KUALA LUMPUR: KTM Distribution Sdn Bhd (KTMD), the express distribution arm of Keretapi Tanah Melayu Bhd, has been urged to implement a more aggressive business strategy to improve its revenue and not be fully dependent on the main customers.
The 2017 Auditor-General’s Report Series 1 on the Management of Government Companies and Federal Government Agencies also recommended that the company carry out more effective promotion by doing an effectiveness study on its promotions.
The report, which was tabled in Parliament today, noted KTMD had implemented courier service activities in line with the objective of its establishment, which was to provide such services to meet the needs of the overseas courier service industry.
Nonetheless, KTMD was still found to be inefficient and ineffective in managing delivery services such as in terms of marketing strategy, delivery method and revenue collection policy.
“There is room for improvement to KTMD’s main income and reduce losses incurred every year,” the report said.
KTMD’s overall financial position was stable because it had adequate resources, it said.
Moreover, the company had good liquidity, which allowed it to meet its short-term liabilities at a 3:1 ratio in 2016, and had a positive cash and cash equivalents balance of RM4.81 million at the end of that year.
However, KTMD had been posting pre-tax losses for three consecutive years.
Hence, the report recommended for KTMD to implement good governance practices, especially in the company’s standard operating procedures (SOPs) that should be reviewed and the preparation of SOPs for finance, marketing and sales.
In addition, KTMD needs to improve its debt management through more effective enforcement and monitoring to reduce arrears.
The report suggested that the company beef up its credit unit and reconsider the credit period given to customers. – Bernama
Source: The Sun Daily