LTAT clarifies losses in A-G’s Report

PETALING JAYA: The negative reserve highlighted in the Auditor-General’s Report for 2022 is only one facet, says the Armed Forces Fund Board (LTAT).

It said that its combined reserves are made up of three components which reflect the board’s stability in combination; retained earnings, reserve fund and the OCI reserve

The LTAT then said that the reserve fund remains constant and is set at 2% of the contributors’ account balance, providing a foundation for financial security.

“The OCI reserve comprises the accumulated unrealised gains/losses of assets tagged as fair value through other comprehensive income, reflecting market fluctuations and asset performance,” the LTAT said in a statement on Friday (March 8).

“Despite the OCI reserve showing a deficit, the combined reserve at the end of Financial Year 2022 (FY22) amounts to a net positive balance of RM160mil, representing an improvement from the preceding year,” it added.

The LTAT then said that the unaudited post-dividend combined reserve for Financial Year 2023 will see further improvement, reflecting LTAT’s commitment to its transformation journey towards strengthening its financial position.

“With regards to the issue of non-cash profit contributing to our income for FY22, the exclusion of it still maintains a position of solvency above the threshold required within our dividend policy,” it added.

The board said that as a retirement fund the dividends when declared are non-cash in nature and are credited to members accounts, adding that the LTAT’s liquidity position remains stable, ensuring it can fulfil all commitments as they arise.

“LTAT is committed to transparency, accountability and the wellbeing of the contributors and beneficiaries and will continue to uphold the highest standards of governance and financial management to safeguard the interests of all stakeholders,” the board added.

The Public Accounts Committee (PAC) on Friday said it will call-up LTAT’s former chairman, former chief executive officer and former senior strategic officer to explain the losses.

The AG’s report found that LTAT’s reserves were in the negative with RM376mil in 2020 and RM258mil in 2021. In 2022, the figure was RM338mil.