ECONOMIC PROFIT AND LOSS STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2014
Economic profit or loss is an amount earned for a period by a business after deducting the operating expenses and a charge of opportunity cost of capital employed. The economic profit and loss statement set out in Table 1 is disclosed on a voluntary basis.
The assumptions used in computing the economic profit/loss are set out below:
(i) The cost of equity is calculated based on the following formula:
Cost of equity = (Beta x Market Risk Premium) + Risk Free Rate
(ii) The Beta used in the calculation is the 5 years adjusted Bloomberg Rate:
Quarterly Period Beta
4th Quarter 2013=1.41
2nd Quarter 2013=1.40
4th Quarter 2014=1.26
(iii) The risk free rate is the rate of return of a 10-year Malaysian Government Securities at the closing of the reporting period:
Risk Free Rate
At 31 December 2013=3.77%
At 30 June 2013=3.70%
At 31 December 2014=3.92%
(iv) The market risk premium is assumed at 6.07%, which represents the market return in excess of the return earned on risk free asset.
TABLE 1 | 31 Dec 2014 12 months (Audited) RM000 |
| 31 Dec 2013 12 months (Audited) RM000 |
Group profit after taxation | 1,015,029 |
| 597,568 |
Less: Cost of capital employed | (396,698) |
| (216,183) |
Economic profit | 618,331 |
| 381,385 |
This announcement is dated 16 February 2015.