Contents 1 ANNUAL REPORT 2012 ANNUAL REPORT KERETAPI TANAH MELAYU BERHAD

03 Corporate Information 22 Audit Committee Report 04 Board of Directors 27 Chairman’s Statement Rationale 10 Statement On Corporate Governance 34 Review of Operation 17 Statement On Internal Control 40 Corporate Calendar 19 Statement On Risk Management 45 Financial Statements

KTMB has provided new Electric Train Services (ETS) and Six Car Set (SCS) services using modern technology and continuous improvement. It is focused on providing comfort to the passenger.

KTMB’s Mission

Be the preferred land transportation system by providing safe, efficient and reliable integrated rail services for people and goods.

We will: • Be competitive and responsive to market needs. • Achieve our goals through a highly trained and motivated workforce using modern technology and process innovation. • Provide reasonable profit and longterm growth to shareholders. Corporate Information

Chairman Registered Office Y.B. Dato’ Sri Ir. Mohd Zin bin Mohamed Ibu Pejabat Korporat KTM Berhad Jalan Sultan Hishamuddin 50621 Kuala Lumpur President Malaysia Datuk Elias bin Kadir Tel : +603 2263 1111 www.ktmb.com.my Directors Pn. Norazura binti Tadzim Auditors Pn. Ruhaizah binti Mohamed Rashid Deloitte KassimChan En. Selvarajoo a/l Manikam Dato’ Sri Zakaria bin Hj. Bahari Tn. Hj. Rosli bin Abdullah En. Harun bin Hj. Johari Datuk Kamaruzaman bin Hj. Mohd Noor Sr. Ahmad Zainuddin bin Hj. Jamaluddin KERETAPI TANAH MELAYU BERHAD 4 ANNUAL REPORT 2012 Board OfDirectors Chairman oftheBoard Y.B. DATO’ SRIIR.MOHD ZINBINMOHAMED KTMB andhasneverbeencharged foranyoffence. relationship withanydirector. Hehasnoconflictofinterest with Board meetingsheldduringthefinancialyear. Hehasnofamily the portfolioofMinisterWorks. Heattended14outofthe15 Y.B. Dato’SriIr. MohdZinwasaformer CabinetMinisterholding the Board asitsNon-ExecutiveChairmanon1October2009. Y.B. Dato’SriIr. MohdZinbinMohamed, wasappointedto any offence. conflict ofinterest withKTMB andhasneverbeenchargedfor year. Hehas nofamilyrelationship withanydirector. Hehasno attended 10 out 10 Board meetings held during the financial Multimodal Freight Sdn.Bhd. Sincehisappointment,hehas 2 May2012.HewasformerlytheChiefExecutiveOfficer of Y.Bhg. DatukEliasKadir, wasappointedtotheBoard on President Y.BHG. DATUK ELIASBINKADIR never beenchargedforanyoffence. any director. Shehasnoconflictofinterest withKTMBandhas during thefinancialyear. Shehasnofamily relationship with of Finance.Sheattended13outthe15Board meetingsheld Finance IncorporatedandPrivatisationSectionoftheMinistry the PrincipalAssistantSecretary attheInvestment,Ministerof on 1July2011.Y. Brs.PuanNorazura’s present positionis Y.Brs. PuanNorazurabintiTadzim, wasappointedtotheBoard Non-Independent Non-ExecutiveDirector Y.BRS. PUANNORAZURABINTITADZIM

Board OfDirectors

2012 ANNUAL REPORT REPORT ANNUAL

5 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 6 ANNUAL REPORT 2012 with KTMBandhasneverbeenchargedforanyoffence. relationship withanydirector. Shehasnoconflictofinterest meetings heldduringthefinancialyear. Shehasnofamily Ministry ofTransport. Sheattended12outofthe15Board Ruhaizah istheDeputySecretary General(Planning)atthe to theBoard on9November 2011.Atpresent, Y. Brs.Puan Y. Brs.PuanRuhaizahbintiMohamedRashid,wasappointed Non-Independent Non-ExecutiveDirector Y.BRS. PUANRUHAIZAHBINTIMOHAMEDRASHID KTMB andhasneverbeenchargedforanyoffence. relationship withanydirector. Hehasnoconflictofinterest with Board meetingsheldduring thefinancialyear. Hehasnofamily the EconomicPlanningUnit.Heattended13outof15 currently aDirector at theEconomicCouncilSecretariat of Board on 16 December 2009. Y. Brs. Encik Selvarajoo is Y.Brs. EncikSelvarajooa/lManikam,wasappointedtothe Non-Independent Non-ExecutiveDirector Y.BRS. ENCIKSELVARAJOO A/LMANIKAM with KTMBandhasneverbeenchargedforanyoffence. family relationship withany director. Hehasnoconflictofinterest 15 Board meetingsheldduring thefinancialyear. Hehasno General oftheMinistryTransport. Heattended11outofthe Board on25February2010. HewasformerlytheSecretary Y.Bhg. Dato’SriZakariabinHj.Bahari,wasappointedtothe Independent Non-ExecutiveDirector Y.BHG. DATO’ SRIZAKARIABINHJ.BAHARI charged foranyoffence. He hasnoconflictofinterest withKTMBandhasneverbeen financial year. Hehasnofamily relationship withanydirector. He attended14outofthe15Board meetingsheldduringthe Officer/Registrar ofthe Malaysian InstituteofAccountants. Board on20July2010.He wasformerlytheChiefExecutive Y.Brs. Tuan Haji Rosli bin Abdullah, was appointed to the Independent Non-ExecutiveDirector Y.BRS. TUANHAJIROSLIBINABDULLAH

Board OfDirectors

2012 ANNUAL REPORT REPORT ANNUAL

7 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 8 ANNUAL REPORT 2012 KTMB andhasneverbeenchargedforanyoffence. relationship withanydirector. Hehasnoconflictofinterest with meetings heldduringthefinancialyear. Hehasnofamily Network (M)Sdn.Bhd.Heattended11outofthe15Board Malaysian AgrifoodCorporationBerhadandColdChain the ManagingDirector/Group ChiefExecutiveOfficer atthe Board on20July2010. At present, Y. Brs.EncikHarunis Y.Brs. EncikHarunbinHj.Johari,wasappointedtothe Independent Non-ExecutiveDirector Y.BRS. ENCIKHARUNBINHJ.JOHARI Y.BHG. DATUK KAMARUZAMANBINHJ.MOHDNOOR any offence. conflict ofinterest withKTMB andhasneverbeenchargedfor year. Hehas no familyrelationship withanydirector. Hehasno He attendedall15Board meetingsheldduringthefinancial Deputy Secretary General(Planning) attheMinistryofTransport. to theBoard on12September 2011.Hewasformerlythe Y.Bhg. DatukKamaruzamanbinHj.MohdNoor, wasappointed Independent Non-ExecutiveDirector charged foranyoffence. He hasnoconflictofinterest withKTMBandhasneverbeen financial year. Hehasnofamily relationship withanydirector. he hasattended9outof10Board meetingsheldduringthe Director atDKBinajaya Sdn. Bhd.Sincehisappointment, to theBoard on27April2012. HewasformerlyanExecutive Y.Brs. Sr. AhmadZainuddinbinHj.Jamaluddin,wasappointed Independent Non-ExecutiveDirector Y.BRS. SR.AHMADZAINUDDINBINHJ.JAMALUDDIN

Board OfDirectors

2012 ANNUAL REPORT REPORT ANNUAL

9 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 10 ANNUAL REPORT 2012 A. Performance. Effectiveness setbythePutrajayaCommitteeonGLCHigh 2012 (“Code”)andthe‘Green Book’onEnhancing Board by the Malaysian Code on Corporate Governance governed Board adoptsandappliestheprinciplesbestpracticesas standards throughout ofcorporategovernance theGroup. The shareholders’ valuethrough promoting andpractisinghigh in discharging its responsibilities, protecting and enhancing The Board recognizes theimportanceofcorporategovernance Statement OnCorporateGovernance

(i) DIRECTORS with theprinciplesofCode:- The following statements set out the Group’s compliance (ii)

this AnnualReport onpages4-9. profiles of the membersofBoard are setoutin interests of the shareholders in the Company. The that thecurrent Board composition fairlyreflects the Group’s businessoperations.TheBoard issatisfied in experience,expertiseand perspectives tothe various backgrounds, bringingin-depthanddiversity The Gr The Boar The Boar Executive Directors. Executive Directors and5(five)IndependentNon- Director/President, three (3)Non-Independent Non- one (1)Non-ExecutiveChairman,Managing The curr Boar monitoring theachievementofthesegoals. direction, establishinggoals formanagementand oftheGroup,governance includingitsstrategic the Board isresponsible fortheoverallcorporate of long-termshareholders’ value.To fulfillthis role, and operations,ultimately, theenhancement the Board inthestewardship oftheGroup’s direction d Balance oup recognises theimportant role playedby ent Board hasten(10)memberscomprising d comprisesprofessionals drawnfrom d (iii) ogether withtheManagingDirector/President who

The Dir Supply ofInformation T bring insightintothesematters. matters beingdeliberated,as they are abletohelp management tobrieftheBoard from timetoon expense. Additionally, theBoard invitesthesenior furtherance oftheirduties, at theCompany’s professional adviceasandwhennecessaryin The Boar by therelevant regulatory authorities,ifany. on new regulations, guidelines or directives issued The Dir are properly minutedandfiledbytheSecretary. proceedings and resolution passed at eachmeeting on issues to be raised at the Board meetings. All to provide Directors withsufficient timetodeliberate distributed totheDirectors priortoBoard meetings The noticesofmeetingsandboar rules andguidelines,ifany. non-compliances with legal, regulatory and statutory the Group’s complianceobligationsandhighlights of theBoard, theSecretary appraisestheBoard on and regulations are compliedwith.Ateachmeeting procedures are followedandthatapplicablerules who isresponsible forensuring thatBoard meeting access totheadviceandservicesofSecretary access to all information within the Group and direct individual capacity, havefullandunrestricted development ofbestpracticesfortheGroup. standards andthe ofcorporategovernance in allitsactivities.TheBoard supportsthehighest committed tobusinessintegrityandprofessionalism the Board isconstitutedofindividualswhoare has in-depthknowledgeoftheGroup’s business, ectors are alsoregularly updatedandadvised ectors whetherasfullBoard orintheir d alsoavailsitselfofindependent d papersare (v) (iv)

129(6) oftheCompaniesAct, 1965. appointment annually in accordance with section of ageare required tosubmitthemselvesforre- appointments. Directors over seventy (70) years the nextAnnualGeneralMeetingheldfollowingtheir year are subjecttore-election byshareholders at The Directors who are appointed during the financial retiring Directors canoffer themselvesforre-election. retire from office, atleastonceinthree (3)years.The Association, one-third (1/3)oftheDirectors, shall out are properly documentedandfiled. ensure thatallassessments andevaluationscarried The NominationandRemunerationCommitteewill each individual Director, as well as the President. a whole,itscommitteesandthecontributionof regulatory obligationsare met. appointments are properly made,andthatlegal by theBoard and the Secretary willensure thatall New appointeeswillbeconsidered andevaluated recommending theappointment ofnewDirectors. Remuneration Committeetheresponsibility of discharge itsdutieseffectively. and core competencies required for the Board to of theBoard comprisestherequired mixofskills and RuhaizahbintiMohamed Rashidwillretire by Selvarajoo a/lManikam,Norazura bintiT For theforthcomingAnnual GeneralMeeting, In accor Re-election ofDir annually r The NominationandRemunerationCommitteealso The Boar The Boar AppointmentstotheBoar dance withtheCompany’s Articlesof eviews theeffectiveness of theBoard as d believesthatthecurrent composition d delegatedtotheNominationand ectors d adzim (vi) ectors’ Training (vii)

* Note:- **** *** ** The Boar Meetings offer themforre-election. rotation pursuanttoArticle104andbeingeligible, n aeabniMh yd**0/2 Dr. AminuddinbinAdnan**** Pn. JamelabintiMohdSyed*** Jamaluddin ** Sr. AhmadZainuddin binHj. En. HarunbinHj.Johari Tn. Hj.RoslibinAbdullah 11/15 Mohd Noor Datuk KamaruzamanbinHj. Dato’ SriZakariabinHj.Bahari En. Selvarajooa/lManikam Rashid Pn. RuhaizahbintiMohamed Pn. NorazurabintiTadzim Datuk EliasbinKadir* Mohamed Dato’ SriIr. Mohd Zinbin record isasfollows:- held duringthefinancialyearandattendance and whenrequired. There were fifteen (15)meetings more effectively. to enablethemdischarge theirresponsibilities training program tofurtherenhancetheirknowledge The Dir Dir

Statement OnCorporateGovernance ectors are encouragedtoattendanyrelevant Resigned on30April2012 Resigned on24February2012 Appointed on27April2012 Appointed on2May2012 d meetsregularly onamonthlybasisoras Meetings Attended 11/15 14/15 15/15 13/15 12/15 13/15 10/10 14/15

9/10

5/5

2012 ANNUAL REPORT REPORT ANNUAL

11 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 12 ANNUAL REPORT 2012 B. C.

DIRECTORS’ REMUNERA (ii) (i) BOARD COMMITTEES

The set outinthisAnnualReportonpages95-96. the Companyforfinancialyearunder review are The detailsofther Shar The MinisterofFinanceIncorporatedastheSpecial objective oftheCode. components andbandsissufficient tomeetthe disclosure ofremuneration byappropriate and theNon-ExecutiveDirectors. remuneration oftheManagingDirector/President Formerly Boar pages 22-26. under r The AuditCommitteeReportforthefinancialyear Audit Committee its responsibilities:- terms ofreference, toassisttheBoard indischarging Committees, which operate within clearly defined responsibilitiesgovernance to the following Board The Boar (a) from 11September2012. the committeeisnowcalledBPCwitheffect

eholder oftheCompanydetermines Board of Directors is of the view that the d Procurement Committee(“BPC”) members, madeupofboth independent The BPCcomprisesatleast thr Composition eview issetoutinthisAnnualReporton known as Tender Committee ‘A’ (“TCA”), d ofDirectors delegates certainofits emuneration oftheDirectors of TION ee (3) (b)

• approve • approve • • •  • recommend • The r Responsibilities members oftheBPC. The Boar recommend • follows:- independent non-executiveDirectors. non-executive Directors andnon- lower; million toRM100whichever is the originalcontractsumabove RM20 (“VO”) upto10%orRM2 million of approve RM50 million; exer RM100 million; exer approve RM5 million; approve to RM300million; r recommend RM300 million; open tenderaboveRM100millionupto to RM300million; dir estricted tenderaboveRM50millionup esponsibilities oftheBPCshallbeas ect negotiationaboveRM500,000up cises forvalueofRM5millionto cises forvalueofRM20millionto d shallappointtheChairmanand

r r estricted open emergency estricted open

to to to

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(iii)

(c) (a) (“NRC”) Nomination andRemunerationCommittee (b)

Ther Meetings n oauabniTdi 7/9 Jamaluddin * Sr. AhmadZainuddin binHj. Pn. NorazurabintiTadzim Mohd Noor(Chairman) Datuk KamaruzamanbinHj. as follows:- financial yearandtheattendance record is approve • * Appointedon11September2012 Note:- The Responsibilities The NRCshallcompriseofatleastthr review • follows:- majority ofwhichare independent. Directors, exclusivelynon-executiveandthe Composition works andserviceswithin4-6month. whichever islower;and sum or RM2millionoftheoriginalcontract reward structure and fringe benefits; including the terms ofemployment, elements of the remuneration packages and recommend to the Board on; (i) all for allDir e were nine(9)meetingsheld duringthe responsibilities of the NRC shall be as above RM5 million to RM50 million

individual

ectors includingtheChairman extension

r emuneration

of

time Meetings Attended

for

4/4 packages 9/9

supply ee (3) ,

Statement OnCorporateGovernance proactively • coordinates • recommend • endorse • ensure • oversee • review • Company’ Dir and experiencestoensur senior management(allstaf fr recommendations totheBoard; human capital and make appropriate companies; including theBoard ofthesubsidiary with theCompany’s requirements; to dososimilarly; and makerecommendation totheBoard Heads ofDepartmentlevelandabove) package; decisions inrespect oftheirremuneration potential appointeestotheBoar boar payments forExecutiveDirectors; and (ii)annualincrements andex-gratia committees; retires atleastoncein3years; of theBoard retires; or(ii)everyDirector (i) ateveryAnnualGeneralMeeting,1/3 Association are adhered to,including: term limitswithintheArticlesof om thedeliberationsandvotingon ectors andthecollectiveBoard d sizeandensure thatany director

annually that

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2012 ANNUAL REPORT REPORT ANNUAL

13 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 14 ANNUAL REPORT 2012 (c)

review • following:- The Authority review • review • review • review • review • Board; and appropriate recommendations tothe bonus orsalaryr Board. appropriate recommendations tothe within theCompanyandmake the totalnumberofappr voluntary Board; the appropriate recommendations to the recommendations totheBoard; Presidents andmakethe appropriate the President andall Senior Vice resignation (optionalretirement) of pr recommendations totheBoard; Non-Executives andmakeappropriate of employmentforExecutivesand policies includingtermsandconditions compensation structur recommendations totheBoard; (main chart)andmakeappropriate organisation structur NRC shall have the authority to do the omotion, salaryincrement and

any any any any any any separation exercise and make

pr pr

pr pr

pr oposal oposal oposal oposal oposed pr oposed eview andmakethe

for e oftheCompany for for for

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E.

(iv) (i) SHAREHOLDERS

(d) Report onpages19-20. financial yearunderr The RiskManagementCommitteeReportforthe Risk ManagementCommittee The Gr Shar Dialogue betweenCompaniesand maintains awebsiteatwww.ktmb.com.my to quarterly performancereports. TheGroup also is disseminatedviatheGroup’s annual report and and corporatedevelopments. Suchinformation shareholders informedoftheGroup’s business

eholders oup recognizes theimportanceofkeeping n j ol i bulh5/5 Tn. Hj.RoslibinAbdullah Mohamed Rashid Pn. Ruhaizahbinti Bahari (Chairman) Dato’ SriZakariabinHj. as follows:- financial yearandtheattendance record is Ther Meetings access • • obtain • Company Secr access duties; and and expertisenecessarytoperformits pr e were five(5)meetings held duringthe operties andpersonnel;

independent to to eview issetoutinthisAnnual

advice the etary.

full

and

pr company ofessional

services Meetings Attended

5/5 5/5 r

ecords, advice of

the

 F.

(ii) (i) ACCOUNT

information relating totheGroup. enable easyandconvenientaccesstoup-todate (21) daysbefore themeeting. Shar Annual GeneralMeeting(“AGM”) (d) (b) (a) follows:- have takenthenecessarystepsandactionsas In preparing thefinancial statements,theDirectors enable detectionoffraudandotherirregularities. Group andtakingreasonable stepstoprevent and accounting records, safeguarding theassetsof Directors are alsoresponsible forkeepingproper the Group’s financialpositionandprospects. The as topresent abalanced andfairassessmentof approved accountingstandards inMalaysiaso with theCompaniesAct1965andapplicable financial statements are prepared in accordance (c) It istheBoar Financial Reporting

ABILITY ANDAUDIT eholders are notifiedofthemeetingtwentyone business inthe foreseeable future. of theGroup onitsabilitytocontinuefurther enquiries andassessmentson the resources basis,havingmadereasonableconcern applying themconsistently; pr reasonable andprudent; making judgementsandestimatesthatar standar stating whetherapplicableaccounting selecting eparing thefinancialstatements onagoing d’s responsibility toensure that the ds havebeenfollowed; suitable accounting policies and e G.

(ii) (iii) and theCompany keepaccountingrecords thatdisclose The Directors are responsible forensuringthat the Group statements havebeenprepared basis. onagoingconcern standards havebeenfollowedandconfirmthatthefinancial also considerthatallapplicable approved accounting estimates thatare reasonable andprudent.TheDirectors and appliedthemconsistentlymadejudgments 2012, the Group hasused appropriate accounting policies statements forthefinancialyearended31December The Directors considerthat,inpreparing thefinancial then ended. flow oftheGroup andoftheCompanyforfinancialyear at theendoffinancialyear, andofthe results andcash view ofthestateaffairs of theGroup andoftheCompany statements foreachfinancialyearthatgiveatrueandfair The Directors are required toprepare thefinancial RESPECT OFFINANCIALSTATEMENTS DIRECTORS’ RESPONSIBILITYST

compliance withlawsandregulations. and efficientcontrols operations,internal and provides reasonable assessmentsofeffective controls,maintaining asystemofinternal which The Board hastheoverallresponsibility for other related regulatory requirements. of compliancewiththeaccountingstandards and Board effectively totheAuditCommitteeinterms highlight mattersrequiring theattentionof are auditorsinturn ableto auditors. Theexternal authority tocommunicatedirectly withtheexternal Audit Committee,whichhasbeenaccorded the relationship auditorsthrough withtheexternal the The Boar Relationship withAuditors Inter nal Control Statement OnCorporateGovernance d hasestablishedatransparent

ATEMENT IN

2012 ANNUAL REPORT REPORT ANNUAL

15 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 16 ANNUAL REPORT 2012 Reporting Standards inMalaysia. the provisions oftheCompaniesAct1965andFinancial them toensure thatthefinancialstatementscomplywith of theGroup andoftheCompanywhichenable reasonable accuracyatanytimeofthefinancialposition Statement OnCorporateGovernance adequately andeffectively, inallmaterialaspects. controlrisk managementandinternal systemisoperating providing assurancetotheBoard thattheCompany’s appropriate and timely corrective actions as needed, and monitoring andreportingcontrol, ofrisksandinternal taking Management assiststheBoar oversight responsibilities: controllevel thathaveprimaryriskmanagementandinternal The Board hasdelegated itsrole tocommitteesattheBoard unforeseeable circumstances. against materialmisstatementorlosstheoccurrence of that the systemscould only provide reasonable assurance achieve businessobjectives.Inaddition,itshouldbenoted designed tomanageratherthaneliminatetheriskfailure to and theCompany’s assets.However, suchsystemsare in ordergovernance to safeguard shareholders’ investments control systemthatare essentialfacetsofeffective corporate integrity andeffectiveness of riskmanagementandtheinternal The Board isresponsible foroverseeingtheadequacy, Board Responsibility to thedateofthisAnnualReport. of theCompanyduringfinancialyearunder review, andup Control, which outlinesthe nature controls and scope of internal The Board is pleased to present the Statement on Internal controlinternal system. should establishasoundriskmanagementframeworkand March 2012setsoutasaprinciplethattheBoard ofa company issuedin The MalaysianCodeonCorporateGovernance ControlStatement OnInternal Board • Board • over riskmanagement. internal controlinternal processes. ef fectiveness of the governance, risk managementand fectiveness ofthegovernance,

Risk Audit

Management

Committee

d inidentifying,evaluating, Committee –

with

oversight

–

with

oversight over

the

activity. Thekeyelementsinclude: structure fortheproper conductoftheGroup’s business The Board iscommittedtomaintainastrongcontrol internal Other KeyElementsoftheControl Process remedial measures andcorrective actionstobetaken. then reported upwards totheBoard, where appropriate, for controlsinternal processes withintheGroup. Majorfindingsare of theeffectivenessriskmanagementand ofthe governance, auditorsalsoperformregularInternal reviews andappraisals to thestandards setby recognised professional bodies. effectively. auditorscarryouttheirfunctionsaccording Internal assurance totheBoardcontrols that theinternal are operating the relevant qualifications andis responsible forproviding AuditDepartmenthas Committee. TheHeadofInternal AuditDepartmentreportsThe Internal directly totheAudit the Company’s control environment to the Audit Committee. of determiningthequality, adequacyandeffectiveness of control system,theBoard hasextendedtheresponsibilities In viewoftheimportancemaintainingasoundinternal ControlInternal shareholder’s value. is vitalforbusinesssustainability and theenhancement of The Board strongly believesthatprudentriskmanagement business environment andclearlycommunicatedtoalllevels. Company. Theframeworkisresponsive tochangesinthe embedded intotheculture, processes andstructures ofthe to ensure theriskmanagementandcontrol framework is control,internal theBoard andManagementare responsible In order toachieveasoundsystemofriskmanagementand Risk Management An • r a hierarchical structure ofreporting andaccountability; esponsibility anddelegationof authoritytogetherwith

organisational

structur e

with

defined

lines

of

2012 ANNUAL REPORT REPORT ANNUAL

17 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI Statement On Internal Control Statement On Risk Management 19 18 ANNUAL REPORT 2012 ANNUAL REPORT KERETAPI TANAH MELAYU BERHAD

• Internal policies and procedures that are regularly updated to reflect changing risks or resolve operational A. Introduction has the power to retain outside counsel, risk management

ANNUAL REPORT 2012 deficiencies including clearly defined limits of authority; consultants or other experts and will receive adequate • A detailed budget process which requires all business The Board believes that an effective risk management funding from the Company to engage such advisors. The units to prepare budget and business plan on an annual framework is essential to the Company in its quest Committee is also empowered to delegate its authorities, basis; to achieve its corporate objectives, especially on the functions and tasks in carrying out risk management KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI • Review of key business variable and the monitoring enhancement of shareholders’ value in today’s rapidly activities. of the achievement of the Group’s performance on a changing market environment. quarterly basis by the Board and the Audit Committee; (ii) Committee Membership • Periodic examination of business process and system With this in mind, the Board has established a dedicated internal control by the Internal Audit Department which, Board Committee known as the Risk Management The RMC shall consist of three (3) or more members, regularly submits its reports to the Audit Committee; Committee (“RMC”) to develop and oversee the each of whom is determined by the Board. • Adequate insurance and physical safeguards on major implementation of an enterprise-wide risk management assets are in place to ensure assets of the Group are framework in the Company. Each member of the RMC should have experience sufficiently covered; in the identification, evaluation or control of risk. • A code of ethics for all employees which defines the At least one (1) member of the RMC should ethical standards and conduct at work; and B. Risk Management Committee (“RMC”) have significant railway operating or technology • Maintenance of proper accounting records, consistent experience. Additionally, as a qualification for application of appropriate accounting policies The Terms of Reference of the RMC are as set out below:- continued membership of the RMC, members of supported by reasonable and prudent judgments and the RMC are encouraged to participate in related estimates, and preparation of the financial statements (i) Purpose trainings as provided or approved by the Board. in accordance with the provisions of the Companies Act 1965, applicable approved accounting standards in The RMC shall assist the Board in: The Board shall appoint the Chairman of the RMC. Malaysia and other regulatory provisions. The Chairman shall be responsible for scheduling (a) assessing and providing oversight to and presiding over RMC meetings, preparing Conclusion management relating to the identification agendas and determining the information needs of and evaluation of major risks involved the RMC. The Chairman should expect to devote For the financial year under review, the Board is satisfied that in the Company’s business operations, significant time to the work of the RMC. the systems of risk management and internal control were technology and network operations, effective and have not resulted in any material loss, contingency finance and accounting, legal compliance, (iii) Committee Meetings or uncertainty. environmental impact, personnel policy, treasury, capital budgeting or any other The RMC shall meet on a regularly scheduled basis The Group internal control system does not apply to its areas that could create significant risks at least four (4) times per year, or more frequently as associated company and joint ventures, as the Board does to the Company’s results, reputation or circumstances dictate. not have any direct control over their operations. Nonetheless, capacity to serve customers; and the Company’s interests are served through the review of The RMC may request that any officer or other management accounts received. (b) reviewing and evaluating the Company’s employee of the Company or the Company’s outside actions to mitigate and manage risks. counsel or other advisor attend any meeting of the The Board and Management recognise that the development RMC or meet with any members of, or consultants of internal control system is an ongoing process and maintains In discharging its role, the RMC is empowered to investigate to, the RMC. an ongoing commitment to strengthen the existing internal any matter brought to its attention with access to all books, control environment of the Group. records, facilities and personnel of the Company. The RMC There were three (3) meetings held during the Statement On Risk Management 20

financial year and the attendance record is as such risks or exposures; (iii) and Company’s

ANNUAL REPORT 2012 follows:- underlying policies with respect to the risk assessment and risk management; Meetings Attended (e) consult from time to time with the Board KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI Datuk Kamaruzaman bin Hj. on issues relating to responsibilities of the 3/3 Mohd Noor (Chairman) Committee; Pn. Ruhaizah binti Mohamed 2/3 Rashid (f) conduct an annual self-evaluation of the Dr. Aminuddin bin Adnan * 1/1 performance of the RMC, including its effectiveness and compliance with its Terms En. Afzar bin Zakariya 2/3 of Reference;

Note:- (g) review and re-assess the adequacy of its * Resigned on 30 April 2012 Terms of Reference and amend as the RMC deems appropriate; and (iv) Key Responsibilities

(h) report regularly to the Board on RMC The following responsibilities are set forth as a guide findings, recommendations and any other with the understanding that the RMC may diverge matters the RMC deems appropriate or at as appropriate given the circumstances. The RMC the Board’s requests and maintain minutes is authorised to carry out these and such other or other records of RMC meetings and responsibilities assigned by the Board from time to activities. time and take any actions reasonably related to the mandate of the RMC. The RMC may delegate any of its responsibilities assigned by the Board.

To fulfil its purpose, the Committee shall:

(a) review and evaluate management’s identification of all major risks to the business and their relative weight;

(b) assess the adequacy of management’s risk assessment, its plans for risk control or mitigation and disclosure; Audit Committee Report

(c) review the Company’s disclosure of risks;

(d) review, assess and discuss with the Board: (i) any significant risks or exposures; (ii) the steps management has taken to minimise KERETAPI TANAH MELAYU BERHAD 22 ANNUAL REPORT 2012 During thefinancialyear2012,ACheldten(10)meetings. The ACcomprisesthedirectors listedbelow: COMPOSITION ANDATTENDANCE Committee onceeveryfive(5)years. The Board shallreview thetermofoffice ofthemembers Independent Non-ExecutiveDirector. is Independent. The Chairman of the Committee shall be an consist offive(5)Non-ExecutiveDirectors, amajorityofwhom The ACshallbeappointedbytheBoard ofDirectors andshall MEMBERSHIP December 2012. Committee (AC)Report for thefinancialperiodended 31 The Board ofDirectors ispleasedtopresent theAudit Audit CommitteeReport (Appointed on27April2012) Sr. AhmadZainuddinbinHj.Jamaluddin (Resigned on25February2012) Pn. HajjahJamelabintiMohdSyed Dato’ SriZakariabinHj.Bahari En. Selvarajooa/lManikam Pn. NorazurabintiTadzim Tn. Hj.RoslibinAbdullah Directors viii) 21 12 vi) 08 v) 17 iii) 19 i) i) 30 vii) 17 iv) 17 ii)

Sept Aug Jul June May April Feb Jan

2012

2012

2012 2012

2012 2012 2012 2012

–

–

–

–

– – 61st –

–

57th

58th 62nd

60th 59th Special Special

AC

AC

AC

AC AC AC

Meeting

Meeting AC

Meeting AC

Meeting Meeting Meeting

Meeting Meeting Designation Chairman Member Member Member Member Member Details ofthemembers’attendanceare asfollows: 1 TERMS OFREFERENCETHEAUDITCOMMITTEE

Directors Pn. HajjahJamelabintiMohdSyed Sr. AhmadZainuddin binHj.Jamaluddin Dato’ SriZakariabinHj.Bahari En. Selvarajooa/lManikam Pn. NorazurabintiTadzim Tn. Hj.RoslibinAbdullah x) x 29 ix) 1.4 1.3 1.2 1.1 Authority

18

Dec Nov Board. provide alinkbetweentheseAuditorsandthe Company’s Auditorsand andInternal External investigate anyactivitywithinits Terms ofReference. pr It isalsoauthorisedtoobtain suchindependent The Committeeshallhavedir necessary informationandexplanation. if required, toassistitinitsworkbyproviding all the Committeeandtobepresent atitsmeetings, All employeesar considers asrelevant toits activities. subsidiaries and to request for any information it investigate anyactivityoftheCompanyandits The Committeeshallhavetheauthorityto ofessional adviceitconsiders necessaryto

2012 2012

– –

Special 63rd

AC e directed toco-operatewith

AC

Meeting

Meeting ect accesstothe Number of meetings attended 10/10 10/10 8/10 8/10 1/2 7/7

2

1.5 2.3 2.2 2.1 Directors forthefollowing: practices, theCommitteeisresponsible totheBoard of policies, procedures, regulations andprudentbusiness operations incompliancewithstatutoryobligations, In Scopes andFunction 2.5 2.4 its role to ensure proper management of the business

(1) ormore members. several documentsinlikeformeachsignedbyone constituted. Any such resolution may consist of by ameetingoftheCommitteedulycalledand as validandeffectual as ifithadbeen passed not being less than three (3) members shall be the membersfortimebeingortheiralternates, A cir d) c) b) a) focusing on: and year-end financialstatementsoftheCompany, T their auditplan. commences, thenature and scopeoftheauditand T and anyquestionofresignation ordismissal. Auditor,appointment oftheExternal theauditfee T and Management’s response. T absence oftheManagement,if necessary. Auditormaywishtodiscuss,inthe the External from theinterimandfinalauditsanymatter T o review andreport totheBoard thequarterly o reviewAuditor, withtheExternal before theaudit o considerandrecommend totheBoard, the o review Auditor’s the External managementletter o discussproblems andreservations arising

Compliance withaccountingstandar The goingconcer Significant adjustmentsarisingfr Any other legalrequirements. practices; cular resolution inwritingsignedbyamajorityof changes in accounting policies and n assumption;and om theaudit; ds and 2.6 2.7

g) c) a) d) b) T f) e) laws, rules,directives andguidelines. including systemsforcompliance withapplicable systems andmanagementinformation systems, and theintegrityofCompany’s control internal T o review inrespectAuditDepartment: oftheInternal o review andreport totheBoard ontheadequacy

accordance withtheCompanypolicy;and increments Auditin ofmemberstheInternal function; on therecommendations audit of theinternal to ensure that the appropriate action is taken auditprocessthe internal andwhere necessary for resigning. member anopportunity to submithisreasons staff membersandprovide theresigning staff of Internal Auditstaff;of Internal the annualPerformanceManagementSystem work; it hasthenecessaryauthoritytocarryoutits Committee; endorsed bytheNominationandRemuneration Auditwhichistobesubsequently the Internal appointments andpromotions ofmembers appraise andrecommend recruitment, transfers, function’s structure andorganisation, as well Audit; the Internal beneficial fortheenhancementofmembers which in its opinion or external, be it internal Be informedofr Appraise andr Consider theadequacyofInter Appraise andr of memberstheInter Any appraisalorassessmentoftheperformance The inter r The adequacyofthescope,functionsand esources audit function and that of the internal nal auditprogrammed andresults of ecommend anytraining/course, ecommend theannualsalary esignations of Internal Audit esignations ofInternal Audit CommitteeReport nal Auditandtoreview

nal Audit

2012 ANNUAL REPORT REPORT ANNUAL

23 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 24 ANNUAL REPORT 2012 3

. To 2.8 2.12 2.11 2.10 2.9 3.4 3.3 3.1 Meetings 3.2

by theBoard. T investigations andManagement’s response. T arise withintheCompanyoritssubsidiaries. T adequate systemofriskmanagement. T applicable laws,rules,directives andguidelines. other Malaysian CodeofCorporateGovernance, the Companyinlinewithprinciplessetout disclosur shall haveasecondorcasting vote. Savethatwher vote andincaseofequality votestheChairman by amajorityofvotes,eachmemberhavingone Questions arisingatanymeetingshallbedecided meetings byinvitation. a representative Auditormayattend oftheExternal The HeadofFinance,theInter fixed bythemembersandunlesssoshallbetwo(2). business oftheAuditCommitteeMeetingmaybe The quorumnecessaryforthetransactionof Meetings shallbeheldatleastfour(4)timesayear or thatwhichonlytwo(2)members are competent meeting atwhichonlysucha quorumispresent, two membersformaquorum, theChairmanofa circulated tothemembers one(1)weekinadvance. Chairman’s discretion. NoticeofMeetingsshallbe although additionalmeetingsmaybecalledatthe o consider and examine other matters as defined o considerthemajorfindingsofinternal o consider any related party transactions that may o propose thatManagementhasinplacean

pr opose e infinancial results andannual reports of

to

the

Boar d

the

best

nal Auditand practices

on e ,

they review. analysis, appraisals,counseland informationontheactivities Management with independent Auditorsfurnish Internal risks andassuringproper process. governance Inthisregard, assessing risks,recommending measures tomitigatethose their responsibilities inestablishingcost-effective controls, Committee andManagementintheeffective dischargeof Auditis toassisttheBoard,The objectiveofInternal Audit Objective control, processes. andgovernance evaluate andimprove theeffectiveness ofriskmanagement, its objectivesbybringingasystematic,disciplinedapproach to organization’s operations.Ithelpsanorganization accomplish consulting activitydesignedtoaddvalueandimprove an auditingisanindependent,objectiveassuranceand Internal Nature Auditing. Internal Auditor’sof Internal Standards fortheProfessional Practice of function withintheorganisationconsistentwithTheInstitute To Audit establishthescopeandactivitiesofInternal Purpose INTERNAL AUDITCHARTER 3.6 3.5

the Committee. The CompanySecr to theattentionofDirectors. any mattertheauditorbelievesshouldbebrought convene ameetingoftheCommitteetoconsider auditor, the Chairman of the Audit Committee shall they considernecessary. Upontherequest ofthe The Exter casting vote. to voteonthequestionofissue,shallnothavea nal Auditormayrequest ameetingif etary shallbetheSecretary of 3. systemsencompassingthe: and governance effectiveness oftheorganisation’s riskmanagement,control Auditactivityshouldmonitorandevaluatethe The Internal 5. 4. 2. 1. Responsibility andAuthority 

engagement. every possible assistance to facilitate the progress of the that departmentsoractivitiesunderreview willprovide to theperformanceofengagements.Itisexpected personnel andphysicalproperties atanylocationrelevant a) therefore, doesnotinanywayrelieve managersinthe activities reviewed. Auditreview AnInternal andappraisal, has no direct responsibility for or authority over any of the In accor Auditors. work withthatoftheExternal Auditwill co-ordinateend, theHeadofInternal itsaudit duplicate efforts, all audit effort will beco-ordinated. To this In or Audit CommitteeandtheBoard fortheirinformation. report Auditactivitieswillbepresented ofInternal tothe Committee willreceive allfinalaudit reports. Eachyeara of staffing planandfinancialbudgetforapproval. TheAudit Committee an annual engagement work schedule including authority. Auditwillsubmit to the Audit The HeadofInternal the Board, AuditCommittee, orotherappropriate governing The HeadofInter Inter prescribed AuditingStandards. are establishedbythis Charterinaccordance with The r d) c) b)

Compliance withlaws,r Safeguar Ef information; Reliability andintegrityoffinancialoperational der toensure adequateauditcoverageandtominimise nal Audithastheauthoritytoaccessrecords, esponsibilities of Internal Auditwithintheorganisation esponsibilities ofInternal fectiveness andefficiency ofoperations; dance withAuditingStandards, Audit Internal ding ofassets;and nal Audithasdirect communication with egulations andcontracts. 2. 1. principles: auditorsareInternal applyingandupholdthefollowing Code ofEthics–Principles status andobjectivity. function. Thisindependenceisachievedthrough organisational Independence isessentialtotheeffectivenessAudit ofInternal Independence

b) information about theactivity or process being examined. objectivity ingathering,evaluating, andcommunicating auditorsexhibit the highest level ofprofessionalInternal Objectivity provides thebasisforreliance ontheirjudgment. auditorsestablishes trustandthus The integrityofinternal Integrity a) them. organisation from theirregular responsibilities assignedto

on engagementrecommendations. of engagementcommunicationsandappropriate action to ensure broad auditcoverage,adequateconsideration reporting relationship istopromote independenceand administratively tothePresident oftheCompany. This the AuditCommittee,orBoard ofDirectors, and procedures for, oroperatessuchsystems. to beimpaired iftheauditor designs,installs,drafts are implemented.Theauditor’s objectivityisconsidered control forsystemsorreviews procedures before they affected whentheauditor recommends standards of The Inter Individual Objectivity The HeadofInter Organisational Status nal Auditor’s objectivityisnotadversely nal Audit reports functionally to

Audit CommitteeReport

2012 ANNUAL REPORT REPORT ANNUAL

25 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 26 ANNUAL REPORT 2012 1. Rules ofConduct 4. 3. 2.

1.3 1.1 auditors: Internal Integrity auditservices. needed intheperformanceofinternal auditorsapplytheknowledge,skills,andexperience Internal Competency professional obligationtodo so. without appropriate authorityunlessthere isalegal or information theyreceive anddonotdiscloseinformation auditorsrespectInternal thevalueandownershipof Confidentiality their owninterests orbyothersinformingjudgments. relevant circumstances andare notundulyinfluencedby auditorsmakeabalancedassessmentofallthe Internal 1.4 1.2 2.1 auditors: Internal Objectivity

the lawandprofession. objectives oftheorganization. Respect andcontributetothelegitimateethical profession auditingortotheorganization. ofinternal or engageinactsthatare discreditable tothe Not knowinglybeapartytoanyillegalactivity Observe thelawandmakedisclosur responsibility. Perform theirworkwithhonesty the interests oftheorganization. activities orrelationships thatmaybeinconflictwith assessment. Thisparticipation includesthose may impairorbepresumed toimpairtheirunbiased Not participate in any activity or relationship that , diligence,and es expectedby , 3. 4.

2.3 2.2 3.2 3.1 auditors: Internal Confidentiality 4.3 4.2 4.1 auditors: Internal Competency

not Disclose allmaterialfactsknowntothemthat,if to impairtheirprofessional judgment. Not acceptanythingthatmayimpairorbepr under review. of theorganization. detrimental tothelegitimateandethicalobjectives any mannerthatwouldbecontrarytothelawor Not useinformationforanypersonalgainorin acquired inthecourseoftheir duties. Prudent intheuseandpr effectiveness andqualityoftheirservices. Continually impr Auditing(Standards).Practice ofInternal Standardsthe International forProfessional Perform inter the necessaryknowledge,skills,andexperience. Engage onlyinthoseservicesforwhichtheyhave disclosed, may distort the reporting of activities nal auditservicesinaccordance with ove theirproficiency andthe otection ofinformation esumed Chairman’s Statement KTMB due toincrease inthenumberofpassengers. There wasabusinessimprovement intheETSservices from RM352.6millionin2011toRM361.02012. Total revenue from thecore businessesincreased slightly under review. There hadbeenmixedgrowth anddeclinesfortheperiod Financial Results OVERVIEW year ended31December2012. Report andAuditedFinancialStatementforthefinancial of KTMB,itgivesmegreat pleasure topresent theAnnual On behalfoftheBoard ofDirectors andtheManagement CHAIRMAN OFTHEBOARD Y.B. DATO’ SRIIR.MOHDZINBINMOHAMED Commuter and Intercity segment. to higheroperatingcostand lossofbusiness in the from RM103.4milliontoRM240.1mainlydue At theGroup level,KTMBnetlosseshadalsoincreased reduce expenditure and improve efficiency. million, despitemanagementef

losses

incr eased

fr om

RM119.9 forts toincrease revenue,

million

to

RM283.9

2012 ANNUAL REPORT REPORT ANNUAL

27 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 28 ANNUAL REPORT 2012 efficient and reliable railservicesforpassengersandgoods. road, seaandair, KTMBcontinuestofocusonproviding safe, rapid developmentofothermodestransportation,suchas of cargo between Malaysia and Thailand. Complementing the for Landbridge services that connect cross-border movements Pelabuhan Tanjung Pelepas.Italsoservesasthebackbone Pinang, PelabuhanKlang,PasirGudangand in thehinterlandtoseaportssuchasPelabuhanPulau Our rail network strategically links the industrial growth centres goods throughout therailway networkinPeninsularMalaysia. player inthelandtransportationsector, movingpassengersand further growth. KTMBhas always beenthenationsestablished component oftheserviceindustry, whichhasgreat potentialfor The railoperatingbusinessisanessentialandintegral CORE BUSINESSES 200,000 adayinthenearfuture. will doublethedailycommuterserviceusersfrom 95,000to time willbeshortenedfrom 30minutesto15and KTMB is optimistic that with MyKomuter, passenger’s waiting two Ladies’Coaches,CCTVandWheelChairarea. information display, Dynamic Route Map, Priority Seating Zone, at anyonetimeandhasfacilitiessuchasintercoms, LCD MyKomuter canaccommodatemor quality ofthecommuterservices. 38 the provision ofbetterquality ofservice,withtheacceptance The year2012sawthetransformationofKTMKomuterthrough KTM Komuter pursued strategiesinthefollowingcore businessareas: In thisconnection,duringtheyear, KTMBhasproactively allocated atotalofRM1.9billionwas (NKRA) bytheGovernment, Thr Car Set(SCS).

ough theinitiativeunderNationalKeyResultAreas electric

to

trains

pur chase

fr om

38 China

new

better

SCS

known e than1,000passengers that

will

as

help

MyKomuter

impr ove

the Six

in KTM punctuality canbeimproved. ridership should the level ofserviceespecially in thearea of in 2012.KTMIntercity isexpecting anincrease inrevenue and also increased to 33.3% from 0.9 million in 2011 to 1.2 million RM23.9 milliontoRM31.9million.Thenumberofpassengers 2010. The2012revenue had shownanincrease of33.5%from improvement overallsince the servicewasintroduced inAugust For theyearended2012,ETShadshowngreater KTM Intercity station inSingapore. the year as well as the effect of the closure of Tanjung Pagar and ridershipwasinfluencedbyaseriesofincidentsthroughout in 2011whichisa16.2%reduction. Thedecrease inrevenue 2012 recorded aridershipof3.1millioncompared to3.7million a decr

2012

Inter ease of 11.1%. Thenumberof passengers for theyear

compar city

contributed ed

to

RM91.8

RM81.6

million

million

in

2011

to

KTMB’

which s

showed r evenue

major Containerized andcementtraffic remained theCargoServices pr 1.8% Revenue from CargoServices continuedtoshowgrowth of Cargo Services such ascontainerisedcargo,cement andsugar. businesses, especiallyinthe transportation of commodities to capture significantmarketshare ofthecargoandhaulage Capitalising onitsestablishedrailinfrastructure, KTMBplanned competitive cargoservicesinthemostcost-effective manner. KTMB continuestoprovide customerswithaviableand and terminal wasopenedforoperationsinthefirstquarterof2012 developed anewcargoterminalatGelangPatahstation.The To coverthelossesofSingapore servicesector, KTMBhad while revenue from thefertilizertraincontributedRM3.9million. Traditional commodity suchassugarrecorded RM10.7million Besar toNorthButterworthContainerTerminal. transportation oftheSouthThaiCargo(STC)from Padang Most ofthecontainerizedtraffic revenue originatedfrom the million whilecementtraf evious year.

contributed

to commodity

RM127.4

RM3.8 .

million Containerized

million

compar fic contributedRM44.5million.

in

terms ed

traf Chairman’s Statement

to fic

of RM125.2

revenue br ought

million

for in

KTMB. RM46.8

in

the

2012 ANNUAL REPORT REPORT ANNUAL

29 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 30 ANNUAL REPORT 2012 cost effective railtransportoperator. human capitalsoastoensure thecompanyisareliable and KTMB wouldcontinuetoaccord prioritytothedevelopmentof growing expectationsandincreasing demands.Inthiscontext, terms ofhardware, software andpersonneltocaterforthe The challengeforKTMBistoexpeditiouslyprepare itselfin escalate thedemandforrailservicesincomingyears. encouraging thepublictoutilisetransportwouldalso volume andimproved revenue. TheGovernment’s focuson (SBU) havethepotentialtoperformwellin2013withincreased We are confidentthatallthethree StrategicBusinessUnits Prospect andChallenges tagline. performance inlinewithour“OntimeEverytime” businesses effectively, improve cost-effectiveness and monitor Towards thisend,KTMBwillcontinuetomanageitscore entity attheoperationallevelandincrease itsefficiency. KTMB willcontinueitsefforts tobecomeaviablebusiness THE WAY FORWARD Keretapi Tanah MelayuBerhad Chairman Y.B. DATO’ SRIIR.MOHD ZINBINMOHAMED support inthepastyear. Corporation fortheirguidance,invaluableassistanceand Commission, the Ministry of Transport and the Railway Asset gratitude totheMinistryofFinance,LandPublicTransport Lastly, wewouldliketotakethisopportunityexpress our challenges ahead. support anddedicationtothecompanyinmeetingfuture It ishopedthatthestaff at all levelswillcontinuetogivetheirfull The year2013willmarkanewchapterinthehistoryofKTMB. Association (SOA)fortheircontinuedsupportandcooperation. Railwaymen’s UnionofMalaya(RUM)andSeniorOfficers We wouldalsoliketo record ourappreciation tothe customers fortheircontinuedpatronage andsupport. rendered duringtheyearandalsotothankallofKTMB’s valued our appreciation totheManagement andstaff, fortheirservices On behalfoftheBoard of Directors, wewouldliketoexpress ACKNOWLEDGEMENT

Chairman’s Statement

2012 ANNUAL REPORT REPORT ANNUAL

31 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI Review of Operations KERETAPI TANAH MELAYU BERHAD 34 ANNUAL REPORT 2012 today we are transporting approximately 4,000 passengers (3) years the passenger load has increased tremendously and an averageof1,000passengersdaily, butoverthelastthree started in2010itwasonlyproviding 10servicesadaywith frequent services between Ipoh and Kuala Lumpur. When it ETS with5setsof6-carcoacheswasintroduced toprovide from thegeneralpublic. services toimprove thefrequency oftrainstofulfillthedemand Electric Train Service (ETS)andSixCarSets(SCS)Commuter through fundingintroduced Government newservicesi.e. In termsofpassengerconveyance,KTMBhasovertheyears both inpassengersandcargoservices. growth as well as significant improvement in rail transportation that willbringlongtermdevelopmentbothintermsofeconomic mega railwayprojects withtheassistanceofGovernment In thearea ofrailtransportation,KTMBhasundertakenmany transportation agenda. period forKTMB.KTMBcontributedinabigwaytothenational The year2012hadbeenaverypromising andprogressive Review ofOperations transport SCS to fulfill theever growing demand forefficient public Another majormilestonein2012istheintroduction ofKTMB’s by 2016. increase thefrequency andreach ofitsservicestomore areas Besar. KTMBisintheprocess ofbuyingnewETSsetsto the coverageofETSwillbeallwaytoGemasandPadang electrified doubletrackincertainareas by2013and2014, thecompletionof to 1.2millionpassengersin2012.With resulted in33.3%increase inridershipfrom 0.9millionin2011 to Thursdayand22servicesfr special occasionslikeNewYear, ChineseNewYear and introduced additionalservices i.e.24hoursservicesduring of commuterservicesalsoincreased in2012.KTMBalso to 15minutesin2012duringthepeakhours.Punctuality passengers. It also reduced the waiting time from 30 minutes efficient andcomfortable commuter servicestotheKlang Valley introduction ofthenew services KTMBisabletoprovide of SCStoservice has between Ipoh-KualaLumpurandviceversa.TheETSservices

also

been in

the

incr Klang the KlangValley the transportneeds. With eased

V alley.

to

18 KTMB

om FridaytoSunday, which services

has

intr daily oduced

fr om

38 Monday

units

of Cargo businesshasalsosignificantlycontributedtothe revenue and HariRayacelebrations. Thaipusam andalsoadditionalservicesduringschoolholidays occupational safety andhealthatworkplace,computer system signaling &communication systemsand maintenance, stock maintenance,overhead linemaintenance, track safety, training in various disciplines such as train operations, rolling In theyear2012,atotal of 3,334employeesattended Transformationyear 2012inlinewiththeGovernment Program. record, KTMBembarkedonawiderscaleoftrainingprogram in and 4,959non-executive.Towards maintainingthisexcellent and dedicatedworkforce totaling5,490i.e.531executive One of the majorfactors in KTMB’s success is the well trained Depot certification inworkprocesses, resulting intheCommuter KTMB also stressed the importance of obtaining international track. awareness program toeducatethepeoplelivingalong and uninterruptedtravelontrain,KTMBalsocontinuedits services toensure safety of thepassenger. To ensure safer by placingourownauxiliarypolicepersonneloncommuter KTMB million in2011toRM127.42012.

KTMB

in also tookanother major step in safety and security

Sentul with

an

achieving

incr ease

of ISO

1.8

9001:2008

%

in

its

r evenue

certification

fr om

RM125.2

in

2012. citizens whoare belowRM3,000which startedon earning promotions in2012wasthe50%discount for Malaysian its variousoffering tothegeneralpublic.Oneof major media andhasusedthe effectively by disseminating KTMB hasintensifieditsmarketing through themainstream in theSouthEastAsiaregion. rail industriesandalsobecomingtheRailCenterofExcellence Malaysia inreducing theshortageofskilledworkerswithin GroupGovernment for High Technology (MiGHT) to assist KTMB isalsocollaboratingwiththeMalaysianIndustry- program railoperators. tootherlocalandinternational at variouslevels,thenextmilestoneforKTMBistoopen the availability of certified skilled workers the year 2014. With program whichisexpectedtobecompletedandcertifiedin A totalof1,250employeesare currently undergoingtheSLDN with theaimofcertifyingcompetencyitsskilledworkers. Dual Training System/SistemLatihanDualNasional(SLDN) had movedonandinitiatedtheimplementationofNational under theMinistry of Human Resources. Followingthis,KTMB approved andendorsedby theSkillsDevelopmentDepartment together withtheotherrailoperatorsinMalaysia.AllNOSSwere Occupational Skills Standards (NOSS)in 11 different categories KTMB hadearlierinitiatedthedevelopmentofNational other managementaspects. applications, customerservice,leadership,teambuildingand

Review ofOperation

2012 ANNUAL REPORT REPORT ANNUAL

35 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 36 ANNUAL REPORT 2012 (NKRA) inimproving urbanpublictransportfortherailway To achieve thetargetsoutlinedinNationalKeyResultArea a brandnewstation,whichisexpected tobeopenedin2013. Rembauwillalsohave opening ofBukitMerahMarine Viaduct. km inlengthon22April2013. Theyear2013willalsoseethe Bukit Berapittunnelwiththestageopeningofitsnew 3 KTMB also replaced one of the oldest tunnel in the country i.e. are expectedtobecompletedin2013and2014respectively. undertaken andon-goingatthemoment.Bothofprojects Seremban -GemasandIpohPadangBesarwhichisbeing and farmostimportantisthedoubletrackingproject from undertaken byKTMBthroughfunding.Themajor Government country, there are manyon-goingprojects, whichare being As railisacatalystinthedevelopmentofeconomy coach totwodedicatedcoaches. SCS introduced additional coachesi.e.from onededicated was introduced in 2010, received a major boost when the new children aswelldisabled persons.TheLadiesCoach,which offered different kinds of discounts to senior citizens, school services. KTMBbeingasocial-mindedtransporterhasalso familiarization tripsformediaespeciallyonthenewSCS in theKlangValley area. KTMBhasalsoconducted many embarked ondistributingfree newspaperstothecommuters students, disabledpersonsandseniorcitizens.KTMBalso discounted fare onweekly ticket,aswellfree ridesfor worth RM2tothepublicbeusedoncommutertravel,50% March toSeptember2012 i.e.distributed100,000vouchers KTM Komuteralsooffered thefollowingpromotions from the KadKomuter1Malaysiasofar. response has been tremendous with 140,000 subscribing to 1 November2012andwillendon31October2013.The stock will be upgraded. Pursuant to this, the Government stock willbeupgraded. Pursuanttothis, the Government passenger andcargoservices, theexistingcapacityofrolling In linewithKTMB’s efforts tomeetthe increasing demandfor by 2014. commuter stationsare on-goingandisexpectedtocomplete and Provision ofAutomaticFare Collection(AFC)systematthe Signalling Systembetween Port KlangJunction-Batu Meanwhile, twoprojects namelytheRemodellingof and December2013respectively. Depot atSeremban are expectedtocompletebyJune2013 Passenger Information System (PIS) and Construction of EMU stations have been completed, whereas Provision of CCTV and Station andProvision ofUniversalFacilitiesattencommuter As of 31 December 2012, the Upgrading of Bandar Tasik Selatan a totalcostofRM299.7million. sector, hasapproved theGovernment 6projects amountingto has in tremendous increase inrevenue forKTMB. expected toincrease 5folds inthenearfuture, whichwillresult infrastructure, the volume of both passengers and cargo is substantialamountofmoneyspentondevelopingrail With for thepeople. Alltheseintegration works willprovide(MRT). seamlesstravel andKLSentral Kajang(MRT) SungaiBuloh(MRT), Jaya (LRT), integrate KTMBstations with otherrailoperatorsi.e.Subang Major integrationworksare alsotaking place currently to 2013. progress andthedeliveryinstagesisexpectedtostart inJune and commissioningworksonthesecoachesPGCisin (KWAPA)Amanah PengangkutanAwam allocation.Thetesting (PGC) have been implemented under theKumpulan Wang Buffet Coaches (ABC) and 2 units of Power Generating Car Second ClassCoaches/ASC),2unitsofAirConditioned of 12 units of new passenger coaches (Air Conditioned for theupgradingofr

allocated

RM528.6

million olling stock.Besides,procurement

under

the

10th

Malaysia

Plan

additional 10ETSsetstobepurchased inthenearfuture. by replacing the current fleet of diesel locomotives with track, KTMBwillcontributeinthereduction ofcarbonemission significantamountofinvestmentintheelectrifieddouble With

Review ofOperation

2012 ANNUAL REPORT REPORT ANNUAL

37 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI Corporate Calendar KERETAPI TANAH MELAYU BERHAD 40 ANNUAL REPORT 2012 Kuala Lumpur. Jaafar Albar, Chairman ofSPAD atInterContinentalHotel, and officiated by Y.B Tan SriDato’SeriSyedHamidbin Standardsby KTMBandRailwayInternational Centre, Japan RailwayStandards.International Aseminarjointlyorganized 23 February2012 services forThaipusamcelebrationsatBatuCavesStation. Media briefingatBatuCavesStationonadditionalKomuter 31 January2012 New Year CelebrationatKLSentralStation. Goodies distributiontopassengersinconjunctionofChinese 19 January2012 Corporate Calendar A A B Media BriefingonMyKomuteratKTMBHeadquarters. 31 March 2012 Station. Yassin, DeputyPrimeMinisterofMalaysiaatKLSentral The LaunchingofMyKomuterbyY.A.B. Tan SriMuhyiddin 8 Mar Station. Station MyKomuter trialrunwithmembersofmedia(KLSentral 6 March 2012 ch 2012 C

–

Kajang

Station D C B

–

KL

Sentral

Station)

at

KL

Sentral

Tournament atStadiumAzlanShah,Ipoh,Perak. in conjunctionofSultanAzlanShahCup2012Hockey ETS theofficial transportationforIndianHockeyPlayers 21 May2012 KTM BerhadLabourDaycelebrationsatKTMBHeadquarters. 9 May2012 the newBahauStation. Y.B. Dato’SriKongChoHa,MinisterofTransport to SiteVisit 24 April2012 D G E F E F G

Corporate Calendar

2012 ANNUAL REPORT REPORT ANNUAL

41 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 42 ANNUAL REPORT 2012 Kuala Lumpur. MyKomuter FunRidewithschoolchildren from Seremban to 13 September2012 Railway ofThailand. Study visittoKTMBbytheGovernor’s Bureau oftheState 23 August2012 to themulti-storey carparkatSerdang Station. bytheMinisterofTransport,Visit Y.B Dato’SriKongChoHa 3 July2012 Seremban Station. by Y.B Dato’SriKongChoHa,MinisterofTransport at Groundbreaking Ceremony ofKTMBEMUSeremban Depot 21 June2012 H H I I Station. Press Conference onKomuter1MalaysiaCard atKLSentral 18 October2012 between JBPM/KTMBandERPatTaman Wahyu Station. Handover Ceremony ofEmergency ResponsePlanManual 10 October2012 Thailand. 33 24 –28September2012 Sentul Depot. Recognition 14 September2012 rd JointConference inPattaya, betweenKTMB-SRT

Ceremony J

of

L ISO

J 9001:2008 K

Certificate,

EMU

Group). Study visittoKTMBbytheEastJapanRailwayCompany(2nd 27 November2012 Group). Study visittoKTMBbytheEastJapanRailwayCompany(1st 14 November2012 Command Centre (TCCC),KLSentral. Study visitbySwitzerlandDelegatesatTrain Control & 4 November2012 media atKLSentralStation. MyKomuter FamiliarizationTrip (Phase2)withmembersof 31 October2012 K L Shah Alam. atI-City,KTMB participatedinSayangiSelangorCarnival 29-30 December2012 activities. ceremony istomakeknownthatKTMBoffer space for such MyKomuter toSentulStation.Thecoverageofthewedding was heldatSentulStation.Thenewly-wedtookarideon The firsttimeeverinKomuterhistory, awedding reception 29 December2012 Myanmar. ASEAN RailwaysCEOs’(ARCEOs’)Conference inYangon, 3-7 December2012 M M

Corporate Calendar

2012 ANNUAL REPORT REPORT ANNUAL

43 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI Financial Statements

Contents

46 Directors’ Report 50 Independent Auditors’ Report 53 Statements Of Comprehensive Income 55 Statements Of Financial Position 59 Statements Of Changes In Equity 61 Statements Of Cash Flows 65 Notes To The Financial Stetements 156 Statements By Directors 157 Declaration By The Officer Primarily Responsible For The Financial Management Of The Company KERETAPI TANAH MELAYU BERHAD 46 ANNUAL REPORT 2012 new ordinary shares ofRM1each. capital oftheCompanywasincreased from RM1,000,000,000toRM2,000,000,000 bythecreation ofanadditional 1,000,000,000 As approved by the shareholders in the Extraordinary General Meeting (“EGM”) held on 30 October 2012, the authorised share Issue OfShares AndDebentures statements. There were nomaterialtransferstoorfrom reserves orprovisions during thefinancialyearotherthanthosedisclosedin Reserves AndProvisions any dividendpaymentinrespect ofthecurrent financialyear. No dividendhasbeenpaidordeclared bytheCompanysinceendofprevious financialyear. Thedirectors donot recommend Dividends substantially affected byany item,transactionoreventofamaterialandunusualnature. In theopinionofdirectors, theresults ofoperationstheGroup andofthe Companyduringthefinancialyearhavenotbeen Loss forthefinancialyearattributableto: The results ofoperations theGroup andoftheCompanyforfinancialyearare asfollows: Results OfOperations There havebeennosignificant changesinthenature oftheseactivitiesduringthefinancialyear. The principalactivitiesofitssubsidiariesare describedinNote13ofthefinancialstatements. Malaysia andSingapore. TheCompanyoperatestheseactivitiespursuanttoalicenceissuedbytheMinistryofTransport. The principalactivitiesoftheCompanyare railwaytransportationoperationsandtheprovision ofrelated railwayservicesinPeninsular Principal Activities Group andoftheCompanyforfinancialyearended31December2012. The Directors of KERETAPI TANAH MELAYU BERHAD hereby submit their report and the audited financial statements of the Directors’ Report (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD Non-controlling interest Owners oftheCompany The Group (240,140) (240,156) RM’000 16 The Company (283,950) (283,950) RM’000 - As (b) (a) out, thedirectors tookreasonable steps: Before thestatementsofcomprehensive incomeandstatementsoffinancialpositiontheGroup andoftheCompanywere made Other StatutoryInformation Company. As attheendoffinancialperiod,there were nounissued shares oftheCompanyunderoptions. No shares have been issued during the financial period by virtue of the exercise of any option to take up unissued shares of the Company. No options have been granted by the Company to any parties during the financial period to take up unissued shares of the Share Options The Companyhasnotissuedanydebentures duringthefinancialyear. ordinary shares issuedrankparipassuwiththethen existing ordinary shares oftheCompany. way ofissuance234,900,000ordinary shares ofRM1 eachatRM1perordinary share forworkingcapitalpurposes.Thenew During thefinancialyear, thepaidupshare capitaloftheCompanywasincreased from RM902,559,000 toRM1,137,459,000by (a) Other thanasmentionedinthepreceding paragraph,atthedateofthisreport, theDirectors are notaware ofanycircumstances: dependent onthecontinuedfinancialsupportfrom MinisterofFinance(Incorporated). as a basis of preparationof the application of going-concern of the financial statements of the Group and of the Company is (Incorporated) toenabletheGroup intheforeseeable andtheCompanytooperateasagoing-concern future. The appropriateness whichpresumesgoing-concern thattheGroup andtheCompanywillcontinuetoreceive financialsupportfrom MinisterofFinance the financialstatementsofGroup andoftheCompanyhavebeenprepared onthebasisofaccountingprinciplesapplicabletoa r (b) espectively asaresult oflossesincurred inthecurrent andpriorfinancialyears.AsmentionedinNote3totheFinancialStatements,

of

31 written downtotheirestimatedrealisable values. to ensur made fordoubtfuldebts;and doubtful debts and had satisfied themselves that there were no known bad debts and that adequate allowance had been to ascertainthatpr misleading; or which wouldr which wouldr statements oftheGroup andoftheCompanyinadequate toanysubstantialextent;or

December e thatanycurrent assetswhich were unlikelytorealise theirbookvalueintheordinary courseofbusinesshadbeen

ender itnecessarytowriteoff anybaddebtsortheamount oftheallowancefordoubtfuldebtsinfinancial ender thevaluesattributedto current assetsinthefinancial statementsoftheGroup andoftheCompany 2012, oper actionhadbeentakeninrelation tothewritingoff ofbaddebtsandthemakingallowancefor

the

Gr oup

and

the

Company

have

a

capital

deficiency

of

RM983,022,000

and Directors’ Report

RM1,205,226,000

2012 ANNUAL REPORT REPORT ANNUAL

47 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 48 ANNUAL REPORT 2012 for re-election. Ruhaizah bintiMohamedRashid retire byrotation attheforthcomingAnnualGeneralMeetingand,beingeligible, offer themselves In accordance withArticle104oftheCompany’s ArticlesofAssociation,Selvarajooa/lManikam, NorazurabintiTadzim and Datuk KamaruzamanbinMohdNoor Norazura bintiTadzim Datuk EliasbinKadir Sr. AhmadZainuddinbinJamaluddin Ruhaizah bintiMohamedRashid Harun binJohari Rosli binAbdullah Dato’ SriZakariabinBahari Selvarajoo a/lManikam Dato’ SriIr. Mohd ZinbinMohamed The followingdirectors served ontheBoard oftheCompanysincedatelastreport: Directors of theCompanyforfinancialyearinwhichthis report ismade. end ofthefinancialyearanddatethis report whichislikelytoaffect substantiallythe results ofoperationstheGroup and In theopinionofDirectors, noitem,transactionoreventofamaterialandunusualnature hasarisenintheintervalbetween Company tomeettheirobligationsasandwhentheyfalldue. the endoffinancialyearwhich,inopinionDirectors, willormaysubstantiallyaffect theabilityofGroup andofthe No contingentorotherliabilityhasbecomeenforceable orislikelytobecomeenforceable withintheperiodoftwelvemonthsafter (b) (a) At thedateofthisreport, there doesnotexist: (d) (c)

any contingentliabilityinr secures theliabilitiesofany otherperson;or any statements oftheGroup andoftheCompanymisleading. not otherwisedealtwithinthisr of theCompanymisleadingorinappropriate; or which have charge on the assets of the Group and of the Company which has arisen since the end of the financial yearwhich arisen which would render adherence to theexisting method ofvaluationassetsorliabilitiesthe Group and espect oftheGroup andof theCompanywhichhasarisensinceendoffinancialyear. eport orfinancialstatementswhichwould render anyamountstatedinthefinancial 16 May2013 Kuala Lumpur DATUK ELIASBINKADIR ______DATO’ SRIIR.MOHDZINBINMOHAMED ______in accordance witharesolution oftheDirectors, Signed onbehalfoftheBoard The auditors,Messrs.DeloitteKassimChan,haveexpressed theirwillingnesstocontinueinoffice. Auditors Finance The CompanyisasubsidiaryofMinisterFinance(Incorporated),bodycorporateincorporatedpursuanttothe of Holding Company to acquire benefitsbymeans oftheacquisitionshares inordebentures ofthe Companyoranyotherbodycorporate. There were noarrangementsduringandattheendoffinancialyearwhichhadobjectenablingDirectors oftheCompany in whichtheDirector hasa substantialfinancialinterest. made bytheCompanyorarelated corporationwiththeDirector orwithafirmofwhichtheDirector isamember, orwithacompany financial statementsorthefixedsalaryofafulltimeemployeeCompany relatedcorporations)by reasonofacontract (other thanabenefitincludedintheaggregate amountofemoluments received ordueand receivable byDirectors asshowninthe Since theendofprevious financialyear, noDirector oftheCompanyhas received nor becomeentitledto receive anybenefit Directors’ Benefits corporations duringthefinancialyear. None oftheDirectors holdingoffice at31December 2012hadanyinterest intheordinary shares oftheCompanyandits related Directors’ Interests

(Incorporated)

Act,

1957

(Revised

1989).

Directors’ Report

2012 ANNUAL REPORT REPORT ANNUAL

49 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 50 ANNUAL REPORT 2012 As Emphasis ofMatters Malaysia. Financial Reporting Standards, Financial Reporting Standards International and the requirements of the Companies Act, 1965 in December 2012andoftheirfinancialperformancecashflowsfortheyearthenended inaccordance with Malaysian 31 of In ouropinion,thefinancialstatementsgiveatrueandfair viewofthefinancialposition Group andoftheCompany as Opinion We believethattheauditevidencewehaveobtainedissufficient andappropriate toprovide abasisforourauditopinion. estimates madebythedirectors, aswellevaluatingtheoverallpresentation ofthefinancialstatements. control. Anauditalsoincludes evaluatingtheappropriateness ofaccountingpoliciesusedandthereasonableness ofaccounting are appropriate inthecircumstances, butnotforthepurposeofexpressing anopinionontheeffectiveness oftheentity’s internal relevant to theentity’s preparation offinancial statements that giveatrueandfairviewin order todesignauditprocedures that the financialstatements,whetherduetofraudorerror. control Inmakingthoseriskassessments,theauditorsconsiderinternal The procedures selecteddependontheauditors’judgement,includingassessmentofrisksmaterialmisstatement An auditinvolvesperformingprocedures toobtainauditevidenceabouttheamountsanddisclosures inthefinancialstatements. perform theaudittoobtainreasonable assurancewhetherthefinancialstatementsare free from materialmisstatement. with approved standards onauditinginMalaysia.Thosestandards require thatwecomplywithethicalrequirements andplan Our responsibility istoexpress anopiniononthesefinancialstatementsbasedouraudit. We conductedourauditinaccordance Auditors’ Responsibility fraud orerror. determine isnecessarytoenablethepreparation offinancialstatementsthatare free from materialmisstatement,whetherdueto requirements oftheCompaniesAct,1965inMalaysia.Thedirectors are alsoresponsiblecontrol forsuchinternal asthedirectors and fairviewinaccordance withMalaysianFinancialReportingStandards,Standards International andthe The directors oftheGroup andtheCompanyare responsible forthepreparation ofthesefinancialstatementssoastogiveatrue Directors’ ResponsibilityfortheFinancialStatements significant accountingpoliciesandotherexplanatoryinformation,assetoutonpages53to155. of changesinequityandstatementscashflowstheGroup andoftheCompanyforyearthenended,asummary position oftheGroup andoftheCompanyas31December2012statementscomprehensive income,statements We haveauditedthefinancialstatementsofKERETAPI TANAH MELAYU BERHAD,whichcomprisethestatementsoffinancial Report ontheFinancialStatements (Incorporated inMalaysia) To TheMembersOfKERETAPI TANAH MELAYU BERHAD Independent Auditors’Report r espectively asa result oflossesincurred inthecurrent andpriorfinancial years.Asmentionedin Note 3totheFinancialStatements,

of

31

December

2012,

the

Gr oup

and

the

Company

have

a

capital

deficiency

of

RM983,022,000

and

RM1,205,226,000

(b) Other Matters (d) (c) (a) In accordance withtherequirements oftheCompaniesAct,1965inMalaysia,wealsoreport that: Report onOtherLegalandRegulatoryRequirements dependent onthecontinuedfinancialsupportfrom MinisterofFinance(Incorporated). as a basis of preparationof the application of going-concern of the financial statements of the Group and of the Company is (Incorporated) toenabletheGroupinforeseeable andtheCompanytooperateasagoing-concern future. Theappropriateness whichpresumesgoing-concern thattheGroup andtheCompanywillcontinuetoreceive financialsupportfrom MinisterofFinance the financialstatementsofGroup andoftheCompanyhavebeenprepared onthebasisofaccountingprinciplesapplicabletoa

1. 2.

subsidiaries ofwhichwehaveactedasauditorsbeenproperly keptinaccordance withtheprovisions oftheAct; report. Act, 1965inMalaysiaandforno otherpurpose.We donot assumeresponsibility to anyotherpersonforthecontentofthis This r financial positionasof31December 2012andfinancialperformancecashflowsfor theyearthenended. audit evidence that the opening balances as at1January 2012 do notcontain misstatements thatmateriallyaffect the Company fortheyearended31December2012have,inthese circumstances, included obtainingsufficient appropriate Reporting Standards andhence,itisunaudited.Ourresponsibilities aspartofourauditthefinancialstatements ofthe not engagedtoreport onthesecomparativeinformationwhichisnowpresented inaccordance withMalaysianFinancial affected thecomparativeinformationaspreviously reported inaccordance withFinancialReportingStandards. We were of cash flows for the year ended 31 December 2011 and related disclosures. The application of these Standards have not 2011 and 1 January 2011, and the statement of comprehensive income, statement of changes in equity and statement comparative informationinthesefinancialstatements, includingthestatementoffinancialpositionasat31December January 2012withatransitiondateof12011.These standards were appliedretrospectively bydirectors tothe As statedinNote2tothefinancialstatements,CompanyadoptedMalaysianFinancialReportingStandar comment madeunderSection174(3)oftheAct. The auditr and wehavereceived satisfactory informationandexplanationsasrequired by us forthesepurposes;and are informandcontent appropriate and proper for thepurposes of thepreparation of thefinancialstatements of the Group W financial statementsoftheGroup; auditors, asmentionedinNote13totheFinancialStatements,beingfinancialstatementsthathavebeenincluded W In e are satisfiedthattheaccounts ofthesubsidiariesthathavebeenconsolidatedwithCompany’s financialstatements e haveconsidered thefinancial statementsandauditors’ reports ofthesubsidiarieswhichwehavenotactedas our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its eport ismadesolelytothemembers oftheCompany, asabody, inaccordance with Section174oftheCompanies eports ontheaccountsofsubsidiarieswere notsubjecttoanyqualificationanddidincludeadverse Independent Auditors’Report

ds on1

2012 ANNUAL REPORT REPORT ANNUAL

51 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 52 ANNUAL REPORT 2012 16 May2013 Chartered Accountant Partner -2903/11/13(J) KAMARUL BAHARINBINTENGKUZAINALABIDIN Chartered Accountants AF 0080 DELOITTE KASSIMCHAN 3.

whose The financialstatementsoftheCompanyforyearended31December2011wer

report

dated

28

June

2012

expressed

an

unmodified

opinion

on

those

statements. e auditedbyanotherfirmofauditors Independent Auditors’Report For TheYear Ended31December2012 Statements OfComprehensive Income (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD Total comprehensive lossforthe year oftax Other comprehensive lossfortheyear, net foreign operations Foreign currency translationdifferences of Other comprehensive income Loss fortheyear Income tax(expense)/credit Loss before tax netoftax Share ofprofit ofequity-accountedinvestees, Operating loss Finance costs Finance income Results from operatingactivities Other operatingexpenses Administrative expenses Other operatingincome Gross loss Cost ofservices Revenue Note 10 7 6 5 (240,161) (240,140) (231,993) (266,999) (238,596) (203,030) (533,414) RM’000 (29,675) (59,943) 103,120 (78,743) 454,671 (8,147) 35,006 1,272 2012 (21) (21) The Group (103,486) (103,453) (103,663) (127,769) (112,201) (494,814) RM’000 440,963 (17,823) (79,747) (54,580) (53,851) 24,106 75,977 2,255 2011 210 (33) (33) (283,950) (283,950) (275,591) (275,591) (246,867) (193,368) (105,370) (466,358) RM’000 (29,269) (43,206) 360,988 (8,359) 95,077 2012 The Company 545 - - - (119,921) (119,921) (119,921) (119,921) (104,068) (427,142) RM’000 352,560 (17,237) (73,612) (35,803) (74,582) 79,929 1,384 2011

- - - -

2012 ANNUAL REPORT REPORT ANNUAL

53 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 54 ANNUAL REPORT 2012 Total comprehensive lossfortheyear Total comprehensive lossattributableto: Loss fortheyear Loss attributableto: Non-controlling interest Owners oftheCompany Non-controlling interest Owners oftheCompany The accompanying Notesformanintegralpart ofthefinancialstatements. Note (240,161) (240,177) (240,140) (240,156) RM’000 2012 16 16 The Group Statements OfComprehensive Income (103,486) (103,496) (103,453) (103,463) RM’000 2011 10 10 (283,950) (283,950) (283,950) (283,950) RM’000 2012 The Company - - (119,921) (119,921) (119,921) (119,921) RM’000 2011 - - As Of31December2012 Statements OfFinancialPosition (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD The Group Tax recoverable Deposits andprepayments Trade andother receivables Inventories Current Assets Total Non-current Assets Deferred taxassets Long-term receivables Other investment Investments inassociates Investment properties Property, plantandequipment Non-current Assets ASSETS Total Current Assets 21 Non-current assetsclassifiedasheldforsale Cash andbankbalances Total Assets Preference Shares (“RCCPS”) Redeemable CumulativeConvertible Share capital Capital andReserves EQUITY ANDLIABILITIES Note 19 19 18 17 16 15 14 12 11 20 23 22 31.12.2012 1,137,459 201,042 157,831 148,646 308,104 313,611 622,263 RM’000 28,925 48,950 26,093 50,583 308,652 2,035 5,507 3,094 140 - - 31.12.2011 420,894 145,545 269,980 185,074 185,074 902,559 605,968 RM’000 87,987 42,303 40,438 10,007 50,583 4,339 3,107 2,092 170 - - 1.1.2011 485,075 135,212 277,830 232,891 232,891 882,559 717,966 RM’000 84,112 45,428 69,216 87,723 50,583 5,786 2,149 9,842 498 170

-

2012 ANNUAL REPORT REPORT ANNUAL

55 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 56 ANNUAL REPORT 2012 The Group Accumulated losses Reserves Equity attributabletoownersoftheCompany Non-controlling interests Capital deficiency Total Non-current Liabilities Retirement benefitobligations Provisions grants Government Deferred gain Deferred taxliabilities Preference Shares (“RCCPS”) Redeemable ConvertibleCumulative Loans andborrowings Non-current Liabilities Current taxliabilities Retirement benefitobligations Provisions Loans andborrowings Trade andotherpayables Current Liabilities Total Current Liabilities Total Liabilities Total Equity andLiabilities Note 24 29 28 27 26 17 23 25 29 28 25 30 (2,170,857) 31.12.2012 1,172,666 1,287,694 1,605,285 (983,118) (983,022) 140,501 166,346 317,591 622,263 RM’000 90,392 17,976 4,934 1,442 9,879 (303) 284 822 96 43 - Statements OfFinancialPosition 31.12.2011 (1,930,701) 1,153,593 1,265,201 1,583,729 (977,841) (977,761) 161,000 144,683 318,528 605,968 RM’000 85,486 16,814 5,756 3,190 9,879 2,144 (282) 362 822 80 - (1,827,238) 1,142,195 1,366,105 1,612,241 (894,345) (894,275) 1.1.2011 146,736 246,136 717,966 RM’000 92,196 38,852 69,216 15,697 88,917 6,578 1,371 7,284 2,377 (249) 822 70 As Of31December2012 Statements OfFinancialPosition (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD The Company Total Non-current Assets Other investment Investments inassociates Investments insubsidiaries Property, plantandequipment Non-current Assets ASSETS Tax recoverable Deposits andprepayments Trade andother receivables Inventories Current Assets Total Current Assets Cash andbankbalances Total Assets Accumulated losses Preference Shares (“RCCPS”) Redeemable CumulativeConvertible Share capital Capital andReserves EQUITY ANDLIABILITIES Capital deficiency Note 15 14 13 11 19 19 18 20 23 22 31.12.2012 (2,393,268) (1,205,226) 1,137,459 126,551 159,170 182,043 258,721 417,891 RM’000 25,830 24,833 48,950 50,583 6,649 1,988 140 907 31.12.2011 21938 (1,989,397) (2,109,318) 11616 (1,056,255) (1,156,176) 250,079 282,728 132,600 902,559 415,328 RM’000 25,830 70,779 42,303 50,583 6,649 2,618 7,623 9,277 170 1.1.2011 257,887 290,536 181,988 882,559 472,524 RM’000 25,830 69,230 45,428 53,583 50,583 6,649 4,570 9,177

170

2012 ANNUAL REPORT REPORT ANNUAL

57 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 58 ANNUAL REPORT 2012 The Company Total Non-current Liabilities Retirement benefitobligations Provisions grants Government Preference Shares (“RCCPS”) Redeemable ConvertibleCumulative Loans andborrowings Non-current Liabilities Trade andother payables Current Liabilities Total Current Liabilities Retirement benefitobligations Provisions Loans andborrowings Total Liabilities Total EquityandLiabilities The accompanying Notesformanintegralpart ofthefinancialstatements. Note 29 28 27 23 25 30 29 28 25 31.12.2012 1,168,192 1,281,779 1,623,117 190,761 139,876 341,338 417,891 RM’000 90,392 17,976 4,934 9,879 285 822 Statements OfFinancialPosition 31.12.2011 1,149,184 1,257,602 1,571,504 144,783 158,418 313,902 415,328 RM’000 85,486 16,814 5,756 9,879 362 822 1,138,861 1,292,184 1,528,779 1.1.2011 145,305 236,595 472,524 RM’000 92,196 38,852 15,697 83,184 6,578 7,284 822 31December2012 Balance asof cash Issue ofordinary shares for fortheyear Total comprehensive loss 1January2012 31December2011/ Balance asof cash Issue ofordinary shares for fortheyear Total comprehensive loss 1January2011 Balance asof The Group For TheYear Ended31December2012 Statement OfChangesInEquity (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD Note 22490- 234,900 22 22,0 - 20,000 22 1,137,459 902,559 8,5 50,583 882,559 RM’000 Capital Share - - - - - Equity RM’000 RCCPS 50,583 053(282) 50,583 distributable distributable Reserves Reserves RM’000 - Other - Other Non - Non - (303) (249) 2)(4,5)(4,7)1 (240,161) 16 (240,177) (240,156) (21) 3)(0,6)(0,9)10 (103,496) (103,463) (33) - - Accumulated 21087 (983,118) (2,170,857) (1,930,701) 18728 (894,345) (1,827,238) RM’000 losses 234,900 - 20,000 - Attributable Company to Equity 9781 80 (977,841) Holders RM’000 of the Controlling Interests RM’000 Non- 96 70 234,900 - 20,000 - (983,022) (977,761) (103,486) (894,275) RM’000

Net

2012 ANNUAL REPORT REPORT ANNUAL

59 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 60 ANNUAL REPORT 2012 The Company Balance asof31December2012 Issue ofordinary shares forcash Total comprehensive lossfortheyear 1January2012 Balance asof31December2011/ Issue ofordinary shares forcash Total comprehensive lossfortheyear Balance asof1January2011 The accompanying Notesformanintegralpart ofthefinancialstatements. Note 2234,900 22 220,000 22 1,137,459 902,559 8,5 053(1,989,397) 50,583 882,559 RM’000 Capital Share - - RCCPS - RM’000 053(2,393,268) 50,583 053(2,109,318) 50,583 Equity Statement OfChangesInEquity - - - 1991 (119,921) (119,921) - Accumulated 2390 (283,950) (283,950) RM’000 losses 234,900 - 20,000 - (1,205,226) (1,156,176) (1,056,255) RM’000 Net For TheYear Ended31December2012 Statements OfCashFlows (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD Loss befor ACTIVITIES CASH FLOWSFROMOPERATING Adjustments for: Capital Operating LossBefore changesinWorking Provision forinventory Property, plantandequipmentwrittenoff other receivables Allowance fordoubtfuldebtsoftradeand Increase inliabilityfordefined benefitplans Finance costs equipment Impairment lossonproperty, plantand Depreciation ofinvestment property equipment Depreciation ofproperty, plantand Finance income grants Amortisation ofGovernment equipment Gain ondisposalofproperty, plantand trade andotherreceivables Reversal ofallowancedoubtfuldebts Share ofresults ofassociates services Claims fromforuneconomic theGovernment - associatedcompany Dividend income: - subsidiaries Impairment lossonotherinvestment e tax

(231,993) (107,171) (25,892) (35,006) (40,827) RM’000 16,408 29,675 84,643 96,581 (1,272) (4,006) 3,394 2012 205 910 (78) 57 30 The Group - - (103,663) (24,106) (28,820) (12,811) RM’000 13,848 19,487 20,600 91,686 (2,255) (1,265) (3,808) 3,332 2,174 2011 (78) 57 - - - - (275,591) (120,883) (40,827) (22,720) RM’000 16,408 29,269 84,643 90,552 (3,327) (1,756) 2,522 2012 (545) (578) 205 910 (78) The Company 30 - - (119,921) RM’000 (28,820) (13,773) (22,823) 13,848 18,901 20,600 87,957 (1,384) (1,198) (2,004) (1,109) 1,984 2,174 2011 (78)

- - - -

2012 ANNUAL REPORT REPORT ANNUAL

61 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 62 ANNUAL REPORT 2012 Net CashUsedInInvestingActivities - subsidiaries - associates Dividends income: Interest received equipment Proceeds from disposalofproperty, plantand Purchase ofproperty, plantandequipment ACTIVITIES CASH FLOWSFROMINVESTING Net CashUsedInOperatingActivities Claims foruneconomicservicesreceived Housing loaninterest paid Retirement benefitspaid Income taxpaid Interest paid Cash UsedInOperations Increase/(Decrease) in: (Increase)/Decrease in: Trade andother payables Inventories Trade andotherreceivables Note i)(54,114) (ii) RM’000 (27,042) (91,339) (11,502) (10,283) (89,113) 22,720 30,002 (9,620) 32,807 (6,852) (7,897) 1,272 3,080 2012 (823) The Group - (111,072) RM’000 (89,317) (12,681) (17,963) (18,370) 13,773 28,820 (3,467) (2,052) 2,255 5,727 8,271 3,125 2011 (823) (878) - (105,593) RM’000 (25,978) (53,242) (97,015) (11,502) (11,837) 22,720 30,002 (9,099) 33,979 (6,852) 2,756 1,243 2012 (823) The Company 545 - (107,051) RM’000 (85,459) (17,323) (17,963) (17,784) 13,773 28,820 (9,573) 1,109 1,384 5,326 9,802 3,125 2011 (823) 323 - ENDOFTHEYEAR CASH ANDEQUIVALENTS AT THE BEGINNINGOFTHEYEAR CASH ANDEQUIVALENTS AT THE Effects offoreign exchangeratechanges EQUIVALENTS NET DECREASEINCASHAND Net CashFrom Financing Activities Government Utilisation ofstimuluspackagefrom Increase indepositspledged Repayment ofshort-termborrowings Advances from subsidiaries Proceeds from short-termborrowings Proceeds from issuanceofordinary shares ACTIVITIES CASH FLOWSFROMFINANCING Note i 26,093 (i) RM’000 (14,665) 103,716 (30,959) 124,900 40,438 10,116 2012 (341) (21) The Group - - RM’000 (46,786) (38,412) 40,438 87,257 55,212 73,624 20,000 2011 (33) - - - Statements OfCashFlows RM’000 117,358 (28,542) 124,900 (5,635) 11,000 10,000 1,988 7,623 2012 The Company - - - RM’000 (45,960) (38,412) 53,583 56,822 75,234 20,000 7,623 2011

- - - -

2012 ANNUAL REPORT REPORT ANNUAL

63 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 64 ANNUAL REPORT 2012 (ii) (i)

Note 21andRM525,000(2011:RMNil)wer amounts: Cash andcashequivalentsincludedinthestatementsofflowscomprisefollowingfinancialposition Cash andcashequivalents During Pur (2011: Cash andbankbalances Less: Depositspledgedwithlicensedbanks Deposits placewith Financial institutions Licensed banks chase ofProperty, plantandequipment

RM111,072,000) the

financial

year The accompanying Notesformanintegralpart ofthefinancialstatements. ,

of the

which

Gr oup’s

RM7,185,000

additions e acquired bythemeanofhire-purchase.

of

(2011:

pr operty,

RMNil)

plant RM’000

26,093 20,903 21,244 20,894 wer 5,190 2012 (341)

and 350 e The Group

r eceived

equipment

fr RM’000 om 40,438 12,119 28,319 28,319 28,319

2011 with

Development

- - an

aggr Statements OfCashFlows egate RM’000

Agr 1,988 1,988 2012 The Company

eement cost - - - - -

of

RM61,824,000 as

explained RM’000 7,623 7,623 2011 - - - - -

in

2. 1. For TheYear Ended31December2012 Notes To TheFinancialStatements (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD

which were inissuebutnotyeteffective andnotearlyadoptedbytheGroup andtheCompanyare aslistedbelow: At thedateofauthorisationfor issueofthesefinancialstatements,thenewand revised Standards andICInterpretations MFRSs andICInterpretations (“ICInts.”)IssuedbutNot Yet Effective Company’s mostrecent annualfinancialstatementsare notbeingpresented. in accordance withFRSstoitsequityinaccordance withMFRSsforthedateoftransitiontoinGroup’s and the and previous financial years. There is also noeffect on Consequently,retained earnings. reconciliations of its equity reported the financialstatementsofGroup andoftheCompanyas restatement hasnoeffect onthenet results forthecurrent Standards, with1January2011asthedateoftransition.TheadoptionMFRSshasnot affected theamountsreported on The transitiontoMFRSsisaccountedforinaccordance withMFRS1:First-timeAdoption ofMalaysianFinancialReporting accordance withFinancialReportingStandards (“FRSs”). in accordance withMFRSs forthefirsttime.Inprevious financialyears,thesestatements were prepared in The Group’s and the Company’s financial statements for the financial year ended 31 December 2012 have been prepared Adoption ofMalaysianFinancialReportingStandards 1965 inMalaysia. Reporting StandardsFinancial (“MFRSs”), International andtheprovisions oftheCompaniesAct, The financialstatementsoftheGroup andoftheCompanyhavebeenprepared inaccordance withMalaysianFinancial BASIS OFPREP 16 May2013. The financialstatementsoftheGroup andoftheCompanywere authorisedbytheBoard ofDirectors forissuanceon Jalan SultanHishamuddin,50621KualaLumpur. The registeredTingkat 1,IbuPejabatKorporatKTMB, office andprincipalplaceofbusinesstheCompanyislocated at nature oftheseactivitiesduring thefinancialyear. Transport. The principal activities of its subsidiaries are described in Note 13. There have been no significant changes in the Peninsular Malaysia and Singapore. The Company operates these activities pursuant to a licence issued by the Ministry of The principalactivitiesoftheCompanyare railwaytransportationoperationsandtheprovision ofrelated railwayservicesin Ministry ofFinance(Incorporated),abodycorporateestablishedinMalaysia. for one(1)ordinary share ownedbytheFederalLand Commissioner, alloftheequityCompanyisownedby Keretapi Tanah MelayuBerhadisapubliclimitedliabilitycompany, incorporatedanddomiciledinMalaysia.Saveexcept GENERAL INFORMA ARATION OF FINANCIALSTATEMENTS

TION

2012 ANNUAL REPORT REPORT ANNUAL

65 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 66 ANNUAL REPORT 2012 the Group andtheCompanyissetoutbelow: A briefdescriptionof the significant new MFRSsand Amendmentsto MFRSs thathave beenissued and mayapplicable to IC Interpretations willhavenomaterialimpactonthefinancialstatementsofCompany intheperiodofinitialapplication. statements oftheGroup andoftheCompanywhentheybecomeeffective andthattheadoptionoftheseStandards and The directors anticipatethattheabovementionedStandards andICInterpretations willbeadoptedintheannualfinancial 5 4 fective immediatelyonissuancedateof1March, 2012 3 2 1 Amendments toMFRSscontainedinthedocumententitledAnnualImprovements 2009-2011CycleissuedinJuly2012 IC Int.20 MFRS 132 MFRS MFRS 127 MFRS 119 MFRS 101 MFRS 13 MFRS 12 MFRS 12 MFRS 11 MFRS 11 MFRS 10 MFRS 10 MFRS 9 MFRS 9 MFRS 7 MFRS 7

2 Investments 128

MFRS 7relating to“MandatoryEffective DateofMFRS9andTransition Disclosures” on1March, 2012 issuance ofAmendmentstoMFRS9(IFRSissuedbyIASBin November2009andOctober2010respectively) and Ef Ef Ef Ef Ef

fective forannualperiodsbeginningonorafter1January, 2014 fective forannualperiodsbeginningonorafter1July, 2012 fective for annual periods beginning on or after 1 January, 2015 insteadof 1 January, 2013 immediatelyupon the fective forannualperiodsbeginningonorafter1January, 2013

Stripping CostsinthePr Liabilities) Financial Instruments:Pr Separate FinancialStatements(IAS27asamendedbyIASBinMay2011) Employee Benefits(IAS19asamendedbyIASBinJune2011) Compr Pr Fair V Disclosur Disclosur Joint Arrangements(Amendmentsr Joint Arrangements Consolidated FinancialStatements(Amendmentsr Consolidated FinancialStatements Financial Instruments(IFRS9issuedbyIASBinNovember2010) Financial Instruments(IFRS9issuedbyIASBinOctober2009) Liabilities) Financial Instruments:Disclosur 2009 andOctober2010r T Financial Instruments:Disclosur ransition DisclosuresAccountingStandards (IFRS9issuedbyInternational Board (“IASB”)inNovember esentation ofFinancialStatements(Amendmentsrelating toPresentation ofItemsOther alue Measurement ehensive Income) e ofInterests inOtherEntities (Amendmentsrelating toTransition Guidance) e ofInterests inOtherEntities 5 1

in

Associates 1 1 4 oduction PhaseofaSurfaceMine esentation (Amendmentsrelating toOffsetting FinancialAssetsand espectively)]

and

Joint es (Amendmentsrelating toDisclosures -Offsetting FinancialAssetsand es [Amendmentsrelating toMandatoryEffective Date ofMFRS9and 1 elating toTransition Guidance)

Ventures 2 1

(IAS

28 elating toTransition Guidance)

as

amended 1 1 3 3 1

by

IASB 1

in

May 1

2011) 1 1

1 (b) (a) Key r and whethertheentitychoosestorestate priorperiods. introduces newdisclosure requirements thatare eitherpermittedorrequired onthebasisofentity’s dateofadoption restating priorperiods.MFRS 7whichwasalsoamendedintandemwiththeissuanceofaforementioned amendments January 2015 instead of on or after 1 January 2013, with earlier application still permitted as well as modified the relief from issuance dateof1March 2012 amendedthemandatoryeffective dateofMFRS9toannualperiodsbeginningonorafter1 relating to“MandatoryEffective DateofMFRS9andTransition Disclosures” whichbecameimmediatelyeffective on the The amendmentstoMFRS9(IFRSissuedbyIASBinNovember2009andOctober2010respectively) (“MFRS9”) measurement offinancial liabilities andforderecognition. of financialassets.MFRS9(IFRSissuedbyIASBinOctober2010)includesthe requirements fortheclassificationand MFRS 9(IFRSissuedbyIASBinNovember2009)introduces newrequirements fortheclassificationandmeasurement MFRS 9andAmendmentsrelating toMandatoryEffective DateofMFRS9andTransition Disclosures 7 require retrospective applicationuponadoption. financial instrumentsunderanenforceable masternettingagreements orsimilararrangements.BothMFRS132and The amendmentstoMFRS7intr off” and“simultaneousrealisation andsettlement”. liabilities requirements. Specifically, theamendmentsclarifymeaningof“currently has a legallyenforceable rightofset- The amendmentstoMFRS132clarifyexistingapplicationissuesrelating totheoffset ofthefinancialassetsand disclosures Amendments toMFRS7and132:Offsetting FinancialAssetsandLiabilitiestherelated

equirements ofMFRS9are describedasfollows: as atfairvaluethrough profit orloss was presented inprofit orloss. loss. Previously, underFRS 139,theentire amount ofthechangeinfairvalue ofthefinancialliabilitydesignated loss. Changesinfairvalueattributable toafinancialliability’s credit riskare notsubsequently reclassified to profit or the liability’s credit riskinothercomprehensive incomewould create orenlargeanaccounting mismatchinprofit or risk ofthatliability, ispresented inothercomprehensive income,unlesstherecognition oftheeffects ofchangesin requires thattheamount ofchangeinthefairvaluefinancialliabilitythatisattributable tochangesinthecredit W for trading)inothercomprehensive income,withonlydividendincomegenerallyrecognised inprofit orloss. make anirrecoverable electiontopresent subsequentchangesinthefairvalueofequityinstrument(thatisnotheld measured attheirfairvaluestheendofsubsequentaccountingperiods.Inaddition, under MFRS9,entitiesmay amortised costattheendofsubsequentaccountingperiods. Allotherdebtinvestmentsandequityare cash flowsthatare solelypaymentsofprincipalandinterest ontheprincipaloutstandingare generallymeasured at held withinabusinessmodelwhoseobjectiveistocollectthe contractualcashflows,andthathave Measurement tobesubsequentlymeasured atamortisedcostorfairvalue.Specifically, debtinvestmentsthat are All r ith regard tothe measurement offinancial liabilities designatedasatfairvalue through profit orloss, MFRS9 ecognised financial assets thatare withinthe scopeofMFRS139FinancialInstruments:Recognitionand oduce newdisclosure requirements relating torightsofoffset andrelated arrangementsfor

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

67 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 68 ANNUAL REPORT 2012 by MFRS13tocoverallassets andliabilitieswithinitsscope. hierarchy currently required forfinancialinstrumentsonlyunderMFRS7Financial Instruments:Disclosures willbeextended required in thecurrent standards. For example, quantitative and qualitativedisclosures basedonthethree-level fairvalue except inspecifiedcircumstances. Ingeneral,thedisclosure requirements inMFRS13are more extensivethanthose items forwhichotherIFRSsrequire orpermitfairvaluemeasurements anddisclosures aboutfairvaluemeasurements, measurements. ThescopeofMFRS13isbroad; itappliestobothfinancialinstrumentitemsandnon-financial The Standard definesfairvalue,establishesaframeworkformeasuringand requires disclosures aboutfairvalue MFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. MFRS 13 the applicationoftheseMFRSsforfirsttime. In July2012,theamendmentstoMFRS10,11and 12were issuedtoclarify certaintransitionalguidanceon than thoseinthecurrent standards. associates and/or unconsolidated structured entities. In general, the disclosure requirements in MFRS 12 are more extensive MFRS 12isadisclosure standard andisapplicabletoentitiesthathaveinterests insubsidiaries,jointarrangements, or proportionate consolidation. accounting, whereas jointly controlled entities under MFRS 131 can be accounted forusing the equitymethod of accounting controlled operations.Inaddition, jointventures underMFRS11are required tobeaccountedforusingtheequitymethodof under MFRS131,there are three typesofjointarrangements:jointlycontrolled entities,jointlycontrolled assetsandjointly joint operationsorventures, dependingontherightsandobligationsofpartiestoarrangements.Incontrast, by Venturers willbewithdrawnupontheeffective dateofMFRS11.Under11,jointarrangementsare classifiedas more partieshavejointcontrol Contributions shouldbeclassified.ICInt.113JointlyControlledEntities-Non-monetary MFRS 11replaces MFRS 131 InterestsinJointVentures. MFRS11dealswithhowajointarrangementofwhichtwoor returns. ExtensiveguidancehasbeenaddedinMFRS10todealwithcomplexscenarios. involvement withtheinvestee,and(c)abilitytouseitspoweroverinvesteeaffect theamountofinvestor’s of control thatcontainsthree elements: (a) poweroveraninvestee,(b)exposure, orrights,tovariablereturnsfrom its Under MFRS10,there isonly onebasisforconsolidation,whichiscontrol. Inaddition,MFRS10includesanewdefinition financial statements.ICInt.112Consolidation-SpecialPurposeEntitieswillbewithdrawnuponeffective dateofMFRS10. MFRS 10replaces thepartsofMFRS127ConsolidatedandSeparateFinancialStatementsthatdealwithconsolidated Key requirements ofthesefiveStandards are describedbelow. (IAS issued, In November2011,apackageoffiveStandards onconsolidation,jointarrangements,associatesanddisclosures was MFRS 10,11,12,127and128

28

including as

amended

MFRS

by

IASB 10,

MFRS

in

May

11,

2011).

MFRS

12,

MFRS

127

(IAS

27

as

amended

by

IASB

in

May

2011)

and

MFRS

128

MFRSs include: The Amendments toMFRSs:AnnualImprovements 2009-2011Cycle The amendmentstoMFRS119require retrospective application. discount ratetothenetdefinedbenefitliabilityorasset. used intheprevious version ofMFRS119are replaced witha“net-interest” amount,whichiscalculated byapplyingthe position toreflect thefullvalueofplandeficitorsurplus.Further, theinterest costandexpectedonplanassets return comprehensive incomein order forthenetpensionassetorliabilityrecognised intheconsolidatedstatementoffinancial of pastservicecosts.Theamendmentsrequire allactuarialgainsandlossestoberecognised immediatelythrough other hence eliminatethe‘corridorapproach’ permittedundertheprevious versionofMFRS119andacceleratetherecognition require the recognition of changes in defined benefit obligations and infairvalue ofplanassetswhen they occur, and significant change relates totheaccountingforchangesindefinedbenefitobligationsandplanassets.Theamendments The amendmentstoMFRS119changetheaccountingfordefinedbenefitplansandterminationbenefits. most MFRS 119(IAS19asamendedbyIASBinJune2011) and totalcomprehensive income. application oftheamendmentstoMFRS101wouldnotresult inanyimpactonprofit orloss,othercomprehensive income income willbemodifiedaccordingly to reflect thechanges.Otherthanabovementioned presentation changes,the The amendmentswillbeappliedretrospectively uponadoptionandhence,thepresentation ofitemsothercomprehensive and othercomprehensive income” andthe“incomestatement”isrenamed the“statementofprofit orloss”. Under theamendmentstoMFRS101,“statementofcomprehensive income”isrenamed “statementofprofit orloss The amendmentsalsointroduce newterminologyforthestatementofcomprehensive incomeandstatement. compr income reclassified subsequentlytoprofit orlosswhenspecific conditions aremet.Incometaxonitemsofothercomprehensive grouped intotwocategories:(a)itemsthatwillnotbereclassified subsequentlytoprofit orloss;and(b)itemsthatwillbe disclosures to be made in the other comprehensive income section such that items of other comprehensive income are statement or in two separate but consecutive statements. However, the amendments to MFRS 101 require additional The amendmentstoMFRS101retain theoptiontopresent profit orlossandothercomprehensive incomeineitherasingle Amendments toMFRS101:Presentation ofItemsOtherComprehensive Income Amendments • Amendments • Amendments • Annual Improvements2009–2011CycleincludeanumberofamendmentstovariousMFRSs.The to ehensive incomeeitherbefore taxornetoftax.

is

r equired

to

be to to to

MFRS MFRS MFRS allocated

132 116 101

on

Financial Instruments:Presentation Property, Plantandequipment; Presentation ofFinancialStatements

the

same

basis

–

the

amendments

do

not

change Notes To TheFinancialStatements

the

option

to

pr esent

items

of

other

2012 ANNUAL REPORT REPORT ANNUAL

69 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 70 ANNUAL REPORT 2012 3.

The Basis ofAccounting SIGNIFICANT ACCOUNTINGPOLICIES transaction costsofanequityshouldbeaccountedforinaccordance withMFRS112IncomeTaxes. The amendmentstoMFRS132clarifythatincometaxrelating todistributionholdersofanequityinstrumentand Amendments toMFRS132 inventory otherwise. as property, plant and equipment when they meet the definition of property, plantand equipment inMFRS116andas The amendmentstoMFRS116clarifythatspare parts,stand-byequipmentandservicingshouldbeclassified Amendments toMFRS116 statement offinancialpositionand related notesinthefuture periods. financial position.Hence,theadoptionofamendmentswhenitbecomeseffective willaffect thepresentation ofthethird in thethird statementoffinancialpositionandthat related notesare not required toaccompanythethird statementof position onlywhentheretrospective application,restatement orreclassification hasamaterialeffect ontheinformation financial position).Theamendments toMFRS101clarifythatanequityis required topresent athird statementoffinancial reclassification topresent astatementoffinancial position asatthebeginningof preceding period(third statementof MFRS 101requires anentitythatchangesaccounting policiesretrospectively, ormakesaretrospective restatement of Amendments toMFRS101 As generally basedonthefairvalueofconsiderationinvolvedinexchangeforassetsandliabilities. policies ofanentitysoastoobtain benefitsfrom itsactivities. of financial reporting period.Control isachievedwhere thefinancialandoperating theCompanyhaspowertogovern The consolidatedfinancial statements comprisethe financialstatementsoftheCompanyand itssubsidiariesasattheend Basis ofConsolidation of theCompanyisdependentoncontinuedfinancialsupport from MinisterofFinance (Incorporated). appropriateness asabasis ofpreparation oftheapplicationgoing-concern financial statementsoftheGroup and Finance (Incorporated)toenabletheGroup intheforeseeable andtheCompanytooperateasagoing-concern future. The presumes thattheGroup andtheCompanywillcontinuetoreceive financialsupportfrom itsholdingcompany, Ministerof and oftheCompanyhavebeenprepared which onthebasisofaccountingprinciplesapplicabletoagoing-concern r espectively as a result of losses incurred in the current and prior financial years. Thefinancialstatements ofthe Group

of financial statements of the Company have been prepared under the historical cost convention. Historical cost is

31

December

2012,

the

Gr oup

and

the

Company

have

a

capital

deficiency

of

RM983,022,000

and

RM1,205,226,000 in thefairvalue of contingentconsiderationclassified asequityare not recognised. contingent considerationclassified asanassetorliabilityare accountedforinaccordance with relevant MFRSs. Changes cost ofacquisitionwhere theyqualifyasmeasurement periodadjustments.Allother subsequentchangesinthefairvalueof arrangement, measured atitsacquisition-datefairvalue. Subsequentchangesinsuchfairvaluesare adjustedagainstthe Where applicable, the consideration for theacquisition includes anyassetofliabilityresulting from acontingentconsideration recognised inprofit orlossasincurred. assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are acquisition ismeasured attheaggregate ofthefairvalues(atdateexchange)assetsgiven,liabilitiesincurred or Acquisitions ofsubsidiariesandbusinessesare accountedforusingtheacquisitionmethod. Theconsiderationforeach Business Combinations investment inanassociateorjointlycontrolled entity. MFRS 139FinancialInstruments:RecognitionandMeasurement or, whenapplicable,thecoston initial recognition ofan subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under would berequired iftherelevant assetsorliabilitieswere disposedof.Thefairvalueofanyinvestmentretained intheformer previously recognised inothercomprehensive incomeinrelation tothesubsidiaryare accountedforinthesamemanneras carrying amountoftheassets(includinggoodwill),andliabilitiessubsidiaryanynon-controlling interests. Amounts the aggregate ofthefairvalue oftheconsiderationreceived andthefairvalueofanyretained interest and(ii)theprevious Where theGroup losescontrol ofasubsidiary, theprofit orlossondisposaliscalculatedasthedifference between(i) Company. at thefairvalueofconsiderationpaidorreceived isrecognised directly inequityandattributedtoownersofthe relative interests inthesubsidiaries.Anydifference betweentheamountbywhichnon-controlling interests are adjusted The carryingamountsoftheGroup’s interests andthenon-controlling interests are adjustedtoreflect thechangesintheir Changes intheGroup’s interests in subsidiariesthatdonotresult inalossofcontrol are accountedforasequitytransactions. income isattributedtonon-controlling interests evenifthisresults inthenon-controlling interests havingadeficitbalance. interests atinitialrecognition plusthenon-controlling interests’ share ofsubsequentchangesinequity. Total comprehensive by-acquisition basis.Subsequenttoacquisition,thecarryingamountofnon-controlling interests istheamountofthose of thefairvalueacquiree’s identifiablenetassets.Thechoiceofmeasurement basisismadeonanacquisition- controlling shareholders maybeinitiallymeasured eitheratfairvalueorthenon-controlling interests’ proportionate share Non-controlling interests insubsidiariesare identifiedseparatelyfrom theGroup’s equitytherein. Theinterests ofnon- All intra-group transactions,balances,incomeandexpensesare eliminatedinfullonconsolidation. line withthoseusedbyothermembersoftheGroup. Where necessary, adjustments are madetothe financial statements ofsubsidiariestobringtheiraccounting policiesinto income from theeffective dateofacquisitionandup to theeffective dateofdisposal,asappropriate. The results of subsidiaries acquired or disposed during the year are includedintheconsolidated statement of comprehensive

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

71 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 72 ANNUAL REPORT 2012 assets • liabilities • not incontrol orjointcontrol overthosepolicies. venture. Significantinfluenceisthepowertoparticipate inthefinancialandoperatingpolicydecisionsofinvestee but Associates are entitiesinwhichtheGroup hassignificantinfluenceandthatisneither asubsidiarynoraninterest inajoint Investment inAssociates included inprofit orloss. losses. Ondisposalofsuchinvestments,thedifference betweennetdisposalproceeds andtheircarryingamountsis In theCompany’s separatefinancialstatements, investmentsinsubsidiariesare statedatcostlessaccumulatedimpairment are considered whenassessingwhethertheGroup hassuchpoweroveranotherentity. benefits from theiractivities. Theexistence and effect of potential votingrightsthat are currently exercisable orconvertible Subsidiaries are entitiesoverwhichtheGroup hastheabilitytocontrol thefinancialandoperatingpoliciessoastoobtain Investments inSubsidiaries about factsandcircumstances thatexistedasoftheacquisitiondate,andissubjecttoamaximumoneyear. The measurement period is the period from the date of acquisition to the date the Group obtains complete information affected theamountsrecognised asofthatdate. information obtainedaboutfactsandcircumstances thatexistedasoftheacquisitiondatethat,ifknown,wouldhave amounts are adjustedduring themeasurement period,oradditionalassetsliabilitiesare recognised, toreflect new occurs, theGroup reports provisional amountsfortheitemsofwhichaccounting isincomplete.Thoseprovisional If theinitialaccountingforabusinesscombinationisincompletebyendofreporting periodinwhichthecombination deferred • (revised) are recognised attheirfairvaluetheacquisitiondate,exceptthat: The acquiree’s identifiableassets,liabilitiesandcontingentthatmeettheconditionsfor recognition underMFRS3 income are reclassified toprofit orloss,where such treatment wouldbeappropriate ifthatinterest were disposedof. arising from interests intheacquiree priortotheacquisitiondatethathavepreviously beenrecognised inothercomprehensive remeasured tofairvalueattheacquisitiondateand resulting gainorloss,ifany, isrecognised inprofit orloss.Amounts Where abusinesscombinationisachievedinstages,theGroup’s previously heldinterests intheacquired entity are ar measur Sale andDiscontinuedOperationsar e measured inaccordance withMFRS2Share-based Payment;and

(or ed inaccordance withMFRS 112IncomeTaxes andMFRS119EmployeeBenefits respectively;

or tax

disposal

equity

assets

instruments

gr

or oups)

liabilities

that

r

elated

and ar e

classified liabilities e measured inaccordance withthatStandard.

to

the

r

eplacement or as

assets held

for

r

elated sale

by

the

in

to

accor

Gr

employee oup dance

of

an

with benefit

acquir

MFRS

ee’s arrangements

5 shar

Non-curr e-based

ar ent e

payment

r Assets ecognised

Held awar

and

for ds

annually, ormore frequently when there isanindicationthatthe unitmaybeimpaired. to benefitfrom thesynergiesofcombination.CGUs towhichgoodwillhasbeenallocatedare testedforimpairment For thepurposeofimpairment testing,goodwillisallocatedtoeachoftheGroup’s cash-generating units(“CGU”)expected cost andsubsequentlymeasured atcostlessanyaccumulatedimpairmentlosses. the fairvalueofacquiree’s identifiableassets,liabilitiesandcontingent liabilities,andisinitially recognised asanassetat Goodwill arisingon the acquisitionofsubsidiary represents the excess ofcosttheacquisition over theGroup’s interest in Goodwill onConsolidation profit orloss. On disposalofsuchinvestments,thedifference betweennetdisposalproceeds andtheircarryingamountisincludedin losses. In theCompany’s separatefinancialstatements,investmentsinassociatesare statedatcostlessaccumulatedimpairment the accountingperiod.Uniformpoliciesare adoptedforliketransactionsandeventsinsimilarcircumstances. results isarrivedatfrom thelastannualfinancialstatementsavailableandmanagementtoendof method. Where thedates of thefinancialstatements usedare notcoterminous withthoseoftheGroup, theshare of The mostrecent available annualfinancialstatementsoftheassociatesare usedbytheGroup inapplyingtheequity losses, unlessithasincurred obligationsormadepaymentsonbehalfoftheassociate. interests that,insubstance, formpartoftheGroup’s netinvestmentintheassociates,Group doesnotrecognise further When theGroup’s share oflosses inanassociateequalsorexceedsitsinterest intheassociate,includinganylong-term of theinvestmentisrecognised immediatelyinprofit orloss. the Group’s share ofthenetfair value oftheassociate’s identifiableassets,liabilitiesandcontingentoverthecost Goodwill relating toanassociate isincludedinthecarryingamountofinvestmentandnotamortised.Anyexcess date theGroup ceasesto have significantinfluenceovertheassociates. in the associates. The associates are equity accounted for from the date theGroup obtainssignificant influence until the determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment are eliminated to the extent of the Group’s interest in the associates. After application of the equity method, the Group changes. Inapplyingtheequitymethod,unrealised gainsandlossesontransactionsbetweentheGroup andtheassociates Where there hasbeenachangerecognised directly intheequity of theassociates,Group recognises itsshare ofsuch profit orlossoftheassociatesis recognised intheconsolidated statementofcomprehensive income. adjusted for post-acquisition changes in the Group’s share of net assets of the associates. The Group’s share of the net Under theequitymethod,investmentinassociatesiscarriedconsolidatedstatementoffinancialpositionatcost Investments in associates are accountedfor in theconsolidated financial statementsusingtheequitymethodofaccounting.

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

73 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 74 ANNUAL REPORT 2012 (i) Foreign Currencies disposal. On disposalofasubsidiary, theattributableamountofgoodwillisincludedindeterminationgainorlosson period. of thecarryingamounteachassetinunit.Animpairmentlossrecognised forgoodwillisnotreversed inasubsequent reduce thecarryingamountofanygoodwillallocatedtounitandthenotherassetsonapro-rata basis If therecoverable amountoftheCGUislessthancarryingunit,impairmentlossallocatedfirstto (ii)

non-monetary items are alsorecognised directly inothercomprehensive income. gains andlosses are recognised directly inothercomprehensive income.Exchangedifferences arisingfrom such loss fortheperiodexcept the differences arisingonthetranslationofnon-monetary itemsinrespect of which Exchange differences arising onthetranslationofnon-monetaryitemscarriedatfair valueare includedinprofit or statements oftheforeign operation,asappropriate. the monetaryitem,are recognised inprofit orloss intheCompany’s financialstatements ortheindividualfinancial monetary items that form part of the Company’s net investment in foreign operations, regardless of thecurrency of entity ortheforeign operations,are recognised inprofit orlossfortheperiod.Exchangedifferences arisingon where thatmonetaryitemisdenominatedinacurrency otherthanthefunctionalcurrency ofeitherthereporting Exchange differences arisingonmonetaryitemsthatformpartoftheGroup’s netinvestmentinforeign operations, reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. currency ofthereporting entityortheforeign operations,are initiallytakendirectly totheforeign currency translation the Group’s netinvestmentinforeign operations,where thatmonetaryitemisdenominatedineitherthefunctional the Group’s netinvestmentinforeign operations.Exchangedifferences arisingonmonetaryitemsthatformpartof included in profit or loss for the period except for exchange differences arising on monetary items that form partof Exchange differences arisingonthesettlementofmonetaryitems,andtranslationare not retranslated. value wasdetermined.Non-monetaryitemsthatare measured intermsofhistoricalcostaforeign currency are fair valuethatare denominated inforeign currencies are translatedattheratesprevailing atthedatewhenfair currencies are translatedattheratesprevailing attheendofreporting period.Non-monetaryitemscarriedat at thedatesoftransactions.Atendeachreporting period,monetaryitemsdenominatedinforeign functional currency (foreign currencies) are recorded inthefunctionalcurrencies usingtheexchangeratesprevailing In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s For are presented inRinggitMalaysia(RM),whichisalsotheCompany’s functionalcurrency. economic environment inwhich theentityoperates(“thefunctionalcurrency”). Theconsolidatedfinancialstatements The individualfinancialstatementsofeachentityintheGroup are measured usingthecurrency oftheprimary Functional andPr eign Currency Transactions esentation Currency (iii) (i) Financial Instruments (ii)

- currency (RinggitMalaysia“RM”)oftheconsolidatedfinancialstatementsare translatedintoRMasfollows: The results andfinancialpositionofforeign operations thathaveafunctionalcurrency different from thepresentation - - For instrument. value through profit orloss,transactioncoststhatare directly attributabletotheacquisitionorissueoffinancial A financialinstrumentis recognised initially, atitsfairvalueplus,inthecaseofafinancialinstrumentnot Group becomesapartyto thecontractualprovisions oftheinstrument. A financialassetorliabilityis recognisedinthestatementoffinancialpositionwhen,andonly recognition. The classificationdependson thenature andpurposeof thefinancialassetsandisdeterminedattimeofinitial loss’ (FVTPL),‘heldtomaturity’ investments,‘available-for-sale’ (AFS)financialassetsand‘loans receivables’. Financial assetsare classifiedintothefollowingspecifiedcategories:financialassets ‘atfairvalue through profitor Financial assets The Group categorisesfinancialinstrumentsasfollows: Financial instrumentcategoriesandsubsequentmeasur Initial r

eign Operations ecognition andmeasurement of acquisition. deemed tobeassetsandliabilitiesoftheCompanyare recorded inRMatthe ratesprevailing atthedate fair valueadjustmentswhicharose ontheacquisitionofforeign subsidiariesbefore 1January, 2006are of the foreign operations and translated at the closing rate at the end of the reporting period. Goodwill and 2006 are treated asassets and liabilitiesoftheforeign operationsandare recorded inthefunctional currency rates fortheyear, whichapproximates theexchangeratesatdatesoftransactions;and prevailing attheendofreporting period; Goodwill andfairvalueadjustmentsarisingontheacquisitionoffor Income andexpensesforeachstatementofcompr Assets andliabilitiesforeachstatementoffinancialpositionpr ement ehensive incomeare translatedataverageexchange esented are translatedattheclosingrate Notes To TheFinancialStatements

eign operationsonorafter1January,

2012 ANNUAL REPORT REPORT ANNUAL

75 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 76 ANNUAL REPORT 2012 (i) as atFVTPL. Income is recognised on an effective interest basis for debt instruments otherthanthose financial assets classified carrying amountoninitialrecognition. cash receipts through the expected life of the financial assets, or(where appropriate) ashorterperiod, tothenet interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future The effective interest methodisaofcalculating theamortisedcostofafinancialassetandallocating Effective Interest Method

in thestatementsofcomprehensive income. interest onthefinancial assetandisincludedinthe“otheroperatingincomeexpenses” lineitem earned recognised inprofit or loss.Thenetgainorloss recognised inprofit or loss incorporatesanydividendor Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement • on • Financial assetsar Financial AssetsAtFVTPL it • it • A financialassetisclassifiedasheldfortradingif: as atFVTPL. such • recognition if: A financial asset other than afinancial asset held for trading may be designated as at FVTPL upon initial it • to bedesignatedasatFVTPL. Instruments: RecognitionandMeasur the would otherwisearise;or provided onthatbasis;or internally documented riskmanagementorinvestmentstrategies,and informationaboutthegrouping is managed anditsperformanceisevaluatedonafairvalue basis, inaccor together andhasar

has is forms

initial

a financial

designation derivative been

part r ecognition e classifiedasatFVTPLwhenthefinancialassetiseitherheldfortradingoritdesignated

acquired

asset of

a that

contract eliminates

forms

ecent actual pattern ofshort-termprofit-taking;ecent actualpattern or

is it principally

is not

part

part

designated containing

or of

of

significantly for a

portfolio a

the gr

oup ement permitstheentire combinedcontract(assetorliability) one

and purpose

of of or effective

r

educes

identified financial mor

of e

selling

embedded as

measur

assets financial a

hedging it

in ement

the or

derivatives, instruments

financial

near instrument.

or

r term; ecognition

liabilities

and

that dance withtheGroup’s or

MFRS the

inconsistency or

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both,

oup 139

manages

Financial which

that

is

(iii) (iv) amortised cost using theeffective interest method,withtheinterest expenserecognised on aneffective yieldbasis. Financial liabilitiesare initiallymeasured atfairvalue,netoftransactioncosts. It issubsequentlymeasured at Financial liabilities (ii)

less anyimpairment,withrevenue recognised onan effective yieldbasis. recognition, held-to-maturityinvestmentsare measured atamortisedcostusingtheeffective interest method fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial Loans Loans andReceivables asset. Otherforeign exchangegainsandlossesare recognised inothercomprehensive income. losses thatare recognised inprofit orlossare determinedbasedontheamortisedcostofmonetary currency andtranslatedatthespotrateendofreporting period.Theforeign exchangegainsand The fairvalueofAFSmonetaryassetsdenominatedinthatforeign currency isdeterminedinthatforeign dividends isestablished. Dividends onAFSequityinstrumentsare recognised inprofit orlosswhenthe Group’s rightto receive the reporting period. unquoted equityinvestmentsare measured atcostlessanyidentifiedimpairmentlossestheendof cannot bereliably measured andderivativesthatare linkedtoandmustbe settledbydeliveryofsuch AFS equityinvestmentsthatdonothaveaquotedmarketpriceinanactiveandwhosefairvalue investment revaluation reserve isreclassified toprofit orloss. is disposedofordeterminedtobeimpaired, thecumulativegainorlosspreviously accumulatedinthe exchange gainsandlossesonmonetaryassets,whichare recognised inprofit or loss.Where theinvestment with theexceptionofimpairmentlosses,interest calculatedusingtheeffective interest method,andforeign are recognised in other comprehensive income and accumulated in the investments revaluation reserve, measured atfairvaluethe endofthereporting period.Gainsandlossesarisingfrom changesinfairvalue as loansandreceivables, held-to-maturityinvestmentorfinancialassetsatFVTPL.AllAFSare AFS AFS FinancialAssets Held-to-maturity investmentsar Held-to-maturity Investments except forshort-termreceivables whentherecognition ofinterest wouldbeimmaterial. interest method,lessanyimpairment.Interest incomeisrecognised byapplyingtheeffective interest rate, quoted inanactivemarket.Loansandreceivables are measured atamortisedcostusingtheeffective financial assets are non-derivatives that are either designated as available-for-sale or are not classified and receivables are non-derivative financial assets with fixed or determinable payments that are not e non-derivativefinancialassetswithfixedordeterminablepaymentsand

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

77 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 78 ANNUAL REPORT 2012 (i) net carryingamountoninitialrecognition. future cashpaymentsthrough theexpectedlifeof financialliability, or(where appropriate) ashorterperiodtothe interest expenseovertherelevant period.Theeffective interest rateisthethatexactlydiscountsestimated The effective interest methodisaofcalculating theamortisedcostofafinancialliabilityandallocating (ii)

on it • • A financialliabilityisclassifiedasheldfortradingif: as atFVTPL. Financial Financial LiabilitiesatFVTPL such • recognition if: A financialliabilityotherthanaheldfortradingmaybedesignatedasatFVTPLuponinitial it • • it • Other financialliabilities,including borr Other FinancialLiabilities with interest expenserecognised onaneffective yield basis. Other financialliabilitiesare subsequentlymeasured atamortisedcostusingthe effective interest method, comprehensive income. paid onthefinancialliabilityandisincludedin‘othergains andlosses’lineiteminthestatementsof recognised inprofit orloss.Thenetgainloss recognised inprofit orlossincorporatesanyinterest Financial liabilitiesatFVTPLare statedatfairvalue,withanygainsorlossesarising onremeasurement together andhasar would otherwisearise;or the internally onthatbasis;or internally documented risk management or investment strategy, and information about the grouping is provided managed anditsperformanceisevaluatedonafairvaluebasis,inaccor to bedesignatedasatFVTPL. Instruments: RecognitionandMeasur

has is liabilities are classified as FVTPL when the financial liability is either held for trading or it is designated forms

initial

a financial

designation derivative been

part r ecognition

acquired

liability of

that a

eliminates contract

forms ecent actual pattern ofshort-termprofit-taking;ecent actualpattern or

is it principally

is not

part

designated part

containing

or of

owings, are initiallymeasured atfairvalue,netoftransactioncosts.

significant of for a

portfolio

a the

gr

ement permitstheentire combinedcontract(assetorliability)

and oup purpose one

r

of educes

effective of or

identified

financial mor

of

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as

embedded measur

financial a assets

hedging ement

or

instruments

in

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financial instrument.

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term; that

dance withtheGroup’s and

the

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both, oup 139

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(i) Property, PlantandEquipment is basedonthe quotedmarketpricesforsimilar itemswhenavailableandreplacement costwhenappropriate. each actedknowledgeably, prudentlyandwithout compulsion.Thefairvalueofotheritemsplantand equipment between knowledgeable willing parties in an arm’s lengthtransactionafterproper marketingwherein thepartieshad at acquisitiondate.Thefairvalue ofproperty istheestimated amountforwhichaproperty couldbeexchanged The costofproperty, plantandequipmentrecognised asaresult ofabusinesscombinationisbasedonfairvalue functionality oftherelated equipmentiscapitalisedaspartofthatequipment. hedges offoreign currency purchases ofproperty, plantand equipment.Purchased software thatisintegralto the Cost alsomayincludetransfersfrom othercomprehensive incomeofanygainorlossonqualifyingcashflow For qualifying assets, borrowing costsare capitalised in accordance with the accounting policyonborrowing costs. of materialsanddirect labour. the itemsandrestoring thesiteonwhichtheyare located.Thecostofself-constructedassetsalsoincludesthe attributable tobringingtheassetworkingconditionforitsintended use,andthecostsofdismantlingremoving Cost includesexpenditures thatare directly attributabletotheacquisitionof assetandanyothercostsdirectly impairment losses. Items ofproperty, plantandequipmentare measured atcostlessanyaccumulateddepreciation andanyaccumulated Recognition andmeasur paid, includinganynon-cashassetstransferred orliabilitiesassumed,isrecognised inprofit orloss. carrying amountofthefinancialliabilityextinguishedortransferred toanotherpartyandtheconsideration is dischargedorcancelledexpires. Onderecognition ofafinancialliability, thedifference betweenthe A financialliabilityorapartofitisderecognised when,andonlytheobligationspecifiedincontract profit orloss. new liabilityassumed)andanycumulative gain orlossthathad been recognised inequityisrecognised in the carryingamountandsumofconsiderationreceived (includinganynewassetobtainedless substantially allrisksandrewards oftheassets.Onderecognition ofafinancial asset,thedifference between from thefinancialassetexpire orthefinancialasset is transferred toanotherpartywithout retainingcontrol or A financialassetorpartofitisderecognised when,andonlythecontractualrightstocashflows Derecognition shorter period,tothenetcarryingamountoninitialrecognition. estimated future cashpaymentsthrough theexpected lifeofthefinancialliability, or(where appropriate) a allocating interest expenseovertherelevant period.The effective interest rateisthethatexactlydiscounts The effective interest methodisaofcalculating theamortisedcostofafinancialliabilityand ement

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

79 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 80 ANNUAL REPORT 2012 (iii) (ii)

financial year. Depr Renovation Fur Of Computer Rail Coaches Rolling stocks Infrastructur Container yards Plant Buildings The estimatedusefullivesforthecurrent andcomparativeperiodsare asfollows: ready fortheirintendeduse. land isnotdepreciated. Property, plantandequipmentunderconstruction are notdepreciated untiltheassetsare useful livesunlessitisreasonably certainthattheGroup willobtainownershipbytheendofleaseterm.Freehold an itemofproperty, plantandequipment.Leasedassetsare depreciated overtheshorterofleasetermandtheir Depreciation is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each part of for cost,lessitsresidual value. Depreciation iscalculated over thedepreciable amount,whichisthecostofanasset,orotheramountsubstituted Depreciation servicing ofproperty, plantandequipmentare recognised intheprofit orlossasincurred. can bemeasured reliably. Thecarryingamountofthereplaced partisderecognised. Thecostsoftheday-to-day item ifitisprobable thatthe future economicbenefitsembodiedwithinthepartwillflowto Group anditscost The costofr Subsequent costs “other income”orexpenses”respectively inprofit orloss. proceeds from disposalwiththecarryingamountof property, plantandequipmentare recognised netwithin The gainsorlossesondisposalofanitemproperty, plantandequipmentare determinedbycomparingthe as separateitems(majorcomponents)ofproperty, plantandequipment. When significantpartsofanitemproperty, plantandequipmenthavedifferent usefullives, theyare accountedfor fice equipment niture andfittings

and eciation methods,usefullives andresidual valuesare reviewed, andadjustedasappropriate atendofthe

and

road

machinery

e eplacing partofanitemproperty, plantandequipmentisrecognised inthecarryingamountof

vehicles

20 -30years 10 years 20 years 10 years 20 years 50 years 5 years 5 years 5 years 8 8

years years

The Gr Statements ofCashFlows inventories. Allowanceismadeforobsolete,slow-movingand defectiveinventories. purchase pricepluscostsincurred inbringingthemtotheirexistinglocationandconditionlessanyallowancefor obsolete Inventories comprising of spare parts,fuelsandotherconsumableswhichare notintendedforresale, are stated atoriginal Inventories (ii) (i) Leases Non-current assetsclassifiedasheldforsaleare measured atthelowerofcarryingamountandfairvaluelesscoststosell. Assets heldforsale

oup andtheCompanyadopt indirect methodinthepreparation ofthestatements ofcashflows. which theyare incurred. lease expense,overthetermoflease.Contingentrentals are chargedtoprofit orlossinthe reporting periodin leased assetare consumed.Leaseincentivesreceived are recognised inprofit orlossasanintegralpartofthetotal lease unlessanothersystematicbasisismore representative inwhicheconomicbenefitsfrom ofthetimepattern the Payments madeunderoperatingleasesare recognised inprofit orlossonastraight-line basisoverthetermof operating leasesand,theleasedassetsare notrecognised ontheGroup’s statementoffinancialposition. Leases, wher Operating lease with theGroup’s generalpolicyonborrowing costs. income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance a constant rate of interest on the remaining balance of the liabilities. Finance charges are charged directly against Lease paymentsare apportioned betweenfinancechargesand reduction oftheleaseobligationsoastoachieve the lessorisincludedinstatementoffinancepositionasaleaseobligation. value oftheminimumleasepayments,eachdeterminedatinceptionlease.Thecorresponding liabilityto Assets held under financeleases are recognised asassets ofthe Group attheirfairvalueor, iflower, atthepresent of ownershiptothelessee.Allotherleasesare classifiedasoperatingleases. Leases ar Finance lease e classifiedasfinanceleasewheneverthetermsoftransfersubstantiallyallrisksand rewards e theGroup doesnotassume substantiallyalltherisksandrewards oftheownership are classifiedas

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

81 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 82 ANNUAL REPORT 2012 (ii) (i) Impairment in value. and atbank,are short-term,highlyliquidinvestmentsandare readily convertibletocashwithinsignificantrisksofchanges Cash andcashequivalents,whichcomprisedepositswithlicensedbanksotherfinancialinstitutions,onhand

in profit orloss. impairment notbeenrecognised atthedateimpairmentisreversed. Theamountofthereversal isrecognised the extentthatasset’s carryingamount doesnotexceedwhatthecarryingamountwouldhavebeenhad to aneventoccurringaftertheimpairmentlosswasrecognised inprofit orloss,theimpairmentlossis reversed, to If, inasubsequentperiod,thefairvalueofdebtinstrument increases andtheincrease canbeobjectivelyrelated or loss. Impairment lossesrecognised inprofit orlossforaninvestmentinequityinstrumentisnot reversed through profit flows discountedatthecurrent marketrateofforasimilarfinancialasset. return is measured asthedifference betweentheasset’s carryingamountandthepresent value ofestimatedfuture cash An impairmentlossinrespect ofunquotedequityinstrumentthatiscarriedatcostrecognised inprofit orlossand other comprehensive income isreclassified from equitytoprofit orloss. available-for-sale financialassethasbeen recognised intheothercomprehensive income,thecumulativelossin asset’s current fairvalue,lessanyimpairmentlosspreviously recognised. Where adecline inthefairvalueofan as thedifference betweentheasset’s acquisitioncost(netofanyprincipalrepayment andamortisation)the An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured allowance account. at theasset’s originaleffective interest rate.Thecarryingamountoftheassetisreduced through theuseofan difference betweentheasset’s carrying amountandthepresent valueofestimatedfuture cashflowsdiscounted An impairmentlossinrespect ofloansandreceivables isrecognised inprofit orlossandismeasured asthe evidence ofimpairment. recognised. Foranequityinstrument, asignificantorprolonged declineinthefairvaluebelowitscostisanobjective estimated future cashflows oftheasset.Lossesexpectedasa result offuture events,nomatterhowlikely, are not whether there isanyobjective evidenceofimpairmentasaresult ofoneormore eventshavinganimpactonthe benefits) are reviewed attheendofeach reporting periodtodetermine whetherthere is any indicationofimpairment. The carryingamountsofother assets(exceptforinventories,deferr Other assets All financialassets(exceptforinvestmentsinsubsidiariesandassociates)ar Financial assets ed taxassetandassetsarising from employee e assessedateachreporting date (ii) (i) Instruments classifiedasequityare measured atcostoninitial recognition andare not remeasured subsequently. Equity instruments

option, andany dividendsare discretionary. Dividends thereon are recognised asdistributionswithin equity. Preference share capitalisclassified asequityifitisnon-redeemable, oris redeemable butonlyattheGroup’s Pr Costs dir Issue expenses credited toprofit orlossinthefinancialyearwhich reversals are recognised. net ofdepreciation oramortisation,ifnoimpairmentlosshadbeenrecognised. Reversalsofimpairmentlossesare extent thattheasset’s carryingamount does notexceedthecarryingamountthatwouldhavebeendetermined, the recoverable amountsince thelastimpairmentlosswasrecognised. Animpairmentlossisreversed onlytothe or nolongerexists.Animpairmentlossisreversed ifthere hasbeenachangeintheestimatesusedtodetermine in priorperiodsare assessed attheendofeachreporting periodforanyindicationsthatthelosshasdecreased An impairmentloss in respect of goodwillisnot reversed. In respect of otherassets,impairmentlosses recognised a group ofcash-generating units)onaproratabasis. of cash-generatingunitsandthentoreduce thecarryingamountofotherassetsincash-generatingunit(or are allocated first to reduce the carryingamount of anygoodwill allocatedto thecash-generating unit orthe group Impairment lossesare recognised inprofit orloss.Impairmentlosses recognised in respect ofcash-generatingunits estimated recoverable amount. An impairmentlossisrecognised ifthecarryingamountofanassetoritsrelated cash-generatingunitexceedsits the assetorcash-generatingunit. pre-tax discountratethat reflects current marketassessmentsofthetimevalue ofmoneyandtherisksspecificto costs tosell.Inassessingvalueinuse,theestimatedfuture cashflowsare discountedtotheirpresent valueusinga The recoverable amountof anassetorcash-generatingunitisthegreater ofitsvalueinuseandfairless combination. to acash-generatingunitorgroup ofcash-generatingunitsthatare expectedtobenefitfrom thesynergiesof generating unit).Thegoodwillacquired inabusinesscombination,forthepurposeofimpairmenttesting,isallocated cash inflowsfrom continuingusethatare largelyindependent ofthecashinflowsotherassets(knownascash- For thepurposeofimpairmenttesting,assetsare grouped togetherintothesmallestgroup ofassetsthatgenerates at thesametime. that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period If anysuchindicationexists,thentheasset’s recoverable amountisestimated.Forgoodwill,andintangibleassets eference share capital ectly attributabletoissueofinstruments classifiedasequityare recognised asadeduction from equity.

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

83 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 84 ANNUAL REPORT 2012 (iii) (ii) (i) Employee Benefits

income andallexpensesrelated todefinedbenefitplans inpersonnelexpenses profit orloss. The Group recognises allactuarialgainsandlossesarisingfrom definedbenefitplansinothercomprehensive the extentthatbenefitsvest immediately, theexpenseis recognised immediatelyinprofit or loss. is recognised inprofit orlossonastraight-linebasisovertheaverageperioduntil benefitsbecomevested. To When thebenefitsofaplanare improved, theportionofincreased benefit relatingtopastservicebyemployees during thelifeofplan,oranysettlementplanliabilities. requirements thatapplytoanyplanintheGroup. AneconomicbenefitisavailabletotheGroup ifitis realisable the plan.Inorder tocalculatethepresent valueofeconomicbenefits,considerationisgiventoanyminimumfunding of economicbenefitsavailableintheformanyfuture refunds from theplanor reductions infuture contributionsto Group, therecognised assetislimitedtothenettotalofanyunrecognised pastservicecostsandthepresent value annually byaqualifiedactuaryusingtheprojected unitcredit method.Whenthecalculation results inabenefittothe are denominatedinthesamecurrency inwhichthebenefitsare expectedtobepaid.Thecalculationisperformed high qualitycorporatebondsthathavematuritydatesapproximating thetermsofGroup’s obligationsandthat the fair value of any plan assets are deducted. The discount rate is the yield at the end of the reporting period on prior periods;thatbenefitisdiscountedtodetermineitspresent value.Anyunrecognised pastservicecostsand estimating the amount of future in for their service in the current benefit that employees have earned return and The Gr Defined benefitplans Once thecontributionshavebeenpaid,Group hasnofurtherpaymentobligations. The Gr Defined contributionplan provided bytheemployee and theobligationcanbeestimatedreliably. Group andtheCompanyhas apresent legalorconstructiveobligationtopaythisamountasaresult ofpastservice A liabilityisrecognised forthe amountexpectedtobepaidundershort-termcashbonusorprofit-sharing plansifthe measured onanundiscounted basisandare expensedastherelated serviceis provided. Short-term employeebenefitobligationsinr Short termemployeebenefits in profit orlossasaccrued. equity holders,orifdividendpaymentsare notdiscretionary. Dividendsthereon are recognised asinterest expense Preference share capitalisclassifiedasfinancialliabilityifit redeemableonaspecificdateorattheoptionof oup’s contributionstostatutorypensionfundsare chargedtoprofit orlossintheyeartowhichthey relate. oup’s netobligationinrespect ofdefinedbenefit retirement plansiscalculatedseparatelyforeachplanby espect ofsalaries,annualbonuses,paidleaveandsickare (ii) (i) Revenue andotherincome also disclosedascontingentliabilitiesunlesstheprobability ofoutfloweconomicbenefitsis remote. obligations, whoseexistencewillonlybeconfirmedbytheoccurrence ornon-occurrence ofoneormore future events,are the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible Where itisnotprobable thatanoutflowofeconomicbenefitswillbe required, ortheamountcannotbeestimated reliably, Contingent liabilities the timevalueofmoneyandrisksspecifictoliability. Theunwindingofthediscountis recognised asfinancecost. are determinedbydiscounting the expectedfuture cashflowsatapre-tax ratethat reflects current marketassessmentsof estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions A provision isrecognised if,asaresult ofapastevent,theGroup hasapresent legalorconstructiveobligationthatcanbe Provisions (iv)

discounted totheirpresent value. can beestimatedreliably. Ifbenefitsare payablemore than12monthsafterthe reporting period,thentheyare encouraging voluntaryredundancy, itisprobable thattheoffer willbeaccepted,andthenumberofacceptances Termination benefits forvoluntary redundancies are recognised as expensesiftheGroup hasmadean offer possibility ofwithdrawal,toaformaldetailedplanterminateemploymentbefore thenormalretirement date. Termination benefitsare recognised asanexpensewhentheGroup isdemonstrablycommitted,without realistic to the Government ofMalaysia. to theGovernment Claims foruneconomicservices are recognised onanaccrualbasisandisbased on anannualbudgetsubmitted Claims fr is recognised asareduction ofrevenue. performed. Ifitisprobable thatdiscountswillbegivenandtheamountcanmeasured reliably, thenthediscount Revenue from servicesrendered isrecognised inprofit andlossnet ofdiscountsasandwhentheservicesare Services T past servicecostthathadnotpreviously beenrecognised. plan assets,changeinthepresent valueofdefinedbenefitobligationandany relatedactuarialgainsandlosses curtailment orsettlement occurs. Thegainorlossoncurtailmentcomprisesanyresulting changeinthefairvalueof The Group recognises gainsandlossesonthecurtailment orsettlementofadefinedbenefitplanwhenthe ermination benefits om the Government foruneconomicservices om theGovernment

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

85 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 86 ANNUAL REPORT 2012 necessary toprepare thequalifyingasset foritsintendeduseorsale are interruptedorcompleted. use orsaleare inprogress. Capitalisation ofborrowing costsissuspended or ceaseswhensubstantiallyallthe activities is beingincurred, borrowing costsare being incurred andactivitiesthatare necessarytoprepare theassetforitsintended The capitalisationofborrowing costsaspartofthecost ofaqualifyingassetcommenceswhenexpenditure fortheasset cost ofthoseassets. that necessarilytakeasubstantialperiodoftimetogetready fortheirintendeduseor sale,are capitalisedaspart ofthe Borrowing costsdirectly attributabletotheacquisition,constructionorproduction ofqualifyingassets,whichare assets recognised inprofit orlossusingtheeffective interest method. Borrowing coststhatare notdirectly attributabletotheacquisition,constructionorproduction ofaqualifyingassetare Borrowing costs (vii) (iv) (iii) (vi) (v)

systematic basisinthesameperiodswhichexpenses are recognised. Grants thatcompensatetheGroup forexpensesincurred are recognised inprofit orlossasotherincomeona over theusefullifeofasset. conditions associated with the grant and are thenrecognised in profit orlossasotherincomeonasystematic basis at fairvaluewhenthere is reasonable assurancethattheywillbereceived and that theGroup willcomplywiththe grantsthatcompensatetheGroupGovernment forthecostofanassetare recognised initiallyasdeferred income income from subleasedproperty isrecognised asotherincome. incentives grantedare recognised asanintegralpart ofthetotalrental income,overthetermoflease.Rental Gover Management feesar Management fee payment isestablished,whichinthecaseofquotedsecuritiesex-dividenddate. Dividend incomeisr Dividend income Interest incomeisrecognised asitaccruesusingthe effective interest methodinprofit orloss. Inter Rental Rental income est income nment grants income from property is recognised in profit or loss on a straight-line basis over theterm of the lease. Lease e recognised inprofit orlosswhenmanagementservicesare rendered. ecognised inprofit orloss onthedatethatGroup’s ortheCompany’s rightto receive 4.

(i) is probable thatfuture taxableprofits willbeavailableagainstwhichtheunutilisedtaxincentivecanutilised. is grantedandclaimed.Anyunutilisedportionofthetaxincentiverecognised asadeferred taxassettotheextentthatit A taxincentivethatisnotabaseofanassetrecognised asareduction oftaxexpenseinprofit orlossasandwhenit reduced totheextentthat itisnolongerprobable thattherelated taxbenefit will be realised. the temporarydifference canbeutilised.Deferred taxassetsare reviewed attheendofeachreporting periodandare A deferred taxassetisrecognised totheextentthatitisprobable thatfuture taxableprofits willbeavailableagainstwhich intend tosettlecurrent tax liabilities andassetsonanetbasisortheirtaxwillberealised simultaneously. they relate toincometaxes leviedbythesametaxauthorityontaxableentity, orondifferent taxentities,butthey Deferred taxassetsandliabilities are offset ifthere isalegallyenforceable righttooffset current taxliabilitiesandassets, when theyreverse, based on thelawsthathavebeenenactedorsubstantivelybyendofreporting period. taxable profit norloss.Deferred taxismeasured atthetaxratesthatare expectedtobeappliedthetemporarydifferences recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor assets andliabilitiesinthestatementoffinancialpositiontheirtaxbases.Deferred taxisnot recognised fortheinitial Deferred taxisrecognised usingtheliabilitymethod,providing fortemporarydifferences betweenthecarryingamountsof by theendofreporting period,andanyadjustmenttotaxpayableinrespect ofprevious years. Current taxistheexpectedpayableontaxableincomeforyear, usingtaxratesenactedorsubstantively it relates toabusinesscombinationoritemsrecognised directly inequityorothercomprehensive income. Income taxcomprisescurrent anddeferred tax.Income taxexpenseisrecognised inprofit orlossexcepttotheextentthat Income Tax assets isdeductedfrom theborrowing costseligible for capitalisation. on the temporary investment of specific borrowingsInvestment income earned pending theirexpenditure on qualifying CRITICAL ACCOUNTINGJUDGEMENTSANDKEYSOURCES OFESTIMA

amounts recognised inthefinancialstatements. opinion thatthere are noinstancesofapplicationjudgementwhichare expectedtohaveasignificanteffect onthe In theprocess ofapplyingtheCompany’s accountingpolicies,which are describedinNote3, managementisofthe Critical judgmentsinapplyingtheCompany’ s accountingpolicies TION UNCERTAINTY

Notes To TheFinancialStatements

2012 ANNUAL REPORT REPORT ANNUAL

87 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 88 ANNUAL REPORT 2012 (ii)

to makepayments,additionalallowancemayberequired. conditions ofthecustomerswithwhichGroup dealswere todeteriorate,resulting inanimpairmentoftheirability of thesereceivables, including thecreditworthiness andthepastcollectionhistoryofeachcustomer. Ifthefinancial on management’s estimate.Aconsiderableamountofjudgementisrequired inassessingtheultimaterealisation Allowance fordoubtfuldebtsismadebasedontheevaluationofcollectabilityandaginganalysisaccounts Allowance fordoubtfuldebts r based impairment inprevious financial yearsmaybe reversible. The recoverable amounts oftheassetswere determined The Group hasassessed,basedoncertainimpairmentindications,thatseveralofitsassetsmaybeimpaired or Impairment ofproperty, plantandequipment to thecarryingamountsofassetsandliabilitieswithinnextfinancialyearotherthanasfollows: estimation uncertaintyattheendofeachreporting period,thathaveasignificantriskofcausingmaterialadjustment Management believesthatthere arethefuture, nokeyassumptions madeconcerning andotherkeysources of Key sour ecognised forthefinancialyearended31December2012asshowninNote11.

on ces ofestimationuncertainty

value-in-use

calculations.

Based

on

these

calculations,

an

impairment

loss

of

RM84,643,000

wer e

5. 6.

valuethrough profit orloss: Interest expenseoffinancial liabilitiesthatare notatfair Claims fromforuneconomicservices theGovernment Parcel andmailservices Electric trainservices Commuter services Passenger services Freight andhaulageservices REVENUE FINANCE COSTS - Others - RCCPS - AlBaiBithamanAjilfinancing - Bankborrowings - Term loans 454,671 198,945 RM’000 RM’000 29,675 19,008 40,827 22,500 31,886 79,309 81,204 9,505 2012 2012 415 570 177 The Group The Group 440,963 192,913 RM’000 RM’000 17,823 10,324 28,820 20,686 23,939 82,824 91,781 6,371 2011 2011 Notes To TheFinancialStatements 324 570 234 360,988 127,383 RM’000 RM’000 29,269 19,008 40,827 31,886 79,309 81,204 9,402 2012 2012 289 570 379 The Company The Company - 352,560 125,186 RM’000 RM’000 17,237 10,324 28,820 23,939 82,824 91,781 6,019 2011 2011 324 570 10

-

2012 ANNUAL REPORT REPORT ANNUAL

89 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 90 ANNUAL REPORT 2012 7.

Gain ondisposalofproperty, plantandequipment* Hiring ofmachines - staff loans - fixeddeposits - loanstock Finance income Amortisation of Government grant Amortisation ofGovernment Reversal ofprovision ofbonus Net unrealised gainonforeign exchange Provision forinventory Impairment lossonotherinvestment Depreciation ofinvestment properties (Note12) Director’s fees Auditor’s remuneration Hire ofplantandequipment Rental ofpremises Property, plantandequipmentwrittenoff receivables Allowance fordoubtfuldebtsoftradeandother Lease rental oflocomotives (Note11) Impairment lossonproperty, plantandequipment Depreciation of property, plant and equipment (Note 11) Loss before taxisarrivedataftercharging(crediting)/charging : LOSS BEFORET AX (25,892) RM’000 (1,807) 19,809 84,643 96,581 3,394 2012 (752) (490) (30) (78) (64) (33) 205 100 364 411 793 910 30 57 The Group RM’000 20,224 20,600 91,686 (1,265) (1,228) (1,732) 6,213 2,174 3,332 2011 (490) 421 (33) (78) (33) 57 76 31 - - - RM’000 (1,807) 19,809 84,643 90,552 2,522 2012 (578) (490) (30) (17) (78) 205 240 411 163 910 The Company 30 96 - - - RM’000 20,224 20,600 87,957 (1,198) (1,228) 2,174 1,984 2011 (861) (490) 242 460 (33) (78) 74 31 - - - - - * ** (Continued)

project “KTMB” toPrimaPraiSdnBhd,basedondevelopmentalagreement signedon15September1995.Thedevelopment Included inthisincomeisr Management feesfrom subsidiaries Dividend income Claims fromforuneconomicservices theGovernment Rental incomefrom third parties** rental uptoagreed cut-off dateandthereafter themanagementofrental incomefrom properties willbemanagedbyRAC. In 2012,adecisionwasreached betweenRACandKTMBwhereby KTMBabletorecognise theincomefrom property 31 December2011. Due tothis,there isnorecognition ofincomefrom property rental in KTMB’s financialstatementsforyearended purpose oftakingoverallassetsandliabilitiesKTMB. RAC istherightful owner ofthe land andbuilding. RAC wasestablishedin 1992 underRailwayAct1991withthemain In amounting Included inr 21. otherreceivables Reversal ofallowancefordoubtfuldebtstradeand - subsidiaries - associates 2011, the Auditor General has audited Railway Assets Corporation “RAC” financialstatementsandintheiropinion that

was

to

concluded ental incomefrom third partiesisincomefrom property rental thatwasderecognised infinancialyear2011

RM20,094,989

and ecognition ofsalelandbyKTMB(Prai)SdnBhd,asubsidiaryKeretapi Tanah MelayuBerhad

full

due

settlement

to

uncertainty

has

been

in

the

made

ownership

on (40,827) (38,056) RM’000

(4,006) 28 2012

Mar of The Group

- - - the ch

said 2011.

income. RM’000 (28,820)

Detail (4,174) (3,808) 2011 Notes To TheFinancialStatements

of - - -

the

arrangement (22,720) (40,827) (37,946) RM’000 (1,756) (3,327) 2012 (288) The Company

explained RM’000 (13,773) (28,820) (1,109) (1,737) (2,004) 2011

(288) in

Note

2012 ANNUAL REPORT REPORT ANNUAL

91 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 92 ANNUAL REPORT 2012 8.

RM5,756,000 corporatised between thecommercial andsubsidisedratesofinterest pertainingtostaff housingloans,hadtobesettledbythe ofMalaysiaissued adirectiveThe Government toallcorporatised entitiesthatwitheffect from July1994,thedifference Other benefits Provision forhousingloan interest Increase inliabilityfordefined benefitplan(Note29) Employees Provident Funds Directors ofsubsidiaries Directors oftheCompany Director’s remuneration: Incentives Bonus W EMPLOYEE BENEFITS - otheremoluments - salaries - otheremoluments - salaries ages andsalaries

entities

(2011:

RM6,578,000). concer ned.

The

outstanding

claims

against 263,382 132,409 RM’000 80,427 16,408 19,195 12,022 2,149 2012 239 487

26 18 The Group the 2

Company 241,622 129,568 RM’000 65,194 13,848 17,702 12,697 1,963 2011

490 as 42 18 94

6 r eferred

to 230,666 119,295 RM’000 76,808 16,408 17,403

in 2012

239 487 The Company Note 26 - - - -

28

amounted 209,415 115,224 RM’000 63,829 13,848 15,888 2011 490 42 94 - - - -

to

9.

Non-Executive Directors Executive Directors The Group 2012 KEY MANAGEMENTPERSONNELCOMPENSA (resigned on25.02.2012) Jamela bintiMohdSyed binMohdNoor Datuk Kamaruzaman Norazura bintiTadzim Jamaluddin Sr. AhmadZainuddinbin Rashid Ruhaizah bintiMohamed Harun binJohari Rosli binAbdullah ao r aai i aai- Dato’ SriZakariabinBahari Selvarajoo a/lManikam Mohamed Dato’ Sri’Ir. Mohd Zinbin Ch’ng SeongKeng (resigned on30.04.2012) Dr AminuddinbinAdnan Datuk EliasbinKadir RM’000 Salary 505 168 319 18 ------RM’000 TION Fees 96 9 7 5 1 9 9 9 9 Remuneration received from theGroup - - - - - Ex- Gratia RM’000 34 21 13 ------Emoluments Notes To TheFinancialStatements RM’000 Other 207 142 37 34 31 24 16 38 34 25 63 63 1 2 Benefits - in -kind RM’000 6195 36 4770 24 4419 24 ------331 - RM’000 Total

10 44 39 31 25 25 47 43 34 20

2012 ANNUAL REPORT REPORT ANNUAL

93 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 94 ANNUAL REPORT 2012 personnel: Other keymanagement Remuneration Total Directors’ responsibility forplanning,directing andcontrolling theactivitiesofentityeitherdirectly orindirectly. Other keymanagementpersonnelcomprisespersonsother thantheDirectors ofGroup entities,havingauthority and The Group 2012 Employee Provident Funds benefits Short-term employee (resigned on30.06.2011) Datuk EliasbinKadir (resigned on30.06.2011) Nik RoslinibintiRajaIsmail (resigned on02.03.2011) Abd RahimbinDaud RM’000 Salary 3,317 3,317 0 166 505 - 166 - - - - RM’000 Fees 5 5 2 Remuneration received from theGroup 399 - - 399 - Ex- Gratia RM’000 34 - - - - - Emoluments RM’000 Other 714 408 306 510 303 - - - Benefits - in -kind RM’000 01,275 60 6505 36 4,430 - - 4,022 - - - - RM’000 Total 408 5 5 2 Non-Executive Directors Executive Directors The Company 2012 (resigned on25.02.2012) Jamela bintiMohdSyed binMohdNoor Datuk Kamaruzaman Norazura bintiTadzim Jamaluddin Sr. AhmadZainuddinbin Rashid Ruhaizah bintiMohamed Harun binJohari Rosli binAbdullah ao r aai i aai- Dato’ SriZakariabinBahari Selvarajoo a/lManikam Mohamed Dato’ Sri’Ir. Mohd Zinbin (resigned on30.04.2012) Dr AminuddinbinAdnan Datuk EliasbinKadir RM’000 Salary 487 168 319 ------RM’000 Fees Remuneration received from theCompany 96 9 7 5 1 9 9 9 9 - - - - Ex- Gratia RM’000 34 21 13 ------Emoluments Notes To TheFinancialStatements RM’000 Other 205 142 37 34 26 24 16 38 31 25 58 63 1 Benefits - in -kind RM’000 6190 36 4750 24 4419 24 ------331 - RM’000 Total

10 44 39 26 25 25 47 40 34

2012 ANNUAL REPORT REPORT ANNUAL

95 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 96 ANNUAL REPORT 2012 personnel: Other keymanagement Remuneration Total Directors’ responsibility forplanning,directing andcontrolling theactivitiesofentityeitherdirectly orindirectly. Other keymanagementpersonnelcomprisespersonsother thantheDirectors ofGroup entities,havingauthority and Employee Provident Funds benefits Short-term employee (resigned on30.06.2011) Datuk EliasbinKadir (resigned on30.06.2011) Nik RoslinibintiRajaIsmail (resigned on02.03.2011) Abd RahimbinDaud RM’000 Salary 2,866 2,866 487 - 166 - - - - RM’000 Fees 166 Remuneration received from theCompany 5 5 2 234 - - 234 - Ex- Gratia RM’000 34 - - - - - Emoluments RM’000 Other 632 350 282 495 290 - - - Benefits - in -kind RM’000 01,242 60 6492 36 3,732 - 350 - - - - - RM’000 3,382 Total 5 5 2 Non-Executive Directors Executive Directors The Group 2011 (resigned on30.06.2011) Datuk EliasbinKadir Jamela bintiMohdSyed Ismail Dr KaderbinSultanMd binMohdNoor Datuk Kamaruzaman Dato’ ManiUsilappan Razak Dato’ OthmanbinAbd Norazura bintiTadzim Rashid Ruhaizah bintiMohamed bintiAbdullah Puan SriDato’AidaBoey Harun binJohari Rosli binAbdullah ao r aai i aai- Dato’ SriZakariabinBahari Selvarajoo a/lManikam Mohamed Dato’ Sri’Ir. Mohd Zinbin Ch’ng SeongKeng rAiudnbnAnn490 Dr AminuddinbinAdnan RM’000 Salary 508 18 ------RM’000 Fees 60 4 8 4 1 1 4 4 4 8 9 Remuneration received from theGroup ------Ex- Gratia RM’000 ------Emoluments Notes To TheFinancialStatements RM’000 Other 100 12 11 14 94 5 8 6 6 1 9 7 6 - - - - Benefits - in -kind RM’000 993 19 2620 12 2596 12 ------RM’000 Total 16 13 16 19 16 24

9 4 6 1 1 6 1 4

2012 ANNUAL REPORT REPORT ANNUAL

97 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 98 ANNUAL REPORT 2012 personnel: Other keymanagement Remuneration Total Directors’ responsibility forplanning,directing andcontrolling theactivitiesofentityeitherdirectly orindirectly. Other keymanagementpersonnelcomprisespersonsother thantheDirectors ofGroup entities,havingauthority and Employee Provident Funds benefits Short-term employee (resigned on30.06.2011) Nik RoslinibintiRajaIsmail (resigned on02.03.2011) Abd RahimbinDaud RM’000 Salary 3,357 3,357 508 - 125 - - - RM’000 Fees 125 9 9 Remuneration received from theGroup - - - Ex- Gratia RM’000 ------Emoluments RM’000 Other 660 456 204 184 84 5 - Benefits - in -kind RM’000 31 19 4,017 - 456 - 3,561 - - - RM’000 Total 848 228 14 9 Non-Executive Directors Executive Directors The Company 2011 (resigned on30.06.2011) Datuk EliasbinKadir Jamela bintiMohdSyed Ismail Dr KaderbinSultanMd binMohdNoor Datuk Kamaruzaman Dato’ ManiUsilappan Razak Dato’ OthmanbinAbd Norazura bintiTadzim Rashid Ruhaizah bintiMohamed bintiAbdullah Puan SriDato’AidaBoey Harun binJohari Rosli binAbdullah ao r aai i aai- Dato’ SriZakariabinBahari Selvarajoo a/lManikam Mohamed Dato’ Sri’Ir. Mohd Zinbin rAiudnbnAnn490 Dr AminuddinbinAdnan RM’000 Salary 490 ------RM’000 Fees Remuneration received from theCompany 60 4 8 4 1 1 4 4 4 8 9 - - - - - Ex- Gratia RM’000 ------Emoluments Notes To TheFinancialStatements RM’000 Other 12 13 94 94 5 8 6 6 1 9 8 7 - - - - Benefits - in -kind RM’000 992 19 2596 12 2596 12 ------RM’000 Total 16 13 16 16 16

9 4 6 1 1 6 1 4

2012 ANNUAL REPORT REPORT ANNUAL

99 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 100 ANNUAL REPORT 2012 personnel: Other keymanagement Remuneration Total Directors’ responsibility forplanning,directing andcontrolling theactivitiesofentityeitherdirectly orindirectly. Other keymanagementpersonnelcomprisespersonsother thantheDirectors ofGroup entities,havingauthority and Employee Provident Funds benefits Short-term employee (resigned on30.06.2011) Nik RoslinibintiRajaIsmail (resigned on02.03.2011) Abd RahimbinDaud RM’000 Salary 3,060 3,060 9 125 490 - 125 - - - RM’000 Fees Remuneration received from theCompany 9 9 - - - Ex- Gratia RM’000 ------Emoluments RM’000 Other 599 395 204 174 80 5 - Benefits - in -kind RM’000 31 9224 19 3,659 - 395 - 3,264 - - - RM’000 Total 820 14 9 10.

Deferred taxexpense(Note 17): Estimated taxpayable: Major componentsofincometaxexpense/(credit) include: INCOME T Under/(Over)provision inprior years Current year Under/(Over)provision inprior years Current year AX EXPENSE/(CREDIT) RM’000 (1,175) 8,147 1,359 2,534 6,788 6,236 2012 552 The Group RM’000 (1,811) 2,391 Notes To TheFinancialStatements 2011 (210) (790) (219) (571) 580 RM’000 8,359 8,359 8,359 2012 The Company - - - - RM’000 2011

------

2012 ANNUAL REPORT REPORT ANNUAL

101 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 102 ANNUAL REPORT 2012 Under/(Over)provision ofdeferred taxinprioryears Under/(Over)provision ofcurrent taxinprioryear 1967-Group relief forCompanies Adjusted oflossunderSection44AIncomeTax Act, Deferred taxassetnotrecognised duringtheyear Tax effects of: Share oftaxassociates Tax atstatutorytaxrateof25% Loss before tax at theeffective incometaxrateoftheCompanyisasfollows: A reconciliation ofincometaxexpenseapplicabletoprofit before taxatthestatutoryincomeratetoexpense Non-taxable income Non-deductible expenses (231,993) (12,871) (57,998) RM’000 (3,662) 50,308 33,549 (9,949) 8,147 2,534 6,236 2012 The Group (103,663) RM’000 (25,916) 30,263 (1,811) (5,715) 3,188 2011 (210) (219) - - (275,591) (68,898) RM’000 50,308 (6,382) 24,972 8,359 8,359 2012 The Company - - - (119,921) RM’000 (29,980) 27,106 2,874 2011 ------11. The Group As of1January2011 Cost Additions Disposals Reclassification Write-offs 1January2012 As of31December2011/ Additions Disposals Reclassification Write-offs As of31December2012

PROPER TY, PLANTANDEQUIPMENT Freehold land and buildings RM’000 12,953 2981575819323,5 1,680,417 30,559 129,312 1,507,558 12,988 0161552612941,6 1,727,914 19,568 132,944 1,555,296 20,106 7,568 (450) 103 (68) - - - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container 1,408,494 RM’000 88,811 3332,4 (33,904) 20,541 13,363 471 (1,923) (4,711) 58,888 (7,243) (2,207) 93 (3,153) (903) 804 furniture and equipment, fittings and renovation Computer, vehicles, RM’000 1,0 49,605 112,006 (7,382) office 7,300 ,3 83361,824 48,313 5,139 road 1 (59,304) 416 Notes To TheFinancialStatements - construction RM’000 Under 14,858 (7,084) - (7,243) - - (4,124) - 1,583,058 RM’000 111,072 (9,589) Total

- -

2012 ANNUAL REPORT REPORT ANNUAL

103 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 104 ANNUAL REPORT 2012 As of1January2011 Accumulated depreciation The Group Depreciation fortheyear Disposals Write-offs 1January2012 As of31December2011/ Depreciation fortheyear Disposals Write-offs As of31December2012 Freehold land and buildings RM’000 2,446 ,4 9,7 96,214 890,475 2,648 2,247 ,0 6,6 103,957 964,863 4,705 (190) 204 (2) - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container RM’000 1,9 90,083 812,199 78,719 84,986 425 (1,605) (4,265) (6,333) 38 (1,580) (368) 7)(5,052) (75) furniture and equipment, fittings and renovation Computer, vehicles, RM’000 12,763 office 9,348 road - construction RM’000 Under 989,337 - 96,581 - (6,060) - (6,333) - 1,073,525 - - - (5,127) - (1,950) - RM’000 904,728 91,686 Total As of1January2011 Accumulated impairmentloss The Group Impairment lossfortheyear 1January2012 As of31December2011/ Impairment lossfortheyear As of31December2012 As of1January2011 Net bookvalue As of31December2011 As of31December2012 Freehold land and buildings RM’000 13,661 1,740 ,4 0,7 12,790 406,570 1,740 ,4 9,1 12,790 491,213 1,740 8,767 8,600 - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container RM’000 385,970 210,325 210,513 20,600 84,643 9201,9 958148,646 19,568 16,197 99,220 furniture and equipment, fittings and renovation Computer, vehicles, RM’000 12,790 20,308 office ,3 49,605 9,133 road Notes To TheFinancialStatements - - construction RM’000 Under 30,559 421,100 - 84,643 - 505,743 - 400,500 - 20,600 - RM’000 277,830 269,980

Total

2012 ANNUAL REPORT REPORT ANNUAL

105 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 106 ANNUAL REPORT 2012 As of1January2011 Cost The Company Additions Disposals Reclassification Write-offs 1January2012 As of31December2011/ Additions Disposals Reclassification Write-offs As of31December2012 Freehold land and buildings RM’000 ,0 ,0,0 77449,605 97,754 1,307,709 3,305 ,4 ,0,7 1,6 0591,556,540 30,559 115,868 1,406,773 3,340 ,8 ,5,1 1,7 9581,597,040 19,568 119,277 1,454,415 3,780 103 440 (68) - - - - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container RM’000 88,811 3332,4 (33,904) 20,541 13,363 (4,610) 58,888 (7,243) 227 (2,553) (2,207) 93 (3,153) (903) 607 furniture and equipment, fittings and renovation Computer, vehicles, RM’000 office 3,279 ,8 83353,242 48,313 3,882 road (889) 1 (59,304) 416 - construction RM’000 Under 14,858 (5,499) - (7,243) - (4,760) - (4,124) - 1,458,373 RM’000 107,051 Total - - As of1January2011 Accumulated depreciation The Company Depreciation fortheyear Disposals Write-offs 1January2012 As of31December2011/ Depreciation fortheyear Disposals Write-offs As of31December2012 Freehold land and buildings RM’000 ,2 1,6 79,790 719,169 1,027 ,9 9,4 86,823 797,445 1,093 ,6 6,5 94,321 869,259 1,166 68 74 (1) (2) - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container RM’000 78,719 82,353 (4,206) (6,333) 38 (1,580) (368) (75) furniture and equipment, fittings and renovation Computer, vehicles, RM’000 office 9,170 8,125 road (627) (557) Notes To TheFinancialStatements - construction RM’000 Under 885,361 - 90,552 - (4,834) - (6,333) - 964,746 - - - - (1,950) - RM’000 799,986 87,957

Total

(632)

2012 ANNUAL REPORT REPORT ANNUAL

107 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 108 ANNUAL REPORT 2012 As of1January2011 Accumulated impairmentlosses The Company Impairment lossforyear 1January2012 As of31December2011/ Impairment lossfortheyear As of31December2012 As of1January2011 Net bookvalue As of31December2011 As of31December2012 Freehold land and buildings RM’000 1,740 ,4 0,7 12,790 406,570 1,740 ,4 9,1 12,790 491,213 1,740 538 507 874 - - infrastructure, yards, rolling rail vehicles stocks and machinery, Plant and container RM’000 385,970 202,570 202,758 20,600 84,643 3931,6 958126,551 19,568 12,166 93,943 furniture and equipment, fittings and renovation Computer, vehicles, RM’000 12,790 6253,5 250,079 30,559 16,255 office ,7 49,605 5,174 road - - construction RM’000 Under 421,100 - 84,643 - 505,743 - 400,500 - 20,600 - RM’000 257,887 Total (c) (b) (a) (d)

The Group Buildings Freehold land As of31December2012 Buildings Freehold land As of31December2011 Buildings Note 25. RM5,326,209) Prime movers,trailersandsideloadersofasubsidiarywith netbookvalueofRM3,075,601(31December2011: ofMalaysia. plant andequipmentsvestedintheRailwayAssetsCorporation bytheGovernment The Companyhasbeengrantedtheexclusiveuseandoccupation ofpar Freehold land As of1January2011 The Gr 2011: Buildings ofasubsidiarywith netbookvalueofRM5,903,463(31December2011:RM6,242,617) and(1January subsidiary asr

RM6,378,301) oup’s freehold landandbuildingscomprise: eferred toinNote25.

and

(1

have January

been

2011:

pledged

RM5,891,136)

to

banks

for

wer

banking RM’000 20,106 20,103 12,988 12,985 12,953 12,950 e

Cost pledged 3 3 3

facilities

to

depreciation and banks

granted Notes To TheFinancialStatements Accumulated cels ofrailwaylandandotherproperty, impairment

for RM’000

to banking 6,445 6,445 4,388 4,388 4,186 4,186

that - - -

subsidiary

facilities Net bookvalue

granted as

disclosed RM’000 13,661 13,658 8,600 8,597 8,767 8,764

to

3 3 3 that

in

2012 ANNUAL REPORT REPORT ANNUAL

109 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 110 ANNUAL REPORT 2012 (f) (e)

- Commuterservices Impairment losseshavebeenrecognised inthefollowinglineitemsofstatementcomprehensive income: Measur - Intercity services - Cargoservices Other operatingexpenses vehicles stocks,trailers,primemoversandrail Plant andmachinery, infrastructure, rolling iii) ii) i) cash generatingunits(“CGUs”): For thepurposeofimpairmenttest,property, plantandequipmentwere dividedintothree (3)independent whether therecoverable amountofproperty, plantandequipmentusedinoperationsexceeditscarryingamount. Following continuingsignificantoperatinglosses,animpairmenttestwasconductedbymanagementtodetermine grants, asdisclosedinNote27,costing: Included inpr

Commuter services Inter Cargo services ement oftherecoverable amount ofcashgeneratingunits(“CGU”) city services operty, plantandequipmentoftheGroup andtheCompanyare assetsacquired underGovernment 31.12.2012 31.12.2012 (11,284) RM’000 RM’000 84,643 85,281 10,646 1,165 The Group andtheCompany 31.12.2011 31.12.2011 RM’000 RM’000 20,600 4,832 8,067 7,701 1,165 1.1.2011 1.1.2011 265,626 107,730 119,525 RM’000 RM’000 38,371 1,165 • • Management • Cash • generating unitandwasbasedonthefollowingkeyassumptions: The valueinusewasdeterminedbydiscountingthefuture cashflowsgeneratedfrom thecontinuinguseofcash A • • indication thattheseassetsare impaired. management isoftheopinionthatremaining amountwithnetcarrying ofRM126,551,000hasno During theyear, thecarryingamountofaboveCGUshavebeenfully impaired asof31December 2012.The sourceson external andhistoricaldata. The valuesassignedtothekeyassumptionsrepresent management’s assessmentoffuture trends andare based Railway • Revenue • years Ticket Fuel 3 years). available thr Personnel (31 December2011and1January2011:3%perannumescalationrate). determining ther (iii) (i) budgets/for (ii)

pr

e-tax cost

flows (31

prices For Commuter annum gr years For CargoServices:thegr growth For Inter - 20%perannumgr

growth is operating December discount

expenses

wer

ecast coveringafive-yearperiod. oughout theperiodofcashflows. assumed

and are

assumes e rate city Services:22%perannumgrowth in2013,13%perannumgrowth ratefor2014,5%

pr owth rate). ecoverable amount. was

assumed 6%

ojected

rate

for

wer 2011

expenses projected , revenue isprojected basedonaveragetrainsetavailable. per to

year

of

e the be

annum

pr

6.6%

based and

to

based owth rate)and(1January2011:acontinuous10%perannumgrowth rate). 2015 ojected annual

be

1

as

per wer

fixed on gr

January

– owth foryear2013isbasedonaveragemonthlytrends forthepastthree on follows: owth

e historical 2017, based annum uneconomic

fixed based pr

ojected rate

2011:

(31 on subsidised

(31

on information, for

5% December

December

2012 3.5% year

based

service annual

2014

prices. price annual

on

incr actual 2011 claim

2011 –

for

ement 11%

2017, incr

the

and operating

fr and ement om Notes To TheFinancialStatements

entire escalation

(31

and

1

1

the

January

January December

salary and

cash

r Gover esults

salary

adjustment rate flows

2011: 2011: nment

and

2011:

adjustment

per period.

available

a 6.6%)

of continuous

annum a

of Malaysia continuous

8% was

management

of

for

for

applied 8%

5% every will Cargo

every

10%

per be

in 3

2012 ANNUAL REPORT REPORT ANNUAL

111 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 112 ANNUAL REPORT 2012 12. 13.

As of31December2012 As of31December2011 As of1January2011 Net bookvalue As of31December2012 Depreciation fortheyear As of31December2011/1January2012 Depreciation fortheyear As of1January2011 Accumulated depreciation 31December2012 As of1January2011/31December2011/12012/ Cost The Group INVESTMENT PROPER INVESTMENTS INSUBSIDIARIES Unquoted shar Less: Accumulatedimpairmentlosses es atcost TIES 31.12.2012 RM’000 6,849 6,649 (200) The Company 31.12.2011 Buildings RM’000 RM’000 (2,035) (2,092) (2,149) 2,846 (811) (754) 6,849 6,649 (697) (200) (57) (57) 1.1.2011 RM’000 RM’000 (2,035) (2,092) (2,149) 2,846 (811) (754) 6,849 6,649 Total (697) (200) (57) (57) # Thefinancialstatementsof these companieswere examined byauditorsotherthantheofCompany. Details oftheCompany’s subsidiariesare asfollows: TB(ala ilg)Sn h.Mlyi Property investment Malaysia Sdn.Bhd. KTMB (RailwayVillage) KTMB ParkingPte.Ltd.# Kiriman Ekspres Sdn.Bhd. Sdn.Bhd.# Syarikat PengangkutanRelUtara MMF LogisticsPte.Ltd.# Held through subsidiaries KTMB (Prai)Sdn.Bhd. TBHrtg oe d.Bd aasaDormant Malaysia KTMB HeritageHotelSdn.Bhd. TB(ugiPtn)Sn h.Mlyi Dormant Malaysia KTMB (SungeiPetani)Sdn.Bhd. ET Sdn.Bhd. KTMB (Brickfields)Sdn.Bhd. Sdn.Bhd. KTMB ConsultancyServices KTMB (Sentul)Sdn.Bhd. KTMB CateringServicesSdn.Bhd. KTMB (CarPark)Sdn.Bhd. KTM DistributionSdn.Bhd. Multimodal Freight Sdn.Bhd. Held bytheCompany Name ofSubsidiaries Incorporated Country of igpr Carparkoperator Singapore igpr Dormant Singapore aasaDormant Malaysia aasaProvision offreight forwarding services Malaysia aasaProperty investment Malaysia aasaDormant Malaysia aasaDormant Malaysia aasaDormant Malaysia aasaProperty investment Malaysia aasaDormant Malaysia aasaCarparkoperator Malaysia Malaysia Malaysia services - Provision ofdoortoparcel delivery - Provision offreight forwarding services andrelated services - Operatorofhotels,restaurants andcafes - Property investment - Property investment - Property investment - Provision ofrailwayconsultancy services - Caterers andproprietor ofrestaurants services and the provision of parcel and courier Management of warehouses, office space related services Provision of haulage freight forwarding and Principal Activities Notes To TheFinancialStatements Effective Equity 2012 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 63 % Interest 2011

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

63 %

2012 ANNUAL REPORT REPORT ANNUAL

113 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 114 ANNUAL REPORT 2012 14.

The Group INVESTMENTS INASSOCIA Unquoted loanstocksatcost Unquoted shares atcost Share ofpost-acquisitionreserves The Company At 31December Less: Accumulatedimpairmentlosses Unquoted loanstocksatcost Unquoted shares atcost At 31December Less: Accumulatedimpairmentlosses TES 31.12.2012 31.12.2012 129,601 157,831 157,856 RM’000 RM’000 21,255 28,255 18,855 25,855 25,830 7,000 7,000 (25) (25) 31.12.2011 31.12.2011 117,315 145,545 145,570 RM’000 RM’000 21,255 28,255 18,855 25,855 25,830 7,000 7,000 (25) (25) 1.1.2011 1.1.2011 106,982 135,212 135,237 RM’000 RM’000 21,255 28,255 18,855 25,855 25,830 7,000 7,000 (25) (25) # @ Details oftheassociates,whichare allincorporatedinMalaysia,are asfollows: Sentul RayaSdn.Bhd. Held through asubsidiary: Property development Admiral HillHotelSdn.Bhd. Kuala LumpurSentralSdn.Bhd. Admiral CoveDevelopmentSdn.Bhd. Dormant Rail Tech IndustriesSdn.Bhd.# Inlandclearancedepotoperator KualaLumpurSdn.Bhd.@ Syarikat PerjalananTerus Butterworth Ipoh CargoTerminal Sdn.Bhd. Fiberail Sdn.Bhd. Held bytheCompany Name ofAssociates

Hence, theresults havebeenequityaccountedbasedonthe26%shareholding. ofRTI the shareholding fortheCompanyandUMWCorporationSdn.Bhd.shall atalltimesbe26:74respectively. inRTI agreements entered intowithUMWCorporationSdn.Bhd.,itwastheintentionofbothpartiesthatproportion of incorporated inMalaysiaforacashconsiderationofRM1;In accordance withthejoint venture andshareholder’s In 1994,theCompanyacquir Curr ently underliquidation. ed a50%equityinterest inRailTech acompany IndustriesSdn.Bhd.(“RTI”), Property development Hotel resort andrelated touristdevelopment Property andresort development services - Manufacture ofrolling stock,repair andmaintenance - Provision ofbusservices Dormant maintain anopticalfibre telecommunicationsystem Provision ofservicestoinstall,manage,operateand Principal Activities Notes To TheFinancialStatements Effective Equity 2012 30 20 20 26 25 36 26 30 % Interest 2011

30 20 20 26 25 36 26 30 %

2012 ANNUAL REPORT REPORT ANNUAL

115 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 116 ANNUAL REPORT 2012 15.

The summarisedfinancialstatementsoftheassociatesare asfollows: Profit fortheyear Revenue Results Total liabilities Non-current liabilities Current liabilities Total assets Non-current assets Current assets Assets andliabilities The Group OTHER INVESTMENTS Available-for-sale financialassets Non-current Total assets Less: Impairmentloss 31.12.2012 31.12.2012 1,577,941 1,260,783 104,597 266,469 933,410 348,714 584,696 297,158 RM’000 RM’000 (215) 355 140 Shar es Unquoted 31.12.2011 31.12.2011 1,650,270 1,355,969 257,959 997,153 340,454 656,699 294,301 RM’000 RM’000 67,307 (185) 355 170 1,004,124 1,580,529 1,300,804 1.1.2011 1.1.2011 307,373 398,683 605,441 279,725 RM’000 RM’000 43,844 (185) 355 170 17. 16.

is ananalysisofthedeferred taxbalances(afteroffset) forstatementsoffinancialpositionpurposes: Certain deferred taxassetsandliabilitieshavebeenoffset inaccordance withtheGroup’s accountingpolicy. Thefollowing Village. financial position.Thelongterm receivable andthecorresponding gainwillbe recorded uponthecompletionofRailway control oftheGroup), theamountshouldonlybedisclosedasacontingentassetandnotrecorded inthestatementof (theprogressto Note26)ispendingonthesuccessfulcompletionofRailwayVillage ofwhichisnotwhollywithinthe In 2011,theGroup decided thatastherecognition ofthelongtermreceivable and thecorresponding deferred gain(refer projectcompletion dateoftheRailwayVillage istobedelayed. approval from therelevant authorities,theCompany, KTMB(Sentul)Sdn.Bhd.andSRSB have mutuallyagreed thatthe hasonlybeengrantedon14August2007.Inviewofthedelaysinobtaining on thedevelopmentofRailwayVillage The Companyreceived aletterfrom SRSBdated24 December2007indicatingthatapproval from relevant authorities tobesatisfiedbyitsassociate,SentulRayaSdn.Bhd.(“SRSB”)(referof theRailwayVillage toNote14). The longtermreceivable represented thenon-cashconsiderationofphaseddevelopment,constructionandcompletion DEFERRED T LONG TERMRECEIV Deferred taxliabilities Deferred taxassets At endofyear Transfer to/(from) profit orloss(Note10) At beginningofyear AX ASSETSANDLIABILITIES ABLE RM’000 RM’000 (1,442) (3,769) (1,442) (1,359) 2,327 2012 2012 (83) The Group The Group RM’000 RM’000 (3,190) 3,107 2011 2011 (873) (83) 790 Notes To TheFinancialStatements (83) RM’000 RM’000 2012 2012 The Company The Company ------RM’000 RM’000 2011 2011

------

2012 ANNUAL REPORT REPORT ANNUAL

117 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 118 ANNUAL REPORT 2012 of theirrealisation, isasfollows: unabsorbed capitalallowances,thetaxeffects ofwhichare notrecognised in the financialstatementsduetouncertainty As of31December2012,theestimatedamounttemporarydifferences arisingfrom tradereceivables, unusedtaxlosses, be availableagainstwhichthedeductibletemporarydifferences, unusedtaxlossesandcredits canbeutilised. which wouldgiverisetodeferred taxassetsare recognised totheextentthat itisprobable thatfuture taxableprofits will As mentionedinNote3,thetaxeffects ofdeductibletemporarydifferences, unused taxlossesandcredits Deferred taxassets/(liabilities)provided inthefinancial statementsare in respect ofthetaxeffects ofthefollowing: Unabsorbed capitalallowances Unused taxlosses Temporary difference arisingfrom: andequipment Temporarily differences arisingfrom property, plant Deferred taxliabilities Unabsorbed capitalallowances Temporarily differences arisingfrom provisions Deferred taxassets Provision Retirement benefitsobligations Inventories Trade andotherreceivables Property, plantandequipment RM’000 RM’000 (3,769) 2,327 2,309 2012 2012 18 The Group The Group RM’000 RM’000 (3,190) 3,107 3,107 2011 2011 - (1,675,449) (1,148,106) The Group andTheCompany (822,498) (100,271) (13,296) (35,380) 449,858 RM’000 (5,756) RM’000 RM’000 2012 2012 2012 The Company The Company - - - - (1,474,216) (1,092,379) (706,025) RM’000 RM’000 475,781 (95,365) (13,092) (36,558) RM’000 (6,578) 2011 2011 2011 - - - - 18. 19.

Spare parts INVENTORIES Fuel Others TRADE ANDOTHERRECEIV Trade receivables Trade Less :Allowancefordoubtfuldebts Amounts duefrom associates Less :Allowancefordoubtfuldebts Amount duefromofMalaysia Government Non-trade Less :Allowancefordoubtfuldebts Other receivables Less :Allowancefordoubtfuldebts ABLES 31.12.2012 31.12.2012 (12,516) 148,769 147,817 (33,016) RM’000 RM’000 45,207 48,950 51,440 38,924 39,904 36,746 2,036 1,707 1,353 3,730 (373) (952) 980 The Gr oup andTheCompany The Group Notes To TheFinancialStatements 31.12.2011 31.12.2011 RM’000 RM’000 (12,225) (33,919) 39,591 42,303 50,738 38,513 39,367 26,770 25,818 48,886 14,967 1,800 1,227 (373) (952) 912 854 1.1.2011 1.1.2011 RM’000 RM’000 (12,701) (21,515) 42,889 45,428 47,887 35,186 36,339 31,294 30,342 31,251

1,035 1,504 1,526 1,153 9,736

(373) (952)

2012 ANNUAL REPORT REPORT ANNUAL

119 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 120 ANNUAL REPORT 2012 Amount duefrom associates Less :Allowancefordoubtfuldebts Deposits andprepayment consist of: Refundable deposits Prepayment 31.12.2012 31.12.2012 161,138 201,042 RM’000 RM’000 18,685 (9,094) 28,627 28,925 9,591 298 The Group The Group 31.12.2011 31.12.2011 RM’000 RM’000 16,929 48,620 87,987 (9,094) 7,835 4,023 4,339 316 1.1.2011 1.1.2011 RM’000 RM’000 16,789 47,773 84,112 (9,094) 7,695 1,317 4,469 5,786 Trade receivables Trade Less :Allowancefordoubtfuldebts Amounts duefrom subsidiaries Amounts duefrom associates Less :Allowancefordoubtfuldebts Amount duefromofMalaysia Government Non-trade Less :Allowancefordoubtfuldebts Other receivables Less :Allowancefordoubtfuldebts Amounts duefrom subsidiaries Less :Allowancefordoubtfuldebts Amounts duefrom associates Less :Allowancefordoubtfuldebts 31.12.2012 148,769 147,817 (33,016) 182,043 RM’000 17,442 (2,365) 15,077 18,095 39,055 18,364 (9,094) 2,038 1,353 6,039 1,174 9,270 (373) (952) (352) 980 822 The Company Notes To TheFinancialStatements 31.12.2011 RM’000 (33,919) 19,478 17,212 18,942 26,770 25,818 50,873 16,954 16,929 70,779 (2,266) (9,094) 1,227 1,583 1,230 7,835 (373) (952) (353) 876 854 1.1.2011 RM’000 (21,515) 18,143 15,483 17,899 31,294 30,342 33,426 11,911 16,468 69,230 (2,660) (9,094)

1,263 1,526 1,153 2,056 1,704 7,374

(373) (952) (352)

2012 ANNUAL REPORT REPORT ANNUAL

121 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 122 ANNUAL REPORT 2012 20.

Deposits andprepayments consistof: Refundable deposits Prepayment CASH ANDBANKBALANCES on behalfare non-tradein nature, unsecured, interest free andrepayable ondemand. The amountduefromofMalaysiawhicharisesmainly Government receivables forsubscriptionofshares andpayment Amount duefromofMalaysia Government nature, unsecured, interest free andrepayable ondemand. The otheramountduefrom subsidiariesandassociateswhicharisesmainlyfrom paymentonbehalfare non-tradein trade terms.Theamountisrepayable withinafixedtermof30days. Included intheamountduefrom subsidiaries and associatesare freight andhaulageservicesthatare subjecttonormal Amount duefrom subsidiaries andassociates Deposits placedwith: Cash andbankbalances Licensed banks Financial institutions 31.12.2012 31.12.2012 RM’000 RM’000 24,695 24,833 20,553 26,093 5,190 138 350 The Company The Gr 31.12.2011 31.12.2011 RM’000 RM’000 28,319 12,119 40,438 oup 2,433 2,618 185 - 1.1.2011 1.1.2011 RM’000 RM’000 52,259 33,408 87,723 4,308 4,570 2,056 262 21.

been classifiedasassetheldforsale. Management haddecidedthatthe33unitsofcondominiums andapartmentsare tobe disposedoff andaccordingly, have value. to buildtheof The Gr ASSETS HELDFORSALE and 31daysto240in1January2011). 2011) per annum and have an average maturity period of 31 days to 240 days (31 days to 240 days in 31 December 2011 anaverageinterestDeposits withfinancialinstitutionsearn at3.30%(3.20%in31December2011and3.20%1January Assets heldforsale value September 1995, KTMB (Prai) will receive 15 cash consideration of RM11,143,970, staff quartersand office spacewith the Prai SdnBhd(“Developer”)aspartoftheconsiderationsalelandinPrai,Penang.Basedonagreement, dated KTMB (Prai)SdnBhd,asubsidiaryoftheCompanyhasreceived 33unitsofcondominiumsandapartmentsfrom Prima Deposits placedwithlicensedbanks Cash andbankbalances

equivalent oup fice spaceandinexchangetransferred 33unitsofcondominiumsandapartmentsinPraiwiththeequivalent

to

RM7,128,000

and

RM5,200,000

r espectively. 31.12.2012 31.12.2012 RM’000 RM’000 1,988 1,988

5,507 Due

- to

financial The Company Notes To TheFinancialStatements

the 31.12.2011 31.12.2011

constraint, RM’000 RM’000 7,623 7,623 - -

the

Developer 1.1.2011 1.1.2011 RM’000 RM’000

34,000 53,583 19,583 was

unable -

2012 ANNUAL REPORT REPORT ANNUAL

123 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 124 ANNUAL REPORT 2012 22.

Authorised: SHARE CAPIT Preference Shares (“RCCPS”)ofRM0.10each 10% RedeemableCumulativeConvertible Special rightsredeemable preference share ofRM1 Issued andfullypaid: Special rightsredeemable preference share ofRM1 speak atsuchmeetings. meetings butnot tovoteatsuchmeetingsof theCompany. However, theSpecialShareholder isentitledtoattendand oranyrepresentativewhich mayonlybetheGovernment orpersonactingonitsbehalf,isentitledtoreceive noticesof major decisionsaffecting theoperationsofCompany are policies.TheSpecialShareholder, consistentwithGovernment The SpecialShare ofMalaysiathrough enablestheGovernment theMinisterofFinanceIncorporatedtoensure thatcertain Special RightsRedeemable Preference Share (“SpecialShare”) capital purposes.Thenewordinary shares issuedrankparipassuwiththethenexistingordinary shares oftheCompany. RM1,137,459,000 bywayofissuance234,900,000ordinary share ofRM1eachatperordinary share forworking During thefinancialyear, theissuedpaidupshare capitaloftheCompanywasincreased from RM902,559,000to 1,000,000,000 newordinary shares ofRM1each. share capitaloftheCompanywasincreased from RM1,000,000,000toRM2,000,000,000bycreation ofanadditional As approved bytheshareholders intheExtraordinary GeneralMeeting(“EGM”)heldon30October2012,theauthorised *

Ordinary shares ofRM1each: Ordinary shares ofRM1each: At beginningofyear Issued duringtheyear At endofyear At beginningofyear Issued duringtheyear At endofyear Consists of1specialrightsr AL edeemable preference share ofRM1each. 31.12.2012 1,000,000 1,994,300 2,000,000 1,137,459 994,300 902,559 234,900 RM’000 5,700 The Group andTheCompany * * 31.12.2011 1,000,000 994,300 994,300 882,559 902,559 RM’000 20,000 5,700 - * * 1,000,000 1.1.2011 994,300 994,300 852,559 882,559 RM’000 30,000 5,700 - * * 23.

REEDEMABLE CONVER voting rights,thedissolutionofCompany, substantialdisposalofassets,amalgamations,mergersandtakeovers. Special Shareholder, inparticularmattersrelating tothecreation andissuanceofadditionalshares whichcarrydifferent Certain matterswhichvarytherightsattachedtoSpecialShare canonlybeeffective withtheconsentinwritingof The SpecialShareholder does nothaveanyrighttoparticipateinthecapitalorprofits oftheCompany. repayment ofcapitaltoanyothermembers. The SpecialShareholder shallbeentitledtorepayment ofthecapitalpaiduponSpecialShare inprioritytoany written noticeupontheCompanyanddeliveringrelevant share certificate. The SpecialShareholder hastherighttorequire theCompanytoredeem theSpecialShare atparanytimebyserving appointed Directors. The SpecialShareholder hastherighttoappointanyperson,butnotmore thansixatanytime,tobeGovernment- Issued andfullypaid: (ii) (i) share pursuanttotheSubscription Agreement dated26July1999withthefollowingsalientfeatures: The 10%RedeemableConvertibleCumulativePreference Shares (“RCCPS”)are issuedatapremium ofRM0.90eachper (iii) RCCPS ofRM0.10each

shareholder year. Anyamounts remaining unpaid shall beaccumulatedandpaidinthefollowingyear(s) preference The FixedDividendistobecumulativeandpaidoutofthepr value ofthePreference Shares. Atenur thirtieth anniversary. Preference Share and willberedeemable at RM1.05foreachPreference Share uponmaturityattheendof The and Dividend oranoptiontoconverttheaggr

interest Preference Shares shall be convertible into ordinary shares on the basis of one new ordinary share for one e ofthirtyyearswithafixedpreference dividendof10%perannum(the“FixedDividend”)onthenominal

of shall

8%

be

TIBLE CUMULATIVE PREFERENCESHARES(“RCCPS”) imposed

entitled

thereon to

impose

into

late

fully egate oftheamountequaltoanyarrears oraccrualtotheFixedDividend

payment

paid

ordinary 31.12.2012

charges RM’000 5,700

shares, ofits availablefordistributionin respect ofeachfinancial

of The Group andTheCompany

8%

and

per

annum Notes To TheFinancialStatements 31.12.2011 RM’000

on 5,700

the

unpaid

amount 1.1.2011 RM’000

of 5,700

the

Fixed

2012 ANNUAL REPORT REPORT ANNUAL

125 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 126 ANNUAL REPORT 2012 24.

of financialpositiontheGroup andoftheCompanyasfollows: the equitycomponentrepresents thefairvalueof conversionoption.TheRCCPSare accountedforinthestatements component. The fair value of the liability component is estimated based on the present value of the dividend obligation whilst The proceeds received from theissueofRCCPShavebeensegregated betweentheliabilitycomponentandequity component At 1January-Fairvaluerecognised asliability RCCPS -liabilitycomponentmovement Interest accrued-opening balanceadjustment (Note6) Interest accrued-recognised inprofit orloss Penalty onlatepaymentofinterest Total interest payable At 31December foreign operations,regardless ofthecurrency ofthemonetaryitems. also usedtorecord theexchangedifferences arisingfrom monetaryitems whichformpartoftheGroup’s netinvestmentin statements offoreign operationswhosefunctionalcurrencies are different from thatoftheGroup’s functional currency. Itis The exchangefluctuation reserve isusedto record exchangedifferences arisingfrom thetranslation ofthefinancial Exchange fluctuation reserve RESERVES 57,000,000 RCCPSofRM0.10each RCCPS share premium Liability componentatinitialrecognition Equity components 31.12.2012 RM’000 51,300 (6,417) 50,583 16,814 17,976 5,700 1,162 570 592 - The Group andTheCompany 31.12.2011 RM’000 51,300 50,583 15,697 16,814 (6,417) 5,700 1,117 570 547 - 1.1.2011 RM’000 51,300 50,583 15,697 (6,417) 5,700 6,417 8,208 9,280 570 502 25.

The Gr LOANS ANDBORROWINGS Term loan1* Unsecured Term loan2* Term loan3* Term loan4* Term loan5* Bank overdraft Revolving credits Al BaiBithamanAjilLoanIX(“ABBAIX”) Secured Al BaiBithamanAjilLoanX(“ABBAX”) Al BaiBithamanAjilLoanVIII(“ABBAVIII”) Hire-purchase payables Bank overdraft oup 31.12.2012 1,168,192 1,308,068 1,313,167 156,546 560,924 116,444 305,308 RM’000 28,970 49,876 90,000 2,865 1,653 5,099 581 - - Notes To TheFinancialStatements 31.12.2011 1,149,184 1,309,675 1,314,593 153,220 550,862 113,525 302,989 RM’000 28,588 80,491 80,000 2,939 1,384 4,918 595 - - 1,138,861 1,222,045 1,231,112 1.1.2011 151,167 540,927 111,841 306,526 RM’000 28,400 42,594 40,590 2,991 4,639 9,067 610 827

-

2012 ANNUAL REPORT REPORT ANNUAL

127 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 128 ANNUAL REPORT 2012 The Group Bank overdraft Unsecured Current Revolving credits Hire purchase payables Secured Al BaiBithamanAjilLoanIX(“ABBAIX”) Al BaiBithamanAjilLoanX(“ABBAX”) Bank overdraft Al BaiBithamanAjilLoanVIII(“ABBAVIII”) Total current portion Total non-current portion Term loan1* Unsecured The Company Term loan2* Term loan3* Term loan4* Term loan5* Bank overdraft Revolving credits 31.12.2012 1,172,666 1,168,192 1,308,068 140,501 156,546 560,924 116,444 305,308 RM’000 49,876 90,000 28,970 49,876 90,000 358 222 45 - - 31.12.2011 1,153,593 1,149,184 1,307,602 161,000 153,220 550,862 113,525 302,989 RM’000 80,491 80,000 28,588 78,418 80,000 242 222 45 - - 1,142,195 1,138,861 1,222,045 1.1.2011 151,167 540,927 111,841 306,526 RM’000 42,594 40,590 88,917 28,400 42,594 40,590 4,639 222 827 45 - 26.

The Company Bank overdraft Unsecured Current Revolving credits Total current portion Total non-current portion (i) The Islamictermfinancingandloanfacilitiesofasubsidiariesare secured bywayofthefollowing: Security * RefertoloanfromtheGovernmentofMalaysia (ii) b) a) & DevelopmentBerhad),theholdingcompanyofSRSB,for purposeofcarryingoutthefollowingviaSRSB: supplementary agreements in2000and2001)(“JVA”) withTaiping ConsolidatedBerhad (“TCB”)(nowknownasYTLLand On 30December1995,theCompanytogetherwithKSSBentered intoaJointVenture Agreement (asamendedbyvarious of thelandandapproval hadbeenobtainedforthealienationofsaidparcels ofland. entertainment and tourist facilities. The Company had procured ofMalaysiato revoke theGovernment the reservation status for thepurposeofanintegrateddevelopmentincorporating commercial complexes and buildings,residential buildings, its associate,SentulRayaSdn.Bhd.(“SRSB”)forthetransfer of parcels ofland(referred toasthe“MixedDevelopmentSite”) On 11September1995,asubsidiary DEFERRED GAIN

amounting ABBA IXandXar in Note11. Bank over Note 11. the developmentandconstruction oftheMixedDevelopmentPr the constructionofRailway V draft ofasubsidiaryissecured byanownershipclaimovercertainprimemoversandtrailersasdisclosed

RM5,903,463 e secured firstfixedcharges ofasubsidiary’s buildings,ownershipclaimoverthebuildings

(31

, KTMB(Sentul)Sdn.Bhd.(“KSSB”),entered intoasaleandpurchase agreement with December illage; and

2011:

RM6,242,617 31.12.2012 1,168,192 139,876 RM’000 49,876 90,000

and oject.

1

January Notes To TheFinancialStatements 31.12.2011 1,149,184

2011: 158,418 RM’000 78,418 80,000

RM6,378,301)

as 1,138,861 1.1.2011 RM’000

disclosed 42,594 40,590 83,184

in

2012 ANNUAL REPORT REPORT ANNUAL

129 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 130 ANNUAL REPORT 2012 27.

GOVERNMENT GRANTS Note 15). The longtermreceivable and thecorresponding gainwillberecorded (refer uponthecompletionofRailwayVillage to Site toSRSB.ThetransferoftheMixedDevelopmentSRSBhadbeencompletedin2011. The aboveconsiderationandminimumreturnare conditionaluponcompletingofthetransferentire MixedDevelopment b) a) by theCompanybasedonKSSB’s shareholding inSRSBcomprisedthefollowing: The considerationforthetransferofMixedDevelopmentSiteandminimumreturnpursuanttoJVA tobederived c) As of1January Plant andequipment Amortisation As of31December As of1January Other Additions Utilisation As of31December Total

payment ofshar RM69,216,000; and and expenseofwhichthetotalproject coststhere-of was at21December2000,estimatedtobenotlessthan land belongingtoKSSB’s whollyownedsubsidiary)bySRSBtheendoffinancialyear2007atitssolecost is tocompriseapartmentsandcertaininfrastructures, facilitiesandamenitiestobeconstructedonthefreehold payment cash considerationofRM36,400,000whichRM4,000,000wasr in kind to KSSB by way of phased development, construction and completion of the Railway Village (which in kindto KSSB by way ofphased development, construction andcompletionoftheRailwayVillage e ofactualprofit ofSRSB. 31.12.2012 RM’000 362 (78) 284 284 - - - - The Gr efundable; oup andTheCompany 31.12.2011 RM’000 (38,412) 38,412 440 362 362 (78) - - 1.1.2011 RM’000 (23,826) 62,238 38,412 38,852 518 440 (78) - 28. 29.

As of1January claims Government PROVISIONS Provisions usedduringtheyear Reversal ofprovisions during theyear As of31December Non-current Current As of31December Present valueofunfundedobligations RETIREMENT BENEFITOBLIGA subsidised The entire provision was in respect of Malaysia on the difference of claims by the Government between the commercial and Unrecognised actuariallosses Total retirement benefits Non-current Current Total retirement benefits their finalsalary onattainmentofthe retirement ageof56. 5 April2013.UndertheScheme, eligibleemployeesare entitled toretirement benefitsvaryingbetween50% and100%of Group’s obligationundertheScheme isdeterminedbasedonthelatestactuarialvaluationbyan independentactuarydated The Group operates an unfunded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible employees. The

rate

of

interest,

pertaining TIONS

to

staff

loans

(Note

8). 31.12.2012 31.12.2012 132,545 (32,274) 100,271 100,271 RM’000 RM’000 93,955 6,578 5,756 4,934 5,756 6,316 (822) 822 - The Gr The Group andTheCompany oup andTheCompany Notes To TheFinancialStatements 31.12.2011 31.12.2011 130,020 RM’000 RM’000 (34,655) 95,365 85,486 95,365 7,400 6,578 5,756 6,578 9,879 (822) 822 - 1.1.2011 1.1.2011 114,505 RM’000 RM’000 (15,025) 99,480 92,196 99,480 (1,001) 9,223 7,400 6,578 7,400 7,284

(822)

822

2012 ANNUAL REPORT REPORT ANNUAL

131 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 132 ANNUAL REPORT 2012 Defined benefitobligationsasof1January Movement inthepresent valueofthedefinedbenefitobligations Final Y Mor Mor Up to5years Years ofService(YOS) retirement benefitsasfollows: All confirmedpermanentemployees(bothexecutivesandnon-executives)hired onorpriorto31July1997are entitledto Benefits paidbytheplan Current servicecostsand interest Defined benefitobligationsasof31December Current servicecosts Expense recognised inthe profit orloss Interest onobligation Actuarial losses ears e than10years e than5yearsandupto10

monthly

of

service

salary

(YOS)

(SAL)

–

service

–

last

drawn from

1

monthly August 1.00 xYOSSAL 0.75 xYOSSAL 0.50 xYOSSAL Retir

1992 basic ement Benefits

salary 31.12.2012 31.12.2012 (11,502) 100,271 RM’000 RM’000 95,365 16,408 16,408 7,296 7,415 1,697 The Group andTheCompany The Group andTheCompany 31.12.2011 31.12.2011 RM’000 RM’000 (17,963) 99,480 13,848 95,365 13,848 6,800 6,718 330 1.1.2011 1.1.2011 RM’000 RM’000 91,173 13,540 99,480 13,540 (5,233) 6,723 6,395 422 30.

The expenseisrecognised inthefollowinglineitemsprofit orloss: - Nonexecutive - Executive Expected rateofsalaryincrease Discount rate Other operatingexpenses The Group TRADE ANDOTHERP Principal actuarialassumptionsattheendofreporting period(expressed asweightedaverages): Actuarial assumptions Trade payables Trade Amount duetoassociates Non-trade Accrued expenses Other payables Unearned revenueUnearned Deposits Interest payable AYABLES 31.12.2012 31.12.2012 31.12.2012 6.0 6.0 6.0 % 166,346 RM’000 RM’000 16,408 93,762 21,799 33,499 72,584 7,974 1,754 6,498 1,060 The Group andTheCompany The Group andTheCompany 31.12.2011 Notes To TheFinancialStatements 31.12.2011 31.12.2011 6.0 6.0 6.0 % 144,683 RM’000 RM’000 13,848 73,725 12,445 34,173 13,410 70,958 7,974 1,994 962 1.1.2011 1.1.2011 1.1.2011 6.0 6.0 6.2 % 146,736 RM’000 RM’000 13,540 58,736 10,340 46,983 20,301 88,000 7,974 2,402

-

2012 ANNUAL REPORT REPORT ANNUAL

133 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 134 ANNUAL REPORT 2012 31.

The Company Trade payables Trade Amount duetosubsidiaries Non-trade Amount duetoassociates Accrued expenses Other payables Unearned revenueUnearned Deposits Interest payable of theGroup, andcertainmembersofseniormanagement oftheGroup. controlling theactivitiesofGroup eitherdirectly orindirectly. Thekeymanagement personnel includesalltheDirectors Key management personnel are defined as those persons having authority and responsibility for planning, directing and common control orcommonsignificantinfluence.Relatedpartiesmaybeindividuals or otherentities. in makingfinancialandoperatingdecisions,orviceversa, where theGroup ortheCompanyandpartyare subjectto Group ortheCompanyhasability, directly orindirectly, tocontrol the partyorexercise significant influenceovertheparty For thepurposesofthesefinancialstatements,partiesare considered tobe related totheGroup ortheCompanyif Identity ofrelated parties RELA are non-tradeinnature, unsecured, interest-free andrepayable ondemand. Amounts duefrom subsidiaries andassociatesarose mainlyfrom advancesgiven andcollectionsmadeonbehalf,which Amount duetosubsidiariesandassociates 90 days(2011:days). Trade payables are non-interest bearing and the normal trade credit terms granted to theGroup andtheCompanyisupto TED PARTIES 31.12.2012 100,312 190,761 RM’000 90,449 46,927 11,985 24,114 7,974 1,754 6,498 1,060 31.12.2011 144,783 RM’000 65,986 33,585 10,638 10,261 13,382 78,797 7,974 1,994 963 1.1.2011 145,305 RM’000 51,318 32,986 33,627 11,801 93,987 7,974 5,197 2,402 -

Kuala LumpurSentralSdnBhd Ipoh CargoTerminal SdnBhd Fiberail SdnBhd Related parties KTMB (CarPark)SdnBhd KTM DistributionSdnBhd Multimodal Freight SdnBhd Subsidiary companies compensation (seeNote9),are asfollows: The significant related partytransactionsoftheGroup andtheCompany, otherthankeymanagementpersonnel Interest income Equipment storage Freight servicesrevenue Wayleave income Dividend income Dividend income Management fees Dividend income Management fees Freight servicescost Dividend income Management fee Freight servicesrevenue Notes To TheFinancialStatements (22,720) RM’000 RM’000 (5,210) (4,757) 12,036 (4,212) The Gr (490) (340) 2012 (811) (120) (945) (120) 2012 (48) - oup andTheCompany The Company RM’000 RM’000 (13,773) 10,749 (4,660) (4,757) (3,027) 2011 2011 (490) (340) (120) (840) (120) (48) (50)

-

2012 ANNUAL REPORT REPORT ANNUAL

135 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 136 ANNUAL REPORT 2012 32.

32.2 32.1 FINANCIAL INSTRUMENTS

Amortised cost: Financial Liabilities Loans andreceivables: Available-for-sale: Financial Assets development ofthebusiness. soastomaintaininvestor,to continueasagoingconcern, creditor andmarketconfidencetosustainfuture Gr Categories offinancialinstruments The Gr Capital Management Trade andotherpayables Shares Redeemable ConvertibleCumulativePreference Loans andborrowings Cash andbankbalances Refundable deposits Trade andother receivables Other investment oup oup’s objectiveswhenmanagingcapitalistomaintainastrong capitalbaseandsafeguard theGroup’s ability 31.12.2012 1,497,489 1,313,167 166,346 227,573 201,042 RM’000 17,976 26,093 298 140 31.12.2011 ,7,9 1,393,545 1,476,090 ,1,9 1,231,112 1,314,593 144,683 128,911 RM’000 16,814 40,438 87,987 316 170 1.1.2011 146,736 173,322 RM’000 15,697 87,723 84,112 1,371 170

32.3

32.3.1 Market • The Gr Financial riskmanagement Liquidity Credit • • Amortised cost: Financial Liabilities Loans andreceivables: Available-for-sale: Financial Assets The Company Trade andother payables Shares Redeemable ConvertibleCumulativePreference Loans andborrowings Cash andbankbalances Refundable deposits Trade andotherreceivables Other investment

oup hasexposure tothefollowing risksfrom itsuseoffinancialinstruments: basis. Management has acredit policyinplace andtheexposure tocredit riskismonitored on anongoing Risk managementobjectives,policies andprocessesformanagingtherisk Receivables receivables from customersandinvestmentsecurities. fails tomeetitscontractualobligations.TheGroup’s exposure tocredit riskarisesprincipallyfrom its Credit riskistheofafinanciallosstoGroup ifacustomerorcounterpartytofinancialinstrument Cr

edit risk risk

risk

risk 31.12.2012 1,516,805 1,308,068 190,761 184,309 182,043 RM’000 17,976 1,988 138 140 Notes To TheFinancialStatements 31.12.2011 1,469,199 ,0,0 1,222,045 1,307,602 144,783 RM’000 16,814 78,757 70,799 7,623 185 170 1,383,047 1.1.2011 145,305 123,245 RM’000 15,697 53,583 69,230

262 170

2012 ANNUAL REPORT REPORT ANNUAL

137 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 138 ANNUAL REPORT 2012 have anymajorconcentrationofcredit riskrelated toanyfinancialinstruments. The Group does not have any significant exposure to any individual customer or counterparty nor does it carrying amountofthesefinancialassets. non-current investments,arises from defaultofthecounterparty, withamaximumexposure equaltothe The credit riskoftheGroup’s other financialassets,whichcomprisecashandequivalents ongoing basisviaGroup management reporting procedures. associations to business partners with high creditworthiness. Trade receivables are monitored on an limits andmonitoringprocedures. Credit risksare minimisedandmonitored bylimitingtheGroup’s Credit risks,ortheriskofcounterparties defaulting,are controlled bytheapplication ofcredit approvals, deemed tohavehighercredit risk,are monitored individually. of thereceivables. Anyreceivables havingsignificant balancespastduemore than90days,whichare that havebeentransacting with theGroup. TheGroup uses ageing analysistomonitorthecredit quality are measured attheirrealisable values.Asignificantportionofthese receivables are regular customers Management hastakenreasonable stepstoensure that receivables thatare neitherpastduenorimpaired represented bythecarryingamountsinstatement offinancialposition. As attheendofreporting period,themaximumexposure tocredit riskarisingfrom receivables is Exposure tocreditrisk,qualityandcollateral Not pastdue 31.12.2011 Past duemore than90days Past due31-60days Past due1-30days Not pastdue 31.12.2012 The Group The ageingoftradereceivables oftheGroup asatthe endofthereporting periodwas: Not pastdue 1.1.2011 Past duemore than90days Past due31-60days Past due1-30days Past duemore than90days Past due31-60days Past due1-30days RM’000 52,793 27,552 10,185 13,933 51,965 23,123 13,710 12,342 49,413 23,170 11,757 11,523 Gross 2,790 1,123 2,963 Notes To TheFinancialStatements impairment Individual (12,889) (12,889) (12,598) (12,598) (13,074) (13,009) RM’000 (65) ------RM’000 39,904 14,663 10,185 13,933 39,367 10,525 13,710 12,342 11,692 36,339 10,161 11,523 1,123 2,790 2,963

Net

2012 ANNUAL REPORT REPORT ANNUAL

139 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 140 ANNUAL REPORT 2012 Past duemore than90days Past due31-60days Past due1-30days Not pastdue 31.12.2011 Past duemore than90days Past due31-60days Past due1-30days Not pastdue 31.12.2012 The Company The ageingoftradereceivables oftheCompanyasatendreporting periodwas: Past duemore than90days Past due31-60days Past due1-30days Not pastdue 1.1.2011 RM’000 20,932 21,581 20,833 Gross 9,809 5,233 5,798 8,208 6,269 6,728 8,046 5,377 7,150 376 260 92 impairment Individual RM’000 (2,738) (2,738) (3,033) (3,029) (2,639) (2,639) (4) ------RM’000 17,899 18,942 18,095 6,780 5,229 5,798 5,569 6,269 6,728 5,308 5,377 7,150 376 260 Net 92 32.3.2

The Group’s exposure toliquidity riskarisesprincipallyfrom itsvariouspayables,loansandborrowings. Liquidity riskisthethatGr Liquidity risk financial institutions. equal toorbetterthantheGroup. Transactions involvingderivativefinancialinstrumentsare withapproved Investments are allowedonly inliquidsecuritiesandonlywithcounterpartiesthathaveacredit rating Risk managementobjectives,policiesandprocessesformanagingtherisk Investments andotherfinancialassets At 31December debts Reversal ofallowancedoubtful Allowance fordoubtfuldebts Reclass tosubsidiaries At 1January The movementsintheallowancefordoubtfuldebtsduringfinancialyearwere: oup willnotbeabletomeetitsfinancialobligationsastheyfalldue. (12,889) (12,598) RM’000 (3,024) 2,733 2012 The Group - (12,598) (13,074) RM’000 (3,332) 3,808 Notes To TheFinancialStatements 2011 - RM’000 (2,738) (2,639) (798) 2012 The Company 699 - RM’000 (2,639) (1,984) (3,033) 2,004 2011

374

2012 ANNUAL REPORT REPORT ANNUAL

141 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 142 ANNUAL REPORT 2012 * The Group on undiscountedcontractualpayments: The tablebelowsummarisesthematurityprofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased Maturity analysis Term loan1-unsecured* 31.12.2012 Term loan3-unsecured* Term loan2-unsecured* Trade andotherpayables Bank overdraft Revolving credits Shares CumulativePreference Redeemable Convertible X-secured Al BaiBithamanAjilLoan IX-secured Al BaiBithamanAjilLoan Hire -purchase payables Term loan5-unsecured* Term loan4-unsecured*

Refer toloanfromtheGovernmentofMalaysia 1,497,489 Carrying 156,546 116,444 560,924 6,4 166,346 - 166,346 305,308 RM’000 amount 00042 10091,060 91,060 8.00 4.25 49,876 90,000 17,976 28,970 ,5 3.46 2,865 1,653 581 interest rate Contractual 8.00 .0150,648 708,951 8.00 8.00 .024,885 8.00 4.05 4.05 4.00 .0345,215 4.00 % Contractual cash flows 1,777,978 197,593 RM’000 30,822 60156,091 56,091 ,1 2 4 666 444 222 352 3,915 1,653 9 45 799 Under 1 166,346 1,1 2 3191,399,743 63,199 920 314,116 RM’000 year ------1 -2year RM’000 386 014530 134 90 969167,954 - 29,639 - - - - - 21,575 9,247 - - - 2 -5year RM’000 258128,050 22,598 915 - - - - 345,215 - - More than 708,951 RM’000 5 years 24,885 2,583 - - - - The Gr * on undiscountedcontractualpayments: The tablebelowsummarisesthematurityprofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased Term loan1-unsecured* 31.12.2011 Term loan2-unsecured* Term loan3-unsecured* Term loan4-unsecured* Term loan5-unsecured* Hire -purchase payables IX-secured Al BaiBithamanAjilLoan X-secured Al BaiBithamanAjilLoan Shares CumulativePreference Redeemable Convertible Revolving credits Bank overdraft Trade andotherpayables

oup Refer toloanfromtheGovernmentofMalaysia 1,476,090 Carrying 153,220 5,6 .0708,951 8.00 550,862 113,525 302,989 144,683 RM’000 amount 28,588 6848.00 16,814 80,000 0418.00 80,491 1,384 ,3 4.05 2,939 9 4.05 595 interest rate Contractual 8.00 .0150,648 8.00 4.00 .0345,215 4.00 3.00 4.25 % Contractual cash flows 1,779,735 197,593 4,8 144,683 144,683 RM’000 30,822 24,885 34083,400 83,400 69686,916 86,916 1,384 ,4 2 2 6 3,239 666 222 222 4,349 889 Under 1 315,508 RM’000 year 4 325 242 45 ------1 -2year Notes To TheFinancialStatements RM’000 9 3111,400,534 63,101 592 514665 134 45 969167,954 29,639 - - - ,4 21,575 9,247 ------2 -5year RM’000 258128,050 22,598 817 - 345,215 - - - - - More than 708,951 RM’000 5 years 24,885

- - - -

2012 ANNUAL REPORT REPORT ANNUAL

143 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 144 ANNUAL REPORT 2012 The Group The tablebelowsummarisesthematuritypr on undiscountedcontractualpayments: Term loan1-unsecured* 1.1.2011 Term loan2-unsecured* Term loan3-unsecured* Term loan4-unsecured* Term loan5-unsecured* VIII-secured Al BaiBithamanAjilLoan IX-secured Al BaiBithamanAjilLoan X-secured Al BaiBithamanAjilLoan Shares CumulativePreference Redeemable Convertible Revolving credits Bank overdraft -secured Trade andotherpayables *

Refer toloanfromtheGovernmentofMalaysia - unsecured 1,393,545 Carrying 151,167 540,927 1,4 .0150,648 8.00 111,841 0,2 .0345,215 4.00 306,526 4,3 - 146,736 RM’000 amount 28,400 15,697 0504.25 40,590 42,594 ,9 9.55 2,991 4,639 827 1 9.55 610 interest rate Contractual ofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased 8.00 .0708,951 8.00 4.00 7.00 8.00 8.00 7.80 % Contractual cash flows 1,704,612 197,593 4,3 146,736 146,736 RM’000 30,823 24,977 05040,590 40,590 25442,594 42,594 ,4 ,0 ,5 ,4 1,035 2,441 2,757 2,909 9,142 1,868 ,3 4,639 4,639 3 836 836 Under 1 238,897 RM’000 year 9 6 0 212 500 563 593 ------1 -2year RM’000 3,320 - - - ,9 23,231 7,592 ------2 -5year RM’000 22,628 9871,422,548 39,847 6,686 - 345,215 - - 24,977 - - - - - More than 174,965 708,951 143,962 RM’000 5 years - - - - - * on undiscountedcontractualpayments: The tablebelowsummarisesthematuritypr The Company Term loan1-unsecured* 31.12.2012 Term loan2-unsecured* Term loan3-unsecured* Term loan4-unsecured* Term loan5-unsecured* Shares CumulativePreference Redeemable Convertible Revolving credits Bank overdraft Trade andother payables

Refer toloanfromtheGovernmentofMalaysia 1,516,805 Carrying 156,546 560,924 116,444 305,308 9,6 - 190,761 RM’000 amount 28,970 17,976 0004.25 90,000 9868.00 49,876 interest rate Contractual ofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased 8.00 .0708,951 8.00 .0150,648 8.00 4.00 .0345,215 4.00 8.00 % Contractual cash flows ,9,2 337,912 1,796,026 197,593 9,6 190,761 190,761 RM’000 30,822 24,885 10091,060 91,060 60156,091 56,091 Under 1 RM’000 year ------1 -2year Notes To TheFinancialStatements RM’000 969167,954 29,639 - - - ,4 21,575 9,247 ------2 -5year RM’000 258128,050 22,598 61,484 - 345,215 - - - - - More than 1,396,630 708,951 RM’000 5 years 24,885

- - -

2012 ANNUAL REPORT REPORT ANNUAL

145 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 146 ANNUAL REPORT 2012 * The Company Term loan1-unsecured* 31.12.2011 Term loan2-unsecured* Term loan3-unsecured* Term loan4-unsecured* Term loan5-unsecured* Shares CumulativePreference Redeemable Convertible Revolving credits Bank overdraft Trade andother payables on undiscountedcontractualpayments: The tablebelowsummarisesthematurityprofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased

Refer toloanfromtheGovernmentofMalaysia 1,469,199 Carrying 153,220 5,6 .0708,951 8.00 550,862 113,525 302,989 144,783 RM’000 amount 28,588 6848.00 16,814 80,000 8488.00 78,418 interest rate Contractual 8.00 .0150,648 8.00 4.00 .0345,215 4.00 4.25 % Contractual cash flows ,7,8 312,784 1,770,988 197,593 4,8 144,783 144,783 RM’000 30,822 24,885 34083,400 83,400 46184,691 84,691 Under 1 RM’000 year ------1 -2year RM’000 969167,954 29,639 - - - ,4 21,575 9,247 ------2 -5year RM’000 258128,050 22,598 61,484 - 345,215 - - - - - More than 1,396,630 708,951 RM’000 5 years 24,885 - - - The Company * on undiscountedcontractualpayments: The tablebelowsummarisesthematuritypr Term loan1-unsecured* 1.1.2011 Term loan2-unsecured* Term loan3-unsecured* Term loan4-unsecured* Term loan5-unsecured* Shares CumulativePreference Redeemable Convertible Revolving credits Trade andother payables Bank overdraft

Refer toloanfromtheGovernmentofMalaysia 1,383,047 Carrying 151,167 540,927 1,4 .0150,648 8.00 111,841 0,2 .0345,215 4.00 306,526 4,0 - 145,305 RM’000 amount 28,400 15,697 0504.25 40,590 42,594 inter Contractual ofile oftheCompany’s financialliabilitiesasattheendof reportingperiodbased 8.00 .0708,951 8.00 4.00 8.00 7.80 est rate % Contractual cash flows 1,686,696 197,593 4,0 145,305 145,305 RM’000 30,823 24,977 05040,590 40,590 25442,594 42,594

Under 1 228,489 RM’000 year ------1 -2year Notes To TheFinancialStatements RM’000 - - - ,9 23,231 7,592 - - - - - 6961,421,301 36,906 - 2 -5year RM’000 22,628 6,686 - 345,215 - 24,977 - - - More than 174,965 708,951 143,962 RM’000 5 years

- - -

2012 ANNUAL REPORT REPORT ANNUAL

147 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 148 ANNUAL REPORT 2012

32.3.3

position Exposure inthestatementoffinancial Trade payables Cash andcashequivalents Trade receivables 31.12.2011 position Exposure inthestatementoffinancial Trade payables Cash andcashequivalents Trade receivables 31.12.2012 The Group entities) risk,basedoncarryingamountsasattheendofreporting periodwas: The Group’s exposure toforeign currency (acurrency whichisotherthanthecurrency oftheGroup Exposure toforeigncurrencyrisk entities are kepttoanacceptable level. Foreign exchangeexposures intransactionalcurrencies otherthanfunctionalcurrencies oftheoperating currencies giving rise to this risk are primarily United States Dollar, Singapore Dollar and Thai Baht. denominated incurrency other thanthefunctionalcurrency oftheoperationstowhichtheyrelate. The The Group isexposedto transactionalcurrency riskprimarilythrough sales andpurchases thatare Risk managementobjectives,policiesandprocessesformanagingtherisk Currency risk other priceswillaffect theGroup’s financialpositionorcashflows. Market Market risk risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and RM’000 (3,080) (3,080) (1,547) (1,547) USD - - - - Denominated in RM’000 1,401 1,650 SGD 579 822 828 852 (30) - RM’000 (4,579) (4,579) (2,792) (2,792) THB - - - - offinancialposition Exposure inthestatement Trade payables Trade receivables 31.12.2012 The Company financialposition Exposure inthestatement of Trade payables Cash andcashequivalents Trade receivables 1.1.2011 offinancialposition Exposure inthestatement Trade payables Cash andcashequivalents Trade receivables 31.12.2011 financialposition Exposure inthestatement of Trade payables Cash andcashequivalents Cash andcashequivalents Trade receivables 1.1.2011 The Group RM’000 RM’000 (3,080) (3,080) (1,806) (1,806) (1,806) (1,806) (1,547) (1,547) USD USD ------Notes To TheFinancialStatements Denominated in Denominated in RM’000 RM’000 (2,159) (2,159) 1,415 1,415 1,380 1,159 SGD SGD 210 580 210 954 828 552 579 954 - - RM’000 RM’000 (4,579) (4,579) (1,912) (1,912) (1,912) (1,912) (1,912) (1,912) THB THB

------

2012 ANNUAL REPORT REPORT ANNUAL

149 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 150 ANNUAL REPORT 2012 of fixedandfloatingrateborrowings. Group to fair value interest rate risk. TheGroup manages its interest rateexposure by maintainingamix rates exposetheGroup to cashflowinterest raterisk.Borrowings obtained atfixedratesexposethe The Group’s interest rateriskarises primarilyfrom interest-bearing borrowings. Borrowings atfloating nature andhavebeenmostly placedinfixeddeposits. changes inmarketinterest rates.TheGroup’s interest-bearing financialassetsare mainly shorttermin bearing financial assets, the Group’s income and operating cash flows are substantially independent of instrument willfluctuateduetochangesinmarketinterest rates.AstheGroup hasnosignificantinterest- of changesinmarketinterest rates.Fairvalueinterest rateriskisthethatvalueofafinancial Cash flowinterest raterisk istheriskthatfuture flowsofafinancialinstrumentwillfluctuatebecause Risk managementobjectives,policiesandprocessesformanagingtherisk securities andshorttermreceivables andpayablesare notsignificantlyexposedtointerest raterisk. are exposedtoariskofchange incashflowsduetochangesinterest rates.Investmentsinequity of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings The Group’s investments in fixed rate instruments andits fixed rate borrowings are exposedto arisk Interest raterisk presented. The exposure tocurrency riskofforeign exchangeisnotmaterialandhence,sensitivityanalysis Currency risksensitivityanalysis (b) (a) Interest raterisksensitivityanalysis Financial liabilities Floating rateinstruments Financial liabilities Financial assets Fixed rateinstruments The Company Financial liabilities Floating rateinstruments Financial liabilities Financial assets Fixed rateinstruments The Group based oncarryingamountsasattheendofreporting periodwas: The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, Exposure tointerestraterisk

assumes thatall othervariables,inparticularinter It isestimatedthatachangeof 1%ininter Cash flowsensitivityanalysisfor variablerateinstruments period wouldnotaffect profit orloss. value hedgedaccountingmodel.Therefore, achangeininterest ratesattheendofreporting profit or loss,andtheGroup doesnotdesignate derivatives ashedginginstrumentsunderafair The Gr Fair valuesensitivityanalysisforfixedrateinstruments (2011: increased/(decreased) post-taxprofit orlossof the Group andoftheCompany byRM1,320,000

oup doesnotaccountforanyfixedratefinancialassetsand liabilitiesatfairvaluethrough RM1,203,700)

and

RM1,305,000 (1,168,192) (1,168,192) 31.12.2012 (1,152,388) (1,173,291) 31.12.2012 (139,876) (139,876) est ratesattheendofreporting periodwouldhave RM’000 RM’000

20,903 (2011: est rates,remain constant. -

RM1,188,100) Notes To TheFinancialStatements 31.12.2011 31.12.2011 11914 (1,104,861) (1,138,861) (1,149,184) (1,149,184) 11573 (1,088,974) (1,125,783) (1,154,102) (158,418) (160,491) RM’000 RM’000 28,319

r espectively. -

(1,143,289) This 1.1.2011 1.1.2011 (83,184) (87,823) RM’000 RM’000

34,000 54,315 analysis

2012 ANNUAL REPORT REPORT ANNUAL

151 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 152 ANNUAL REPORT 2012 32.4

financial position,are asfollows: The fairvaluesofotherfinancialassetsandliabilities,togetherwiththecarryingamountsshowninstatement instruments. payables and short term borrowings approximate fair values due to the relatively short term nature of these financial Amount dueto subsidiaries Preference Shares Redeemable ConvertibleCumulative Loans andborrowings Financial liabilities ofMalaysia Amount duefrom Government Amount duefrom associates Amount duefrom subsidiaries Other investments Financial assets 31.12.2011 Amount duetoassociates Amount duetosubsidiaries Preference Shares Redeemable ConvertibleCumulative Loans andborrowings Financial liabilities ofMalaysia Amount duefrom Government Amount duefrom associates Amount duefrom subsidiaries Other investments Financial assets 31.12.2012 The carryingamountsofcashandequivalents,tradeotherr Fair valueoffinancialinstruments ,5,1 ,5,1 ,4,8 1,149,184 1,149,184 1,152,718 1,152,718 1,168,192 1,168,192 1,171,638 1,171,638 Carrying 147,817 RM’000 amount 16,814 25,818 17,976 10,571 8,689 7,924 170 140 The Group - - - - Fair value RM’000 16,814 17,976 # # # 147,817 # # - - - - * * eceivables, shorttermreceivables and Carrying RM’000 amount 33,585 16,814 25,818 46,927 17,976 10,571 8,689 7,974 2,106 2,860 The Company 140 170 Fair value RM’000 16,814 17,976 # # # # # # # # # * *

market incremental lendingratesforsimilartypeoflending, borrowing andleasing arrangements. Fair valuehasbeendetermined usingdiscountedestimatedcashflows.Thediscountrates usedare thecurrent Loans andborrowings those whosecarryingamountsreasonably approximate theirfairvaluesare asfollows: The methods and assumptions used by the management to determine fair valuesof financial instruments other than # * Amount duetosubsidiaries Preference Shares Redeemable ConvertibleCumulative Malaysia Amount duefromof Government Amount duefrom associates Long termreceivables Other investments Financial assets 1.1.2011 Loans andborrowings Financial liabilities Amount duefrom subsidiaries

would beeventuallyreceived orsettled. carrying amounts recorded at the end of the reporting period to be significantly different from thevalues that these amountslackafixed repayment term.However, theGroup andtheCompanydonotanticipate Malaysia dueprincipallytotheinabilityestimatesettlement datewithoutincurringexcessivecostsas It isnotpracticabletoestimatethefairvalueofamountsdueto/fr be eventuallyreceived. amounts recorded at the end of the reporting period to be significantly different from thevalues that would without incurringexcessivecosts.However, theGroup andtheCompanydonotanticipatecarrying long termreceivables because ofthelackquotedmarketpricesandinabilitytoestimatefairvalue It isnotpracticabletoestimatethefairvalueofGr ,4,8 ,4,8 ,3,6 1,138,861 1,138,861 1,143,289 1,143,289 Carrying RM’000 amount 15,697 30,342 69,216 8,848 170 The Group - - Fair value oup’s andtheCompany’s unquotedshares and RM’000 15,697 # # - - * * Notes To TheFinancialStatements om relatedof partiesandGovernment Carrying RM’000 amount 15,697 32,986 30,342 8,527 2,967 The Company 170 - Fair value RM’000 15,697

# # # # - *

2012 ANNUAL REPORT REPORT ANNUAL

153 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 154 ANNUAL REPORT 2012 32.4.1

Other investment Financial assets 1.1.2011 Other investment Financial assets 31.12.2011 Other investment Financial assets 31.12.2012 The Group Level • Level • levels havebeendefinedasfollows: The tablebelowanalysesfinancialinstrumentscarriedatfairvalue,byvaluationmethod.different Fair valuehierar Level • Unquoted company Unquoted company Unquoted company inputs). or liability

: Inputs 2: Quoted 1: : Inputs 3: , eitherdirectly (i.e.asprices)orindirectly (i.e.derived from prices). chy

for other

prices

the

than

asset

(unadjusted)

quoted

or

liability

prices RM’000

Level 1 in

that

active

included

ar - - - e

not markets

based

within RM’000 Level 2

for

on

Level

identical

observable - - -

1

that

assets

ar RM’000

Level 3 market e

observable

170 170 140 or

liabilities.

data

(unobservable

for RM’000

the T 170 170 otal 140

asset

34. 33.

the supplementaryagr On Sdn Bhd(“KLSSB”). Pembinaan RedzaiSdnBhd(“PRSB”)tosetoutthemutual rights andobligationsasshareholders inKualaLumpurSentral asset andnotrecorded inthestatement offinancialpositionuponthe certaintyofthe receipt obtained from relevant party. As of31December2012,KTMB decided,therecognition of KTMB’s amountshouldonlybedisclosedasacontingent Return equivalent toKTMB’s (“theDeficit”) within sixty(60)daysafterthePaymentDate. Return MRCBshallpaytoKTMBincashthedifferenceReturn, betweentheamountofcashreceived byKTMBandtheamount MRCB furtherguaranteesthat iftheamountpaidtoKTMBbyKLSSBPaymentDate shallbelessthanKTMB’s to KTMBbyKLSSB. (“Payment Date”). KTMB’s will be paid less any dividend and capital repayment Return that have already been distributed December 2012 or within sixty (60) days upon completion of the KL Sentral Project,31 whichever shall be the earlier by Malaysia OneHundred andFifteenMillion(RM115,000,000)only(“KTMB’s whichshallbepaidbyKLSSB Return”), MRCB guaranteestoKTMBthatthereturnKTMB’s investmentintheKLSentralProject shallnotbelessthanRinggit being grantedtitletothesurrounding commercial developmentlands. construct anewrailwaycentralstationontheKualaLumpur Brickfieldsrailwayyard (“KL SentralProject”) inexchange for 10 Mar On JOINT VENTUREARRANGEMENT Lease obligationsonrental oflocomotive: Property, plantandequipment Capital expenditure CAPIT 2013 2012 2011 Approved butnotcontracted for Approved andcontractedfor

18 18

AL COMMITMENTS ch 1999) with the Government ofMalaysiaandSyarikatTanahch 1999)withtheGovernment danHarta Sdn Bhdtoundertaketheobligation April April

1997, 1996,

KLSSB Ker etapi eement dated19February2003)withMalaysianResources CorporationBerhad(“MRCB”)and

enter

T anah ed

Melayu into

a

Concession

Berhad

(“KTMB”)

Agr eement 357,081 274,865 RM’000

82,216 enter 9,227 3,080 2012

The Group (as ed -

into amended

a

318,167 205,232 112,935 RM’000 Joint 8,493 1,959 Notes To TheFinancialStatements

2011 by

V the - enture

supplementary

Agr 340,196 261,024 RM’000 79,172 eement 9,227 3,080 2012 The Company -

agr (as eement

amended 299,360 188,932 110,428 RM’000 8,493 1,959 2011

dated

- by

2012 ANNUAL REPORT REPORT ANNUAL

155 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI KERETAPI TANAH MELAYU BERHAD 156 ANNUAL REPORT 2012 16 May2013 DA ______DATO’ SRIIR.MOHDZINBINMOHAMED ______in accordance witharesolution ofthedirectors, Signed onbehalfoftheBoard on thatdate. as of31December2012andthefinancialperformancecashflows Group andoftheCompanyforyearended of theCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewfinancialpositionGroup andoftheCompany up inaccordance withMalaysianFinancialReportingStandards,Standards International andtherequirements The Directors ofKERETAPI TANAH MELAYU BERHADstatethat,intheiropinion,theaccompanyingfinancialstatementsare drawn Statement ByDirectors (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD TUK ELIASBINKADIR

COMMISSIONER FOROATHS ______Before me, of May2013. Subscribed andsolemnlydeclared bytheabovenamedHAZALINABINTIABDULRAHMANatKUALALUMPURonthis16thday HAZALINA BINTIABDULRAHMAN ______Declarations Act,1960. and Imakethissolemndeclarationconscientiouslybelievingthesametobetrue,byvirtueofprovisions oftheStatutory MELAYU BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct I, HAZALINABINTIABDULRAHMAN,beingtheOfficer primarily responsible forthefinancialmanagementofKERETAPI TANAH Primarily ResponsibleForTheFinancialManagementOfCompany Declaration ByTheOfficer (Incorporated inMalaysia) KERETAPI TANAH MELAYU BERHAD

2012 ANNUAL REPORT REPORT ANNUAL

157 KERETAPI TANAH MELAYU BERHAD MELAYU TANAH KERETAPI