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the financial year, the paid-up share capital of the Company increased due to the vesting of Long Term Incentive Plan (‘LTIP’) granted to eligible employees, details of which are disclosed in Note 34 to the financial statements. The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company. FINANCIAL STATEMENTS Sec 5 197 TENAGA NASIONAL BERHAD’S LTIP The Company implemented a LTIP on 30 April 2015 for a period of 10 years. The LTIP is governed by the by-laws, which are approved by the shareholders at an Extraordinary General Meeting on 18 December 2014. The main features and details of the number of grants over the shares of the Company are set out in Note 34 to the financial statements. The Companyhas been granted a relief by the Companies Commission of Malaysia (‘CCM’) via letter dated 9 February 2024 from having to disclose in this report the names of the persons to whom LTIP have been granted under the scheme and details of their holdings pursuant to Section 255(1) and Paragraph 5, Part 1, Fifth Schedule of the Companies Act 2016 except for information on employees who were granted the offering of up to 257,700 and more ordinary shares under the LTIP scheme. The employees of the Company who were granted the offering of up to 257,700 and more ordinary shares under the LTIP scheme are as follows: Number of ordinary shares granted under PS* Number of ordinary shares granted under RS** Total Dato’ Seri Ir. Baharin bin Din 503,900 251,400 755,300 Nazmi bin Othman 310,700 191,700 502,400 Datuk Ir. Megat Jalaluddin bin Megat Hassan 255,700 157,400 413,100 Wan Nazmy bin Wan Mahmood 234,000 159,300 393,300 Wahizan bin Abd Rahman 230,500 154,900 385,400 Amir Mahmod bin Abdullah 173,900 136,400 310,300 Zainal Abidin Shah bin Mahamood @ Yahya 168,300 136,800 305,100 Ahmad Faraid bin Mohammed Yahaya 138,600 137,700 276,300 Mohamed Ghous bin Ahmad 132,300 125,400 257,700 * PS - Performance Share Grant ** RS - Restricted Share Grant None of the subsidiaries’ employees were granted | [
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the Company who were granted the offering of up to 257,700 and more ordinary shares under the LTIP scheme are as follows: Number of ordinary shares granted under PS* Number of ordinary shares granted under RS** Total Dato’ Seri Ir. Baharin bin Din 503,900 251,400 755,300 Nazmi bin Othman 310,700 191,700 502,400 Datuk Ir. Megat Jalaluddin bin Megat Hassan 255,700 157,400 413,100 Wan Nazmy bin Wan Mahmood 234,000 159,300 393,300 Wahizan bin Abd Rahman 230,500 154,900 385,400 Amir Mahmod bin Abdullah 173,900 136,400 310,300 Zainal Abidin Shah bin Mahamood @ Yahya 168,300 136,800 305,100 Ahmad Faraid bin Mohammed Yahaya 138,600 137,700 276,300 Mohamed Ghous bin Ahmad 132,300 125,400 257,700 * PS - Performance Share Grant ** RS - Restricted Share Grant None of the subsidiaries’ employees were granted offeringrepresenting 257,700 or more ordinary shares under the LTIP scheme. DIRECTORS The Directors who have held office during the financial year and during the period from the end of the financial year to the date of the report are: Company Dato' Abdul Razak bin Abdul Majid (Appointed w.e.f. 27 March 2023) Datuk Ir. Megat Jalaluddin bin Megat Hassan (Appointed w.e.f. 1 March 2024) Ramzi bin Mansor (Appointed w.e.f. 1 March 2024) Selvendran Katheerayson (Appointed w.e.f. 1 September 2023) Rohaya binti Mohammad Yusof Muazzam bin Mohamad (Appointed w.e.f. 1 July 2023) Ong Ai Lin Juniwati Rahmat Hussin DIRECTORS’ REPORT TENAGA NASIONAL BERHAD Integrated Annual Report 2023 198 DIRECTORS (CONTINUED) The Directors who have held office during the financial year and during the period from the end of the financial year to the date of the report are: (continued) Company (continued) Gopala Krishnan K.Sundaram Dato’ Roslina binti Zainal Dato’ Merina binti Abu Tahir Elaine Ong Yee Lynn (Alternate Director to Selvendran Katheerayson) (Cessation of Office as Alternate Director to Datuk Amran Hafiz bin Affifudin w.e.f. 1 September 2023) (Appointment as Alternate Director to Selvendran Katheerayson w.e.f. 24 November 2023) Datuk Amran | [
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March 2024) Ramzi bin Mansor (Appointed w.e.f. 1 March 2024) Selvendran Katheerayson (Appointed w.e.f. 1 September 2023) Rohaya binti Mohammad Yusof Muazzam bin Mohamad (Appointed w.e.f. 1 July 2023) Ong Ai Lin Juniwati Rahmat Hussin DIRECTORS’ REPORT TENAGA NASIONAL BERHAD Integrated Annual Report 2023 198 DIRECTORS (CONTINUED) The Directors who have held office during the financial year and during the period from the end of the financial year to the date of the report are: (continued) Company (continued) Gopala Krishnan K.Sundaram Dato’ Roslina binti Zainal Dato’ Merina binti Abu Tahir Elaine Ong Yee Lynn (Alternate Director to Selvendran Katheerayson) (Cessation of Office as Alternate Director to Datuk Amran Hafiz bin Affifudin w.e.f. 1 September 2023) (Appointment as Alternate Director to Selvendran Katheerayson w.e.f. 24 November 2023) Datuk Amran Hafizbin Affifudin (Resigned w.e.f. 1 September 2023) Datuk Rawisandran a/l Narayanan (Cessation of Office as Director w.e.f. 18 May 2023) Datin Rashidah binti Mohd Sies (Appointed w.e.f. 10 April 2023) (Resigned w.e.f. 12 January 2024) Dato’ Seri Ir. Baharin bin Din (Cessation of Office w.e.f. 29 February 2024) Subsidiaries The Directors who have held office during the financial year and during the period from the end of the financial year to the date of the report are set out in the respective subsidiaries’ statutory accounts and the said information is deemed incorporated herein by such reference and made part thereof. The Company has been granted a relief by the CCM via a letter dated 1 March 2024 order pursuant to Section 255(1) of the Companies Act 2016 relieving the Company’s Directors from full compliance to the requirements under Section 253(2) of the Companies Act 2016. DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the | [
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of the financial year to the date of the report are set out in the respective subsidiaries’ statutory accounts and the said information is deemed incorporated herein by such reference and made part thereof. The Company has been granted a relief by the CCM via a letter dated 1 March 2024 order pursuant to Section 255(1) of the Companies Act 2016 relieving the Company’s Directors from full compliance to the requirements under Section 253(2) of the Companies Act 2016. DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Companyor any other body corporate, other than as disclosed in the Directors’ interests in shares and debentures. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits shown under Directors’ Remuneration below and in Note 33 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a partner, or with a company in which the Director has a substantial financial interest. INDEMNITY AND INSURANCE COSTS The Group and the Company have their own Directors and Officers Liability Insurance at a premium of RM518,750 (excluding Sales and Services Tax (‘SST’) and Stamp Duty) to cover the liability of Directors and Officers in discharging their duties for the period of 1 November 2023 until 31 October 2024. DIRECTORS’ REPORT FINANCIAL STATEMENTS Sec 5 199 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, none of the Directors who held office at the end of the financial year held any shares or debentures in the Company or its subsidiaries during the financial year except as follows: Number of | [
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which the Director has a substantial financial interest. INDEMNITY AND INSURANCE COSTS The Group and the Company have their own Directors and Officers Liability Insurance at a premium of RM518,750 (excluding Sales and Services Tax (‘SST’) and Stamp Duty) to cover the liability of Directors and Officers in discharging their duties for the period of 1 November 2023 until 31 October 2024. DIRECTORS’ REPORT FINANCIAL STATEMENTS Sec 5 199 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, none of the Directors who held office at the end of the financial year held any shares or debentures in the Company or its subsidiaries during the financial year except as follows: Number of ordinaryshares As at 1.1.2023/ Date of Appointment Vested/ Acquired Disposed As at 31.12.2023 Dato’ Abdul Razak bin Abdul Majid 26,562 0 0 26,562 Dato’ Seri Ir. Baharin bin Din 116,700 51,500 0 168,200 Dato’ Roslina binti Zainal 18,400 0 0 18,400 Ordinary shares granted pursuant to the Company’s LTIP granted to the Director during the financial year are as follows: As at 1.1.2023 Vested Forfeited As at 31.12.2023 Dato’ Seri Ir. Baharin bin Din Performance Share Grant (‘PS Grant’) PS Grant 6 47,400 0 (47,400) 0 PS Grant 7 98,700 0 0 98,700 PS Grant 8 164,300 0 0 164,300 Restricted Share Grant (‘RS Grant’) RS Grant 6 9,000 (9,000) 0 0 RS Grant 7 37,700 (18,900) 0 18,800 RS Grant 8 70,600 (23,600) 0 47,000 DIRECTORS’ REMUNERATION Group Company 2023 RM 2022 RM 2023 RM 2022 RM Non-Executive Directors’ fees 2,041,419 2,538,667 1,970,774 2,478,667 Non-Executive Directors’ other emoluments 1,254,753 1,170,480 1,246,253 1,162,980 Executive Directors’ remuneration and other emoluments 3,945,003 4,284,299 3,945,003 4,284,299 7,241,175 7,993,446 7,162,030 7,925,946 In respect of the Directors or past Directors of the Company, there were benefits receivable by the Directors from the Company and its subsidiaries as Directors’ other emoluments for | [
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Dato’ Seri Ir. Baharin bin Din Performance Share Grant (‘PS Grant’) PS Grant 6 47,400 0 (47,400) 0 PS Grant 7 98,700 0 0 98,700 PS Grant 8 164,300 0 0 164,300 Restricted Share Grant (‘RS Grant’) RS Grant 6 9,000 (9,000) 0 0 RS Grant 7 37,700 (18,900) 0 18,800 RS Grant 8 70,600 (23,600) 0 47,000 DIRECTORS’ REMUNERATION Group Company 2023 RM 2022 RM 2023 RM 2022 RM Non-Executive Directors’ fees 2,041,419 2,538,667 1,970,774 2,478,667 Non-Executive Directors’ other emoluments 1,254,753 1,170,480 1,246,253 1,162,980 Executive Directors’ remuneration and other emoluments 3,945,003 4,284,299 3,945,003 4,284,299 7,241,175 7,993,446 7,162,030 7,925,946 In respect of the Directors or past Directors of the Company, there were benefits receivable by the Directors from the Company and its subsidiaries as Directors’ other emoluments for theirservices. The estimated monetary value of benefits received by the Directors was RM588,150 (2022: RM441,980) for the Group and the Company. DIRECTORS’ REPORT TENAGA NASIONAL BERHAD Integrated Annual Report 2023 200 STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (a) Before the financial statements of the Group and of the Company were prepared, 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 be realised in the ordinary course of business, including the values of current assets as shown in the accounting records of the Group and of the Company had been written down to an amount which the current assets might be expected so to realise. (b) At the date of this report, the Directors are not aware of any circumstances: (i) which would render the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; or | [
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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 be realised in the ordinary course of business, including the values of current assets as shown in the accounting records of the Group and of the Company had been written down to an amount which the current assets might be expected so to realise. (b) At the date of this report, the Directors are not aware of any circumstances: (i) which would render the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; or (ii)which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or (iii) which have arisen and would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. (c) At the date of this report: (i) there are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year which secures the liabilities of any other person; and (ii) there are no contingent liabilities in the Group and in the Company which have arisen since the end of the financial year. (d) No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Company and its subsidiaries to meet their obligations when they fall due. (e) 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 respective financial statements misleading. (f) In the opinion of the Directors: (i) the | [
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in the Company which have arisen since the end of the financial year. (d) No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Company and its subsidiaries to meet their obligations when they fall due. (e) 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 respective financial statements misleading. (f) In the opinion of the Directors: (i) the resultsof 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; and (ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. DIRECTORS’ REPORT FINANCIAL STATEMENTS Sec 5 201 AUDITORS’ REMUNERATION T otal fees for statutory audits and audit-related services provided by the auditors, PricewaterhouseCoopers PLT, and its member firms amounted to RM12.2 million (2022: RM10.4 million) for the Group and RM2.9 million (2022: RM2.8 million) for the Company, while total fees for assurance related and non-audit services amounted to RM0.2 million (2022: RM1.7 million) for the Group and NIL (2022: RM0.3 million) for the Company respectively. Non-audit services provided by the auditors and its member firms comprise tax related services and other advisory services. Details of the auditors’ remuneration are set out in Note 33 to the financial statements. AUDITORS The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have | [
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for the financial year in which this report is made. DIRECTORS’ REPORT FINANCIAL STATEMENTS Sec 5 201 AUDITORS’ REMUNERATION T otal fees for statutory audits and audit-related services provided by the auditors, PricewaterhouseCoopers PLT, and its member firms amounted to RM12.2 million (2022: RM10.4 million) for the Group and RM2.9 million (2022: RM2.8 million) for the Company, while total fees for assurance related and non-audit services amounted to RM0.2 million (2022: RM1.7 million) for the Group and NIL (2022: RM0.3 million) for the Company respectively. Non-audit services provided by the auditors and its member firms comprise tax related services and other advisory services. Details of the auditors’ remuneration are set out in Note 33 to the financial statements. AUDITORS The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressedtheir willingness to accept re-appointment as auditors. This report was approved by the Board of Directors on 19 March 2024. Signed on behalf of the Board of Directors: DATO’ ABDUL RAZAK BIN ABDUL MAJID DATUK IR. MEGAT JALALUDDIN BIN MEGAT HASSAN CHAIRMAN PRESIDENT/CHIEF EXECUTIVE OFFICER DIRECTORS’ REPORT TENAGA NASIONAL BERHAD Integrated Annual Report 2023 202 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2023 Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million NON-CURRENT ASSETS Property, plant and equipment ('PPE') 5 121,932.1 116,577.1 78,765.4 75,185.5 Right-of-use ('ROU') assets 6 34,106.8 37,405.1 65,457.0 71,879.1 Subsidiaries 7 0 0 8,027.6 7,848.0 Joint ventures 8 208.4 249.5 0 0 Associates 9 1,458.8 1,429.7 75.7 75.7 Intangible assets 10 1,270.5 593.6 0 0 Investment in unquoted debt security 11 259.3 253.4 259.3 253.4 Tax recoverable 4 3,522.4 3,522.4 3,522.4 3,522.4 Deferred tax assets 12 379.3 377.5 0 0 Long term receivables 13 540.9 250.5 382.8 141.1 Amounts due from subsidiaries 14 0 0 4,885.5 4,416.1 Finance lease receivables 15 6.1 7.4 0 0 Financial assets at fair value through other | [
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Annual Report 2023 202 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2023 Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million NON-CURRENT ASSETS Property, plant and equipment ('PPE') 5 121,932.1 116,577.1 78,765.4 75,185.5 Right-of-use ('ROU') assets 6 34,106.8 37,405.1 65,457.0 71,879.1 Subsidiaries 7 0 0 8,027.6 7,848.0 Joint ventures 8 208.4 249.5 0 0 Associates 9 1,458.8 1,429.7 75.7 75.7 Intangible assets 10 1,270.5 593.6 0 0 Investment in unquoted debt security 11 259.3 253.4 259.3 253.4 Tax recoverable 4 3,522.4 3,522.4 3,522.4 3,522.4 Deferred tax assets 12 379.3 377.5 0 0 Long term receivables 13 540.9 250.5 382.8 141.1 Amounts due from subsidiaries 14 0 0 4,885.5 4,416.1 Finance lease receivables 15 6.1 7.4 0 0 Financial assets at fair value through other comprehensiveincome (‘FVOCI’) 16 55.1 70.7 54.3 70.0 Contract cost assets 17 4.7 1.3 0 0 Financial assets at fair value through profit or loss (‘FVTPL’) 18 35.9 55.6 33.4 53.1 Derivative financial instruments 19 168.0 72.3 0 0 Employee benefits 24 147.1 0 147.1 0 164,095.4 160,866.1 161,610.5 163,444.4 CURRENT ASSETS Inventories 20 2,758.0 3,290.8 278.7 331.0 Receivables, deposits and prepayments 21 10,408.2 22,827.0 7,707.7 19,824.4 Contract assets 17 4,446.8 3,825.9 4,226.9 3,430.0 Contract cost assets 17 99.5 165.5 0 0 Tax recoverable 1,519.0 1,207.5 1,097.3 817.6 Finance lease receivables 15 1.1 1.2 0 0 Amounts due from subsidiaries 14 0 0 3,092.1 5,600.8 Amounts due from joint ventures 8 22.7 44.6 0 0 Amounts due from associates 9 388.3 659.1 5.2 5.6 Derivative financial instruments 19 0 0.2 0 0 Financial assets at FVTPL 18 1,614.1 8,141.0 1,336.0 6,222.9 Deposits, bank and cash balances 22 19,390.5 4,893.4 13,326.6 748.2 40,648.2 45,056.2 31,070.5 36,980.5 FINANCIAL STATEMENTS Sec 5 203 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2023 Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million CURRENT LIABILITIES Payables 23 (12,830.7) (11,509.7) (8,337.9) | [
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and prepayments 21 10,408.2 22,827.0 7,707.7 19,824.4 Contract assets 17 4,446.8 3,825.9 4,226.9 3,430.0 Contract cost assets 17 99.5 165.5 0 0 Tax recoverable 1,519.0 1,207.5 1,097.3 817.6 Finance lease receivables 15 1.1 1.2 0 0 Amounts due from subsidiaries 14 0 0 3,092.1 5,600.8 Amounts due from joint ventures 8 22.7 44.6 0 0 Amounts due from associates 9 388.3 659.1 5.2 5.6 Derivative financial instruments 19 0 0.2 0 0 Financial assets at FVTPL 18 1,614.1 8,141.0 1,336.0 6,222.9 Deposits, bank and cash balances 22 19,390.5 4,893.4 13,326.6 748.2 40,648.2 45,056.2 31,070.5 36,980.5 FINANCIAL STATEMENTS Sec 5 203 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2023 Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million CURRENT LIABILITIES Payables 23 (12,830.7) (11,509.7) (8,337.9) (6,741.2)Contract liabilities 17 (338.6) (573.4) (244.9) (237.1) Derivative financial instruments 19 (1.4) (2.9) (1.4) (2.9) Lease liabilities 15 (2,983.5) (3,140.5) (4,466.2) (5,054.2) Amounts due to subsidiaries 14 0 0 (6,944.0) (6,709.1) Amounts due to associates 9 (579.7) (777.6) (568.8) (765.9) Current tax liabilities (108.2) (187.9) (24.1) (37.2) Employee benefits 24 (615.8) (592.5) (589.5) (569.6) Consumer deposits 25 (8,050.1) (7,550.6) (7,659.6) (7,185.7) Short term borrowings 26 (7,330.6) (13,262.2) (4,354.4) (11,112.2) (32,838.6) (37,597.3) (33,190.8) (38,415.1) NET CURRENT ASSETS/(LIABILITIES) 7,809.6 7,458.9 (2,120.3) (1,434.6) TOTAL ASSETS LESS CURRENT LIABILITIES 171,905.0 168,325.0 159,490.2 162,009.8 NON-CURRENT LIABILITIES Borrowings 26 (54,439.6) (50,620.0) (25,323.7) (25,119.7) Derivative financial instruments 19 (10.5) (2.3) 0 0 Contract liabilities 17 (5,449.7) (4,783.1) (4,651.3) (4,039.7) Government development grants 27 (922.8) (875.4) 0 0 Lease liabilities 15 (27,877.4) (30,137.9) (64,820.4) (68,750.9) Deferred tax liabilities 12 (9,018.3) (8,820.3) (6,491.2) (6,640.3) Other liabilities 28 (1,348.7) (1,154.1) (764.4) (714.0) Employee benefits 24 (11,755.3) | [
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(2,983.5) (3,140.5) (4,466.2) (5,054.2) Amounts due to subsidiaries 14 0 0 (6,944.0) (6,709.1) Amounts due to associates 9 (579.7) (777.6) (568.8) (765.9) Current tax liabilities (108.2) (187.9) (24.1) (37.2) Employee benefits 24 (615.8) (592.5) (589.5) (569.6) Consumer deposits 25 (8,050.1) (7,550.6) (7,659.6) (7,185.7) Short term borrowings 26 (7,330.6) (13,262.2) (4,354.4) (11,112.2) (32,838.6) (37,597.3) (33,190.8) (38,415.1) NET CURRENT ASSETS/(LIABILITIES) 7,809.6 7,458.9 (2,120.3) (1,434.6) TOTAL ASSETS LESS CURRENT LIABILITIES 171,905.0 168,325.0 159,490.2 162,009.8 NON-CURRENT LIABILITIES Borrowings 26 (54,439.6) (50,620.0) (25,323.7) (25,119.7) Derivative financial instruments 19 (10.5) (2.3) 0 0 Contract liabilities 17 (5,449.7) (4,783.1) (4,651.3) (4,039.7) Government development grants 27 (922.8) (875.4) 0 0 Lease liabilities 15 (27,877.4) (30,137.9) (64,820.4) (68,750.9) Deferred tax liabilities 12 (9,018.3) (8,820.3) (6,491.2) (6,640.3) Other liabilities 28 (1,348.7) (1,154.1) (764.4) (714.0) Employee benefits 24 (11,755.3) (10,965.7)(11,024.2) (10,334.5) (110,822.3) (107,358.8) (113,075.2) (115,599.1) TOTAL NET ASSETS 61,082.7 60,966.2 46,415.0 46,410.7 EQUITY Share capital 29 12,499.5 12,204.3 12,499.5 12,204.3 Other reserves 30 (6,682.6) (6,463.3) (6,161.8) (5,453.4) Retained profits 53,008.9 52,776.1 40,077.3 39,659.8 CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY 58,825.8 58,517.1 46,415.0 46,410.7 NON-CONTROLLING INTERESTS (‘NCI’) 7(b) 2,256.9 2,449.1 0 0 TOTAL EQUITY 61,082.7 60,966.2 46,415.0 46,410.7 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. TENAGA NASIONAL BERHAD Integrated Annual Report 2023 204 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Revenue 31 53,066.9 50,867.7 48,456.7 46,879.7 Imbalance Cost Pass-Through (‘ICPT’) under recovery 32 10,598.2 22,315.3 10,213.4 21,942.2 | [
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(115,599.1) TOTAL NET ASSETS 61,082.7 60,966.2 46,415.0 46,410.7 EQUITY Share capital 29 12,499.5 12,204.3 12,499.5 12,204.3 Other reserves 30 (6,682.6) (6,463.3) (6,161.8) (5,453.4) Retained profits 53,008.9 52,776.1 40,077.3 39,659.8 CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY 58,825.8 58,517.1 46,415.0 46,410.7 NON-CONTROLLING INTERESTS (‘NCI’) 7(b) 2,256.9 2,449.1 0 0 TOTAL EQUITY 61,082.7 60,966.2 46,415.0 46,410.7 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. TENAGA NASIONAL BERHAD Integrated Annual Report 2023 204 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Revenue 31 53,066.9 50,867.7 48,456.7 46,879.7 Imbalance Cost Pass-Through (‘ICPT’) under recovery 32 10,598.2 22,315.3 10,213.4 21,942.2 Operatingexpenses 33 (57,371.1) (64,612.1) (51,543.4) (61,193.1) Net reversal/(loss) on impairment of financial instruments 45 114.7 (101.4) 133.3 10.2 Other operating income 35 948.2 940.0 909.3 1,054.8 Operating profit 7,356.9 9,409.5 8,169.3 8,693.8 Foreign exchange loss 36 (209.5) (223.5) (51.7) (328.2) Share of results of joint ventures 8 18.1 21.0 0 0 Share of results of associates 9 44.3 76.6 0 0 Profit before finance cost 7,209.8 9,283.6 8,117.6 8,365.6 Finance income 37 544.3 277.7 688.2 420.9 Finance cost 37 (4,331.1) (4,343.4) (5,468.7) (5,451.4) Fair value changes of financial instruments 37 (49.4) 130.7 (1.1) (15.2) Profit before taxation and zakat 3,373.6 5,348.6 3,336.0 3,319.9 Taxation and zakat 38 (770.0) (1,791.2) (381.0) (894.1) Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Profit attributable to: - Owners of the Company 2,770.3 3,463.3 2,955.0 2,425.8 - Non-controlling interests (166.7) 94.1 0 0 Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Sen Sen Earnings per share: - Basic 39 48.00 60.35 - Diluted 39 47.79 59.98 CONSOLIDATEDSTATEMENTOF | [
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(209.5) (223.5) (51.7) (328.2) Share of results of joint ventures 8 18.1 21.0 0 0 Share of results of associates 9 44.3 76.6 0 0 Profit before finance cost 7,209.8 9,283.6 8,117.6 8,365.6 Finance income 37 544.3 277.7 688.2 420.9 Finance cost 37 (4,331.1) (4,343.4) (5,468.7) (5,451.4) Fair value changes of financial instruments 37 (49.4) 130.7 (1.1) (15.2) Profit before taxation and zakat 3,373.6 5,348.6 3,336.0 3,319.9 Taxation and zakat 38 (770.0) (1,791.2) (381.0) (894.1) Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Profit attributable to: - Owners of the Company 2,770.3 3,463.3 2,955.0 2,425.8 - Non-controlling interests (166.7) 94.1 0 0 Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Sen Sen Earnings per share: - Basic 39 48.00 60.35 - Diluted 39 47.79 59.98 CONSOLIDATEDSTATEMENTOF PROFITORLOSSForTheFinancialYearEnded31December2023FINANCIAL STATEMENTS Sec 5 205 CONSOLIDATEDSTATEMENTOF COMPREHENSIVEINCOMEForTheFinancialYearEnded31December2023 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) (Restated) Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Other comprehensive (expense)/income Items that will not be reclassified subsequently to profit or loss: Defined benefit plan actuarial (loss)/gain (658.6) 653.4 (585.3) 494.4 Fair value changes of financial assets at FVOCI 47 (15.6) 7.9 (15.7) 7.9 Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences 427.8 (222.3) 0 0 Share of other comprehensive income (‘OCI’)/expense of associates accounted for using the equity method 9 133.0 (55.2) 0 0 T otal other comprehensive (expense)/income (113.4) 383.8 (601.0) 502.3 T otal comprehensive income for the financial year 2,490.2 3,941.2 2,354.0 2,928.1 Attributable to: - Owners of the Company 2,658.4 3,827.4 2,354.0 2,928.1 - Non-controlling interests 7(b) (168.2) 113.8 0 0 T otal | [
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2022 RM’million (Restated) (Restated) Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Other comprehensive (expense)/income Items that will not be reclassified subsequently to profit or loss: Defined benefit plan actuarial (loss)/gain (658.6) 653.4 (585.3) 494.4 Fair value changes of financial assets at FVOCI 47 (15.6) 7.9 (15.7) 7.9 Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences 427.8 (222.3) 0 0 Share of other comprehensive income (‘OCI’)/expense of associates accounted for using the equity method 9 133.0 (55.2) 0 0 T otal other comprehensive (expense)/income (113.4) 383.8 (601.0) 502.3 T otal comprehensive income for the financial year 2,490.2 3,941.2 2,354.0 2,928.1 Attributable to: - Owners of the Company 2,658.4 3,827.4 2,354.0 2,928.1 - Non-controlling interests 7(b) (168.2) 113.8 0 0 T otal comprehensiveincome for the financial year 2,490.2 3,941.2 2,354.0 2,928.1 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 206 CONSOLIDATEDSTATEMENTOF CHANGESINEQUITYForTheFinancialYearEnded31December2023 Attributable to owners of the Company Non- controlling interests RM’million Total equity RM’million Note Ordinary shares RM’million Other reserves RM’million Retained profits RM’million Group At 1 January 2023 12,204.3 (6,463.3) 52,776.1 2,449.1 60,966.2 Defined benefit plan actuarial loss 30 0 (645.6) 0 (13.0) (658.6) Fair value changes of financial assets at FVOCI 30 0 (15.6) 0 0 (15.6) Foreign currency translation differences 30 0 416.3 0 11.5 427.8 Profit/(Loss) for the financial year 0 0 2,770.3 (166.7) 2,603.6 Share of OCI of associates accounted for using the equity method 30 0 133.0 0 0 133.0 T otal comprehensive (expense)/income for the financial year 0 (111.9) 2,770.3 (168.2) 2,490.2 LTIP: - Share-based payment expense 0 221.0 0 0 221.0 - Reversal of share-based payment expense 0 (33.2) 0 0 (33.2) - Shares issued 295.2 (295.2) 0 0 0 Dividends paid: - Final dividend for FY2022 40 0 0 (1,495.8) 0 (1,495.8) - Interim dividend for FY2023 | [
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2023 12,204.3 (6,463.3) 52,776.1 2,449.1 60,966.2 Defined benefit plan actuarial loss 30 0 (645.6) 0 (13.0) (658.6) Fair value changes of financial assets at FVOCI 30 0 (15.6) 0 0 (15.6) Foreign currency translation differences 30 0 416.3 0 11.5 427.8 Profit/(Loss) for the financial year 0 0 2,770.3 (166.7) 2,603.6 Share of OCI of associates accounted for using the equity method 30 0 133.0 0 0 133.0 T otal comprehensive (expense)/income for the financial year 0 (111.9) 2,770.3 (168.2) 2,490.2 LTIP: - Share-based payment expense 0 221.0 0 0 221.0 - Reversal of share-based payment expense 0 (33.2) 0 0 (33.2) - Shares issued 295.2 (295.2) 0 0 0 Dividends paid: - Final dividend for FY2022 40 0 0 (1,495.8) 0 (1,495.8) - Interim dividend for FY2023 400 0 (1,041.7) 0 (1,041.7) RedemptionofRedeemablePreferenceShares byNCI7(b)000(24.0)(24.0) T otal transactions with owners 295.2 (107.4) (2,537.5) (24.0) (2,373.7) At 31 December 2023 12,499.5 (6,682.6) 53,008.9 2,256.9 61,082.7 FINANCIAL STATEMENTS Sec 5 207 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For The Financial Year Ended 31 December 2023 Attributable to owners of the Company Non- controlling interests RM’million Total equity RM’million Note Ordinary shares RM’million Other reserves RM’million Retained profits RM’million Group At 1 January 2022 11,927.6 (6,813.3) 51,494.1 1,784.0 58,392.4 Defined benefit plan actuarial gain 30 0 626.9 0 26.5 653.4 Fair value changes of financial assets at FVOCI 30 0 7.9 0 0 7.9 Foreign currency translation differences 30 0 (215.5) 0 (6.8) (222.3) Profit for the financial year 0 0 3,463.3 94.1 3,557.4 Share of OCI of associates accounted for using the equity method 30 0 (55.2) 0 0 (55.2) T otal comprehensive income for the financial year 0 364.1 3,463.3 113.8 3,941.2 LTIP: - Share-based payment expense 0 299.1 0 0 299.1 - Reversal of share-based payment expense 0 (36.5) 0 0 (36.5) - Shares issued 276.7 (276.7) 0 0 0 Dividends paid: - Final dividend for FY2021 0 0 (1,030.7) 0 (1,030.7) - Interim dividend for FY2022 40 0 0 (1,150.6) | [
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51,494.1 1,784.0 58,392.4 Defined benefit plan actuarial gain 30 0 626.9 0 26.5 653.4 Fair value changes of financial assets at FVOCI 30 0 7.9 0 0 7.9 Foreign currency translation differences 30 0 (215.5) 0 (6.8) (222.3) Profit for the financial year 0 0 3,463.3 94.1 3,557.4 Share of OCI of associates accounted for using the equity method 30 0 (55.2) 0 0 (55.2) T otal comprehensive income for the financial year 0 364.1 3,463.3 113.8 3,941.2 LTIP: - Share-based payment expense 0 299.1 0 0 299.1 - Reversal of share-based payment expense 0 (36.5) 0 0 (36.5) - Shares issued 276.7 (276.7) 0 0 0 Dividends paid: - Final dividend for FY2021 0 0 (1,030.7) 0 (1,030.7) - Interim dividend for FY2022 40 0 0 (1,150.6) 0(1,150.6) Dividends paid to NCI 0 0 0 (17.7) (17.7) Increase in equity shares of NCI 0 0 0 15.7 15.7 Conversion to NCI equity 7(b) 0 0 0 626.8 626.8 RedemptionofRedeemablePreferenceShares byNCI7(b)000(73.5)(73.5) T otal transactions with owners 276.7 (14.1) (2,181.3) 551.3 (1,367.4) At 31 December 2022 12,204.3 (6,463.3) 52,776.1 2,449.1 60,966.2 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 208 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For The Financial Year Ended 31 December 2023 Attributable to owners of the Company Note Ordinary shares RM’million Other reserves RM’million Retained profits RM’million Total equity RM’million Company At 1 January 2023 12,204.3 (5,453.4) 39,659.8 46,410.7 Defined benefit plan actuarial loss 30 0 (585.3) 0 (585.3) Fair value changes of financial assets at FVOCI 30 0 (15.7) 0 (15.7) Profit for the financial year 0 0 2,955.0 2,955.0 T otal comprehensive (expense)/income for the financial year 0 (601.0) 2,955.0 2,354.0 LTIP: - Share-based payment expense 0 221.0 0 221.0 - Reversal of share-based payment expense 0 (33.2) 0 (33.2) - Shares issued 295.2 (295.2) 0 0 Dividends paid: - Final dividend for FY2022 40 0 0 (1,495.8) (1,495.8) - Interim dividend for FY2023 40 0 0 (1,041.7) (1,041.7) T otal transactions with owners 295.2 (107.4) (2,537.5) (2,349.7) At 31 December 2023 | [
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Company Note Ordinary shares RM’million Other reserves RM’million Retained profits RM’million Total equity RM’million Company At 1 January 2023 12,204.3 (5,453.4) 39,659.8 46,410.7 Defined benefit plan actuarial loss 30 0 (585.3) 0 (585.3) Fair value changes of financial assets at FVOCI 30 0 (15.7) 0 (15.7) Profit for the financial year 0 0 2,955.0 2,955.0 T otal comprehensive (expense)/income for the financial year 0 (601.0) 2,955.0 2,354.0 LTIP: - Share-based payment expense 0 221.0 0 221.0 - Reversal of share-based payment expense 0 (33.2) 0 (33.2) - Shares issued 295.2 (295.2) 0 0 Dividends paid: - Final dividend for FY2022 40 0 0 (1,495.8) (1,495.8) - Interim dividend for FY2023 40 0 0 (1,041.7) (1,041.7) T otal transactions with owners 295.2 (107.4) (2,537.5) (2,349.7) At 31 December 2023 12,499.5(6,161.8) 40,077.3 46,415.0 At 1 January 2022 11,927.6 (5,941.6) 39,415.3 45,401.3 Defined benefit plan actuarial gain 30 0 494.4 0 494.4 Fair value changes of financial assets at FVOCI 30 0 7.9 0 7.9 Profit for the financial year 0 0 2,425.8 2,425.8 T otal comprehensive income for the financial year 0 502.3 2,425.8 2,928.1 LTIP: - Share-based payment expense 0 299.1 0 299.1 - Reversal of share-based payment expense 0 (36.5) 0 (36.5) - Shares issued 276.7 (276.7) 0 0 Dividends paid: - Final dividend for FY2021 0 0 (1,030.7) (1,030.7) - Interim dividend for FY2022 40 0 0 (1,150.6) (1,150.6) T otal transactions with owners 276.7 (14.1) (2,181.3) (1,918.7) At 31 December 2022 12,204.3 (5,453.4) 39,659.8 46,410.7 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. FINANCIAL STATEMENTS Sec 5 209 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM OPERATING ACTIVITIES Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Adjustments for: Taxation and zakat 770.0 1,791.2 381.0 894.1 PPE: - Depreciation 7,783.7 7,500.7 5,060.3 | [
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share-based payment expense 0 (36.5) 0 (36.5) - Shares issued 276.7 (276.7) 0 0 Dividends paid: - Final dividend for FY2021 0 0 (1,030.7) (1,030.7) - Interim dividend for FY2022 40 0 0 (1,150.6) (1,150.6) T otal transactions with owners 276.7 (14.1) (2,181.3) (1,918.7) At 31 December 2022 12,204.3 (5,453.4) 39,659.8 46,410.7 The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. FINANCIAL STATEMENTS Sec 5 209 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM OPERATING ACTIVITIES Profit for the financial year 2,603.6 3,557.4 2,955.0 2,425.8 Adjustments for: Taxation and zakat 770.0 1,791.2 381.0 894.1 PPE: - Depreciation 7,783.7 7,500.7 5,060.3 4,790.2- Written off/impairment 53.5 61.8 29.4 33.5 - Gain on disposals (14.3) (35.6) (14.3) (8.3) - Abandoned projects 0 35.1 0 35.1 ROU assets: - Depreciation 3,482.0 3,901.8 5,709.6 6,236.0 - Gain on disposals (2.6) (7.5) (2.6) (7.5) Provision for post-employment benefits 670.4 659.7 620.8 604.9 LTIP: - Share-based payment expense 221.0 299.1 151.6 203.7 - Reversal of share-based payment expense (33.2) (36.5) (20.9) (23.4) Foreign exchange translation loss 290.6 249.5 143.8 326.8 Gain on disposal of associate (21.3) 0 0 0 Share of results of joint ventures (18.1) (21.0) 0 0 Share of results of associates (44.3) (76.6) 0 0 Dividend income (0.9) (2.4) (81.0) (156.4) Finance income (544.3) (277.7) (688.2) (420.9) Finance cost on: - Borrowings 2,499.4 2,403.9 1,094.2 984.2 - Lease liabilities 1,636.5 1,756.4 4,043.7 4,239.3 - Consumer deposits 197.0 183.8 187.7 175.1 - Others 16.5 24.1 143.1 52.8 Release of: - Customers’ contributions (286.1) (276.3) (233.4) (229.3) - Deferred income (150.5) (146.1) 0 0 Government development grants: - Other operating income (72.5) (63.4) 0 0 - Finance cost (18.3) (24.8) 0 0 Impairment losses on: - Receivables 116.9 183.9 94.6 174.2 - Contract assets 33.8 | [
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(33.2) (36.5) (20.9) (23.4) Foreign exchange translation loss 290.6 249.5 143.8 326.8 Gain on disposal of associate (21.3) 0 0 0 Share of results of joint ventures (18.1) (21.0) 0 0 Share of results of associates (44.3) (76.6) 0 0 Dividend income (0.9) (2.4) (81.0) (156.4) Finance income (544.3) (277.7) (688.2) (420.9) Finance cost on: - Borrowings 2,499.4 2,403.9 1,094.2 984.2 - Lease liabilities 1,636.5 1,756.4 4,043.7 4,239.3 - Consumer deposits 197.0 183.8 187.7 175.1 - Others 16.5 24.1 143.1 52.8 Release of: - Customers’ contributions (286.1) (276.3) (233.4) (229.3) - Deferred income (150.5) (146.1) 0 0 Government development grants: - Other operating income (72.5) (63.4) 0 0 - Finance cost (18.3) (24.8) 0 0 Impairment losses on: - Receivables 116.9 183.9 94.6 174.2 - Contract assets 33.8 37.723.1 34.4 - Amounts due from subsidiaries 0 0 163.7 66.1 - Amounts due from joint ventures 7.8 3.8 0 0 - Amounts due from associates 0.1 0.1 0.1 0.1 - Financial guarantee contracts 1.5 37.6 4.2 37.6 - Investment in unquoted debt security 6.0 3.1 6.0 3.1 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 210 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Adjustments for: (continued) Reversal of impairment losses on: - Receivables (254.9) (56.5) (239.7) (26.6) - Contract assets (22.6) (71.0) (19.3) (64.0) - Amounts due from subsidiaries 0 0 (163.0) (210.8) - Amounts due from joint ventures (0.3) (13.7) 0 0 - Amounts due from associates (0.1) (0.1) (0.1) (0.1) - Financial guarantee contracts 0 (18.1) 0 (18.8) - Investment in unquoted debt security (2.9) (5.4) (2.9) (5.4) Impairment losses on investment in: - Subsidiaries 0 0 15.2 18.9 - Joint ventures 1.3 2.3 0 0 - Associates 35.9 68.6 0 0 Reversal of impairment losses of investment in a subsidiary 0 0 (137.7) 0 Impairment losses on intangible assets 123.6 22.7 0 0 Inventories: - Provision for | [
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2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Adjustments for: (continued) Reversal of impairment losses on: - Receivables (254.9) (56.5) (239.7) (26.6) - Contract assets (22.6) (71.0) (19.3) (64.0) - Amounts due from subsidiaries 0 0 (163.0) (210.8) - Amounts due from joint ventures (0.3) (13.7) 0 0 - Amounts due from associates (0.1) (0.1) (0.1) (0.1) - Financial guarantee contracts 0 (18.1) 0 (18.8) - Investment in unquoted debt security (2.9) (5.4) (2.9) (5.4) Impairment losses on investment in: - Subsidiaries 0 0 15.2 18.9 - Joint ventures 1.3 2.3 0 0 - Associates 35.9 68.6 0 0 Reversal of impairment losses of investment in a subsidiary 0 0 (137.7) 0 Impairment losses on intangible assets 123.6 22.7 0 0 Inventories: - Provision for obsolescence59.0 83.6 50.0 65.2 - Write back of obsolescence (93.4) (90.7) (64.8) (85.5) - Written off 98.7 119.1 89.4 111.1 Changes in fair value of financial instruments 49.4 (130.7) 1.1 15.2 Capacity charges differential (136.5) (533.8) (507.8) (828.0) Cash from operations before working capital changes 19,041.1 21,099.1 18,791.9 19,442.4 Working capital changes: - Inventories 468.5 (1,425.7) (22.3) (254.3) - Receivables 12,239.7 (12,388.2) 12,035.2 (11,796.4) - Contract balances (822.9) (427.1) (800.7) (418.4) - Payables 1,592.0 2,899.2 1,503.5 1,736.4 - Subsidiaries balances 0 0 1,881.5 1,270.1 - Associates balances 91.2 299.4 (196.7) 597.1 - Joint ventures balances 14.4 8.8 0 0 Cash generated from operations 32,624.0 10,065.5 33,192.4 10,576.9 Post-employment benefits paid (871.9) (808.9) (841.3) (779.6) Contract liabilities received 1,121.8 828.7 852.8 632.6 Consumer deposits received 303.4 326.6 286.2 325.5 Net taxation and zakat paid (933.9) (1,034.0) (622.1) (359.6) Net cash flows generated from operating activities 32,243.4 9,377.9 32,868.0 10,395.8 FINANCIAL STATEMENTS Sec 5 211 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million | [
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21,099.1 18,791.9 19,442.4 Working capital changes: - Inventories 468.5 (1,425.7) (22.3) (254.3) - Receivables 12,239.7 (12,388.2) 12,035.2 (11,796.4) - Contract balances (822.9) (427.1) (800.7) (418.4) - Payables 1,592.0 2,899.2 1,503.5 1,736.4 - Subsidiaries balances 0 0 1,881.5 1,270.1 - Associates balances 91.2 299.4 (196.7) 597.1 - Joint ventures balances 14.4 8.8 0 0 Cash generated from operations 32,624.0 10,065.5 33,192.4 10,576.9 Post-employment benefits paid (871.9) (808.9) (841.3) (779.6) Contract liabilities received 1,121.8 828.7 852.8 632.6 Consumer deposits received 303.4 326.6 286.2 325.5 Net taxation and zakat paid (933.9) (1,034.0) (622.1) (359.6) Net cash flows generated from operating activities 32,243.4 9,377.9 32,868.0 10,395.8 FINANCIAL STATEMENTS Sec 5 211 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022RM’million (Restated) CASH FLOWS FROM INVESTING ACTIVITIES Net cash inflow from disposal of associate 133.0 0 0 0 Acquisition of subsidiaries net of cash and cash equivalents (1,616.2) (710.8) 0 0 Additional investments in: - Subsidiaries 0 0 0 (9.0) - Financial assets at FVTPL (30,500.6) (97,219.4) (26,381.0) (95,181.0) - Joint venture 0 (0.1) 0 0 Proceeds from redemptions: - Investment in unquoted debt security 0 50.0 0 50.0 - Redeemable Preference Shares (‘RPS’) in associates 0 2.6 0 0 Disposals of financial assets at FVTPL 37,102.6 91,605.8 31,327.0 89,662.7 Dividend income received 205.2 98.1 65.0 152.8 Finance income received 488.5 145.9 359.6 69.1 PPE: - Additions (10,599.2) (8,428.9) (8,421.0) (6,876.9) - Proceeds from disposals 10.7 41.3 34.7 14.0 Intangible assets: - Addition 0 (145.8) 0 0 Proceeds from disposals of ROU assets 4.9 8.2 4.9 8.2 Advances granted to subsidiaries 0 0 (217.1) (1,072.0) Repayment of advances from subsidiaries 0 0 1,048.7 376.4 Deposits maturing more than 90 days - Invested (4,393.9) (2,696.3) (139.5) 0 - Matured 3,380.3 2,883.2 139.5 0 Net cash flows | [
213
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(26,381.0) (95,181.0) - Joint venture 0 (0.1) 0 0 Proceeds from redemptions: - Investment in unquoted debt security 0 50.0 0 50.0 - Redeemable Preference Shares (‘RPS’) in associates 0 2.6 0 0 Disposals of financial assets at FVTPL 37,102.6 91,605.8 31,327.0 89,662.7 Dividend income received 205.2 98.1 65.0 152.8 Finance income received 488.5 145.9 359.6 69.1 PPE: - Additions (10,599.2) (8,428.9) (8,421.0) (6,876.9) - Proceeds from disposals 10.7 41.3 34.7 14.0 Intangible assets: - Addition 0 (145.8) 0 0 Proceeds from disposals of ROU assets 4.9 8.2 4.9 8.2 Advances granted to subsidiaries 0 0 (217.1) (1,072.0) Repayment of advances from subsidiaries 0 0 1,048.7 376.4 Deposits maturing more than 90 days - Invested (4,393.9) (2,696.3) (139.5) 0 - Matured 3,380.3 2,883.2 139.5 0 Net cash flows usedin investing activities (5,784.7) (14,366.2) (2,179.2) (12,805.7) CASH FLOWS FROM FINANCING ACTIVITIES Government development grants received 13.3 3.3 0 0 Long term borrowings: - Drawdowns 4,441.5 7,493.7 0 4,000.0 - Repayments (1,205.7) (2,556.3) (105.5) (105.5) Short term borrowings: - Drawdowns 6,170.8 17,427.9 5,500.0 16,475.0 - Repayments (12,980.0) (10,304.2) (12,235.0) (9,490.0) Finance cost paid (2,860.4) (2,657.2) (1,386.6) (1,212.2) Repayments of lease obligations: - Principal (2,375.7) (2,116.7) (3,258.1) (3,475.5) - Interest (1,639.7) (1,656.1) (4,080.2) (4,213.8) TENAGA NASIONAL BERHAD Integrated Annual Report 2023 212 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM FINANCING ACTIVITIES (CONTINUED) Dividends paid to shareholders (2,537.5) (2,181.3) (2,537.5) (2,181.3) Dividends paid to NCI 0 (17.7) 0 0 Redemption of RPS by NCI (24.0) (73.5) 0 0 Net increase in debt reserve accounts (357.5) (4.1) 0 0 Net decrease in cash at bank, held in trust 42.8 58.3 0 0 Net decrease/(increase) in restricted cash 0.3 (7.2) 0 0 Net cash flows (used in)/generated from financing | [
213,
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(10,304.2) (12,235.0) (9,490.0) Finance cost paid (2,860.4) (2,657.2) (1,386.6) (1,212.2) Repayments of lease obligations: - Principal (2,375.7) (2,116.7) (3,258.1) (3,475.5) - Interest (1,639.7) (1,656.1) (4,080.2) (4,213.8) TENAGA NASIONAL BERHAD Integrated Annual Report 2023 212 CONSOLIDATED STATEMENT OF CASH FLOWS For The Financial Year Ended 31 December 2023 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (Restated) CASH FLOWS FROM FINANCING ACTIVITIES (CONTINUED) Dividends paid to shareholders (2,537.5) (2,181.3) (2,537.5) (2,181.3) Dividends paid to NCI 0 (17.7) 0 0 Redemption of RPS by NCI (24.0) (73.5) 0 0 Net increase in debt reserve accounts (357.5) (4.1) 0 0 Net decrease in cash at bank, held in trust 42.8 58.3 0 0 Net decrease/(increase) in restricted cash 0.3 (7.2) 0 0 Net cash flows (used in)/generated from financing activities(13,311.8) 3,408.9 (18,102.9) (203.3) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 13,146.9 (1,579.4) 12,585.9 (2,613.2) EFFECTS OF CHANGES IN FOREIGN CURRENCIES 22.2 0.6 (7.5) 15.3 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 4,056.1 5,634.9 748.2 3,346.1 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR (NOTE 22) 17,225.2 4,056.1 13,326.6 748.2 The changes in liabilities arising from financing activities have been disclosed in Notes 15, 26 and 27 respectively. The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. FINANCIAL STATEMENTS Sec 5 213 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 1 GENERAL INFORMATION The Group and the Company are primarily involved in the business of the generation, transmission, distribution and sales of electricity and those tabulated in Note 49 to these financial statements, which also includes the details of the subsidiaries of the Group. There have been no significant changes in these activities of the Group and of the Company during the financial year. The Group and the Company follow the Incentive Based Regulation | [
214,
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22) 17,225.2 4,056.1 13,326.6 748.2 The changes in liabilities arising from financing activities have been disclosed in Notes 15, 26 and 27 respectively. The notes set out on pages 213 to 362 form an integral part of these consolidated financial statements. FINANCIAL STATEMENTS Sec 5 213 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 1 GENERAL INFORMATION The Group and the Company are primarily involved in the business of the generation, transmission, distribution and sales of electricity and those tabulated in Note 49 to these financial statements, which also includes the details of the subsidiaries of the Group. There have been no significant changes in these activities of the Group and of the Company during the financial year. The Group and the Company follow the Incentive Based Regulation (‘IBR’)framework for the regulated business. The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of the registered office of the Company is Pejabat Setiausaha Syarikat, Tenaga Nasional Berhad (‘TNB’), Tingkat 16, T ower A, TNB Platinum, No. 3, Jalan Bukit Pantai, Bangsar, 59100 Kuala Lumpur, Malaysia. The financial statements of the Group and the Company have been approved for issuance in accordance with a resolution of Board of Directors on 19 March 2024. 2 BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Malaysian Financial Reporting Standards (‘MFRS’), International Financial Reporting Standards (‘IFRS’) and the requirements of the Companies Act 2016 in Malaysia. The Directors continue to consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. The financial statements have been prepared under the historical cost convention, except as disclosed in Note 3 and respective notes in the financial statements. The preparation of financial statements in conformity | [
215
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Pantai, Bangsar, 59100 Kuala Lumpur, Malaysia. The financial statements of the Group and the Company have been approved for issuance in accordance with a resolution of Board of Directors on 19 March 2024. 2 BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Malaysian Financial Reporting Standards (‘MFRS’), International Financial Reporting Standards (‘IFRS’) and the requirements of the Companies Act 2016 in Malaysia. The Directors continue to consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. The financial statements have been prepared under the historical cost convention, except as disclosed in Note 3 and respective notes in the financial statements. The preparation of financial statements in conformity withMFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgements are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4. (a) New standard and amendments to published standards that are effective and applicable to the Group and the Company. Effective for financial year beginning on 1 January 2023: MFRS 17 Insurance Contracts Amendments to MFRS 17 Insurance Contracts Initial Application of MFRS 17 Insurance Contracts and MFRS 9 Financial Instruments - Comparative Information Amendments to MFRS 101 Presentation of Financial Statements and MFRS | [
215
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Directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgements are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4. (a) New standard and amendments to published standards that are effective and applicable to the Group and the Company. Effective for financial year beginning on 1 January 2023: MFRS 17 Insurance Contracts Amendments to MFRS 17 Insurance Contracts Initial Application of MFRS 17 Insurance Contracts and MFRS 9 Financial Instruments - Comparative Information Amendments to MFRS 101 Presentation of Financial Statements and MFRS PracticeStatement 2 Making Materiality Judgements Disclosure of Accounting Policies Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors Definition of Accounting Estimates Amendments to MFRS 112 Income Taxes Deferred Tax related to Assets and Liabilities arising from a Single Transaction Amendments to MFRS 112 Income Taxes International Tax Reform - Pillar Two Model Rules The amendments to the published standards listed above did not have any significant impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods, other than as disclosed below. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 214 2 BASIS OF PREPARATION (CONTINUED) (a) New standard and amendments to published standards that are effective and applicable to the Group and the Company. (continued) Adoption and amendments to MFRS 17 - Insurance Contracts The adoption of MFRS 17 Insurance Contracts and its related amendments has resulted in changes in accounting policies, shifting from recognising insurance profits upon premium receipt to acknowledging them as | [
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Income Taxes International Tax Reform - Pillar Two Model Rules The amendments to the published standards listed above did not have any significant impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods, other than as disclosed below. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 214 2 BASIS OF PREPARATION (CONTINUED) (a) New standard and amendments to published standards that are effective and applicable to the Group and the Company. (continued) Adoption and amendments to MFRS 17 - Insurance Contracts The adoption of MFRS 17 Insurance Contracts and its related amendments has resulted in changes in accounting policies, shifting from recognising insurance profits upon premium receipt to acknowledging them as itfulfils insurance services. In addition, it requires disclosing anticipated future profits from insurance contract. The standard is effective for annual reporting periods beginning on or after 1 January 2023 and it supersedes MFRS 4. The Group and the Company completed the assessment of MFRS 17 and concluded that the impact from adoption of the standard is mainly contributed by TNB Global Captive (L) Ltd., which provides reinsurance services. The adoption of MFRS 17 does not have a material impact on the consolidated financial statements and hence the prior period financial statements were not restated. Adjustments related to the changes in accounting policies and other relevant disclosures under MFRS 17 are detailed in Notes 17, 21, 23 and 31 of the financial statements. Amendments to MFRS 112 - Income Taxes Amendments to MFRS 112 Income Taxes on International Tax Reform - Pillar Two Model Rules give entities temporary relief from recognising and disclosing accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (‘OECD’) international tax reform and introduces targeted disclosure requirements to help investors better understand an | [
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of the standard is mainly contributed by TNB Global Captive (L) Ltd., which provides reinsurance services. The adoption of MFRS 17 does not have a material impact on the consolidated financial statements and hence the prior period financial statements were not restated. Adjustments related to the changes in accounting policies and other relevant disclosures under MFRS 17 are detailed in Notes 17, 21, 23 and 31 of the financial statements. Amendments to MFRS 112 - Income Taxes Amendments to MFRS 112 Income Taxes on International Tax Reform - Pillar Two Model Rules give entities temporary relief from recognising and disclosing accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (‘OECD’) international tax reform and introduces targeted disclosure requirements to help investors better understand an entity’sexposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect. The Group applied temporary exception for the year ended 31 December 2023. The legislation will be effective for the Group’s financial year beginning 1 January 2024 in certain jurisdictions. The Group is in the process of assessing the potential exposure arising from Pillar Two legislation and expects to complete the assessment in the financial year ending 2024. (b) Amendments to the published standards that are applicable to the Group and the Company but not yet effective. Effective for financial year beginning on 1 January 2024: AmendmentstoMFRS107CashFlowStatementsand MFRS7FinancialInstruments:DisclosuresSupplierFinanceArrangements Amendments to MFRS 16 Leases Lease Liability in a Sale and Leaseback AmendmentstoMFRS101PresentationofFinancialStatementsClassificationofLiabilitiesasCurrentorNon-currentand Non-currentLiabilitieswithCovenants Effective for financial year beginning on 1 January 2025: AmendmentstoMFRS121TheEffectsofChangesin ForeignExchangeRatesLackofExchangeability Effective date deferred by Malaysian Accounting Standards Board: | [
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before legislation implementing the rules is in effect. The Group applied temporary exception for the year ended 31 December 2023. The legislation will be effective for the Group’s financial year beginning 1 January 2024 in certain jurisdictions. The Group is in the process of assessing the potential exposure arising from Pillar Two legislation and expects to complete the assessment in the financial year ending 2024. (b) Amendments to the published standards that are applicable to the Group and the Company but not yet effective. Effective for financial year beginning on 1 January 2024: AmendmentstoMFRS107CashFlowStatementsand MFRS7FinancialInstruments:DisclosuresSupplierFinanceArrangements Amendments to MFRS 16 Leases Lease Liability in a Sale and Leaseback AmendmentstoMFRS101PresentationofFinancialStatementsClassificationofLiabilitiesasCurrentorNon-currentand Non-currentLiabilitieswithCovenants Effective for financial year beginning on 1 January 2025: AmendmentstoMFRS121TheEffectsofChangesin ForeignExchangeRatesLackofExchangeability Effective date deferred by Malaysian Accounting Standards Board: AmendmentstoMFRS10ConsolidatedFinancialStatementsandMFRS128InvestmentsinAssociatesandJointVenturesSaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 215 2 BASIS OF PREPARATION (CONTINUED) (b) Amendments to the published standards that are applicable to the Group and the Company but not yet effective. (continued) The amendments to published standards are not expected to have a material impact on the financial statements of the Group and the Company. There are no other standards, amendments and improvements to published standards and interpretations to existing standards that are not effective that would be expected to have a material impact on the Group and the Company. 3 SUMMARY OF MATERIAL ACCOUNTING POLICIES The material accounting policies applied in the preparation of these consolidated financial statements are set | [
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AmendmentstoMFRS121TheEffectsofChangesin ForeignExchangeRatesLackofExchangeability Effective date deferred by Malaysian Accounting Standards Board: AmendmentstoMFRS10ConsolidatedFinancialStatementsandMFRS128InvestmentsinAssociatesandJointVenturesSaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 215 2 BASIS OF PREPARATION (CONTINUED) (b) Amendments to the published standards that are applicable to the Group and the Company but not yet effective. (continued) The amendments to published standards are not expected to have a material impact on the financial statements of the Group and the Company. There are no other standards, amendments and improvements to published standards and interpretations to existing standards that are not effective that would be expected to have a material impact on the Group and the Company. 3 SUMMARY OF MATERIAL ACCOUNTING POLICIES The material accounting policies applied in the preparation of these consolidated financial statements are set outbelow and within the respective notes to the financial statements line items. (a) Subsidiaries and basis of consolidation (i) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when: • exposed to, or has rights to, variable returns from its involvement with the entity; • has the ability to affect those returns through its power to direct the relevant activities of the entity; and • the existence and effect of potential voting rights are considered only when such rights are substantive when assessing control. In the Company’s separate financial statements, investments in subsidiaries are stated at cost less accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts are included in the statement of profit or loss. (ii) Basis of consolidation The consolidated financial statements comprise the | [
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consolidation (i) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when: • exposed to, or has rights to, variable returns from its involvement with the entity; • has the ability to affect those returns through its power to direct the relevant activities of the entity; and • the existence and effect of potential voting rights are considered only when such rights are substantive when assessing control. In the Company’s separate financial statements, investments in subsidiaries are stated at cost less accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts are included in the statement of profit or loss. (ii) Basis of consolidation The consolidated financial statements comprise the financialstatements of the Company and its subsidiaries. The characteristics of those financial statements are: • the financial statements of the subsidiaries are prepared for the same reporting date as the Company. • subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. • intragroup balances, transactions and unrealised gains or losses are eliminated in full. • uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances. The Group applies the acquisition method to account for business combinations. The consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and contingent liabilities | [
217
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the Group obtains control, and continue to be consolidated until the date that such control ceases. • intragroup balances, transactions and unrealised gains or losses are eliminated in full. • uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances. The Group applies the acquisition method to account for business combinations. The consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and contingent liabilities assumedin a business combination are, with limited exceptions, measured initially at their fair value at the acquisition date. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 216 3 SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (a) Subsidiaries and basis of consolidation (continued) (ii) Basis of consolidation (continued) The excess of the consideration transferred, the amount of any NCI in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the gain is recognised in the statement of profit or loss. Refer to Note 10 for accounting policy on goodwill. NCI is the equity in a subsidiary not attributable, directly or indirectly, to a parent. On an acquisition-by-acquisition basis, the Group measures any NCI in the acquiree either at fair value or at the NCI’s proportionate share of the acquiree’s | [
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The excess of the consideration transferred, the amount of any NCI in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the gain is recognised in the statement of profit or loss. Refer to Note 10 for accounting policy on goodwill. NCI is the equity in a subsidiary not attributable, directly or indirectly, to a parent. On an acquisition-by-acquisition basis, the Group measures any NCI in the acquiree either at fair value or at the NCI’s proportionate share of the acquiree’s identifiablenet assets. At the end of the reporting period, NCI consists of amount calculated on the date of combinations and its share of changes in the subsidiary’s equity since the date of combination. All earnings and losses of the subsidiary are attributed to the parent and the NCI, even if the attribution of losses to the NCI results in a debit balance in the shareholders’ equity. (iii) Changes in ownership interest When the Group ceases to consolidate because of loss of control, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in the statement of profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in OCI in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in OCI are reclassified to statement of profit or loss. Gains or losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the subsidiaries sold. (b) Transactions with NCI Transactions with NCI that do not result in loss of | [
218
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in the entity is remeasured to its fair value with the change in carrying amount recognised in the statement of profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in OCI in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in OCI are reclassified to statement of profit or loss. Gains or losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the subsidiaries sold. (b) Transactions with NCI Transactions with NCI that do not result in loss of controlare accounted for as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and NCI to reflect their relative interests in the subsidiary. Any differences between the amount of the adjustment to NCI and any consideration paid or received are recognised in equity attributable to owners of the Group. (c) Impairment of non-financial assets Assets that are subject to amortisation are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is recognised in the statement of profit or loss for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of fair value less cost to sell and its value in use (‘VIU’). For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill previously impaired are reviewed for possible reversal of the impairment at each reporting date. Any | [
218
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that are subject to amortisation are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is recognised in the statement of profit or loss for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of fair value less cost to sell and its value in use (‘VIU’). For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill previously impaired are reviewed for possible reversal of the impairment at each reporting date. Any subsequentincrease in recoverable amount is recognised in the statement of profit or loss. All other material accounting policies are disclosed in their respective notes. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 217 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continuously evaluated by the Directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equate to the related actual results. T o enhance the information content of the estimates, certain key variables that are anticipated to have a material impact on the Group’s and the Company’s results and financial positions are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (a) Impairment of associates The Group and the Company assess impairment of | [
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on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equate to the related actual results. T o enhance the information content of the estimates, certain key variables that are anticipated to have a material impact on the Group’s and the Company’s results and financial positions are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (a) Impairment of associates The Group and the Company assess impairment of itsinvestment in associates whenever the events or changes in circumstances indicate that the carrying amount may not be recoverable, i.e. the carrying amount is more than the recoverable amount. Recoverable amount is measured at the higher of the fair value less cost to sell and its VIU. The VIU is the net present value of the projected future cash flow derived from the investment discounted at an appropriate discount rate. Projected future cash flows are based on the Group’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information. The assumptions used, results and sensitivity of the impairment assessments are disclosed in Note 9. (b) Impairment of intangible assets The Group tests intangible assets which includes goodwill for impairment annually in accordance with its accounting policy and whenever events or change in circumstances indicate that this is necessary within the financial period. This requires an estimation of the VIU of the cash generating unit (‘CGU’) to which the goodwill is allocated. Estimating the VIU requires the Group to make an estimate of the | [
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projected future cash flow derived from the investment discounted at an appropriate discount rate. Projected future cash flows are based on the Group’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information. The assumptions used, results and sensitivity of the impairment assessments are disclosed in Note 9. (b) Impairment of intangible assets The Group tests intangible assets which includes goodwill for impairment annually in accordance with its accounting policy and whenever events or change in circumstances indicate that this is necessary within the financial period. This requires an estimation of the VIU of the cash generating unit (‘CGU’) to which the goodwill is allocated. Estimating the VIU requires the Group to make an estimate of the expectedfuture cash flows from the CGU to the Group and also to apply a suitable discount rate in order to calculate the present value of those cash flows. The assumptions used, results and sensitivity of the impairment assessment of goodwill are disclosed in Note 10. (c) Measurement of expected credit loss (‘ECL’) allowance for financial assets The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group and the Company use judgements in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s and the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of key assumptions and inputs used are disclosed in Note 45. (d) Recognition of fair value adjustments and intangible assets arising from acquisitions During the financial year, the Group acquired Spark Renewables Pty Ltd Group (‘Spark Renewables’), Dullarbtons Limited (‘Dullarbtons’) and Elipsgeen Limited (‘Elipsgeen’), and purchase price allocation exercises were undertaken which involved assumptions in determining the fair value of | [
219
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(‘ECL’) allowance for financial assets The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group and the Company use judgements in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s and the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of key assumptions and inputs used are disclosed in Note 45. (d) Recognition of fair value adjustments and intangible assets arising from acquisitions During the financial year, the Group acquired Spark Renewables Pty Ltd Group (‘Spark Renewables’), Dullarbtons Limited (‘Dullarbtons’) and Elipsgeen Limited (‘Elipsgeen’), and purchase price allocation exercises were undertaken which involved assumptions in determining the fair value of theidentifiable assets acquired and liabilities assumed. The provisional goodwill arising from these acquisitions amounted to RM491.1 million. Details of the acquisition are set out in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 218 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (continued) (e) Estimation of income taxes (i) Income tax Income tax is estimated based on the rules governed under the Income Tax Act, 1967. Differences in determining the capital allowances, deductibility of certain expenses and subsequent utilisation of reinvestment allowance may arise during the estimation of the provision for income tax between tax calculated at the statement of financial position date, and the final submission to the tax authority as a result of obtaining further detailed information that may become available subsequent to the statement of financial position date. Where the final tax | [
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ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (continued) (e) Estimation of income taxes (i) Income tax Income tax is estimated based on the rules governed under the Income Tax Act, 1967. Differences in determining the capital allowances, deductibility of certain expenses and subsequent utilisation of reinvestment allowance may arise during the estimation of the provision for income tax between tax calculated at the statement of financial position date, and the final submission to the tax authority as a result of obtaining further detailed information that may become available subsequent to the statement of financial position date. Where the final tax outcomeof these matters is different from the amounts that were initially recognised, such differences will impact the income tax provisions and deferred tax balance in the period in which such determination is made. The Group and the Company have recorded tax recoverable for which the Group and the Company believe that it is probable to be recovered. Where the final tax outcome of this matter is different from the amount that was initially recorded, such difference may cause a material adjustment to the carrying amount of the tax recoverable balance recorded in the period in which such determination is made. Reinvestment allowance (‘RIA’) litigation The Company and the Inland Revenue Board (‘IRB’) have entered into varies of litigation cases in respect of the Company’s eligibility for RIA. The details of the cases are as disclosed in Note 42(a). As at 31 December 2023, the Group and the Company recorded a tax recoverable of RM3,522.4 million from the IRB arising from: • Resubmission of tax computations for the Years of Assessment (‘YAs’) 2003 to 2006 and 2008 to 2012 pursuant to the explicit approval given by the IRB on 21 January 2013 on the eligibility of the Company in | [
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that was initially recorded, such difference may cause a material adjustment to the carrying amount of the tax recoverable balance recorded in the period in which such determination is made. Reinvestment allowance (‘RIA’) litigation The Company and the Inland Revenue Board (‘IRB’) have entered into varies of litigation cases in respect of the Company’s eligibility for RIA. The details of the cases are as disclosed in Note 42(a). As at 31 December 2023, the Group and the Company recorded a tax recoverable of RM3,522.4 million from the IRB arising from: • Resubmission of tax computations for the Years of Assessment (‘YAs’) 2003 to 2006 and 2008 to 2012 pursuant to the explicit approval given by the IRB on 21 January 2013 on the eligibility of the Company in claimingthe RIA amounted to RM1,765.2 million; and • The payment which had been made to IRB in December 2020 in respect of YAs 2016 and 2017 amounted to RM1,757.2 million which is disputed by IRB as detailed in Note 42(a). The Group and the Company have not recorded the potential additional tax liability arising from the tax impact if the RIA claimed is disallowed and the Company loses its litigation. The realisation of this tax recoverable and the potential tax liability are dependent on the outcome of judgement on the RIA claims by the Special Commissioners of Income Tax (‘SCIT’) and by the Kuala Lumpur High Court, including the subsequent notice of appeal filed by IRB before the Court of Appeal. The Directors have performed an assessment on the tax recoverable of RM3,522.4 million and the potential tax liability of RM6,101.4 million based on legal view obtained from external legal counsel and the facts surrounding its RIA claims. The Directors have exercised judgement that there is sufficient evidence and case law to support the Company’s appeal against the Notices and no provisions to be recognised with regards to the potential tax liability. (ii) Deferred tax assets Deferred tax assets are recognised to the extent that it is probable that taxable profit | [
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on the outcome of judgement on the RIA claims by the Special Commissioners of Income Tax (‘SCIT’) and by the Kuala Lumpur High Court, including the subsequent notice of appeal filed by IRB before the Court of Appeal. The Directors have performed an assessment on the tax recoverable of RM3,522.4 million and the potential tax liability of RM6,101.4 million based on legal view obtained from external legal counsel and the facts surrounding its RIA claims. The Directors have exercised judgement that there is sufficient evidence and case law to support the Company’s appeal against the Notices and no provisions to be recognised with regards to the potential tax liability. (ii) Deferred tax assets Deferred tax assets are recognised to the extent that it is probable that taxable profit willbe available against which the deductible temporary differences or unused tax losses can be utilised. This involves judgement regarding the future financial performance of the particular entity in which the deferred tax asset has been recognised, as disclosed in Note 12. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 219 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (continued) (f) Post-employment employee benefits The Group and the Company provide both Retirement Benefit Plan and Post-Retirement Medical Plan for certain employees. The present value of the employee benefits obligations depends on a number of factors that are determined on an actuarial basis using certain assumptions. The key assumptions used in determining the net cost/(income) for the employee benefits include discount rate, medical claim inflation rate and salary increment rate. Any changes in these assumptions will impact the carrying amount of employee benefits obligations, as disclosed in Note 24. • Discount rate The Group and the | [
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221
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JUDGEMENTS (CONTINUED) The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: (continued) (f) Post-employment employee benefits The Group and the Company provide both Retirement Benefit Plan and Post-Retirement Medical Plan for certain employees. The present value of the employee benefits obligations depends on a number of factors that are determined on an actuarial basis using certain assumptions. The key assumptions used in determining the net cost/(income) for the employee benefits include discount rate, medical claim inflation rate and salary increment rate. Any changes in these assumptions will impact the carrying amount of employee benefits obligations, as disclosed in Note 24. • Discount rate The Group and the Companydetermine the appropriate discount rate at the end of each financial period. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group and the Company consider the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related employee benefits obligations. • Medical claim inflation rate The medical claim inflation rate for general practitioner, hospitalisation, specialist and dialysis medical claims, as determined by the Group and the Company are based on the annualised increase in average claims over the past 5 years. • Salary increment rate The salary increment rate for employees receiving the Retirement Benefit Plan as determined by the Group and the Company is based on the average salary increment rate for the past 13 years and considerations for price inflation, real salary increase, promotions and Collective Agreement (‘CA’) negotiation. 5 PROPERTY, PLANT AND | [
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rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related employee benefits obligations. • Medical claim inflation rate The medical claim inflation rate for general practitioner, hospitalisation, specialist and dialysis medical claims, as determined by the Group and the Company are based on the annualised increase in average claims over the past 5 years. • Salary increment rate The salary increment rate for employees receiving the Retirement Benefit Plan as determined by the Group and the Company is based on the average salary increment rate for the past 13 years and considerations for price inflation, real salary increase, promotions and Collective Agreement (‘CA’) negotiation. 5 PROPERTY, PLANT AND EQUIPMENT(‘PPE’) Accounting Policy PPE are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the construction or acquisition of the items and bringing them to the location and condition so as to render them operational in the manner intended by the Group and the Company and allocated according to its components. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items can be measured reliably. The carrying amount of the replaced part is derecognised. The cost of major overhaul/inspection is recognised in the asset’s carrying amount as a replacement and the remaining carrying amount of the previous major overhaul/inspection is derecognised. Major spare parts and standby equipment are recognised as assets when the Group and the Company expect to use for more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of PPE, they are accounted for as PPE. Gains or losses on disposal of PPE are determined by reference to | [
221
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included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items can be measured reliably. The carrying amount of the replaced part is derecognised. The cost of major overhaul/inspection is recognised in the asset’s carrying amount as a replacement and the remaining carrying amount of the previous major overhaul/inspection is derecognised. Major spare parts and standby equipment are recognised as assets when the Group and the Company expect to use for more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of PPE, they are accounted for as PPE. Gains or losses on disposal of PPE are determined by reference to theircarrying amount and are recognised in statement of profit or loss. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 220 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) Accounting Policy (continued) Freehold land and capital work-in-progress are not depreciated. Other PPE are depreciated on the straight line method to allocate the cost to their residual values over their estimated useful lives, summarised as follows: Buildings and civil works 10 - 100 years Plant and machinery 3 - 50 years Lines and distribution mains 10 - 50 years Distribution services 25 years Meters 10 - 15 years Public lighting 15 - 25 years Furniture, fittings and office equipment 3 - 15 years Motor vehicles 5 - 20 years Residual values and useful lives of assets are reviewed and adjusted if appropriate, on an annual basis. At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is recognised if the carrying amount exceeds the recoverable amount (Note 3(c)). As at 1.1.2023 RM’million Effect of changes in | [
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- 100 years Plant and machinery 3 - 50 years Lines and distribution mains 10 - 50 years Distribution services 25 years Meters 10 - 15 years Public lighting 15 - 25 years Furniture, fittings and office equipment 3 - 15 years Motor vehicles 5 - 20 years Residual values and useful lives of assets are reviewed and adjusted if appropriate, on an annual basis. At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is recognised if the carrying amount exceeds the recoverable amount (Note 3(c)). As at 1.1.2023 RM’million Effect of changes in foreigncurrencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2023 RM’million 2023 Group Cost Freehold land 3,387.8 0 0 234.5 (0.1) 79.8 3,702.0 Buildings and civil works 26,721.5 0 0 21.3 (0.5) 185.5 26,927.8 30,109.3 0 0 255.8 (0.6) 265.3 30,629.8 Plant and machinery 98,243.9 531.5 1,489.7 517.2 (198.8) 3,150.2 103,733.7 Lines and distribution mains 56,866.5 0 0 301.1 (62.8) 3,207.0 60,311.8 Distribution services 5,612.1 0 0 14.2 0 339.1 5,965.4 Meters 4,320.9 0 0 6.5 (110.3) 391.0 4,608.1 Public lighting 2,215.4 0 0 0 0 196.1 2,411.5 Furniture, fittings and office equipment 4,265.4 0 0 311.8 (20.3) (29.9) 4,527.0 Motor vehicles 865.4 0 0 37.3 (17.8) (5.1) 879.8 202,498.9 531.5 1,489.7 1,443.9 (410.6) 7,513.7 213,067.1 Capital work-in-progress 12,295.6 0 0 9,314.9 (10.2) (7,100.3) 14,500.0 214,794.5 531.5 1,489.7* 10,758.8 (420.8) 413.4 227,567.1 * It relates to the acquisition of Spark Renewables, Dullarbtons and Elipsgeen as subsidiaries of the Group during the current financial year as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 221 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2023 | [
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mains 56,866.5 0 0 301.1 (62.8) 3,207.0 60,311.8 Distribution services 5,612.1 0 0 14.2 0 339.1 5,965.4 Meters 4,320.9 0 0 6.5 (110.3) 391.0 4,608.1 Public lighting 2,215.4 0 0 0 0 196.1 2,411.5 Furniture, fittings and office equipment 4,265.4 0 0 311.8 (20.3) (29.9) 4,527.0 Motor vehicles 865.4 0 0 37.3 (17.8) (5.1) 879.8 202,498.9 531.5 1,489.7 1,443.9 (410.6) 7,513.7 213,067.1 Capital work-in-progress 12,295.6 0 0 9,314.9 (10.2) (7,100.3) 14,500.0 214,794.5 531.5 1,489.7* 10,758.8 (420.8) 413.4 227,567.1 * It relates to the acquisition of Spark Renewables, Dullarbtons and Elipsgeen as subsidiaries of the Group during the current financial year as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 221 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2023 RM’millionEffect of changes in foreign currencies RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs/ Impairments RM’million As at 31.12.2023 RM’million 2023 Group Accumulated depreciation Buildings and civil works 9,490.6 0 678.8 (4.8) 10,164.6 Plant and machinery 46,848.2 65.4 4,165.9 (208.9) 50,870.6 Lines and distribution mains 31,125.6 0 1,917.4 (48.2) 32,994.8 Distribution services 3,590.0 0 206.7 (0.1) 3,796.6 Meters 2,468.7 0 232.2 (106.9) 2,594.0 Public lighting 809.0 0 144.8 0 953.8 Furniture, fittings and office equipment 3,263.7 0 393.7 (43.0) 3,614.4 Motor vehicles 621.6 0 44.2 (19.6) 646.2 98,217.4 65.4 7,783.7 (431.5) 105,635.0 As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2022 RM’million 2022 Group Cost Freehold land 3,166.0 0 0 227.6 0 (5.8) 3,387.8 Buildings and civil works 25,379.2 0 0 44.7 (25.8) 1,323.4 26,721.5 28,545.2 0 0 272.3 (25.8) 1,317.6 30,109.3 Plant and machinery 94,296.6 (272.1) 1,584.4 128.2 (476.0) 2,982.8 98,243.9 Lines and | [
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machinery 46,848.2 65.4 4,165.9 (208.9) 50,870.6 Lines and distribution mains 31,125.6 0 1,917.4 (48.2) 32,994.8 Distribution services 3,590.0 0 206.7 (0.1) 3,796.6 Meters 2,468.7 0 232.2 (106.9) 2,594.0 Public lighting 809.0 0 144.8 0 953.8 Furniture, fittings and office equipment 3,263.7 0 393.7 (43.0) 3,614.4 Motor vehicles 621.6 0 44.2 (19.6) 646.2 98,217.4 65.4 7,783.7 (431.5) 105,635.0 As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2022 RM’million 2022 Group Cost Freehold land 3,166.0 0 0 227.6 0 (5.8) 3,387.8 Buildings and civil works 25,379.2 0 0 44.7 (25.8) 1,323.4 26,721.5 28,545.2 0 0 272.3 (25.8) 1,317.6 30,109.3 Plant and machinery 94,296.6 (272.1) 1,584.4 128.2 (476.0) 2,982.8 98,243.9 Lines and distributionmains 54,401.4 0 0 3.3 (47.4) 2,509.2 56,866.5 Distribution services 5,330.7 0 0 0.7 0 280.7 5,612.1 Meters 4,011.5 0 0 3.8 (137.4) 443.0 4,320.9 Public lighting 1,961.7 0 0 0 (0.1) 253.8 2,215.4 Furniture, fittings and office equipment 3,869.0 0 0 398.6 (13.4) 11.2 4,265.4 Motor vehicles 845.2 0 0 39.5 (17.8) (1.5) 865.4 193,261.3 (272.1) 1,584.4 846.4 (717.9) 7,796.8 202,498.9 Capital work-in-progress 12,230.7 0 0 7,738.6 (11.5) (7,662.2) 12,295.6 205,492.0 (272.1) 1,584.4* 8,585.0 (729.4) 134.6 214,794.5 * It relates to the acquisition of Clean Energy and Infrastructure UK Limited Group (‘CEI UK’) as a subsidiary as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 222 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs/ RM’million As at 31.12.2022 RM’million 2022 Group Accumulated depreciation Buildings and civil works 8,834.3 0 672.6 (16.3) 9,490.6 Plant and machinery | [
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0 398.6 (13.4) 11.2 4,265.4 Motor vehicles 845.2 0 0 39.5 (17.8) (1.5) 865.4 193,261.3 (272.1) 1,584.4 846.4 (717.9) 7,796.8 202,498.9 Capital work-in-progress 12,230.7 0 0 7,738.6 (11.5) (7,662.2) 12,295.6 205,492.0 (272.1) 1,584.4* 8,585.0 (729.4) 134.6 214,794.5 * It relates to the acquisition of Clean Energy and Infrastructure UK Limited Group (‘CEI UK’) as a subsidiary as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 222 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs/ RM’million As at 31.12.2022 RM’million 2022 Group Accumulated depreciation Buildings and civil works 8,834.3 0 672.6 (16.3) 9,490.6 Plant and machinery 43,265.0(24.8) 4,033.9 (425.9) 46,848.2 Lines and distribution mains 29,305.6 0 1,853.6 (33.6) 31,125.6 Distribution services 3,396.7 0 193.3 0 3,590.0 Meters 2,384.4 0 221.6 (137.3) 2,468.7 Public lighting 676.8 0 132.3 (0.1) 809.0 Furniture, fittings and office equipment 2,925.5 0 352.0 (13.8) 3,263.7 Motor vehicles 598.1 0 41.4 (17.9) 621.6 91,386.4 (24.8) 7,500.7 (644.9) 98,217.4 As at 1.1.2023 RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2023 RM’million 2023 Company Cost Freehold land 3,235.1 234.5 (0.1) (2.0) 3,467.5 Buildings and civil works 17,054.1 0 0 189.7 17,243.8 20,289.2 234.5 (0.1) 187.7 20,711.3 Plant and machinery 47,265.4 0 (159.2) 2,617.4 49,723.6 Lines and distribution mains 53,688.1 0 (62.6) 3,180.7 56,806.2 Distribution services 5,242.3 0 0 315.4 5,557.7 Meters 4,201.5 0 (109.9) 391.8 4,483.4 Public lighting 2,213.6 0 0 196.2 2,409.8 Furniture, fittings and office equipment 3,668.9 275.6 (14.2) 0 3,930.3 Motor vehicles 678.2 25.8 (11.7) (4.0) 688.3 137,247.2 535.9 (357.7) 6,885.2 144,310.6 Capital work-in-progress 8,710.0 7,994.7 (6.2) (6,719.5) | [
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fittings and office equipment 2,925.5 0 352.0 (13.8) 3,263.7 Motor vehicles 598.1 0 41.4 (17.9) 621.6 91,386.4 (24.8) 7,500.7 (644.9) 98,217.4 As at 1.1.2023 RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2023 RM’million 2023 Company Cost Freehold land 3,235.1 234.5 (0.1) (2.0) 3,467.5 Buildings and civil works 17,054.1 0 0 189.7 17,243.8 20,289.2 234.5 (0.1) 187.7 20,711.3 Plant and machinery 47,265.4 0 (159.2) 2,617.4 49,723.6 Lines and distribution mains 53,688.1 0 (62.6) 3,180.7 56,806.2 Distribution services 5,242.3 0 0 315.4 5,557.7 Meters 4,201.5 0 (109.9) 391.8 4,483.4 Public lighting 2,213.6 0 0 196.2 2,409.8 Furniture, fittings and office equipment 3,668.9 275.6 (14.2) 0 3,930.3 Motor vehicles 678.2 25.8 (11.7) (4.0) 688.3 137,247.2 535.9 (357.7) 6,885.2 144,310.6 Capital work-in-progress 8,710.0 7,994.7 (6.2) (6,719.5) 9,979.0145,957.2 8,530.6 (363.9) 165.7 154,289.6 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 223 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2023 RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs RM’million As at 31.12.2023 RM’million 2023 Company Accumulated depreciation Buildings and civil works 5,536.9 392.5 0 5,929.4 Plant and machinery 25,760.1 1,941.3 (132.2) 27,569.2 Lines and distribution mains 29,727.0 1,783.7 (46.5) 31,464.2 Distribution services 3,341.5 186.7 0 3,528.2 Meters 2,378.9 226.3 (103.4) 2,501.8 Public lighting 807.9 144.6 0 952.5 Furniture, fittings and office equipment 2,753.9 353.2 (14.1) 3,093.0 Motor vehicles 465.5 32.0 (11.6) 485.9 70,771.7 5,060.3 (307.8) 75,524.2 As at 1.1.2022 RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2022 RM’million 2022 Company Cost Freehold land 3,013.3 227.6 0 (5.8) 3,235.1 Buildings and civil works 15,740.8 0 (6.9) 1,320.2 17,054.1 18,754.1 227.6 (6.9) 1,314.4 20,289.2 | [
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(‘PPE’) (CONTINUED) As at 1.1.2023 RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs RM’million As at 31.12.2023 RM’million 2023 Company Accumulated depreciation Buildings and civil works 5,536.9 392.5 0 5,929.4 Plant and machinery 25,760.1 1,941.3 (132.2) 27,569.2 Lines and distribution mains 29,727.0 1,783.7 (46.5) 31,464.2 Distribution services 3,341.5 186.7 0 3,528.2 Meters 2,378.9 226.3 (103.4) 2,501.8 Public lighting 807.9 144.6 0 952.5 Furniture, fittings and office equipment 2,753.9 353.2 (14.1) 3,093.0 Motor vehicles 465.5 32.0 (11.6) 485.9 70,771.7 5,060.3 (307.8) 75,524.2 As at 1.1.2022 RM’million Additions RM’million Disposals RM’million Transfers/ Adjustments/ Reclassification/ Write offs RM’million As at 31.12.2022 RM’million 2022 Company Cost Freehold land 3,013.3 227.6 0 (5.8) 3,235.1 Buildings and civil works 15,740.8 0 (6.9) 1,320.2 17,054.1 18,754.1 227.6 (6.9) 1,314.4 20,289.2 Plantand machinery 45,323.6 0 (366.2) 2,308.0 47,265.4 Lines and distribution mains 51,328.5 0 (46.0) 2,405.6 53,688.1 Distribution services 4,982.6 0 0 259.7 5,242.3 Meters 3,897.1 0 (137.3) 441.7 4,201.5 Public lighting 1,960.0 0 (0.1) 253.7 2,213.6 Furniture, fittings and office equipment 3,324.2 356.4 (11.8) 0.1 3,668.9 Motor vehicles 663.2 32.4 (16.3) (1.1) 678.2 130,233.3 616.4 (584.6) 6,982.1 137,247.2 Capital work-in-progress 9,203.9 6,606.0 (2.5) (7,097.4) 8,710.0 139,437.2 7,222.4 (587.1) (115.3) 145,957.2 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 224 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2022 RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs RM’million As at 31.12.2022 RM’million 2022 Company Accumulated depreciation Buildings and civil works 5,158.3 383.6 (5.0) 5,536.9 Plant and machinery 24,278.9 1,822.7 (341.5) 25,760.1 Lines and distribution mains 28,034.3 1,726.3 (33.6) 29,727.0 Distribution services 3,166.8 174.7 0 3,341.5 | [
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0 0 259.7 5,242.3 Meters 3,897.1 0 (137.3) 441.7 4,201.5 Public lighting 1,960.0 0 (0.1) 253.7 2,213.6 Furniture, fittings and office equipment 3,324.2 356.4 (11.8) 0.1 3,668.9 Motor vehicles 663.2 32.4 (16.3) (1.1) 678.2 130,233.3 616.4 (584.6) 6,982.1 137,247.2 Capital work-in-progress 9,203.9 6,606.0 (2.5) (7,097.4) 8,710.0 139,437.2 7,222.4 (587.1) (115.3) 145,957.2 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 224 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) As at 1.1.2022 RM’million Charged for the financial year RM’million Released on disposals/ Transfers/ Write offs RM’million As at 31.12.2022 RM’million 2022 Company Accumulated depreciation Buildings and civil works 5,158.3 383.6 (5.0) 5,536.9 Plant and machinery 24,278.9 1,822.7 (341.5) 25,760.1 Lines and distribution mains 28,034.3 1,726.3 (33.6) 29,727.0 Distribution services 3,166.8 174.7 0 3,341.5 Meters2,300.7 215.5 (137.3) 2,378.9 Public lighting 675.9 132.1 (0.1) 807.9 Furniture, fittings and office equipment 2,460.6 304.8 (11.5) 2,753.9 Motor vehicles 451.2 30.5 (16.2) 465.5 66,526.7 4,790.2 (545.2) 70,771.7 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Net book value Freehold land 3,702.0 3,387.8 3,467.5 3,235.1 Buildings and civil works 16,763.2 17,230.9 11,314.4 11,517.2 20,465.2 20,618.7 14,781.9 14,752.3 Plant and machinery 52,863.1 51,395.7 22,154.4 21,505.3 Lines and distribution mains 27,317.0 25,740.9 25,342.0 23,961.1 Distribution services 2,168.8 2,022.1 2,029.5 1,900.8 Meters 2,014.1 1,852.2 1,981.6 1,822.6 Public lighting 1,457.7 1,406.4 1,457.3 1,405.7 Furniture, fittings and office equipment 912.6 1,001.7 837.3 915.0 Motor vehicles 233.6 243.8 202.4 212.7 107,432.1 104,281.5 68,786.4 66,475.5 Capital work-in-progress 14,500.0 12,295.6 9,979.0 8,710.0 121,932.1 116,577.1 78,765.4 75,185.5 The title deeds of certain lands are in the process of being registered in the name of the Company and certain subsidiaries. Net book value of PPE | [
226
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vehicles 451.2 30.5 (16.2) 465.5 66,526.7 4,790.2 (545.2) 70,771.7 Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Net book value Freehold land 3,702.0 3,387.8 3,467.5 3,235.1 Buildings and civil works 16,763.2 17,230.9 11,314.4 11,517.2 20,465.2 20,618.7 14,781.9 14,752.3 Plant and machinery 52,863.1 51,395.7 22,154.4 21,505.3 Lines and distribution mains 27,317.0 25,740.9 25,342.0 23,961.1 Distribution services 2,168.8 2,022.1 2,029.5 1,900.8 Meters 2,014.1 1,852.2 1,981.6 1,822.6 Public lighting 1,457.7 1,406.4 1,457.3 1,405.7 Furniture, fittings and office equipment 912.6 1,001.7 837.3 915.0 Motor vehicles 233.6 243.8 202.4 212.7 107,432.1 104,281.5 68,786.4 66,475.5 Capital work-in-progress 14,500.0 12,295.6 9,979.0 8,710.0 121,932.1 116,577.1 78,765.4 75,185.5 The title deeds of certain lands are in the process of being registered in the name of the Company and certain subsidiaries. Net book value of PPE pledgedas security for borrowings are disclosed in Note 26. Included in the capital work-in-progress is interest capitalised during the financial year for the Group and the Company of RM377.5 million (2022: RM286.5 million) and RM275.0 million (2022: RM263.6 million) respectively. The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 5.3% (2022: 5.2%). NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 225 6 RIGHT-OF-USE ('ROU') ASSETS Accounting Policy A lease is a contract, or part of a contract, whereby the lessor conveys to the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. T o assess whether a contract conveys the right to control the use of an identified asset, the Group and the Company assess whether: • The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier | [
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amount of borrowing costs eligible for capitalisation is 5.3% (2022: 5.2%). NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 225 6 RIGHT-OF-USE ('ROU') ASSETS Accounting Policy A lease is a contract, or part of a contract, whereby the lessor conveys to the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. T o assess whether a contract conveys the right to control the use of an identified asset, the Group and the Company assess whether: • The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier (‘lessor’)has a substantive substitution right, then the asset is not identified; • The customer (‘lessee’) has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and • The customer (‘lessee’) has the right to direct the use of the asset. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the customer (‘lessee’) has the right to direct the use of the asset if either the customer (‘lessee’) has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used. The Group and the Company as lessees The Group and the Company lease various buildings, plant and machinery, furniture and fittings, office equipment and motor vehicles. These leases have tenures between 1 and 25 years. Lease terms are generally negotiated on an individual basis. As for leasehold land, the remaining period of the respective leases ranges from 4 to 99 years. (i) Initial recognition The Group and the Company recognise a ROU asset and a lease liability for all leases conveying the right to control the use of an identified asset for a period of time. The ROU assets recognised by the Group and the Company are | [
227
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asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used. The Group and the Company as lessees The Group and the Company lease various buildings, plant and machinery, furniture and fittings, office equipment and motor vehicles. These leases have tenures between 1 and 25 years. Lease terms are generally negotiated on an individual basis. As for leasehold land, the remaining period of the respective leases ranges from 4 to 99 years. (i) Initial recognition The Group and the Company recognise a ROU asset and a lease liability for all leases conveying the right to control the use of an identified asset for a period of time. The ROU assets recognised by the Group and the Company are initiallyrecorded at cost, which comprise the following: • The amount of the initial measurement of the lease liability; • Any lease payments made on or before the commencement date of the lease, less any lease incentives received; • Any initial direct costs incurred by the Group and the Company; and • An estimate of costs to be incurred by the Group and the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the lessor. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the Group’s incremental borrowing rate. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in-substance fixed payments), less any lease incentives receivable; • Variable lease payments that are based on an index or a rate; • Amounts expected to be payable by the lessee under residual value guarantees; • The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and • Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. NOTES TO THE FINANCIAL | [
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condition required by the lessor. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the Group’s incremental borrowing rate. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in-substance fixed payments), less any lease incentives receivable; • Variable lease payments that are based on an index or a rate; • Amounts expected to be payable by the lessee under residual value guarantees; • The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and • Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. NOTES TO THE FINANCIAL STATEMENTS31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 226 Accounting Policy (continued) The Group and the Company as lessees (continued) (ii) Subsequent measurement After initial recognition, the Group and the Company measure ROU assets at cost: • Less any accumulated depreciation; • Less any accumulated impairment losses; and • Adjusted for any remeasurement of the lease liabilities. The Group and the Company measure the lease liability by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect lease payments made, and remeasuring the carrying amount to reflect any reassessments or lease modifications. The interest on the lease liability is recognised as finance cost in the statement of profit or loss. (iii) Extension and termination options Extension and termination options are included in a number of property and equipment leases across the Group. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably | [
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The Group and the Company measure the lease liability by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect lease payments made, and remeasuring the carrying amount to reflect any reassessments or lease modifications. The interest on the lease liability is recognised as finance cost in the statement of profit or loss. (iii) Extension and termination options Extension and termination options are included in a number of property and equipment leases across the Group. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certainto be extended (or not terminated). The assessment of reasonable certainty is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee. The Group and the Company have elected not to recognise ROU assets and lease liabilities for leases of low-value assets. If an arrangement contains lease and non-lease components, the Group and the Company apply MFRS 15 to allocate the consideration in the contract based on the stand-alone selling prices. A ROU asset and its corresponding lease liability are recognised at the date the leased asset is available for used by the Group and the Company. Each lease payment is allocated between the principal and finance cost. The finance cost is charged to statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The ROU asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such | [
228
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to allocate the consideration in the contract based on the stand-alone selling prices. A ROU asset and its corresponding lease liability are recognised at the date the leased asset is available for used by the Group and the Company. Each lease payment is allocated between the principal and finance cost. The finance cost is charged to statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The ROU asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indicationexist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is recognised if the carrying amount exceeds the recoverable amount (Note 3(c)). 6 RIGHT-OF-USE ('ROU') ASSETS (CONTINUED) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 227 6 RIGHT-OF-USE ('ROU') ASSETS (CONTINUED) As at 1.1.2023 RM’million Effect of changes in foreign currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Depreciation charged for the financial year RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2023 RM’million 2023 Group Net book value Leasehold land 2,092.3 29.3 83.8 0 (46.9) 55.9 2,214.4 Buildings 35.4 0.1 0 13.1 (18.6) (0.5) 29.5 2,127.7 29.4 83.8 13.1 (65.5) 55.4 2,243.9 Plant and machinery 35,259.1 0 0 0 (3,403.5) 0 31,855.6 Furniture, fittings and office equipment 17.9 0 0 0.3 (12.2) 0.1 6.1 Motor vehicles 0.4 0 0 1.6 (0.8) 0 1.2 37,405.1 29.4 83.8* 15.0 (3,482.0) 55.5 34,106.8 * It relates to the acquisition of Dullarbtons and Elipsgeen as subsidiaries as disclosed in Note 48. As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Depreciation charged for the | [
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currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Depreciation charged for the financial year RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2023 RM’million 2023 Group Net book value Leasehold land 2,092.3 29.3 83.8 0 (46.9) 55.9 2,214.4 Buildings 35.4 0.1 0 13.1 (18.6) (0.5) 29.5 2,127.7 29.4 83.8 13.1 (65.5) 55.4 2,243.9 Plant and machinery 35,259.1 0 0 0 (3,403.5) 0 31,855.6 Furniture, fittings and office equipment 17.9 0 0 0.3 (12.2) 0.1 6.1 Motor vehicles 0.4 0 0 1.6 (0.8) 0 1.2 37,405.1 29.4 83.8* 15.0 (3,482.0) 55.5 34,106.8 * It relates to the acquisition of Dullarbtons and Elipsgeen as subsidiaries as disclosed in Note 48. As at 1.1.2022 RM’million Effect of changes in foreign currencies RM’million Acquisition of subsidiaries RM’million Additions RM’million Depreciation charged for the financialyear RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2022 RM’million 2022 Group Net book value Leasehold land 2,060.6 (15.3) 79.4 0 (45.5) 13.1 2,092.3 Buildings 36.1 0.1 0 29.8 (29.5) (1.1) 35.4 2,096.7 (15.2) 79.4 29.8 (75.0) 12.0 2,127.7 Plant and machinery 32,584.6 0 0 6,487.0 (3,812.5) 0 35,259.1 Furniture, fittings and office equipment 28.9 0 0 2.7 (13.7) 0 17.9 Motor vehicles 1.0 0 0 0 (0.6) 0 0.4 34,711.2 (15.2) 79.4* 6,519.5 (3,901.8) 12.0 37,405.1 * It relates to the acquisition of CEI UK as a subsidiary as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 228 6 RIGHT-OF-USE ('ROU') ASSETS (CONTINUED) As at 1.1.2023 RM’million Additions RM’million Depreciation charged for the financial year RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2023 RM’million 2023 Company Net book value Leasehold land 912.2 0 (18.1) 3.6 897.7 Buildings 71.6 3.5 (21.9) 0 53.2 983.8 3.5 (40.0) 3.6 950.9 Plant and machinery 70,881.5 0 (5,658.6) (719.8) 64,503.1 Furniture, fittings and office equipment 13.8 0.2 (11.0) 0 3.0 71,879.1 3.7 | [
229,
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and office equipment 28.9 0 0 2.7 (13.7) 0 17.9 Motor vehicles 1.0 0 0 0 (0.6) 0 0.4 34,711.2 (15.2) 79.4* 6,519.5 (3,901.8) 12.0 37,405.1 * It relates to the acquisition of CEI UK as a subsidiary as disclosed in Note 48. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 228 6 RIGHT-OF-USE ('ROU') ASSETS (CONTINUED) As at 1.1.2023 RM’million Additions RM’million Depreciation charged for the financial year RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2023 RM’million 2023 Company Net book value Leasehold land 912.2 0 (18.1) 3.6 897.7 Buildings 71.6 3.5 (21.9) 0 53.2 983.8 3.5 (40.0) 3.6 950.9 Plant and machinery 70,881.5 0 (5,658.6) (719.8) 64,503.1 Furniture, fittings and office equipment 13.8 0.2 (11.0) 0 3.0 71,879.1 3.7 (5,709.6)(716.2) 65,457.0 As at 1.1.2022 RM’million Additions RM’million Depreciation charged for the financial year RM’million Transfers/ Adjustments/ Reclassification RM’million As at 31.12.2022 RM’million 2022 Company Net book value Leasehold land 930.6 0 (18.9) 0.5 912.2 Buildings 87.2 14.4 (30.0) 0 71.6 1,017.8 14.4 (48.9) 0.5 983.8 Plant and machinery 70,179.8 6,876.2 (6,174.5) 0 70,881.5 Furniture, fittings and office equipment 24.4 2.0 (12.6) 0 13.8 71,222.0 6,892.6 (6,236.0) 0.5 71,879.1 The title deeds of certain leasehold lands classified as ROU assets are in the process of being registered in the name of the Company and certain subsidiaries. Net book value of ROU pledged as security for borrowings are disclosed in Note 26. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 229 7 SUBSIDIARIES Company Note 2023 RM’million 2022 RM’million At cost: Unquoted Ordinary Shares 1,571.8 1,571.8 Redeemable Preference Shares 9,654.1 9,654.1 Shares/Options granted to employees of subsidiaries 447.2 390.1 11,673.1 11,616.0 Less: Accumulated impairment losses (a) (3,645.5) (3,768.0) 8,027.6 7,848.0 The list of the Group subsidiaries is disclosed in Note 49. Capital and other commitments | [
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6,876.2 (6,174.5) 0 70,881.5 Furniture, fittings and office equipment 24.4 2.0 (12.6) 0 13.8 71,222.0 6,892.6 (6,236.0) 0.5 71,879.1 The title deeds of certain leasehold lands classified as ROU assets are in the process of being registered in the name of the Company and certain subsidiaries. Net book value of ROU pledged as security for borrowings are disclosed in Note 26. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 229 7 SUBSIDIARIES Company Note 2023 RM’million 2022 RM’million At cost: Unquoted Ordinary Shares 1,571.8 1,571.8 Redeemable Preference Shares 9,654.1 9,654.1 Shares/Options granted to employees of subsidiaries 447.2 390.1 11,673.1 11,616.0 Less: Accumulated impairment losses (a) (3,645.5) (3,768.0) 8,027.6 7,848.0 The list of the Group subsidiaries is disclosed in Note 49. Capital and other commitments forthe subsidiaries are disclosed in Note 41. Contingent liabilities for the subsidiaries are disclosed in Note 42. (a) Movement in accumulated impairment losses for investment in subsidiaries was mainly contributed by the impairment assessment for Power and Energy International (Mauritius) Ltd. (‘PEIM’): During the financial year, the Company had undertaken the impairment assessment of its investment in PEIM, an investment holding company. Based on the impairment assessment which estimates the cash flow available for distribution from PEIM’s divestment of its significant associate, GMR Energy Limited (‘GEL’) as disclosed in Note 9, the recoverable amount of the Company’s investment in PEIM exceeded its carrying amount, hence a reversal of impairment loss of RM137.7 million (2022: NIL) was recognised in the current financial year. (b) Non-controlling interests (‘NCI’) The NCI is not material to the financial performance, financial position and cash flows of the Group. The NCI information for Sabah Electricity Sdn. Bhd. ('SESB'), Kapar Energy Ventures Sdn. Bhd. (‘KEV’) and Jimah East Power Sdn. Bhd. (‘ JEP’), which contribute to substantial portion of total NCI is set | [
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had undertaken the impairment assessment of its investment in PEIM, an investment holding company. Based on the impairment assessment which estimates the cash flow available for distribution from PEIM’s divestment of its significant associate, GMR Energy Limited (‘GEL’) as disclosed in Note 9, the recoverable amount of the Company’s investment in PEIM exceeded its carrying amount, hence a reversal of impairment loss of RM137.7 million (2022: NIL) was recognised in the current financial year. (b) Non-controlling interests (‘NCI’) The NCI is not material to the financial performance, financial position and cash flows of the Group. The NCI information for Sabah Electricity Sdn. Bhd. ('SESB'), Kapar Energy Ventures Sdn. Bhd. (‘KEV’) and Jimah East Power Sdn. Bhd. (‘ JEP’), which contribute to substantial portion of total NCI is set outbelow: SESB KEV JEP Other individually immaterial NCI Total 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Carrying amount of NCI 374.2 372.5 644.2 771.5# 820.1* 892.9* 418.4 412.2 2,256.9 2,449.1 T otal comprehensive income/(expenses) allocated to NCI 1.7 20.1 (127.3) 98.9 (48.8) 24.9 6.2 (30.1) (168.2) 113.8 * Included in the carrying amount of NCI in JEP is a redemption of RPS from NCI amounting to RM24.0 million (2022: RM73.5 million). # Included in the carrying amount of NCI in KEV is a conversion to NCI equity amounting to RM626.8 million as disclosed in Note 26. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 230 7 SUBSIDIARIES (CONTINUED) (b) NCI (continued) The summarised financial information of SESB, KEV and JEP before inter-company eliminations are as follows: SESB KEV JEP 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Summarised statement of financial position Non-current assets 7,986.3 8,074.4 1,281.7 1,425.0 10,564.5 10,562.4 Current assets 2,285.0 2,123.3 | [
231,
232
] | [
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1.7 20.1 (127.3) 98.9 (48.8) 24.9 6.2 (30.1) (168.2) 113.8 * Included in the carrying amount of NCI in JEP is a redemption of RPS from NCI amounting to RM24.0 million (2022: RM73.5 million). # Included in the carrying amount of NCI in KEV is a conversion to NCI equity amounting to RM626.8 million as disclosed in Note 26. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 230 7 SUBSIDIARIES (CONTINUED) (b) NCI (continued) The summarised financial information of SESB, KEV and JEP before inter-company eliminations are as follows: SESB KEV JEP 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Summarised statement of financial position Non-current assets 7,986.3 8,074.4 1,281.7 1,425.0 10,564.5 10,562.4 Current assets 2,285.0 2,123.3 1,576.72,481.5 1,762.1 2,226.6 Non-current liabilities (6,322.9) (6,566.6) (325.4) (565.2) (8,309.9) (8,803.4) Current liabilities (2,204.8) (1,905.7) (927.6) (1,418.6) (1,361.0) (1,087.7) Net assets 1,743.6 1,725.4 1,605.4 1,922.7 2,655.7 2,897.9 Summarised statement of comprehensive income Revenue 2,766.3 2,561.2 3,066.3 4,312.6 4,511.2 4,452.8 Profit/(Loss) after tax 85.5 (37.1) (318.3) 247.2 (162.7) 83.1 Other comprehensive (expense)/income (75.6) 153.8 0 0 0 0 T otal comprehensive income/(expense) 9.9 116.7 (318.3) 247.2 (162.7) 83.1 Summarised statement of cash flows Net cash flows generated from/(used in) operating activities 855.0 306.3 53.3 (77.6) 755.3 732.4 Net cash flows (used in)/generated from investing activities (191.9) 22.8 8.4 7.8 18.4 706.5 Net cash flows used in financing activities (599.3) (684.5) (153.9) (159.9) (881.5) (928.8) Net increase/(decrease) in cash and cash equivalents 63.8 (355.4) (92.2) (229.7) (107.8) 510.1 8 JOINT ARRANGEMENTS Accounting Policy A joint arrangement is an arrangement over which there is contractually agreed sharing of control by the Group with one or more parties where decisions about the relevant activities relating to the joint | [
232
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4,312.6 4,511.2 4,452.8 Profit/(Loss) after tax 85.5 (37.1) (318.3) 247.2 (162.7) 83.1 Other comprehensive (expense)/income (75.6) 153.8 0 0 0 0 T otal comprehensive income/(expense) 9.9 116.7 (318.3) 247.2 (162.7) 83.1 Summarised statement of cash flows Net cash flows generated from/(used in) operating activities 855.0 306.3 53.3 (77.6) 755.3 732.4 Net cash flows (used in)/generated from investing activities (191.9) 22.8 8.4 7.8 18.4 706.5 Net cash flows used in financing activities (599.3) (684.5) (153.9) (159.9) (881.5) (928.8) Net increase/(decrease) in cash and cash equivalents 63.8 (355.4) (92.2) (229.7) (107.8) 510.1 8 JOINT ARRANGEMENTS Accounting Policy A joint arrangement is an arrangement over which there is contractually agreed sharing of control by the Group with one or more parties where decisions about the relevant activities relating to the joint arrangementrequire unanimous consent of the parties sharing control. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement. A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of the arrangement. Joint operations are joint arrangements whereby the Company has the rights to the assets and obligations for the liabilities. In respect of its interests in joint operations, the Company shall recognise in its financial statements the assets that it controls and the expenses and liabilities that it incurs and its share of the income that it earns from the sale of goods or services. The Group’s interest in joint ventures is accounted for in the consolidated financial statements using the equity method of accounting. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 231 Accounting Policy (continued) Equity accounting involves recognising in the consolidated statement of profit or loss, consolidated statement of OCI and consolidated statement of changes in equity, the Group’s share of profits | [
232,
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Joint operations are joint arrangements whereby the Company has the rights to the assets and obligations for the liabilities. In respect of its interests in joint operations, the Company shall recognise in its financial statements the assets that it controls and the expenses and liabilities that it incurs and its share of the income that it earns from the sale of goods or services. The Group’s interest in joint ventures is accounted for in the consolidated financial statements using the equity method of accounting. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 231 Accounting Policy (continued) Equity accounting involves recognising in the consolidated statement of profit or loss, consolidated statement of OCI and consolidated statement of changes in equity, the Group’s share of profits lesslosses of the joint ventures based on the latest audited financial statements or management accounts of the joint ventures, made up to the financial year end of the Group. Where necessary, adjustments are made to the results and net assets of the joint ventures to ensure consistency of accounting policies with those of the Group. The Group’s investments in joint ventures are recorded at cost inclusive of goodwill and adjusted thereafter for accumulated impairment losses and the post-acquisition change in the Group’s share of net assets of the joint ventures. Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in joint ventures. Unrealised losses are also eliminated on the same basis but only to the extent of the costs that can be recovered, and the balances that provide evidence of reduction in net realisable value or an impairment of the asset transferred are recognised in the consolidated statement of profit or loss. 8 JOINT ARRANGEMENTS (CONTINUED) Joint ventures Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Unquoted shares 88.4 88.4 7.9 7.9 Share of post-acquisition results and reserves | [
233
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at cost inclusive of goodwill and adjusted thereafter for accumulated impairment losses and the post-acquisition change in the Group’s share of net assets of the joint ventures. Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in joint ventures. Unrealised losses are also eliminated on the same basis but only to the extent of the costs that can be recovered, and the balances that provide evidence of reduction in net realisable value or an impairment of the asset transferred are recognised in the consolidated statement of profit or loss. 8 JOINT ARRANGEMENTS (CONTINUED) Joint ventures Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Unquoted shares 88.4 88.4 7.9 7.9 Share of post-acquisition results and reserves 132.0171.8 0 0 220.4 260.2 7.9 7.9 Less: Accumulated impairment losses (12.0) (10.7) (7.9) (7.9) 208.4 249.5 0 0 Share of net assets of joint ventures 208.4 249.5 None of the joint ventures are material individually to the financial position, financial performance and cash flows of the Group. The aggregated financial information of the Group’s joint ventures is as follows: 2023 RM’million 2022 RM’million Group’s share of results: Profit after tax and total comprehensive income 18.1 21.0 Dividend received 57.9 0 Amounts due from joint ventures Amounts due from joint ventures* 42.5 56.9 Less: Loss allowances (19.8) (12.3) 22.7 44.6 * The Group’s credit policy provides amounts due from joint ventures with a 30 days (2022: 30 days) credit period. The list of the Group’s joint arrangements is disclosed in Note 50. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 232 9 ASSOCIATES Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Unquoted shares (a) 2,048.2 3,307.9 75.7 75.7 Share of post-acquisition results and reserves 13.1 (465.2) 0 0 2,061.3 2,842.7 75.7 75.7 Less: Accumulated impairment losses (b) (602.5) (1,413.0) | [
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RM’million 2022 RM’million Group’s share of results: Profit after tax and total comprehensive income 18.1 21.0 Dividend received 57.9 0 Amounts due from joint ventures Amounts due from joint ventures* 42.5 56.9 Less: Loss allowances (19.8) (12.3) 22.7 44.6 * The Group’s credit policy provides amounts due from joint ventures with a 30 days (2022: 30 days) credit period. The list of the Group’s joint arrangements is disclosed in Note 50. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 232 9 ASSOCIATES Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Unquoted shares (a) 2,048.2 3,307.9 75.7 75.7 Share of post-acquisition results and reserves 13.1 (465.2) 0 0 2,061.3 2,842.7 75.7 75.7 Less: Accumulated impairment losses (b) (602.5) (1,413.0) 00 1,458.8 1,429.7 75.7 75.7 Share of net assets of associates 1,458.8 1,429.7 The list of the Group’s associates is disclosed in Note 51. (a) Divestment in GEL 2023 During the financial year, the Group via its wholly owned subsidiary, PEIM, had completed the divestment of its entire 30.0% equity interest in GEL via a Settlement Agreement for an amount of RM133.0 million (USD28.5 million) in cash. Hence, GEL has ceased to be an associate of the Group. Accounting Policy Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20.0% and 50.0% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are initially recognised at cost. Equity accounting is discontinued when the Group ceases to have significant influence over the associates. The Group’s share of its associates’ post-acquisition profits or losses are recognised in the statement of profit or loss, and its share of post-acquisition movements in OCI are recognised in OCI. The cumulative post-acquisition movements are adjusted against the | [
234
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amount of RM133.0 million (USD28.5 million) in cash. Hence, GEL has ceased to be an associate of the Group. Accounting Policy Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20.0% and 50.0% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are initially recognised at cost. Equity accounting is discontinued when the Group ceases to have significant influence over the associates. The Group’s share of its associates’ post-acquisition profits or losses are recognised in the statement of profit or loss, and its share of post-acquisition movements in OCI are recognised in OCI. The cumulative post-acquisition movements are adjusted against the carryingamount of the investment. When the Group’s share of losses in an associate equals or exceeds its interests in the associate, including any long term interests that, in substance, form part of the Group’s net investment in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. The Group’s investments in associates include goodwill identified on acquisition, net of any accumulated impairment losses (Note 3(c)). Profits and losses resulting from upstream and downstream transactions between the Group and its associates are recognised in the Group’s financial statements only for the unrelated investor’s interests in the associates. The accounting policies of associates are adjusted where necessary to ensure consistency with the policies adopted by the Group. Dilution of gains and losses in associates are recognised in the consolidated statement of profit or loss. If the ownership | [
234
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or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. The Group’s investments in associates include goodwill identified on acquisition, net of any accumulated impairment losses (Note 3(c)). Profits and losses resulting from upstream and downstream transactions between the Group and its associates are recognised in the Group’s financial statements only for the unrelated investor’s interests in the associates. The accounting policies of associates are adjusted where necessary to ensure consistency with the policies adopted by the Group. Dilution of gains and losses in associates are recognised in the consolidated statement of profit or loss. If the ownership interestin an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in OCI is reclassified to statement of profit or loss where appropriate. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 233 9 ASSOCIATES (CONTINUED) (a) Divestment in GEL (continued) 2023 (continued) The initial value of the investment in GEL of RM1,259.7 million has been fully written down in previous financial years. Consequently, the Group has recognised a gain of RM21.3 million from this disposal: Group 2023 RM’million Disposal proceeds 133.0 Less: Carrying amount of investment in associate 0 Less: Accumulated reserves reclassified to profit or loss (111.7) Gain on disposal of associate 21.3 (b) (i) Impairment assessment for Blyth Offshore Demonstrator Limited (‘BODL’) 2023 Due to adverse external market conditions, the Group had undertaken an impairment assessment of its investment in BODL in the current year. An impairment charge of RM31.2 million (GBP5.5 million) was recognised as its recoverable amount was lower than the carrying amount. The recoverable amount of BODL was determined based | [
234,
235
] | [
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in GEL (continued) 2023 (continued) The initial value of the investment in GEL of RM1,259.7 million has been fully written down in previous financial years. Consequently, the Group has recognised a gain of RM21.3 million from this disposal: Group 2023 RM’million Disposal proceeds 133.0 Less: Carrying amount of investment in associate 0 Less: Accumulated reserves reclassified to profit or loss (111.7) Gain on disposal of associate 21.3 (b) (i) Impairment assessment for Blyth Offshore Demonstrator Limited (‘BODL’) 2023 Due to adverse external market conditions, the Group had undertaken an impairment assessment of its investment in BODL in the current year. An impairment charge of RM31.2 million (GBP5.5 million) was recognised as its recoverable amount was lower than the carrying amount. The recoverable amount of BODL was determined based onVIU calculations which applied a discounted free cash flow to equity model. The cash flows used are the most recent projections and sensitivity analysis was conducted to ensure the reliability of relevant variables. Key assumptions used 2023 % Revenue growth rate (5.2) Discount rate 6.8 The Group’s review includes impact assessment of changes in key assumptions. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million Decrease RM’million Revenue growth rate 1.0 44.3 (36.5) Discount rate 1.0 (29.3) 32.2 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 234 9 ASSOCIATES (CONTINUED) (b) (ii) Impairment assessment for Lumut Maritime Terminal Sdn. Bhd. (‘LMT’) 2023 The Group had reviewed the basis of impairment parameter updated based on 2023 data. Based on the assessment, the recoverable amount exceeded its carrying amount, hence no additional impairment loss was recognised in the current financial year. 2022 The Group had undertaken the impairment assessment of its investment in LMT, an associate. The assessment was | [
235,
236
] | [
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in key assumptions. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million Decrease RM’million Revenue growth rate 1.0 44.3 (36.5) Discount rate 1.0 (29.3) 32.2 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 234 9 ASSOCIATES (CONTINUED) (b) (ii) Impairment assessment for Lumut Maritime Terminal Sdn. Bhd. (‘LMT’) 2023 The Group had reviewed the basis of impairment parameter updated based on 2023 data. Based on the assessment, the recoverable amount exceeded its carrying amount, hence no additional impairment loss was recognised in the current financial year. 2022 The Group had undertaken the impairment assessment of its investment in LMT, an associate. The assessment was triggeredby Net Zero 2050 initiative of no extension of Power Purchase Agreement (‘PPA’) provided for the coal fired power plant. Based on the impairment assessment, the carrying amount of the Group’s investment in LMT exceeded its recoverable amount by RM68.6 million. Key assumption used The recoverable amount was determined based on VIU calculations, which applied a discounted cash flow model of LMT for the remaining operation and maintenance contract period which expires in 2042 and its other sources of income. The cash flows used in the calculations are the most recent forecasts and projections approved by the Board of Directors and management of LMT. The key assumptions used in determining the VIU were: 2022 % Terminal growth rate 2.0 Cost of equity 9.0 The cash flows were discounted using cost of equity based on the risk specific to the industry. The key assumptions includes optimisation of LMT’s assets and no new source of business. The Group’s review includes impact assessment of changes in key assumptions. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million | [
236
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the remaining operation and maintenance contract period which expires in 2042 and its other sources of income. The cash flows used in the calculations are the most recent forecasts and projections approved by the Board of Directors and management of LMT. The key assumptions used in determining the VIU were: 2022 % Terminal growth rate 2.0 Cost of equity 9.0 The cash flows were discounted using cost of equity based on the risk specific to the industry. The key assumptions includes optimisation of LMT’s assets and no new source of business. The Group’s review includes impact assessment of changes in key assumptions. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million DecreaseRM’million Terminal growth rate 1.0 5.9 (4.4) Cost of equity 1.0 (17.5) 23.1 The aggregated financial information of the Group’s associates is as follows: 2023 RM’million 2022 RM’million Group’s share of results: - Profit after tax 44.3 76.6 - T otal other comprehensive income/(expense) 133.0 (55.2) Dividends received 164.6 120.1 Effect of changes in foreign currencies 52.3 (26.2) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 235 9 ASSOCIATES (CONTINUED) Amounts due from/(to) associates Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Amounts due from associates* 395.6 666.4 5.3 5.7 Less: Loss allowances (7.3) (7.3) (0.1) (0.1) 388.3 659.1 5.2 5.6 Amounts due to associates^ (579.7) (777.6) (568.8) (765.9) * The Group’s and the Company’s credit policy provides amounts due from associates with a 30 days (2022: 30 days) credit period. ^ Credit terms of amounts due to associates is 30 days (2022: 30 days) depending on the terms of the contracts. The unrecognised cumulative losses of the Group’s associates are as follows: Gama Enerji Anonîm Şîrketî 2023 RM’million 2022 RM’million As at the beginning of the financial year (25.4) (393.1) Arising in the financial year (85.9) | [
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2023 FINANCIAL STATEMENTS Sec 5 235 9 ASSOCIATES (CONTINUED) Amounts due from/(to) associates Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Amounts due from associates* 395.6 666.4 5.3 5.7 Less: Loss allowances (7.3) (7.3) (0.1) (0.1) 388.3 659.1 5.2 5.6 Amounts due to associates^ (579.7) (777.6) (568.8) (765.9) * The Group’s and the Company’s credit policy provides amounts due from associates with a 30 days (2022: 30 days) credit period. ^ Credit terms of amounts due to associates is 30 days (2022: 30 days) depending on the terms of the contracts. The unrecognised cumulative losses of the Group’s associates are as follows: Gama Enerji Anonîm Şîrketî 2023 RM’million 2022 RM’million As at the beginning of the financial year (25.4) (393.1) Arising in the financial year (85.9) 367.7As at the end of the financial year (111.3) (25.4) The associates that are material to the Group are BODL, Jimah Energy Ventures Holdings Sdn. Bhd. (‘ JEV’), and LMT. The following summarises the financial information of the associates and reconciled the information to the carrying amount of the Group’s interest in those associates. (i) The summarised statement of comprehensive income: BODL JEV LMT 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Revenue 164.6 147.2 3,332.2 4,656.6 136.5 127.1 Profit/(Loss) after tax 17.8 (56.5) (77.4) 186.8 15.4 13.3 Other comprehensive income/(expense) 269.6 (123.9) 0 0 0 0 T otal comprehensive income/(expense) 287.4 (180.4) (77.4) 186.8 15.4 13.3 (ii) The summarised statement of financial position: BODL JEV LMT 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Non-current assets 1,258.3 1,223.8 2,646.2 2,740.8 324.6 320.3 Current assets 87.8 120.9 1,268.5 1,932.5 198.9 201.9 Non-current liabilities (260.9) (267.5) (1,642.8) (1,730.5) (14.8) (15.9) Current liabilities (55.2) (285.7) (765.4) (1,342.0) (16.9) (19.9) 1,030.0 791.5 1,506.5 1,600.8 491.8 486.4 NOTES TO THE FINANCIAL | [
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of the Group’s interest in those associates. (i) The summarised statement of comprehensive income: BODL JEV LMT 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Revenue 164.6 147.2 3,332.2 4,656.6 136.5 127.1 Profit/(Loss) after tax 17.8 (56.5) (77.4) 186.8 15.4 13.3 Other comprehensive income/(expense) 269.6 (123.9) 0 0 0 0 T otal comprehensive income/(expense) 287.4 (180.4) (77.4) 186.8 15.4 13.3 (ii) The summarised statement of financial position: BODL JEV LMT 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Non-current assets 1,258.3 1,223.8 2,646.2 2,740.8 324.6 320.3 Current assets 87.8 120.9 1,268.5 1,932.5 198.9 201.9 Non-current liabilities (260.9) (267.5) (1,642.8) (1,730.5) (14.8) (15.9) Current liabilities (55.2) (285.7) (765.4) (1,342.0) (16.9) (19.9) 1,030.0 791.5 1,506.5 1,600.8 491.8 486.4 NOTES TO THE FINANCIAL STATEMENTS31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 236 9 ASSOCIATES (CONTINUED) (iii) Reconciliation of the summarised financial information: BODL JEV LMT 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Group’s share of net assets 504.7 387.8 376.6 400.2 245.9 243.2 Goodwill 91.9 83.4 0 0 37.8 37.8 Less: Accumulated impairment losses (31.2) 0 0 0 (68.6) (68.6) Transaction cost capitalised 6.9 6.3 0 0 0 0 Effect of changes in foreign currency (0.9) 0 0 0 0 0 Carrying amount 571.4 477.5 376.6 400.2 215.1 212.4 Individually immaterial associates: 2023 RM’million 2022 RM’million Aggregate carrying amount of individually immaterial associates 295.7 339.6 Aggregate amounts of the Group’s share of profit: - Profit after tax 47.3 50.9 - Other comprehensive income 0.9 5.5 10 INTANGIBLE ASSETS Accounting Policy Goodwill Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration transferred, the amount of any NCI in the acquiree and the fair value of any previous equity | [
238
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387.8 376.6 400.2 245.9 243.2 Goodwill 91.9 83.4 0 0 37.8 37.8 Less: Accumulated impairment losses (31.2) 0 0 0 (68.6) (68.6) Transaction cost capitalised 6.9 6.3 0 0 0 0 Effect of changes in foreign currency (0.9) 0 0 0 0 0 Carrying amount 571.4 477.5 376.6 400.2 215.1 212.4 Individually immaterial associates: 2023 RM’million 2022 RM’million Aggregate carrying amount of individually immaterial associates 295.7 339.6 Aggregate amounts of the Group’s share of profit: - Profit after tax 47.3 50.9 - Other comprehensive income 0.9 5.5 10 INTANGIBLE ASSETS Accounting Policy Goodwill Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration transferred, the amount of any NCI in the acquiree and the fair value of any previous equity interestin the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed on the acquisition date. If the fair value of consideration transferred is less than the fair value of the net identifiable assets of the acquire in the case of a bargain purchase, the resulting gain is recognised in statement of profit or loss. Goodwill is recognised in the statement of financial position as non-current asset at cost less accumulated impairment losses and tested for impairment annually. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. The carrying value of goodwill is compared to the recoverable amount, which is the higher of VIU and the fair value less costs of disposal. Any impairment is recognised immediately to the statement of profit or loss and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity | [
238
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and tested for impairment annually. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. The carrying value of goodwill is compared to the recoverable amount, which is the higher of VIU and the fair value less costs of disposal. Any impairment is recognised immediately to the statement of profit or loss and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity disposed.Rights to build The rights to build are stated at cost less any accumulated amortisation and impairment losses. The rights to build are considered to have a finite life. The asset is reviewed annually for adjustments to the useful economic life and any indications of impairment. Impairment losses are recognised when the carrying value of the intangible asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its VIU. Subsequent costs involved in renewing or maintaining the rights to build are charged to the statement of profit and loss as and when incurred. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 237 10 INTANGIBLE ASSETS (CONTINUED) Accounting Policy (continued) Project development portfolio The project development portfolio consists of contractual rights acquired relating to early stage solar, wind and Battery Energy Storage System (‘BESS’) projects in Australia. The project development portfolio is stated at cost less any accumulated amortisation and impairment losses. They are considered to have a finite life and are amortised on a straight-line basis over the period of expected future economic benefits of the asset. The asset is reviewed annually for adjustments | [
238,
239
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fair value less costs to sell and its VIU. Subsequent costs involved in renewing or maintaining the rights to build are charged to the statement of profit and loss as and when incurred. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 237 10 INTANGIBLE ASSETS (CONTINUED) Accounting Policy (continued) Project development portfolio The project development portfolio consists of contractual rights acquired relating to early stage solar, wind and Battery Energy Storage System (‘BESS’) projects in Australia. The project development portfolio is stated at cost less any accumulated amortisation and impairment losses. They are considered to have a finite life and are amortised on a straight-line basis over the period of expected future economic benefits of the asset. The asset is reviewed annually for adjustments tothe useful economic life and any indications of impairment. Impairment losses are recognised when the carrying value of the intangible asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its VIU. Subsequent costs involved in renewing or maintaining the development portfolio are charged to the statement of profit and loss as and when incurred. Goodwill RM’million Rights to build RM’million Project development portfolio RM’million Total RM’million 2023 Group As at the beginning of the financial year 421.4 172.2 0 593.6 Acquisition of subsidiaries* 491.1 0 429.3 920.4 Impairment (123.6) 0 0 (123.6) Effect of changes in foreign currencies 35.2 17.5 17.1 69.8 Transfer to PPE# 0 (189.7) 0 (189.7) As at the end of the financial year 824.1 0 446.4 1,270.5 * Goodwill arising from the acquisition of Spark Renewables, Dullarbtons and Elipsgeen (Note 48). Project development portfolio arising from the acquisition of Spark Renewables (Note 48). # Transfer to PPE upon commencement of the project. Goodwill RM’million Rights to build RM’million Total RM’million 2022 Group As at the beginning of the financial year 438.4 0 438.4 Acquisition of a | [
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when incurred. Goodwill RM’million Rights to build RM’million Project development portfolio RM’million Total RM’million 2023 Group As at the beginning of the financial year 421.4 172.2 0 593.6 Acquisition of subsidiaries* 491.1 0 429.3 920.4 Impairment (123.6) 0 0 (123.6) Effect of changes in foreign currencies 35.2 17.5 17.1 69.8 Transfer to PPE# 0 (189.7) 0 (189.7) As at the end of the financial year 824.1 0 446.4 1,270.5 * Goodwill arising from the acquisition of Spark Renewables, Dullarbtons and Elipsgeen (Note 48). Project development portfolio arising from the acquisition of Spark Renewables (Note 48). # Transfer to PPE upon commencement of the project. Goodwill RM’million Rights to build RM’million Total RM’million 2022 Group As at the beginning of the financial year 438.4 0 438.4 Acquisition of a subsidiary*17.9 0 17.9 Additions# 0 168.6 168.6 Impairment (22.7) 0 (22.7) Effect of changes in foreign currency (12.2) 3.6 (8.6) As at the end of the financial year 421.4 172.2 593.6 * Goodwill arising from the acquisition of CEI UK (Note 48). # Acquisition of rights to build for a portfolio of 101.7megawatts (‘MW’) solar capacity and 65MW battery storage in United Kingdom. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 238 10 INTANGIBLE ASSETS (CONTINUED) Group 2023 RM’million 2022 RM’million Classification of goodwill by countries Malaysia 211.0 211.0 Foreign: - United Kingdom 108.7 210.4 - Australia 345.7 0 - Republic of Ireland 158.7 0 824.1 421.4 Impairment assessment for goodwill The carrying value of goodwill is allocated to the Group’s CGUs. The recoverable amount of the CGU including goodwill, is determined based on its VIU. This VIU calculation applies a discounted cash flow model using cash flow projections based on forecast approved by management. The forecasts reflect management’s expectations of revenue growth, operating costs and margins for the CGUs based on current assessment of market share, expectations of market and industry growth. | [
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Kingdom. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 238 10 INTANGIBLE ASSETS (CONTINUED) Group 2023 RM’million 2022 RM’million Classification of goodwill by countries Malaysia 211.0 211.0 Foreign: - United Kingdom 108.7 210.4 - Australia 345.7 0 - Republic of Ireland 158.7 0 824.1 421.4 Impairment assessment for goodwill The carrying value of goodwill is allocated to the Group’s CGUs. The recoverable amount of the CGU including goodwill, is determined based on its VIU. This VIU calculation applies a discounted cash flow model using cash flow projections based on forecast approved by management. The forecasts reflect management’s expectations of revenue growth, operating costs and margins for the CGUs based on current assessment of market share, expectations of market and industry growth. Thediscount rate applied to the cash flow forecast refers to the industry’s pre-tax Weighted Average Cost of Capital (‘WACC’). (a) Goodwill relating to operations in Malaysia The discounted cash flow model used cash flow projections which covered a five-year period and cash flows beyond the projection years are extrapolated using an estimated terminal growth rate. The following key assumptions have been applied in the VIU calculation: 2023 % 2022 % Revenue growth rate 2.1 1.8 Pre-tax discount rate 8.8 8.1 Terminal growth rate 1.9 1.8 Based on the Group’s assessment, no impairment losses were required as at 31 December 2023 as the recoverable amount exceeded the carrying amount. The Group’s review includes an impact assessment of changes in key assumptions used. Based on the sensitivity analysis performed, it was concluded that no reasonable change in the base case assumptions would cause the carrying amount of the CGU to exceed its recoverable amount. (b) Goodwill relating to operations in the United Kingdom The Group tests whether the goodwill has suffered any impairment on an annual basis. The Group has determined the recoverable amount of foreign CGU by assessing | [
240
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have been applied in the VIU calculation: 2023 % 2022 % Revenue growth rate 2.1 1.8 Pre-tax discount rate 8.8 8.1 Terminal growth rate 1.9 1.8 Based on the Group’s assessment, no impairment losses were required as at 31 December 2023 as the recoverable amount exceeded the carrying amount. The Group’s review includes an impact assessment of changes in key assumptions used. Based on the sensitivity analysis performed, it was concluded that no reasonable change in the base case assumptions would cause the carrying amount of the CGU to exceed its recoverable amount. (b) Goodwill relating to operations in the United Kingdom The Group tests whether the goodwill has suffered any impairment on an annual basis. The Group has determined the recoverable amount of foreign CGU by assessing theVIU of the underlying assets. Based on the impairment assessment, the carrying value of the goodwill as at 31 December 2023 exceeded its recoverable amount by RM123.6 million (2022: RM22.7 million), mainly due to external market conditions affecting future cash flows. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 239 10 INTANGIBLE ASSETS (CONTINUED) Impairment assessment for goodwill (continued) (b) Goodwill relating to operations in the United Kingdom (continued) The discounted cash flow model used cash flow projections which covered a 27-year period (2022: 28-year period). The following key assumptions has been applied in the VIU calculation: 2023 % 2022 % Revenue growth rate (3.5) (3.2) Pre-tax discount rate 8.4 7.8 The Group’s review includes an impact assessment of changes in key assumptions used. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million Decrease RM’million 2023 Revenue growth rate 1.0 285.8 (252.7) Pre-tax discount rate 1.0 (143.2) 161.7 2022 Revenue growth rate 1.0 355.7 (312.7) Pre-tax discount rate 1.0 (158.1) 176.3 (c) Goodwill relating to operations in Australia The | [
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(continued) (b) Goodwill relating to operations in the United Kingdom (continued) The discounted cash flow model used cash flow projections which covered a 27-year period (2022: 28-year period). The following key assumptions has been applied in the VIU calculation: 2023 % 2022 % Revenue growth rate (3.5) (3.2) Pre-tax discount rate 8.4 7.8 The Group’s review includes an impact assessment of changes in key assumptions used. The effects of the movement in the key assumptions to the recoverable amount are as follows: Changes in assumptions % Impact on recoverable amount Increase RM’million Decrease RM’million 2023 Revenue growth rate 1.0 285.8 (252.7) Pre-tax discount rate 1.0 (143.2) 161.7 2022 Revenue growth rate 1.0 355.7 (312.7) Pre-tax discount rate 1.0 (158.1) 176.3 (c) Goodwill relating to operations in Australia The goodwillis deemed to be attributable to Spark Renewable’s future ability to develop and operate new renewable energy projects in Australia, as well as enhanced scale and operational diversity in its renewable projects portfolio. (d) Goodwill relating to operations in the Republic of Ireland The goodwill consists of potential upsides from extension of lease terms and grid connection approvals up to 15 years. 11 INVESTMENT IN UNQUOTED DEBT SECURITY Group and Company 2023 RM’million 2022 RM’million Unsecured Loan Notes 287.5 278.5 Less: Loss allowance (28.2) (25.1) 259.3 253.4 The Unsecured Loan Notes primarily related to the Islamic Medium Term Notes (‘IMTN’) facility subscription with a maturity period of 14 years and matures on 5 May 2034. Credit risk relating to debt instrument above is disclosed in Note 45(b) of the financial statements. Accounting Policy Investment in unquoted debt security is a financial instrument and the accounting policy is disclosed in Note 45. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 240 Accounting Policy Deferred tax is recognised on temporary differences arising between the tax bases of assets and | [
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connection approvals up to 15 years. 11 INVESTMENT IN UNQUOTED DEBT SECURITY Group and Company 2023 RM’million 2022 RM’million Unsecured Loan Notes 287.5 278.5 Less: Loss allowance (28.2) (25.1) 259.3 253.4 The Unsecured Loan Notes primarily related to the Islamic Medium Term Notes (‘IMTN’) facility subscription with a maturity period of 14 years and matures on 5 May 2034. Credit risk relating to debt instrument above is disclosed in Note 45(b) of the financial statements. Accounting Policy Investment in unquoted debt security is a financial instrument and the accounting policy is disclosed in Note 45. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 240 Accounting Policy Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilitiesand their carrying amounts in the financial statements including those arising from business combinations. Deferred tax is not recognised on goodwill and those arising from initial recognition of an asset or liability which at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unutilised tax credits can be utilised. Deferred tax is recognised on temporary differences arising on investment in subsidiaries, joint ventures and associates except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Tax benefit from reinvestment allowance is recognised when the tax credit is utilised and no deferred tax asset is recognised when the tax credit is receivable. Deferred tax is measured at the tax rates (and laws) that have been enacted or substantially enacted at the end of the reporting period and are expected to apply when the related deferred tax asset is realised | [
242
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profit will be available against which the deductible temporary differences, unused tax losses and unutilised tax credits can be utilised. Deferred tax is recognised on temporary differences arising on investment in subsidiaries, joint ventures and associates except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Tax benefit from reinvestment allowance is recognised when the tax credit is utilised and no deferred tax asset is recognised when the tax credit is receivable. Deferred tax is measured at the tax rates (and laws) that have been enacted or substantially enacted at the end of the reporting period and are expected to apply when the related deferred tax asset is realised orthe deferred tax liability is settled. The Group and the Company will recognise a deferred tax asset and a deferred tax liability for any temporary differences arising on initial recognition of a lease transaction. Where applicable, a deferred tax asset is recognised as the Group and the Company is able to benefit from the tax deductions in the future. Any differences between the deferred tax asset and deferred tax liability will be recognised in the profit and loss. Upon adopting the amendments, the Group and the Company do not expect material adjustments to the retained earnings as the initial recognition of the lease transactions gave rise to equal and offsetting temporary differences. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the statement of financial position: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Deferred tax assets: - Deferred tax assets to be realised after more than 12 months 257.8 246.4 0 0 - Deferred tax assets to be | [
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liability will be recognised in the profit and loss. Upon adopting the amendments, the Group and the Company do not expect material adjustments to the retained earnings as the initial recognition of the lease transactions gave rise to equal and offsetting temporary differences. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the statement of financial position: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Deferred tax assets: - Deferred tax assets to be realised after more than 12 months 257.8 246.4 0 0 - Deferred tax assets to be realisedwithin 12 months 121.5 131.1 0 0 379.3 377.5 0 0 Deferred tax liabilities: - Deferred tax liabilities to be settled after more than 12 months (8,119.2) (8,496.2) (5,600.3) (6,337.4) - Deferred tax liabilities to be settled within 12 months (899.1) (324.1) (890.9) (302.9) (9,018.3) (8,820.3) (6,491.2) (6,640.3) Net total (8,639.0) (8,442.8) (6,491.2) (6,640.3) 12 DEFERRED TAXATION NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 241 12 DEFERRED TAXATION (CONTINUED) The movements during the financial year relating to deferred tax are as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million As at the beginning of the financial year (8,442.8) (7,805.6) (6,640.3) (6,265.3) Credited/(Charged) to statement of profit or loss: (Note 38) - PPE 109.8 (1,262.4) (210.3) (554.9) - Post-employment benefits (215.0) (135.4) (51.0) (37.5) - Tax losses and capital allowances 244.7 340.2 0 0 - Provisions and allowances (33.9) 866.9 (47.0) 17.8 - Contract assets (380.9) (98.6) (192.1) (96.2) - Lease liabilities (573.5) 951.2 (1,073.2) 614.0 - ROU assets 689.9 (984.1) 1,537.9 (162.1) (158.9) (322.2) (35.7) (218.9) Credited to OCI: - Post-employment benefits 208.7 | [
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(6,640.3) 12 DEFERRED TAXATION NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 241 12 DEFERRED TAXATION (CONTINUED) The movements during the financial year relating to deferred tax are as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million As at the beginning of the financial year (8,442.8) (7,805.6) (6,640.3) (6,265.3) Credited/(Charged) to statement of profit or loss: (Note 38) - PPE 109.8 (1,262.4) (210.3) (554.9) - Post-employment benefits (215.0) (135.4) (51.0) (37.5) - Tax losses and capital allowances 244.7 340.2 0 0 - Provisions and allowances (33.9) 866.9 (47.0) 17.8 - Contract assets (380.9) (98.6) (192.1) (96.2) - Lease liabilities (573.5) 951.2 (1,073.2) 614.0 - ROU assets 689.9 (984.1) 1,537.9 (162.1) (158.9) (322.2) (35.7) (218.9) Credited to OCI: - Post-employment benefits 208.7 (73.7)184.8 (156.1) - Effect of changes in foreign currencies (52.5) 0 0 0 Acquisition of subsidiaries (Note 48) (193.5) (241.3) 0 0 As at the end of the financial year (8,639.0) (8,442.8) (6,491.2) (6,640.3) Subject to income tax Deferred tax assets (before offsetting): - Provisions and allowances 1,296.2 1,330.1 781.5 828.5 - Post-employment benefits 2,759.9 2,766.2 2,748.4 2,614.6 - Tax losses and capital allowances 3,072.9 2,828.2 0 0 - Lease liabilities 7,277.8 7,851.3 16,339.5 17,412.7 - PPE 62.6 58.2 0 0 Offsetting (14,090.1) (14,456.5) (19,869.4) (20,855.8) Deferred tax assets (after offsetting) 379.3 377.5 0 0 Deferred tax liabilities (before offsetting): - PPE (13,072.6) (12,932.0) (9,842.8) (9,632.5) - Contract assets (1,215.1) (834.2) (1,023.6) (831.5) - ROU assets (8,820.7) (9,510.6) (15,494.2) (17,032.1) Offsetting 14,090.1 14,456.5 19,869.4 20,855.8 Deferred tax liabilities (after offsetting) (9,018.3) (8,820.3) (6,491.2) (6,640.3) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 242 12 DEFERRED TAXATION (CONTINUED) The amount of deductible temporary differences, unused tax losses, | [
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to income tax Deferred tax assets (before offsetting): - Provisions and allowances 1,296.2 1,330.1 781.5 828.5 - Post-employment benefits 2,759.9 2,766.2 2,748.4 2,614.6 - Tax losses and capital allowances 3,072.9 2,828.2 0 0 - Lease liabilities 7,277.8 7,851.3 16,339.5 17,412.7 - PPE 62.6 58.2 0 0 Offsetting (14,090.1) (14,456.5) (19,869.4) (20,855.8) Deferred tax assets (after offsetting) 379.3 377.5 0 0 Deferred tax liabilities (before offsetting): - PPE (13,072.6) (12,932.0) (9,842.8) (9,632.5) - Contract assets (1,215.1) (834.2) (1,023.6) (831.5) - ROU assets (8,820.7) (9,510.6) (15,494.2) (17,032.1) Offsetting 14,090.1 14,456.5 19,869.4 20,855.8 Deferred tax liabilities (after offsetting) (9,018.3) (8,820.3) (6,491.2) (6,640.3) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 242 12 DEFERRED TAXATION (CONTINUED) The amount of deductible temporary differences, unused tax losses, reinvestmentallowance and investment tax allowance for which no deferred tax assets are recognised in the statement of financial position are as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Deductible temporary differences 340.4 278.9 0 0 Tax losses* 413.8 874.7 0 0 Reinvestment allowance and investment tax allowance 5,917.2 5,925.1 123.7 0 No deferred tax assets are recognised from the deductible temporary differences and unused tax losses due to uncertainty of their recoverability. The unabsorbed capital allowances and investment tax allowance do not expire under current tax legislation. * The unutilised tax losses arising from a year of assessment (‘YA’) are allowed to be carried forward for utilisation up to 10 consecutive YAs from that YA. The accumulated unabsorbed tax losses brought forward are expected to expire between YA2028 to YA2030. 13 LONG TERM RECEIVABLES Accounting Policy Long term receivables are financial instruments and the accounting policy is disclosed in Note 45. Group Company Note 2023 RM’million 2022 RM’million | [
244
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differences 340.4 278.9 0 0 Tax losses* 413.8 874.7 0 0 Reinvestment allowance and investment tax allowance 5,917.2 5,925.1 123.7 0 No deferred tax assets are recognised from the deductible temporary differences and unused tax losses due to uncertainty of their recoverability. The unabsorbed capital allowances and investment tax allowance do not expire under current tax legislation. * The unutilised tax losses arising from a year of assessment (‘YA’) are allowed to be carried forward for utilisation up to 10 consecutive YAs from that YA. The accumulated unabsorbed tax losses brought forward are expected to expire between YA2028 to YA2030. 13 LONG TERM RECEIVABLES Accounting Policy Long term receivables are financial instruments and the accounting policy is disclosed in Note 45. Group Company Note 2023 RM’million 2022 RM’million 2023RM’million 2022 RM’million Financial assets Other receivables (a) 61.2 54.3 35.0 46.9 Less: Loss allowances (14.4) (14.7) (13.9) (14.7) 46.8 39.6 21.1 32.2 Non-financial assets (b) 494.1 210.9 361.7 108.9 540.9 250.5 382.8 141.1 (a) Included in the Group and the Company are advances given to staff and other non-trade receivables, which are not expected to be received within 12 months from the reporting date. Credit risks are disclosed in Note 45(b) to the financial statements. (b) Non-financial assets primarily relates to deposits and indirect tax receivables which are not expected to be received within 12 months from the reporting date. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 243 Accounting Policy The amounts due from/(to) subsidiaries are financial instruments and its accounting policy is as disclosed in Note 45. 14 AMOUNTS DUE FROM/(TO) SUBSIDIARIES Company Note 2023 RM’million 2022 RM’million Non-current Amounts due from subsidiaries 5,156.6 4,681.8 Less: Loss allowances (271.1) (265.7) (a) 4,885.5 4,416.1 Current Amounts due from subsidiaries 3,394.2 5,909.0 Less: Loss allowances (302.1) (308.2) (b) 3,092.1 5,600.8 Amounts due to subsidiaries | [
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which are not expected to be received within 12 months from the reporting date. Credit risks are disclosed in Note 45(b) to the financial statements. (b) Non-financial assets primarily relates to deposits and indirect tax receivables which are not expected to be received within 12 months from the reporting date. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 243 Accounting Policy The amounts due from/(to) subsidiaries are financial instruments and its accounting policy is as disclosed in Note 45. 14 AMOUNTS DUE FROM/(TO) SUBSIDIARIES Company Note 2023 RM’million 2022 RM’million Non-current Amounts due from subsidiaries 5,156.6 4,681.8 Less: Loss allowances (271.1) (265.7) (a) 4,885.5 4,416.1 Current Amounts due from subsidiaries 3,394.2 5,909.0 Less: Loss allowances (302.1) (308.2) (b) 3,092.1 5,600.8 Amounts due to subsidiaries (b)(6,944.0) (6,709.1) (a) The amounts due from subsidiaries are mainly in relation to shareholder loans to: (i) TNB Power Generation Sdn. Bhd. (‘TPGSB’) amounting to RM2,572.5 million (2022: RM3,305.9 million), which is based on the Islamic financing structure, for a profit rate of 3.8% per annum repayable over 15 years. (ii) TNB International Sdn. Bhd. (‘TNBI’) amounting to a total of RM1,064.8 million (2022: RM1,025.8 million), which consists of two loans amounting to RM985.8 million and RM79.0 million, with the effective interest rate of 6.7% and 9.2% per annum repayable over 10 and 15 years respectively. (iii) Vantage RE Ltd. (‘VRE’) amounting to RM884.3 million (2022: RM842.0 million), which is based on the Islamic financing structure, for a profit rate of 5.3% (2022: 4.5%) per annum repayable over 2 years. (iv) GSPARX Sdn. Bhd. amounting to a total of RM277.7 million (2022: RM98.1 million), which consist of two loans amounting to RM194.3 million and RM83.4 million, are based on the Islamic financing structure, for a profit rate of 6.5% and 7.5% per annum repayable over 2 years. (b) Amounts due from/(to) subsidiaries classified as current are trade | [
245
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total of RM1,064.8 million (2022: RM1,025.8 million), which consists of two loans amounting to RM985.8 million and RM79.0 million, with the effective interest rate of 6.7% and 9.2% per annum repayable over 10 and 15 years respectively. (iii) Vantage RE Ltd. (‘VRE’) amounting to RM884.3 million (2022: RM842.0 million), which is based on the Islamic financing structure, for a profit rate of 5.3% (2022: 4.5%) per annum repayable over 2 years. (iv) GSPARX Sdn. Bhd. amounting to a total of RM277.7 million (2022: RM98.1 million), which consist of two loans amounting to RM194.3 million and RM83.4 million, are based on the Islamic financing structure, for a profit rate of 6.5% and 7.5% per annum repayable over 2 years. (b) Amounts due from/(to) subsidiaries classified as current are trade related,unsecured, interest free and repayable on demand. Credit risks are disclosed in Note 45(b) to the financial statements. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 244 Accounting Policy The Group and the Company as lessors When the Group and the Company act as lessors, they determine at lease inception whether each lease is a finance lease or an operating lease. T o classify each lease, the Group and the Company make an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; otherwise, then it is an operating lease. Operating leases Leases where the Group and the Company retain substantially all of the risks and rewards of ownership of the leased assets are classified as operating leases. The Group and the Company recognise lease payments received under operating leases as operating income on a straight- line basis over the lease term. Finance leases If the Group and the Company transfer substantially all of the risks and rewards incidental to ownership of the leased assets, leases are classified as finance leases. The Group and | [
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the Company make an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; otherwise, then it is an operating lease. Operating leases Leases where the Group and the Company retain substantially all of the risks and rewards of ownership of the leased assets are classified as operating leases. The Group and the Company recognise lease payments received under operating leases as operating income on a straight- line basis over the lease term. Finance leases If the Group and the Company transfer substantially all of the risks and rewards incidental to ownership of the leased assets, leases are classified as finance leases. The Group and theCompany derecognise the leased assets and recognise the net investment in the lease as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. The Group and the Company as lessees The accounting policy on ROU assets and lease liabilities for lessees are disclosed in Note 6. 15 LEASES (a) Finance lease receivables The Group’s finance lease receivables arise from Cooling Energy Supply Agreement (‘CESA’). Group Minimum lease payments Present value of minimum lease payments 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Within 1 year 2.0 2.0 1.1 1.2 After 1 year and not later than 2 years 2.0 2.0 1.5 1.3 After 2 years and not later than 3 years 2.0 2.0 1.6 1.5 After 3 years and not later than 4 years 2.0 2.0 1.7 1.6 After 4 years and not later than 5 years 1.3 2.0 1.3 1.7 After 5 years 0 1.6 0 1.3 7.3 9.6 6.1 7.4 9.3 11.6 7.2 8.6 Less: Unearned finance income (2.1) (3.0) Present value of minimum lease payment receivable 7.2 8.6 The effective interest rate implicit in the finance lease is approximately 9.5% | [
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lease receivables arise from Cooling Energy Supply Agreement (‘CESA’). Group Minimum lease payments Present value of minimum lease payments 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Within 1 year 2.0 2.0 1.1 1.2 After 1 year and not later than 2 years 2.0 2.0 1.5 1.3 After 2 years and not later than 3 years 2.0 2.0 1.6 1.5 After 3 years and not later than 4 years 2.0 2.0 1.7 1.6 After 4 years and not later than 5 years 1.3 2.0 1.3 1.7 After 5 years 0 1.6 0 1.3 7.3 9.6 6.1 7.4 9.3 11.6 7.2 8.6 Less: Unearned finance income (2.1) (3.0) Present value of minimum lease payment receivable 7.2 8.6 The effective interest rate implicit in the finance lease is approximately 9.5% (2022:9.5%). The carrying amount of the finance lease receivables approximate their fair values. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 245 15 LEASES (CONTINUED) (b) Lease liabilities The Group’s and the Company’s obligations under lease liabilities arise predominantly from the power purchase agreements with several Independent Power Producers (‘IPPs’). Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Minimum lease payments: - Within 1 year 4,472.0 4,757.1 8,280.1 9,096.9 - After 1 year and not later than 2 years 3,767.5 3,875.4 7,510.4 7,788.4 - After 2 years and not later than 3 years 3,508.3 3,973.0 7,338.9 7,491.6 - After 3 years and not later than 4 years 3,383.5 3,475.2 7,190.9 7,338.9 - After 4 years and not later than 5 years 3,297.6 3,349.7 7,057.3 7,190.9 - After 5 years 23,991.5 26,793.3 69,137.6 76,195.0 37,948.4 41,466.6 98,235.1 106,004.8 T otal minimum lease payments 42,420.4 46,223.7 106,515.2 115,101.7 Future finance charges (11,559.5) (12,945.3) (37,228.6) (41,296.6) 30,860.9 33,278.4 69,286.6 73,805.1 Amount payable under lease liabilities: - Within 1 year 2,983.5 3,140.5 4,466.2 5,054.2 - After 1 year and not later than 2 years 2,355.6 2,386.9 3,875.3 3,950.1 - After 2 years and not later than 3 years 2,235.3 2,599.6 3,911.4 3,855.7 - | [
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1 year and not later than 2 years 3,767.5 3,875.4 7,510.4 7,788.4 - After 2 years and not later than 3 years 3,508.3 3,973.0 7,338.9 7,491.6 - After 3 years and not later than 4 years 3,383.5 3,475.2 7,190.9 7,338.9 - After 4 years and not later than 5 years 3,297.6 3,349.7 7,057.3 7,190.9 - After 5 years 23,991.5 26,793.3 69,137.6 76,195.0 37,948.4 41,466.6 98,235.1 106,004.8 T otal minimum lease payments 42,420.4 46,223.7 106,515.2 115,101.7 Future finance charges (11,559.5) (12,945.3) (37,228.6) (41,296.6) 30,860.9 33,278.4 69,286.6 73,805.1 Amount payable under lease liabilities: - Within 1 year 2,983.5 3,140.5 4,466.2 5,054.2 - After 1 year and not later than 2 years 2,355.6 2,386.9 3,875.3 3,950.1 - After 2 years and not later than 3 years 2,235.3 2,599.6 3,911.4 3,855.7 - After3 years and not later than 4 years 2,227.9 2,218.6 3,978.4 3,911.4 - After 4 years and not later than 5 years 2,259.9 2,210.0 4,063.1 3,978.4 - After 5 years 18,798.7 20,722.8 48,992.2 53,055.3 27,877.4 30,137.9 64,820.4 68,750.9 30,860.9 33,278.4 69,286.6 73,805.1 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 246 15 LEASES (CONTINUED) (b) Lease liabilities (continued) The weighted average effective interest rate applicable to the lease liabilities as at the financial year end for the Group and the Company are 5.2% (2022: 5.5%) and 5.7% (2022: 5.8%) per annum respectively. The carrying amounts of the lease liabilities approximate their fair values. Reconciliation of lease liabilities during the financial year is as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million As at the beginning of the financial year 33,278.4 29,241.9 73,805.1 71,190.5 Cash flows (4,015.4) (3,772.8) (7,338.3) (7,689.3) Non-cash changes - Additional lease 15.0 6,491.2 3.7 6,892.6 - Acquisition of subsidiaries (Note 48) 83.8 79.4 0 0 - Capacity payment differences (137.4) (517.7) (507.8) (828.0) - Finance charges (Note 37(b)) 1,636.5 1,756.4 4,043.7 4,239.3 - | [
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15 LEASES (CONTINUED) (b) Lease liabilities (continued) The weighted average effective interest rate applicable to the lease liabilities as at the financial year end for the Group and the Company are 5.2% (2022: 5.5%) and 5.7% (2022: 5.8%) per annum respectively. The carrying amounts of the lease liabilities approximate their fair values. Reconciliation of lease liabilities during the financial year is as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million As at the beginning of the financial year 33,278.4 29,241.9 73,805.1 71,190.5 Cash flows (4,015.4) (3,772.8) (7,338.3) (7,689.3) Non-cash changes - Additional lease 15.0 6,491.2 3.7 6,892.6 - Acquisition of subsidiaries (Note 48) 83.8 79.4 0 0 - Capacity payment differences (137.4) (517.7) (507.8) (828.0) - Finance charges (Note 37(b)) 1,636.5 1,756.4 4,043.7 4,239.3 - Reassessmentof lease 0 0 (719.8) 0 As at the end of the financial year 30,860.9 33,278.4 69,286.6 73,805.1 The statement of profit or loss includes the following amounts relating to leases: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Depreciation charge of ROU assets (Note 6) 3,482.0 3,901.8 5,709.6 6,236.0 Finance charges (Note 37 (b)) 1,636.5 1,756.4 4,043.7 4,239.3 Expense relating to leases of low-value assets (Note 33) 39.6 37.8 39.3 37.5 Expense relating to variable lease payments not included in lease liabilities 81.8 443.2 337.4 644.8 16 FINANCIAL ASSETS AT FVOCI Accounting Policy Financial assets at FVOCI are financial instruments and the accounting policy is disclosed in Note 45. Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Financial assets at FVOCI 55.1 70.7 54.3 70.0 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 247 16 FINANCIAL ASSETS AT FVOCI (CONTINUED) The Group and the Company have irrevocably elected non-trading equity securities above at initial recognition to present its fair value changes in OCI. The Group and the Company consider this | [
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6,236.0 Finance charges (Note 37 (b)) 1,636.5 1,756.4 4,043.7 4,239.3 Expense relating to leases of low-value assets (Note 33) 39.6 37.8 39.3 37.5 Expense relating to variable lease payments not included in lease liabilities 81.8 443.2 337.4 644.8 16 FINANCIAL ASSETS AT FVOCI Accounting Policy Financial assets at FVOCI are financial instruments and the accounting policy is disclosed in Note 45. Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Financial assets at FVOCI 55.1 70.7 54.3 70.0 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 247 16 FINANCIAL ASSETS AT FVOCI (CONTINUED) The Group and the Company have irrevocably elected non-trading equity securities above at initial recognition to present its fair value changes in OCI. The Group and the Company consider this classificationto be more relevant as these instruments are strategic investments of the Group and of the Company and not held for trading purposes. During the financial year, there were dividend income recognised and no investment was disposed. The details of the financial assets at FVOCI are as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Labuan Reinsurance (L) Ltd. 54.3 70.0 54.3 70.0 Al-Imtiaz Operation and Maintenance Company Ltd. 0.5 0.4 0 0 Club Memberships - Sultan Salahuddin Abdul Aziz Shah Club 0.1 0.1 0 0 - Glenmarie Golf Country Club 0.1 0.1 0 0 - Leisure Holidays Bhd 0.1 0.1 0 0 17 CONTRACT BALANCES Accounting Policy (a) Contract cost assets - Costs to fulfil a contract The Group recognises a contract cost that relates directly to a contract or to an anticipated contract as an asset when the cost generates or enhances resources of the Group which will be used in satisfying performance obligations in the future and it is expected to be recovered. These contract costs are initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates. An impairment loss is | [
249
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0.4 0 0 Club Memberships - Sultan Salahuddin Abdul Aziz Shah Club 0.1 0.1 0 0 - Glenmarie Golf Country Club 0.1 0.1 0 0 - Leisure Holidays Bhd 0.1 0.1 0 0 17 CONTRACT BALANCES Accounting Policy (a) Contract cost assets - Costs to fulfil a contract The Group recognises a contract cost that relates directly to a contract or to an anticipated contract as an asset when the cost generates or enhances resources of the Group which will be used in satisfying performance obligations in the future and it is expected to be recovered. These contract costs are initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates. An impairment loss is recognisedin the statement of profit or loss when the carrying amount of the contract cost exceeds the expected revenue less expected cost that will be incurred. Where the impairment condition no longer exists or has improved, the impairment loss is reversed to the extent that the carrying amount of the contract cost does not exceed the amount that would have been recognised had there been no impairment loss recognised previously. (b) Trade contract assets A trade contract asset is recognised when the Group’s and the Company’s rights to consideration are conditional on something other than the passage of time. A contract asset is subject to impairment in accordance to MFRS 9 ‘Financial Instruments’ (Note 45). Typically, the amount will be billed within 30 days of the supply of electricity for electricity customers and 60 to 180 days for satisfying the performance obligation for other revenue streams. An assessment of electricity supplied to customers between the date of the last meter reading and the financial year end of the Group and of the Company (unread and unbilled) was made and it is recognised as trade contract assets. Payment is expected within 30 days from the billing date for all trade receivables. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual | [
249,
250
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Company’s rights to consideration are conditional on something other than the passage of time. A contract asset is subject to impairment in accordance to MFRS 9 ‘Financial Instruments’ (Note 45). Typically, the amount will be billed within 30 days of the supply of electricity for electricity customers and 60 to 180 days for satisfying the performance obligation for other revenue streams. An assessment of electricity supplied to customers between the date of the last meter reading and the financial year end of the Group and of the Company (unread and unbilled) was made and it is recognised as trade contract assets. Payment is expected within 30 days from the billing date for all trade receivables. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report2023 248 Accounting Policy (continued) (c) Trade contract liabilities A trade contract liability represents the obligation of the Group and of the Company to transfer goods or services to a customer for which consideration has been received (or the amount is due) from the customers. Trade contract liabilities primarily relate to contributions paid by electricity customers for the construction of electricity network assets. The customers’ contributions are expected to be recognised as revenue over a period of 20 years, being the estimated average useful life of the electricity network assets used to connect the customers to the electricity supply. Other trade contract liabilities within the Group are relating to students fees. All other trade contract liabilities are expected to be recognised as revenue over the next 12 months. (d) Non-trade contract assets and liabilities Non-trade contract balances are pertaining to insurance and reinsurance contracts which are recognised in accordance to MFRS 4 ‘Insurance Contracts’. These balances have been classified as receivables (Note 21) and payables (Note 23) respectively as at 1 January 2023 upon adoption of MFRS 17. 17 CONTRACT BALANCES (CONTINUED) The Group and the Company have | [
250
] | [
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electricity network assets. The customers’ contributions are expected to be recognised as revenue over a period of 20 years, being the estimated average useful life of the electricity network assets used to connect the customers to the electricity supply. Other trade contract liabilities within the Group are relating to students fees. All other trade contract liabilities are expected to be recognised as revenue over the next 12 months. (d) Non-trade contract assets and liabilities Non-trade contract balances are pertaining to insurance and reinsurance contracts which are recognised in accordance to MFRS 4 ‘Insurance Contracts’. These balances have been classified as receivables (Note 21) and payables (Note 23) respectively as at 1 January 2023 upon adoption of MFRS 17. 17 CONTRACT BALANCES (CONTINUED) The Group and the Company have recognisedthe following assets and liabilities related to contracts with customers: Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Contract cost assets - Current 99.5 165.5 0 0 - Non-current 4.7 1.3 0 0 Contract assets - Trade (a) 4,446.8 3,586.0 4,226.9 3,430.0 - Non-trade 0 239.9 0 0 4,446.8 3,825.9 4,226.9 3,430.0 Contract liabilities - Current trade 338.6 320.0 244.9 237.1 - Non-current trade 5,449.7 4,783.1 4,651.3 4,039.7 (b) 5,788.3 5,103.1 4,896.2 4,276.8 - Current non-trade 0 253.4 0 0 5,788.3 5,356.5 4,896.2 4,276.8 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 249 17 CONTRACT BALANCES (CONTINUED) The Group and the Company have recognised the following assets and liabilities related to contracts with customers: (continued) Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (a) Trade contract assets (i) As at the beginning of the financial year 3,586.0 3,169.7 3,430.0 2,982.0 Performance obligations completed 4,647.0 3,853.7 4,265.1 3,464.4 Transfer to receivables (3,738.0) (3,400.4) (3,430.0) (2,982.0) Less: Loss allowances (48.2) (37.0) (38.2) (34.4) As at the end of the | [
250,
251
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0 0 4,446.8 3,825.9 4,226.9 3,430.0 Contract liabilities - Current trade 338.6 320.0 244.9 237.1 - Non-current trade 5,449.7 4,783.1 4,651.3 4,039.7 (b) 5,788.3 5,103.1 4,896.2 4,276.8 - Current non-trade 0 253.4 0 0 5,788.3 5,356.5 4,896.2 4,276.8 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 249 17 CONTRACT BALANCES (CONTINUED) The Group and the Company have recognised the following assets and liabilities related to contracts with customers: (continued) Group Company Note 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million (a) Trade contract assets (i) As at the beginning of the financial year 3,586.0 3,169.7 3,430.0 2,982.0 Performance obligations completed 4,647.0 3,853.7 4,265.1 3,464.4 Transfer to receivables (3,738.0) (3,400.4) (3,430.0) (2,982.0) Less: Loss allowances (48.2) (37.0) (38.2) (34.4) As at the end of the financialyear 4,446.8 3,586.0 4,226.9 3,430.0 (b) Trade contract liabilities (i)(ii)(iii) As at the beginning of the financial year 5,103.1 4,696.8 4,276.8 3,873.5 Received during the financial year 1,121.8 828.7 852.8 632.6 Release to statement of profit or loss: - Customers’ contribution (286.1) (276.3) (233.4) (229.3) - Deferred income (150.5) (146.1) 0 0 As at the end of the financial year 5,788.3 5,103.1 4,896.2 4,276.8 (i) Significant changes in trade contract assets and liabilities Trade contract assets have increased as the Group and the Company have provided more services ahead of the agreed payment schedules for fixed-price contracts. The Group and the Company also recognised a loss allowance for trade contract assets. Trade contract liabilities have increased for the Group and the Company due to larger prepayments or contributions received from customers. (ii) Revenue recognised in relation to trade contract liabilities The following table shows how much of the revenue recognised in the current financial year relates to carried-forward trade contract liabilities and how much relates to performance obligations that were satisfied in a | [
251
] | [
-0.030517578125,
0.0269775390625,
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- Deferred income (150.5) (146.1) 0 0 As at the end of the financial year 5,788.3 5,103.1 4,896.2 4,276.8 (i) Significant changes in trade contract assets and liabilities Trade contract assets have increased as the Group and the Company have provided more services ahead of the agreed payment schedules for fixed-price contracts. The Group and the Company also recognised a loss allowance for trade contract assets. Trade contract liabilities have increased for the Group and the Company due to larger prepayments or contributions received from customers. (ii) Revenue recognised in relation to trade contract liabilities The following table shows how much of the revenue recognised in the current financial year relates to carried-forward trade contract liabilities and how much relates to performance obligations that were satisfied in a priorfinancial year: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Revenue recognised, included in the trade contract liabilities balances in relation to preceding year (234.6) (219.1) (218.4) (218.3) Revenue recognised, included in the trade contract liabilities balances in relation to current year (202.0) (203.3) (15.0) (11.0) (436.6) (422.4) (233.4) (229.3) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 250 17 CONTRACT BALANCES (CONTINUED) (iii) Unsatisfied performance obligations in long term contracts The following table shows unsatisfied performance obligations resulting from long term contracts: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Aggregate amount of the transaction price allocated to contracts that are partially or fully unsatisfied 5,788.3 5,103.1 4,896.2 4,276.8 Management expects 5.0% (2022: 5.5%) of the transaction price allocated to the unsatisfied contracts will be recognised as revenue during the next financial year. The remaining 95.0% (2022: 94.5%) will be recognised from financial years 2025 to 2043. In respect of the supply of electricity, | [
251,
252
] | [
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balances in relation to current year (202.0) (203.3) (15.0) (11.0) (436.6) (422.4) (233.4) (229.3) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 250 17 CONTRACT BALANCES (CONTINUED) (iii) Unsatisfied performance obligations in long term contracts The following table shows unsatisfied performance obligations resulting from long term contracts: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Aggregate amount of the transaction price allocated to contracts that are partially or fully unsatisfied 5,788.3 5,103.1 4,896.2 4,276.8 Management expects 5.0% (2022: 5.5%) of the transaction price allocated to the unsatisfied contracts will be recognised as revenue during the next financial year. The remaining 95.0% (2022: 94.5%) will be recognised from financial years 2025 to 2043. In respect of the supply of electricity, theGroup and the Company applied the practical expedient to not disclose information related to the transaction price allocated to the remaining performance obligations, on the basis that revenue is recognised from the satisfaction of the performance obligations upon the consumption of electricity by the customers. All contracts for period of one year or less are billed based on services provided. The transaction price allocated to these unsatisfied contracts is not disclosed. 18 FINANCIAL ASSETS AT FVTPL Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Financial assets at FVTPL 1,650.0 8,196.6 1,369.4 6,276.0 Current 1,614.1 8,141.0 1,336.0 6,222.9 Non-current 35.9 55.6 33.4 53.1 1,650.0 8,196.6 1,369.4 6,276.0 Financial assets at FVTPL mainly represent investments in unit trusts and students’ loans. Credit risks relating to financial assets at FVTPL are disclosed in Note 45(b) to the financial statements. Accounting Policy Financial assets at FVTPL are financial instruments and the accounting policy is disclosed in Note 45. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL | [
252,
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