cash equivalents at the beginning of year 1,232,708 1,899,907
Cash and cash equivalents at the end of year 867,544 1,232,708

Cash and cash equivalents comprise (Note 14):


Cash and bank balances 133,117 210,306
Deposits with licensed banks 734,427 1,022,402
867,544 1,232,708

The accompanying notes form an integral part of the financial statements.


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(Incorporated in Malaysia)

Notes to the Company financial statements

6. Income
Company
Note 2018 2017
RM'000 RM'000

Dividend income:
- from subsidiaries 170,747 441,509
- from associates 2,027,649 2,201,881
- from financial assets designated as fair value
through other comprehensive income \ 2,390 39,960
- financial assets designated as fair value
through profit or loss 44,747 37,920
Gain from divestments:
- gain from divestments of subsidiaries and
associates 224,485 2,026,081
- net fair value gain on financial assets
designated as fair value through profit or loss 95,469 149,054
Interest income on:
- loans and receivable 96,178 82,382
- financial assets designated as fair value through
profit or loss 71,707 50,026
Directors' fees (i) 8,737 9,054
Others 1,370 1,352
2,743,479 5,039,219

(i) Directors’ fees relate to income receivable from related companies for the services
rendered by the Company's employees as nominee directors of the related companies.

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7. Operating (loss)/profit

Included in operating (loss)/profit are the following:


Company
Note 2018 2017
RM'000 RM'000

Staff costs 8 32,649 122,985


Auditors’ remuneration
- statutory audit 390 390
- other assurance services 883 1,522
- others 116 321
Rental of buildings and equipment 30,565 29,464
Repair and maintenance 7,382 8,637
Depreciation 22 3,883 5,347
Amortisation of computer software 23 1,495 1,265
Gain on disposal of property and equipment (264) (14)

8. Staff costs

Company
2018 2017
RM'000 RM'000

Wages and salaries 128,978 100,160


Statutory contributions to EPF and social security 26,796 18,306
Long Term Incentive Plan (i) (126,700) -
Others 3,575 4,519
32,649 122,985

Included in staff costs are executive directors' and key management personnels'
remuneration as disclosed in Notes 9 and 10, respectively.

(i) Long Term Incentive Plan ("LTIP")

The Khazanah Nasional Shadow Share Option Scheme ("LTIP") is governed by the
Board of Directors' approval policy and construed in accordance with applicable laws in
Malaysia.

Details of the LTIP is as follows:

Note Issue Date Expiry Date

LTIP 1 1 Jul 2004 30 Jun 2007


LTIP 2 1 Jul 2007 31 Dec 2014
LTIP 3 (i) 1 Jan 2015 Cancelled

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8. Staff costs (cont'd.)

(i) Long Term Incentive Plan ("LTIP") (cont'd.)

Following the Board of Directors’ meeting on 6 September 2018, the Board has
exercised its right to terminate the LTIP Scheme and cancel all existing options. There
will be no further offers made pursuant to the cancellation.

The salient features of the previous Schemes are as follows:

(a) Subject to the discretion of the Option Committee, all confirmed employees shall be
eligible to participate in the Scheme.

(b) The instrument will take form of options on Shadow Khazanah Shares.

(c) The option does not carry voting rights and is not entitled to any dividends.

(d) The option value for each Shadow Share shall be the Spread between the Fair
Value (the VWAP for the six-month calendar period ending on the last business day
prior to the date on which the Option is exercised) and the Subscription Price
(where it is based on the VWAP Net Worth at the period of grant). This Spread is
multiplied by the number of Shadow Shares in respect of which the Grantee has
exercised his or her Option, which represents the maximum payment to be received
by the employee.

VWAP = Volume Weighted Average Price of the shares within the


Company's investment portfolio.

(e) LTIP is based on a Semi Annual Grant. All confirmed employees in the Company at
that point in time will be granted options on a six ("6") monthly basis. The
subscription price is set based on the 6-month-VWAP for the period when the
options are granted. In essence, the exercise price for the options will fluctuate
depending on movements in the value of the portfolio over a six monthly period.

(f) The options would vest one year after the grant date. Vesting is subject to
performance rating and all options not exercised would remain exercisable from
vesting until expiry.

(g) Limit to payout subject to Board approval - there will be a net cumulative limit of
150% of Base Pay per annum. Board approval will be required if any payout is to
exceed this cumulative limit.

The key salient changes of LTIP3 vis-à-vis LTIP2 are as follows:

(a) The vesting of each performance-based under LTIP2 depends on performance for
selected level and above, whereas under LTIP3, applicable to all levels.

(b) Additional criteria introduced under LTIP3 on the eligibility to exercise performance
portion.
99
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

8. Staff costs (cont'd.)

(i) Long Term Incentive Plan ("LTIP") (cont'd.)

The following table illustrates the strike price of each tranche granted, the number of shadow shares and its movements in the Scheme during
the year.

<--------------------------------------------------------- Number of shadow shares ---------------------------------------------------------------->


<------------- Granted (on Provision basis) ----------------> <------------------ Vested (on Payout basis) ------------------->

Outstanding Outstanding Outstanding Vested Exercised Cancelled Outstanding


Initial (upon as at 1 as at 31 as at 1 during during during the as at 31 Subscription Exercise
joining) January Movement December January the year the year year December Price Period *

2018

(Granted 6 monthly)
LTIP2
Issue 11: 2H 2012 Options 3,044,817 1,500 (1,500) - - - - - - 81.06 1.1.2014 - 31.12.2017
Issue 12: 1H 2013 Options 3,001,013 7,735 (7,735) - 7,735 - (7,735) - - 90.21 1.7.2014 - 30.6.2018
Issue 13: 2H 2013 Options 3,200,705 72,329 (72,329) - 68,975 - (68,975) - - 98.18 1.1.2015 - 31.12.2018
Issue 14: 1H 2014 Options 3,022,297 144,534 (144,534) - 109,809 - (109,809) - - 100.59 1.7.2015 - 30.6.2019
LTIP3
Issue 15: 2H 2014 Options 3,159,172 2,535,221 (2,535,221) - 2,436,017 - (2,436,017) - - 109.29 1.1.2016 - 31.12.2019
Issue 16: 1H 2015 Options 3,234,683 2,690,804 (2,690,804) - 2,588,682 - (2,588,682) - - 113.24 1.7.2016 - 30.6.2020
Issue 17: 1H 2016 Options 3,102,580 2,600,175 (2,600,175) - 2,424,498 - (2,424,498) - - 104.78 1.1.2017 - 31.12.2020
Issue 18: 1H 2016 Options 3,122,516 3,122,516 (3,122,516) - 2,556,933 (2,556,933) - - 105.64 1.7.2017 - 30.6.2021
Issue 19: 1H 2017 Options 3,232,509 - - - 3,232,509 - (2,063,171) (1,169,338) - 106.74 1.1.2018 - 31.12.2021
Issue 20: 2H 2017 Options 3,201,388 - - - 3,201,388 - (3,201,388) - 106.77 1.7.2018 - 30.6.2022
31,321,680 11,174,814 (11,174,814) - 16,626,546 - (12,255,820) (4,370,726) -

100
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

8. Staff costs (cont'd.)

(i) Long Term Incentive Plan ("LTIP") (cont'd.)

<--------------------------------------------------------- Number of shadow shares ---------------------------------------------------------------->


<------------- Granted (on Provision basis) ----------------> <------------------ Vested (on Payout basis) ------------------->
Outstanding Outstanding Outstanding Vested Exercised Cancelled Outstanding
Initial (upon as at 1 as at 31 as at 1 during during during the as at 31 Subscription Exercise
joining) January Movement December January the year the year year December Price Period *

2017

(Granted 6 monthly)
LTIP2
Issue 11: 2H 2012 Options 3,044,817 1,500 - 1,500 1,500 - (1,500) - - 81.06 1.1.2014 - 31.12.2017
Issue 12: 1H 2013 Options 3,001,013 7,735 - 7,735 7,735 - - - 7,735 90.21 1.7.2014 - 30.6.2018
Issue 13: 2H 2013 Options 3,200,705 72,329 - 72,329 72,329 - (3,354) - 68,975 98.18 1.1.2015 - 31.12.2018
Issue 14: 1H 2014 Options 3,022,297 144,534 - 144,534 144,534 - (34,725) - 109,809 100.59 1.7.2015 - 30.6.2019
LTIP3
Issue 15: 2H 2014 Options 3,159,172 2,652,974 (117,753) 2,535,221 2,535,221 - (99,204) - 2,436,017 109.29 1.1.2016 - 31.12.2019
Issue 16: 1H 2015 Options 3,234,683 2,766,567 (75,763) 2,690,804 2,690,804 - (102,122) - 2,588,682 113.24 1.7.2016 - 30.6.2020
Issue 17: 1H 2016 Options 3,102,580 3,102,580 (502,405) 2,600,175 2,600,175 - (175,677) - 2,424,498 104.78 1.1.2017 - 31.12.2020
Issue 18: 1H 2016 Options 3,122,516 3,122,516 - 3,122,516 3,122,516 (454,967) (110,616) - 2,556,933 105.64 1.7.2017 - 30.6.2021
Issue 19: 1H 2017 Options 3,232,509 - - - 3,232,509 - - - 3,232,509 106.74 1.1.2018 - 31.12.2021
Issue 20: 2H 2017 Options 3,201,388 - - - 3,201,388 - - 3,201,388 106.77 1.7.2018 - 30.6.2022
31,321,680 11,870,735 (695,921) 11,174,814 17,608,711 (454,967) (527,198) - 16,626,546

101
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

9. Directors' remuneration

Company
2018 2017
RM'000 RM'000

Executive Directors of the Company:


Wages and salaries 7,269 7,117
Statutory contribution to EPF 1,231 1,305
8,500 8,422
Non-Executive Directors of the Company:
Fees and allowances 109 31
Others 286 2,881
395 2,912

8,895 11,334

10. Key management personnel remuneration

Company
2018 2017
RM'000 RM'000

Wages and salaries 44,924 39,402


Statutory contribution to EPF 7,069 6,562
Long Term Incentive Plan 3,566 154
55,559 46,118

Key management personnel are staff who are involved in decision making and management
of the Company.

11. Finance costs

Company
2018 2017
RM'000 RM'000

Interest expense on term loans 218,712 166,507


Interest expense on Revolving Credit Facility 186,966 196,371
Interest expense on Medium and Islamic
Medium Term Notes ("MTN and IMTN") 991,764 788,055
Amortisation of discounts on Khazanah Bonds (Note 26(a)) 613,243 639,541
Amortisation of discounts on Exchangeable Trust
Certificates 311,951 149,856
2,322,636 1,940,330

102
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

12. Taxation

Company
2018 2017
RM'000 RM'000

Malaysian income tax 27,164 21,070


Foreign income tax 3,177 2,992
Under/(over) provision in prior years 34,529 (4,356)
64,870 19,706

Deferred tax (Note 24):


Relating to origination and reversal of temporary
differences 170,972 55,000

Total income tax expense 235,842 74,706

The tax treatment of the Company has fallen under the ambit of Section 60F Investment
Holding Company ("Section 60F") of the Income Tax Act, 1967 for the current and prior
financial years.

Under Section 60F, Investment Holding Company is defined as a company whose activities
consist mainly of the holding of investment and not less than 80% of its gross income
(whether exempt or not) is derived therefrom. Income from the holding of investment is not to
be treated as business income whilst income other than income from holding of investment is
to be treated as other non-business gains or profits under Section 4(f) of the Income Tax Act,
1967.

The Malaysian tax rate is calculated at the statutory tax rate of 24% (2017: 24%) of the
estimated assessable profit for the year.

The reconciliation between tax expense and the product of accounting profit multiplied by the
applicable corporate tax rate for the years ended 31 December 2018 and 2017 are as
follows:

Company
2018 2017
RM'000 RM'000

(Loss)/profit before taxation (5,812,076) 2,826,549

Taxation at Malaysian statutory tax rate of 24%


(2017: 24%) (1,394,898) 678,372
Effect of income not subject to tax (615,717) (1,153,380)
Effect of expenses not deductible for tax purposes 2,211,928 554,070
Under/(over) provision in prior years 34,529 (4,356)
Tax expense for the year 235,842 74,706

103
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

13. Dividends

Company
Dividends in respect of year/
Dividends recognised in year
2018 2017
RM'000 RM'000

Dividends on ordinary shares:


Interim single-tier dividend on 5,443,953,229 ordinary
shares - 600,000
Special single-tier dividend on 5,443,953,229 ordinary
shares - 130,000
Interim single-tier dividend on 5,443,953,229 ordinary
shares 1,000,000 -
Special single-tier dividend on 5,443,953,229 ordinary
shares 500,000 -

Dividends on RCCPS:
Interim single-tier dividend of RM100 per share on
1,000,000,000 RCCPS - 100,000
Special single-tier dividend of RM170 per share on
1,000,000 RCCPS - 170,000
1,500,000 1,000,000

14. Cash and bank balances

Company
2018 2017
RM'000
RM'000 RM'000

Cash on hand and at bank 133,117 210,306


Deposits with licensed banks 734,427 1,022,402
867,544 1,232,708

104
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

15. Investment in money market instruments

Investment in money market instruments relates to short term commercial papers.

16. Other financial assets

Current Non-current Total


Company RM'000 RM'000
RM'000 RM'000

2018

Financial assets designated


as fair value through profit
or loss
At fair value:
Quoted shares outside Malaysia 1,129,019 - 1,129,019
Quoted equity funds outside Malaysia 818,234 - 818,234
Unquoted money market funds outside
Malaysia - 396,881 396,881
Unquoted bonds in Malaysia 9,987 95,113 105,100
1,957,240 491,994 2,449,234

Financial assets designated


as fair value through other
comprehensive income
At fair value:
Quoted shares in Malaysia - 110,500 110,500

Loans receivable
At amortised cost:
Loans receivable (i) - 2,852,065 2,852,065
Less: Allowance for impairment
losses (ii) - (1,031,445) (1,031,445)
- 1,820,620 1,820,620

1,957,240 2,423,114 4,380,354

105
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

16. Other financial assets (cont'd.)

Current Non-current Total


Company RM'000 RM'000
RM'000 RM'000

Group - 2017 (Restated)

Financial assets designated


as fair value through profit
or loss
At fair value:
Quoted shares outside Malaysia 1,463,233 - 1,463,233
Unquoted equity funds inside Malaysia -
Quoted equity funds outside Malaysia 1,118,689 - 1,118,689
Unquoted money market funds outside
Malaysia - 273,136 273,136
Unquoted bonds in Malaysia 25,040 80,162 105,202
2,606,962 353,298 2,960,260

Financial assets designated


as fair value through other
comprehensive income
At fair value:
Quoted shares in Malaysia - 108,000 108,000
Unquoted shares in Malaysia - 883,000 883,000
- 991,000 991,000

Loans receivable
At amortised cost:
Loans receivable (i) - 2,852,065 2,852,065
Less: Allowance for
impairment losses (ii) - (447,341) (447,341)
- 2,404,724 2,404,724

2,606,962 3,749,022 6,355,984

106
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

16. Other financial assets (cont'd.)

Current Non-current Total


Company RM'000 RM'000
RM'000 RM'000

Group - 2016 (restated)

Financial assets designated


as fair value through profit
or loss
At fair value:
Quoted shares outside Malaysia 1,029,746 - 1,029,746
Unquoted equity funds inside Malaysia -
Quoted equity funds outside Malaysia 872,534 - 872,534
Unquoted money market funds outside
Malaysia - 164,475 164,475
Unquoted bonds in Malaysia 30,484 80,005 110,489
1,932,764 244,480 2,177,244

Financial assets designated


as fair value through other
comprehensive income
At fair value:
Quoted shares in Malaysia - 106,000 106,000
Unquoted shares in Malaysia - 1,022,000 1,022,000
- 1,128,000 1,128,000

Loans receivable
At amortised cost:
Loans receivable (i) - 1,861,065 1,861,065
Less: Allowance for
impairment losses (ii) - (401,944) (401,944)
- 1,459,121 1,459,121

1,932,764 2,831,601 4,764,365

(i) The loans receivable is unsecured, interest free and has no fixed terms of repayment.

(ii) A reconciliation of the allowance for impairment losses on loans receivable is as follows:

Individually
impaired
2018 2017
RM'000 RM'000
At 1 January 447,341 401,944
Charge for the year 584,104 45,397
At 31 December 1,031,445 447,341

Other than the loans receivable, the other financial assets above are neither past due
nor impaired.
107
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

17. Other receivables


Company
Note 2018 2017
RM'000
RM'000 RM'000

Dividend receivable - 14,740


Interest income receivable 13,716 12,950
Deposits 4,253 4,305
Amount due from related companies (i) 2,937 19,474
Amount due from Yayasan Amir (ii) 204,557 204,467
Amount due from MoF, Inc. (iii) 851,602 987,088
Others 1,050 3,764
1,078,115 1,246,788

(i) The amount due from related companies is unsecured, bears interest ranging between
4% to 5% (2017: ranging between 4% to 5%) per annum and is repayable on demand.

(ii) The amount due from Yayasan Amir has the same terms as the Ihsan Sukuk
Programme, disclosed in Note 26(g).

(iii) The amount due from MoF, Inc. is unsecured, interest free and is repayable on demand.

During the year, the other receivables are neither past due nor impaired.

18. Tax recoverable

The tax recoverable relates to tax over-payment of tax based on the Company's tax
submissions, which are still subject to Inland Revenue ("IRB") agreement.

19. Interest in subsidiaries

Company
2018 2017
RM'000 RM'000

Shares at cost,
Unquoted shares in Malaysia 42,739,207 41,669,486
Unquoted shares outside Malaysia 6,733,892 7,293,394
49,473,099 48,962,880
Less: Accumulated allowance for impairment losses (20,441,647) (17,758,202)
29,031,452 31,204,678
Amount due from subsidiaries * 5,852,475 7,532,502
34,883,927 38,737,180

* As the amount due from subsidiaries is, in substance, a part of the Company's net
investments in the subsidiaries, it is stated at cost less accumulated impairment losses.
108
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

19. Interest in subsidiaries (cont'd.)

Details of the subsidiaries are shown in Note 78.

During the current financial year:

(a) Additional acquisition/subscription in existing subsidiaries

(i) The Company subscribed to an additional 91,000,000 preference shares in Agrifood


Resources Holdings Sdn Bhd ("ARH"), for a total cash consideration of RM91.0
million, resulting in the Company maintaining its equity interest of 100%. ARH, an
unlisted company incorporated in Malaysia, is an investment holding company.

(ii) The Company subscribed to an additional 176,176,130 preference shares in


Granatum Ventures Sdn Bhd ("Granatum"), for a total cash consideration of
RM176.2 million, resulting in the Company maintaining its equity interest of 100%.
Granatum, an unlisted company incorporated in Malaysia, is an investment holding
company.

(iii) The Company subscribed to an additional 16,220,000 preference shares in i2M


Ventures Sdn Bhd ("i2M"), for a total consideration of RM16.2 million, resulting in
the Company maintaining its equity interest of 100%. i2M, an unlisted company
incorporated in Malaysia, is an investment holding company.

(iv) The Company subscribed to an additional 12,266,087 preference shares in Ophir


Ventures Sdn Bhd ("Ophir"), for a total consideration of RM12.3 million, resulting in
the Company maintaining its equity interest of 100%. Ophir, an unlisted company
incorporated in Malaysia, is an investment holding company.

(v) The Company subscribed to an additional 24,472,206 preference shares in Pulau


Manukan Ventures Sdn Bhd ("PMV"), for a total cash consideration of RM24.4
million, resulting in the Company maintaining its equity interest of 100%. PMV, an
unlisted company incorporated in Malaysia, is an investment holding company.

(vi) The Company subscribed to an additional 254,735,000 preference shares in


Themed Attractions Resorts & Hotels Sdn Bhd ("TARH"), for a total cash
consideration of RM254.7 million, resulting in the Company maintaining its equity
interest of 100%. TARH, an unlisted company incorporated in Malaysia, is an
investment holding company.

(iv) The Company subscribed to an additional 1,400,000 ordinary shares and 2,200,000
preference shares in Bukit Frasers Ventures Sdn Bhd ("Bukit Frasers"), for a total
consideration of RM3.6 million, resulting in the Company maintaining its equity
interest of 100%. Bukit Frasers, an unlisted company incorporated in Malaysia, is an
investment holding company.

109
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

19. Interest in subsidiaries (cont'd.)

(a) Additional acquisition/subscription in existing subsidiaries (cont'd.)

(v) The Company subscribed to an additional 12,700,000 preference shares in Mount


Gading Ventures Sdn Bhd ("Mount Gading"), for a total consideration of RM12.7
million, resulting in the Company maintaining its equity interest of 100%. Mount
Gading an unlisted company incorporated in Malaysia, is an investment holding
company.

(vi) The Company subscribed to an additional 1,100,000,000 preference shares in


Pulau Memutik Ventures Sdn Bhd ("Pulau Memutik"), for a total consideration of
RM1.1 billion, resulting in the Company maintaining its equity interest of 100%.
Pulau Memutik, an unlisted company incorporated in Malaysia, is an investment
holding company.

(vii) The Company subscribed to an additional 200,000 ordinary shares and 425,000
preference shares in Pulau Segantang Ventures Sdn Bhd ("Pulau Segantang"), for
a total consideration of RM0.6 million, resulting in the Company maintaining its
equity interest of 100%. Pulau Segantang, an unlisted company incorporated in
Malaysia, is an investment holding company.

(viii) The Company subscribed to an additional 3,100,000 preference shares in Tanjung


Bidara Ventures Sdn Bhd ("Tanjung Bidara"), for a total consideration of RM3.1
million, resulting in the Company maintaining its equity interest of 100%. Tanjung
Bidara, an unlisted company incorporated in Malaysia, is an investment holding
company.

(ix) The Company subscribed to an additional 22,985,000 preference shares in Teluk


Rubiah Ventures Sdn Bhd ("Teluk Rubiah"), for a total consideration of RM22.9
million, resulting in the Company maintaining its equity interest of 100%. Teluk
Rubiah, an unlisted company incorporated in Malaysia, is an investment holding
company.

(xi) The Company subscribed to an additional 27,438,000 preference shares in Pulau


Tiga Ventures Sdn Bhd ("Pulau Tiga"), for a total consideration of RM27.4 million,
resulting in the Company maintaining its equity interest of 100%. Pulau Tiga, an
unlisted company incorporated in Malaysia, is an investment holding company.

110
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

19. Interest in subsidiaries (cont'd.)

(b) Special Purpose Vehicles ("SPVs")

Special purpose vehicles ("SPVs") are wholly-owned subsidiaries of the Company that
have been set up to actively hold investments or as funding vehicles of the Company.
The SPVs are disclosed in Note 78.

Certain proforma financial statements' captions of the Company after including the
assets and liabilities held through the SPVs as at 31 December are as follows:

Proforma
2018 2017
RM'000
RM'000 RM'000

Revenue 4,470,748 6,112,168


(Loss)/profit from operations (6,271,325) 2,896,364
Net (loss)/profit for the year (6,520,800) 2,807,983

Proforma
2018 2017
RM'000
RM'000 RM'000

Cash, bank balances and investment in money market 1,748,537 2,606,759


Other financial assets 29,375,262 30,299,281
Interest in subsidiaries 15,038,080 15,972,949
Interest in associates 36,965,491 37,968,252
Interest in joint ventures 866,343 1,334,456
Borrowings 55,235,165 49,870,701
Retained profits 9,586,537 17,607,257
Currency translation reserve 3,354,773 3,475,279
Fair value adjustment reserve 3,366,776 5,675,498
Capital contribution from shareholders 2,324,423 2,324,423

Total assets 86,818,988 92,567,000


Total liabilities 55,902,278 51,200,342

111
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

20. Interest in associates

Company
2018 2017
RM'000 RM'000

Shares at cost,
Quoted shares in Malaysia 24,617,476 24,243,513
Unquoted shares in Malaysia 932,407 645,897
25,549,883 24,889,410
Less: Accumulated allowance for impairment losses (144,665) (184,490)
25,405,218 24,704,920

Market values of quoted shares in Malaysia 57,783,191 71,252,910

Details of the associates are shown in Note 78.

During the current financial year:

(i) The Company elected to participate in the dividend reinvestment plan of CIMB Group
Holdings Berhad ("CIMB"), resulting in the Company acquiring an additional
110,166,298 ordinary shares. The Company also disposed 62,990,300 ordinary shares
of CIMB for a total cash consideration of RM363.5 million. Pursuant to the above
transactions, the Company's equity interest in CIMB increased to 27.37%. CIMB, a
company incorporated in Malaysia, is listed on Bursa Malaysia Main Market and is
involved in investment holding, financial services, property management, provision of
consultancy services and dealing in securities.

21. Derivative financial instruments

Company
Nominal Liability
RM'000 RM'000

2018

Non-hedging derivative:
Embedded derivatives
Long term 2,898,821 46,431

2017

Non-hedging derivative:
Embedded derivatives
Short term 1,380,171 118,677
Long term 3,241,633 122,889
4,621,804 241,566

112
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

21. Derivative financial instruments (cont'd.)

Embedded derivative liabilities

The Company, via special purpose vehicles, issued Exchangeable Trust Certificates, as
described in Note 26(b). The embedded derivatives represent the fair value of:

(i) the option provided to certificate holders to convert into ordinary shares of the underlying
assets ("Exchange Property"); and

(ii) the cash settlement option that the Company has to redeem the Exchangeable Trust
Certificates.

22. Property and equipment

Office
equipment,
furniture and
fittings and
computer Motor
equipment vehicles Renovation Total
Company RM'000 RM'000 RM'000 RM'000

At 31 December 2018

Cost

At 1 January 2018 30,175 6,294 31,934 68,403


Additions 451 - 43 494
Disposal (5) (3,574) - (3,579)
At 31 December 2018 30,621 2,720 31,977 65,318

Accumulated depreciation

At 1 January 2018 18,475 4,502 31,729 54,706


Charge for the year 2,933 822 128 3,883
Disposal (4) (3,212) - (3,216)
At 31 December 2018 21,404 2,112 31,857 55,373

Net carrying amount

At 31 December 2018 9,217 608 120 9,945

113
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

22. Property and equipment (cont'd.)

Office
equipment,
furniture and
fittings and
computer Motor
equipment vehicles Renovation Total
Company (cont'd.) RM'000 RM'000 RM'000 RM'000

At 31 December 2017

Cost

At 1 January 2017 23,515 6,465 32,811 62,791


Additions 7,155 - 152 7,307
Disposal (495) (171) (1,029) (1,695)
At 31 December 2017 30,175 6,294 31,934 68,403

Accumulated depreciation

At 1 January 2017 16,098 3,571 31,195 50,864


Charge for the year 2,808 1,102 1,437 5,347
Disposal (431) (171) (903) (1,505)
At 31 December 2017 18,475 4,502 31,729 54,706

Net carrying amount

At 31 December 2017 11,700 1,792 205 13,697

114
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

23. Computer software

2018 2017
Company RM'000 RM'000

Cost

At 1 January 16,842 16,422


Additions 742 420
Write off (5,282) -
At 31 December 12,302 16,842

Accumulated amortisation

At 1 January 14,510 13,245


Charge for the year 1,495 1,265
Write off (5,282) -
At 31 December 10,723 14,510

Net carrying amount

At 31 December 1,579 2,332

Computer software relates to licence fees, professional fees and other directly attributable
costs of preparing the asset for its intended use or for bringing the asset to its working
condition.

24. Deferred taxation

Company
2018 2017
RM'000 RM'000

Deferred tax asset - 170,972

115
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

24. Deferred taxation (cont'd.)

The component and movement of deferred tax during the financial year are as follows:

Deferred tax asset of the Company:

Khazanah Bonds
and Exchangeable
Trust Certificates
RM'000

At 1 January 2018 170,972


Recognised in profit or loss (170,972)
At 31 December 2018 -

At 1 January 2017 225,972


Recognised in profit or loss (55,000)
At 31 December 2017 170,972

25. Provisions and other payables

Company
Note 2018 2017
RM'000 RM'000

Interest payable (i) 379,653 313,885


Dividend payable - 400,000
Amount due to related companies (ii) 1,823,357 462,595
Other payables and accruals (iii) 102,623 138,979
Other provisions (iv) - 154,294
2,305,633 1,469,753

The terms and conditions of the above liabilities are as follows:

(i) Interest payable is normally settled quarterly, semi-annually or annually throughout the
financial year, depending on the terms of the respective borrowings of the Company.

(ii) The amount due to related companies is unsecured, interest free and is repayable on
demand.

(iii) Other payables and accruals are interest free and have an average term of 60 to 90
days (2017: average term of 60 to 90 days).

116
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

25. Provisions and other payables (cont'd.)

(iv) The movement in the other provisions are as follows:

Note 2018 2017


RM'000 RM'000
Balance as at 1 Jan 154,294 155,314
Less: Payment of LTIP (27,594) (1,020)
Reversal for the year 8(i) (126,700) -
Balance as at 31 Dec - 154,294

26. Borrowings

Company
Note Short term Long term Total
RM'000 RM'000
RM'000 RM'000

2018

Khazanah Bonds - secured (a) 2,446,349 10,179,439 12,625,788


Exchangeable Trust
Certificates (b) - 2,898,822 2,898,822
Danga Capital Berhad (c) - 15,815,364 15,815,364
Rantau Abang Capital
Berhad (d) 1,500,000 5,500,000 7,000,000
Term loans - unsecured (e) 913,614 2,500,000 3,413,614
Revolving credit facility (f) 3,400,000 - 3,400,000
Ihsan Sukuk Berhad (g) - 200,000 200,000
8,259,963 37,093,625 45,353,588

Company
Note Short term Long term Total
RM'000 RM'000
RM'000 RM'000

2017

Khazanah Bonds - secured (a) 1,933,287 12,079,258 14,012,545


Exchangeable Trust
Certificates (b) 1,380,171 3,241,633 4,621,804
Danga Capital Berhad (c) - 12,248,934 12,248,934
Rantau Abang Capital
Berhad (d) - 7,000,000 7,000,000
Term loans - unsecured (e) 897,569 2,500,000 3,397,569
Revolving credit facility (f) 2,300,000 - 2,300,000
Ihsan Sukuk Berhad (g) - 200,000 200,000
6,511,027 37,269,825 43,780,852

117
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(a) Khazanah Bonds - secured

Company
2018 2017
RM'000
RM'000 RM'000

At 1 January 14,012,545 14,373,004


Amortisation of discount for the year (Note 11) 613,243 639,541
Less: Redeemed during the year (2,000,000) (1,000,000)
At 31 December 12,625,788 14,012,545

On 29 May 2006, the Company launched a Government Guaranteed Bond programme


of up to a total of RM20 billion in nominal value.

The details of the Khazanah Bonds are as follows:

- Issued under the Shariah principle of Musyarakah;

- Bear no coupon and shall be redeemed by the Company in full at their face value on
the maturity dates;

- Subject to any written law, the Khazanah Bonds rank pari passu among themselves
and equal with all other unsecured obligations (other than subordinated obligations
and priorities created by law, if any) of the Company; and

- Are irrevocably guaranteed by the Government of Malaysia.

Khazanah Bonds of RM2 billion were fully redeemed during the year.

The maturity structure of Khazanah Bonds is as follows:

Company
2018 2017
RM'000
RM'000 RM'000

Due within one year


Zero coupon Khazanah bonds, at nominal value 2,500,000 2,000,000
Less: Unamortised discount * (53,651) (66,713)
2,446,349 1,933,287

Due after one year, and within five years


Zero coupon Khazanah bonds, at nominal value 8,000,000 8,500,000
Less: Unamortised discount * (1,019,420) (966,362)
6,980,580 7,533,638

118
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(a) Khazanah Bonds - secured


Company
2018 2017
RM'000
RM'000 RM'000

Due after five years


Zero coupon Khazanah bonds, at nominal value 4,500,000 6,500,000
Less: Unamortised discount * (1,301,141) (1,954,380)
3,198,859 4,545,620

12,625,788 14,012,545

* The total unamortised discount is derived as follows:


Total discount upon issuance (7,819,164) (7,819,164)
Total amortisation to date 5,444,952 4,831,709
Total unamortised discount at 31 December (2,374,212) (2,987,455)

(b) Exchangeable Trust Certificates ("ETC")

Company
Note 2018 2017
RM'000
RM'000 RM'000

USD500 million 7-year ETC (i) 188,794 1,816,267


SGD600 million 5-year ETC (ii) - 1,380,171
USD398.8 million 5-year ETC (iii) 1,501,261 1,425,366
USD320.8 million 5-year ETC (iv) 1,208,767 -
2,898,822 4,621,804

The maturity structure of the ETCs is as follows:

Company
2018 2017
RM'000
RM'000 RM'000

Due within one year - 1,380,171


Due after one year, and within five years 2,898,822 3,241,633
2,898,822 4,621,804

119
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(i) USD500 million 7-year Exchangeable Trust Certificates

On 18 September 2014, the Company via an independent special purpose


company, Cahaya Capital Limited (the “Issuer”), issued a Shariah-compliant
exchangeable trust certificates (the “Certificates”).

The issuance comprise USD500 million 7-year Certificates with a put option on Year
4 and is exchangeable into ordinary shares of RM1.00 each of Tenaga Nasional
Berhad ("TNB"), the Exchange Property. The Certificates were priced at 100% of
the principal amount at zero periodic payments with a yield to optional/scheduled
dissolution of negative 0.05%. Unless previously exchanged, redeemed, purchased
or cancelled, the Certificates will be redeemed at 99.65% of their nominal amount
on 18 September 2021 (“the Scheduled Dissolution Date”).

Exchange Right

The Certificates are exchangeable for a pro-rata share of TNB ordinary shares with
par value of RM1.00 each during the Exchange Period. Notwithstanding the
Exchange Right, at any time when the delivery of Exchange Property is required to
satisfy the Exchange Right, the Company has the option to purchase the Exchange
Property for an amount equal to the Cash Settlement Amount.

The Exchange Property initially comprise 111,728,612 TNB shares and include all
Relevant Securities and other property arising out of or derived or resulting
therefrom and such other property, in each case as may be deemed or required to
comprise all or part of the Exchange Property pursuant to the Conditions, but
excluding any such property as may or may be deemed to have ceased to form part
of the Exchange Property.

Following the dividends declared by TNB during the Exchange Period which
exceeded the reference amount as defined in the Conditions of the Certificates,
further adjustments to the Exchange Property were made resulting in the Certificate
holders being entitled to receive 223.4572 TNB shares and RM315.08 cash as
capital distribution for each USD1,000 nominal value of Certificates effective 29
December 2017.

Exchange Period

Each Certificateholder has the right (“Exchange Right”) to exchange a Certificate at


any time during the Exchange Period, beginning on and including 29 October 2014
and ending on and including the earlier to occur of:

(a) the close of business on the date which falls 10 Business Days prior to the
Scheduled Dissolution Date; or

120
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(i) USD500 million 7-year Exchangeable Trust Certificates (cont'd.)

Exchange Period (cont'd.)

(b) if the Certificates shall have been called for dissolution prior to the Scheduled
Dissolution Date, the close of business on the day which falls 10 Business Days
prior to the date fixed for dissolution.

Redemption

During the year, 2,252.02 Certificates worth of USD449.5 million were exchanged
for TNB ordinary shares.

This note to the financial statements should be read in conjunction with the
conditions set out in the offering circular dated 15 September 2014 relating to the
Certificates.

(ii) SGD600 million 5-year Exchangeable Trust Certificates

On 24 October 2013, the Company via an independent special purpose company,


Indah Capital Limited (the “Issuer”), issued a Shariah-compliant exchangeable trust
certificates (the “Certificates”).

The issuance comprise SGD600 million 5-year Certificates with a put option on Year
3 and is exchangeable into ordinary shares of RM1.00 each of IHH Healthcare
Berhad ("IHH"), the Exchange Property, currently held by a subsidiary of the
Company. The Certificates were priced at 100% of the principal amount at zero
periodic payments with a yield to optional/scheduled dissolution of negative 0.25%.
Unless previously exchanged, redeemed, purchased or cancelled, the Certificates
will be redeemed at 98.76% of their nominal amount on 24 October 2018 (“the
Scheduled Dissolution Date”).

Exchange Right

The Certificates are exchangeable for a pro-rata share of IHH ordinary shares with
par value of RM1.00 each during the Exchange Period. Notwithstanding the
Exchange Right, at any time when the delivery of Exchange Property is required to
satisfy the Exchange Right, the Company has the option to purchase the Exchange
Property for an amount equal to the Cash Settlement Amount.

121
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(ii) SGD600 million 5-year Exchangeable Trust Certificates (cont'd.)

The Exchange Property initially comprise 311,364,054 IHH shares and include all
Relevant Securities and other property arising out of or derived or resulting
therefrom and such other property, in each case as may be deemed or required to
comprise all or part of the Exchange Property pursuant to the Conditions, but
excluding any such property as may or may be deemed to have ceased to form part
of the Exchange Property.

Following the dividends declared by IHH during the Exchange Period which
exceeded the reference amount as defined in the Conditions of the Certificates,
further adjustments to the Exchange Property were made resulting in the Certificate
holders being entitled to receive 129,735.0223 IHH shares and RM14,270.85 cash
as capital distribution for each SGD250,000 nominal value of Certificates effective
18 July 2017.

Exchange Period

Each Certificateholder has the right (“Exchange Right”) to exchange a Certificate at


any time during the Exchange Period, beginning on and including 4 December 2013
and ending on and including the earlier to occur of:

(a) the close of business on the date which falls 10 Business Days prior to the
Scheduled Dissolution Date; and

(b) if the Certificates shall have been called for dissolution prior to the Scheduled
Dissolution Date, the close of business on the day which falls 10 Business Days
prior to the date fixed for dissolution.

Redemption

The Certificates were exchanged and fully redeemed during the year.

This note to the financial statements should be read in conjunction with the
conditions set out in the offering circular dated 18 October 2013 relating to the
Certificates.

(iii) USD398.8 million 5-year Exchangeable Trust Certificates

On 23 September 2016, the Company via an independent special purpose


company, Bagan Capital Limited (the “Issuer”), issued a Shariah-compliant
exchangeable trust certificates (the “Certificates”).

122
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(iii) USD398.8 million 5-year Exchangeable Trust Certificates (cont'd.)

The issuance comprise USD398.8 million 5-year Certificates with a put option on
Year 3 and is exchangeable into ordinary shares of HKD0.10 each of Beijing
Enterprises Water Group Limited ("BEWG"), the Exchange Property, currently held
by a subsidiary of the Company. The Certificates were priced at 100% of the
principal amount at zero periodic payments and yield to optional/scheduled
dissolution. Unless previously exchanged, redeemed, purchased or cancelled, the
Certificates will be redeemed at 100.00% of their nominal amount on 23 September
2021 (“the Scheduled Dissolution Date”).

Exchange Right

The Certificates are exchangeable for a pro-rata share of BEWG ordinary shares
with par value of HKD0.10 each during the Exchange Period. Notwithstanding the
Exchange Right, at any time when the delivery of Exchange Property is required to
satisfy the Exchange Right, the Company has the option to purchase the Exchange
Property for an amount equal to the Cash Settlement Amount.

The Exchange Property initially comprise 399,856,758 BEWG shares and include all
Relevant Securities and other property arising out of or derived or resulting
therefrom and such other property, in each case as may be deemed or required to
comprise all or part of the Exchange Property pursuant to the Conditions, but
excluding any such property as may or may be deemed to have ceased to form part
of the Exchange Property.

Certificate holders being entitled to receive 1,002.6498 BEWG shares for each
USD1,000 nominal value of Certificates.

Following the dividends declared by BEWG during the Exchange Period which
exceeded the reference amount as defined in the Conditions of the Certificates,
further adjustments to the Exchange Property were made resulting in the Certificate
holders being entitled to receive 1,002.6498 BEWG shares and HKD199.53 cash as
capital distribution for each USD1,000 nominal value of Certificates effective 20
October 2017.

Exchange Period

Each Certificateholder has the right (“Exchange Right”) to exchange a Certificate at


any time during the Exchange Period, beginning on and including 3 November 2016
and ending on and including the earlier to occur of:

(a) the close of business on the date which falls 10 Business Days prior to the
Scheduled Dissolution Date; or
123
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(iii) USD398.8 million 5-year Exchangeable Trust Certificates (cont'd.)

Exchange Period (cont'd.)

(b) if the Certificates shall have been called for dissolution prior to the Scheduled
Dissolution Date, the close of business on the day which falls 10 Business Days
prior to the date fixed for dissolution.

Redemption

There were no redemptions made during the year.

This note to the financial statements should be read in conjunction with the
conditions set out in the offering circular dated 20 September 2016 relating to the
Certificates.

(iv) USD320.8 million 5-year Exchangeable Trust Certificates

On 8 February 2018, the Company via an independent special purpose company,


Cindai Capital Limited (the “Issuer”), issued a Shariah-compliant exchangeable trust
certificates (the “Certificates”).

The issuance comprise USD320.8 million 5-year Certificates with a put option on
Year 3 and is exchangeable into ordinary shares of RMB1.00 each of CITIC
Securities Co. Ltd. ("CITIC"), the Exchange Property, currently held by a subsidiary
of the Company. The Certificates were priced at 100% of the principal amount at
zero periodic payments and yield to optional/scheduled dissolution. Unless
previously exchanged, redeemed, purchased or cancelled, the Certificates will be
redeemed at 100.00% of their nominal amount on 8 February 2023 (“the Scheduled
Dissolution Date”).

Exchange Right

The Certificates are exchangeable for a pro-rata share of CITIC ordinary shares
with par value of RMB1.00 each during the Exchange Period. Notwithstanding the
Exchange Right, at any time when the delivery of Exchange Property is required to
satisfy the Exchange Right, the Company has the option to purchase the Exchange
Property for an amount equal to the Cash Settlement Amount.

The Exchange Property initially comprise 94,494,683 CITIC shares and include all
Relevant Securities and other property arising out of or derived or resulting
therefrom and such other property, in each case as may be deemed or required to
comprise all or part of the Exchange Property pursuant to the Conditions, but
excluding any such property as may or may be deemed to have ceased to form part
of the Exchange Property. Certificate holders being entitled to receive 294.5594
CITIC shares for each USD1,000 nominal value of Certificates.

124
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(b) Exchangeable Trust Certificates ("ETC") (cont'd.)

(iii) USD320.8 million 5-year Exchangeable Trust Certificates (cont'd.)

Exchange Period

Each Certificateholder has the right (“Exchange Right”) to exchange a Certificate at


any time during the Exchange Period, beginning on and including 21 March 2018
and ending on and including the earlier to occur of:

(a) the close of business on the date which falls 10 Business Days prior to the
Scheduled Dissolution Date; or

(b) if the Certificates shall have been called for dissolution prior to the Scheduled
Dissolution Date, the close of business on the day which falls 10 Business Days
prior to the date fixed for dissolution.

Redemption

There were no redemptions made during the year.

This note to the financial statements should be read in conjunction with the
conditions set out in the offering circular dated 5 February 2018 relating to the
Certificates.

(c) Danga Capital Berhad ("Danga")

Company
Note 2018 2017
RM'000
RM'000 RM'000

Islamic Medium Term Note 1 (i) 1,500,000 1,500,000


("IMTN 1")
Islamic Medium Term Note 2 (i) 2,000,000 2,000,000
("IMTN 2")
Islamic Medium Term Note 3 (i) 1,500,000 1,500,000
("IMTN 3")
Islamic Medium Term Note 4 (i) 1,500,000 1,500,000
("IMTN 4")
Islamic Medium Term Note 5 (i) 1,500,000 -
("IMTN 5")
Islamic Medium Term Note 6 (i) 2,000,000 -
("IMTN 6")
Multicurrency Islamic Medium Term
Note 1 ("MIMTN 1") (ii) 2,729,071 2,737,914
Multicurrency Islamic Medium Term
Note 2 ("MIMTN 2") (ii) 3,086,293 3,011,020
15,815,364 12,248,934
125
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(c) Danga Capital Berhad ("Danga") (cont'd.)

On 19 November 2008, the Securities Commission of Malaysia ("SC") approved a RM10


billion IMTN and MIMTN programme to be issued by the Company, via a special
purpose vehicle, Danga Capital Berhad. The programme has a tenure of 35 years from
the date of the first drawdown.

On 12 October 2015, the SC approved for the programme to be increased to RM20


billion.

The Company will use the proceeds for financing of general investments, refinancing of
borrowings and working capital requirements.

(i) Islamic Medium Term Notes ("IMTN")

The details of the IMTNs are as follows:

The IMTNs are unsecured and were issued at par.

The IMTNs will make periodic distribution at the profit rate every six months from
the issuance to maturity.

During the year, the Company issued IMTN 5 and IMTN 6 for investment and
general working capital requirements.

The maturity structure of the IMTNs is as follows:

Company
2018 2017
RM'000
RM'000 RM'000

Due after one year, and within five years 2,000,000 2,000,000
Due after five years 8,000,000 4,500,000
10,000,000 6,500,000

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(c) Danga Capital Berhad ("Danga") (cont'd.)

(ii) Multicurrency Islamic Medium Term Notes ("MIMTN")

The details of the MIMTNs are as follows:

MIMTN 1 MIMTN 2
Issuance date 10-Aug-06 29-Feb-12
Maturity date 10-Aug-16 28-Feb-17
Tenure 10 years 5 years
Profit rate 3.725% 3.035%
Nominal amount SGD900 million USD750 million

The MIMTNs are unsecured and were issued at par.

The MIMTNs will make periodic distribution at the profit rate every six months from
the issuance to maturity.

No new issuance during the year.

The maturity structure of the MIMTNs are as follows:

Company
2018 2017
RM'000
RM'000 RM'000

Due after one year, and within five years 5,815,364 5,748,934

127
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(d) Rantau Abang Capital Berhad ("RACB")

Company
2018 2017
RM'000
RM'000 RM'000

Medium Term Note 1 ("MTN 1") 1,000,000 1,000,000


Medium Term Note 2 ("MTN 2") 1,000,000 1,000,000
Medium Term Note 3 ("MTN 3") 1,500,000 1,500,000
Medium Term Note 4 ("MTN 4") 1,500,000 1,500,000
Medium Term Note 5 ("MTN 5") 1,000,000 1,000,000
Medium Term Note 6 ("MTN 6") 1,000,000 1,000,000
7,000,000 7,000,000

On 24 February 2006, the SC approved a RM7 billion Sukuk financing to be issued by


the Company, via a special purpose vehicle, Rantau Abang Capital Berhad. The
programme has a tenure of 35 years from the date of the first drawdown.

The Company will use the proceeds for financing of general investments, refinancing of
borrowings and working capital requirements.

The details of the Sukuk financing are as follows:

The Sukuk financing are unsecured and were issued at par.

The Sukuk financing will make periodic distribution at the profit rate every six months
from the issuance to maturity.

No new issuance during the year.

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(d) Rantau Abang Capital Berhad ("RACB") (cont'd.)

The maturity structure of the Sukuk financing is as follows:

Company
2018 2017
RM'000 RM'000

Due within one year 1,500,000 -


Due after one year, and within five years 2,500,000 4,000,000
Due after five years 3,000,000 3,000,000
7,000,000 7,000,000

(e) Term loans - unsecured

Company
Short term Long term Total
RM'000 RM'000
RM'000 RM'000

2018

Unsecured floating term loans 913,614 - 913,614


Unsecured fixed term loans - 2,500,000 2,500,000

2017

Unsecured floating term loans 897,569 - 897,569


Unsecured fixed term loans - 2,500,000 2,500,000

The unsecured floating term loan bear interest ranging between 2.5263% to 3.0171%
(2017: 1.6962% to 1.9522%) per annum.

The unsecured fixed term loans bear interest of 4.641% (2017: 4.641%) per annum.

The maturity structure of the term loans are as follows:

Company
2018 2017
RM'000 RM'000

Due within one year 913,614 897,569


Due after five years 2,500,000 2,500,000
3,413,614 3,397,569

129
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(f) Revolving credit facility

The Company utilised RM3.4 billion in nominal value under the existing banking facilities
of RM4.5 billion. The utilisation/rollover period for the year is 1 month.

The Company used the proceeds for Khazanah’s investment and general working
capital requirements.

The revolving credit bears interest ranging from 3.76% to 4.23% (2017: 3.76% to 3.96%)
per annum.

The maturity structure of the revolving credit is as follows:

Company
2018 2017
RM'000 RM'000

Due within one year 3,400,000 2,300,000

(g) Ihsan Sukuk Berhad

Company
2018 2017
RM'000
RM'000 RM'000

Medium Term Note 1 ("MTN 1") 100,000 100,000


Medium Term Note 2 ("MTN 2") 100,000 100,000
200,000 200,000

On 11 March 2015, the SC approved a RM1 billion in nominal value, Sukuk Programme
to be established under the Sustainable and Responsible Investment Sukuk framework
("Sukuk Programme") to be issued by the Company, via a special purpose vehicle, Ihsan
Sukuk Berhad. The programme has a tenure of 25 years from the date of the first
issuance under the Sukuk Programme.

The Company will use the proceeds for the purpose of funding Shariah-compliant
Eligible Sustainable and Responsible Investment.

The details of the Ihsan Sukuk are as follows:

MTN 1 MTN 2
Issuance date 17-Jun-11 7-Aug-13
Maturity date 16-Jun-18 7-Aug-20
Tenure 7 years 7 years
Profit rate 4.30% 4.60%
Nominal amount RM100 million RM100 million

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Khazanah Nasional Berhad


(Incorporated in Malaysia)

26. Borrowings (cont'd.)

(g) Ihsan Sukuk Berhad (cont'd.)

The Ihsan Sukuk are unsecured and issued at par. The proceeds were utilised to fund
Yayasan Amir Trust Schools Programme ("Yayasan Amir"). Yayasan Amir is a not-for-
profit foundation established on 26 October 2010 to improve assessibility to quality
education in government schools through a Public-Private-Partnership with the Ministry
of Education of Malaysia.

MTN 1
The Ihsan Sukuk will make annual distribution at the profit rate from the issuance to
maturity. In relation to the repayment of the Principal, the Company shall reduce the
amount to be repaid by 6.22% (by redeeming the Ihsan Sukuk at 93.78%) in the event
Yayasan Amir meets its key performance indicators ("KPIs") pursuant to the conditions
of the Ihsan Sukuk.

This note to the financial statements should be read in conjunction with the conditions
set out in the information memorandum dated 11 June 2015 relating to the Ihsan Sukuk.

MTN 2
The Ihsan Sukuk will make annual distribution at the profit rate from the issuance to
maturity. In relation to the repayment of the Principal, the Company shall reduce the
amount to be repaid by 3.18% (by redeeming the Ihsan Sukuk at 96.82%) in the event
Yayasan Amir meets its key performance indicators ("KPIs") pursuant to the conditions
of the Ihsan Sukuk.

This note to the financial statements should be read in conjunction with the conditions
set out in the prospectus dated 13 July 2017 relating to the Ihsan Sukuk.

The First and Second Sukuk Ihsan Sukukholders may exercise their option to waive the
repayment of the principal and profit of the IMTNs at any time during the tenure of the
First and Second Sukuk Ihsan.

The potential reduction to the dissolution distribution amount and the potential waiver
above give rise to embedded derivative. As at 31 December 2018, the embedded
derivative cannot be reliably measured thus bifurcated and carried at RMNil due to the
uncertainty in determining the ability of Yayasan Amir to meet the KPIs.

The maturity structure of the Ihsan Sukuk financing is as follows:

Company
2018 2017
RM'000 RM'000

Due after one year, and within five years 100,000 100,000
Due after five years 100,000 100,000
200,000 200,000
131
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(Incorporated in Malaysia)

26. Borrowings (cont'd.)

The movement in the borrowings are as follows:

Company
2018 2017
RM'000 RM'000

At 1 January 43,780,852 42,244,089


Drawdown 5,884,662 2,600,000
Repayment (5,007,644) (1,000,000)
Unrealised loss/(gain) on foreign exchange 82,475 (702,778)
Amortisation of discounts on Khazanah Bonds (Note 26(a)) 613,243 639,541
45,353,588 43,780,852

27. Ordinary and preference shares

Issued and fully paid-up:

Number of ordinary shares Amount


2018 2017 2018 2017
'000 '000 RM'000 RM'000

At 1 January 5,443,953 5,443,953 12,283,201 5,443,953


Transition to no-par regime - - - 5,640,248
Redemption of RCCPS - - - 1,199,000
At 31 December 5,443,953 5,443,953 12,283,201 12,283,201

(a) Under the Companies Act, 2016 in Malaysia which came into effect on 31 January 2017,
the concept of authorised share capital no longer exists.

(b) In accordance with Section 74 of the Companies Act, 2016, the Company's ordinary
share no longer have a par or nominal value with effect from 31 January 2017. Pursuant
to Section 618 of the Companies Act, 2016, the amount standing to the credit of the
Company's share premium became part of the Company's share capital. There is no
impact on the numbers of ordinary shares in issue or the relative entitlement of any of
the members of the Company.

Issued and fully paid-up:

Number of RCCPS Amount


2018 2017 2018 2017
'000 '000 RM'000 RM'000

At 1 January 1,000 1,200,000 1,000 1,200,000


Redeemed during the year - (1,199,000) - (1,199,000)
At 31 December 1,000 1,000 1,000 1,000

Total ordinary and


preference shares 5,444,953 5,444,953 12,284,201 12,284,201
132
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(Incorporated in Malaysia)

27. Ordinary and preference shares (cont'd.)

The salient terms of the RCCPS are as follows:

(a) Under the Companies Act, 2016 in Malaysia which came into effect on 31 January 2017,
the concept of authorised share capital no longer exists.

(b) In accordance with Section 74 of the Companies Act, 2016, the Company’s RCCPS no
longer have a par or nominal value with effect from 31 January 2017. Pursuant to
Section 618 of the Companies Act, 2016, the amount standing to the credit of the
Company’s share premium became part of the Company’s share capital. There is no
impact on the numbers of RCCPS in issue or the relative entitlement of any of the
members of the Company.

(c) The RCCPS shall carry a variable dividend whereby the dividend rate and the payment
of which shall be payable at the option of the Company. If dividend is not paid, any part
of that dividend will be accumulated until such time as the Company is in a position to
declare any such dividend at its discretion;

(d) The RCCPS shall rank for dividend in priority to the ordinary shares;

(e) Redemption of the RCCPS shall be at the discretion of the Company and shall be
redeemed at the par value;

(f) Conversion of the RCCPS shall be at the discretion of the Company at any time after the
issuance of the RCCPS;

(g) The RCCPS will be convertible into new ordinary shares of the Company for a value of
RM1 per RCCPS where the number of new ordinary shares shall be calculated based on
the last available/audited realisable asset value of the Company at the time of
conversion provided that the conversion price for each unit of RCCPS shall not fall below
the par value of the ordinary shares of RM1 each;

(h) Prior to the conversion of the RCCPS, the RCCPS holder would not have the right to
vote at any general meeting of the Company;

(i) The maturity dates of the RCCPS are as follows:

2018 2017
RM'000 RM'000

7 March 2021 1,000 1,000

(j) The Company has the discretion to extend the tenure of the RCCPS.

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28. Financial instruments by category

31 December 2018

Financial Financial
assets assets
designated designated
as fair value as fair value
Amortised through through
cost profit or loss OCI Total
RM'000 RM'000 RM'000 RM'000

Financial assets
Cash and bank balances 867,544 - - 867,544
Investment in money market
instruments 9,903 - - 9,903
Other financial assets 1,820,620 2,449,234 110,500 4,380,354
Other receivables 1,078,115 - - 1,078,115
Total 3,776,182 2,449,234 110,500 6,335,916

Financial
liabilities
designated Financial
as fair value liabilities at
through amortised
profit or loss cost Total
RM'000 RM'000 RM'000

Financial liabilities
Borrowings - 45,353,588 45,353,588
Derivative liabilities 46,431 - 46,431
Other payables - 2,305,633 2,305,633
Total 46,431 47,659,221 47,705,652

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(Incorporated in Malaysia)

28. Financial instruments by category (cont'd.)

31 December 2017

Financial Financial
assets assets
designated designated
as fair value as fair value
Amortised through through
cost profit or loss OCI Total
RM'000 RM'000 RM'000 RM'000

Financial assets
Cash and bank balances 1,232,708 - - 1,232,708
Other financial assets 2,404,724 2,960,260 991,000 6,355,984
Other receivables 1,246,788 - - 1,246,788
Total 4,884,220 2,960,260 991,000 8,835,480

Financial
liabilities
designated Financial
as fair value liabilities at
through amortised
profit or loss cost Total
RM'000 RM'000 RM'000

Financial liabilities
Borrowings - 43,780,852 43,780,852
Derivative liabilities 241,566 - 241,566
Other payables - 1,315,459 1,315,459
Total 241,566 45,096,311 45,337,877

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(Incorporated in Malaysia)

29. Fair value of financial instruments

(a) Fair value of financial instruments by classes that are not carried at fair value and
whose carrying amounts are not reasonable approximation of fair value

2018 2017
Carrying Carrying
amount Fair value amount Fair value
RM'000 RM'000 RM'000 RM'000

Financial liabilities
Exchangeable Trust
Certificates 2,945,253 3,140,922 4,863,370 5,209,612
Islamic Medium Term
Notes
- Danga 16,041,910 15,941,461 12,415,015 12,372,978
- RACB 7,081,601 7,170,150 7,081,601 7,110,155
- Ihsan Sukuk 204,136 199,653 204,125 198,156
Fixed term loans 2,552,132 2,660,047 2,503,123 2,670,069

For the purpose of comparability, the above carrying amounts include the following:

(i) Exchangeable Trust Certificates include carrying amount of related embedded


derivative liabilities.

(ii) For interest-bearing financial liabilities, interest payable as at reporting date is


included.

(b) Determination of fair value

(i) Cash and cash equivalents, receivables and payables

The carrying amounts of these financial assets and liabilities are reasonable
approximation of fair value due either to their short term nature or are repayable on
demand.

(ii) Quoted shares

The fair value of quoted shares is determined directly by reference to their


published market bid price at the reporting date.

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29. Fair value of financial instruments (cont'd.)

(b) Determination of fair value (cont'd.)

(iii) Financial assets designated as fair value through profit and loss

The fair value of unquoted bonds, funds and structured products are based on the
indicative fair values obtained from Bond Pricing Agency of Malaysia, Bloomberg
and/or respective licensed banks.

(iv) Loans receivable

The fair value of loans receivable are estimated by discounting the estimated future
cash flows using current interest rates for financial assets with similar risk profile.

(v) Embedded derivatives

The fair value of embedded derivatives are valued using the Binomial/Black Scholes
model with market observable inputs. The model incorporates various inputs
including closing market prices of underlying shares, foreign exchange spot rates
and market interest rates.

(vi) Periodic Payment Exchangeable Trust Certificates

The fair value of Periodic Payment Exchangeable Trust Certificates is determined


directly by reference to their published market ask price at the reporting date.

(vii) Other loans and borrowings

The carrying amount of the current portion of other loans and borrowings are
reasonable approximations of fair value due to the insignificant impact of
discounting.

The carrying amount of certain other loans and borrowings are reasonable
approximations of fair value as they are floating rate instruments that are re-priced
to market interest rates near the reporting date.

The fair value of non-current other loans and borrowings, other than floating rate
instruments, are estimated by discounting expected future cash flows at market
incremental lending rate for similar types of borrowing at the reporting date.

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(Incorporated in Malaysia)

29. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy

Quantitative disclosures fair value measurement hierarchy for asset and liabilities
as at 31 December 2018:

Fair value measurement using


Quoted
Unabsorvable
Observable
input Unobservable
Carrying market price input input
Assets and liabilities amount Level 1 Level 2 Level 3
measured at fair value RM'000 RM'000 RM'000 RM'000

Financial assets
Financial assets
designated as fair value
through profit or loss
- Quoted shares 1,129,019 1,129,019 - -
- Quoted equity
funds 818,234 818,234 - -
- Unquoted money
market funds 396,881 - 396,881 -
- Unquoted bonds 105,100 105,100 - -

Financial assets
designated as fair value
through other
comprehensive income
- Quoted shares 110,500 110,500 - -
- Unquoted bonds - - - -

Financial liability
Embedded derivatives 46,431 - 46,431 -

Assets and liabilities


for which fair values
are disclosed

Assets
Investments in
associates
- Quoted shares 24,617,476 57,783,191 - -

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29. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

Quantitative disclosures fair value measurement hierarchy for asset and liabilities
as at 31 December 2018 (cont'd.):

Fair value measurement using


Quoted
Unabsorvable
Observable
input Unobservable
Assets and liabilities Carrying market price input input
for which fair values amount Level 1 Level 2 Level 3
are disclosed (cont'd.) RM'000 RM'000 RM'000 RM'000

Liabilities
Exchangeable Trust
Certificates 2,945,253 3,140,922 - -
Islamic Medium Term
Notes
- Danga 16,041,910 - 15,941,461 -
- RACB 7,081,601 - 7,170,150 -
- Ihsan Sukuk 204,136 - 199,653 -
Term loans - unsecured 2,552,132 - 2,660,047 -

Quantitative disclosures fair value measurement hierarchy for asset and liabilities
as at 31 December 2017:

Fair value measurement using


Quoted
Unabsorvable
Observable
input Unobservable
Carrying market price input input
Assets and liabilities amount Level 1 Level 2 Level 3
measured at fair value RM'000 RM'000 RM'000 RM'000

Financial assets
Financial assets
designated as fair value
through profit or loss
- Quoted shares 1,463,233 1,463,233 - -
- Quoted equity
funds 1,118,689 1,118,689 - -
- Unquoted money
market funds 273,136 - 273,136 -
- Unquoted bonds 105,202 105,202 - -
Financial assets
designated as fair
value through other
comprehensive income
- Quoted shares 108,000 108,000 - -
- Unquoted shares 883,000 - - 883,000
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(Incorporated in Malaysia)

29. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

Quantitative disclosures fair value measurement hierarchy for asset and liabilities
as at 31 December 2017 (cont'd.):

Fair value measurement using


Quoted
Unabsorvable
Observable
input Unobservable
Assets and liabilities Carrying market price input input
measured at fair value amount Level 1 Level 2 Level 3
(cont'd.) RM'000 RM'000 RM'000 RM'000

Financial liability
Embedded derivatives 241,566 - 241,566 -

Fair value measurement using


Quoted
Unabsorvable
Observable
input Unobservable
Assets and liabilities Carrying market price input input
for which fair values amount Level 1 Level 2 Level 3
are disclosed RM'000 RM'000 RM'000 RM'000

Assets
Investments in
associates
- Quoted shares 24,243,513 71,252,910 - -

Liabilities
Exchangeable Trust
Certificates 4,863,370 5,209,612 - -
Islamic Medium Term
Notes
- Danga 12,415,015 - 12,372,978 -
- RACB 7,081,601 - 7,110,155 -
- Ihsan Sukuk 204,125 - 198,156 -
Term loans - unsecured 2,503,123 - 2,670,069 -

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(Incorporated in Malaysia)

29. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

A reconciliation of the beginning and closing balances of Level 3 financial instruments,


including movements is summarised below:

Fair value
through OCI
investments
Unquoted
shares
RM'000

At 1 January 2018 883,000


Net fair value movement (883,000)
At 31 December 2018 -

At 1 January 2017 1,022,000


Net fair value movement (139,000)
At 31 December 2017 883,000

(d) Level 3 fair value measurement

Description of significant unobservable inputs to valuation:

Fair value through other comprehensive income investments - unquoted shares

Valuation Significant Sensitivity of input to


technique unobservable fair value
input

Market comparables Discount rate 5% increase/(decrease) in


(ranging from 0%-15%) the discount would result
in decrease/(increase) in
fair value (2017: RM 44 million)

Discount for lack of marketability represents the amounts that the Company has
determined that market participants would take into account when pricing the
instruments.

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(Incorporated in Malaysia)

30. Financial risk management objectives and policies

The Company is exposed to financial risks arising from its operations and the use of the
financial instruments. The key financial risks include interest rate, foreign currency, equity
price, credit and liquidity risks.

The Company has an approved set of guidelines and policies as well as internal controls
which set out its overall business strategies to manage these risks. The Company's overall
financial risk management objective is to enhance shareholders' value through effective
management of the Company's risks.

The Board of Directors reviews and agrees policies and procedures for the management of
these risks. The following sections provide details regarding the Company's exposure to the
abovementioned financial risks and the objectives, policies and processes for the
management of these risks.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Company’s
exposure to the risk of changes in market interest rates relates primarily to the
Company’s term loans with floating interest rates.

The Company actively manages its interest rate risk by maintaining an interest cover
ratio of at least one and a half times.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in


interest rates on that portion of borrowings. With all other variables held constant, the
table below summarises the Company’s exposure to interest rate risk on floating rate
borrowings. There is no impact on the Company’s equity.

Effect on
profit or loss
RM'000

2018
Increase in 25 basis points (10,784)
Decrease in 25 basis points 10,784

2017
Increase in 25 basis points (7,994)
Decrease in 25 basis points 7,994

The assumed movement in basis points for interest rate sensitivity analysis is based on
the currently observable market environment.

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(Incorporated in Malaysia)

30. Financial risk management objectives and policies (cont'd.)

(a) Interest rate risk (cont'd.)

Weighted average interest rate and average maturity

(i) Financial assets

The weighted average interest rates per annum and the average remaining maturity
of deposits as at 31 December were as follows:

2018 2017
Weighted Weighted
average Average average Average
interest days to interest days to
rates maturity rates maturity
% %

Licensed banks 3.59 17 3.35 13


Other financial
institutions - - 3.48 15

(ii) Financial liabilities

The interest rates per annum and the remaining maturity of borrowings and term
loans as at 31 December were as follows:

2018 2017
Interest Years to Interest Years to
rates maturity rates maturity
% %

Term loans 4.64 6.06 4.64 7.06


Bonds and notes 3.04 to 5.33 0.22 to 13.68 3.04 to 5.20 0.52 to 14.68

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates.

The Company maintains a natural hedge, whenever possible, by borrowing in the


currency of the country in which investments are located or by borrowing in currencies
that match the future revenue stream to be generated from the investments.

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(Incorporated in Malaysia)

30. Financial risk management objectives and policies (cont'd.)

(b) Foreign currency risk (cont'd.)

During the year, the currencies in which the Company mainly transacted in other than its
functional currency of Ringgit Malaysia ("RM") were United States Dollars ("USD"),
Singapore Dollar ("SGD") and Chinese Renminbi ("CNY"). This is mainly due to the
other investments, cash and bank balances and borrowings. The natural hedge strategy
was maintained as the proceeds from the floating term loan, ETCs and MIMTN were
used for investments in USD and SGD respectively.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the
USD, SGD and CNY exchange rates, with all other variables held constant, of the
Company’s profit before tax (due to changes in the fair value of monetary assets and
liabilities). The Company’s exposure to foreign currency changes for all other currencies
is not material.

Changes in Effect on
rate profit or loss
RM'000

2018

USD/RM - Strengthened 5% (302,000)


USD/RM - Weakened 5% 302,000

SGD/RM - Strengthened 5% (136,000)


SGD/RM - Weakened 5% 136,000

CNY/RM - Strengthened 5% 123,000


CNY/RM - Weakened 5% (123,000)

2017

USD/RM - Strengthened 5% (319,000)


USD/RM - Weakened 5% 319,000

SGD/RM - Strengthened 5% (212,000)


SGD/RM - Weakened 5% 212,000

CNY/RM - Strengthened 5% 153,000


CNY/RM - Weakened 5% (153,000)

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(Incorporated in Malaysia)

30. Financial risk management objectives and policies (cont'd.)

(c) Equity price risk

The Company’s quoted equity securities are susceptible to market price risk arising from
the uncertainties on future values of the investment securities. The Company manages
the equity price risk through diversification and placing limits on individual and total
equity instruments. Reports on the equity portfolio monitoring are submitted to the
Company’s senior management on a regular basis. The Company’s Board of Directors
reviews and approves all equity investment decisions.

Equity price sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the
equity price, with all other variables held constant, of the Company’s equity investments
(due to changes in the fair value of financial assets at fair value through other
comprehensive income and financial assets at fair value through profit or loss).

Effect on Effect on
equity profit or loss
RM'000 RM'000

2018

Increase of 10% in equity price 11,100 240,300


Decrease of 10% in equity price (11,100) (240,300)

2017

Increase of 10% in equity price 99,100 271,900


Decrease of 10% in equity price (99,100) (271,900)

(d) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a
counterparty default on its obligations. The Company's exposure to credit risk arises
primarily from loan receivables. For other financial assets (including investments in
bonds, money market instruments and cash and deposits with banks) the Company
minimises credit risk by dealing exclusively with high credit rating counterparties.

At the reporting date, the Company's maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised in the statement of
financial position, including derivatives with positive fair value.

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30. Financial risk management objectives and policies (cont'd.)

(d) Credit risk (cont'd.)

Financial assets that are neither past due nor impaired

Information regarding the financial assets that are neither past due nor impaired is
disclosed in Note 16 and Note 17. Investments in money market instruments and cash
and deposits with licensed banks are neither past due nor impaired as these are placed
with or entered into with reputable financial institutions with high credit ratings and no
history of default.

Financial assets that are either past due or impaired

Information regarding the financial assets that are either past due or impaired is
disclosed in Note 16 and Note 17.

(e) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial
obligations due to shortage of funds. The Company's exposure to liquidity risk arises
from mismatches of the maturities of financial assets and liabilities.

The Company actively manages its debt maturity profile, operating cash flows and the
availability of funding so as to ensure that all refinancing, repayment and funding needs
are met. As part of its overall prudent liquidity management, the Company maintains a
portfolio of highly liquid assets to meet its working capital and investment requirements.

In addition, the Company maintains a balanced and flexible funding structure through
the use of credit facilities, short and long term borrowings. Short term flexibility is
achieved through credit facilities and short term borrowings. As far as possible, the
Company raises committed funding from both capital markets and financial institutions
and prudently balances its portfolio with certain short term funding so as to achieve
overall cost effectiveness.

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30. Financial risk management objectives and policies (cont'd.)

(e) Liquidity risk (cont'd.)

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted repayment
obligations.
Less More
than 3 3 to 12 1 to 5 than
On demand months months years 5 years Total
31 December 2018 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Non-interest bearing financial liabilities


Amount due to related companies 1,823,357 - - - - 1,823,357
Dividend payable - - - - - -
Other payables and accruals - 102,623 - - - 102,623
Khazanah Bonds - secured - 1,000,000 1,500,000 8,000,000 4,500,000 15,000,000
Exchangeable Trust Certificates ("ETC") # - - - 5,034,592 - 5,034,592
1,823,357 1,102,623 1,500,000 13,034,592 4,500,000 21,960,572

Interest bearing financial liabilities *


Islamic Medium Term Notes
- Danga - 246,094 426,456 9,983,156 10,630,148 21,285,854
- RACB - 82,050 1,744,100 3,358,650 4,089,750 9,274,550
- Ihsan Sukuk - - 8,600 130,112 104,312 243,024
Floating term loans - 928,004 - - - 928,004
Fixed term loans - 58,807 57,854 463,782 2,674,832 3,255,275
Revolving credit facility - 3,409,987 - - - 3,409,987
- 4,724,942 2,237,010 13,935,700 17,499,042 38,396,694
Total undiscounted financial liabilities 1,823,357 5,827,565 3,737,010 26,970,292 21,999,042 60,357,266

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(Incorporated in Malaysia)

30. Financial risk management objectives and policies (cont'd.)

(e) Liquidity risk (cont'd.)


Less More
than 3 3 to 12 1 to 5 than
On demand months months years 5 years Total
31 December 2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Non-interest bearing financial liabilities


Amount due to related companies 462,595 - - - - 462,595
Dividend payable - 400,000 - - - 400,000
Other payables and accruals - 138,979 - - - 138,979
Khazanah Bonds - secured - - 2,000,000 8,500,000 6,500,000 17,000,000
Exchangeable Trust Certificates ("ETC") # - - 1,424,500 3,637,610 - 5,062,110
462,595 538,979 3,424,500 12,137,610 6,500,000 23,063,684

Interest bearing financial liabilities *


Islamic Medium Term Notes
- Danga - 281,642 370,915 9,097,485 5,553,653 15,303,695
- RACB - 82,050 244,100 5,032,300 4,242,250 9,600,700
- Ihsan Sukuk - - 8,900 135,648 109,213 253,761
Floating term loans - 985,428 - - - 985,428
Fixed term loans - 59,125 56,900 464,418 2,790,857 3,371,300
Revolving credit facility - 2,307,687 - - - 2,307,687
- 3,715,932 680,815 14,729,851 12,695,973 31,822,571
Total undiscounted financial liabilities 462,595 4,254,911 4,105,315 26,867,461 19,195,973 54,886,255

# For the purpose of liquidity risk presentation, the embedded derivatives are not separated from the host instrument of ETC.

* For interest bearing financial liabilities, the above analysis include future interest or coupon payments, as well as repayment of the
principal. The cash flows of floating interest financial liabilities are estimated based on forward rates.

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(Incorporated in Malaysia)

31. Transition to MFRS Framework

During the year, the Company adopted:

MFRS 1: First-time Adoption of Malaysian Financial Standards.

The adoption of this MFRS had no material effect on the amounts reported by the Company
for the current or prior years.

The effect of changes for the Group is disclosed in Note 76.

MFRS 15: Revenue from Contracts with Customers.

The adoption of this MFRS had no material effect on the amounts reported by the Company
for the current or prior years.

The effect of changes for the Group is disclosed in Note 76.

MFRS 9: Financial Instruments

The adoption of this MFRS had no material effect on the amounts reported by the Company
for the current or prior years other than elected reclassifications as disclosed below.

The effect of changes for the Group is disclosed in Note 76.

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31. Transition to MFRS Framework (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation.

31 December 1 January 2018


2017 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial assets
Loans and receivables
- Cash and cash equivalents 1,232,708 - - 1,232,708 -
- Loans receivable 852,065 2,000,000 - 2,852,065 -
2,084,773 2,000,000 - 4,084,773 -

Financial assets designated as fair value through profit


or loss
- Quoted shares 1,463,233 - 1,463,233 - -
- Quoted equity funds 1,118,689 - 1,118,689 - -
- Unquoted money market funds 273,136 - 273,136 - -
- Unquoted bonds 2,105,202 (2,000,000) 105,202 - -
4,960,260 (2,000,000) 2,960,260 - -

Financial assets designated as available-for-sale


- Quoted shares 108,000 - - - 108,000
- Unquoted shares 883,000 - - - 883,000
991,000 - - - 991,000

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(Incorporated in Malaysia)

31. Transition to MFRS Framework (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2018


2017 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial liabilities
At amortised cost
- Embedded derivatives 241,566 - 241,566 - -
- Exchangeable Trust Certificates 4,863,370 - - 4,863,370 -
- Islamic Medium Term Notes
- Danga 12,415,015 - - 12,415,015 -
- RACB 7,081,601 - - 7,081,601 -
- Ihsan Sukuk 204,125 - - 204,125 -
- Term loans - unsecured 2,503,123 - - 2,503,123 -
27,308,800 - 241,566 27,067,234 -

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(Incorporated in Malaysia)

31. Transition to MFRS Framework (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2017


2016 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial assets
Loans and receivables
- Cash and cash equivalents 1,899,907 - - 1,899,907 -
- Loans receivable 861,065 1,000,000 - 1,861,065 -
2,760,972 1,000,000 - 3,760,972 -

Financial assets designated as fair value through profit


or loss
- Quoted shares 1,029,746 - 1,029,746 - -
- Quoted equity funds 872,534 - 872,534 - -
- Unquoted money market funds 164,475 - 164,475 - -
- Unquoted bonds 1,110,489 (1,000,000) 110,489 - -
3,177,244 (1,000,000) 2,177,244 - -

Financial assets designated as available-for-sale


- Quoted shares 106,000 - - - 106,000
- Unquoted shares 1,022,000 - - - 1,022,000
1,128,000 - - - 1,128,000

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(Incorporated in Malaysia)

31. Transition to MFRS Framework (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2017


2016 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial liabilities
At amortised cost
- Embedded derivatives 506,368 - 506,368 - -
- Exchangeable Trust Certificates 5,332,621 - - 5,332,621 -
- Islamic Medium Term Notes
- Danga 11,301,896 - - 11,301,896 -
- RACB 6,058,775 - - 6,058,775 -
- Ihsan Sukuk 102,285 - - 102,285 -
- Term loans - unsecured 2,552,132 - - 2,552,132 -
25,854,077 - 506,368 25347709 -

153
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(Incorporated in Malaysia)

31. Transition to MFRS Framework (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January
2017 2018
Previously Reported
reported MFRS 9 under
under FRS Remeasurement MFRS
RM'000 RM'000 RM'000
Other comprehensive income ("OCI")
Net loss on available-for-sale financial assets
- Loss on fair value changes, net of tax representing
other comprehensive income for the year (137,000) 137,000 -

Net loss on fair value through other comprehensive income


financial assets
- Loss on fair value changes, net of tax representing
other comprehensive income for the year - (137,000) (137,000)

154
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(Incorporated in Malaysia)

32. Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise
shareholder value.

The Company manages its capital structure and makes adjustments to it, in line with the
changes in economic conditions. To maintain or adjust the capital structure, the Company
may adjust the dividend payments to shareholders, return of capital to shareholders or issue
new shares. No changes were made to the objectives, policies or processes for the years
ended 31 December 2018 and 31 December 2017.

The Company is not subject to any externally imposed capital requirements.

The Company monitors capital after including the assets and liabilities held through the SPVs
("Proforma") using gearing ratio, which is defined to be net debt divided by total capital. The
Company’s policy is to keep the gearing ratio below two and a half times (2.5 times). The
Company includes within net debt, loans and borrowings less cash and bank balances.
Capital represents equity attributable to the owners of the Company.

Proforma
Note 2018 2017
RM'000 RM'000
Borrowings 19(b) 55,235,165 49,870,701
Less: Cash, bank balances and investment in
money market 19(b) (1,748,537) (2,606,759)
Net debt 53,486,628 47,263,942

Share capital 27 12,284,201 12,284,201


Capital contribution from shareholders 2,324,423 2,324,423
Retained profits 19(b) 9,586,537 17,607,257
Fair value adjustment reserve 19(b) 3,366,776 5,675,498
Currency translation reserve 19(b) 3,354,773 3,475,279
Equity attributable to the owners of the Company 30,916,710 41,366,658

Gearing ratio (times) 1.73 1.14

33. Commitments
Company
2018 2017
RM'000 RM'000
Approved but not contracted for:
Capital injection committed for a subsidiary 1,600,200 1,792,000
Capital injection committed for investments 3,219,323 7,172,262
Investment injection committed for an associate - 1,000,000
Property and equipment 32,526 33,200

155
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(Incorporated in Malaysia)

34. Contingent liabilities

Company
2018 2017
RM'000 RM'000

Guarantee given to certain subsidiaries for


term loan facilities with licensed banks 9,882,120 6,090,179
Guarantee given to an associate for
letter of credit facility with a licensed bank 51,556 49,701

35. Subsequent events

The Company issued the following for investment and general working capital requirements:

(i) On 14 February 2019, the Company via Danum Capital Berhad, under a new RM10.0
billion Islamic Securities Programme (“Sukuk financing”), issued a new 7 years RM500
million IMTN with a semi-annual periodic distribution at a profit rate of 4.30% per annum
and a new 15 years RM1.0 billion IMTN with a semi-annual periodic distribution at a
profit rate of 4.68% per annum.

(ii) On 28 November 2018, the Company via Pulau Memutik Ventures Sdn. Bhd., entered
into a Share Purchase Agreement ("SPA") with Mitsui & Co., Ltd for the divestment of
1,403,087,400 shares of IHH. As of 22 March 2019, the conditions precedent for the
SPA entered have been fulfilled. Accordingly, the current asset classified as held for sale
has been fully disposed of for a total cash consideration of USD2,007,517,444.

(iii) On 14 January 2019, the Company via Mostyn Investment (Mauritius) Limited, entered
into a Share Purchase Agreement with Quinag Bidco Ltd, a company incorporated under
the laws of Mauritius to sell the Company's entire shareholding in Fractal Analytics
Private Limited for a total consideration of USD101,519,434.

156
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of comprehensive income


For the year ended 31 December 2018

Group
Note 2018 2017
RM'000 RM'000
(Restated)

Continuing operations
Revenue 36 20,666,604 23,627,806
Operating expenses (27,489,620) (22,728,789)
Other income 969,677 3,867,119
Operating (loss)/profit 37 (5,853,339) 4,766,136
Finance costs 40 (3,253,058) (3,011,234)
Share of results of associates and joint ventures 1,248,857 6,810,670
(Loss)/profit before taxation (7,857,540) 8,565,572
Taxation 41 (472,616) (322,919)
(Loss)/profit for the year, net of taxation (8,330,156) 8,242,653

Discontinued operations
Loss from discontinued operations,
net of taxation 42 (321,510) -
(Loss)/profit for the year (8,651,666) 8,242,653

Other comprehensive income:


Items that may be reclassified subsequently
to profit or loss:
Foreign currency translation differences (791,864) (1,922,211)
Net (loss)/gain on fair value of cash flow hedges (469,171) 19,382
Share of other comprehensive loss
of associates and joint ventures (3,703) (1,577,428)
(1,264,738) (3,480,257)

157
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of comprehensive income


For the year ended 31 December 2018 (cont'd.)

Group
2018 2017
RM'000 RM'000
(Restated)
Other comprehensive income (cont'd.):
Items that will not be reclassified subsequently
to profit or loss:
Net (loss)/gain on fair value through other
comprehensive income financial assets,
net of tax (2,733,905) 4,516,596
Actuarial (loss)/gain on defined benefit plans 65 (289) 3,067
Share of other comprehensive income/(loss)
of associates and joint ventures 58,074 (290,262)
(2,676,120) 4,229,401
Other comprehensive (loss)/income for the year (3,940,858) 749,144
Total comprehensive (loss)/income for the year (12,592,524) 8,991,797

Profit attributable to:


Owners of the Company (8,676,373) 8,027,791
Non-controlling interests 24,707 214,862
(8,651,666) 8,242,653

Total comprehensive income attributable to:


Owners of the Company (12,618,794) 8,915,020
Non-controlling interests 26,270 76,777
(12,592,524) 8,991,797

The accompanying notes form an integral part of the financial statements.


158
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of financial position


As at 31 December 2018

Group
As at 1
Note 2018 2017 January 2017
RM'000 RM'000 RM'000
(Restated) (Restated)
Assets
Non-current assets
Property, plant and equipment 43 12,385,313 15,214,459 16,891,547
Land held for property
development 44 5,593,236 5,122,427 5,416,090
Investment properties 45 3,044,449 2,801,461 2,774,900
Concession intangible assets 46 3,647,853 3,862,903 4,371,732
Goodwill on consolidation 47 2,047,588 1,922,871 2,186,617
Other intangible assets 48 825,820 986,775 941,975
Interest in associates 50 65,106,060 71,086,049 70,240,203
Interest in joint ventures 51 4,470,480 4,941,339 4,076,747
Other non-current financial
investments 52 34,200,214 35,422,554 30,764,360
Other non-current assets 53 2,164,365 3,123,662 4,191,957
Derivative assets 54 7,055 30,031 5,599
Deferred tax assets 55 340,605 557,568 594,972
133,833,038 145,072,099 142,456,699

Current assets
Property development-in-progress 56 1,831,223 2,518,303 1,854,701
Inventories and work-in-progress 57 2,156,720 1,345,094 1,152,004
Trade receivables 58 2,715,369 1,351,305 1,936,066
Other receivables 59 5,296,700 5,233,946 5,180,485
Tax recoverable 13,561 131,575 112,824
Derivative assets 54 17,559 206,857 153,618
Other current financial investments 52 1,180,031 1,885,516 1,086,864
Cash and bank balances 60 5,730,632 6,845,117 9,323,631
18,941,795 19,517,713 20,800,193
Assets held for sale and assets of
disposal group classified as
held for sale 42 1,352,385 630,626 2,587,266
20,294,180 20,148,339 23,387,459
Total assets 154,127,218 165,220,438 165,844,158

159
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of financial position


As at 31 December 2018 (cont'd.)

Group
As at 1
Note 2018 2017 January 2017
RM'000 RM'000 RM'000
(Restated) (Restated)

Equity and liabilities


Current liabilities
Borrowings 61 23,240,715 18,577,607 18,814,644
Trade payables 62 2,725,414 2,648,796 2,392,722
Other current liabilities 63 8,142,308 10,993,344 14,464,174
Tax payable 88,595 8,087 75,162
Derivative liabilities 54 288,100 24,370 3,505
34,485,132 32,252,204 35,750,207
Liabilities of disposal group
classified as held for sale 42 - 194,279 791,132
34,485,132 32,446,483 36,541,339

Non-current liabilities
Borrowings 61 54,150,732 52,725,665 54,235,285
Other non-current liabilities 66 8,349,701 7,613,552 7,133,056
Deferred tax liabilities 55 646,812 683,694 657,739
Derivative liabilities 54 147,793 312,816 612,857
63,295,038 61,335,727 62,638,937
Total liabilities 97,780,170 93,782,210 99,180,276

Equity attributable to owners


of the Company:
Share capital 12,284,201 12,284,201 12,284,201
Ordinary and preference shares 27 12,284,201 12,284,201 6,643,953
Share premium - - 3,840,248
Capital redemption reserve - - 1,800,000
Capital contribution from
shareholders 4,124,423 4,124,423 4,124,423
Reserves 33,887,504 49,048,222 44,099,829
Shareholders' funds 50,296,128 65,456,846 60,508,453
Non-controlling interests 6,050,919 5,981,382 6,155,429
Total equity 56,347,047 71,438,228 66,663,882

Total equity and liabilities 154,127,218 165,220,438 165,844,158

The accompanying notes form an integral part of the financial statements.

160
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of changes in equity


For the year ended 31 December 2018

<------------------------------------ Attributable to owners of the Company -------------------------------------->


Ordinary and Capital
preference Capital contribution from Other Distributable Non-
shares Share redemption Total shareholders reserves retained controlling Total
(Note 27) premium reserve share capital ("CCS") (Note 65) profits Total interests equity
2018 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January (as reported) 12,284,201 - - 12,284,201 4,124,423 6,841,825 42,669,919 65,920,368 5,989,665 71,910,033
Effect of adoption of MFRS - - - - - 2,008 (465,530) (463,522) (8,283) (471,805) Taly
At 1 January (as restated) 12,284,201 - - 12,284,201 4,124,423 6,843,833 42,204,389 65,456,846 5,981,382 71,438,228
(Loss)/profit for the year - - - - - - (8,676,373) (8,676,373) 24,707 (8,651,666)
Other comprehensive (loss)/income
- arising during the year - - - - - (3,942,421) - (3,942,421) 1,563 (3,940,858)
Total comprehensive income - - - - - (3,942,421) (8,676,373) (12,618,794) 26,270 (12,592,524)
Transactions with owners
Dilution of interest in subsidiaries - - - - - - (585) (585) 1,647 1,062
Acquisition of subsidiaries - - - - - - (36,540) (36,540) 6,680 (29,860)
Disposal of subsidiaries - - - - - - 10,410 10,410 4,648 15,058
Dilution of interest in
associates - - - - - 86,419 (386,881) (300,462) - (300,462)
Share of reserves of associates
and joint ventures - - - - - (645,999) 37,335 (608,664) - (608,664)
Transfer to:
- disposal group held for sale - - - - - 56,597 - 56,597 - 56,597
- statutory reserve - - - - - (208,958) 127,878 (81,080) - (81,080)
- capital reserve - - - - - 485,058 485,058 89,068 574,126
- general reserve - - - - - (502,032) (502,032) - (502,032)
Redemption of preference shares - - - - - (35,853) (35,853) - (35,853)
Share based payment - - - - - (28,773) - (28,773) - (28,773)
Dividend paid to non-controlling
interests - - - - - - - (58,776) (58,776)
Dividends paid to owners - - - - - - (1,500,000) (1,500,000) (1,500,000)
Total transactions with owners - - - - - (1,242,746) (1,299,178) (2,541,923) 43,267 (2,498,657) Add
At 31 December 12,284,201 - - 12,284,201 4,124,423 1,658,666 32,228,838 50,296,129 6,050,919 56,347,047

161
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of changes in equity


For the year ended 31 December 2018 (cont'd.)

<------------------------------------ Attributable to owners of the Company -------------------------------------->


Ordinary and Capital
preference Capital contribution from Other Distributable Non-
shares Share redemption Total shareholders reserves retained controlling Total
(Note 27) premium reserve share capital ("CCS") (Note 65) profits Total interests equity
2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January (as reported) 6,643,953 3,840,248 1,800,000 12,284,201 4,124,423 7,629,355 36,876,380 60,914,359 6,130,515 67,044,874
Effect of adoption of MFRS - - - - - 2,009 (407,915) (405,906) 24,914 (380,992)
At 1 January (as restated) 6,643,953 3,840,248 1,800,000 12,284,201 4,124,423 7,631,364 36,468,465 60,508,453 6,155,429 66,663,882
Profit for the year - - - - - - 8,027,791 8,027,791 214,862 8,242,653
Other comprehensive income
- arising during the year - - - - - 887,229 - 887,229 (138,085) 749,144
Total comprehensive income - - - - - 887,229 8,027,791 8,915,020 76,777 8,991,797
Transactions with owners
Dilution of interest in subsidiaries - - - - - - (25,631) (25,631) 16,407 (9,224)
Disposal of subsidiaries - - - - - (153) 9,120 8,967 (44,497) (35,530)
Share of reserves of associates
and joint ventures - - - - - 61,348 24,914 86,262 (24,914) 61,348
Transfer to:
- disposal group held for sale - - - - - 45,213 - 45,213 - 45,213
- statutory reserve - - - - - (1,864,681) (12,600) (1,877,281) - (1,877,281)
- capital reserve - - - - - - (91,251) (91,251) - (91,251)
- general reserve - - - - - 84,089 - 84,089 - 84,089
Net effect of redemption of RCCPS - - - - - - (1,199,000) (1,199,000) - (1,199,000)
Expiry of share options - - - - - (3,064) 2,581 (483) (28,163) (28,646)
Share based payment - - - - - 2,488 - 2,488 (248) 2,240
Dividend paid to non-controlling
interests - - - - - - - - (169,409) (169,409)
Dividends paid to owners - - - - - - (1,000,000) (1,000,000) - (1,000,000)
Total transactions with owners - - - - - (1,674,760) (2,291,867) (3,966,627) (250,824) (4,217,451)
Transition to no-par regime 5,640,248 (3,840,248) (1,800,000) - - - - - - -
At 31 December 12,284,201 - - 12,284,201 4,124,423 6,843,833 42,204,389 65,456,846 5,981,382 71,438,228

The accompanying notes form an integral part of the financial statements.

162
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(Incorporated in Malaysia)

Consolidated statement of cash flows


For the year ended 31 December 2018

Group
2018 2017
RM'000 RM'000
(Restated)
Cash flows from operating activities
(Loss)/profit before taxation (7,857,540) 8,565,572
Adjustments for:
Gain from divestments of investments (1,393,368) (2,696,803)
Dividend income from other investments (476,105) (674,503)
Interest income (334,597) (361,632)
Unrealised loss/(gain) on foreign exchange, net 160,763 (697,407)
Depreciation 1,250,838 2,261,854
Net fair value loss/(gain) on financial assets at
fair value through profit or loss 785,384 (604,570)
Loss/(gain) on revaluation of derivatives, net 46,251 (615,627)
Allowance for impairment losses on
investments and receivables, net 3,704,130 1,101,201
Allowance for impairment losses on property, plant and
equipment 2,555,811 170,641
Allowance for impairment on investment properties 12,901 -
Allowance for impairment land held for property development - 638
Allowance for impairment on assets held for sale - 82,000
Net amortisation charge for concession assets 97,610 102,910
Amortisation of other intangible assets 70,602 138,068
Amortisation of government grants (1,890) (48,309)
Impairment of goodwill on consolidation 90,441 12,916
Impairment of concession assets 325 3,100
Bad debts written off/(recovered) 174,337 (315)
Inventories written (back)/off (34,162) 4,541
Property, plant and equipment written off 39,357 35,938
Loss on disposal of property, plant and equipment (35,317) (62,258)
Gain on disposal of investment properties (97) -
Interest expense 3,253,058 3,011,234
Amortisation of deferred income (3,600) (29,464)
Depreciation of investment properties 35,761 13,481
Reversal of provision for foreseeable losses (669,093) (3,604)
Provision for aircraft maintenance and overhaul 356,156 91,888
Share of results from associates and joint ventures (1,248,857) (6,810,670)
Operating profit before working capital changes 579,099 2,990,820

163
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of cash flows


For the year ended 31 December 2018 (cont'd.)

Group
2018 2017
RM'000 RM'000

Cash flows from operating activities (cont'd.)


Increase in property development-in-progress (1,475,778) (1,705,923)
Decrease in land held for property development 53,700 -
(Increase)/decrease in inventories and work-in-progress (778,613) 78,783
(Increase)/decrease in trade and other receivables (1,426,818) 2,355,679
Decrease in trade and other payables (2,774,418) (4,520,787)
Interest paid (3,187,290) (2,180,912)
Interest received 337,148 376,419
Dividend received 475,869 673,960
Income tax refund/(paid) 274,094 (433,739)
Net cash used in operating activities (7,923,007) (2,365,700)

Cash flows from investing activities


Net inflow of investments 6,813,183 3,557,371
Acquisition of subsidiaries (1,032,342) -
Net cash inflow from disposal of subsidiaries 626,340 462,999
Purchase of property, plant and equipment (1,223,029) (1,274,038)
Purchase of other intangible assets (107,043) (216,093)
Proceeds from disposal of property, plant and equipment 18,464 172,372
Proceeds from disposal of intangible assets - 31,852
Proceeds from disposal of investment properties 783 7,771
Proceeds from disposal of land held for property development - 268,097
Addition in concession assets (30,551) (30,554)
Addition in land held for property development (445,229) (445,067)
Addition in investment properties (66,984) (47,813)
Net cash generated from investing activities 4,553,592 2,486,897

Cash flows from financing activities


Drawdown of borrowings 20,625,896 6,487,747
Repayment of borrowings (16,383,842) (6,740,995)
Redemption of RCCPS - (1,199,000)
Dividends paid (1,957,776) (911,126)
Net cash generated from/(used in) financing activities 2,284,278 (2,363,374)

164
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

Consolidated statement of cash flows


For the year ended 31 December 2018 (cont'd.)

Group
2018 2017
RM'000 RM'000

Net changes in cash and cash equivalents (1,085,137) (2,242,177)


Cash and cash equivalents at the beginning of year 6,845,117 9,323,631
Exchange rate effects (29,348) (236,337)
Cash and cash equivalents at the end of year 5,730,632 6,845,117

Cash and cash equivalents comprise:


Cash and bank balances 4,643,194 2,636,017
Short term placements 1,087,438 4,209,100
5,730,632 6,845,117

The accompanying notes form an integral part of the financial statements.


165
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

Notes to the consolidated financial statements

36. Revenue

Revenue of the Group consists of the following:

Group
2018 2017
RM'000 RM'000
(Restated)
Investment-related revenue:

Gain from divestments of investments


and investment properties 1,393,368 2,696,803
Dividend income from fair value through
other comprehensive income investments 332,853 619,054
Dividend income from fair value through
profit or loss investments 143,252 55,449
Interest income on:
Loans and receivables 205,452 251,127
Fair value through other comprehensive income
investments 51,242 39,399
Fair value through profit or loss investments 77,903 71,106
Lease and rental income 46,972 58,037
Others 29,401 36,684
2,280,443 3,827,659

Engineering and construction-related revenue:

Toll collection 430,845 429,396


Construction contracts 157,647 329,824
Land and property development sales 1,948,364 1,754,957
Sale of goods 836,056 961,484
Others 582,787 793,155
3,955,699 4,268,816

Services-related revenue:

Revenue from airlines and airport operations 9,185,565 9,144,533


Rendering of services 3,443,986 3,600,590
Insurance related services 929,532 1,909,710
Others 871,379 876,498
14,430,462 15,531,331

Total Revenue 20,666,604 23,627,806

166
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

36. Revenue (cont'd.)

Group
2018 2017
RM'000 RM'000
(Restated)
Timing of revenue recognition:
- At a point in time 6,078,495 7,766,651
- Over time 14,588,109 15,861,155
20,666,604 23,627,806

37. Operating (loss)/profit

Operating (loss)/profit is stated after charging/(crediting) the following:


Group
Note 2018 2017
RM'000 RM'000
(Restated)

Staff costs 38 3,657,444 3,470,691


Auditors’ remuneration:
Statutory audits
- to member firms of Ernst & Young Global 8,316 10,810
- to other firms 2,911 4,766
Other services 1,361 1,361
Rental expense of land, buildings and equipment 184,402 252,828
Unrealised foreign exchange loss/(gain), net 160,763 (697,407)
Fuel cost 3,255,867 3,115,515
Handling, landing, parking, enroute
charges, catering and other related costs 1,404,077 1,472,285
Aircraft maintenance and overhaul 1,323,968 1,117,689
Provision for aircraft maintenance and
overhaul costs 63 356,156 91,888
Depreciation 43 1,250,838 2,261,854
Allowance for impairment losses
on investments and receivables, net 3,704,130 1,101,201
Allowance for impairment losses on
property, plant and equipment 43 2,555,811 170,641
Allowance for impairment losses on
assets held for sale - 82,000
Net amortisation charge for concession
assets 46 97,610 102,910
Amortisation of deferred income (3,600) (29,464)
Amortisation of other intangible assets 48 70,602 138,068
Amortisation of Government grants 66(i) (1,890) (48,309)
Depreciation of investment properties 45 35,761 13,481
Allowance for impairment losses on
investment properties 45 12,901 -

167
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(Incorporated in Malaysia)

37. Operating profit (cont'd.)

Group
Note 2018 2017
RM'000 RM'000
(Restated)

Impairment of goodwill on consolidation 47 90,441 12,916


Impairment of concession assets 46 325 3,100
Impairment of land held for property
development 44 - 638
Bad debts written off/(recovered) 174,337 (315)
Inventories written (back)/off (34,162) 4,541
Retirement benefit obligations - 2,628
Reversal of provision for foreseeable losses (669,093) (3,604)
Gain on disposal of investment properties (97) -
Gain on disposal of property,
plant and equipment (35,317) (62,258)
Property, plant and equipment written off 43 39,357 35,938
Net fair value loss/(gain) on financial assets at
fair value through profit or loss 785,384 (604,570)
Net fair value loss/(gain) on derivatives 46,251 (615,627)

38. Staff costs

Group
Note 2018 2017
RM'000 RM'000

Wages and salaries 3,156,517 2,883,063


Statutory contributions to EPF and
social security 329,944 275,896
LTIP (i) (126,840) 14,615
Employees service entitlement and
retirement benefits 64 3,380 2,855
Others 294,443 294,262
3,657,444 3,470,691

(i) During the year, the Company's Board has exercised its right to terminate the LTIP
Scheme and cancel all existing options. There will be no further offers made pursuant to
the cancellation.

In addition to the Company's LTIP, two of the subsidiaries, UEM Group Berhad ("UEM
Group") and Avicennia Capital Sdn. Bhd. ("Avicennia") also introduced LTIP plan, which
is governed by and construed in accordance with applicable laws in Malaysia, which
was approved by UEM Group and Avicennia's Boards respectively.

(ii) Included in the staff costs of the Group and of the Company is Executive Directors'
remuneration amounting to RM8,500,000 (2017: RM8,422,000) as disclosed in Note 39.

168
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

39. Directors' remuneration

Group
2018 2017
RM'000 RM'000
Executive Directors of the Company:
Wages and salaries 7,269 7,117
Statutory contribution to EPF 1,231 1,305
8,500 8,422

Non-Executive Directors of the Company:


Fees and allowances 109 31
Others 286 2,881
395 2,912

8,895 11,334

40. Finance costs

Group
2018 2017
RM'000 RM'000

Interest expense on term loans and borrowings 1,277,716 937,830


Interest expense on bonds and Medium Term Notes 985,180 969,208
Amortisation of discount on Khazanah Bonds 613,243 639,541
Amortisation of discount on Exchangeable Trust
Certificates 311,951 149,856
Others 64,968 314,799
3,253,058 3,011,234

41. Taxation

Group
2018 2017
RM'000 RM'000
(Restated)
Continuing operations
Current income tax:
Malaysian income tax 284,311 188,236
Foreign income tax 15,018 22,939
299,329 211,175
(Over)/under provision in prior year:
Malaysian income tax (5,604) 1,193
293,725 212,368

169
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

41. Taxation (cont'd.)


Group
2018 2017
RM'000 RM'000
(Restated)
Continuing operations (cont'd.)
Deferred tax (Note 55):
Relating to origination and reversal of temporary
differences 178,503 110,622
Under/(over) provision in prior year 388 (71)
178,891 110,551

Income tax expense recognised in profit or loss 472,616 322,919

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2017: 24%) of
the estimated assessable profit for the year. Income tax for other jurisdictions is calculated at
the rates prevailing in the respective jurisdictions.

The reconciliation between tax expense and the product of accounting profit multiplied by the
applicable corporate tax rate for the years ended 31 December 2018 and 2017 are as
follows:

Group
2018 2017
RM'000 RM'000
(Restated)

(Loss)/profit before taxation from continuing operations (7,857,540) 8,565,572

Taxation at Malaysian statutory tax rate of 24%


(2017: 24%) (1,885,809) 2,055,737
Effect of different tax rates in foreign jurisdiction 21,325 12,381
Effect of income not subject to tax (915,198) (1,479,122)
Effect of expenses not deductible for tax purposes 2,757,430 856,754
Effect of utilisation of previously unrecognised tax losses (498,496) (704,822)
Deferred tax benefits not recognised 1,298,306 1,215,430
Tax effect on share of associates and joint ventures' profit
attributable to the equity holders (299,726) (1,634,561)
(Over)/under provision of income tax expense in prior year (5,604) 1,193
Under/(over) provision of deferred tax expense
in prior year 388 (71)
Income tax expense recognised in profit or loss 472,616 322,919

170
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

41. Taxation (cont'd.)

(i) In 2011, the Ministry of Finance granted Iskandar Management Services Sdn Bhd (a
subsidiary of IIB) a tax exemption on statutory income arising from services for the
"Legoland" project from 2011 until 2020.

(ii) In 2015, the Ministry of Finance granted IIB a 5-year tax exemption of up to 70% of its
taxable income from 1 January 2013 to 31 December 2017. As at 31 December 2018,
IIB is currently in the process of applying for extension of income tax exemption from
MoF.

(iii) On 4 April 2018, Malaysian Airline System Berhad ("MAS") received a letter from the
Inland Revenue Board ("IRB") questioning the non-deduction of withholding tax in
respect of payments made by MAS to leasing entities incorporated in Labuan in
connection with its lease of aircraft from foreign lessors. The IRB views the use of the
Labuan incorporated entities as tax avoidance schemes under Section 140(1)(c) of the
ITA. MAS has since taken professional advice and the view is that the use of Labuan
incorporated entities are legitimate and lease payments made should not be subjected
to withholding taxes. MAS will make representations to the IRB to justify its position. No
demand notices or assessments have been raised by the IRB to-date. On this basis, no
provision for withholding tax has been made in the statement of comprehensive income.

42. Assets held for sale

Discontinued operations and disposal group classified as held for sale and other assets held
for sale by the Group are as follows:

A) Avicennia Capital Sdn Bhd

(i) Divestment of Acibadem Saglik Ve Hayat Sigorta A.S.

On 17 August 2018, the Group via Burau Ventures Sdn. Bhd. (a subsidiary held
through Pasir Kalong Investments Limited) entered into Share Purchase
Agreement with Bupa International Markets Limited ("Bupa") for the disposal of its
entire equity interest in Acibadem for a total cash consideration of
USD176,580,301 equivalent to approximately RM724,120,496 (exchange rate:
USD1: RM4.1008). On 31 December 2018, the disposal exercise was completed
followng fulfillment of all conditions precedent to the sale. Accordingly, Acibadem
ceased to be a subsidiary of the Group on 31 December 2018.

171
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

42. Assets held for sale (cont'd.)

A) Avicennia Capital Sdn Bhd (cont'd.)

(ii) Transfer of General Takaful Business to other Takaful Operators

The Islamic Financial Services Act 2013 ("IFSA 2013") requires all composite
Takaful Operators to segregate their composite licences into separate Family
Takaful and General Takaful licences by 1 July 2018. In compliance with this Act,
Sun Life Malaysia Takaful Berhad ("SLMT") (a subsidiary company) had
relinquished its composite Takaful licence by the Minister of Finance to conduct its
Family Takaful Business. Accordingly, SLMT had ceased to underwrite any new
general takaful business.

As at 31 December 2018, all takaful related assets and liabilities in the notes to the
financial statements are in respect of the discontinued general takaful business.

The combined financial results in respect of the discontinued operations (i.e. Acibadem
and General Takaful Business) included in the profit for the year are set out as below.

Statement of comprehensive income

Group 2018
Note RM'000

Operating revenue 1,002,348

Net earned contribution 962,032


Other operating revenue 133,150
Net benefits and claims (808,549)
Fees and commission expense (70,075)
Other operating expenses (221,309)
Loss before taxation (4,751)
Taxation (16,791)
Loss after tax of discontinued operation (21,542)
Loss on disposal of subsidiary 49 (299,968)
Loss from discontinued operations (321,510)

172
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

42. Assets held for sale (cont'd.)

B) IHH Healthcare Berhad ("IHH")

The assets classified as held for sale as at 31 December 2018 are as follows:

2018 2017
Note RM'000 RM'000

Investment in associate 50 1,205,675 -

On 28 November 2018, the Company via Pulau Memutik Ventures Sdn. Bhd. entered
into a Share Purchase Agreement ("SPA") with Mitsui & Co., Ltd for the divestment of
1,403,087,400 shares of IHH.

C) Iskandar Investment Berhad ("IIB")

The assets classified as held for sale as at 31 December 2017 are as follows:

2018 2017
RM'000 RM'000

Land held for development 44 - 79,280

On 14 April 2016, the shareholders of the Company approved the sale of certain plots
of land measuring approximately 200 acres to an interested buyer and/or its nominees.

This sale was not completed and the land has been reclassed back to land held for
development, as disclosed in Note 44.

D) Penerbangan Malaysia Berhad ("PMB")

Certain aircraft and spare engines with net book value of RM63,439,000 (2017:
RM69,287,000) have been classified under assets held for sale.

173
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

42. Assets held for sale (cont'd.)

The major classes of assets held for sale and assets and liabilities of the disposal group
classified as held for sale on the consolidated statement of financial position are as follows:

Group
2018 2017 2016
Note RM'000 RM'000 RM'000
(Restated) (Restated)
Assets:
Land held for property
development 44 - 79,280 79,280
Investment in associate 50 1,205,675 - 1,044,388
Financial assets 79,968 39,295 -
Reinsurance and retakaful
assets - 7,088 -
Insurance and takaful
receivables - 3,071 -
Property, plant and
equipment 43 66,742 499,125 394,960
Investment properties - - 38,721
Other non-current financial
investments - - 303,672
Other non-current assets - - 482,182
Deferred tax assets 55 - 236 -
Tax recoverable - - 2,023
Receivables - 7 69,640
Cash and bank balances - 2,524 172,400
Assets held for sale and assets of
disposal group classified as
held for sale 1,352,385 630,626 2,587,266

Liabilities:
Deferred tax liabilities 55 - - 2,582
Borrowings - 142,058 60,000
Other liabilities - 52,221 5,880
Insurance contract liabilities - - 650,987
Insurance payables - - 71,683
Liabilities of disposal group
classified as held for sale - 194,279 791,132

174
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

43. Property, plant and equipment

Renovation,
Furniture capital
Aircraft and improvements
Plant and fittings and capital
and spare and other Land and work-in-
machinery engines equipment buildings progress Total
Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2018

Cost

At 1 January 6,007,229 16,250,778 1,661,448 4,346,067 1,476,525 29,742,047


Additions 73,584 276,012 66,353 51,736 755,344 1,223,029
Reclassification 935,039 (1,533,589) 890,408 623,673 (915,531) -
Currency translation differences - - 16,370 2,925 3,491 22,786
Disposals (10,257) (464) (26,219) (10,309) (9,557) (56,806)
Write-offs (2,786) (170,586) (12,791) (1,530) (14,165) (201,858)
Disposal of subsidiaries (Note 49 (iii)) - - (3,164) - - (3,164)
Transfer to investment properties (Note 45) - - - - (102,415) (102,415)
Transfer to property development-in-progress (Note 56) (25,787) (25,787)
Transfer to asset held for sale (Note 42) - (66,512) - (230) - (66,742)
At 31 December 7,002,809 14,755,639 2,592,405 5,012,332 1,167,905 30,531,090

175
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

43. Property, plant and equipment (cont'd.)

Renovation,
Furniture capital
Aircraft and improvements
Plant and fittings and capital
and spare and other Land and work-in-
machinery engines equipment buildings progress Total
Group (cont'd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2018 (cont'd.)

Accumulated depreciation and


impairment losses

At 1 January 4,797,145 7,358,430 1,359,135 1,007,132 5,746 14,527,588


Charge for the year (Note 37) 222,807 752,952 174,338 96,405 4,336 1,250,838
Allowance for impairment losses (Note 37) 64,827 2,269,137 204,805 17,042 - 2,555,811
Currency translation differences 763 - 15,345 1,364 (115) 17,357
Disposals (2,081) (116) (29,109) (2,820) (8,992) (43,118)
Write-offs (254) (152,453) (9,794) - - (162,501)
Transfer to investment properties (Note 45) - - - - (198) (198)
At 31 December 5,083,207 10,227,950 1,714,720 1,119,123 777 18,145,777

Net book value

At 31 December 1,919,602 4,527,689 877,685 3,893,209 1,167,128 12,385,313

176
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

43. Property, plant and equipment (cont'd.)

Renovation,
Furniture capital
Aircraft and improvements
Plant and fittings and capital
and spare and other Land and work-in-
machinery engines equipment buildings progress Total
Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2017

Cost

At 1 January 5,573,803 16,540,202 1,334,486 4,336,256 1,380,700 29,165,447


Additions 640,759 112,766 171,443 98,881 250,189 1,274,038
Reclassification (36,905) - 162,856 17,684 (143,635) -
Currency translation differences (3,467) - (3,218) (7,782) (8,304) (22,771)
Disposals (82,507) (21,005) (536) (11,833) - (115,881)
Write-offs (2,951) - (3,583) (62,115) (2,425) (71,074)
Disposal of subsidiaries (81,503) - - - - (81,503)
Transfer to land held for property
development (Note 44) - - - (25,024) - (25,024)
Transfer to asset held for sale - (381,185) - - - (381,185)
At 31 December 6,007,229 16,250,778 1,661,448 4,346,067 1,476,525 29,742,047

177
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

43. Property, plant and equipment (cont'd.)

Renovation,
Furniture capital
Aircraft and improvements
Plant and fittings and capital
and spare and other Land and work-in-
machinery engines equipment buildings progress Total
Group (cont'd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2017 (cont'd.)

Accumulated depreciation and


impairment losses

At 1 January 3,816,503 6,710,103 941,302 800,597 5,395 12,273,900


Charge for the year (Note 37) 987,558 625,107 417,644 231,428 117 2,261,854
Allowance for impairment losses (Note 37) - 170,641 - - - 170,641
Currency translation differences 3,426 - 2,082 6,897 234 12,639
Disposals (1,735) (2,534) (50) (1,448) - (5,767)
Write-offs (2,951) - (1,843) (30,342) - (35,136)
Disposal of subsidiaries (5,656) - - - - (5,656)
Transfer to asset held for sale - (144,887) - - - (144,887)
At 31 December 4,797,145 7,358,430 1,359,135 1,007,132 5,746 14,527,588

Net book value

At 31 December 1,210,084 8,892,348 302,313 3,338,935 1,470,779 15,214,459

178
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

43. Property, plant and equipment (cont'd.)

The net carrying amounts of aircraft held under finance lease arrangements is
RM821,041,000 (2017: RM486,185,000).

The net carrying amounts of aircraft pledged as securities for term loan is RM469,071,000
(2017: RM3,465,895,000).

44. Land held for property development

Group
Note 2018 2017
RM'000 RM'000
(Restated)
At cost
At 1 January (as reported) 3,939,786 4,785,908
Effect of adoption of MFRS 76 1,182,641 630,182
At 1 January (as restated) 5,122,427 5,416,090
Additions 445,229 445,067
Disposals (93) (268,097)
Impairment loss 37 - (638)
Currency translation differences - (5,066)
Transfer from property,
plant and equipment 43 25,024
Transfer from assets held for sale 42 79,280 -
Transfer to investment properties 45 (26,457) -
Transfer to property
development-in-progress 56 (27,150) (489,953)
At 31 December 5,593,236 5,122,427

As at the reporting date, freehold land and related development expenditure of:

(a) RM21.7 million (2017: RM21.7 million) have been deposited by UEM Land Berhad as
security for the borrowing granted to a subsidiary of UEM; and

(b) RM282.1million (2017: RM289.1 million) are pledged as securities for the borrowing
facilities granted to UEM Sunrise Berhad's subsidiaries.

Included in the current year additions are as follows:


Group
2018 2017
RM'000 RM'000

Staff costs 6,015 6,430


Interest expense 35,231 41,992

179
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

44. Land held for property development (cont'd.)

Included in land held for property development of the Group are parcels of land committed
through the agreement as follows:

UEM

Master Agreement ("MA") dated 23 October 2012 entered between UEM Land and
Ascendas to undertake the development of an integrated technology park over
approximately 519 acres of land in Gerbang Nusajaya, Iskandar Puteri, Johor Darul Takzim.
The development to be undertaken on the lands consists of the following:

(i) Phase 1 lands measuring approximately 205 acres and further broken down into two
plots identified as Plot A with an estimated area of 120 acres and Plot B with an
estimated area of 85 acres;
(ii) Phase 2 lands measuring approximately 166 acres; and
(iii) Phase 3 lands measuring approximately 148 acres.

In 2013, 120 acres of Plot A lands were purchased by Nusajaya Tech Park Sdn Bhd
("NTPSB"). Pursuant to the MA, UEM Land agreed to grant Ascendas the option to agree for
NTPSB to complete the purchase of Plot B lands and to exercise the options to purchase
Phase 2 and Phase 3 lands, all within the period of 9 years commencing from the date of the
MA. No option was exercised in the current and preceding financial years. The options shall
automatically lapse if not exercised within the option period.

45. Investment properties

Group
Note 2018 2017
RM'000 RM'000

Land and building

Cost
At 1 January 2,933,586 2,898,868
Additions 66,984 47,813
Disposals (550) (13,095)
Transfer from property, plant and
equipment 43 102,415 -
Transfer from land held for property
development 44 26,457 -
Transfer from property development-
in-progress 56 96,678 -
At 31 December 3,225,570 2,933,586

180
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

45. Investment properties (cont'd.)

Group
Note 2018 2017
RM'000 RM'000

Land and building (cont'd.)

Accumulated depreciation and


impairment losses
At 1 January 132,125 123,968
Depreciation 37 35,761 13,481
Disposals 136 (5,324)
Allowance for impairment losses 37 12,901 -
Transfer from property, plant and
equipment 43 198 -
At 31 December 181,121 132,125

Carrying amount at 31 December 3,044,449 2,801,461

Fair value 8,365,644 9,123,927

Investment properties comprise commercial properties, office lots, condominium units and
landed properties.

(a) The fair values of the investment properties are determined by an independent
professional valuer based on the following valuation techniques depending on the
location and types of properties.

(i) The income approach converts estimated future amounts of cash flows or income
to a single present value (discounted) amount by applying an appropriate market-
derived discount rate.

(ii) The comparison/cost method of valuation entails separate valuations of the land
and buildings to arrive at the market value of the subject property. The land is
valued by reference to transactions of similar lands in surrounding area with
appropriate adjustments made for differences in the relevant characteristics of the
land. Completed buildings are valued by reference to the current estimates on
constructional costs to erect equivalent buildings, taking into consideration of
similar accommodation in terms of size, construction, finishes contractors'
overhead, fees and profits. Appropriate adjustments are then made for the factors
of obsolescence and existing physical condition of the building.

The fair values of investment properties are categorised as Level 3 under the fair value
hierarchy as disclosed in Note 68.

181
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

46. Concession intangible assets

Group
Note 2018 2017
RM'000 RM'000

Cost
At 1 January 4,153,443 4,580,855
Additions 30,551 30,554
Exchange differences (158,844) (457,966)
At 31 December 4,025,150 4,153,443

Accumulated amortisation
and impairment losses
At 1 January 290,540 209,123
Charge for the year, net of reversal 37 97,610 102,910
Impairment loss 37 325 3,100
Exchange differences (11,178) (24,593)
At 31 December 377,297 290,540

Net carrying amount

At 31 December 3,647,853 3,862,903

As at the reporting date, the Group has the following concession intangible assets:

Concession
Concession intangible asset Concession companies period

Cikampek-Palimanan Toll Road PT Lintas Marga Sedaya up to 2041


Indonesia ("CPTR") ("LMS")

Padalur-Trichy Highway, India Trichy Padalur Tollways up to 2031


Private Limited ("TPTPL")

REPPA arrangement Kualiti Alam Sdn. Bhd. and up to 2034


Cenergi SEA Sdn. Bhd.

182
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

47. Goodwill on consolidation

Group
Note 2018 2017
RM'000 RM'000

At 1 January 1,922,871 2,186,617


Acquisition of subsidiaries 49(i) 641,950 -
Disposal of subsidiary 49(iii) (445,962) (191,375)
Exchange differences 19,170 (59,455)
Less: Impairment of goodwill on
consolidation 37 (90,441) (12,916)
At 31 December 2,047,588 1,922,871

(a) Impairment tests for goodwill

Allocation of goodwill

Goodwill has been allocated to the Group's cash generating units ("CGUs") identified
according to business segment as follows:

2018 2017
RM'000 RM'000

Goodwill - Business Segment


Engineering, construction and expressway 1,002,901 1,080,461
Financial services 398,626 838,299
Healthcare 641,950 -
2,043,477 1,918,760
Other business segments 4,111 4,111
2,047,588 1,922,871

183
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

47. Goodwill on consolidation (cont'd.)

(b) Key assumptions used in recoverable amount

The recoverable amount of a CGU is determined based on the following methodology:

(i) where investments are listed, principally the market value is used.

(ii) where investments are not investment holding and where the underlying is
unlisted, value-in-use is applied.

(iii) where investments themselves are investment holding, the market value of the
underlying value-in-use is calculated using cash flow projections or earnings and
book multiples of a comparable listed company in the same market and the same
industry.

The following describes each key assumption on which management has based its
evaluation to undertake impairment testing of goodwill:

(i) Company earnings and book multiples


Earnings and book multiples are chosen based on acknowledged market norms
for that industry and that geography with due consideration to asset size, market
share, profitability and target market.

(ii) Growth rate


The average growth rate used in cash flow projections are consistent with the long
term average growth rate for the industry.

(iii) Discount rate


The discount rates used are pre-tax and reflect specific risks relating to the
relevant segments.

184
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

48. Other intangible assets

Development Software VOBA Intellectual


expenditure and and property
and work in related Brand banc- and
progress costs name assurance licences Total
Group Note RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

2018

At 1 January 17,517 162,160 16,098 572,610 218,390 986,775


Additions 14,129 71,754 - - 21,160 107,043
Disposal (4,428) (8,194) - (77,297) - (89,919)
Disposal of subsidiaries 49(iii) - - - (107,468) - (107,468)
Foreign exchange difference - (9) - - - (9)
27,218 225,711 16,098 387,845 239,550 896,422
Less: Amortisation 37 (1,841) (55,248) - - (13,513) (70,602)
At 31 December 25,377 170,463 16,098 387,845 226,037 825,820

2017

At 1 January 18,271 128,656 15,777 603,026 176,245 941,975


Additions 129 100,040 325 37,600 77,999 216,093
Disposal - (2,369) - - (29,483) (31,852)
Foreign exchange difference - (1,314) - - (59) (1,373)
18,400 225,013 16,102 640,626 224,702 1,124,843
Less: Amortisation 37 (883) (62,853) (4) (68,016) (6,312) (138,068)
At 31 December 17,517 162,160 16,098 572,610 218,390 986,775

185
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries

Details of the subsidiaries are shown in Note 78 and Note 79.

(i) Acquisition of Prince Court Medical Centre ("PCMC")

In March 2018, the Company via a special purpose company, Pulau Memutik Ventures
Sdn. Bhd. has signed a share sale and purchase agreement for the acquisition of 100%
interest in Prince Court Medical Centre ("PCMC") from Petronas Hartabina Sdn Bhd.
The Company also entered into a term sheet for a collaboration agreement with IHH
Healthcare Berhad ("IHH") for shared services support and operational improvement
initiatives at PCMC. Accordingly, IHH will be given a right of first offer to acquire PCMC
during a pre-agreed period.

The following summarises the major classes of consideration transferred, and the
recognised amounts of assets acquired and liabilities assumed at the acquisition date:

Fair value of the consideration transferred


2018
RM'000

Total consideration transferred 1,086,663

Identifiable assets acquired and liabilities assumed

Land and building 360,307


Other property, plant and equipment 27,692
Project in-progress 8,430
Cash and cash equivalent 54,321
Other assets 53,742
Trade payables (13,398)
Other payables (46,381)
444,713

Net cash outflow from acquisition of subsidiary

Purchase consideration settled via cash and cash equivalents (1,086,663)


Cash and cash equivalent acquired 54,321
(1,032,342)

Goodwill
Goodwill was recognised as a result of the acquisition as follows:

Total consideration transferred 1,086,663


Fair value of identifiable net assets (444,713)
Goodwill 641,950
186
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(ii) Newly incorporated subsidiary

(a) On 1 March 2018, Malaysia Airlines Holidays Sdn. Bhd. was incorporated for a
consideration of RM2. During the financial year, the investment was increased to
RM200,000.

(b) On 22 February 2018, UEM Sunrise (Developments) Pty Ltd, a wholly-owned


subsidiary of UEM Sunrise formalised the incorporation of UEM Sunrise (Aurora
Melbourne Central Property Management) Pty Ltd and UEM Sunrise
(Conservatory Melbourne Property Management) Pty Ltd with paid-up share
capital of AUD2 each.

(iii) Disposal, dissolution or dilution of interests in subsidiaries

(a) On 10 August 2018, Edgenta UEMS Pte. Ltd. Became a direct subsidiary of
Edgenta (Singapore) Pte. Ltd. ("ESG"), a wholly-owned subsidiary of UEM
Edgenta via the transfer of shares by way of distribution-in-specie from Asia
Integrated Facility Solution ("AIFS"), a wholly owned subsidiary of ESG).

(b) During the year, the following subsidiaries were dissolved via members' voluntary
liquidation, deregistered, struck off, or wind up:

- AIFS
- Asia Facility Solutions Pte Ltd ("AFS")
- Cimaco Quarry Sdn. Bhd. ("CQSB")
- International Business Link Inc
- 0757422 B.C. Ltd.
- Nusajaya Business Park Sdn. Bhd.
- Projek Usahasama Transit Ringan Automatik Sdn. Bhd. ("PUTRA")
- UEM Sunrise Pacific Sdn. Bhd.
- York Place Limited

187
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(iii) Disposal, dissolution or dilution of interests in subsidiaries (cont'd.)

The value of the assets and liabilities of subsidiaries disposed at the respective dates of
dissolution are as follows:

Note 2018
RM'000
Assets:
Property and equipment 43 3,164
Intangible assets 48 107,468
Goodwill 47 445,962
Financial assets 496,205
Reinsurance and retakaful assets 9,077
Insurance and takaful receivables 167,390
Other receivables 25,277
Deferred tax assets 55 10,102
Current tax assets 6,744
Cash and bank balances 97,780
1,369,169

Liabilities:
Insurance and takaful contract liabilities 364,672
Insurance and takaful payables 115,695
Investment contract liabilities 8,925
Financial liabilities 133
Other payables 49,205
Deferred tax liabilities 55 12,007
550,637

Net assets disposed of 818,532

188
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(iii) Disposal, dissolution or dilution of interests in subsidiaries (cont'd.)

Note 2018
RM'000

Consideration receivable 59(iv)(e) 724,120


Net assets disposed of/derognised (818,532)
Loss on disposal before reclassification adjustments (94,412)
Cumulative gain on FVOCI financial assets in respect
of the disposal subsidiary reclassified from equity
to profit or loss 420
Cumulative foreign exchange loss in respect of the
net assets of the disposal subsidiary reclassified
from equity to profit or loss (205,976)
Loss on disposal of subsidiary/derecognition of
investment in subsidiary 42 (299,968)

Net cash inflows arising from the disposal of interests in subsidiaries were as
follows:

2018
RM'000

Consideration receivable 59(iv)(e) 724,120


Less: Cash and cash equivalent balance disposed of (97,780)
Net cash inflows 626,340

189
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(iv) Segments with material non-controlling interests

Segments which have non-controlling interests that are material to the Group are listed
below:

2018

(a) Summarised consolidated statement of comprehensive income

Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Revenue 4,653 33 10,487 15,173


Profit/(loss) for the year 405 (64) (4,124) (3,783)

Profit/(loss) attributable to:


Owners of the Company 270 (328) (4,708) (4,766)
Non-controlling interests 135 264 584 983
405 (64) (4,124) (3,783)

(b) Summarised consolidated statement of financial position

Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 13,309 3,240 5,553 22,102


Current assets 7,239 1,059 3,577 11,875
Total assets 20,548 4,299 9,130 33,977

Non-current liabilities 6,132 492 10,805 17,429


Current liabilities 4,489 310 13,826 18,625
Total liabilities 10,621 802 24,631 36,054

Net assets/(liabilities) 9,927 3,497 (15,501) (2,077)

Non-controlling interests 3,409 2,446 34 5,889


Non-controlling interests which
are immaterial to the Group 162
6,051

190
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(iv) Segments with material non-controlling interests

Segments which have non-controlling interests that are material to the Group are listed
below (cont'd.):

2018 (cont'd.)

(c) Summarised consolidated statement of cash flows

Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Net cash generated from/


(used in):
Operating activities 685 (3) 1,899 2,581
Investing activities (162) 439 152 429
Financing activities (232) (342) (2,239) (2,813)
Net changes in cash and
cash equivalents 291 94 (188) 197
Effects of exchange rate
changes (26) - - (26)
Cash and cash equivalents
at beginning of year 1,317 25 896 2,238
Cash and cash equivalents
at end of year 1,582 119 708 2,409

2017

(a) Summarised consolidated statement of comprehensive income

Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Revenue 5,452 72 10,644 16,168


Profit/(loss) for the year 573 (52) (524) (3)

Profit/(loss) attributable to:


Owners of the Company 395 (323) (1,110) (1,038)
Non-controlling interests 178 271 586 1,035
573 (52) (524) (3)

191
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

49. Investment in subsidiaries (cont'd.)

(iv) Segments with material non-controlling interests

Segments which have non-controlling interests that are material to the Group are listed
below (cont'd.):

(b) Summarised consolidated statement of financial position

2017 (cont'd.)
Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 11,849 3,327 9,953 25,129


Current assets 9,287 1,304 3,060 13,651
Total assets 21,136 4,631 13,013 38,780

Non-current liabilities 7,195 699 7,560 15,454


Current liabilities 4,010 419 16,448 20,877
Total liabilities 11,205 1,118 24,008 36,331

Net assets/(liabilities) 9,931 3,513 (10,995) 2,449

Non-controlling interests 3,404 2,448 30 5,882


Non-controlling interests which
are immaterial to the Group 99
5,981

(c) Summarised consolidated statement of cash flows

Infrastructure
& Transportation
Construction Property & Logistics Total
RM'mil RM'mil RM'mil RM'mil

Net cash generated from/


(used in):
Operating activities 285 (85) 1,432 1,632
Investing activities (90) (297) (97) (484)
Financing activities (243) (85) (1,685) (2,013)
Net changes in cash and
cash equivalents (48) (467) (350) (865)
Cash and cash equivalents
at beginning of year 1,365 492 1,246 3,103
Cash and cash equivalents
at end of year 1,317 25 896 2,238

192
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

50. Interest in associates

Group
2018 2017 2016
RM'000 RM'000 RM'000
(Restated) (Restated)
Shares at cost,
Quoted shares in Malaysia 41,758,924 39,537,461 39,424,310
Quoted shares outside Malaysia 732,033 780,297 855,661
Unquoted shares in Malaysia 1,432,609 2,888,688 2,259,219
Unquoted shares outside Malaysia 3,626,063 3,389,913 4,392,001
47,549,629 46,596,359 46,931,191
Share of post acquisition reserves 21,894,778 24,838,608 23,599,412
69,444,407 71,434,967 70,530,603
Less: Allowance for impairment losses (3,132,672) (348,918) (290,400)
Less: Reclassification to asset held
for sale (Note 42) (1,205,675) - -
65,106,060 71,086,049 70,240,203

Market value of quoted shares


In Malaysia 78,986,787 94,483,339 83,954,253
Outside Malaysia 301,151 286,819 439,599

The summarised financial information in respect of each of the Group's aggregated material
associates is set out below. The summarised financial information represents the amounts in
the financial statements of the associates and not the Group's share of those amounts.

2018

Summarised consolidated statement of comprehensive income

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Revenue 116,190 227 4,852 121,269


Profit for the year 4,653 31 727 5,410

193
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

50. Interest in associates (cont'd.)

2018

Summarised consolidated statement of financial position

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 760,570 1,892 18,010 780,472


Current assets 59,951 1,897 4,263 66,111
Total assets 820,521 3,789 22,273 846,583

Non-current liabilities 599,210 1,608 11,000 611,818


Current liabilities 50,933 649 2,132 53,714
Total liabilities 650,143 2,257 13,132 665,532

Reconciliation of the summarised financial information presented above

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Net assets 170,378 1,532 9,141 181,051

Share of net assets 44,810 518 2,704 48,032


Goodwill 10,743 - 1,237 11,980
55,553 518 3,941 60,012

Carrying amount of the Group's immaterial interest in associates 9,432


69,444

2017

Summarised consolidated statement of comprehensive income

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Revenue 112,674 374 4,652 117,700


Profit for the year 18,540 30 237 18,807
194
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

50. Interest in associates (cont'd.)

2017
Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Summarised consolidated statement of financial position

Non-current assets 728,510 1,883 19,092 749,485


Current assets 53,599 1,857 3,404 58,860
Total assets 782,109 3,740 22,496 808,345

Non-current liabilities 566,596 1,919 11,253 579,768


Current liabilities 43,950 321 2,234 46,505
Total liabilities 610,546 2,240 13,487 626,273

Reconciliation of the summarised financial information presented above

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Net assets 171,563 1,500 9,009 182,072

Share of net assets 50,624 510 2,661 53,795


Goodwill 10,264 - 1,237 11,501
60,888 510 3,898 65,296

Carrying amount of the Group's immaterial interest in associates 6,139


71,435

2016
Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Summarised consolidated statement of comprehensive income

Revenue 104,245 512 4,173 108,930


Profit for the year 15,887 66 73 16,026

195
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

50. Interest in associates (cont'd.)

2016
Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Summarised consolidated statement of financial position

Non-current assets 702,886 1,923 18,699 723,508


Current assets 48,726 1,941 2,590 53,257
Total assets 751,612 3,864 21,289 776,765

Non-current liabilities 545,626 2,077 10,826 558,529


Current liabilities 45,963 317 1,766 48,046
Total liabilities 591,589 2,394 12,592 606,575

Reconciliation of the summarised financial information presented above

Infrastructure
Investment & Transportation
holding construction & logistics Total
RM'mil RM'mil RM'mil RM'mil

Net assets 160,023 1,470 8,697 170,190

Share of net assets 49,328 503 2,826 52,657


Goodwill 10,265 - 1,237 11,502
59,593 503 4,063 64,159

Carrying amount of the Group's immaterial interest in associates 6,372


70,531

Details of the associates, are shown in Note 78 and Note 79.

196
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

51. Interest in joint ventures

Group
Note 2018 2017 2016
RM'000 RM'000 RM'000
(Restated) (Restated)
Shares at cost,
Unquoted shares
in Malaysia (i) 2,961,194 3,122,775 3,115,591
Unquoted shares
outside Malaysia 616,258 677,132 242,208
Investments in
unincorporated entities 141,146 141,146 141,146
3,718,598 3,941,053 3,498,945
Share of post-acquisition
reserves 1,133,786 1,020,750 544,734
4,852,384 4,961,803 4,043,679
Less: Accumulated
impairment losses (435,120) (20,539) (141,363)
4,417,264 4,941,264 3,902,316
Amount due from joint
ventures 53,216 75 174,431
4,470,480 4,941,339 4,076,747

(i) Acquisition/accretion of interest in joint ventures by the Group

(a) During the year, PEIB subscribed to:

(i) additional 39,950,542 CCPS at an issued price of INR10 each in Jetpur


Somnath Tollways Private Limited ("JSTPL") for a cash consideration of
INR399.5million or RM23.7 million.

(ii) additional 83,127,858 Compulsory Convertible Preference Shares ("CCPS")


at an issued price of INR10 each in Uniquest through Ghir Investments
(Mauritius) Limited for a total cash consideration of INR831.3 million or
RM49.0 million.

(b) During the year, UEM Sunrise subscribed for 25,850,000 RPS pf RM1.00 per
share amounting to RM25.9 million via conversion of advances to Nusajaya
Lifestyle Sdn. Bhd.

197
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

51. Interest in joint ventures (cont'd.)

Details of the joint ventures are disclosed in Note 78 and Note 79.

The summarised financial information in respect of each of the Group's aggregated material
joint ventures is set out below. The summarised financial information represents the amounts
in the financial statements of the associates and not the Group's share of those amounts.

2018

Summarised consolidated statement of comprehensive income

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Revenue 2,487 427 327 3,241


Profit for the year - 87 26 113

Summarised consolidated statement of financial position

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 20,958 733 2,819 24,510


Current assets 4,858 1,091 870 6,819
Total assets 25,816 1,824 3,689 31,329

Non-current liabilities 17,792 471 203 18,466


Current liabilities 929 239 740 1,908
Total liabilities 18,721 710 943 20,374

Reconciliation of the summarised financial information presented above

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Net assets 7,095 1,114 2,746 10,955

Share of net assets 3,884 422 1,094 5,400

Carrying amount of the Group's immaterial interest in joint ventures (548)


4,852

198
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

51. Interest in joint ventures (cont'd.)

2017

Summarised consolidated statement of comprehensive income

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Revenue 1,115 433 237 1,785


Profit for the year 210 65 5 280

Summarised consolidated statement of financial position

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 20,678 754 2,747 24,179


Current assets 7,601 1,104 689 9,394
Total assets 28,279 1,858 3,436 33,573

Non-current liabilities 20,235 571 157 20,963


Current liabilities 1,405 212 614 2,231
Total liabilities 21,640 783 771 23,194

Reconciliation of the summarised financial information presented above

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Net assets 6,639 1,075 2,665 10,379

Share of net assets 3,529 419 1,067 5,015

Carrying amount of the Group's immaterial interest in joint ventures (53)


4,962

199
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

51. Interest in joint ventures (cont'd.)

2016

Summarised consolidated statement of comprehensive income

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Revenue 2,085 479 130 2,694


Profit for the year (82) (3) (11) (96)

Summarised consolidated statement of financial position

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Non-current assets 18,659 804 3,479 22,942


Current assets 7,561 1,104 430 9,095
Total assets 26,220 1,908 3,909 32,037

Investment Infrastructure
holding & construction Property Total
RM'mil RM'mil RM'mil RM'mil

Non-current liabilities 13,002 596 109 13,707


Current liabilities 7,614 212 954 8,780
Total liabilities 20,616 808 1,063 22,487

Reconciliation of the summarised financial information presented above

Net assets 5,604 1,100 2,846 9,550

Share of net assets 2,909 440 1,141 4,490

Carrying amount of the Group's immaterial interest in joint ventures (446)


4,044

200
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

52. Other financial investments

Group - 2018
Current Non-current Total
RM'000 RM'000
RM'000 RM'000
Financial assets designated as fair
value through profit or loss
At fair value:
Quoted shares in Malaysia 94,983 10,999,033 11,094,016
Quoted shares outside Malaysia - 59,745 59,745
Unquoted shares in Malaysia - 965,590 965,590
Unquoted shares outside Malaysia - (37,176) (37,176)
Quoted bonds in Malaysia - 448,278 448,278
Unquoted bonds in Malaysia - 1,143,212 1,143,212
Quoted fund in Malaysia - 407,927 407,927
Unquoted fund in Malaysia 191,673 - 191,673
286,656 13,986,609 14,273,265

Financial assets designated as fair


value through other comprehensive
income
At fair value:
Quoted shares in Malaysia - 16,256,448 16,256,448
Quoted shares outside Malaysia - 24,270 24,270
Unquoted shares in Malaysia 883,000 212,432 1,095,432
Quoted bonds in Malaysia - 328,558 328,558
Unquoted bonds in Malaysia - 817,678 817,678

At cost:
Unquoted shares in Malaysia - 53,231 53,231
Unquoted shares outside Malaysia 10,375 13,206 23,581
893,375 17,705,823 18,599,198

Amortised cost
Loans receivable - 2,507,782 2,507,782

Total 1,180,031 34,200,214 35,380,245

201
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

52. Other financial investments (cont'd.)

Group - 2017 (Restated)


Current Non-current Total
RM'000 RM'000
RM'000 RM'000
Financial assets designated as fair
value through profit or loss
At fair value:
Quoted shares in Malaysia - 219,307 219,307
Quoted shares outside Malaysia 161,892 11,374,809 11,536,701
Unquoted shares in Malaysia 10,375 23,595 33,970
Unquoted shares outside Malaysia - 496,256 496,256
Quoted bonds in Malaysia - 430,032 430,032
Unquoted bonds in Malaysia - 1,069,185 1,069,185
Quoted fund in Malaysia - 366,617 366,617
Unquoted fund in Malaysia 433,767 107,328 541,095
606,034 14,087,129 14,693,163

Financial assets designated as fair


value through other comprehensive
income
At fair value:
Quoted shares in Malaysia - 178,799 178,799
Quoted shares outside Malaysia - 11,361,157 11,361,157
Unquoted shares in Malaysia 1,279,482 1,246,003 2,525,485
Unquoted shares outside Malaysia - 3,694,627 3,694,627
Quoted bonds in Malaysia - 285,791 285,791
Quoted bonds outside Malaysia - 430,981 430,981
Unquoted bonds in Malaysia - 774,224 774,224
Quoted fund in Malaysia - 2,646 2,646
Quoted fund outside Malaysia - 28,523 28,523

At cost:
Unquoted shares in Malaysia - 47,061 47,061
Unquoted shares outside Malaysia - 43,644 43,644
1,279,482 18,093,456 19,372,938

Amortised cost
Unquoted bonds outside Malaysia - 45,721 45,721
Loans receivable - 3,196,248 3,196,248
- 3,241,969 3,241,969

Total 1,885,516 35,422,554 37,308,070

202
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

52. Other financial investments (cont'd.)

Group - 2016 (restated)


Current Non-current Total
RM'000 RM'000
RM'000 RM'000
Financial assets designated as fair
value through profit or loss
At fair value:
Quoted shares in Malaysia 14 156,470 156,484
Quoted shares outside Malaysia 86,006 9,825,639 9,911,645
Unquoted shares in Malaysia - 528,886 528,886
Unquoted shares outside Malaysia - 586,147 586,147
Quoted bonds in Malaysia - 455,919 455,919
Quoted bonds outside Malaysia - 139 139
Unquoted bonds in Malaysia - 984,782 984,782
Quoted fund in Malaysia - 296,905 296,905
Unquoted fund in Malaysia 932,990 183,267 1,116,257
1,019,010 13,018,154 14,037,164

Financial assets designated as fair


value through other comprehensive
income
At fair value:
Quoted shares in Malaysia 1,997 106,000 107,997
Quoted shares outside Malaysia - 10,217,254 10,217,254
Unquoted shares in Malaysia 65,857 1,055,402 1,121,259
Unquoted shares outside Malaysia - 2,638,816 2,638,816
Quoted bonds in Malaysia - 324,089 324,089
Quoted bonds outside Malaysia - 418,259 418,259
Unquoted bonds in Malaysia - 654,562 654,562
Quoted fund outside Malaysia - 2,933 2,933
Unquoted fund inMalaysia - 11,790 11,790

At cost:
Unquoted shares in Malaysia - 37,061 37,061
Unquoted shares outside Malaysia - 43,705 43,705
Less: Accumulated allowance for
impairment losses - (22,525) (22,525)
67,854 15,487,346 15,555,200

Amortised cost
Unquoted bonds in Malaysia - 7,500 7,500
Unquoted bonds outside Malaysia - 52,741 52,741
Loans receivable - 2,198,619 2,198,619
- 2,258,860 2,258,860

Total 1,086,864 30,764,360 31,851,224


203
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

53. Other non-current assets

Group
2018 2017 2016
Note RM'000 RM'000 RM'000
(Restated) (Restated)
Receivables under finance
lease (i) 16,136 19,008 511,326
Trade receivables 172,725 391,947 512,068
Reinsurance assets 185,168 1,331,917 2,089,202
Prepaid land lease
payments 13,842 3,902 -
Staff loans 28,651 31,233 39,824
Cash and bank balances 60, (ii) 5,955 - 2,659
Contract assets (iii) 1,190,904 1,143,101 957,327
Others 550,984 202,554 79,551
2,164,365 3,123,662 4,191,957

(i) Leasing portfolio of a subsidiary of the Group comprises financing of long term lease
related to investment properties of the Group. As at the reporting date, the present
value of lease receivables under non-cancellable lease agreements was as follows:

Group
2018 2017
RM'000 RM'000

Minimum lease receivables:


Within one year 4,851 2,544
Between one and five years 20,722 19,008
More than five years 10,246 -
Total minimum lease payments 35,819 21,552

Present value of receivables:


Within one year 2,039 2,544
Between one and five years 8,880 19,008
More than five years 7,256 -
18,175 21,552
Less: Amount due within one year (Note 59) (2,039) (2,544)
Amount due after one year 16,136 19,008

(ii) Relates to security for banking facilities granted to UEM Group's subsidiaries.

204
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

53. Other non-current assets (cont'd.)

(iii) Contract assets

2018 2017 2016


Group Note RM'000 RM'000 RM'000
(Restated) (Restated)

Contract assets

Current 58 388,098 546,739 884,395


Non-current 1,190,904 1,143,101 957,327
1,579,002 1,689,840 1,841,722

Contract liabilities

Current 62 (54,306) (161,483) (203,660)


Non-current 66 (291,116) (298,078) (310,193)
(345,422) (459,561) (513,853)

2018 2017 2016


Group Note RM'000 RM'000 RM'000
(Restated) (Restated)

Contract assets

Contract assets from


property development
and strategic land
sales (a) 116,894 263,066 531,755
Contract assets from
construction contracts (b) 1,262,262 1,165,211 955,509
Contracts assets from
rendering services (c) 199,846 261,563 354,458
1,579,002 1,689,840 1,841,722
Contract liabilities

Contract assets from


property development
and strategic land
sales (a) (330,638) (364,899) (398,658)
Contract liabilities from
construction contracts (b) (417) (66,900) (33,326)
Contracts liabilities from
rendering services (c) (14,367) (27,762) (81,869)
(345,422) (459,561) (513,853)

205
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

53. Other non-current assets (cont'd.)

(iii) Contract assets (cont'd.)

(a) Contract assets from property development and strategic land sales

For property development, the Group issues progress billings to purchasers when
the billing milestones are attained. The Group recognises revenue when the
performance obligation is satisfied.

For strategic land sales, the Group recognises revenue and issues billings to
purchasers upon transfer of control. The contract assets and contract liabilities
relating to the sale of properties and land sales as of each reporting period are
shown as below:

2018 2017
Group RM'000 RM'000
(Restated)

Contract assets 116,894 263,066


Contract liabilities (330,638) (364,899)
(213,744) (101,833)

At 1 January (101,833) 133,097


Revenue recognised during the financial year 569,695 1,060,453
Deferred during the financial year (681,606) (1,295,383)
At 31 December (213,744) (101,833)

The unsatisfied performance obligations at the end of the reporting period are
estimated to be recognised in the following periods:
2018 2017
RM'000 RM'000
(Restated)

Within 1 year 2,601,548 1,899,559


Between 1 and 4 years 1,618,956 2,932,166
More than 4 years 167,477 179,132
4,387,981 5,010,857

206
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

53. Other non-current assets (cont'd.)

(iii) Contract assets (cont'd.)

(b) Contract assets from construction contracts

2018 2017 2016


Group RM'000 RM'000 RM'000
(Restated) (Restated)

Contract assets 1,262,262 1,165,211 955,509


Contract liabilities (417) (66,900) (33,326)
1,261,845 1,098,311 922,183

Construction work in progress


("WIP"), at cost 4,305,862 7,306,960 7,039,354
Add : Attributable profit 14,786 144,646 175,347
4,320,648 7,451,606 7,214,701
Less :
- Progress billings (2,389,393) (5,612,665) (5,551,784)
- Recognition of expected losses (669,410) (740,630) (740,734)
1,261,845 1,098,311 922,183

2018 2017
Group RM'000 RM'000

Contract revenue recognised as revenue in


the year 130,376 306,835
Contract cost recognised as expense in the year 186,011 294,492
Retention sum receivable on construction
contracts 133,392 136,309

Included in current year additions in construction WIP of the Group are:

Group
2018 2017
RM'000 RM'000

- staff costs 11,358 22,106


- interest income (873) (1,590)
- interest expense 45,111 66,424
- depreciation charge 1,412 2,848
- amortisation charge 6 12

207
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

53. Other non-current assets (cont'd.)

(iii) Contract assets (cont'd.)

(c) Contract assets from rendering services

Contract assets are initially recognised for revenue earned from services
transferred which receipt of the consideration is conditional on the completion and
final acceptance by customers. Upon final acceptance by the customers, the
amounts recognised as contract assets becomes unconditional and are
reclassified to trade receivables.

Contract liabilities include billings made in advance which represent amounts


where customers have been invoiced ahead of the satisfaction of the performance
obligation by the Group.

2018 2017
Group RM'000 RM'000
(Restated)

Contract assets 199,846 261,563


Contract liabilities (14,367) (27,762)
185,479 233,801

Revenue recognised from amounts included in


contract liabilities at the beginning of the year 27,762 81,869

The unsatisfied performance obligations at the end of the reporting period are
estimated to be recognised in the following periods:

Within 1 year 1,728,000 1,848,000


Between 1 and 20 years 7,700,000 8,038,000
9,428,000 9,886,000

208
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

54. Derivative financial instruments

Group
Nominal
amount Assets Liabilities
2018 RM'000 RM'000 RM'000

Forward exchange
rate contracts (i) 14,100 - (167)
Fuel hedging contracts
(barrels) (ii) 8,800 - (388,384)
Foreign currency
hedging contracts (iii) 56,070 (311) -
Interest rate derivatives (iv) 530,694 8,969 -
Currency swap-i (v) 599,100 15,956 -
Profit rate swap-i (v) - (911)
Embedded derivatives 2,898,821 - (46,431)
24,614 (435,893)

Analysed as:
Current 17,559 (288,100)
Non-current 7,055 (147,793)
24,614 (435,893)

2017

Forward exchange
rate contracts (i) 10,700 - (346)
Fuel hedging contracts
(barrels) (ii) 6,750 234,378 -
Foreign currency
hedging contracts (iii) 123,926 - (2,185)
Interest rate derivatives (iv) 781,983 2,510 (1,078)
Currency swap-i (v) 174,000 - (1,614)
Profit rate swap-i (v) 474,500 - (3,038)
Coupon Exchange
Agreement (vi) 56,927,245 - (87,359)
Embedded derivatives 4,621,804 - (241,566)
236,888 (337,186)

Analysed as:
Current 206,857 (24,370)
Non-current 30,031 (312,816)
236,888 (337,186)

209
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

54. Derivative financial instruments (cont'd.)

(i) Forward exchange rate contracts

Cement Industries of Malaysia Berhad's ("CIMA") outstanding forward exchange rate


contracts with notional amount totalling RM14.1 million (2017: RM10.7million), which
are used to manage portion of CIMA's transaction exposure denominated in USD.

(ii) Fuel hedging contracts (barrels)

Malaysian Aviation Group Berhad ("MAGB") hold swaps designated as hedge of highly
probable forecast fuel purchases to reduce the volatility of cash flows. The contracts are
intended to hedge the volatility of the purchase price of fuel for a period up to 36
months forward.

The amounts retained in other comprehensive income at 31 December 2018 are


expected to mature and affect the profit or loss between 2019 and 2020.

There were no highly probable transactions for which hedge accounting had previously
been used, which is no longer expected to occur.

The cash flow hedges of the highly probable forecast fuel purchases were assessed to
be highly effective and as at 31 December 2018, a net unrealised loss of
RM388,148,000 (2017: net unrealised gain of RM105,832,000) was included in other
comprehensive income in respect of these contracts.

The amount removed from other comprehensive income during the financial year and
included in profit or loss is gain of RM386,121,000 (2017: gain of RM57,821,000).

(iii) Foreign currency hedging contracts

MAGB has options and forward currency contracts outstanding as at 31 December


2018 designated as hedges of firm commitments and highly probable future payments
denominated in foreign currencies.

The amount retained in other comprehensive income at 31 December 2018 are


expected to mature and affect profit or loss in 2019.

The terms of the forward currency contracts have been negotiated to match the terms
of the commitments. There were no highly probable transactions for which hedge
accounting had previously been used, which is no longer expected to occur.

210
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

54. Derivative financial instruments (cont'd.)

(iii) Foreign currency hedging contracts (cont'd.)

The cash flow hedges of the highly probable future payments denominated in foreign
currencies were assessed to be highly effective and as at 31 December 2018, a net
unrealised loss of RM4,868,000 (2017: net unrealised gain of RM22,262,000) was
included in other comprehensive income in respect of these contracts.

The amount removed from other comprehensive income during the financial year and
included in profit or loss is loss of RM7,030,000 (2017: loss of RM18,897,000).

(iv) Interest rate derivatives

As at 31 December 2018, MAGB has interest rate caps and swaps at contracted
interest rates varying between 2.1% to 3% (2017: 2.1% to 3.0%) per annum. The
contracts are intended to hedge the volatility of interest rates for up to maximum 80% of
the floating interest rate risk exposure of any financial year.

The amounts retained in other comprehensive income at 31 December 2018 are


expected to mature and affect the profit or loss between 2019 to 2025.

There were no highly probable transactions for which hedge accounting had previously
been used, which is no longer expected to occur.

The cash flow hedges of the highly probable forecast fuel purchases were assessed to
be highly effective and as at 31 December 2018, a net unrealised loss of RM4,010,000
(2017: net unrealised gain of RM2,291,000) was included in other comprehensive
income in respect of these contracts.

The amount removed from other comprehensive income during the financial year and
included in profit or loss is loss of RM476,000 (2017: loss of RM7,253,000).

(v) Currency swap-i and profit rate swap-i

UEM Sunrise (Australia) Sdn. Bhd.'s outstanding profit rate swap-i with notional amount
of RM438.4 million (2017: RM474.5 million) to hedge the profit rate risk arising from the
profit margin repayment on AUD150 million Commodity Murabahah Financing-i Facility.

UEM Sunrise (Australia) Sdn. Bhd.'s outstanding cross currency swap-i contract with
notional amount of RM160.7 million (2017: RM174.0 million) to convert the USD45
million Commodity Murabahah Financing-i Facility into AUD, which shall not exceed
AUD55 million.

211
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

54. Derivative financial instruments (cont'd.)

(vi) Coupon Exchange Agreement

On 8 March 2013, LMS entered into a Coupon Exchange Agreement with Export-Import
Bank of Malaysia Berhad ("EXIM") whereby LMS' obligation in respect of payment of
interest and principal for tranche B of its syndicated term loan was swapped from IDR to
USD. The agreement was terminated following the refinancing of the syndicated term
loan.

55. Deferred taxation

Group
Note 2018 2017
RM'000 RM'000
(Restated)

At 1 January (as reported) (134,242) (31,121)


Effect of adoption of MFRS 8,116 (31,646)
As 1 January (as restated) (126,126) (62,767)
Disposal of subsidiary (net) 49(iii) 1,905 (30,372)
Recognised in profit or loss 41 (178,891) (110,551)
Recognised in other
comprehensive income (907) -
Exchange differences (2,188) 77,800
Reclassified to disposal group classified
as held for sale 42 - (236)
At 31 December (306,207) (126,126)

Presented after appropriate offsetting as follows:

Deferred tax assets 340,605 557,568


Deferred tax liabilities (646,812) (683,694)
(306,207) (126,126)

212
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

55. Deferred taxation (cont'd.)

The components and movements of deferred tax liabilities and assets of the Group during the financial year are as follows:

Deferred tax liabilities of the Group:

Fair value
Accelerated adjustment Other
capital of land and Interest temporary
allowances building capitalised differences Total
Note RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2018 (as reported) (314,322) (235,621) (74,322) (52,306) (676,571)


Effect of adoption of MFRS (7,123) - - - (7,123)
At 1 January (as restated) (321,445) (235,621) (74,322) (52,306) (683,694)
Recognised in profit or loss (14,461) 3,182 (63) 38,735 27,393
Disposal of subsidiary 49(iii) 12,007 - - - 12,007
Exchange differences (2,518) - - - (2,518)
At 31 December 2018 (326,417) (232,439) (74,385) (13,571) (646,812)

At 1 January 2017 (as reported) (286,849) (235,621) (74,322) (44,884) (641,676)


Effect of adoption of MFRS (16,063) - - - (16,063)
At 1 January 2017 (as restated) (302,912) (235,621) (74,322) (44,884) (657,739)
Recognised in profit or loss (28,375) - - (78,322) (106,697)
Exchange differences 9,842 - - 70,900 80,742
At 31 December 2017 (as restated) (321,445) (235,621) (74,322) (52,306) (683,694)
-

213
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

55. Deferred taxation (cont'd.)

Deferred tax assets of the Group:

Unutilised Khazanah
tax Bonds
losses and and
Provision unabsorbed Exchangeable Other
for capital Trust temporary
liabilities allowance Certificates differences Total
RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2018 (as reported) 220,829 144,524 170,972 6,004 542,329


Effect of adoption of MFRS - 15,239 - - 15,239
At 1 January 2018 (as restated) 220,829 159,763 170,972 6,004 557,568
Recognised in profit or loss 3,471 (42,544) (170,972) 3,761 (206,284)
Disposal of subsidiary 49(iii) (10,102) - - - (10,102)
Recognised in other comprehensive income 61 - - (968) (907)
Exchange differences (1) 331 - - 330
At 31 December 2018 214,258 117,550 - 8,797 340,605

At 1 January 2017 (as reported) 242,308 144,908 225,972 (2,633) 610,555


Effect of adoption of MFRS - (15,583) - - (15,583)
At 1 January 2017 (as restated) 242,308 129,325 225,972 (2,633) 594,972
Recognised in profit or loss 10,390 46,893 (55,000) (6,137) (3,854)
Disposal of subsidiary (28,927) (16,455) - 15,010 (30,372)
Reclassified to disposal group classified as held for sale - - - (236) (236)
Exchange differences (2,942) - - - (2,942)
At 31 December 2017 (as restated) 220,829 159,763 170,972 6,004 557,568

214
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

55. Deferred taxation (cont'd.)

Deferred tax assets have not been recognised in respect of the following items:

Group
2018 2017
RM'000
RM'000 RM'000

Unutilised tax losses 9,483,040 5,445,269


Unabsorbed capital allowances and investment
tax allowance 8,151,516 6,779,677
Other temporary differences 1,245,811 3,322,879
18,880,367 15,547,825

Based on Budget 2019, business entities are allowed to carry forward unabsorbed losses
and unutilised capital allowances in a year of assessment for a maximum period of seven
years of assessment. Deferred tax assets have not been recognised due to the history of
losses in the Group's subsidiaries.

56. Property development-in-progress

Group
Note 2018 2017 2016
RM'000
RM'000 RM'000 RM'000
(Restated) (Restated)
Cumulative property
development costs
At 1 January 7,541,983 6,617,516 5,766,896
Effect of adoption of
MFRS (1,762,024) (1,273,118) (985,000)
At 1 January (as restated) 5,779,959 5,344,398 4,781,896
Development costs incurred
during the year 1,475,778 2,110,310 1,784,082
Transfers from/(to)
- Land held for property
development 44 27,150 489,953 (111,560)
- Property, plant and
equipment 43 25,787 - 1,342
- Investment properties 45 (96,678) - -
- Inventories (903,251) (276,414) (205,256)
Foreign currency
translation (1,790) (14,972) 13,996
Reversal of costs arising
from completed projects (502,771) (1,873,316) (920,102)
At 31 December 5,804,184 5,779,959 5,344,398

215
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

56. Property development-in-progress (cont'd.)

Group
2018 2017 2016
RM'000
RM'000 RM'000 RM'000
(Restated) (Restated)
Cumulative costs recognised in
statement of comprehensive
income
At 1 January (as reported) (4,492,951) (4,000,161) (3,419,815)
Effect of adoption of MFRS 1,231,295 510,464 883,348
At 1 January (as restated) (3,261,656) (3,489,697) (2,536,467)
Reversal of costs arising from
completed projects 502,771 1,873,316 920,102
Recognised during the year (1,225,529) (1,682,668) (1,851,539)
Foreign currency translation 11,453 37,393 (21,793)
At 31 December (3,972,961) (3,261,656) (3,489,697)

At 31 December 1,831,223 2,518,303 1,854,701

Included in costs incurred during the year are:

Group
2018 2017
RM'000
RM'000 RM'000

Staff costs 10,189 12,421


Interest expense 77,615 91,897

As at the reporting date, freehold land and related development expenditure of RM271.5
million (2017: RM263.2 million) is pledged as security for the borrowing facilities granted to a
subsidiary of the Group.

57. Inventories and work-in-progress

Group
2018 2017
RM'000
RM'000 RM'000

At cost:
Raw materials 62,446 54,091
Work-in-progress 26,795 72,624
Finished goods 39,917 49,556
Consumables 139,334 149,450
Catering and general stores 23,902 22,685
Property held for sale 597,392 715,125
Others 644,158 14,228
1,533,944 1,077,759
216
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

57. Inventories and work-in-progress (cont'd.)

Group
2018 2017
RM'000
RM'000 RM'000

At net realisable value:


Work-in-progress 22,361 -
Finished goods 13,958 -
Consumables 529 480
Consumable aircraft spares 342,331 206,398
Property held for sale 214,215 21,855
Golf memberships * 28,606 29,242
Others 776 9,360
622,776 267,335

2,156,720 1,345,094

* In accordance with the Development Agreement dated 16 June 2005 between Horizon
Hills Development Sdn. Bhd. ("Horizon Hills") and Nusajaya Greens Sdn. Bhd.
("NGSB"), Horizon Hills shall settle part of the purchase consideration of the golf course
land in the form of rights to club membership (golf and non-golf) which is to be issued
by Horizon Hills Resort Bhd, a wholly-owned subsidiary of Horizon Hills.

The cost of inventories and work-in-progress recognised as an expense during the year is
RM839.0 million (2017: RM799.3 million).

58. Trade receivables

Group
Note 2018 2017 2016
RM'000
RM'000 RM'000
RM'000 RM'000
(Restated) (Restated)

Trade receivables (i) 2,915,282 1,218,240 1,465,660


Less: Allowance for
doubtful debts (588,011) (413,674) (413,989)
2,327,271 804,566 1,051,671

Contract assets 53(iii) 388,098 546,739 884,395


2,715,369 1,351,305 1,936,066

217
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

58. Trade receivables (cont'd.)

(i) Trade receivables

- The Group has no significant concentration of credit risk that may arise from
exposures to a single debtor or to groups of debtors.

- Trade receivables are non-interest bearing and are generally on 30 to 90 days


(2017: 30 to 90 days) terms. They are recognised at their original invoice amounts
which represent their fair values on initial recognition.

The ageing analysis of the trade receivables is as follows:

2018 2017
RM'000 RM'000

Group
Neither past due nor impaired 1,396,219 368,510
1 to 30 days past due not impaired 196,336 160,834
31 to 60 days past due not impaired 92,770 73,128
More than 60 days past due not impaired 641,946 202,094
931,052 436,056
Impaired 588,011 413,674
2,915,282 1,218,240

Receivables that are neither past due nor impaired

Receivables that are neither past due nor impaired are creditworthy debtors with good
payment records with the Group.

Receivables that are past due but not impaired

The Group has trade receivables that are related to customers with good payment
records with the Group or those with ongoing transactions, progressive payments
and/or amounts owing by the Group.

Receivables that are impaired

The Group's trade receivables that are impaired are all individually impaired. There are
no impairment arising from collective impairment.

218
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

58. Trade receivables (cont'd.)

(i) Trade receivables (cont'd.)

The movement of the allowance account used to record impairment is as follows:

Group
2018 2017
RM'000 RM'000

At 1 January 413,674 413,989


Written off/(write back) 174,337 (315)
At 31 December 588,011 413,674

59. Other receivables

Group
Note 2018 2017 2016
RM'000
RM'000 RM'000 RM'000
(Restated) (Restated)

Dividend receivable 986 750 207


Interest income receivable 621 3,172 17,959
Amount due from a former
director and shareholder
of a subsidiary (i) 2,315,979 2,315,979 2,315,979
Amount due from MoF Inc. 851,602 987,076 -
Amount due from associates (ii) 33,661 94,283 948,627
Amount due from joint
ventures 117,833 277,803 539,031
Amount due from related
companies 360,006 364,531 188,308
Insurance receivables (iii) 1,164,081 207,200 208,699
Receivable under finance
lease 53(i) 2,039 2,544 40,374
Other deposits and
prepayments 266,397 62,347 458,131
Accrued income 1,548,197 2,122,680 1,360,290
Others (iv) 1,248,601 1,548,288 1,716,766
7,910,003 7,986,653 7,794,371

Less: Allowance for impairment losses (2,613,303) (2,752,707) (2,613,886)


5,296,700 5,233,946 5,180,485

219
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

59. Other receivables (cont'd.)

The Group has no significant concentration of credit risk that may arise from exposures to a
single debtor or to groups of debtors.

(i) On 11 December 2000, UEM exercised the Put Option granted by Tan Sri Dato' Seri
Halim bin Saad ("TSHS"), a past director of the Company in 1998 in respect of the
Company's investment in UEM Land. The cost of shares plus holding cost on the
720,959,000 UEM Land shares ("Put Option Shares"), representing 31.0% of the paid-
up capital of UEM Land as at 11 December 2000 amounting to RM3,165.8 million
became the principal amount of debt due from TSHS and accrued interest at a rate of
9.4% per annum compounded semi-annually until full repayment.

The amount of RM3,165.8 million repayable in 3 equal instalments of RM100.0 million


each on 14 February 2001, 14 July 2001 and 14 December 2001 respectively and the
balance including interest was to be paid on 14 May 2002. On 14 February 2001, the
Company received the first instalment from TSHS and granted an Extension of Time for
the second instalment to 12 September 2001.

On 12 September 2001, the Company announced that it had not received the second
instalment payment from TSHS and considered TSHS to have defaulted. The Put
Option agreement was terminated subsequently and a notice of termination was sent to
TSHS on 21 November 2001. Resulting from the termination of the Put Option
agreement, the Company retained the UEM Land shares and forfeited the RM100.0
million first instalment for its own account by way of set-off and in part satisfaction of its
claim for compensation. As TSHS had failed to repay the outstanding amount as
scheduled, full provision of RM2,316 million had been made on the net amount due
from TSHS.

(ii) The amount due from associates is unsecured, interest-free and is repayable on
demand.

220
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

59. Other receivables (cont'd.)

(iii) Insurance receivables

Group
2018 2017
RM'000
RM'000 RM'000

Due premiums, including agents/brokers 15,631 146,723


Due from reinsurers and cedants 1,148,450 60,477
1,164,081 207,200
Less: Accumulated impairment losses (727) (8,885)
Net insurance receivables 1,163,354 198,315

(iv) Included in others are:

(a) Deposits amounting to RM50 million (2017: Nil) representing a deposit paid by a
subsidiary of UEM Sunrise for the subscription of shares in Mega Legacy (M) Sdn.
Bhd.

(b) Deposits amounting to RM10 million (2017: RM42 million) paid by subsidiaries of
UEM Sunrise for the acquisition and joint development of lands in Kuala Lumpur
and Selangor.

(c) An amount of RM22.9 million (2017: RM22.9 million) representing tax penalty paid
to IRB.

(d) PLUS BKSP Toll Limited's net carrying value of concession intangible assets of
RM131.1 million or INR2,212.1 million (2017: RM140.2 million or INR2,212.1
million) to be recovered through claim submitted to Maharashtra State Road
Development Corporation ("MSRDC") for premature termination of the Concession
Agreement with MSRDC. The amount had been fully impaired previously.

(e) An amount of RM724.1 million relating to consideration receivable from disposal of


Acibadem Saglik Ve Hayat Sigorta A.S ("Acibadem").

221
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

60. Cash and bank balances

Group
2018 2017
RM'000
RM'000 RM'000

Cash in hand and at bank 4,649,149 2,636,017


Deposits with licensed banks 1,084,002 4,197,096
Deposit with other financial institutions 3,436 12,004
5,736,587 6,845,117

Analysed as:
Non-current (Note 53) 5,955 -
Current 5,730,632 6,845,117
5,736,587 6,845,117

The range of interest rates and maturities of the term deposits as at 31 December 2018 is
disclosed in Note 67(c).

61. Borrowings

Note Short term Long term Total


Group RM'000 RM'000
RM'000 RM'000

2018

Secured bonds and notes (i) 2,481,349 10,984,439 13,465,788


Unsecured bonds and
notes (ii) 3,013,921 24,670,869 27,684,790
Exchangeable Trust
Certificates 26(b) - 2,898,822 2,898,822
Other borrowings (iii) 17,745,445 15,596,602 33,342,047
23,240,715 54,150,732 77,391,447
2017

Secured bonds and notes (i) 1,933,287 12,944,258 14,877,545


Unsecured bonds and
notes (ii) 877,190 21,372,835 22,250,025
Exchangeable Trust
Certificates 26(b) 1,380,171 3,241,633 4,621,804
Other borrowings (iii) 14,386,959 15,166,939 29,553,898
18,577,607 52,725,665 71,303,272

222
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(i) Secured bonds and notes

Note Short term Long term Total


Group RM'000 RM'000 RM'000

2018

Khazanah Bonds 26(a) 2,446,349 10,179,439 12,625,788


Prohawk (A) 35,000 805,000 840,000
2,481,349 10,984,439 13,465,788

2017

Khazanah Bonds 26(a) 1,933,287 12,079,258 14,012,545


Prohawk (A) - 865,000 865,000
1,933,287 12,944,258 14,877,545

(A) Konsortium ProHAWK Sdn Bhd ("Prohawk")

IMTN

On 18 June 2013, Prohawk established an IMTN Programme under the Shariah


Principle of Murabahah, with a nominal amount of up to RM900.0 million.

The IMTN is secured by a first ranking charge over all of Prohawk's assets, rights,
interests and titles, including granting the right to the security agent to appoint a
substituted entity to take over the concession.

There are several series within the issue tranches, each with different tenure and
profit rate. The details of the IMTN issuance are as follows:

Issuance date Amount Tenure


RM million (Years)

28 June 2013 200.0 17.5 - 20.0


20 December 2013 120.0 15.0 - 17.5
26 June 2014 120.0 13.0 - 15.0
22 December 2014 400.0 4.5 - 12.0
840.0

223
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(ii) Unsecured bonds and notes

Note Short term Long term Total


Group RM'000 RM'000 RM'000

2018

Islamic CP/MTN
Programme
Khazanah 26(c) & (d) 1,500,000 21,315,364 22,815,364
UEM Sunrise (a) 1,482,460 2,754,978 4,237,438
UEM Edgenta (b) 31,461 501,005 532,466
UGB (c) - 99,522 99,522
3,013,921 24,670,869 27,684,790

2017

Islamic CP/MTN
Programme
Khazanah 26(c) & (d) - 19,248,934 19,248,934
UEM Sunrise (a) 877,190 1,722,810 2,600,000
UEM Edgenta (b) - 301,691 301,691
UGB (c) - 99,400 99,400
877,190 21,372,835 22,250,025

(a) UEM Sunrise Berhad ("UEM Sunrise")

(i) UEM Sunrise Term Loan and Revolving Credit Facilities

The term loan and revolving credit facilities utilised by UEM Sunrise's
subsidiaries are subject to interest rates ranging from 3.82% to 5.59% (2017:
3.60% to 5.33%) per annum.

The outstanding balance in previous year which consists of two tranches of


RM100.0 million each had been fully settled in the previous financial year.

The facilities are secured by certain freehold land held for property
development and property development costs, as disclosed in Note 44.

224
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(ii) Unsecured bonds and notes (cont'd.)

(a) UEM Sunrise (cont'd.)

(ii) UEM Sunrise ICPN and IMTN

In 2012, UEM Sunrise established an ICP Programme and an IMTN


Programme, with a combined nominal value of RM2.0 billion and a sub-limit
on the ICP Programme of RM500.0 million in nominal value. The ICP and
IMTN Programme have been assigned with a rating of MARC-1IS/ AA-IS
respectively.

The details of the IMTN issuance are as follows:

Issuance date Amount Tenures Profit


RM'million (Years) rate

13 December 2013 700 5 4.60%


30 June 2014 200 5 4.72%
30 June 2014 200 7 4.90%
10 April 2015 150 5 4.58%
10 April 2015 150 7 4.80%
11 December 2017 200 3 4.80%
11 December 2017 300 5 5.06%

In year 2016, UEM Sunrise established its second Sukuk programme: Islamic
Commercial Paper Programme ("ICP Programme") and Islamic Medium
Term Notes Programme ("IMTN Programme") with a combined nominal value
of RM2.0 billion and a sub-limit on the ICP Programme of RM500.0 million in
nominal value. The ICP and IMTN Programmes have been assigned a rating
of MARC-1IS/AA-IS respectively.

The details of the IMTN and ICP issuance are as follows:

Issuance date Amount Tenures Profit


RM'million (Years) rate

20 May 2016 500 7 5.00%


8 August 2017 100 1 4.47%
600

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61. Borrowings (cont'd.)

(ii) Unsecured bonds and notes (cont'd.)

(b) UEM Edgenta

UEM Edgenta had established an ICP Programme and an IMTN Programme


under the Shariah Principle of Murabahah via a Tawarruq Arrangement, which
have a combined aggregate limit of up to RM1,000.0 million in nominal value and a
sub-limit on the ICP Programme of RM300.0 million in nominal value.

On 26 April 2017, UEM Edgenta completed the issuance of the following:-

a) RM50.0 million in nominal value of ICPs with a tenor of 12 months; and


b) RM250.0 million in nominal value of IMTNs with a tenor of 5 years.

The proceeds from the issuance of ICP and IMTN are utilised by UEM Edgenta for
its Shariah-compliant general corporate purposes.

The weighted average interest rates for ICP and IMTN are 4.37% (2017: 4.33%)
and 4.85% (2017: 4.85%) respectively.

(c) United Growth Berhad ("UGB")

On 21 June 2012, UEM, through UGB, issued an IMTN Programme under the
Shariah Principle of Musharakah, with nominal amount of up to RM2.2 billion. On
the same day, UGB issued RM100.0 million IMTN at a discounted price of RM98.8
million.

The tenure of IMTN programme is 10 years and will be maturing on 21 June 2022.
The IMTN carries a fixed profit rate of 4.73% per annum.

The discount of RM1.2 million is amortised over the tenure of the IMTN at an
effective interest rate of 4.88% (2017: 4.88%) per annum. As at the reporting date,
the carrying value of the IMTN, taking into consideration the unamortised portion of
the discount, is as follows:

2018 2017
RM'000 RM'000

Principal 100,000 100,000


Unamortised discount (478) (600)
99,522 99,400

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61. Borrowings (cont'd.)

(iii) Other borrowings

Short term Long term Total


Group RM'000 RM'000
RM'000 RM'000
2018
Secured:
CIMA (A) - 22,000 22,000
Other term loans and
payables (B) 670,714 12,961,928 13,632,642
Loan from
Government (C) 35,180 352,529 387,709
LMS (D) 474,065 1,856,755 2,330,820
Finance lease and
hire purchase payable (E) 204,804 403,210 608,014
Others (F) 25,521 180 25,701
1,410,284 15,596,602 17,006,886
Unsecured:
Other term loans and
payables (B) 16,332,404 - 16,332,404
Others (F) 2,757 - 2,757
16,335,161 - 16,335,161
Total 17,745,445 15,596,602 33,342,047

2017
Secured:
CIMA (A) - 142,000 142,000
Other term loans and
payables (B) 961,904 6,953,074 7,914,978
Loan from
Government (C) 528,872 416,673 945,545
LMS (D) 87,841 2,423,407 2,511,248
Finance lease and
hire purchase payable (E) 3,893,465 463,588 4,357,053
Others (F) 13,443 309 13,752
5,485,525 10,399,051 15,884,576
Unsecured:
Other term loans and
payables (B) 7,734,364 4,767,888 12,502,252
Others (F) 1,167,070 - 1,167,070
8,901,434 4,767,888 13,669,322
Total 14,386,959 15,166,939 29,553,898

227
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(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(iii) Other borrowings (cont'd.)

(A) Cement Industries Of Malaysia Berhad ("CIMA")

In 2011, CIMA Group obtained a syndicated term loan facility to part finance its
plant expansion. The facility is secured by way of third party legal charge over land
of CIMA's subsidiary in Negeri Sembilan.

The term loan is subject to fixed interest rate of 5.25% (2017: 5.25%) per annum.

The term loan is fully settled on 25 January 2019.

(B) Other term loans and payables

Included in the Group's term loans and payables are secured and unsecured term
loans with interest rates ranging from 1.3% to 10.76% (2017: 1.3% to 10.76%) per
annum and facility terms of 1 to 5 years.

Secured term loans of the Group are secured by the followings:

(i) property, plant and equipment

(ii) deposit with licensed banks

(iii) investment assets

(iv) assignment of proceeds

(v) corporate guarantees

(C) Loan from Government

Iskandar Investment Berhad ("IIB"), a subsidiary of the Group, was granted a term
loan facility of RM550 million from Ministry of Finance, Malaysia ("MoF"), to finance
the Legoland Themed Park Project. The term loan is secured by way of debenture
issued by IDR Assets Sdn. Bhd. ("IDRA"), and is subject to interest charge at
3.75% per annum. The interest for the first 48 months is to be capitalised to the
principal. The term loan including the capitalised interest is repayable from 2013 to
2026.

228
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(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(iii) Other borrowings (cont'd.)

(C) Loan from Government (cont'd.)

In prior years, Themed Attractions And Resort Sdn. Bhd. ("TAR"), the holding
company of IDRA had undertake to complete the novation of the term loan by 31
December 2015 and assume the liability in relation to the said loan.

Due to certain unforeseen circumstances not within the control of IIB, the novation
was not completed. In August 2016, TAR issued a letter of undertaking ("LOU") to
IIB confirming that IIB will remain as a party to the MOF loan and TAR will continue
to indemnify IIB for any claims, actions as a party to the MoF loan. IIB shall not be
liable for any amount owing under the MOF loan and TAR will be fully responsible
for the payment and settlement of all the amounts owing under the MOF loan. With
this LOU, TAR has been released from its obligation to novate the MOF loan.
Accordingly, the MOF loan is classified based on the existing terms of the loan.

The unamortised borrowing costs eligible for capitalisation included in the term
loan is RM1,203,208 (2017: RM1,375,095).

(D) PT Lintas Marga Sedaya ("LMS")

On 26 September 2012, LMS obtained a syndicated term loan facility to finance


the construction of the Cikampek-Palimanan Toll Road ("CPTR"). The credit facility
is divided into three tranches and the maximum amount of the credit facility is
IDR8,800,000 million with the first drawdown in June 2013. The applicable interest
rates, paid quarterly, are based on time deposits for a period of three months plus
margins as follows:

- 5.50% per annum prior to the Project Commercial Operation Date;


- 5.25% per annum since the Project Commercial Operation Date for the part
of financing which is unsecured by the Standby Letter of Credit Top Up
Guarantee; and
- 3.25% per annum since the Project Commercial Operation Date for the part
of financing which is secured by Standby Letter of Credit Top Up Guarantee.

The average interest rates are 10.76% (2017: 10.76%) for the portion of loan
without Standby Letter of Credit and 8.96% (2017: 8.96%) for the portion of loan
with Standby Letter of Credit.

The loan is secured pari passu and pro rata over all receivables, assets, escrow
account, shares issued, assignment of rights agreement and letter of undertaking
from UEM, shareholders of LMS and Mezzanine creditors.

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61. Borrowings (cont'd.)

(iii) Other borrowings (cont'd.)

(D) PT Lintas Marga Sedaya ("LMS") (cont'd.)

On August 10, 2018, LMS and a syndication of banks and financial institution
signed a new 15 years syndicated term loan facility agreement of IDR8,889,100
million which is divided into two tranches as follows:

(a) Tranche A amounting to IDR8,416,500 million for the full repayment of the
previous syndicated loan balance.

(b) Tranche B amounting to IDR472,600 million for the construction of access toll
road to Kertajati International Airport.

The applicable interest expense, payable quarterly, is based on the interest rates
on time deposits for a period of three months plus margins of 3.94%. The average
interest rates is 9.70% per annum for current year.

The loan is secured pari passu and pro rata over all receivables, assets, escrow
account, shares issued, assignment of rights agreement and letters of undertaking
from UEM, shareholders of LMS (which includes PEIB) and PT Astra Tol
Nusantara.

(E) Finance lease and hire purchase creditors

Group
2018 2017
RM'000 RM'000

Future minimum lease payments:


Less than one year 227,767 4,301,670
Between one year and five years 313,040 454,634
More than five years 141,281 57,970
Total minimum future lease payments 682,088 4,814,274
Less: Future finance charges (74,074) (457,221)
Present value of finance liabilities 608,014 4,357,053

Analysis of present value of finance lease liabilities:


Not later than one year 204,804 3,893,465
Later than one year and not later than
five years 268,624 414,384
Later than five years 134,586 49,204
Analysed as: 608,014 4,357,053
Less: Amount due within 12 months (204,804) (3,893,465)
Amount due after 12 months 403,210 463,588

230
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(Incorporated in Malaysia)

61. Borrowings (cont'd.)

(iii) Other borrowings (cont'd.)

(E) Finance lease and hire purchase creditors (cont'd.)

Finance leases and hire purchases are subject to a floating or fixed interest rate
ranging from 1.45% to 5.77% (2017: 1.76% to 9.97%) per annum.

Included in finance lease liabilities are leases of aircraft. Under the terms of the
finance lease, the Group has the option to buy the aircraft from the lessor at a
predetermined price.

In the event the lessee exercises the option to buy the aircraft at the purchase
option date, the purchase price comprises total sum of the purchase option price
and rent of the aircraft due and payable on the purchase option date.

The finance lease of the Group has tenure ranging between 5 to 12 years (2017: 5
to 12 years).

(F) Others

Included in other borrowings are:

(i) Revolving credit facilities

The revolving credit facilities bear interest at rates ranging from 2.08% to
5.59% (2017: 2.08% to 5.45%) per annum. Certain revolving credit facilities
are guaranteed by the Group and the Government of Malaysia.

(ii) Bank overdrafts

The bank overdrafts bear interest at rates ranging from 7.74% to 8.60%
(2017: 7.49% to 8.35%) per annum. Certain bank overdrafts are secured by a
general lien over a subsidiary's assets and short term fixed deposits.

The movement in the borrowings are as follows:

Group
2018 2017
RM'000 RM'000

At 1 January 71,303,272 73,049,929


Drawdown 20,625,896 6,487,747
Repayment (16,383,842) (6,740,995)
Unrealised gain/(loss) on foreign exchange 1,083,022 (2,286,109)
Amortisation 763,099 792,700
77,391,447 71,303,272
231
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(Incorporated in Malaysia)

62. Trade payables

Group
Note 2018 2017 2016
RM'000 RM'000 RM'000
(Restated) (Restated)

Trade payables 2,671,108 2,487,313 2,189,062


Contract liabilities 53(iii) 54,306 161,483 203,660
2,725,414 2,648,796 2,392,722

The payables are interest free and the normal trade credit terms granted to the Group range
from 30 days to 90days (2017: 30 days to 90 days).

63. Other current liabilities

2018 2017 2016


Group Note RM'000 RM'000 RM'000
(Restated) (Restated)

Dividend payable - 400,000 150,000


Sales in advance of carriage (i) 1,448,746 1,370,234 1,412,929
Amount due to MOF Inc. (ii) - - 2,484,474
Amount due to associates (ii) 19,771 21,148 23,898
Amount due to related
companies (iii) 144,536 84,993 192,691
Interest payable 379,653 313,885 272,960
Insurance payables 51,616 181,507 162,621
Government grant 66(i) 55,326 20,648 60,671
Retirement benefit obligations
and provision for
employee entitlements 64 1,854 975 10,831
Deferred liabilities and
income 66(iii) 73,138 117,211 437,263
Provision for aircraft
maintenance and overhaul
costs (iv) 2,630,264 2,274,108 2,215,124
Accruals 2,158,671 3,154,152 3,070,092
Other payables 1,178,733 3,054,483 3,970,620
8,142,308 10,993,344 14,464,174

(i) Sales in advance of carriage represents the value of unutilised passenger tickets and
cargo airway bills in respect of transportation services not yet rendered as at the
reporting date.

(ii) The amount due to associates is unsecured, interest free and is repayable on demand.

(iii) The amount due to related companies is unsecured, interest free and is repayable on
demand.
232
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(Incorporated in Malaysia)

63. Other current liabilities (cont'd.)

(iv) The Group leases a majority of its aircraft and engines whereby under the terms of the
leases, these aircraft and engines are to be returned substantially in the original state
when they were leased. Provisions are made based on the estimated hours flown and
estimated costs of maintenance required. These estimates are based on past
experiences and are regularly reviewed to ensure they approximate actual costs.

2018 2017
Group RM'000 RM'000

At 1 January 2,274,108 2,215,124


Additional provision 409,330 360,077
Reversal of provision (53,174) (268,189)
Disposal - (32,904)
At 31 December 2,630,264 2,274,108

All other balances of financial liabilities above are unsecured, interest free and are normally
settled on 30 to180 days (2017: 30 to 180 days) terms.

64. Retirement benefit obligations and provision for service entitlements

Group
Retirement Provision for
benefit service
Note obligation entitlements Total
RM'000 RM'000 RM'000

At 1 January 2018 28,625 27,570 56,195


Exchange differences 859 (56) 803
Arising during the year 2,848 532 3,380
Payments made during the year (1,190) - (1,190)
At 31 December 2018 31,142 28,046 59,188
Less: Current portion 63 (1,854) - (1,854)
Long term portion 66 29,288 28,046 57,334

At 1 January 2017 27,610 27,343 54,953


Exchange differences 231 - 231
Arising during the year 2,628 227 2,855
Payments made during the year (1,844) - (1,844)
At 31 December 2017 28,625 27,570 56,195
Less: Current portion 63 (975) - (975)
Long term portion 66 27,650 27,570 55,220

233
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(Incorporated in Malaysia)

64. Retirement benefit obligations and provision for service entitlements (cont'd.)

(a) Retirement benefit obligations

Provision for retirement benefits mainly arising from:

CIMA

The liabilities and costs relating to the benefit are provided by CIMA pursuant to the
Collective Agreement entered between CIMA and Cement Industry Employees’ Union.
Under the scheme, eligible employees are entitled to retirement benefits upon reaching
the retirement age of 60.

The retirement benefit is only payable to unionised employees who:

(a) retire on attainment of age 60; or


(b) are medically boarded out; or
(c) die in service; or
(d) resign voluntarily after 10 years of company service; or
(e) promoted to executive or supervisor level

CIMA Group maintains a book reserve in respect of the liabilities based on the actuarial
valuation updated by an independent actuary on 31 December 2018. The retirement
plan is currently not funded and there are no physical assets set aside for the cost of
the benefits.

Edgenta UEMS Ltd (formerly known as UEM Solution Ltd)

Edgenta UEMS Ltd (formerly known as UEM Solution Ltd), a subsidiary of UEMS Pte
Ltd, has a retirement plan covering all its regular employees who opted for defined
benefits plan. Benefits under the plan are based on the length of service and estimated
base pay at the time of retirement. The pension assets and liabilities are valued on
annual basis by independent actuarist.

The plan assets, comprising cash and cash equivalents, are deposited with the Bank of
Taiwan and are managed by the government of Taiwan. The plan assets do not have
quoted market prices in active market.

UEM Edgenta Berhad ("UEM Edgenta")

UEM Edgenta Group operates an unfunded, defined benefit Retirement Benefit


Scheme for its eligible employees. Under the Scheme, eligible employees are entitled to
retirement benefits on attainment of the retirement age of 60, on medical incapacity or
on death. The present value of defined benefit obligation was based on the actuarial
valuation report by independent actuarist dated 20 January 2019.

234
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(Incorporated in Malaysia)

64. Retirement benefit obligations and provision for service entitlements (cont'd.)

(a) Retirement benefit obligations (cont'd.)

PT Lintas Marga Sedaya ("LMS")

LMS operates an unfunded, defined benefit Retirement Benefit Scheme for its eligible
employees. Under the Scheme, eligible employees are entitled to retirement benefits on
attainment of the retirement age of 55, on medical incapacity or on death. The present
value of the defined benefit obligation was based on the actuarial valuation report by an
independent actuarist dated 31 January 2019.

Trichy Padalur Tollways Private Limited ("TPTPL")

TPTPL operates a defined benefit plan for its employees for gratuity. Under the gratuity
plan, every employee who has completed at least five years of service gets agratuity on
departure. The present value of defined benefit plan was based on the actuarial
valuation report by an actuarist dated 24 January 2019.

(b) Provision for employee entitlements

Provision for employee entitlements comprises provision for retirement leave


entitlements of eligible employees of a foreign subsidiary. The provisions are in respect
of both vested and unvested entitlements, and are made by reference to independent
actuarial valuations.

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(Incorporated in Malaysia)

65. Other reserves

Foreign
currency Fair value Cash flow Share Retirement
translation adjustment hedge option Capital Statutory benefit
reserve reserve reserve reserve reserve reserve reserve Others Total
Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Note (a) Note (b) Note (c) Note (d) Note (e) Note (g)
2018

At 1 January (as reported) 3,604,967 6,179,988 (522,600) (9,108) (174,557) 247,543 (2,280,395) (204,013) 6,841,825
Effect of adoption of MFRS 16,646 - (14,638) - - - - - 2,008
At 1 January (as restated) 3,621,613 6,179,988 (537,238) (9,108) (174,557) 247,543 (2,280,395) (204,013) 6,843,833
Foreign currency
translation differences
of foreign operations (244,120) - - - - - - - (244,120)
Net loss on fair value of
other comprehensive income - (2,394,624) - - - - - - (2,394,624)
Net loss on fair value of
cash flow hedges - - (595,475) - - - - - (595,475)
Share of other comprehensive
(loss)/income of associates
and joint ventures (562,096) (326,992) 123,101 - - - 58,074 - (707,913)
Actuarial loss on
retirement benefit plan - - - - - - (289) - (289)
Total other comprehensive
loss (806,216) (2,721,616) (472,374) - - - 57,785 - (3,942,421)

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(Incorporated in Malaysia)

65. Other reserves (cont'd.)

Foreign
currency Fair value Cash flow Share Retirement
translation adjustment hedge option Capital Statutory benefit
reserve reserve reserve reserve reserve reserve reserve Others Total
Group (cont'd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Note (a) Note (b) Note (c) Note (d) Note (e) Note (g)

2018 (cont'd.)
Transaction with owners
Disposal of subsidiaries - - - - - - - - -
Dilution of interest in
associates - - - - 86,419 - - - 86,419
Share of reserves of
associates and joint ventures - - - (1,229) (642,239) - - (2,530) (645,999)
Transfer to:
- disposal group held for sale - - - - - - - 56,597 56,597
- statutory reserve - - - - - (208,958) - - (208,958)
- general reserve - - - - - - - (502,032) (502,032)
Expiry of share options - - - - - - - - -
Share based payments - - - (28,773) - - - - (28,773)
Total transactions with
owners - - - (30,002) (555,820) (208,958) - (447,965) (1,242,746)
At 31 December 2,815,397 3,458,372 (1,009,612) (39,110) (730,377) 38,585 (2,222,610) (651,978) 1,658,666

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(Incorporated in Malaysia)

65. Other reserves (cont'd.)

Foreign
currency Fair value Cash flow Share Retirement
translation adjustment hedge option Capital Statutory benefit
reserve reserve reserve reserve reserve reserve reserve Others Total
Group (cont'd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Note (a) Note (b) Note (c) Note (d) Note (e) Note (g)

2017

At 1 January (as reported) 7,087,958 1,620,985 (196,810) (10,531) (233,753) 2,112,224 (1,993,200) (757,518) 7,629,355
Effect of adoption of MFRS - - - - - - - 2,009 2,009
At 1 January (as restated) 7,087,958 1,620,985 (196,810) (10,531) (233,753) 2,112,224 (1,993,200) (755,509) 7,631,364
Foreign currency
translation differences
of foreign operations (1,741,026) - - - - - - - (1,741,026)
Net gain on fair value of
other comprehensive
income - 4,515,617 - - - - - - 4,515,617
Net (loss)/gain on fair value of
cash flow hedges - - (403,318) - - - - 423,965 20,647
Share of other comprehensive
(loss)/income of associates
and joint ventures (1,698,342) - 77,528 - - - (290,262) - (1,911,076)
Actuarial gain on
retirement benefit plan - - - - - - 3,067 - 3,067
Total other comprehensive
income (3,439,368) 4,515,617 (325,790) - - - (287,195) 423,965 887,229

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(Incorporated in Malaysia)

65. Other reserves (cont'd.)

Foreign
currency Fair value Cash flow Share Retirement
translation adjustment hedge option Capital Statutory benefit
reserve reserve reserve reserve reserve reserve reserve Others Total
Group (cont'd.) RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Note (a) Note (b) Note (c) Note (d) Note (e) Note (g)

2017 (cont'd.)
Transaction with owners
Disposal of subsidiaries - - - - (153) - - - (153)
Share of reserves of
associates and joint ventures - - - 1,999 59,349 - - - 61,348
Transfer to:
- disposal group held for sale - - - - - - - 45,213 45,213
- statutory reserve - - - - - (1,864,681) - - (1,864,681)
- general reserve - - - - - - - 84,089 84,089
Expiry of share options - - - (3,064) - - - - (3,064)
Share based payments - - - 2,488 - - - - 2,488
Total transactions with
owners - - - 1,423 59,196 (1,864,681) - 129,302 (1,674,760)
At 31 December (as restated) 3,648,590 6,136,602 (522,600) (9,108) (174,557) 247,543 (2,280,395) (202,242) 6,843,833

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65. Other reserves (cont'd.)

(a) The foreign currency translation reserve represents exchange differences arising from
the translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group's presentation currency.

(b) Fair value adjustment reserve represents the cumulative fair value changes, net of tax,
of fair value through other comprehensive income financial assets until they are
disposed of or impaired.

(c) The cash flow hedge reserve represents the cumulative effective portion of gains or
losses arising on change in fair value of hedging instruments entered into for cash flow
hedges. The cumulative gains or losses in fair value of cash flow hedges will be
reclassified to profit or loss only when the hedged transaction affects the profit or loss.

(d) Share option reserve represents the equity-settled share options granted to employees
of the Group. The reserve is made up of the cumulative value of services received from
employees recorded over the vesting period commencing from the grant date of equity-
settled share options.

(e) The statutory reserve of the Group is maintained in compliance with the requirements of
Bank Negara Malaysia. This reserve is not distributable as cash dividends.

(f) The capital redemption reserve relates to the capitalisation of retained profits arising
from the redemption of preference shares. With the introduction of the Companies Act,
2016 effective 31 January 2017, the balance within the capital redemption reserve
account has been transferred to the ordinary shares account.

(g) The retirement benefit reserve relates to the actuarial gain or losses for the defined
benefit plans of the Group.

(h) The capital contribution from the shareholders relates to contribution from the holding
company, where no repayment is expected.

66. Other non-current liabilities

Group
2018 2017 2016
Note RM'000 RM'000 RM'000
(Restated) (Restated)
Retirement benefit
obligation and provision
for employee entitlements 64 57,334 55,220 49,832
Government grants (i) 6,401 78,895 73,330
Insurance contract liabilities (ii) 3,724,329 2,784,003 2,730,293
Deferred liabilities and
income (iii) 2,008,169 1,922,273 1,672,922
Contract liabilities 53(iii) 291,116 298,078 310,193
Others 2,262,352 2,475,083 2,296,486
8,349,701 7,613,552 7,133,056
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(Incorporated in Malaysia)

66. Other non-current liabilities (cont'd.)

(i) Government grants


Group
Note 2018 2017
RM'000 RM'000

At 1 January 99,543 134,001


Received during the year (8,187) 13,851
Recognised in profit or loss 37 (1,890) (48,309)
At 31 December 89,466 99,543

Analysed as:
Current 63 55,326 20,648
Non-current 6,401 78,895
61,727 99,543

Government grants granted to subsidiaries comprise the following:

(i) Technology Development Cluster grant was given for the development of the
University Supported Technology Incubation Centre Project under the Seventh
Malaysian Plan.

(ii) The Research and Information Database Homepage ("RAIDAH") grant is for the
development of a technology database projects. The grant has been fully utilised
during the year.

(iii) Government grant received by MAVTRAC Sdn. Bhd. ("MAVTRAC"), a wholly-


owned subsidiary of the Group, as the start up costs of operations to develop a
system that will enable MAVTRAC to be the approved provider of building
materials for Government approved projects.

MAVTRAC had ceased operations since 2014 and there was no utilisation of the
government grant since then. During the year, the unutilised grant was released to
profit or loss.

(iv) The Group was given a Government grant as funding for the development of
projects in the Iskandar Development Region ("IDR").

(v) A subsidiary of the Company, Blue Archipelago Berhad, was given a grant to fund
the implementation of the Integrated Aquaculture Shrimp Park Project.

(vi) A subsidiary of the Group, Xeraya Capital Sdn. Bhd. was given a grant for the
creation of the Mudharabah Innovation Fund ("MIF"). The MIF shall be invested in
the technology and life sciences sectors, focusing on venture and late stage high
potential growth funds or companies.

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66. Other non-current liabilities (cont'd.)

(i) Government grants (cont'd.)

(vii) Strategic Iskandar Fund was given to compensate Iskandar Malaysia Studios Sdn.
Bhd. ("IMS") and i2M Ventures Sdn. Bhd. both subsidiaries of the Group, for
operational expenses incurred.

(viii) Grant from Unit Kerjasama Awam Swasta ("UKAS") to fund IMS for the cost of
eligible capital expenditure.

(ii) Insurance contract liabilities

Group
2018 2017
RM'000 RM'000

Gross
Life insurance and family takaful 2,581,250 2,433,496
General insurance and takaful 1,143,079 350,507
3,724,329 2,784,003
Reinsurance
Life insurance (184,623) (160,408)
General insurance (545) (1,171,509)
(185,168) (1,331,917)
Net
Life insurance and family takaful 2,396,627 2,273,088
General insurance and takaful 1,142,534 (821,002)
3,539,161 1,452,086

(iii) Deferred liabilities and income

Deferred Deferred
liabilities income Total
RM'000 RM'000 RM'000

2018

Amount recognised - 2,561,651 2,561,651


Accumulated realisation - (480,344) (480,344)
- 2,081,307 2,081,307

Due within 12 months (Note 63) - 73,138 73,138


Due after 12 months - 2,008,169 2,008,169
- 2,081,307 2,081,307

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66. Other non-current liabilities (cont'd.)

(iii) Deferred liabilities and income (cont'd.)

Deferred Deferred
liabilities income Total
RM'000 RM'000 RM'000
2017

Amount recognised - 2,372,412 2,372,412


Accumulated realisation - (332,928) (332,928)
- 2,039,484 2,039,484

Due within 12 months (Note 63) - 117,211 117,211


Due after 12 months - 1,922,273 1,922,273
- 2,039,484 2,039,484

Included in deferred income is the following:

(a) Deferred lease rental income

Deferred lease rental income comprises lease rental income received in advance
from a third party upon the assignment of the lease, with respect to long term
leasehold land of a subsidiary, to the third parties. Deferred lease rental is
amortised on a straight line basis over the lease tenure period.

67. Financial risk management objectives and policies

The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include equity price, fuel price, interest rate, foreign
currency, credit and liquidity risks. The Group has an approved set of guidelines and policies
as well as internal controls which set out its overall business strategies to manage these
risks. The Group's overall financial risk management objective is to enhance shareholders'
value through effective management of the Group's risks. Although this guiding principle and
objective is consistent throughout the Group, the Group consists of subsidiaries and
subsidiaries group with their own governing Boards that will apply and determine the
implementation of these policies in respect of each individual company.

The following sections provide details regarding the Group's exposure to the
abovementioned financial risks and the objectives, policies and processes for the
management of these risks.

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67. Financial risk management objectives and policies (cont'd.)

(a) Equity price risk

Equity price risk the risk that the fair value or future cash flows of the Group’s equity
instruments will fluctuate because of changes in equity prices (other than interest or
exchange rates).

The Group is exposed to equity price risk arising from its investment in quoted equity
instruments. The quoted equity instruments are designated as fair value through profit
or loss or available-for-sale financial assets.

Equity/investment risk management includes due diligence in screening the investment


proposals according to the Group investment guidelines and procedures, constant
communication and close monitoring of the performance of investee companies.

Sensitivity analysis for equity price risk

The following table demonstrates the sensitivity to a reasonably possible change in the
equity price, with all other variables held constant, of the Group’s equity (due to
changes in the fair value of available-for-sale equity investments) and profit or loss (due
to changes in the fair value of equity investments designated at fair value through profit
or loss).

Effect on Effect on
equity profit or loss
RM'000 RM'000
Group

2018

Increase in 12% of equity price 2,441,161 1,712,792


Decrease in 12% of equity price (2,441,161) (1,712,792)

2017

Increase in 12% of equity price 2,313,868 2,003,180


Decrease in 12% of equity price (2,313,868) (2,003,180)

(b) Fuel price risk

Fuel price risk is the risk that future cash flows of the Group's financial instruments will
fluctuate because of changes in market prices of fuel.

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67. Financial risk management objectives and policies (cont'd.)

(b) Fuel price risk (cont'd.)

The Group's earnings are affected by changes in the price of jet fuel, as a subsidiary of
the Group operates in the air transportation business which require a continuous supply
of fuel for its aircrafts. The Group manages this risk by using instruments such as
swaps and options designated as hedge of highly probable forecast fuel purchases to
reduce the volatility of cash flows. The Group's risk management strategy is to maintain
a competitive hedge with regards to its competitors. The Group's risk management
policy is to hedge up to 36 months forward with specified maximum and minimum
hedge coverage. The percentage is guided by both competitive hedge policy and
management's judgement.

As at 31 December 2018, the Group had entered into various fuel hedging transactions
for periods up to 31 December 2018 in lots totalling 8,800,000 (2017: 6,750,000)
barrels.

Sensitivity analysis for fuel price risk

The fuel price sensitivity analysis is based on fuel hedging contracts that are still
outstanding as at the end of the financial year and unhedged fuel contracts. At the
reporting date, if fuel price increases or decreases, each by USD10 per barrel, the
effects are as follows:

Increase/(decrease)
2018 2017
Profit net Profit net
Equity of tax Equity of tax
Group RM'000 RM'000 RM'000 RM'000

Increase in USD10
per barrel (544,236) 907,634 224,329 48,641
Decrease in USD10
per barrel 544,236 (907,634) (224,329) (48,641)

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s
financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk arises primarily from its loans and
borrowings.

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67. Financial risk management objectives and policies (cont'd.)

(c) Interest rate risk (cont'd.)

The Group actively manages its interest rate risk by maintaining a portfolio of financial
instruments, including derivatives guided by its investment guidelines and policies, and
regular reviews of its debt portfolio, interest rates and market expectations.

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity to a reasonably possible change in


interest rates, with all other variables held constant, of the Group’s profit/(loss) before
tax (due to changes in the interest expense on floating rate borrowings and interest rate
derivatives) and equity (due to changes in the cash flow hedge):

Group Effect on Effect on


equity profit or loss
RM'000 RM'000

2018

Increase in 25 basis points (887) (1,673)


Decrease in 25 basis points 887 1,673

2017

Increase in 25 basis points - (1,515)


Decrease in 25 basis points - 1,515

Weighted average interest rate and average maturity

The weighted average interest/profit rates per annum and the average maturity on the
financial assets and financial liabilities as at 31 December were as follows:

Financial assets

2018 2017
Weighted Weighted
average Average average Average
interest maturity interest maturity
rates days rates days
% %

Licensed banks 3.59 - 3.97 1 to 365


Other financial
institutions - - 3.48 15

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67. Financial instruments and related disclosures (cont'd.)

(c) Interest rate risk (cont'd.)

Financial liabilities

2018 2017
Weighted Weighted
Average Average Average Average
interest maturity interest maturity
rates years rates years
% %

Bank overdrafts 8.17 Within 1 year 5.98 Within 1 year


Revolving credit 4.21 Within 1 year 3.76 Within 1 year
Finance lease and
hire purchase 4.27 1 to 12 years 5.87 1 to 12 years
Term loans 6.56 1 to 5 years 5.87 1 to 5 years

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates.

The Group's exposure to foreign exchange risk arises mainly from borrowings,
operating revenues and expenses which are denominated in foreign currencies mainly
US Dollar ("USD"), Chinese Renminbi ("CNY") and Singapore Dollar ("SGD").

The Group maintains a natural hedge, whenever possible, by borrowings in the


currency of the country in which the property or investment is located or by borrowing in
currencies that match the future revenue streams to be generated from its investments.

Foreign exchange exposures in transactional currencies other than functional


currencies of the operating entities are kept to an acceptable level and short term
imbalances are addressed by buying or selling foreign currencies at spot rates.

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67. Financial risk management objectives and policies (cont'd.)

(d) Foreign currency risk (cont'd.)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in


respective foreign currency exchange rates, with all other variables held constant, of the
Group’s profit/(loss) before tax (due to translation of monetary items):

Effect on
Group Changes in profit/(loss)
rate before tax
RM'000
2018

USD/RM - Strengthened +5% (562,247)


- Weakened -5% 562,247

SGD/RM - Strengthened +5% (135,998)


- Weakened -5% 135,998

CNY/RM - Strengthened +5% 123,000


- Weakened -5% (123,000)

2017

USD/RM - Strengthened +5% (567,659)


- Weakened -5% 567,659

SGD/RM - Strengthened +5% (211,998)


- Weakened -5% 211,998

CNY/RM - Strengthened +5% 153,000


- Weakened -5% (153,000)

(e) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should
a counterparty default on its obligations. The Group’s exposure to credit risk arises
primarily from trade and other receivables. For other financial assets (including
investment securities, cash and bank balances and derivatives), the Group minimise
credit risk by dealing exclusively with high credit rating counterparties.

Credit risk or the risk of counter parties defaulting is monitored and controlled by the
application of credit approval, limits and monitoring procedures. Credit risk is minimised
and monitored via strictly limiting the funding/borrowing to subsidiaries and associates.

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67. Financial risk management objectives and policies (cont'd.)

(e) Credit risk (cont'd.)

Credit evaluations are performed on all customers requiring credit over a certain
amount and strictly limiting the Group's associations to business partners with high
credit worthiness. Trade and other receivables are monitored on an ongoing basis.

Deposits with banks and other financial institutions and derivatives that are neither past
due nor impaired are placed with or entered with reputable financial institutions or
companies with no history of default.

Exposure to credit risk

At the reporting date, the Group's maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised on the balance sheet,
including derivatives with positive fair values.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired
is disclosed in Note 58 and Note 59, respectively. Deposits with banks and other
financial institutions, investment securities and derivatives that are neither past due nor
impaired are placed with or entered into with reputable financial institutions or
companies with high credit ratings and no history of default.

(f) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulties in meeting their financial
obligations due to shortage of funds. The Group’s and the Company’s exposure to
liquidity risk arises primarily from mismatches of the maturities of financial assets and
liabilities.

The Group actively manages its debt maturity profile, operating cash flows and the
availability of funding so as to ensure that all refinancing, repayment and funding needs
are met. As part of its overall prudent liquidity management, the Group endeavours to
maintain sufficient level of cash or cash convertible investments to meet its working
capital requirements.

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67. Financial risk management objectives and policies (cont'd.)

(f) Liquidity risk (cont'd.)

In addition, the Group’s objective is to maintain a balance of funding and flexibility


through the use of credit facilities, short and long term borrowings. Short term flexibility
is achieved through credit facilities and short term borrowings. As far as possible, the
Group raises committed funding from both capital markets and financial institutions and
prudently balances its portfolio with some short term fundings so as to achieve the
Group's asset and liability management strategy.

The table below summarises the maturity profile of the Group’s financial liabilities based
on contractual undiscounted repayment obligations.

On demand More
or within 1 to 5 than
one year years 5 years Total
RM'000 RM'000 RM'000 RM'000

2018

Financial liabilities
Trade payables 2,725,414 - - 2,725,414
Other liabilities 1,027,839 858,973 2,680,075 4,566,887
Borrowings 11,516,759 27,823,215 22,184,830 61,524,804
Derivative liabilities 7,055 147,793 - 154,848
Total undiscounted
financial liabilities 15,277,067 28,829,981 24,864,905 68,971,953

2017

Financial liabilities
Trade payables 2,648,796 - - 2,648,796
Other liabilities 1,257,758 705,017 2,183,247 4,146,022
Borrowings 18,756,095 33,258,550 30,585,132 82,599,777
Derivative liabilities 24,370 312,816 - 337,186
Total undiscounted
financial liabilities 22,687,019 34,276,383 32,768,379 89,731,781

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68. Fair value of financial instruments

(a) Fair value of financial instruments by classes that are not carried at fair value and
whose carrying amounts are not reasonable approximation of fair value

Group
Carrying
amount Fair value
RM'000 RM'000
2018

Financial assets

Other financial assets


- Unquoted shares at cost less impairment 76,812 *

Financial liabilities

Borrowings 32,559,776 33,057,839

2017

Financial assets

Other financial assets


- Unquoted shares at cost less impairment 90,705 *

Financial liabilities

Borrowings 30,850,062 31,371,651

* Fair value information has not been disclosed for the Group's investment in equity
instruments that are carried at cost because fair value cannot be determined
reliably. These equity instruments represent ordinary shares in companies that are
not quoted on any market and does not have any comparable industry peer that is
quoted. In addition, the variability in the range of reasonable fair value estimates
derived from valuation technique is significant.

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68. Fair value of financial instruments (cont'd.)

(b) Determination of fair value

(i) Cash and cash equivalents, receivables and payables

The carrying amount of these financial assets and liabilities are reasonable
approximation of fair value due to either their short term nature or they are
repayable on demand.

(ii) Quoted shares

The fair value of quoted shares is determined directly by reference to their


published market bid price at the reporting date.

(iii) Financial assets designated as fair value through profit and loss

The fair value of unquoted bonds and structured products are based on the
indicative fair values obtained from Bondweb, Bloomberg and/or respective
licensed banks.

(iv) Loans receivable

The fair value of loans receivable are estimated by discounting the estimated
future cash flows using current interest rates for financial assets with similar risk
profile.

(v) Embedded derivatives

The fair value of embedded derivatives are valued using the Binomial model with
market observable inputs. The model incorporates various inputs including closing
market prices of underlying shares, foreign exchange spot rates and market
interest rates.

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68. Fair value of financial instruments (cont'd.)

(b) Determination of fair value (cont'd.)

(vi) Derivatives

Forward currency contracts and interest rate swap contracts are valued using a
valuation technique with market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap models, using present value
calculations. The models incorporate various inputs including the credit quality of
counterparties, foreign exchange spot and forward rates and interest rate curves.

(vii) Loans and borrowings

The carrying amount of the current portion of loans and borrowings is reasonable
approximations of fair value due to the insignificant impact of discounting.

The carrying amount of certain loans and borrowings is reasonable approximations


of fair value as they are floating rate instruments that are re-priced to market
interest rates near the reporting date.

The fair value of non-current loans and borrowings, other than floating rate
instruments, are estimated by discounting expected future cash flows at market
incremental lending rate for similar types of borrowing at the reporting date.

(c) Fair value measurement hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs that have a significant effect on the
recorded fair value are observable, either directly or indirectly;

Level 3: techniques that use inputs that have a significant effect on the recorded fair
value that are not based on observable market data.

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68. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

Quantitative disclosures fair value measurement hierarchy for assets and


liabilities as at 31 December 2018:

Fair value measurement using


Quoted Observable Unobservable
Assets and liabilities Carrying market price input input
measured at fair amount Level 1 Level 2 Level 3
value RM'000 RM'000 RM'000 RM'000

Financial assets
Financial assets
designated as
fair value through
profit or loss
- Shares 12,082,175 11,153,761 928,414 -
- Bonds 1,591,490 448,278 1,143,212 -
- Funds 599,600 407,927 191,673 -
Financial assets
designated as
fair value through
other comprehensive
income
- Shares 19,196,770 18,101,338 212,432 883,000
- Bonds 1,146,236 328,558 817,678 -
- Funds - - - -
Derivative assets 24,614 - 24,614 -

Financial liability
Derivative liabilities 435,893 - 435,893 -

Assets and liabilities


for which fair values
are disclosed

Assets
Interest in associates
- Quoted shares 42,490,957 79,287,938 - -
Investment
properties 3,044,449 - - 8,365,644

Liability
Borrowings 32,559,776 - 33,057,839 -

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68. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

Quantitative disclosures fair value measurement hierarchy for assets and


liabilities as at 31 December 2017:

Fair value measurement using


Quoted Observable Unobservable
Assets and liabilities Carrying market price input input
measured at fair amount Level 1 Level 2 Level 3
value RM'000 RM'000 RM'000 RM'000

Financial assets
Financial assets
designated as
fair value through
profit or loss
- Shares 14,286,234 13,756,008 530,226 -
- Bonds 1,499,217 430,032 1,069,185 -
- Funds 907,712 366,617 541,095 -
Financial assets
designated as
fair value through
other comprehensive
income
- Shares 17,760,068 11,539,956 5,337,112 883,000
- Bonds 1,490,996 716,772 774,224 -
- Funds 31,169 31,169 - -
Derivative assets 236,888 - 236,888 -

Financial liability
Derivative liabilities 337,186 - 337,186 -

Assets and liabilities


for which fair values
are disclosed

Assets
Interest in associates
- Quoted shares 40,317,758 94,770,158 - -
Investment
properties 2,801,461 - - 9,123,927

Liability
Borrowings 30,850,062 - 31,371,651 -

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68. Fair value of financial instruments (cont'd.)

(c) Fair value measurement hierarchy (cont'd.)

During the year, there were no transfers between Level 1 and Level 2 fair value
measurements.

A reconciliation of the beginning and closing balances of Level 3 financial instruments,


including movements is summarised below:

Fair value through


other comprehensive
income
Unquoted shares
RM'000

At 1 January 2018 883,000


Net fair value gain recognised in other comprehensive income -
At 31 December 2018 883,000

At 1 January 2017 1,022,000


Net fair value gain recognised in other comprehensive income (139,000)
At 31 December 2017 883,000

(d) Level 3 fair value measurement

Description of significant unobservable inputs to valuation:

Fair value through other comprehensive income investments - unquoted shares

Valuation Significant Sensitivity of input to


technique unobservable fair value
input

Market comparables Discount rate 5% increase (decrease) in the


(ranging from 0%-15%) the discount would result
in decrease (increase) in
fair value
(2017: RM44 million)

Discount for lack of marketability represents the amounts that the Group has
determined that market participants would take into account when pricing the
instruments.

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69. Financial instruments by category

31 December 2018
Financial assets
Financial assets designated as fair
designated as fair value through other
Amortised value through comprehensive
cost profit or loss income Total
RM'000 RM'000 RM'000 RM'000

Financial assets

Cash and bank balances 5,730,632 - - 5,730,632


Other financial assets 2,507,782 14,273,265 18,599,198 35,380,245
Derivative assets - 24,614 - 24,614
Other receivables 10,176,434 - - 10,176,434
Total 18,414,848 14,297,879 18,599,198 51,311,925

Financial liabilities
designated as fair value Financial liabilities
through profit or loss at amortised cost Total
RM'000 RM'000 RM'000

Financial liabilities

Borrowings - 77,391,447 77,391,447


Derivative liabilities 435,893 - 435,893
Other payables - 10,167,704 10,167,704
Total 435,893 87,559,151 87,995,044

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69. Financial instruments by category (cont'd.)

31 December 2017
Financial assets
Financial assets designated as fair
designated as fair value through other
Amortised value through comprehensive
cost profit or loss income Total
RM'000 RM'000 RM'000 RM'000

Financial assets

Cash and bank balances 6,845,117 - - 6,845,117


Other financial assets 3,196,248 14,693,163 19,372,938 37,262,349
Derivative assets - 236,888 - 236,888
Other receivables 9,708,913 - - 9,708,913
Total 19,750,278 14,930,051 19,372,938 54,053,267

Financial liabilities
designated as fair value Financial liabilities
through profit or loss at amortised cost Total
RM'000 RM'000 RM'000

Financial liabilities

Borrowings - 71,303,272 71,303,272


Derivative liabilities 337,186 - 337,186
Other payables - 12,946,139 12,946,139
Total 337,186 84,249,411 84,586,597

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70. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise
shareholder value.

The Group regularly reviews and manages its capital structure and makes adjustments to it,
in light of changes in economic conditions. To maintain or adjust the capital structure, the
Group may adjust the dividend payment to shareholders, return capital to shareholders or
issue new shares.

No changes were made in the objectives, policies or processes in regards to the Group’s
management of its capital structure during the financial years ended 31 December 2018 and
31 December 2017.

Certain subsidiaries of the Group are subject to externally imposed capital requirements.
This externally imposed capital requirement has been complied with by those subsidiaries for
the financial years ended 31 December 2018 and 31 December 2017.

The Group monitors capital using a gearing ratio, which is defined as net debt divided by
total capital. The Group’s policy is to keep the gearing ratio below two and a half times. The
Group includes within net debt, loans and borrowings less cash and bank balances. Capital
represents equity attributable to the owners of the Group.

Although this guiding principle and objective is consistent throughout the Group, the Group
consists of subsidiaries and subsidiaries groups' with their own governing Boards and
management that will apply different key measurements for its capital structure
management including gearing ratio.

Group
Note 2018 2017
RM'000 RM'000

Long term borrowings 61 54,150,732 52,725,665


Short term borrowings 61 23,240,715 18,577,607
Less: Cash and bank balances 60 (5,730,632) (6,845,117)
Net debt 71,660,815 64,458,155

Share capital 27 12,284,201 12,284,201


Capital contribution from shareholders 4,124,423 4,124,423
Reserves 33,887,504 49,048,222
Equity attributable to the owners of the Group 50,296,128 65,456,846

Gearing ratio (times) 1.42 0.98

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71. Commitments

(i) Capital commitment


Group
2018 2017
RM'000 RM'000

Approved and contracted for 5,610,064 4,231,167


Approved but not contracted for 20,195 9,931,519
5,630,259 14,162,686

Analysed as follows:
Property, plant and equipment and land held
for property development 5,600,496 5,619,694
Investments 29,763 96,437
Others - 274,293
5,630,259 5,990,424

(ii) Non-cancellable operating lease commitments payable:

Group
2018 2017
RM'000 RM'000

As lessor
Due within 1 year 308,647 342,941
Due within 1 year and not later than 5 years 141,355 157,061
Due after 5 years 94,931 105,479

As lessee
Due within 1 year 2,221,765 689,557
Due within 1 year and not later than 5 years 7,475,446 2,366,985
Due after 5 years 8,875,022 6,090,627

In 2006, the Group entered into two non-cancellable leasing agreements with third
parties to lease two aircrafts. These leases expire in 2020 and have a purchase option
in 2018. The aircrafts were subleased to a subsidiary.

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72. Contingent liabilities

Aur Ventures Sdn. Bhd. ("Aur")

Group
2018 2017
RM'000 RM'000

Guarantee given to Yayasan Hasanah (i) 3,000,000 3,000,000


Bank performance bonds and guarantees 309,820 686,886

(i) The Company's SPV, Aur Ventures Sdn. Bhd. ("Aur") entered into an Investment
Management Agreement ("IMA") with Yayasan Hasanah ("YH"), where it guarantees
the followings:

(a) a minimum return of no less than the amount required by YH based on YH's
annual budget as approved by the Board of Trustees of YH, subject to a maximum
limit of RM150 million per annum; and

(b) the invested capital of RM3 billion for such period of time until the termination of
the IMA

As at 31 December 2018, no provision is required to be made given the uncertainty


surrounding the crystalisation period of the guarantees.

Malaysian Airline System Berhad ("MAS")

(a) Flight MH370

Following the disappearance of flight MH370, next-of-kin of the passengers are entitled
to receive compensation for the losses they suffered. The compensation amounts
payable to the next-of-kin of the passengers will be fully covered by the MAS’s aviation
liability insurance policy and will be determinable upon submission and verification of
the losses suffered by the respective next-of-kin.

As at 31 December 2018, MAS has concluded close to 50% of claims by the next-of-
kin. Claims filed in court in relation to flight MH370 will be resolved via the legal
process.

These compensation amounts payable are not expected to have significant impact to
MAS’s results in the financial statements as any future claims (including legal cases) or
compensation payable to the next-of-kin of the passengers will also be fully covered by
MAS's aviation liability insurance policies.

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(Incorporated in Malaysia)

72. Contingent liabilities (cont'd.)

Malaysian Airline System Berhad ("MAS") (cont'd.)

(b) Flight MH17

Following the catastrophic loss of flight MH17, next-of-kin of the passengers are entitled
to receive compensation for the losses they suffered. The compensation amounts
payable to the next-of-kin of the passengers will be fully covered by MAS’s aviation
liability insurance policy and will be determinable upon submission and verification of
the losses suffered by the respective next-of-kin. As at 31 December 2018, MAS has
concluded close to 90% of claims by the next-of-kin. Claims filed in court in relation to
flight MH17 will be resolved via the legal process.

These compensation amounts payable are not expected to have significant impact to
MAS’s results in the financial statements as any future claims (including legal cases) or
compensation payable to the next-of-kin of the passengers will also be fully covered by
MAS's aviation liability insurance policies.

(c) On 11 November 2012, the Company instituted a claim against Silkways Cargo Service
Ltd ("Silkways") (a former General Sales Agent of the Company) pursuant to a Side
Letter dated 1 March 2009 to a general sales agency agreement (cargo) dated 1 March
2009 made between the Company and Silkways. The claim was for the sum of
USD150,000 plus interest of USD13,125 for the shortage of cargo sale for the period
from March 2011 to February 2012 as Silkways was supposed to achieve a total sale of
USD8,500,000 but Silkways only achieved a total sale of USD5,155,000.

On 15 November 2012 the Company filed an additional claim against Silkways for the
sum of approximately BDT262,244,000 for, among others, losses suffered in
connection with cargo sales, passenger ticket sales, goodwill losses, and loss of
business.

In response to the claims, Silkways had on 24 November 2013 filed a counterclaim


against MAS for the sum of BDT2,786,416,000 for, among others, commission charges,
loss of business and goodwill. MAS's solicitors had on 6 July 2014 filed a written
statement in reply to this counterclaim, and are currently waiting for decision by the
District Court of Dhaka.

There was no update in the case from prior year. As MAS is still waiting for decision by
the court, therefore it is not practicable to state the timing of any payment.

262
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

72. Contingent liabilities (cont'd.)

Iskandar Investment Berhad ("IIB")

(d) Damages claim from a third party

In year 2014, a third party commenced an action against a subsidiary of the Group,
Iskandar Harta Holdings Sdn Bhd ("IHHSB"), claiming for wrongful breach of the terms
under a Lease Purchase Agreement (“LPA”) dated 28 November 2011 regarding the
sale of a land lease by IHHSB to the said party. The estimated payout is RM87,393,000
should the action be successful.

On 7 August 2017, the learned Judge dismissed the Plaintiff’s claims against IHHSB.
On 11 August 2017, the Plaintiff filed Notice of Application for Stay of Execution and
Notice of Appeal against the High Court decision. At the date of this report, the Court
held in favor of IHH.

UEM Group Berhad ("UEM")

(e) On 10 February 2009, a legal proceeding was filed in the Court of Qatar ("CoQ") by the
Director General of the Public Works Authority (Plaintiff) against Persons International
Ltd. ("the 1st Defendant"), UEM ("the 2nd Defendant") and the Qatar Insurance
Company ("the 3rd defendant").

The legal action requested for a ruling to render the defendants jointly liable to settle in
its benefit the amount of QR878.3 million (approximately RM978.2 million) as material
and moral damage for the losses incurred as per the reasons detailed in the initiatory
pleading, along with preserving the right of plaintiff to indemnity for delay in the project
and any other damages. The claims were amended to QR1,147.9 million
(approximately RM1,278.4 million) on 23 February 2009.

The solicitors in Qatar have indicated that UEM has sufficient grounds in defending the
action. UEM filed the short memorial of defense, together with a counter claim of
QR855.6 million (approximately RM952.9 million) on 15 October 2009. On 29
December 2011, the counter claim was amended to QR1,165.6 million (approximately
RM1,278.4 million).

On 9 January 2014, the CoQ passed a preliminary decision disputing a panel of experts
to examine the matter, which was subsequently formed. On 17 March 2015, the CoQ
granted UEM's request to replace one of the accounting experts with a quantity survey
expert.

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(Incorporated in Malaysia)

72. Contingent liabilities (cont'd.)

UEM Group Berhad ("UEM") (cont'd.)

(e) (cont'd.)

Subsequent to the submission of the report and exhibits by the experts in November
and December 2016, the Plaintiff and the defendants filed memorial with comments on
the expert's findings. At the 14 March 2017 hearing, the experts submitted their
supplementary report. All parties submitted their comments on the supplementary
report on 30 March 2017. Further comments on the supplementary report were
submitted on 11 April 2017. The Court scheduled the judgment on 27 April 2017.

At the 27 April 2017 hearing, the CoQ decided that the case requires essential
documents, which had not been submitted by the parties in order for the Court to reach
a verdict. Accordingly, the CoQ decided to re-open the case for further deliberation.

Following the submission of documents by the Plaintiff and the defendants in May and
June 2017, the CoQ gave an oral judgment on 21 June 2017. The written judgement
received provides the breakdown of the amount awarded to UEM of QR208.2 million
(approximately RM231.9 million), as well as the amount awarded to Plaintiff of QR147.3
million (approximately RM164.0 million), of which an amount of QR73.6 million
(approximately RM82.0 million) is adjudged against UEM. The net amount awarded to
UEM was QR134.6 million (approximately RM149.9 million).

(f) The Plaintiff, the 1st Defendant and UEM had separately filed appeal against the CoQ's
verdict. On 15 October 2017, the Court of Appeal ("CoA") decided to consolidate all the
three appeals. On 7 January 2018, the Plaintiff, UEM and the 3rd Defendant submitted
their memorandum. The CoA adjourned the proceedings until 19 March 2018 for
consolidating the case file from the CoQ.

(g) In March 2013, the Group had given a Letter of Undertakings to PT Bank Central Asia
TBK, the Security Agent for LMS' syndicated term loan, to finance any cash
deficiencies, costs overruns and to ensure the construction for the CPTR is completed.

The Group agreed and undertook to finance and fund any cash deficiency required by
LMS in relation to the CPTR Project so that LMS is able to promptly perform its
obligation under the syndicated term loan facility. The undertaking remains effective up
until June 2022, being 7 years from the Commercial Operation Date.

Besides, PEIB, together with the other shareholder of LMS, have also entered into a
Keep Well Agreement with Deutsche Bank AG, Jakarta Branch ("DB Jakarta"), MEXIM
and LMS on 8 March 2013, whereby each shareholder jointly and severally agreed to
indemnify MEXIM and DB Jakarta for any shortfall or failure to settle any outstanding
amount due, including net settlement amount under the Coupon Exchange Agreement.

No provision has been recognised on the potential obligations arising from the above
undertakings, as the possibility of crystalisation is uncertain and the amount of the
possible obligations cannot be measured with sufficient reliability.

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(Incorporated in Malaysia)

72. Contingent liabilities (cont'd.)

UEM Group Berhad ("UEM") (cont'd.)

(h) On 25 July 2017, UEM Land, a wholly-owned subsidiary of UEM Sunrise, was served
with the claim filed by Impresive Circuit Sdn Bhd and 1 other ('the Plaintiffs") in relation
to shares held in Setia Haruman ("the 1st Defendant") ("the Claim"). UEM Land is cited
as the 9th Defendant in the Claim.

The Claim seeks, amongst others, for:

(a) a declaration that the 2nd to the 9th Defendants respectively had managed and
conducted the affairs of the 1st Defendant and/or exercised their powers
oppressively and/or disregarded and/or acted in a manner unfairly prejudicial to the
interest of the Plaintiffs as members of Setia Haruman pursuant to Section 346 of
the Companies Act 2016; and

(b) an order that the 2nd to the 9th Defendants do jointly and/or severally purchase
the 750,000 ordinary shares of Setia Haruman owned or held by Impresive Circuit
Sdn Bhd at such price and on such terms as shall be determined by the
Honourable Court.

On 25 April 2018, UEM Land had succesffuly applied to strike out Datuk Kasi A/L K.L.
Palaniappan ("Datuk Kasi"), the First Plaintiff in the suit, as a party in the Claim. The
remaining Plaintiff in the suit, Impressive Circuit Sdn Bhd, sucessfully added two other
Defendents in the suit namely Menara Embun Sdn. Bhd. and Modern Eden Sdn. Bhd.

On 20 June 2018, Datuk Kasi and the 2nd-6th Defendents have respectively filed their
appeal to the CoA against the High Court's decision in allowing the 7th-9th Defendants
striking Out and Misjoinder application, striking Datuk Kasi out as a party. The 2nd-6th
Defendants are appealing against the dismissal of their application to strike themselves
out as parties to the action by High Court.

UEM Land denies allegations made by the Plaintiffs and will be vigrously defending the
Claim and is seeking advice from its solicitors to that end. Based on the foregoing at
this juncture, the Claim has no material financial and operational impact to the Group.
The solicitor is of the view that UEM Land has a reasonably good chance of success in
defending the Plaintiff's case against UEM Land.

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(Incorporated in Malaysia)

72. Contingent liabilities (cont'd.)

Cenergi SEA Sdn Bhd ("Cenergi")

(i) The Group currently has 30 active Carbon Development Mechanism ("CDM") projects
which have been registered with the United Nations Framework Convention on Climate
Change ("UNFCCC"). The Group has contractual responsibilities that need to be
fulfilled as the appointed consultant of the CDM projects. These include management of
validation process as required by UNFCCC, implementation of the monitoring plan i.e.
steps required to monitor the data of emission and marketing emission reduction credit
to potential purchasers. Failure to fulfil any of the contractual responsibilities may lead
to potential proceedings from the contract counterparty. However, as the Certified
Emission Reductions ("CERs") market is currently unattractive, the Directors are of the
opinion that it is highly unlikely that clients will request for the services to be provided as
per the contract. The Group is currently in the process of renegotiating the terms of the
contracts.

73. Significant events

The following are the significant events of the Group during the financial year ended 31
December 2018:

Avicennia Capital Sdn Bhd ("Avicennia")

(a) Disposal of Acibadem Saglik Ve Hayat Sigorta A.S. ("Acibadem")

On 17 August 2018, the Group via Burau Ventures Sdn. Bhd. (a subsidiary held through
Pasir Kalong Investments Limited) entered into Share Purchase Agreement with Bupa
International Markets Limited ("Bupa") for the disposal of its entire equity interest in
Acibadem for a total cash consideration of USD176,580,302 equivalent to
RM724,120,496. The disposal exercise was completed on 31 December 2018.
Accordingly, Acibadem ceased to be subsidiary of the Group on 31 December 2018.

(b) Discontinuation of General Takaful Business

With effect from 1 July 2018, pursuant to the requirements under Sections 16 and 286
of the Islamic Financial Services Act 2013, Sun Life Takaful Malysia ("SLMT") had
surrendered its composite takaful license and was granted a Family Takaful license by
the Minister of Finance to carry on its Family Takaful business. Accordingly, SLMT had
ceased to underwrite any new general takaful business.

266
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(Incorporated in Malaysia)

73. Significant events (cont'd.)

Pulau Memutik Ventures Sdn. Bhd.

(c) Acquisition of Prince Court Medical Centre ("PCMC")

In March 2018, the Company via a special purpose company, Pulau Memutik Ventures
Sdn. Bhd. has signed a share sale and purchase agreement for the acquisition of 100%
interest in Prince Court Medical Centre ("PCMC") from Petronas Hartabina Sdn Bhd.
The Company also entered into a term sheet for a collaboration agreement with IHH
Healthcare Berhad ("IHH") for shared services support and operational improvement
initiatives at PCMC. Accordingly, IHH will be given a right of first offer to acquire PCMC
during a pre-agreed period.

Iskandar Investment Berhad ("IIB")

(d) A subsidiary, Iskandar Innovations Sdn Bhd, has entered into a tenancy agreement on
15 December 2017, with Menara Burj Sdn Bhd, a related party of the associate, to rent
the units identified as LG001-LG010 (Lower Ground Floor), GF001-GF002 (Ground
Floor), FF001B, FF001, FF005-FF011 and FF006-1 (First Floor) Seri Medini measuring
approximately 39,541.81sq.ft. in total located at No.7, Persiaran Ledang Heights,
Iskandar Puteri, Johor for a period of three years from 1 January 2018 to 31 December
2020 and pursuant to the terms of the tenancy agreement a 3-year’s rental advance of
RM3,492,973 was paid accordingly.

(e) IIB on 8 January 2018 has entered into a tenancy agreement with Medini Pulse Sdn
Bhd, a related party, to rent Levels 18 and 19, Wing A, Medini 9, Medini Iskandar
Malaysia, 79250 Iskandar Puteri, Johor measuring approximately 25,685.59 square feet
for a period of three years. The tentative commencement date is 1 April 2018 subject to
the issuance of the Certificate of Completion and Compliance. Pursuant to the terms of
the tenancy agreement a 3-year’s rental advance of RM3,217,645 was paid
accordingly.

267
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

74. Subsequent events

The following are the significant subsequent events of the Group after the financial year
ended 31 December 2018:

Malaysia Aviation Group Berhad ("MAGB")

On 25 January 2019, MAG Group enteres into a Settlement Agreement with MAS and
MASkargo wherein both parties agreed to fully and finally settle MAG Group's identified net
claims, issues, differences and disputes in all jurisdiction in respect of the intercompany
transactions up to 31 December 2018. The settlement involves MAS and MASkargo paying
MAG Group RM70,371,505 and Penerbangan Malaysia Berhad RM29,628,495 totalling
RM100,000,000.

Malaysia Airports Holdings Berhad ("MAHB")

Malaysia Airports (Sepang) Sdn Bhd, a wholly owned subsidiary of the Company, has been
served by the solicitors of AirAsia Berhad (AAB) and AirAsia X Berhad (AAX) with a copy of
its letter dated 31 January 2019 (the Letter).The Letter alleged, amongst others, AAX and
AAB have suffered losses and damages amounting to RM479,781,000. The letter further
stated that notice therefore given to Malaysia Airports (Sepang) Sdn Bhd that mediation shall
be convened pursuant to Section 74 of the Malaysian Aviation Commission Act, 2015.

Iskandar Investment Berhad ("IIB")

On 4 January 2019 and 16 January 2019, Iskandar Investment Berhad has subscribed
7.25% RPS of Medini Compass Sdn Bhd of RM15,000,000 and RM10,000,000, respectively.

268
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(Incorporated in Malaysia)

75. Segment information

The Group is principally engaged in the following activities:

(i) Investment holding;


(ii) Infrastructure and construction;
(iii) Property;
(iv) Financial Institution Group;
(v) Transportation & Logistics;
(vi) Leisure & Tourism;
(vii) Agrifood;
(viii) Others.

Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision-maker.

The Directors are of the opinion that all inter-segment transactions have been entered into in
the normal course of business and have been established on terms and conditions that are
not materially different from those obtainable in transactions with unrelated parties.

No segment information by geographical area has been presented as the Group operates
predominantly in Malaysia.

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(Incorporated in Malaysia)

75. Segment information (cont'd.)

2018

Infrastructure Financial Asset/disposal


Investment & Institution Transportation Leisure group held for Total
Holding Construction Property Group & Logistics & Tourism Agrifood Others Elimination Total sale operations
<----------------------------------------------------------------------------------------------------------------RM million --------------------------------------------------------------------------------------------------------------->
REVENUE
External sales 1,470 5,817 33 1,076 10,487 454 141 1,188 - 20,666 - 20,666
Inter-segment sales 2,919 - - - - - - - (2,919) - - -
Total revenue 4,389 5,817 33 1,076 10,487 454 141 1,188 (2,919) 20,666 - 20,666

RESULTS
Operating profit/(loss) (5,225) 665 (41) (194) (3,710) (337) (75) 3,064 - (5,853) - (5,853)
Finance cost (2,353) (375) (20) - (394) (60) (3) (47) - (3,252) - (3,252)
Share of results from associates
and joint venture 1,280 (62) (4) - 2 (5) 9 28 - 1,248 1,248
Profit/(loss) before tax (6,298) 227 (65) (194) (4,102) (402) (69) 3,045 - (7,857) - (7,857)
Taxation (249) (190) - (21) (21) (7) (2) 17 - (473) (473)

Profit/(loss) after tax (6,547) 37 (65) (215) (4,123) (409) (71) 3,062 - (8,330) (8,330)
Profit from discontinued
operations, net of taxation - - - (321) - - - - - (321) (321)
Non controlling interests - (9) 2 (71) (4) 57 1 (1) - (25) (25)

Net profit/(loss) for the year (6,547) 28 (63) (607) (4,127) (352) (70) 3,061 - (8,676) - (8,676)

ASSETS AND LIABILITIES


Segment assets 34,000 24,069 2,664 5,464 9,235 5,118 410 2,415 - 83,375 - 83,375
Investment in associates 55,488 540 433 - 9,235 - 87 83 - 65,867 - 65,867
Investment in joint ventures 1,814 1,199 102 - - - 55 1,229 - 4,399 - 4,399
Consolidated total assets 91,302 25,808 3,199 5,464 18,469 5,118 553 3,727 - 153,641 - 153,641

Segment liabilities 55,922 13,963 801 2,897 24,008 2,242 142 (2,186) - 97,790 - 97,790
Consolidated total liabilities 55,922 13,963 801 2,897 24,008 2,242 142 (2,186) - 97,790 - 97,790

270
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

75. Segment information (cont'd.)

2017

Infrastructure Financial Asset/disposal


Investment & Institution Transportation Leisure group held for Total
Holding Construction Property Group & Logistics & Tourism Agrifood Others Elimination Total sale operations
<----------------------------------------------------------------------------------------------------------------RM million --------------------------------------------------------------------------------------------------------------->
REVENUE
External sales 1,416 7,716 72 2,138 10,644 518 137 986 - 23,627 - 23,627
Inter-segment sales 4,705 - - - - - - - (4,705) - - -
Total revenue 6,121 7,716 72 2,138 10,644 518 137 986 (4,705) 23,627 - 23,627

RESULTS
Operating profit/(loss) (2,252) 1,398 (32) 228 - (180) (45) 5,649 - 4,766 - 4,766
Finance cost (1,929) (471) (20) - (514) (41) (5) (31) - (3,011) - (3,011)
Share of results from
associates and joint venture 6,756 13 4 - 5 (4) 8 29 - 6,811 - 6,811
Profit/(loss) before tax 2,575 940 (48) 228 (509) (225) (42) 5,647 - 8,566 - 8,566
Taxation (88) (153) (5) (46) (15) (4) (1) (11) - (323) (323)

Profit/(loss) after tax 2,487 787 (53) 182 (524) (229) (43) 5,636 - 8,243 - 8,243
Profit from discontinued
operations, net of taxation - - - - - - - - - - - -
Non controlling interests - (168) 9 - (2) 24 - (78) - (215) - (215)

Net profit/(loss) for the year 2,487 619 (44) 182 (526) (205) (43) 5,558 - 8,028 - 8,028

ASSETS AND LIABILITIES


Segment assets 34,578 25,142 3,092 6,045 13,247 4,714 522 1,221 - 88,561 631 89,192
Investment in associates 69,763 555 435 - 194 - 59 81 - 71,087 - 71,087
Investment in joint ventures 3,638 1,128 83 - - 67 25 - - 4,941 - 4,941
Consolidated total assets 107,979 26,825 3,610 6,045 13,441 4,781 606 1,302 - 164,589 631 165,220

Segment liabilities 51,010 14,815 1,117 3,414 20,540 1,716 224 752 - 93,588 194 93,782
Consolidated total liabilities 51,010 14,815 1,117 3,414 20,540 1,716 224 752 - 93,588 194 93,782

271
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework

The following comparatives of the Group for statement of financial position for the financial year ended 31 December 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2.

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 31 December 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Non-current assets
Property, plant and equipment 15,214,459 - - - 15,214,459
Land held for property development 3,939,786 - 1,182,641 - 5,122,427
Investment properties 2,801,461 - - - 2,801,461
Concession intangible assets 3,862,903 - - - 3,862,903
Goodwill on consolidation 1,922,871 - - - 1,922,871
Other intangible assets 986,775 - - - 986,775
Interest in associates 71,087,317 (1,268) - - 71,086,049
Interest in joint ventures 5,354,782 (416,862) 3,419 - 4,941,339
Other non-current financial investments 35,406,935 - - 15,619 35,422,554
Other non-current assets 1,900,818 - 1,222,844 - 3,123,662
Derivative assets 30,031 - - - 30,031
Deferred tax assets 542,329 - 15,207 32 557,568
Total non-current assets 143,050,467 (418,130) 2,424,111 15,651 145,072,099

272
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for statement of financial position for the financial year ended 31 December 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 31 December 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Current assets
Property development-in-progress 3,049,032 - (530,729) - 2,518,303
Inventories and work-in-progress 1,345,094 - - - 1,345,094
Trade receivables 3,596,090 (27,030) (2,229,584) 11,829 1,351,305
Other receivables 5,488,588 - (252,480) (2,162) 5,233,946
Tax recoverable 131,575 - - - 131,575
Derivative assets 206,857 - - - 206,857
Other current financial investments 1,885,516 - - - 1,885,516
Cash and bank balances 6,845,117 - - - 6,845,117
22,547,869 (27,030) (3,012,793) 9,667 19,517,713

Assets held for sale and assets of


disposal group classified as held for
sale 630,626 - - - 630,626
23,178,495 (27,030) (3,012,793) 9,667 20,148,339
Total assets 166,228,962 (445,160) (588,682) 25,318 165,220,438

273
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Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for statement of financial position for the financial year ended 31 December 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 31 December 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Current liabilities
Borrowings 18,577,607 - - - 18,577,607
Trade payables 2,930,291 - (281,495) - 2,648,796
Other current liabilities 11,082,451 - (89,107) - 10,993,344
Tax payable 43,415 - (35,328) - 8,087
Derivative liabilities 24,370 - - - 24,370
32,658,134 - (405,930) - 32,252,204
Liabilities of disposal group classified
as held for sale 194,279 - - - 194,279
32,852,413 - (405,930) - 32,446,483

Non-current liabilities
Borrowings 52,725,665 - - - 52,725,665
Other non-current liabilities 7,751,464 - (137,902) (10) 7,613,552
Deferred tax liabilities 676,571 - 3,542 3,581 683,694
Derivative liabilities 312,816 - - - 312,816
61,466,516 - (134,360) 3,571 61,335,727

Total liabilities 94,318,929 - (540,290) 3,571 93,782,210

274
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(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for statement of financial position for the financial year ended 31 December 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 31 December 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Equity attributable to owners of the Company


Share capital 12,284,201 - - - 12,284,201
Capital contribution from shareholders 4,124,423 - - - 4,124,423
Reserves 49,511,744 (445,160) (35,008) 16,646 49,048,222
Shareholders' funds 65,920,368 (445,160) (35,008) 16,646 65,456,846
Non-controlling interests 5,989,665 - (13,384) 5,101 5,981,382
Total equity 71,910,033 (445,160) (48,392) 21,747 71,438,228

Total equity and liabilities 166,228,962 (445,160) (588,682) 25,318 165,220,438

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(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for the statement of financial position for the financial year ended 1 January 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2.

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 1 January 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Non-current assets
Property, plant and equipment 16,891,547 - - - 16,891,547
Land held for property development 4,785,908 - 630,182 - 5,416,090
Investment properties 2,774,900 - - - 2,774,900
Concession intangible assets 4,371,732 - - - 4,371,732
Goodwill on consolidation 2,186,617 - - - 2,186,617
Other intangible assets 941,975 - - - 941,975
Interest in associates 70,683,600 (445,160) 1,763 - 70,240,203
Interest in joint ventures 4,084,144 - (7,397) - 4,076,747
Other non-current financial investments 30,747,910 - - 16,450 30,764,360
Other non-current assets 3,234,630 - 957,327 - 4,191,957
Derivative assets 5,599 - - - 5,599
Deferred tax assets 610,555 - (15,583) - 594,972
Total non-current assets 141,319,117 (445,160) 1,566,292 16,450 142,456,699

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(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for the statement of financial position for the financial year ended 1 January 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 1 January 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Current assets
Property development-in-progress 2,617,355 - (762,654) - 1,854,701
Inventories and work-in-progress 1,152,004 - - - 1,152,004
Trade receivables 3,249,156 - (1,283,448) (29,642) 1,936,066
Other receivables 5,180,485 - - - 5,180,485
Tax recoverable 112,824 - - - 112,824
Derivative assets 153,618 - - - 153,618
Other current financial investments 1,086,864 - - - 1,086,864
Cash and bank balances 9,323,631 - - - 9,323,631
22,875,937 - (2,046,102) (29,642) 20,800,193

Assets held for sale and assets of


disposal group classified as held for
sale 2,587,266 - - - 2,587,266
25,463,203 - (2,046,102) (29,642) 23,387,459
Total assets 166,782,320 (445,160) (479,810) (13,192) 165,844,158

277
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for the statement of financial position for the financial year ended 1 January 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 1 January 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Current liabilities
Borrowings 18,814,644 - - - 18,814,644
Trade payables 2,629,708 - (236,986) - 2,392,722
Other current liabilities 14,558,196 - (94,022) - 14,464,174
Tax payable 113,180 - (38,018) - 75,162
Derivative liabilities 3,505 - - - 3,505
36,119,233 - (369,026) - 35,750,207
Liabilities of disposal group classified
as held for sale 791,132 - - - 791,132
36,910,365 - (369,026) - 36,541,339

Non-current liabilities
Borrowings 54,235,285 - - - 54,235,285
Other non-current liabilities 7,337,263 - (204,207) - 7,133,056
Deferred tax liabilities 641,676 - 16,063 - 657,739
Derivative liabilities 612,857 - - - 612,857
62,827,081 - (188,144) - 62,638,937

Total liabilities 99,737,446 - (557,170) - 99,180,276

278
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for the statement of financial position for the financial year ended 1 January 2017 have been adjusted as
a result of adoption of MFRS Framework as disclosed in Note 2.2. (cont'd.)

Statement of financial position As reported MFRS 1 MFRS 15 MFRS 9 As restated


as at 1 January 2017 RM'000 RM'000 RM'000 RM'000 RM'000

Group

Equity attributable to owners of the Company


Share capital 12,284,201 - - - 12,284,201
Capital contribution from shareholders 4,124,423 - - - 4,124,423
Reserves 44,505,735 (445,160) 52,446 (13,192) 44,099,829
Shareholders' funds 60,914,359 (445,160) 52,446 (13,192) 60,508,453
Non-controlling interests 6,130,515 - 24,914 - 6,155,429
Total equity 67,044,874 (445,160) 77,360 (13,192) 66,663,882

Total equity and liabilities 166,782,320 (445,160) (479,810) (13,192) 165,844,158

279
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

76. Transition to MFRS framework (cont'd.)

The following comparatives of the Group for the statement of comprehensive income for the financial year ended 31 December 2017 have been
adjusted as a result of adoption of MFRS Framework as disclosed in Note 2.2.

As reported MFRS 1 MFRS 15 MFRS 9 As restated


RM RM RM RM RM

Revenue 24,666,619 (1,051,008) 12,195 23,627,806


Operating expense (23,921,040) 316,407 815,809 60,035 (22,728,789)
Other income 3,834,317 820 51,514 (19,532) 3,867,119
Operating profit 4,579,896 317,227 (183,685) 52,698 4,766,136
Finance costs (3,011,234) - - - (3,011,234)
Share of results of associates and
joint ventures 7,118,106 (316,489) 9,053 - 6,810,670
Profit before tax 8,686,768 738 (174,632) 52,698 8,565,572
Taxation (363,974) - 53,250 (12,195) (322,919)
Profit for the year 8,322,794 738 (121,382) 40,503 8,242,653

280
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

77. Impact of adoption of MFRS 9 on classification of financial instruments

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation.

31 December 1 January 2018


2017 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial assets
Loans and receivables
- Cash and cash equivalents 6,845,117 - - 6,845,117 -
- Loans receivable 1,196,248 2,000,000 - 3,196,248 -
8,041,365 2,000,000 - 10,041,365 -

Financial assets designated as fair value through profit


or loss
- Quoted and unquoted shares 12,286,234 - 12,286,234 - -
- Quoted and unquoted bonds 3,499,217 (2,000,000) 1,499,217 - -
- Unquoted and unquoted funds 907,712 - 907,712 - -
16,693,163 (2,000,000) 14,693,163 - -

Financial assets designated as available-for-sale


- Quoted and unquoted shares 17,835,154 15,619 - - 17,850,773
- Quoted and unquoted bonds 1,490,996 - - - 1,490,996
- Unquoted and unquoted funds 31,169 - - - 31,169
19,357,319 15,619 - - 19,372,938

Financial assets designated as held-to-maturity


- Quoted and unquoted bonds 45,721 - 45,721 - -

281
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

77. Impact of adoption of MFRS 9 on classification of financial instruments (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2018


2017 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial liabilities
At amortised cost
- Embedded derivatives 241,566 - 241,566 - -
- Periodic Payment Exchangeable Trust Certificates 4,863,370 - - 4,863,370 -
- Islamic Medium Term Notes
- Danga 12,415,015 - - 12,415,015 -
- RACB 7,081,601 - - 7,081,601 -
- Ihsan Sukuk 204,125 - - 204,125 -
- Term loans - unsecured 2,503,123 - - 2,503,123 -
27,308,800 - 241,566 27,067,234 -

282
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

77. Impact of adoption of MFRS 9 on classification of financial instruments (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2017


2016 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000
Financial assets
Loans and receivables
- Cash and cash equivalents 9,323,631 - - 9,323,631 -
- Loans receivable 640,315 1,558,304 - 2,198,619 -
9,963,946 1,558,304 - 11,522,250 -

Financial assets designated as fair value through profit


or loss
- Quoted and unquoted shares 11,725,016 (541,854) 11,183,162 - -
- Quoted and unquoted bonds 2,440,840 (1,000,000) 1,440,840 - -
- Unquoted and unquoted funds 1,413,162 - 1,413,162 - -
15,579,018 (1,541,854) 14,037,164 - -

Financial assets designated as available-for-sale


- Quoted and unquoted shares 14,143,567 - - - 14,143,567
- Quoted and unquoted bonds 1,396,910 - - - 1,396,910
- Unquoted and unquoted funds 14,723 - - - 14,723
15,555,200 - - - 15,555,200

Financial assets designated as held-to-maturity


- Quoted and unquoted bonds 60,241 - 60,241 - -

283
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

77. Impact of adoption of MFRS 9 on classification of financial instruments (cont'd.)

The impact of the changes in accounting policies on the financial statements as a result of the transition to MFRS are as follows. Certain
comparatives have also been restated to conform with the current year presentation. (cont'd.)

31 December 1 January 2017


2016 Reclassification to new MFRS 9 category
MFRS 139 Remeasurement FVTPL Amortised cost FVOCI
RM'000 RM'000 RM'000 RM'000 RM'000

Financial liabilities
At amortised cost
- Embedded derivatives 506,368 - 506,368 - -
- Periodic Payment Exchangeable Trust Certificates 5,332,621 - - 5,332,621 -
- Islamic Medium Term Notes
- Danga 11,301,896 - - 11,301,896 -
- RACB 6,058,775 - - 6,058,775 -
- Ihsan Sukuk 102,285 - - 102,285 -
- Term loans - unsecured 2,552,132 - - 2,552,132 -
25,854,077 - 506,368 25,347,709 -

284
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company

(A) Subsidiaries of the Company

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Agrifood Resources Holdings Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. ("ARHSB")

Atlantic Quantum Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding


and provision of
management services

Aur Investments (Cayman Cayman Islands 100.0 100.0 - - Investment holding


Islands) Limited #

Aur Ventures Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding

Balok Ventures Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding

Banggi Ventures Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding

Batu Hill Development Ltd. # England and 100.0 100.0 - - Dormant


Wales

Bombalai Hill Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Brinchang Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Broga Hill Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Bukit Bendera Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Bukit Chini Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Bukit Damar Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

285
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Bukit Frasers Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Bukit Galla Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Bukit Puteri Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Carey Investments (Cayman Cayman Islands 100.0 100.0 - - Investment holding


Islands) Limited #

Cenang Capital Ltd. * Malaysia 100.0 100.0 - - Under liquidation

Cenviro Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding


and provision of
management services

Chendering Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Cosmos Friendship Limited # Hong Kong 100.0 100.0 - - Investment holding

Dayang Bunting Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Dendana Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Limited #

Desaru Investments Cayman Islands 100.0 100.0 - - Investment holding


(Cayman Islands) Ltd. #

Feringghi Capital Limited # Malaysia 100.0 100.0 - - To provide funding for


the operations of
Special Purpose
Vehicle on behalf of
its holding company

286
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Gemia Investments Limited # Cayman Islands 100.0 100.0 - - Investment holding

Glam Ventures Pte Limited # Singapore 100.0 100.0 - - Investment holding

Granatum Ventures Sdn. Malaysia 100.0 100.0 - - Investment holding


Bhd. (formerly known
as ("fka") Pulau
Gaya Ventures Sdn. Bhd.)

Gunung Korbu Investments Cayman Islands 100.0 100.0 - - Investment holding


(Cayman Islands) Limited #

Gunung Nuang Ventures Malaysia 100.0 100.0 - - Investment holding


Limited #

i2M Ventures Sdn. Bhd. Malaysia 100.0 100.0 - - Promotion, marketing


and administration of
business service
cluster

Iskandar Capital Sdn. Bhd. Malaysia 15.3 15.3 Equity method Investment holding

Iskandar Investment Malaysia 60.0 60.0 40.0 40.0 Investment holding,


Berhad ("IIB") property investment,
property and land
development and the
provision of shared
services to the
subsidiaries

Iskandar Ventures Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding


("IVSB") #

Jerai Ventures Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding

Kelanang Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

287
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Khazanah Americas United States 100.0 100.0 - - Investment advisory


Incorporated #

Khazanah Asset Management Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. #

Khazanah Europe Investment United Kingdom 100.0 100.0 - - Provision of


Limited # intra-group
financial, legal and
investment advisory
services, related
services to the group

Khazanah Nasional Hong Kong 100.0 100.0 - - Investment holding


Consulting (Hong Kong)
Company Limited #

Klebang Capital Ltd. # Malaysia 100.0 100.0 - - Investment holding

Kuala Perlis Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Kuala Selangor Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Lankayan Ventures Malaysia - 100.0 - - Dissolved


Sdn. Bhd. *

Layang-layang Ventures Malaysia 100.0 100.0 - - To manage, disburse


Sdn. Bhd. # and monitor the
allocation of grant
from Ministry of
Finance to Allied
Healthcare Centre of
Excellence ("AH CoE")

Ledang Ventures Pte Ltd. # Singapore 100.0 100.0 - - Investment holding

Lembong Ventures Sdn. Malaysia 100.0 100.0 - - Dormant


Bhd. #

288
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Lido Capital Ltd. # Malaysia 100.0 100.0 - - Fund raising on behalf


of its holding company

Little Steps Sdn. Bhd. # Malaysia 100.0 100.0 - - Childcare operator

Malaysian Airline System Malaysia 100.0 100.0 - - Air transportation and


Berhad ("MAS") provision of related
services

Malaysia Aviation Group Malaysia 100.0 100.0 - - Investment holding


Berhad ("MAGB") *

Malaysian Technology Malaysia 100.0 100.0 - - Venture capital


Development Corporation services activities,
Sdn. Bhd. * management of
government grants,
technology incubation
management and
technology support
services

Mantanani Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Mataking Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Mount Bintang Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Mount Gading Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Mount Hatton Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

289
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Mount Irau Ventures Malaysia 100.0 100.0 - - Providing human


Sdn. Bhd. # capital services
including recruitment
services, secondment
and redeployment of
human capital

Mount Rajah Ventures Jersey 100.0 100.0 - - Dormant


Limited #

Mount Raya Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Mount Reskit Investments Malaysia 100.0 100.0 - - Investment holding


Ltd. #

Mount Serudum Ventures Malaysia 100.0 100.0 - - Leasing of properties


Sdn. Bhd. #

Mount Terra Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Noring Investments (Mauritius) Mauritius 100.0 100.0 - - Investment holding


Limited #

Ophir Ventures Sdn. Bhd. # Malaysia 100.0 100.0 - - Investment holding

Pagon Hill Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pangkor Investments Cayman Islands 100.0 100.0 - - Investment holding


(Cayman Islands) Ltd. #

Pantai Air Papan Malaysia 100.0 100.0 - - Investment holding


Investments Limited #

Pantai Barat Investments Cayman Islands 100.0 100.0 - - Investment holding


(Cayman Islands) Ltd. #

290
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Pantai Cahaya Bulan Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Pantai Juara Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pantai Melawi Ventures Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. #

Pantai Morib Ventures Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. #

Pantai Remis Investments Malaysia 100.0 100.0 - - Dormant


Limited #

Pantai Saujana Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pantai Sura Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pasir Salak Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Payar Investments Ltd. # Malaysia 100.0 100.0 - - Investment holding

Penerbangan Malaysia Malaysia 100.0 100.0 - - Carrying on business


Berhad ("PMB") of acquiring, sale and
leasing of aircraft and
aircraft engines,
investment holding,
strategic management
of the domestic airline
business and other
related services

Penerbangan Perdana Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. #

291
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Perhentian Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Pine Tree Hill Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Ponorogo Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pulau Dinawan Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pulau Kaca Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pulau Kendi Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pulau Kukup Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Pulau Labas Ventures Malaysia 100.0 100.0 - - To assist the


Sdn. Bhd. # government of
Malaysia to establish
the Malaysian
Aviation Commission
pursuant to Act 771
Malaysian Aviation
Commission Act 2015

Pulau Manukan Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Pulau Melaka Ltd. # Malaysia 100.0 100.0 - - Investment holding

Pulau Memutik Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Pulau Segantang Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

292
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Pulau Selingan Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Pulau Sibu Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Pulau Tiga Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Rantau Abang Capital Malaysia 100.0 100.0 - - Fund raising on behalf


Berhad # of the company to
issue Islamic
Commercial Papers
and Islamic Medium
Term Notes Sukuk
Musyarakah

Redang Investments Ltd. # Malaysia 100.0 100.0 - - Investment holding

Rhizophora Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Sampadi Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Santubong Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Satang Investments Ltd. # Malaysia 100.0 100.0 - - Investment holding

Sebatik Investments Limited # Malaysia 100.0 100.0 - - Investment holding

Silterra Malaysia Sdn. Bhd. Malaysia 100.0 100.0 - - Manufacturing of


("Silterra") * semiconductor wafer

Sipadan Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

293
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

STLR Sdn. Bhd. # Malaysia 100.0 100.0 - - Selling, leasing and


renting of properties

Studios Film Office Sdn. Bhd. Malaysia 100.0 100.0 - - Film production
(fka Mount Cecil Ventures services
Sdn. Bhd.)

Suluq Investments (Mauritius) Mauritius 100.0 100.0 - - Investment holding


Ltd. #

Sungai Pulai Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Synapse Education Holdings Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Taman Tugu Project Malaysia 100.0 100.0 - - To carry out efforts of


Development Sdn. Bhd. project management
(fka Taman Tugu Dataran including but not
Muzium Development limited to execution of
projects relating to the
Sdn. Bhd.) #
refurbishment,
rejuvenation and
redevelopment of
Taman Tugu in Kuala
Lumpur and
elsewhere in Malaysia

Tanjung Adang Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Tanjung Bidara Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Tanjung Buai Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Tanjung Jara Investments Hong Kong 100.0 100.0 - - Investment holding


Ltd. #

294
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Tanjung Manis Investments Malaysia 100.0 100.0 - - Dormant


Ltd. #

Tanjung Pinang Investments Malaysia 100.0 100.0 - - Dormant


Limited #

Tanjung Rhu Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Tanjung Sedili Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Tanjung Tuan Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Tasik Pedu Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Bahang Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Belanga Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Cempedak Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Teluk Dalam Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Gadong Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Kalung Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Teluk Kemang Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Teluk Kumbar Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

295
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Teluk Nibong Ventures Malaysia 100.0 100.0 - - Provision of transition


Sdn. Bhd. support services
including outplacement
support and training
support services
for the development
of human capital

Teluk Pauh Sdn. Bhd. # Malaysia 100.0 100.0 - - Administration of


collaboration with the
Cruyff Foundation in
Malaysia

Teluk Rubiah Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

Teluk Senangin Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Themed Attractions Resorts & Malaysia 100.0 100.0 - - Investment holding


Hotels Sdn. Bhd. ("TARHSB") and provision of
management services

Think City Sdn. Bhd. Malaysia 100.0 100.0 - - Promoting and


preserving the living
culture and heritage
areas including but not
limited to initiating
projects relating to the
rejuvenation and
transformation of
George Town, Penang
and elsewhere in
Malaysia

Tioman Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

Titiwangsa Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Ltd. #

296
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(A) Subsidiaries of the Company (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Tulai Beach Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. #

UEM Group Berhad Malaysia 100.0 100.0 - - Project design,


("UEM") management and
contracting in the
fields of civil, electrical
and mechanical
engineering,
undertaking of turnkey
projects and
investment holding

Western Hill Investments Malaysia 100.0 100.0 - - Investment holding


Limited #

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Axiata Group Berhad * Malaysia 37.2 37.3 Equity method Telecommunication


and related services

Bank Muamalat Malaysia 30.0 30.0 Equity method Islamic commercial


Malaysia Berhad banking and finance

CIMB Group Holdings Malaysia 26.8 27.3 Equity method Investment holding,
Berhad * management
company, property
management, provision
of consultancy
services and dealing in
securities

Malaysia Airports Holdings Malaysia 33.2 33.2 Equity method Investment holding
Berhad

Malaysia Electric Corporation Malaysia 30.0 30.0 Equity method In liquidation


Berhad *

297
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

78. Subsidiaries and associates of the Company (cont'd.)

(B) Associates of the Company

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Northern Utility Resources Malaysia - 20.0 Equity method In liquidation


Sdn. Bhd. *

Pulau Kapas Ventures Malaysia 30.0 30.0 Equity method Investment holding
Sdn. Bhd. *

Telekom Malaysia Berhad * Malaysia 26.2 26.2 Equity method Telecommunication


and related services

Tenaga Nasional Berhad * Malaysia 28.8 29.0 Equity method Generation,


transmission and
distribution and sale
of electricity

TIME dotCom Berhad * ^ Malaysia 11.2 11.2 Equity method Investment holding,
provision of
management and
marketing/promotional
services and retailing
of telecommunications
products

Valuecap Sdn. Bhd. * Malaysia 33.3 33.3 Equity method Investment in


marketable securities
listed on Bursa
Malaysia Berhad and
provision of services to
its two wholly owned
subsidiaries

* Subsidiaries and associates not audited by member firms of Ernst & Young Global.

# SPV set up for investment or funding purposes, which are consolidated in the proforma financial
statements of the Company as disclosed in Note 19(b).

~ Equals to proportion of voting rights held.

^ The Company has a total of 20.8% shareholding in TIME dotCom Berhad, comprising 11.4% held
via the Company and 9.4% held by Pulau Kapas Ventures Sdn. Bhd.

298
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group

Other than the subsidiaries, associates and joint venture of the Company as listed in Note 78, the
subsidiaries and associates of the Group are as listed below:

(i) Subsidiaries, associates and joint ventures of UEM Group Berhad ("UEM"), are disclosed in Note
79(A).

(ii) Subsidiaries of Malaysian Airline System Berhad ("MAS"), are disclosed in Note 79(B).

(iii) Subsidiaries and associates of Malaysia Aviation Group Berhad ("MAGB"), are disclosed in Note
79(C).
(iv) Subsidiaries, associates and joint ventures of Iskandar Investment Berhad ("IIB"), are disclosed in
Note 79(D).

(v) Subsidiaries, associates and joint ventures of Themed Attractions Resorts & Hotels Sdn. Bhd.
("TARHSB"), are disclosed in Note 79(E).

(vi) Subsidiary of Malaysian Technology Development Corporation ("MTDC"), are disclosed in Note 79(F).

(vii) Other subsidiaries, associates and joint ventures of the Group are disclosed in Note 79(G).

(A) Subsidiaries, associates and joint ventures of UEM Group Berhad

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %
Subsidiaries of UEM

PLUS Expressways Malaysia 100.0 100.0 - - Investment holding and


International Berhad ("PEIB") provision of expressway
operation services

UEM Sunrise Berhad Malaysia 66.1 66.1 33.9 33.9 Investment holding
("UEM Sunrise")

UEM Builders Berhad Malaysia 100.0 100.0 - - Investment holding and


("UEM Builders") provision of management
services

299
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM (cont'd.)

Cement Industries of Malaysia 100.0 100.0 - - Provision of management


Malaysia Berhad ("CIMA") services and investment
holding

UEM Edgenta Berhad Malaysia 69.1 69.1 30.9 30.9 Investment holding and
("UEM Edgenta") provision of management
services to its subsidiaries

Konsortium ProHAWK Malaysia 65.0 65.0 35.0 35.0 Planning, design,


Sdn. Bhd. financing, development,
construction, landscaping,
equipment,
installation, completion,
testing and commissioning
of a hospital building,
facilities and infrastructure
at the identified project
land and to carry out total
asset and facilities
management services at
hospital or commercial or
government buildings

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of UEM

UE Construction (Phil.) Phillipines 40.0 40.0 Equity method Dormant


Inc.<

300
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint Ventures of UEM

PLUS Malaysia Berhad Malaysia 51.0 51.0 Equity method Investment holding and
("PLUS Malaysia") x provision of expressway
operation services

UEM – Sabah Economic Unincorporated 70.0 70.0 Equity method Construction and
Development x engineering works

UEM – Sarawak Unincorporated 70.0 70.0 Equity method Construction and


Economic engineering works
Development x

UEM – Essar Projects Unincorporated 51.0 51.0 Equity method Construction and
Limited x extension of roads

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of PEIB

Ghir Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius)
Limited

PLUS Kalyan (Mauritius) Mauritius 100.0 100.0 - - Investment holding


Private Limited

PLUS Plaza (Mauritius) Mauritius 100.0 100.0 - - Investment holding


Private Limited

301
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of PEIB (cont'd.)

PT Lintas Marga Sedaya Indonesia 55.0 55.0 45.0 45.0 Undertake the design,
("LMS") construction,
management, financing,
operation, maintenance
and toll collection of the
116-754 kilometre
Cikampek Palimanan Toll
Road ("CPTR") in
Indonesia

PEIB Capital Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding


("PEIB")

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint venture of PEIB

Jetpur Somnath Tollways India 64.4 64.4 Equity method Ceased operations
Private Limited ("JSTPL") //

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of PLUS Kalyan (Mauritius) Private Limited

PLUS BKSP Toll India 94.1 94.1 5.9 5.9 Ceased operations
Limited *## α

302
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of PLUS Plaza (Mauritius) Private Limited

Trichy Padalur Tollways India 74.0 74.0 26.0 26.0 Undertake construction,
Private Limited operation, maintenance
("TPTPL") α and toll collection of the
four laning and
strengthening of Padalur-
Trichy Highway section
from KM285 to KM325 of
NH-45 in the state of
Tamil Nadu, India, on
Build, Operate and
Transfer basis

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint venture of Ghir Investments (Mauritius) Limited

Uniquest Infra Ventures India 80.1 80.1 Equity method Developing, owning and
Private Limited xαt managing road
infrastructure projects in
India

303
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Uniquest Infra Ventures Private Limited

Khalghat Sendhwa India 80.1 80.1 19.9 19.9 Undertake the design,
Tollways Private engineering, finance,
Limited αt construction, operation
and maintenance of
Khalghat-MP/Maharashtra
Border Section on NH-3
from Km84.700 to
Km167.500 in the State of
Madhya Pradesh under
NHDP Phase IIIA through
a concession on Build,
Operate and Transfer
(BOT) basis

Subsidiaries of Plus Malaysia

Projek Lebuhraya Malaysia 51.0 51.0 49.0 49.0 Provision of operation,


Usahasama Berhad maintenance and toll
collection of the
expressways

Teras Teknologi Malaysia 51.0 51.0 49.0 49.0 Investment holding and
Sdn. Bhd. engaged in supply,
installation and
maintenance of toll
systems and equipment
for expressway projects

PLUS Helicopter Services Malaysia 51.0 51.0 49.0 49.0 Provision of helicopter
Sdn. Bhd. charter services and aerial
surveillance of
expressways

304
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Plus Malaysia (cont'd.)

Expressway Lingkaran Malaysia 51.0 51.0 49.0 49.0 Inactive


Tengah Sdn. Bhd.

Linkedua (Malaysia) Malaysia 51.0 51.0 49.0 49.0 Inactive


Berhad

Lebuhraya Pantai Timur Malaysia 51.0 51.0 49.0 49.0 Provision of operations,
2 Sdn. Bhd. maintenance and toll
collection of the East
Coast Expressway Phase
2

Penang Bridge Malaysia 51.0 51.0 49.0 49.0 Inactive


Sdn. Bhd.

Projek Lebuhraya Utara- Malaysia 51.0 51.0 49.0 49.0 Inactive


Selatan Berhad

Subsidiaries of UEM Sunrise

UEM Land Berhad Malaysia 66.1 66.1 33.9 33.9 Property development,
("UEM Land") property investment, project
procument and
management and strategic
investment holding

Nusajaya Resort Malaysia 66.1 66.1 33.9 33.9 Operator of the East
Sdn. Bhd. Ledang Clubhouse

Sunrise Berhad Malaysia 66.1 66.1 33.9 33.9 Property development and
("Sunrise") investment holding

UEM Sunrise (Australia) Malaysia 66.1 66.1 33.9 33.9 Investment holding
Sdn. Bhd.

305
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Sunrise (cont'd.)

UEM Sunrise (Canada) Malaysia 66.1 66.1 33.9 33.9 Investment holding,
Sdn. Bhd. property development
and general trading

UEM Sunrise Malaysia 66.1 66.1 33.9 33.9 Investment holding


Management
Services Sdn. Bhd.

UEM Sunrise Properties Malaysia 66.1 66.1 33.9 33.9 Investment holding,
Sdn. Bhd. property development
and general trading

Nusajaya Five O Malaysia 66.1 66.1 33.9 33.9 Provision of security


Sdn. Bhd. services

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Associate of UEM Sunrise

UEM Sunrise Edgenta Malaysia 68.2 68.2 Equity method Investment holding and
TMS Sdn. Bhd. β management of real estate

Joint ventures of UEM Sunrise

Nusajaya Lifestyle Malaysia 36.4 36.4 Equity method Property and real estate
Sdn. Bhd. x development, management
and property management

Nusajaya Premier Malaysia 52.9 52.9 Equity method Property development and
Sdn. Bhd. x investment holding

Desaru South Course Malaysia 33.7 33.7 Equity method Property development
Residences Sdn. Bhd.
("DSCR") x

306
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Joint ventures of UEM Sunrise (cont'd.)

Desaru North Course Malaysia 33.7 33.7 Equity method Property development
Residences Sdn. Bhd.
("DNCR") x

Desaru South Course Malaysia 33.7 33.7 Equity method Property development
Land Sdn. Bhd.
("DSCL") x

Malaysian Bio-Xcell Malaysia 26.4 26.4 Equity method Development and


Sdn. Bhd. * operation of a
biotechnology park
in the Southern Industrial
Logistics Cluster in
Iskandar
Puteri, Iskandar Malaysia

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Land

Bandar Nusajaya Malaysia 66.1 66.1 33.9 33.9 Investment holding,


Development Sdn. Bhd. property development,
("BND") land trading and an agent
for its subsidiaries

Finwares Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Investment holding

Fleet Group Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Investment holding

Hatibudi Nominees Malaysia 66.1 66.1 33.9 33.9 Investment holding


(Tempatan) Sdn. Bhd.

307
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Land (cont'd.)

Marina Management Malaysia 66.1 66.1 33.9 33.9 Marina management and
Sdn. Bhd. property management

Mahisa Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property developer and
undertaking construction
and turnkey development
contracts

Marak Unggul Sdn. Bhd. Malaysia 33.1 33.1 66.9 66.9 Dormant

Nusajaya Development Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Nusajaya Medical Park Malaysia 66.1 66.1 33.9 33.9 Construct, manage and/or
Sdn. Bhd. * operate specialised
buildings for long term
lease and property
development

Nusajaya Business Park Malaysia 66.1 66.1 33.9 33.9 Dormant


Sdn. Bhd.

Projek Usahasama Malaysia 66.1 66.1 33.9 33.9 In creditors' voluntary


Transit Ringan liquidation
Automatik Sdn. Bhd.

UEM Sunrise Nusantara Malaysia 66.1 66.1 33.9 33.9 Investment holding
Sdn. Bhd.

UEM Sunrise Overseas Malaysia 66.1 66.1 33.9 33.9 Investment holding
Corporation Sdn. Bhd.

308
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Land (cont'd.)

UEM Sunrise Pacific Malaysia 66.1 66.1 33.9 33.9 Investment holding
Sdn. Bhd.

UEM Sunrise Ventures Malaysia 66.1 66.1 33.9 33.9 Investment holding
Sdn. Bhd.

Aura Muhibah Sdn. Bhd. Malaysia 39.7 39.7 60.3 60.3 Property development

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Associates of UEM Land

Setia Haruman Malaysia 16.5 16.5 Equity method Township development,


Sdn. Bhd. * property development,
project development and
sale of land

Scope Energy Malaysia 26.4 26.4 Equity method Property development


Sdn. Bhd.*

Inneonusa Sdn. Bhd. * Malaysia 25.8 25.8 Equity method Provision of information
communication technology

(ICT) system security and


smart building services
including smart tenant
services for building
owners, operators,
residents and visitors

Sarandra Malaysia Malaysia 26.4 26.4 Equity method Dormant


Sdn. Bhd. Є

309
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Joint Ventures of UEM Land

Cahaya Jauhar Malaysia 39.7 39.7 Equity method Undertake the turnkey
Sdn. Bhd. X design and build contract
for the development of the
Johor State New
Administrative Centre (now
known as Kota Iskandar)
and State Government
Staff Housing in Iskandar
Puteri, Johor, and
provision of facilities
maintenance and
management services

Gerbang Leisure Park Malaysia 33.1 33.1 Equity method Property development
Sdn. Bhd. *

Haute Property Sdn. Bhd. * Malaysia 26.4 26.4 Equity method Property development and
property marketing

Horizon Hills Malaysia 33.1 33.1 Equity method Property development


Development Sdn. Bhd.

Nusajaya Consolidated Malaysia 33.1 33.1 Equity method Property development and
Sdn. Bhd.* related activities

Nusajaya Tech Park Malaysia 26.4 26.4 Equity method Property development
Sdn. Bhd.

FASTrack Iskandar Malaysia 19.8 19.8 Equity method Property development and
Sdn. Bhd. to develop, construct,
operate and manage
motorsport city with
related facilities and
services

310
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Cahaya Jauhar Sdn. Bhd.

CJ Capital Sdn. Bhd. Malaysia 39.7 39.7 60.3 60.3 Special purpose vehicle
solely to undertake the
issuance of Sukuk
Murabahah and any other
activities incidental to its
function as a special
purpose vehicle
in relation to the Sukuk
Murabahah

CJ Bina Maju Sdn. Bhd. Malaysia 39.7 39.7 60.3 60.3 Development of
government projects
and provision of
facilities maintenance
and management

CJ Residentials Sdn. Bhd. Malaysia 39.7 39.7 60.3 60.3 Development of


government projects
and provision of
facilities maintenance
and management

CJ Developments Sdn. Bhd. Malaysia 39.7 39.7 60.3 60.3 Development of


government projects
and provision of
facilities maintenance
and management

CJ Ledang Development Malaysia 39.7 39.7 60.3 60.3 Development of


Sdn. Bhd. government projects
and provision of
facilities maintenance
and management

311
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Horizon Hills Development Sdn. Bhd.

Horizon Hills Resort Malaysia 33.1 33.1 66.9 66.9 Proprietor of a club and
Berhad management of a golf
course

Horizon Hills Property Malaysia 33.1 33.1 66.9 66.9 Property management
Services Sdn. Bhd. and maintenance
services

Subsidiary of Nusajaya Consolidated Sdn. Bhd.

Clear Dynamic Sdn. Bhd.* Malaysia 33.1 33.1 66.9 66.9 Hospitality and related
services
Subsidiaries of BND

Nusajaya Industrial Park Malaysia 66.1 66.1 33.9 33.9 Property development
Sdn. Bhd.

Nusajaya Gardens Malaysia 66.1 66.1 33.9 33.9 Land trading and
Sdn. Bhd. investment holding

Nusajaya Greens Malaysia 66.1 66.1 33.9 33.9 Property development,


Sdn. Bhd. land trading and
investment holding

Nusajaya Heights Malaysia 66.1 66.1 33.9 33.9 Property development,


Sdn. Bhd. land trading and
investment holding

Nusajaya Rise Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development,
land trading and
investment holding

312
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of BND (cont'd.)

Nusajaya Seaview Malaysia 66.1 66.1 33.9 33.9 Land trading and
Sdn. Bhd. investment holding

Nusajaya Land Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Preferred Resources Malaysia 76.3 76.3 23.7 23.7 Inactive


Sdn. Bhd. ++

Symphony Hills Malaysia 66.1 66.1 33.9 33.9 Property development,


Sdn. Bhd. land trading and
investment holding

Subsidiary of UEM Sunrise Nusantara Sdn. Bhd.

P.T. Bias Permata Indonesia 66.1 66.1 33.9 33.9 Investment holding
Subsidiary of UEM Sunrise Overseas Corporation Sdn. Bhd.

UEM Sunrise South Africa South Africa 66.1 66.1 33.9 33.9 Investment holding
(Pty) Ltd. *

Subsidiaries of UEM Sunrise South Africa (Pty) Ltd

Roc-Union (Proprietary) South Africa 53.1 53.1 46.9 46.9 Investment holding
Limited *

Subsidiary of Roc-Union (Proprietary) Limited

Rocpoint (Proprietary) South Africa 53.1 53.1 46.9 46.9 Acquisition and
Limited * development of land

313
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Associate of Rocpoint (Proprietary) Limited

Durban Point Development South Africa 26.6 26.6 Equity method Property development
Company (Proprietary)
Limited

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Sunrise

Arcoris Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property investment and
development

Ascot Assets Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development

Subsidiaries of Sunrise (cont'd.)

Aston Star Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property investment,
development and
construction

Aurora Tower at KLCC Malaysia 66.1 66.1 33.9 33.9 Property development
Sdn. Bhd.

Ibarat Duta Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development

Laser Tower Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development

Lembah Suria Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development

314
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Sunrise (cont'd.)

Lucky Bright Star Malaysia 66.1 66.1 33.9 33.9 Property investment and
Sdn. Bhd. development

Milik Harta Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property development

New Planet Trading Malaysia 66.1 66.1 33.9 33.9 Property investment and
Sdn. Bhd. development

Prinsip Eramaju Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Saga Centennial Malaysia 66.1 66.1 33.9 33.9 Ceased operation


Sdn. Bhd.

SCM Property Services Malaysia 66.1 66.1 33.9 33.9 Provision of property
Sdn. Bhd. management services

Solid Performance Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Summer Suites Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sun Victory Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Property investment and
development

Sunrise Alliance Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Benchmark Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

315
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Sunrise (cont'd.)

Sunrise Century Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Hospitality and Malaysia 66.1 66.1 33.9 33.9 Provision of ancillary
Leisure Sdn. Bhd. services to property
related projects

Sunrise Innovations Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Landmark Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Mersing Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Oscar Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Investment holding

Sunrise Overseas Malaysia 66.1 66.1 33.9 33.9 Investment holding and
Corporation Sdn. Bhd. provision of management
services

Sunrise Paradigm Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Pioneer Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Project Services Malaysia 66.1 66.1 33.9 33.9 Property development and
Sdn. Bhd. project management for
property development
projects

316
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Sunrise (cont'd.)

Sunrise Quality Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Region Malaysia 66.1 66.1 33.9 33.9 Property development


Sdn. Bhd.

Sunrise Sovereign Malaysia 66.1 66.1 33.9 33.9 Investment holding


Sdn. Bhd.

Sunrise International The Cayman 66.1 66.1 33.9 33.9 Investment holding
Development Ltd Islands

Sunrise Overseas (S) Singapore 66.1 66.1 33.9 33.9 Promotion and
Pte Ltd. management services
relating to Sunrise Group's
properties

Sunrise MS Pte Ltd. Singapore 66.1 66.1 33.9 33.9 Provision of consultancy,
advisory and technical
services in relation to
project development

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Joint Ventures of Sunrise

Sime Darby Sunrise Malaysia 33.1 33.1 Equity method Property development
Development Sdn.
Bhd.*αt

317
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Joint Ventures of Sunrise (cont'd.)

Sunrise MCL Land Malaysia 33.1 33.1 Equity method Property development and
Sdn. Bhd.* property investment

Subsidiaries of UEM Sunrise (Australia) Sdn. Bhd.

UEM Sunrise (Land) Australia 66.1 66.1 33.9 33.9 Holding and financing
Pty Ltd company

UEM Sunrise Australia 66.1 66.1 33.9 33.9 Holding and financing
(Developments) Pty Ltd company

Subsidiaries of UEM Sunrise (Land) Pty Ltd

UEM Sunrise (Mackenzie Australia 66.1 66.1 33.9 33.9 Trustee company
Street) Pty Ltd

UEM Sunrise (Mackenzie Australia 66.1 66.1 33.9 33.9 Landowning entity
Street) Unit Trust

UEM Sunrise (La Trobe Australia 66.1 66.1 33.9 33.9 Trustee company
Street) Pty Ltd

UEM Sunrise (La Trobe Australia 66.1 66.1 33.9 33.9 Landowning entity
Street) Unit Trust

UEM Sunrise (St Kilda Australia 66.1 66.1 33.9 33.9 Trustee company
Road) Pty Ltd

UEM Sunrise (St Kilda Australia 66.1 66.1 33.9 33.9 Landowning entity
Road) Unit Trust

318
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Sunrise (Developments) Pty Ltd

UEM Sunrise (Mackenzie Australia 66.1 66.1 33.9 33.9 Development company
Street Development)
Pty Ltd

UEM Sunrise (La Trobe Australia 66.1 66.1 33.9 33.9 Development company
Street Development)
Pty Ltd

UEM Sunrise (St Kilda Australia 66.1 66.1 33.9 33.9 Development company
Road Development)
Pty Ltd

Subsidiaries of UEM Sunrise (Developments) Pty Ltd (cont'd.)

UEM Sunrise (Aurora Australia 66.1 - 33.9 - Property management


Melbourne Central Property services
Management) Pty Ltd

UEM Sunrise Australia 66.1 - 33.9 - Property management


(Conservatory Melbourne services
Property Management) Pty
Ltd

Subsidiaries of UEM Sunrise Properties Sdn. Bhd.

Nusajaya DCS Malaysia 66.1 66.1 33.9 33.9 Provison of cooling plant
Sdn. Bhd. facility services

Opera Retreat Malaysia 66.1 66.1 33.9 33.9 Property investment


Sdn. Bhd.

319
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Sunrise Properties Sdn. Bhd. (cont'd.)

Puteri Harbour Malaysia 66.1 66.1 33.9 33.9 Own and operate a
Convention Centre convention centre
Sdn. Bhd.

UEM Sunrise Nusajaya Malaysia 66.1 66.1 33.9 33.9 Property investment
Properties Sdn. Bhd.

Subsidiary of UEM Sunrise (Canada) Sdn. Bhd.

UEM Sunrise (Canada) Canada 66.1 66.1 33.9 33.9 Real estate acquisition
Development Ltd. and development

Subsidiaries of UEM Sunrise Management Services Sdn. Bhd.

UEM Sunrise Nusajaya Malaysia 66.1 66.1 33.9 33.9 Property management
Property Services services
Sdn. Bhd.

UEM Sunrise Project Malaysia 66.1 66.1 33.9 33.9 Property management for
Services Sdn. Bhd. property development

Subsidiary of Sunrise Oscar Sdn. Bhd.

Sunrise DCS Sdn. Bhd. Malaysia 66.1 66.1 33.9 33.9 Provision of cooling plant
facility services

Subsidiary of Sunrise International Development Ltd

Sunrise Holdings S.àr.l. The Grand 66.1 66.1 33.9 33.9 Investment holding
Duchy of
Luxembourg

320
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Sunrise Holdings S.àr.l.

Canada Sunrise Canada 66.1 66.1 33.9 33.9 Property investment and
Development Corp. * development

Subsidiaries of Canada Sunrise Development Corp.

Canada Sunrise Canada 66.1 66.1 33.9 33.9 Property investment and
Developments development
(Richmond) Limited *

0757422 B.C. Ltd* Canada 66.1 66.1 33.9 33.9 Property investment and
development

Subsidiaries of UEM Builders

Buildcast Sdn. Bhd. Malaysia 100.0 100.0 - - Production of precast


concrete products

IBS Iconsis Sdn. Bhd. * Malaysia 100.0 100.0 - - Ceased operations

Intria Bina Sdn. Bhd. Malaysia 100.0 100.0 - - Civil engineering and
construction works

Hoto Stainless Steel Malaysia 97.9 97.9 2.1 2.1 Manufacturing and sale of
Industries Sdn. Bhd. stainless steel pipes

Pati Sdn. Bhd. ("PATI") Malaysia 100.0 100.0 - - Civil engineering works
and building construction

PATI Technologies Malaysia 100.0 100.0 - - Ceased operations


Sdn. Bhd. *

Total Trade Sdn. Bhd. Malaysia 100.0 100.0 - - Ceased operations

321
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Builders (cont'd.)

UEM Construction Malaysia 100.0 100.0 - - Contractors for the


Sdn. Bhd. ("UEMC") execution of construction
and engineering works

UEM Construction (B) Brunei 100.0 100.0 - - Civil, electrical, mechanical


Sdn. Bhd. < and industrial plant
construction and general
building and contracting

UEMB – MRCB JV Malaysia 51.0 51.0 49.0 49.0 Master contractor for the
Sdn. Bhd. execution of engineering
and construction works

UEMB - Najcom JV Unincorporated 65.0 65.0 35.0 35.0 Master contractor for the
execution of engineering
and construction works

UEMB-PROPEL Unincorporated 100.0 100.0 - - Civil engineering works


Consortium and building construction

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Associate of UEM Builders

Preferred Resources Malaysia 76.3 76.3 Equity method Inactive


Sdn. Bhd. ++ *

322
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Joint Venture of UEM Builders

Shimizu – Nishimatsu - Unincorporated 20.0 20.0 Equity method Water transfer tunnel and
UEMB – IJM JV related works for Pahang-
Selangor Raw Water
Transfer project

Joint Venture of Buildcast Sdn. Bhd.

Buildcast Sdn. Unincorporated - 70.0 Equity method Dissolved


Bhd.– Persys
Sdn. Bhd. JV x

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEMC

UEM (Mauritius) Co Ltd Mauritius 100.0 100.0 - - Investment holding


("UEMM") *

PT Karabha Gryamandiri µ Indonesia 55.0 55.0 45.0 45.0 Subcontractor of


construction of CPTR
package

UEMC - PPES Works Unincorporated 70.0 70.0 30.0 30.0 Design and build for
(Sarawak) Sdn. Bhd. JV Hospital Lawas project

323
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~
principal place 2018 2017 Accounting Principal activities
of business % % model applied

Associate of UEMC

Samsung C&T Malaysia 40.0 40.0 Equity method Civil engineering works
Corporation UEM and building construction
Construction JV Sdn. Bhd.

Joint Ventures of UEMC

UEC – Hasrat Usaha Unincorporated - 70.0 Equity method Dormant


Sdn. Bhd. JV x

UEMC – Bina Puri JV x Unincorporated 60.0 60.0 Equity method Design, construction,
completion, testing,
commissioning and
maintenance of main
terminal building, satellite
building, sky bridge and
piers

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEMM

UE Development India India 100.0 100.0 - - Construction works and


Pvt Ltd ("UEDI") * maintenance of
expressways

Pati International (India) India 100.0 100.0 - - Construction and


Pvt. Ltd. * engineering services

UEM Builders – India 60.0 60.0 40.0 40.0 Construction, execution


Ansalapi Contracts and completion of various
Pvt. Ltd. Ω* building and engineering
works at Sushant Golf
City, Lucknow

324
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of PT Karabha Gryamandiri

PT Karabha Gryamandiri Unicorporated 30.3 30.3 69.7 69.7 Design, development,


& PT Nusa Raya Cipta construction, management,
Consortium maintenance and operation
of the CPTR package

Subsidiary of Pati International (India) Pvt Ltd

Rushil Constructions India 100.0 100.0 - - Maintain highways


(India) Pvt. Ltd. *

Subsidiary of PATI Sdn. Bhd.

Pati Pave Sdn. Bhd. * Malaysia 100.0 100.0 - - Ceased operations

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of PATI Sdn. Bhd.

Pati Philippines Inc. * Phillipines 40.0 40.0 Equity method Dormant

Joint Ventures of PATI Sdn. Bhd.

Road Builder (M) Unincorporated 50.0 50.0 Equity method Construction and
Sdn. Bhd. – PATI extension of roads
Sdn. Bhd. JV

B. Seenaiah & Co – Unincorporated 25.0 25.0 Equity method Construction and


Road Builder (M) extension of roads
Sdn. Bhd. – PATI
Sdn. Bhd. JV

325
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint Ventures of PATI Sdn. Bhd. (cont'd.)

Hindustan Construction Unincorporated 50.0 50.0 Equity method Construction and


Co Ltd - PATI extension of roads
Sdn. Bhd. JV

PATI - Bhagheeratha Unincorporated 50.0 50.0 Equity method Construction and


Engineering Ltd JV extension of roads

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of CIMA

Cimaco Readymix Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Cimaco Quarry Sdn. Bhd. Malaysia - 100.0 - - Dissolved

I-Mix Concrete Industries Malaysia 100.0 100.0 - - Inactive


Sdn. Bhd.

Kuad Sdn. Bhd. Malaysia 70.0 70.0 30.0 30.0 Quarrying business and its
related activities

Kuari Pati Sdn. Bhd. Malaysia 100.0 100.0 - - Quarrying business and its
related activities

Matang Pagar Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Quarrying business and its
related activities

326
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of CIMA (cont'd.)

Negeri Sembilan Cement Malaysia 100.0 100.0 - - Manufacture and sale of


Industries Sdn. Bhd. cement

Pemasaran Simen Malaysia 100.0 100.0 - - Inactive


Negara Sdn. Bhd.

Profitlite Holdings Malaysia 100.0 100.0 - - Quarrying business and its


Sdn. Bhd. related activities

Unipati Concrete Malaysia 100.0 100.0 - - Production and sale of


Sdn. Bhd. ready-mixed concrete

Subsidiaries of Kuari Pati Sdn. Bhd.

Pati Bukit Perak Malaysia 100.0 100.0 - - Quarrying business and its
Sdn. Bhd. related activities

Pati Nilai Quarry Malaysia 70.0 70.0 30.0 30.0 Quarrying business and its
Sdn. Bhd. related activities

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Kuari Pati Sdn. Bhd.

Semenyih Quarry Malaysia 40.0 40.0 Equity method Quarrying business and its
Sdn. Bhd. * related activities

327
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Edgenta

Opus Group Berhad Malaysia 69.1 69.1 30.9 30.9 Investment holding
("Opus")

Edgenta Propel Berhad Malaysia 69.1 69.1 30.9 30.9 Maintenance and repair of
("Edgenta Propel") civil, mechanical and
electrical works of roads,
infrastructure and
expressways and industrial
cleaning services

Edgenta Environmental & Malaysia 69.1 69.1 30.9 30.9 Geotechnical investigation,
Material Testing Sdn. Bhd. instrumentation and
pavement condition
assessment works

Faber Development Malaysia 69.1 69.1 30.9 30.9 Investment holding


Holdings Sdn. Bhd.

Edgenta Healthcare Malaysia 69.1 69.1 30.9 30.9 Investment holding


Management Sdn. Bhd.

Faber Hotels Holdings Malaysia 69.1 69.1 30.9 30.9 Investment holding
Sdn. Bhd.

Faber LLC* Emirates of 51.9 51.9 48.1 48.1 Facilities management


Dubai services in United Arab
Emirates

328
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Edgenta (cont'd.)

Edgenta Facilities Malaysia 69.1 69.1 30.9 30.9 Investment holding and
Sdn. Bhd. provision of integrated
facilities management
services

Edgenta Energy Services Malaysia 48.4 48.4 51.6 51.6 Energy performance
Sdn. Bhd. management services

Edgenta Energy Projects Malaysia 69.1 69.1 30.9 30.9 Providing energy
Sdn. Bhd. management services and
renewable energy
services through capital
investments

Edgenta (Singapore) Singapore 69.1 69.1 30.9 30.9 Investment holding


Pte. Ltd.

Edgenta Township Malaysia 69.1 69.1 30.9 30.9 Investment holding and
Management Services management of real
Sdn. Bhd. estate

KFM Holdings Sdn. Bhd. Malaysia 55.3 55.3 44.7 44.7 Cleaning contractors,
improvers and other
related activities

Sate Yaki Sdn. Bhd. Malaysia 41.5 41.5 58.5 58.5 In liquidation

329
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Opus

Builders Credit & Leasing Malaysia 69.1 69.1 30.9 30.9 Investment holding
Sdn. Bhd.

International Business British Virgin 69.1 69.1 30.9 30.9 Investment holding
Link, Inc Islands

Opus International New Zealand 69.1 69.1 30.9 30.9 Investment holding
(NZ) Limited

Opus International (M) Malaysia 69.1 69.1 30.9 30.9 Management of the
Berhad ("OIM") planning, design and
construction of
infrastructure projects
and provision of
facilities management
services

Subsidiaries of OIM

Opus Management Malaysia 69.1 69.1 30.9 30.9 Dormant


Sdn. Bhd.

Pengurusan LRT Malaysia 69.1 69.1 30.9 30.9 Dormant


Sdn. Bhd.

Pengurusan Lantas Malaysia 69.1 69.1 30.9 30.9 Dormant


Berhad

330
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of OIM (cont'd.)

Opus International India India 69.1 69.1 30.9 30.9 Provision of asset
Pte Ltd * development and asset
management services

Opus Al-Dauliyyah LLC ** Kingdom of 69.1 69.1 30.9 30.9 Engineering consultancy
Saudi Arabia services

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of OIM

Opus Consultants (M) Malaysia 20.7 20.7 Equity method Engineering consultancy
Sdn. Bhd. (fka Ace services
Vector Sdn. Bhd.) *

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Edgenta Propel

Aquatrans Sdn. Bhd. Malaysia 69.1 69.1 30.9 30.9 Undertaking of water
projects

PT Edgenta PROPEL Indonesia 68.9 68.9 31.1 31.1 Provision of management


Indonesia consultancy and advisory
related to management of
roads

331
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Jointly controlled operation of Edgenta Propel

Edgenta Unincorporated 38.0 38.0 Equity method Providing highway


Propel-NRC JO maintenance services

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Faber Development Holdings Sdn. Bhd.

Country View Malaysia 69.1 69.1 30.9 30.9 Property development and
Development provision of facilities
Sdn. Bhd. management services

Faber Grandview Malaysia 69.1 69.1 30.9 30.9 Property development


Development (Sabah)
Sdn. Bhd.

Faber Heights Malaysia 69.1 69.1 30.9 30.9 Property management


Management
Sdn. Bhd.

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Faber Development Holdings Sdn. Bhd. (cont'd.)

Faber Union Sdn. Bhd. Malaysia 69.1 69.1 30.9 30.9 Property development

Rimbunan Melati Malaysia 38.0 38.0 62.0 62.0 Property development


Sdn. Bhd.

332
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Edgenta Healthcare Management Sdn. Bhd.

Edgenta Mediserve Malaysia 69.1 69.1 30.9 30.9 Provision of hospital


Sdn. Bhd. @ support services

Subsidiaries of EMS

Cermin Cahaya Malaysia 69.1 69.1 30.9 30.9 Provision of cleansing


Sdn. Bhd. services to hospitals

Edgenta Healthtronics Malaysia 69.1 69.1 30.9 30.9 Provision of biomedical


Sdn. Bhd. electronic engineering
maintenance services

Fresh Linen Services Malaysia 41.5 41.5 58.5 58.5 Provision of laundry
(Sabah) Sdn. Bhd. processing activities

Edgenta Mediserve Malaysia 69.1 69.1 30.9 30.9 Investment holding


(Sarawak) Sdn. Bhd.

Edgenta Mediserve Malaysia 69.1 69.1 30.9 30.9 Investment holding


(Sabah) Sdn. Bhd.

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associates of Edgenta Mediserve (Sarawak) Sdn. Bhd.

One Medicare Sdn. Bhd.* Malaysia 27.7 27.7 Equity method Provision of hospital
support services

333
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associates of Edgenta Mediserve (Sarawak) Sdn. Bhd. (cont'd.)

Biomedix Solutions Malaysia 27.7 27.7 Equity method Provision of biomedical


Sdn. Bhd. * engineering maintenance
services

Associate of Edgenta Mediserve (Sabah) Sdn. Bhd.

Sedafiat Sdn. Bhd.* Malaysia 27.7 27.7 Equity method Provision of hospital
support services

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Edgenta Facilities Sdn. Bhd.

Edgenta Facilities Malaysia 69.1 69.1 30.9 30.9 Facilities management


Management Sdn. Bhd. services

General Field Sdn. Bhd. Malaysia 69.1 69.1 30.9 30.9 Provision of energy
performance
management services

Faber Star Facilities India 69.1 69.1 30.9 30.9 Facilities management in
Management Limited * India

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Edgenta Facilities Sdn. Bhd.

Faber Sindoori India 35.3 35.3 Equity method Facilities management in


Management Services India
Private Limited*

334
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Edgenta Township Management Services Sdn. Bhd.

UEM Sunrise Edgenta Malaysia 68.2 68.2 31.8 31.8 Investment holding and
TMS Sdn Bhd β management of real estate

Subsidiary of UEM Sunrise Edgenta TMS

Edgenta TMS Sdn. Bhd. Malaysia 33.4 33.4 66.6 66.6 Management of real estate

Subsidiaries of KFM Holdings Sdn. Bhd.

KFM Projects Sdn. Bhd. Malaysia 55.3 55.3 44.7 44.7 Project management
consulting services

KFM Systems Sdn. Bhd. Malaysia 55.3 55.3 44.7 44.7 Consulting and contractor
for building management
systems for the built
environment

KFM Solutions Sdn. Bhd. Malaysia 55.3 55.3 44.7 44.7 Consultancy services in
green, smart and
connected urban ecology
and integrated facilty
management services

KFM Energy Services Malaysia 55.3 55.3 44.7 44.7 Provision of consultancy
Sdn. Bhd. and other services relating
to conservation and
renewable energy

Veridis PPP One Malaysia 55.3 55.3 44.7 44.7 Concession holder
Sdn. Bhd. specialising in retrofitting
works of building utilising
green technology

Operon Malaysia Malaysia 55.3 55.3 44.7 44.7 Provision of supervising


Sdn. Bhd. officer for activities related
to green technology and
other solutions for the built
environment

335
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of KFM Holdings (cont'd.)

Operon Consulting Malaysia 38.7 38.7 61.3 61.3 Asset management


Sdn. Bhd. consulting services

Operon Middle East British Virgin 55.3 55.3 44.7 44.7 Facilities management and
Limited Islands buildings cleaning services

KFM Middle East British Virgin 38.7 38.7 61.3 61.3 Dormant
Limited * Islands

Subsidiary of Operon Consulting Sdn. Bhd.

Operon Asset Advisory Malaysia 19.0 19.0 81.0 81.0 Asset management
Sdn. Bhd. * consulting services

Subsidiary of Edgenta (Singapore) Pte Ltd

Asia Integrated Facility Singapore - 69.1 - 30.9 Dissolved


Solutions Pte Ltd *

UEMS Pte Ltd Singapore 67.4 67.4 32.6 32.6 Investment holding

Subsidiary of Asia Integrated Facility Solutions Pte Ltd

Asia Facility Solutions Singapore 69.1 69.1 30.9 30.9 In members' voluntary
Pte Ltd * liquidation

Subsidiary of Asia Facility Solutions Pte Ltd

UEMS Pte Ltd Singapore - 67.4 - 32.6 Investment holding

Subsidiary of UEMS Pte Ltd

UEMS Solutions Pte Ltd Singapore 67.4 67.4 32.6 32.6 Provision of facility
management services

336
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of UEMS Pte Ltd (cont'd.)

UEMS Solutions Malaysia 67.4 67.4 32.6 32.6 Provision of facility


Sdn. Bhd. management services

UEMS Solutions Ltd Taiwan 67.4 67.4 32.6 32.6 Provision of facility
management services

ServiceMaster Hong Hong Kong 67.4 67.4 32.6 32.6 Dormant


Kong Limited

Subsidiary of UEMS Solutions Ltd

UEMS ServiceCorp Ltd Taiwan 67.4 67.4 32.6 32.6 Provision of cleaning and
consulting services for
business enterprises,
buildings and home
service to individuals

Other subsidiaries of UEM

First Impact Sdn. Bhd. Malaysia 100.0 100.0 - - Investment property


("FISB") holding, provision of
maintenance and other
related activities of the
office building owned
by the company

Forte Tech Solutions Malaysia 100.0 100.0 - - Provision of information


Sdn. Bhd. technology solutions and
systems support services

Intralogic Sdn. Bhd. Malaysia 100.0 100.0 - - Ceased operations

337
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Other subsidiaries of UEM (cont'd.)

Hydron (M) Sdn. Bhd. Malaysia 100.0 100.0 - - Ceased operations

Infrared Advanced Malaysia 75.0 75.0 25.0 25.0 Research, development


Technologies Sdn. Bhd. design, manufacture,
implementation, marketing,
selling and supplying of
electronic toll collection
system

MAVTRAC Sdn. Bhd. Malaysia 100.0 100.0 - - Ceased operations

Pantai Panorama Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Serayin Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding,


trading and letting
of properties

UEM Group Malaysia 100.0 100.0 - - Ceased operations


Management
Sdn. Bhd.

UEM International Malaysia 100.0 100.0 - - Investment holding


(West Asia) Sdn. Bhd.

UEM International Labuan 100.0 100.0 - - Investment holding


(Labuan) Limited

United Growth Berhad Malaysia 100.0 100.0 - - Investment holding

Vistajati Holdings Malaysia 100.0 100.0 - - Property development


Sdn. Bhd.

UEM Capital Limited Labuan 100.0 100.0 - - Investment holding

338
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Other subsidiaries of UEM (cont'd.)

UEM Suria Berhad Malaysia 100.0 100.0 - - Investment holding

York Place Limited * Isle of Man, - 100.0 - - Dissolved


United
Kingdom

Subsidiary of UEM International (West Asia) Sdn. Bhd.

UEM Al-Dauliyyah LLC ^ Kingdom of 100.0 100.0 - - Ceased operations


Saudi Arabia

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Other associates of UEM

Puncak Vista Sdn. Bhd. Malaysia 30.0 30.0 Equity method Under compulsory
liquidation

Mekar Idaman Sdn Bhd * Malaysia 45.0 45.0 Equity method Liquidation by Court

Other joint venture of UEM

UEM MMC Joint Venture Malaysia 50.0 50.0 Equity method Investment holding and
Sdn. Bhd. provision of expressway
operation services for Pan
Borneo Sabah project

339
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of UEM Suria Berhad

Suria Legenda Malaysia 100.0 100.0 - - Dormant


Development
Sdn. Bhd.

Suria Siena Development Malaysia 100.0 100.0 - - Property development


Sdn. Bhd.

Suria Siena Dua Malaysia 100.0 100.0 - - Dormant


Development Sdn. Bhd.

Suria Azure Malaysia 100.0 100.0 - - Dormant


Development Sdn. Bhd.

* Audited by firms other than Ernst & Young.

α Financial year end other than 31 December.

t For the purpose of applying the equity method of accounting for associate and joint ventures with
financial year end other than 31 December, the last audited financial statements available and the
management financial statements to the end of the accounting period of the associate and joint
ventures have been used.

x Deemed to be joint ventures of the Group pursuant to FRS 11 : Joint Arrangements as the parties
involved are undertaking economic activities that are subject to joint control.

// The Group has a total of 64.4% shareholding in JSTPL, comprising 26.0% held via PEIB and 38.4%
held via Uniquest.

## The Group has a total of 94.1% shareholding in PLUS BKSP comprising 0.1% held by PEIB and
94.0% held by PLUS Kalyan (Mauritius) Private Limited, a wholly-owned subsidiary of PEIB.

β The Group has a total of 68.2% shareholding in UEM Sunrise Edgenta TMS Sdn Bhd, comprising
19.8% held by UEM Sunrise and 48.4% held by Edgenta Township Management Services Sdn Bhd.

< Some of the shares in the company are held in trust by individuals.

++ The Group has a total of 76.3% shareholding in Preferred Resources Sdn Bhd comprising 30.0% held
via UEM Builders and 46.3% held via BND.

340
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(A) Subsidiaries, associates and joint ventures of UEM (cont'd.)

m The non-controlling shareholders assign all their rights to the dividend to UEMC.

Ω The Group has a total of 60.0% shareholding in UEM Builders – Ansalapi Contracts Pvt Ltd
comprising 50.0% held via UEM (Mauritius) Co Ltd and 10.0% held via UE Development India Pvt Ltd.

& The Group had a total of 55.7% shareholding in Opus Consultants DMCC in previous year, comprising
21.1% held by Opus IC and 34.6% held by OIM.

ø Opus International North American Principals Inc. P.S was incorporated on 2 February 2015 and had
stock buy-sell agreements with Opus IC, giving Opus IC 100% accounting control over Opus
International North America Principals Inc. P.S.

v The Group had a total of 27.3% shareholding in Opus Middle East LLC in previous year, comprising
10.4% held by Opus IC and 16.9% held by OIM.

@ The Group has a total of 69.1% shareholdings in Edgenta Mediserve Sdn Bhd, comprising 39.4% held
by Edgenta Healthcare Management Sdn Bhd and 29.7% held by UEM Edgenta.

^ The Group holds 100.0% of the equity in UEM Al-Dauliyyah LLC, comprising 90.0% held by UEM
International (West Asia) Sdn Bhd and 10.0% held directly by UEM.

** The Group holds 69.1% of the equity in Opus Al-Dauliyyah LLC, comprising 65.7% held directly by
OIM and 3.4% held by Opus Management Sdn Bhd.

є Previously a subsidiary.

(B) Subsidiaries of MAS

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries

Delima Insurance Malaysia 100.0 100.0 - - Captive insurance


(Labuan) Limited business. Ceased
operations in prior year

MASkargo Sdn. Bhd. ^^ Malaysia 100.0 100.0 - - Air cargo operations,


charter freighter and all
warehousing activities
relating to air cargo
operations. Ceased
operations in 2015

341
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(B) Subsidiaries of MAS (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries (cont'd.)

MAS Golden Boutiques Malaysia 100.0 100.0 - - Carried on the business


Sdn. Bhd. related to travel retail and
mail order. Ceased
operations in 2015

Malaysia Airlines Capital Malaysia 100.0 100.0 - - Labuan leasing business


(L) Limited

Malaysia Airlines Capital Malaysia 100.0 100.0 - - Labuan leasing business


II (L) Limited

Malaysia Airlines Capital Malaysia 100.0 100.0 - - Labuan leasing business


III (L) Limited

Malaysia Airlines Capital Malaysia 100.0 100.0 - - Labuan leasing business


IV (L) Limited

Kelip-Kelip Labuan Malaysia 100.0 100.0 - - Labuan leasing business


Limited

Kelip-Kelip II Labuan Malaysia 100.0 100.0 - - Labuan leasing business


Limited

Kelip-Kelip II Cayman 100.0 100.0 - - Leasing business


Cayman Limited Islands

Kelip-Kelip III Labuan Malaysia 100.0 100.0 - - Labuan leasing business


Limited

Kunang Kunang Labuan Malaysia 100.0 100.0 - - Dormant


Limited

Malaysia Airlines A330 Malaysia 100.0 100.0 - - Labuan leasing business


Capital Labuan Limited

Malaysia Airlines B738 Malaysia 100.0 100.0 - - Labuan leasing business


Capital Labuan Limited

342
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(B) Subsidiaries of MAS (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries (cont'd.)

Malaysia Airlines B738 II Malaysia 100.0 100.0 - - Labuan leasing business


Capital Labuan Limited

Malaysia Airlines Cayman 100.0 100.0 - - Leasing business


Capital IV Cayman Islands
Limited

Malaysia Airlines Capital Cayman 100.0 100.0 - - Leasing business


V Cayman Limited Islands

MAS Academy Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

Malaysian Aerospace Malaysia 100.0 100.0 - - Dormant


Engineering
Sdn. Bhd. ("MAE")

MAS Aerotechnologies Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

MAS Golden Holidays Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

MH Loyalty Programme Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

^^ On 25 May 2015, MASkargo Sdn. Bhd. was placed under Administration pursuant to the MAS Act.

Subsidiaries of MAGB

Malaysia Airlines Berhad Malaysia 100.0 100.0 - - Business of air


("MAB") transportation and the
provision of related
services

343
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(C) Subsidiaries and associates of MAGB

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of MAGB (cont'd.)

AeroDarat Services Malaysia 100.0 100.0 - - Ground services activities


Sdn. Bhd. on airfields

FlyFirefly Sdn. Bhd. Malaysia 100.0 100.0 - - Air transportation and the
("Firefly") provision of related
services
MAB Kargo Sdn. Bhd. Malaysia 100.0 100.0 - - Other cargo holding
activities
MAB Leasing Limited Malaysia 100.0 100.0 - - To carry on business of
purchase, sale, lease,
obtaining lease financing
and refinancing of
commercial aircraft

MAB Pesawat Sdn. Bhd. Malaysia 100.0 100.0 - - To carry on business of


purchase, sale, lease,
obtaining lease financing
and refinancing of
commercial aircraft

MASwings Sdn. Bhd. Malaysia 100.0 100.0 - - Air transportation and the
provision of related
services

Hijrah Biru Sdn. Bhd. Malaysia 100.0 100.0 - - Air transportation and the
provision of related
services

MAB Academy Sdn. Bhd. Malaysia 100.0 100.0 - - Other education

MAB Academy Sdn. Bhd. Malaysia 100.0 - - - Dormant

344
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(C) Subsidiaries and associates of MAGB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Malaysia Airlines Berhad

Bakawali (Labuan) Malaysia 100.0 100.0 - - Labuan leasing business


Limited

MAB Engineering Malaysia 100.0 100.0 - - Other services activities


Services Sdn. Bhd. incidental to air
transportation

MAS Aero Services Malaysia 51.0 51.0 49.0 49.0 Provision of laundry and
Sdn. Bhd. cleaning related services

MAS Awana Services Malaysia 60.0 60.0 40.0 40.0 Provision of catering and
Sdn. Bhd. cabin handling services

Impeccable Vintage Malaysia 100.0 100.0 - - Activities of holding


Properties Sdn. Bhd. companies

Subsidiary of FlyFirefly Sdn. Bhd.

FlyFirefly Holiday Malaysia 100.0 100.0 - - Tour and travel related


Sdn. Bhd. operation

MASkargo Logistics Malaysia 100.0 100.0 - - Providing trucking,


Sdn. Bhd. clearance and
warehousing services

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %
Associates of MAGB

Hamilton Sunstrand Malaysia - 49.0 Equity method Repair and overhaul of


Customer Support Centre selected aircraft
(M) Sdn. Bhd. ("Hamilton") enviromental control
systems, aircraft
pneumatic components
and propeller system

345
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(C) Subsidiaries and associates of MAGB (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associates of MAGB (cont'd.)

Hamilton Sunstrand Malaysia - 49.0 Equity method Repair and overhaul of


Customer Support Centre selected aircraft
(M) Sdn. Bhd. ("Hamilton") enviromental control
systems, aircraft
pneumatic components
and propeller system

Brahim's SATS Food Malaysia 30.0 30.0 Equity method Carry on airline catering
Service Sdn Bhd related services

GE Engine Services Malaysia - 30.0 Equity method Repair and overhaul of


Malaysia Sdn. Bhd. aircraft engine
("GEESM")

Pan Asia Pacific Aviation Hong Kong 24.0 24.0 Equity method Provision of aircraft
Services Limited maintainence services
("PAPAS")

Taj Madras Flight Kitchen India 20.0 20.0 Equity method Inflight catering of food
Limited ("Taj Madras") and beverage

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of IIB

Iskandar Coast Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Investment holding and
("ICSB") property development

Iskandar Development Malaysia 100.0 100.0 - - Management services


Management Services
Sdn. Bhd. ("IDMS")

SJIC Bina Sdn. Bhd. Malaysia 100.0 100.0 - - Construction

346
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(D) Subsidiaries, associates and joint ventures of IIB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of IIB (cont'd.)

Peak Alpha Express Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Educity Iskandar Malaysia 100.0 100.0 - - Investment holding, property


Malaysia Sdn. Bhd. development and property
("EIMSB") management services

Iskandar Assets Malaysia 100.0 100.0 - - Property investment


Sdn. Bhd.

Iskandar Harta Holdings Malaysia 100.0 100.0 - - Property and investment


Sdn. Bhd. ("IHHSB") holding

Medini Security Services Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Medini Land Sdn. Bhd. Malaysia 100.0 100.0 - - Property and investment
holding

Iskandar Investment Singapore - 100.0 - - Dissolved


Pte. Ltd. ѡ

Iskandar Innovations Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. ("IISB")

Wurawari Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Iskandar Capital Sdn. Malaysia 55.4 55.4 44.6 44.6 Investment holding
Bhd. ("IskCap")

Subsidiary of ICSB

River Retreat Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Property development and
investment

347
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(D) Subsidiaries, associates and joint ventures of IIB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of ICSB (cont'd.)

Teladan Tekun Malaysia 80.0 80.0 20.0 20.0 Investment holding


Sdn. Bhd.

Iskandar Medical Malaysia 80.0 80.0 20.0 20.0 Investment holding


Education Sdn. Bhd.

Subsidiaries of IDMS

Iskandar Management Malaysia 100.0 100.0 - - Management services


Services Sdn. Bhd.

Medini City Management Malaysia 100.0 100.0 - - Management services


Sdn. Bhd.

Subsidiary of IHHSB

Ujung Medini Sdn. Bhd. Malaysia 100.0 100.0 - - Property investment

Subsidiaries of EIMSB

Iskandar Education Malaysia 100.0 100.0 - - Property development


Village Sdn. Bhd. and management

Iskandar British Malaysia 100.0 100.0 - - Property development


Education Sdn. Bhd. and management

Iskandar Education Malaysia 100.0 100.0 - - Property development


Enterprise Sdn. Bhd. and management

348
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(D) Subsidiaries, associates and joint ventures of IIB (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associates of IIB

Jasmine Acres Sdn. Bhd. Malaysia 33.3 33.3 Equity method Investment holding
("JASB")

Joint ventures of IIB

Nusajaya Lifestyle Malaysia 45.0 45.0 Equity method Property development


Sdn. Bhd.

Metrogold Assets Malaysia 20.0 20.0 Equity method Property development


Sdn. Bhd.

Raffles Iskandar Malaysia 20.0 20.0 Equity method Property development


Sdn. Bhd.

Sunway Iskandar Malaysia 40.0 40.0 Equity method Property development


Development Sdn. Bhd.

Nusajaya Premier Malaysia 16.0 16.0 Equity method Property development


Sdn. Bhd.

Inneonusa Sdn Bhd Malaysia 10.0 10.0 Equity method Management services
("ISB")

Joint venture of JASB

Medini Iskandar Malaysia Malaysia 20.0 20.0 Equity method Property investment
Sdn. Bhd. holding and the provision
of construction services

ѡ All the companies are audited by Ernst & Young, Malaysia except that marked "ѡ", which is audited by
a member firm of Ernst & Young Global in Singapore.

349
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of TARHSB

Themed Attractions and Malaysia 100.0 100.0 - - Investment holding


Resorts Sdn. Bhd.

Destination Resorts and Malaysia 100.0 100.0 - - Investment holding


Hotels Sdn. Bhd.

Themed Destination IP Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiaries of Themed Attractions and Resort Sdn. Bhd.

Rakan Riang Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Own and operate KidZania
educational and
entertainment facility

Malaysia Truly Asia Centre Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

TAR PH Holdings Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. and provision of
management services

TAR Riverwalk Sdn. Malaysia 100.0 100.0 - - Investment holding and to


Bhd. own and operate water
park

Themed Attractions Malaysia 100.0 100.0 - - Investment holding


Berhad

LL Malaysia Attractions Malaysia 100.0 100.0 - - Investment holding


Holdings Sdn. Bhd.
("LLMAH")

Rakan Riang Pte Ltd.^ Singapore 80.0 80.0 20.0 20.0 Own and operate
KidZania educational
and entertainment
facility

LL Resorts Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

350
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Themed Attractions Berhad

PH Family Theme Park Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. company and provision
of catering and
management services

Subsidiaries of TAR PH Holdings Sdn. Bhd.

TAR LBC Sdn. Bhd. Malaysia 100.0 100.0 - - Own and operate Thomas
Town attraction

TAR KB Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

TAR PH Sdn. Bhd. Malaysia 100.0 100.0 - - Own and operate Hotel Jen

TAR PH Family Malaysia 100.0 100.0 - - Own and lease retail


Entertainment Sdn. Bhd. properties

TAR Kittown Sdn. Bhd. Malaysia 100.0 100.0 - - Own and operate Sanrio
Hello Kitty Town attraction

PH Marina Boulevard Malaysia 100.0 100.0 - - Investment holding and to


Sdn. Bhd. own and lease retail
properties

Subsidiaries of PH Marina Boulevard Sdn. Bhd.

PH Marina Boulevard Malaysia 100.0 100.0 - - Dormant


1 Sdn. Bhd.

PH Marina Boulevard Malaysia 100.0 100.0 - - Dormant


2 Sdn. Bhd.

PH Marina Boulevard Malaysia 100.0 100.0 - - Dormant


3 Sdn. Bhd.

351
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of PH Marina Boulevard Sdn. Bhd. (cont'd.)

PH Marina Boulevard Malaysia 100.0 100.0 - - Dormant


4 Sdn. Bhd.

PH Marina Boulevard Malaysia 100.0 100.0 Dormant


5 Sdn. Bhd.

PH Marina Boulevard Malaysia 100.0 100.0 - - Dormant


6 Sdn. Bhd.

Subsidiaries of TAR Riverwalk Sdn. Bhd.

Riverwalk Waterpark Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Dolphin Attractions Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Destination Attractions Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Park Three Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding

Subsidiaries of LL Malaysia Attractions Holdings Sdn. Bhd.

IDR Resorts Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Investment holding
and provision of
management services

LL Themed Hotel Malaysia 100.0 100.0 - - Own and operate Legoland


Sdn. Bhd. Hotel Malaysia

352
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of IDR Resorts Sdn. Bhd.

IDR Assets Sdn. Bhd. Malaysia 80.0 80.0 20.0 20.0 Own and lease assets
of Legoland Malaysia
Theme Park

LL Malaysia Taman Tema Malaysia 80.0 80.0 20.0 20.0 Manage and operate
Sdn. Bhd. Legoland Malaysia
Theme Park, Water Park
and Sealife Aquarium
Educational Facility

Subsidiaries of Destination Resorts and Hotels Sdn. Bhd.

Stulang Ventures Malaysia 78.5 78.5 21.5 21.5 Investment holding


Sdn. Bhd.

Elite Sun Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding

Pantai Andaman Malaysia 100.0 100.0 - - Investment holding


Ventures Sdn. Bhd.

Desaru Estate Sdn. Bhd. Malaysia 100.0 100.0 - - Ownership of an international


class hotel "Hard Rock
Hotel Desaru Coast"

Hijauan Desaru Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

DRH Green Homes (M) Malaysia 84.3 84.3 15.7 15.7 Property development
Sdn. Bhd.

Asia Pioneer Capital Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. ("APC")

ECM Golf Berhad Malaysia 100.0 100.0 - - Dormant

353
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Destination Resorts and Hotels Sdn. Bhd. (cont'd.)

Little Red Cube Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

Datai Hotels and Resorts Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Desaru Beach Parks Malaysia 100.0 100.0 - - Chalet owner


Sdn. Bhd.

Desaru Theme Hotel Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Subsidiary of Stulang Ventures Sdn. Bhd.

Desaru Development Malaysia 55.0 55.0 45.1 45.1 Investment holding and
Corporation Sdn. Bhd. master developer of
("DDC") Desaru Coast

Subsidiary of Elite Sun Sdn. Bhd.

Crustacea Enterprises Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Subsidiaries of Pantai Andaman Ventures Sdn. Bhd.

Teluk Datai Resorts Malaysia 100.0 100.0 - - Investment holding and


Sdn. Bhd. ("TDR") own and operate The
Datai Langkawi

TD Langkawi Ventures Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Subsidiaries of DDC

DDC Resort Sdn. Bhd. Malaysia 55.0 55.0 45.0 45.0 Investment holding and
("DDCR") provision of management
services

354
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of DDC (cont'd.)

DDC Peladang Sdn. Bhd. Malaysia 55.0 55.0 45.0 45.0 Investment holding

Desaru Development Malaysia 66.5 66.5 33.5 33.5 Investment holding and
Holdings One Sdn. Bhd. property developer
("DDH1")

Desaru Land 3 Sdn. Bhd. Malaysia 55.0 55.0 45.0 45.0 Investment holding

Subsidiaries of DDH1

Desaru Peace Holdings Malaysia 33.9 33.9 66.1 66.1 Investment holding
Sdn. Bhd. ("DPH")

Desaru North Course Malaysia 66.5 66.5 33.5 33.5 Owner and operator
Sdn. Bhd.

Desaru South Course Malaysia 66.5 66.5 33.5 33.5 Own and operate golf
Sdn. Bhd. course

Desaru Riverwalk Malaysia 66.5 66.5 33.5 33.5 Own and operate retail
Sdn. Bhd. space

Desaru Convention Malaysia 82.9 82.9 17.1 17.1 Own and operate
Centre Sdn. Bhd. convention center

Desaru Corniche Malaysia 82.9 82.9 17.1 17.1 Investment holding


Sdn. Bhd.

Desaru Land Sdn. Bhd. Malaysia 66.5 66.5 33.5 33.5 Investment holding

Desaru Ferry Sdn. Bhd. Malaysia 66.5 66.5 33.5 33.5 Ferry terminal operators

DC Resort Marketing Malaysia 66.5 66.5 33.5 33.5 Operate e-commerce


Sdn. Bhd. (fka Desaru business
Commercial Land
Sdn. Bhd.)

355
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of DDH1 (cont'd.)

Desaru Beachfront 1 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Beachfront 2 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Beachfront 3 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Beachfront 4 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Beachfront 5 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Land 2 Malaysia 66.5 66.5 33.5 33.5 Investment holding


Sdn. Bhd.

Desaru Boutique Hotel Malaysia 66.5 66.5 33.5 33.5 Investment holding
Sdn. Bhd.

Desaru Coast Cuisine Malaysia 66.5 66.5 33.5 33.5 Own and operate food
Sdn. Bhd. and beverage business

Subsidiaries of DPH

Desaru Peace Holdings Malaysia 33.9 33.9 66.1 66.1 Own and operate luxury
Club Sdn. Bhd. branded resort (One &
Only Desaru Coast)

Desaru Peace Holdings Malaysia 33.9 33.9 66.1 66.1 Dormant


Operator Sdn. Bhd.

Desaru Peace Holdings Malaysia 33.9 33.9 66.1 66.1 Investment holding and
Villas Sdn. Bhd. property development and
construction

356
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Desaru Peace Holdings Villas Sdn. Bhd.

Desaru Peace Holdings Malaysia 30.3 30.3 69.7 69.7 Property developer
Villas Two Sdn. Bhd.

Subsidiaries of Desaru Corniche Sdn. Bhd.

Desaru Corniche Hotel Malaysia 82.9 82.9 17.1 17.1 Own and operate hotel
Sdn. Bhd.

Desaru Corniche Malaysia 82.9 82.9 17.1 17.1 Property construction


Property Sdn. Bhd.

Subsidiaries of DDC Resort Sdn. Bhd.

DDC Corporate Services Malaysia 55.0 55.0 45.0 45.0 Provision of general
Sdn. Bhd. maintenance services,
parking and recreation
activities

Desaru Beach Sdn. Bhd. ** Malaysia 55.0 55.0 45.0 45.0 Dormant

Desaru Golden Beach Malaysia 55.0 55.0 45.1 45.1 Dormant


Hotel Sdn. Bhd.

Desaru Golf & Country Malaysia 55.0 55.0 45.1 45.1 Dormant
Club Berhad

Desaru Golf & Country Malaysia 55.0 55.0 45.1 45.1 Dormant
Resort Berhad

Desaru Golf (Lake One) Malaysia 55.0 55.0 45.1 45.1 Dormant
Sdn. Bhd.

357
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of DDC Resort Sdn. Bhd. (cont'd.)

Desaru Health Spa Malaysia 55.0 55.0 45.1 45.1 Dormant


Sdn. Bhd.

Desaru Marina Sdn. Bhd. Malaysia 55.0 55.0 45.1 45.1 Dormant

Desaru Marina Malaysia 55.0 55.0 45.1 45.1 Dormant


Commercial Sdn. Bhd.

Desaru Marina Hotel Malaysia 55.0 55.0 45.1 45.1 Dormant


Sdn. Bhd.

Desaru Palace Hotel Malaysia 55.0 55.0 45.1 45.1 Dormant


Sdn. Bhd.

Desaru Resort Homes Malaysia 55.0 55.0 45.1 45.1 Dormant


Sdn. Bhd.

Desaru Sunny Beach Malaysia 55.0 55.0 45.1 45.1 Dormant


Hotel Sdn. Bhd.

Desaru Tennis Ranch Malaysia 55.0 55.0 45.1 45.1 Dormant


Hotel Sdn. Bhd.

Variasi Kesuma Malaysia 55.0 55.0 45.1 45.1 Dormant


Sdn. Bhd. **

Subsidiaries of Teluk Datai Resorts Sdn. Bhd.

TDR Villas Sdn. Bhd. Malaysia 100.0 100.0 - - Property developer

358
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(E) Subsidiaries, associates and joint ventures of TARHSB (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Teluk Datai Resorts Sdn. Bhd. (cont'd.)

Anak Datai Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

Kasturi Pasifika Malaysia 100.0 100.0 - - Owner of "The Datai" brand


Sdn. Bhd.

Subsidiary of TDR Villas Sdn. Bhd.

TDR Golf Resorts Bhd. Malaysia 100.0 100.0 - - Own and operate golf course

** Under voluntary liquidation

+++ The Group's effective interest is 60.6%, comprising 33.7% held by UEM Sunrise and 26.9% held by
DRH Group.

^ Incorporated under Companies Act, Cap. 50 of the Republic of Singapore, with shares issued in
Singapore dollar ("SGD")

(F) Subsidiary of MTDC

Malaysian Technology Malaysia 100.0 100.0 - - Provision of technical


Consultants Sdn. Bhd. consultancy and
commercialisation of
research and
development ventures

Subsidiaries of ARHSB

Agro Treasures Malaysia 67.0 100.0 33.0 - Investment holding


Sdn. Bhd. ("ATSB")

359
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of ARHSB (cont'd.)

Blue Archipelago Berhad Malaysia 100.0 100.0 - - Investment holding and


("BAB") trading of shrimp
aquaculture products.

Biotropics Malaysia Malaysia 100.0 100.0 - - Business in the research


Berhad ("BMB") and development,
marketing and sales of
products based on
Malaysia's biodiversity such
as plants and other
medicinal herbs

Malaysian Agrifood Malaysia 100.0 100.0 - - Investment holding,


Corporation Berhad production and trading of
("MAFC") agriculture products and
management of food
supply chain

Commerce KNB Agro Malaysia 60.0 15.0 40.0 85.0 Agriculture venture capital
Teroka Sdn Bhd

Cold Chain Network (M) Malaysia 60.0 40.0 - - Business in temperature


Sdn. Bhd. controlled logistics
warehousing services

Subsidiaries of BAB

Arca Biru Sdn. Bhd. Malaysia 100.0 100.0 - - To carry on the business
of shrimp aquaculture

360
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of BAB

Isharp Sdn. Bhd. Malaysia 100.0 100.0 - - Trade and produce of


aquaculture products

Subsidiaries of BMB

Phytes Biotek Malaysia 100.0 100.0 - - Formulation and


Sdn. Bhd. manufacturing of herbal
extracts and other herbal
products

Subsidiaries of Phytes Biotek Sdn. Bhd.

Nu-Prep (M) Sdn. Bhd. Malaysia 100.0 100.0 - - Dormant

Plante Resources Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Subsidiaries of MAFC

Cameron Fresh Farms Malaysia 100.0 100.0 - - Investment in agriculture


Sdn. Bhd. property

Cold Chain Network (M) Malaysia 91.1 91.1 8.9 To provide


Sdn. Bhd. temperature-controlled
logistics and warehousing
services

Lotus Logistics Sdn. Bhd. Malaysia 100.0 100.0 - Dormant

361
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of MAFC

MAFC International (M) Malaysia 100.0 100.0 - Trading of agricultural


Sdn. Bhd. produce. The entity
became dormant since
31 December 2016

Subsidiary of Aur Investments (Cayman Islands) Limited

Tuba Investments Kingdom of 99.5 99.5 0.5 0.5 Investment holding


W.L.L. * + Bahrain

Subsidiary of Bukit Damar Investments Limited

Gobi MAVCAP Asean Malaysia 67.0 67.0 33.0 33.0 Micro venture capital fund
Superseed Fund, L.P. *

Subsidiary of Bukit Frasers Ventures Sdn. Bhd.

IDM Lab Malaysia 100.0 100.0 - - Internet and digital


Sdn. Bhd. media lab

Subsidiary of Carey Investments Limited

Tuba Investments Kingdom of 0.5 0.5 99.5 99.5 Investment holding


W.L.L. * + Bahrain

Subsidiaries of Cenviro Sdn. Bhd.

Abu Dhabi Kualiti Abu Dhabi 100.0 100.0 - - Under members voluntary
Alam Environmental liquidation
Services LLC ("ADKA") *

362
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Cenviro Sdn. Bhd. (cont'd.)

Cenviro Services Sdn Bhd Malaysia 100.0 100.0 - - Sole agent for marketing,
("CS") (fka Kualiti Khidmat collecting and transporting
Alam Sdn. Bhd.("KKA")) scheduled waste

Cenviro Special Builders Malaysia 100.0 100.0 - - Provision of project


Sdn. Bhd. ("CSB") management consultant for
integrated environmental
solutions

Cenviro Recycling and Malaysia 100.0 100.0 - - Provision of waste recycling


Recovery Sdn. Bhd. ("CRR") and recovery services
(fka Kualiti Kitar Alam Sdn.
Bhd. ("KKI"))

Cenviro (Johor) Malaysia 100.0 100.0 - - Has not commenced


Sdn. Bhd. ("CJSB") business operations

Cenviro Green Energy Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. ("CGE")

Environmental, Malaysia 100.0 100.0 - - Provision of training,


Preservation and consultancy, research and
Innovation Centre development, publication,
Sdn. Bhd. ("EPIC") innovation and
commercialisation services
Kualiti Alam Malaysia 100.0 100.0 - - Undertake the collection,
Sdn. Bhd. ("KASB") transportation, treatment
and disposal of scheduled
waste

Recycle for Life Malaysia 100.0 100.0 - - Undertake the collection


Sdn. Bhd. ("RFL") and handling of recyclable
items

363
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of CGE

Cenviro Green Energy Malaysia 100.0 100.0 - - Has not commenced


Melaka Sdn. Bhd. business operations
("CEGM")

Subsidiary of KASB

Kualiti Alam Lahat Malaysia 100.0 70.0 - 30.0 Has not commenced
Sdn. Bhd. ("KAL") business operations

Subsidiary of Cosmos Friendship Limited

KCS Green Energy Hong Kong 100.0 100.0 - - Investment holding


International (Group)
Investments Company Ltd.

Subsidiaries of KCS Green Energy International

KCS Jining Investments Hong Kong 100.0 100.0 - - Investment holding


Company Limited

KCS Huai'an Investments Hong Kong 100.0 100.0 - - Investment holding


Company Limited

Subsidiary of Granatum Ventures Sdn. Bhd.

Candelon Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiary of Granatum Ventures Sdn. Bhd.

Iskandar Malaysia Malaysia 99.4 99.4 0.6 0.6 Investment holding


Studios Sdn. Bhd. ("IMS")

364
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Iskandar Ventures Sdn. Bhd.

Jasmine Acres Sdn. Bhd. Malaysia 66.7 66.7 33.3 33.3 Investment holding

Southview Hills Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding

Subsidiary of Khazanah Nasional Consulting (Hong Kong) Company Ltd

Khazanah Nasional China 100.0 100.0 - - Consultancy services on


Consulting (Beijing) business, market
Company Ltd information, project
management, etc.

Subsidiary of Mantanani Ventures Sdn. Bhd.

Khazanah Turkey Turkey 100.0 100.0 - - Investment holding


Regional Office
Danismanlik Hizmetleri
A.S.

Subsidiary of Noring Investments (Mauritius) Limited

Mostyn Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Limited

Subsidiary of Ophir Ventures Sdn. Bhd.

ReGen Rehabilitation Malaysia 60.0 60.0 40.0 40.0 Provision of post-acute


International Sdn. Bhd. impatient rehabilitation
services

Subsidiaries of Payar Investments Limited

Cenergi SEA Sdn. Bhd. Malaysia 92.9 92.9 7.1 7.1 Investment holding and
provision of advisory
services

365
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Cenergi SEA Sdn. Bhd.

Lestari SEA Ltd. Mauritius/ 100.0 100.0 - - Investment holding


Malaysia

Cenergi Carbon Ltd. Malaysia 100.0 100.0 - - Emission reduction project


operations

Cenergi EE Sdn. Bhd. Malaysia 100.0 100.0 - - Energy efficiency project


operations

Cenergi RE Sdn. Bhd. Malaysia 100.0 100.0 - - Investment holding

Cenergi Operations and Malaysia 100.0 100.0 - - Operation and maintenance


Maintenance Sdn. Bhd. of renewable energy power
plants

Subsidiary of Cenergi EE Sdn. Bhd.

Cenergi Sunseap Energy Malaysia 100.0 100.0 - - Renewable energy


Solutions Sdn. Bhd. developers in solar
and energy efficiency

Subsidiaries of Cenergi RE Sdn. Bhd.

FJP Green Power Malaysia 70.0 70.0 30.0 30.0 Intended to contract and
Sdn. Bhd. * construct a renewable
energy plant

Biopower Climate Care Malaysia 100.0 100.0 - - Contracting and


Sdn. Bhd. construction of a
renewable energy plant

366
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Cenergi RE Sdn. Bhd. (cont'd.)

Metro Havana Sdn. Bhd. Malaysia 70.0 70.0 30.0 30.0 Contracting and
construction of a
renewable energy plant

GLT Energy Sdn. Malaysia 60.0 60.0 40.0 40.0 Contracting and
Bhd. ("GLTE") construction of a
renewable energy plant

Pantai Remis Cenergi Malaysia 100.0 100.0 - - Intended to contract and


Sdn. Bhd. construct a renewable
energy plant

Cenergi EPC Sdn. Bhd. Malaysia 100.0 100.0 - - To carry on business of


engineering procurement
& construction

Cenergi Hamparan Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Cenergi Eco Power Malaysia 100.0 100.0 - - Contracting and


Sdn. Bhd. construction of a
renewable energy plant

Cenergi Green Power Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd.

Subsidiary of PMB

Aircraft Business Malaysia 100.0 100.0 - - Lease of aircraft and


Malaysia Sdn. Bhd. provision of related
services

367
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Pulau Manukan Ventures Sdn. Bhd.

Pulau Manukan Ventures Malaysia 100.0 100.0 - - Investment holding / life


Labuan Ltd. sciences fund

Xeraya Capital Sdn. Bhd. Malaysia 100.0 100.0 - - Investment support


services
Subsidiary of Xeraya Capital Sdn. Bhd.

Xeraya Capital Labuan Malaysia 100.0 100.0 - - Investment management


Ltd. services

Subsidiary of Pulau Memutik Ventures Sdn. Bhd.

Pantai Support Services Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd. *

Prince Court Medical Malaysia 100.0 - - - Provision of medical,


Centre Sdn Bhd surgical and hospital
services

Subsidiary of Pulau Tiga Ventures Sdn. Bhd.

Continuum Capital Malaysia 100.0 100.0 - - Venture capital fund


Sdn. Bhd.

Subsidiary of Continuum Capital Sdn. Bhd.

Encipta Ltd. Malaysia 100.0 100.0 - - Investment holding

368
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Rhizophora Ventures Sdn. Bhd.

Angsana Production Malaysia 100.0 100.0 - - Film and television


Services Sdn. Bhd. productions consultancy
services and production of
television series

Rhizophora Capital Malaysia 100.0 100.0 - - Funding assistance to


Sdn. Bhd. film or television

Sonneratia Capital Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Stylosa Production Malaysia 100.0 100.0 - - Investing in and


Sdn. Bhd. co-production of media
content

Apareiba Capital Malaysia 100.0 100.0 - - Investment holding, media


Sdn. Bhd. content development and
production

Subsidiaries of Angsana Production Services Sdn. Bhd.

Marco Polo Productions Malaysia 100.0 100.0 - - Produce an episodic


Asia Sdn. Bhd. television series titled
"Marco Polo". In 2017, the
Company has ceased
operations.

AGT Productions Malaysia 100.0 100.0 - - Produce a television


Sdn. Bhd. series titled "Asia's Got
Talent".
Subsidiaries of Sonneratia Capital Sdn. Bhd.

Elektra One Sdn. Bhd. Malaysia 100.0 100.0 - - Investing and co-
production of media
content

369
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Sonneratia Capital Sdn. Bhd. (cont'd.)

Elektra Two Sdn. Bhd. Malaysia 100.0 100.0 - - Investing and co-
production of media
content
Elektra Three Sdn. Bhd. Malaysia 100.0 100.0 - - Investing and co-
production of media
content
Subsidiaries of Santubong Ventures Sdn. Bhd.

Greatville Pte. Ltd. Singapore - - - - Struck off

PT Pantai Damai Indonesia 99.0 99.0 1.0 1.0 Under members' voluntary
liquidation

Subsidiaries of Silterra

Pembinaan Waferfab Malaysia 100.0 100.0 - - Dormant


Sdn. Bhd. *

Silterra Sales and Malaysia 100.0 100.0 - - Sale and marketing of


Marketing Sdn. Bhd. advanced semiconductor
("SSM") * products

Silterra Capital Malaysia 100.0 100.0 - - Providing funding to


Berhad ("SCB") * holding company

Subsidiary of SSM

Silterra Sales and Malaysia 100.0 100.0 - - Sale and marketing of


Marketing (L) Ltd. * advanced semiconductor
products

370
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiary of Sungai Pulai Investments (Mauritius) Limited

Sungai Pulai Investments Singapore 100.0 100.0 - - Investment holding


(Singapore) Pte Ltd

Subsidiary of Synapse Education Holdings Sdn. Bhd.

LeapEd Services Sdn. Bhd. Malaysia 100.0 100.0 - - To provide educational


services to the school
sector in Malaysia.

Subsidiary of Tanjung Bidara Ventures Sdn. Bhd.

Tanjong Aru Capital Malaysia 100.0 100.0 - - Provision of sports facilities


Sdn. Bhd.

Subsidiary of Tanjong Aru Capital Sdn. Bhd.

Mulu Ventures Sdn. Bhd. Malaysia 100.0 100.0 - - Provision of cricket


facilities
Subsidiary of Teluk Belanga Investment Ltd.

Bagan Lalang Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiary of Teluk Cempedak Investments (Mauritius) Limited

Khazanah India Advisors India 100.0 100.0 - - Investment advisory


Private Ltd. ***

Subsidiary of Teluk Nibong Ventures Sdn. Bhd.

CDC Advisory Sdn. Bhd. Malaysia 100.0 100.0 - - Provision of transition


support services including
advisory, outplacement,
and training support
services

371
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective Non-controlling


Name incorporation/ interest~ interest~ Principal activities
principal place 2018 2017 2018 2017
of business % % % %

Subsidiaries of Titiwangsa Investments (Mauritius) Limited

Panorama Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Limited

Ramunia Investments Mauritius 100.0 100.0 - - Investment holding


(Mauritius) Limited

Subsidiary of Tulai Beach Ventures Sdn. Bhd.

Avicennia Capital Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiaries of Avicennia Capital Sdn. Bhd.

Renggis Ventures Malaysia 96.0 96.0 4.0 4.0 Investment holding


Sdn. Bhd.

Kuala Gula Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Pasir Kalong Malaysia 100.0 100.0 - - Investment holding


Investments Limited

Tanjung Piai Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Tasik Bera Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiaries of Renggis Ventures Sdn. Bhd.

SunLife Malaysia Malaysia 49.0 49.0 51.0 51.0 Underwriting of life


Assurance Bhd. * insurance and investment-
linked business

372
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Subsidiaries of Renggis Ventures Sdn. Bhd. (cont'd.)

SunLife Malaysia Malaysia 49.0 49.0 51.0 51.0 Management of family


Takaful Bhd. * takaful, general takaful
and investment-linked
takaful business

Subsidiary of Pasir Kalong Investments Limited

Burau Ventures Malaysia 100.0 100.0 - - Investment holding


Sdn. Bhd.

Subsidiary of Burau Ventures Sdn. Bhd.

Acibadem Saglik Ve Turkey 100.0 100.0 - - Underwriting of life


Hayat Sigorta A.S. insurance, personal
assurance and health
insurance

Associates of Atlantic Quantum Sdn. Bhd.

Key Asic Bhd. * Malaysia 9.9 11.8 Equity method Liquidated

Associate of Bagan Lalang Ventures Sdn. Bhd.

Acibadem Saglik Turkey - 15.0 Equity method Provider of healthcare


Yatirimlari Holding services
A.S. *

Associate of Bukit Galla Investments Limited

WeLab Holdings Ltd * British Virgin 10.9 11.5 Equity method Online credit analytics and
Islands/Hong lending platform
Kong

373
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of CRR

Shan Poornam Sdn. Bhd. Malaysia 40.0 40.0 Equity method Investment holding
("SPSB")

Associate of Cosmos Friendship Limited

Beijing Enterprises Hong Kong 23.1 23.1 Equity method Investment holding
Environment Group Ltd *

Associate of Desaru Investments (Cayman Islands) Limited

Al-Imtiaz Operations and Kingdom of 20.0 20.0 Equity method Operation and maintenance
Maintenance Company Saudi Arabia contracts of electric power
Limited * and water desalination
stations

Associate of Gemia Investments Limited

Fajr Capital Limited * Saudi Arabia 19.1 19.1 Equity method Provision in Islamic finance
services

Associate of MAFC

Monoluxury Sdn. Bhd. * Malaysia 35.0 20.0 Equity method Cultivation, processing
and trading of vegetables
and related vegetable
products
Associate of Mataking Ventures Sdn. Bhd.

General Fusion Inc. * Canada 8.5 8.5 Equity method Nuclear fusion
development
Associate of Mount Bintang Ventures Sdn. Bhd.

edotco Group Sdn. Bhd. * Malaysia 10.6 10.6 Equity method Integrated
telecommunications
infrastructure services

374
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Mount Raya Investment Limited

Phunware, Inc * Delaware, USA - 8.47 Equity method Software application


services

Associate of Pantai Air Papan Ventures Sdn. Bhd.

VTI Group * Vietnam 16.9 16.9 Equity method Operates leading local
F&B chains and
international modern
retails brands
Associate of Pantai Cahaya Bulan Ventures Sdn. Bhd.

Astro Malaysia Holdings Malaysia 20.7 20.7 Equity method Media entertainment
Berhad ("AMHB") *

Associates of Pantai Support Services Sdn. Bhd.

Unitab Medic Sdn. Bhd. * Malaysia 30.0 30.0 Equity method Investment holding and
supervision of medical
examination of foreign
workers in Malaysia

Associate of Payar Investments Limited

RedT Energy Plc (fka Jersey 9.5 9.5 Equity method Clean energy and energy
Camco Clean Energy Plc) * storage

Associate of Panorama Investment (Mauritius) Ltd

Actoserba Active India 22.5 22.5 Equity method Online retailer of women
Wholesale Private innerwear in India.
Limited *

Associate of Pasir Salak Investments Limited

8990 Holdings Inc. * Philippines 8.6 8.6 Equity method Housing development

375
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Pulau Memutik Sdn. Bhd.

IHH Healthcare Bhd. * Malaysia 42.1 42.3 Equity method Investment holding and
healthcare service provider

Associate of Pulau Tiga Ventures Sdn. Bhd.

First Floor Capital Malaysia 25.0 25.0 Equity method Venture capital
Sdn. Bhd. * management company

Continuum Capital II Malaysia 99.0 99.0 Equity method Venture capital fund
Limited Partnership

Fashion Valet Sdn Bhd Malaysia 9.0 - Equity method Online fashion and
cosmetic retail platform

Associate of Ramunia Investments (Mauritius) Limited

Vas Data Services India 14.6 14.6 Equity method Online retailer
Private Limited *

Associates of Redang Investments Limited

ACR Capital Holdings Singapore 24.7 24.0 Equity method Provision of reinsurance
Pte. Ltd. * services

Associate of Shan Poornam Sdn. Bhd.

Shan Poornam Metals Malaysia 40.0 40.0 Equity method Collection, processing and
Sdn. Bhd. ("SPM") recycling of scraps

Shan Poornam Global Malaysia 40.0 40.0 Equity method Industrial waste recovery
Sdn. Bhd.

376
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Shan Poornam Sdn. Bhd. (cont'd.)

Shan Poornam Global Malaysia 40.0 40.0 Equity method Industrial waste recovery
Sdn. Bhd.

Associate of Shan Poornam Metals Sdn. Bhd. ("SPM")

ENS 4R Sdn. Bhd. Malaysia 40.0 40.0 Equity method Collection, processing and
recycling of scraps

Shan Poornam Metals Malaysia 40.0 40.0 Equity method Collection, processing and
(Sarawak) Sdn. Bhd. recycling of scraps

Shan Poornam Metals Malaysia 40.0 40.0 Equity method Collection, processing and
(Selangor) Sdn. Bhd. recycling of scraps

Shan Poornam Metals Malaysia 40.0 40.0 Equity method Collection, processing and
(Johor) Sdn. Bhd. recycling of scraps

Shan Poornam Green Malaysia 40.0 40.0 Equity method Dormant


Tech Sdn. Bhd.

Associate of Tanjung Tuan Investments Limited

Blippar.com Limited * England and 10.5 15.1 Equity method Mobile visual-search app
Wales developer

Associate of Teluk Dalam Investments Limited

AfricInvest Mauritius 18.0 18.0 Equity method Private equity fund


Fund III LLC*

377
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Associate of Candelon Ventures Sdn Bhd

Imagica South East Malaysia 51.0 51.0 Equity method Provider of


Asia Sdn. Bhd. comprehensive digital
post production services

Joint venture of ARHSB

Commerce-KNB Agro Malaysia 67.0 67.0 Equity method Agriculture venture capital
Teroka Sdn. Bhd.
("CKAT") *

The Holstein Milk Malaysia 30.0 30.0 Equity method Involved in dairy farming,
Company Sdn. Bhd. processing and distribution
of fresh dairy produce

Joint venture of BAB

AB Hatchery Sdn. Bhd. Malaysia 51.0 51.0 Equity method Post larvae farming and
trading

Joint venture of Cenviro Sdn Bhd

E-Idaman Sdn. Bhd. Malaysia 50.0 50.0 Equity method Investment holding,
("EISB") provision of project
management, consultancy
and contracting services
in the field of solid waste
management

378
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint venture of EISB

Environment Idaman Malaysia 50.0 50.0 Equity method Provision of integrated solid
Sdn. Bhd. waste and public cleansing
management and any other
related business in the
Northern Region of
Peninsular Malaysia

Environment Idaman Malaysia 50.0 50.0 Equity method Provision of integrated solid
(Kedah and Perlis) waste collection and public
Sdn. Bhd. cleansing management
services, including technical
expert services in waste
management

Green Resources Malaysia 50.0 50.0 Equity method Provision of project


Recovery Sdn. Bhd. management, consultancy
and contracting services in
the field of solid waste and
public cleansing
management services and
dealing with recyclable
items and facilities

Environment Idaman Malaysia 50.0 50.0 Equity method Provision of integrated solid
(Perak) Sdn. Bhd. waste collection and pubic
cleansing management
services, including
technical expert services
in waste management

379
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint venture of Dayang Bunting Ventures Sdn. Bhd.

Sunway Iskandar Malaysia 40.0 40.0 Equity method Investment holding


Sdn. Bhd. *

Joint venture of Desaru Investments (Cayman Islands) Limited

Malaysian Shoaiba Malaysia 40.0 40.0 Equity method Water and energy service
Consortium Sdn. Bhd. * provider

Joint Venture of Mostyn Investment (Mauritius) Limited

Fractal Analytics Private India 30.1 35.9 Equity method Specializing in predictive
Limited * analytics and decision
sciences

Joint venture of Pantai Cahaya Bulan Ventures Sdn. Bhd.

Astro Holdings Sdn. Malaysia 29.3 29.3 Equity method Investment holding
Bhd. *

Joint venture of Pulau Selingan Investments Limited

DaVita Care Pte Ltd * Singapore 20.0 20.0 Equity method Healthcare service
provider
Joint venture of Sungai Pulai Investments (Mauritius) Limited

M+S Pte. Ltd. Singapore 60.0 60.0 Equity method Property development

380
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

Country of Effective
Name incorporation/ interest~ Accounting Principal activities
principal place 2018 2017 model applied
of business % %

Joint venture of Stylosa Productions Sdn. Bhd.

Ideate Media Sdn. Bhd. * Malaysia 50.0 50.0 Equity method Create platforms to invest,
develop, own and monetise
intellectual property creative
assets

Joint venture of Tanjung Bidara Ventures Sdn. Bhd.

Southern Marina Malaysia 30.0 30.0 Equity method Property development


Development
Sdn. Bhd. *

Joint venture of Teluk Rubiah Ventures Sdn. Bhd.

Pulau Indah Ventures Malaysia 50.0 50.0 Equity method Township development
Sdn. Bhd. *

Joint ventures of Xeraya Capital Labuan Ltd.

Malaysian Life Sciences Malaysia 50.0 50.0 Equity method Investment management
Capital Fund services
Management Co. Ltd. *

MLSCF II (DP) Ltd * @ Malaysia 50.0 50.0 Equity method Investment management
holding

MLSCF Management Malaysia 50.0 50.0 Equity method Investment management


(Labuan), LLP services

MLSCF II (GP) Malaysia 50.0 50.0 Equity method General partner of MLS
(Labuan), LLP Capital Fund II, LP

381
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

79. Subsidiaries, associates and joint ventures of the Group (cont'd.)

(G) Other subsidiaries, associates and joint ventures of the Group (cont'd.)

* Audited by firms of auditors other than Ernst & Young.

^^ Although the Company does not hold ordinary shares in the associates, the Company exerts
significant influence by virtue of the Company's holding in the preference shares in the respective
associates which gives the Company the right to appoint directors on the board of the respective
associates.
+ The Group's effective interest in Tuba Investments WLL is 100%, comprising 99.5% held by Aur
Investments (Cayman Islands) Limited and 0.5% held by Carey Investments (Cayman Islands) Limited.

*** The Group's effective interest in Khazanah India Advisors Private Ltd. is 100%, comprising 99.9% held
by Teluk Cempedak Investments (Mauritius) Limited and 0.1% held by Chendering Investments Ltd.

^ The Group's effective interest in Invendo Medical GmbH is 21.2%, which is held by Pulau Duyung
Ventures (Cayman Islands) Ltd. And ISKA Holding S.àr.l. of 10.6% each.

@ In accordance with the respective partnership agreements, the rights to participate in any distributions
can only be exercised upon contribution of the partnership capital. As of the reporting date, the Group
has yet to make any capital contribution.

382
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries

The names of the directors of the Company's subsidiaries in office since the beginning of the
financial year to the date of this report (not including Directors of the Company who have
been listed in the Directors' Report) are:

Abang Rahmat Shobra


Abdul Kadir Md Kassim
Abu Safian Talib (Alternate director to Afizul Aezhar Sharifuddin)
Adi Saufi Mohamad Daud
Afizul Aezhar Sharifuddin
Ahmad Luqman Bin Mohd Azmi
Ahmad Rizal Omar
Ahmad Zamri Said
Ahmad Zulqarnain Bin Che On
Alastair Douglas McCracken
Amalanathan Thomas
Aminah Othman
Aminuddin Bin Zakaria
Amir Hamzah Bin Azizan
Amirsham Bin A Aziz
Amirul Fares Bin Wan Zahir
Amlah Binti Yassin
Amran Hafiz Affifudin
Andreas Weiss (Alternate Director to Helmuth Blasch)
Andrew Lim Kok Nien
Angela Chong Yit Phin
Anil Thadani
Anoop Gupta
Anupum Khaitan
Anwar Syahrin Abdul Ajib
Azmin Isa
Azmy Mahbot
Azzam bin Mohamed
Badrul Hisham bin Dahalan
Bhagat Chintamani Aniruddha
Boo Hui Yee
Bryan Lim Tsin Lin
Brett Thomas Adolf Rubi
Budi Mahatma Kusumawardhana
Calvin Raqeem R Jacob
Caroline Goergen
Chan Cheow Hong
Chang Li Kwon
Chang Li Li

383
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Cheah Swee Choo (Alternate Director to Dato' Sri Ghazali Bin Mohd Ali)
Chen Yen-Yu
Chin Chi Haw
Chinta Madhav
Chong Yit Phin
Christina Foo
Daniel Tan Sze Hun
Datin Zainabbi Abubacker
Datin Teh Ija Mohd Jalil
Dato' Ahmad Omar
Dato' Ahmad Pardas Bin Senin
Dato' Azmir Merican Azmi Merican
Dato' Boonler Somchit A/L Loy Somchit
Dato' Borhanuddin Bin Osman
Dato' Dr Nirmala Menon A/P Y.B. Menon
Dato' George Stewart Labrooy
Dato' Haja Najmudeen K P M Abd Kader
Dato' Haji Mohd Salleh Bin Yeop Abd Rahman (Alternate Director to Tan Sri Haji
Esa Bin Mohamed)
Dato' Iskandar Mizal Bin Mahmood
Dato' Mohamed Nasri Sallehuddin
Dato' Mohd Izani Ghani
Dato' Mohd Rafik Shah Mohamad
Dato' Mohd Shukri Bin Hussin
Dato' Noorazman Abd Aziz
Dato' Noorizah Hj Abd Hamid
Dato' Ooi Sang Kuang
Dato' Richard Edwin Wroth Small
Dato' Sri Ghazali Bin Mohd Ali
Dato' Srikandan Kanagainthiram (Retired on 31 May 2018)
Dato' Tan Thean Thye
Dato' Tharuma Rajah A/L Kathiravelu
Datuk Akmal bin Ahmad
Datuk Dr Mohamed Arif Bin Nun
Datuk Dr Syed Muhamad Bin Syed Abdul Kadir
Datuk Ir. Khairil Anwar bin Ahmad
Datuk Ir. Mohd Zulastri Mohd Amin
Datuk Joseph Dominic Silva
Datuk Mohamad Hishammudin Bin Hamdan
Datuk Nik Airina Nik Jaffar
David Lau Nai Pek
Devamanokaran Poonagasu
Djap Tet Fa
Dr Mohamadon Bin Abdullah

384
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Dr Nungsari Ahmad Radhi


Dr. Saman @ Saimy Ismail
Dr. Tee Kim Siong
Dumisani Blessing Mnganga
Dzulkifly Bin Hassan (Alternate Director to Izaddeen Bin Daud)
Effizal Faiz bin ZUlkifly
Elakumari a/p Kantilal
Enita Azlina Binti Osman
Eysa Zulkifli
Fardan Abdul Majeed
Faridah Binti Bakar Ali
Festus A Christ Dhas
Firdaus Azis
Firdaus Bin Abdullah
Foong Chee Yeong
Goh Keat Siang
Guna Segaran A/L Alagappan
Gurdip Singh Sidhu A/L Gurbachan Singh
Hafizuddin Bin Sulaiman
Hamdan Abdul Majeed
Han Jun Siew
Hannah Lyana Lee Abdullah
Hans Aksel Pedersen
Haris Hardi Bin Zakaria
Harman Faiz Habib Muhamad
Harun Bin Johari
Hazurin Harun
Helmuth Blasch
Hiew Yoon Khong
How Seet Meng
Huang Wan Hung
Hwang Chee Leong
Ian Krisnawan Bin Ahmad
Idham Ismail
Idris Mohd Noh
Ignatius Ong Ming Choy
Izaddeen Bin Daud
Izham Bin Ismail
Izlan Bin Izhab
Jalaluddin Bin Dato' Mohd Jarjis
Jamil Hajar bin Abdul Muttalib
Jamilah Dato' Hashim
Jesudason Selvaraj
John Bong Kim Fook

385
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Jose Isidro Navato Camacho


Juhana Binti Hamzah
Juniwati Rahmat Hussin
Kamalam Pillay Rungapadiachy
Karim Gilani
Karina Binti Ridzuan
Khairuddin Hong bin Abdullah
Kurt Stocks (Alternate Director to Hans Aksel Pedersen)
Kwan Joon Hoe
Latifah Binti M.Daud
Lee Wen Ling
Lila Azmin Abdullah
Lim Cheok Peng
Lim Sooi San
Lim Tau Kien
Lim Tian Huat
Lim Wah Seng
Liong Kok Kit
Lisa Ong Li Mei
Loh Tzu Anne
Loh Wai Yee
Low Chee Yen
Low Guat Peng
Lynette Yeow Su-Yin
Marouf Moutairou
Martin Hubert
Marzuki Bin Hj Madon
Mat Sahwira bin Tamat (Alternate Director to Norliza binti Suleiman)
Mazli Mohamed Ayob
Mazyu Sherina Mohamed Yusof
Melanie Muhidin
Melinda Omar
Mohamad Affendi Yusoff
Mohamad Faizal Mohamad
Mohamed Rastam Shahrom
Mohammad Izani Bin Ashari
Mohd Anizam Bin Jamian (Alternate Director to Izaddeen Bin Daud)
Mohd Asrul Bin Ab Rahim
Mohd Fauzi Moh Sakroni
Mohd Nadziruddin Bin Mohd Basri
Mohd Salehoddin bin Abdul Hamid
Mohd Suhaimi Ahmad
Muhammad Noor Abd Aziz @ Hashim
Muhinder Singh A/L Dasoundha Singh

386
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Muntasir Mohamad Zain


Mustafa Kemal Olgac
Naiken Veerasamy
Natazha Bin Hariss (Alternate Director to Tuan Haji Lukman Bin Abu Jari @ Abu Bakar)
Nik Azli Bin Abu Zahar
Nik Marien Nik Ahmad Kamal
Nik Nazhah Binti Nik Abdul Aziz
Nik Rizal Kamil Bin Nik Ibrahim Kamil
Noor Aisah Tawab
Nor Din Abdullah
Norazalina Sham Binti Abdullah
Nordiana Binti Nordin
Norliza binti Suleiman
Nubly Zainuham Ambotang
Nurolamin Abas
Ong Chee Wei
Ooi Say Teng
Patrick Cheah Gim Guan
Patrick Lau Hui Ping
Pee Boon Hooi
Philip anak Kevin Akeu
Philip John Whittaker
Philip Neil McDanell
Philippa Smith Lambert
Preamakanthan A/L D Kanapathy
Primoehadi Notowidigdo
Prof. Philip Sutton Cox
Prof. Tan Sri Dato' Dzulkifli Bin Abdul Razak
PuahTuan Soon Benson
Pushpanathan A/L S.A. Kanagarayar
Quek Pei Lynn
Rajgopal Rajkumar (Alternate Director to Anil Thadani)
Reagan Chan Chung Cheng
Rinaldi
Roni Lihawa Bin Abdul Wahab
Roslina Binti Arbak
Rosni Tarip
Saeed Abdulla Omar Saeed Al Amoudi
Samir Balkrishna Pansare
Savinilorna Payandi Pillay Ramen
Selvendran Katheerayson
Shabniz Panawoolla-Jaulim
Shafidz Iswandi Azhar
Shahin Farouque Bin Jammal Ahmad

387
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Shahira Binti Ahmed Bazari


Shahnaz Al-Sadat Bt Abdul Mohsein
Shahrin Yong Azmi @ Shahryn Yong Azmi
Sharon Ruba A/P Krishnamurthy
Sheranjiv A/L M Sammanthan
Sitthambaranatha Gandhi Suppiah
Sivaramakrishnan Narayanan Ayakkad
Sofia Zakaria
Soh Choo Sen
Stephanie Saw Ai Lin
Subashini Krishnan
Subimal Sen Gupta
Suhaimi Bin Halim
Suriana Abdul Hamid
Tan Bee Eng
Tan Bun Poo
Tan Cheh Tian
Tan Sri Bashir Ahmad Bin Abdul Majid
Tan Sri Dato' Chen Kooi Chiew @ Cheng Ngi Chong
Tan Sri Dato' Lim Kang Hoo
Tan Sri Dato' Sri Haji Esa Bin Mohamed
Tan Sri Dato' Sri Zamzamzairani Bin Mohd Isa
Tan Sri Datuk Chen Lok Loi
Tan Sri Dr. Azmil Khalili Dato' Khalid
Tan Sri Md Nor Bin Md Yusof
Tan Sri Rafidah Aziz
Tan Sri Tan Boon Seng @ Krishnan
Tan Sri Yeoh Choo Kheng
Tan Thomas Kae Jye
Tan Wan San (Alternate Director to Tan Sri Dato' Chen Kooi Chiew @ Cheng Ngi Chong)
Tay Tuan Leng
Tee Mei Ling Diana
Tengku Dato' Sri Azmil Zahruddin Bin Raja Abdul Aziz
Tong Kooi Ong
Tuan Haji Lukman Bin Abu Jari @ Abu Bakar
Tunku Ali Redhauddin Ibni Tuanku Muhriz
Vallo A/L Mutto
Victor John Zacharias
Vinod Kumar Saigal
Wen Khai Meng (Alternate to Hiew Yoon Khong)
Wiwiek Dianawati Santoso
Wong Eugene
Wong Khai Shiun (Alternate Director to Tan Sri Dato' Lim Kang Hoo)
Wong Peck Ling

388
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Wong Shu Hsien


Y.A.M. Tunku Ali Redhauddin Ibni Tuanku Muhriz
Y.M. Raja Tan Sri Dato' Seri Arshad Bin Raja Tun Uda
Yap Kheng Han
Yeoh Keat Seng
YM Ungku Suseelawati Ungku Omar
Yong Choon Yan
Yong Lee Lian
Zadil Hanief Mohamad Zaidi
Zafarin Abd Ghaffar
Zaida Khalida Binti Shaari
Zainul Fadziruddin Bin Zainuddin
Zakaria Ahmad Zabidi
Zalinah binti A. Hamid
Zamri Yusof
Zohari Mahur
Ahmad Johan Bin Mohammad Raslan (appointed on 1 January 2018)
Amiruddin Daud (appointed on 30 April 2018)
Aqilah Binti Che Azizuddin (appointed on 24 April 2018)
Dato' Mohd Khalis Bin Abd Rahim (appointed on 22 January 2018)
Dato' Quah Thain Khan (appointed on 1 October 2018)
Dato Ramlee Bin A Rahman (appointed on 27 November 2018)
Datuk Shahril Ridza bin Ridzuan (appointed on 31 October 2018)
Dr Mahadevan A/L Thambirajah (appointed on 1 August 2018)
Dr. Chan Tuck Leong (appointed on 30 May 2018)
Emily Kok (appointed on 30 March 2018)
Fauzidah binti Abdul Rahman (appointed on 31 December 2018)
Foo Shiou Voon (Alternate Director to (appointed on 26 November 2018)
Mohammad Izani Bin Ashari)
Graeme Walwyn (appointed on 30 January 2018)
Hau Yean Ching (appointed on 1 October 2018)
Hazman Hilmi Bin Sallahuddin (appointed on 3 May 2018)
Ibrahim Bin Mohamed Salleh (appointed on 1 September 2018)
Ir. Nurul Amani Rashid (appointed on 1 October 2018)
Jehanne Goh Yen Qi (appointed on 30 March 2018)
Justin Mahmud Hashim (appointed on 26 July 2018)
Kamarudin Bin Kamilin (appointed on 30 March 2018)
Kamarul Anuar Mohamad Kamar (appointed on 1 January 2018
Kutbuddin Asgar Ali (appointed on 15 January 2019)
Lee Ching Yen Stephen (appointed on 1 April 2018)
Lee Heng Meng (appointed on 15 January 2019)
Lee Lin Chien (appointed on 10 January 2018)
Lee Siow Woon (appointed on 31 December 2018)
Lim Chong Mow (appointed on 29 June 2018)

389
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Lim Kooi June (appointed on 24 April 2018)


Lim Teck Wee (appointed on 1 January 2019)
Megat Shahir Bin Megat Mohamed Supian (appointed on 30 March 2018)
Mohamad Zamani Razali (appointed on 4 January 2018)
Mohd Azlan Abas (appointed on 16 April 2018)
Mohd Nukman bin Abdul Rahman (appointed on 26 July 2018)
Mohd Razif Mohd Yusoff (appointed on 30 January 2018)
Mohd Salleh Bin Ahmad Tabrani (appointed on 30 March 2018)
Mohd Shahazwan Mohd Harris (Alternate (appointed on 22 October 2018 and
Director to Dato' Noorazman Abd Aziz) resigned on 28 February 2019)
Mohd Zulkefly Bin Ujang (appointed on 30 March 2018)
Nor Azman Bin Abdul Aziz (appointed on 30 March 2018 and
resigned on 23 January 2019)
Nor Suhaila binti Abdul Latif (appointed on 1 January 2019)
Norlida Abdul Azmi (appointed on 10 January 2018)
Nurul Iman Mohd Zaman (appointed on 13 March 2018)
Paul Sandanasamy Richard (appointed on 1 March 2018)
Peter Tan Beow Teik (appointed on 31 December 2018)
Philip See Yew Jin (appointed on 30 March 2018)
Prakash Prasannan (appointed on 1 October 2018)
Prof. Ir Dr Ahmad Fadzil Bin Mohamad Hani (appointed on 9 June 2018)
Rahimah Binti Farjan Ali @ Pasan Ali (appointed on 30 March 2018)
Rakesh Devasish Jena (Alternate Director (appointed on 21 March 2018)
to Chin Chi Haw)
Ramlan Khamis (appointed on 18 June 2018)
Roli Shukla (appointed on 30 March 2018)
Rowina Ghazali Seth (appointed on 1 August 2018)
Samuel Ooi Thean Aun (appointed on 13 July 2018)
Sawkut Oomarlly Bundhoo (appointed on 16 April 2018)
Shankar Menon a/l Krishnan @ Vasuthavan (appointed on 16 October 2018)
Sharmanand Jhurreea (appointed on 27 February 2018)
Sharuddin Omar Hashim (appointed on 14 May 2018)
Siti Aishah Binti Abdul Samad (appointed on 30 March 2018)
Siti Aishah Md Lassim (appointed on 30 January 2018 and
resigned on 2 September 2018)
Sophia Lim Siew Fay (appointed on 19 October 2018)
Sugu Maran Kailasan (appointed on 26 July 2018)
Sundhiraj Sharma (appointed on on 30 November 2018)
Suzanne Ng Bee June (appointed on 30 March 2018)
Suzilawati Binti Azmi (appointed on 30 March 2018)
Syed Ahmad Safarudin Syed Zainal Abidin (appointed on 18 June 2018)
Tahirah Mohd Nor (appointed on 15 January 2019)
Tan Kok Meng (appointed on 30 March 2018 and
resigned on 17 May 2018)

390
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

Teo Ling Ling, Sharon (appointed on 15 January 2019)


Tn Hj Noorazam bin Osman (appointed on 4 June 2018)
Wan Ahmad Saifuddin bin Wan Ahmad Radzi (appointed on 26 July 2018)
Wong Koon Keng (appointed on 15 January 2019)
Wong Wai Seng (appointed on 25 January 2018)
Yap Tze Khong (appointed on 30 April 2018)
Yaw Choon Yee (appointed on 15 January 2019)
Yogesh Gauba (appointed on 17 December 2018)
Zul Bahari Abu Bakar (appointed on 11 July 2018)
Zulfa Ashida Zulkifli (appointed on 15 January 2019)
Zulkifly Garib (appointed on 15 January 2019)
Abd Razak bin Mohd Yusoff (resigned on 4 June 2018)
Adnan Mohammad (resigned on 13 September 2018)
Ahmad Shahizam Bin Mohd Shariff (resigned on 1 August 2018)
Ahmad Yusri Yahaya (resigned on 31 July 2018)
Amy Mokhzani Mohamad (Alternate Director (resigned on 4 January 2018)
to Dr. Tee Kim Seong)
Anandraj A/L Vadivellu (retired on 27 May 2018)
Arved Nikolaus Von Zur Muehlen (resigned on 30 November 2018)
Azri Bin Zaharuddin (resigned on 30 August 2018)
Ben Chan Wei Beng (resigned on 24 April 2018)
Cheah Ho Chee (resigned on 28 February 2018)
Chek Khai Juat (resigned on 19 October 2018)
Chia Ku Tang (resigned on 31 December 2018)
Chow Yin See (resigned on 31 December 2018)
Colin Pang Toh Chin (resigned on 31 December 2018)
Dato' Jezilee Mohamad Ramli (resigned on 3 August 2018)
Dato' Mohd Izzaddin Idris (resigned on 7 October 2018)
Dato' Roslan Ibrahim (resigned on 8 October 2018)
Dato' Sri Dr Mohmad Isa Bin Hussain (Alternate (resigned on 26 March 2018)
Director to Tan Sri Dr Mohd Irwan Serigar Bin Abdullah)
Dato' Sri Mohammed Shazalli Bin Ramly (resigned on 26 June 2018)
Dato' Wan Kamaruzaman Bin Wan Ahmad (resigned on 31 October 2018)
Datuk Haji Abdul Wahab Bin Aziz (resigned on 1 October 2018)
Dr Patrick Lau Hui Ping (resigned on 17 May 2018)
Dr. Farid Mohamed Sani (resigned on 2 October 2018)
Habibul Rahman Bin Kadir Shah (resigned on 11 May 2018)
Hiew Wai Yen (resigned on 14 February 2018)
Ikmal Hijaz Hashim (resigned on 13 September 2018)
Ina Anzalna Binti Shamsudin (resigned on 17 October 2018)
Ir. Wan Nor 'Azman Wan Salleh (resigned on 31 July 2018)
Izaddeen bin Daud (resigned on 4 June 2018)
Jeff Saw Seong Keat (resigned on 1 March 2018)
Joanne Jacinta Oei Wen-Li (resigned on 15 June 2018)
Johan Mahmood Merican (resigned on 7 June 2018)

391
275505-K

Khazanah Nasional Berhad


(Incorporated in Malaysia)

80. Directors of subsidiaries (cont'd.)

K. Gopalan V.P. Govinda Pathiyar (resigned on 18 June 2018)


Kamaludin Othman (resigned on 13 September 2018)
Kaushal Kumar Garg (resigned on 21 November 2018)
Khoo Lay Seng (resigned on 13 July 2018)
Lock Jian Wah (resigned on 20 April 2018)
Lokman Hamzah (resigned on 9 July 2018)
Loo Kin Han (resigned on 14 Febuary 2018)
Mah Poon Keat (resigned on 11 July 2018)
Marie Chantale Wan Min Kee (resigned on 16 April 2018)
Michael Peter Lake (resigned on 31 December 2018)
Michelle Chow Sue Mei (resigned on 29 June 2018)
Mohamad Rauff Bin Nabi Bax (resigned on 1 August 2018)
Mohd Azmi bin Hitam (resigned on 1 January 2019)
Mohd Fuad Ahmad (resigned on 15 March 2018)
Mohd Nordin bin Jamaludin (resigned on 1 January 2019)
Mohd Ridzwan Bin Nordin (resigned on 5 March 2018)
Muhammad Fadzil Abdul Hamid (resigned on 31 July 2018)
Muhammad Zainal Ashikin Bin Muhammad Rejab (resigned on 19 June 2018)
Ng Yan Chuan (resigned on 28 July 2018 and appointed
on 19 February 2019)
Omar Siddiq Bin Amin Noer Rashid (resigned on 31 May 2018)
Proteek Kumar Sengupta (resigned on 31 March 2018)
Quah Bee Fong (resigned on 19 Febuary 2018)
Raja Norasikin Tengku Aziz (resigned on 15 January 2019)
Shahnaz Binti Abdul Samad (resigned on 27 July 2018)
Shamsudin Yusof (resigned on 15 January 2019)
Sonia Lutchmiah (resigned on 27 February 2018)
Suhaimi Jamal (resigned on 27 February 2018)
Tan Sri Dato' Azman bin Mokhtar (resigned on 31 July 2018)
Tan Sri Dato' Ir. Omar Ibrahim (resigned on 1 March 2019)
Tan Sri Dato' Sri Zamzamzairani Mohd Isa (resigned on 1 October 2018)
Tan Sri Dr. Ir. Ahmad Tajuddin Ali (retired on 1 January 2018)
Tan Vi Lex (resigned on 1 October 2018)
Tuan Farezuddeen Ahmad Tuan Ibrahim (resigned on 13 September 2018)
Tunku Siti Raudzoh Tunku Ibrahim (resigned on 1 January 2018)
Vimala A/P V.R. Menon (resigned on 1 August 2018)
Wan Shamilah Binti Wan Muhammad Saidi (resigned on 1 August 2018)
Yeoh Suat Gaik (resigned on 25 June 2018)
Yeow Tau Ling (resigned on 1 January 2019)
Zaiviji Ismail Abdullah (resigned on 1 March 2019)
Zulaifah Abdul Ghani (resigned on 4 January 2018)
Zulkiflee Omar (resigned on 31 May 2018)

392

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