Corporate Information

Transcription

Contents
1
22
Audit Committee Report
04
Board of Directors
27
Chairman’s Statement
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.
KERETAPI TANAH MELAYU BERHAD
ANNUAL REPORT 2012
Rationale
03
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
Board Of Directors
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Board Of Directors
Y.BHG. DATUK ELIAS BIN KADIR
Y.BRS. PUAN NORAZURA BINTI TADZIM
President
Non-Independent Non-Executive Director
Y.Bhg. Datuk Elias Kadir, was appointed to the Board on
Y.Brs. Puan Norazura binti Tadzim, was appointed to the Board
2 May 2012. He was formerly the Chief Executive Officer of
on 1 July 2011. Y. Brs. Puan Norazura’s present position is
Multimodal Freight Sdn. Bhd. Since his appointment, he has
the Principal Assistant Secretary at the Investment, Minister of
attended 10 out 10 Board meetings held during the financial
Finance Incorporated and Privatisation Section of the Ministry
year. He has no family relationship with any director. He has no
of Finance. She attended 13 out of the 15 Board meetings held
conflict of interest with KTMB and has never been charged for
during the financial year. She has no family relationship with
any offence.
any director. She has no conflict of interest with KTMB and has
never been charged for any offence.
Y.B. DATO’ SRI IR. MOHD ZIN BIN MOHAMED
Y.B. Dato’ Sri Ir. Mohd Zin bin Mohamed, was appointed to
Chairman of the Board
the Board as its Non-Executive Chairman on 1 October 2009.
Y.B. Dato’ Sri Ir. Mohd Zin was a former Cabinet Minister holding
the portfolio of Minister of Works. He attended 14 out of the 15
Board meetings held during the financial year. He has no family
relationship with any director. He has no conflict of interest with
KTMB and has never been charged for any offence.
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Board Of Directors
Y.BRS. PUAN RUHAIZAH BINTI MOHAMED RASHID
Y.BRS. ENCIK SELVARAJOO A/L MANIKAM
Y.BHG. DATO’ SRI ZAKARIA BIN HJ. BAHARI
Y.BRS. TUAN HAJI ROSLI BIN ABDULLAH
Independent Non-Executive Director
Y. Brs. Puan Ruhaizah binti Mohamed Rashid, was appointed
Y.Brs. Encik Selvarajoo a/l Manikam, was appointed to the
Y.Bhg. Dato’ Sri Zakaria bin Hj. Bahari, was appointed to the
Y.Brs. Tuan Haji Rosli bin Abdullah, was appointed to the
to the Board on 9 November 2011. At present, Y. Brs. Puan
Board on 16 December 2009. Y. Brs. Encik Selvarajoo is
Board on 25 February 2010. He was formerly the Secretary
Board on 20 July 2010. He was formerly the Chief Executive
Ruhaizah is the Deputy Secretary General (Planning) at the
currently a Director at the Economic Council Secretariat of
General of the Ministry of Transport. He attended 11 out of the
Officer/Registrar of the Malaysian Institute of Accountants.
Ministry of Transport. She attended 12 out of the 15 Board
the Economic Planning Unit. He attended 13 out of the 15
15 Board meetings held during the financial year. He has no
He attended 14 out of the 15 Board meetings held during the
meetings held during the financial year. She has no family
Board meetings held during the financial year. He has no family
family relationship with any director. He has no conflict of interest
financial year. He has no family relationship with any director.
relationship with any director. She has no conflict of interest
with KTMB and has never been charged for any offence.
He has no conflict of interest with KTMB and has never been
with KTMB and has never been charged for any offence.
charged for any offence.
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Board Of Directors
Y.BRS. ENCIK HARUN BIN HJ. JOHARI
Y.BHG. DATUK KAMARUZAMAN BIN HJ. MOHD NOOR
Y.Brs. Encik Harun bin Hj. Johari, was appointed to the
Y.Bhg. Datuk Kamaruzaman bin Hj. Mohd Noor, was appointed
Board on 20 July 2010. At present, Y. Brs. Encik Harun is
to the Board on 12 September 2011. He was formerly the
the Managing Director/Group Chief Executive Officer at the
Deputy Secretary General (Planning) at the Ministry of Transport.
Malaysian Agrifood Corporation Berhad and Cold Chain
He attended all 15 Board meetings held during the financial
Network (M) Sdn. Bhd. He attended 11 out of the 15 Board
year. He has no family relationship with any director. He has no
meetings held during the financial year. He has no family
conflict of interest with KTMB and has never been charged for
any offence.
Y.BRS. SR. AHMAD ZAINUDDIN BIN HJ. JAMALUDDIN
Y.Brs. Sr. Ahmad Zainuddin bin Hj. Jamaluddin, was appointed
to the Board on 27 April 2012. He was formerly an Executive
Director at DK Binajaya Sdn. Bhd. Since his appointment,
he has attended 9 out of 10 Board meetings held during the
financial year. He has no family relationship with any director.
He has no conflict of interest with KTMB and has never been
charged for any offence.
The Board recognizes the importance of corporate governance
Together with the Managing Director/President who
(iv)
Appointments to the Board
in discharging its responsibilities, protecting and enhancing
has in-depth knowledge of the Group’s business,
shareholders’ value through promoting and practising high
the Board is constituted of individuals who are
standards of corporate governance throughout the Group. The
committed to business integrity and professionalism
of the Board comprises the required mix of skills
Board adopts and applies the principles and best practices as
in all its activities. The Board supports the highest
and core competencies required for the Board to
governed by the Malaysian Code on Corporate Governance
standards of corporate governance and the
discharge its duties effectively.
2012 (“Code”) and the ‘Green Book’ on Enhancing Board
development of best practices for the Group.
Effectiveness set by the Putrajaya Committee on GLC High
Performance.
offer them for re-election.
The Board believes that the current composition
(vi) Meetings
The Board meets regularly on a monthly basis or as
and when required. There were fifteen (15) meetings
(iii)
rotation pursuant to Article 104 and being eligible,
Supply of Information
The Board delegated to the Nomination and
held during the financial year and the attendance
Remuneration Committee the responsibility of
record is as follows:-
recommending the appointment of new Directors.
The following statements set out the Group’s compliance
with the principles of the Code:A. DIRECTORS
The Directors whether as full Board or in their
New appointees will be considered and evaluated
individual capacity, have full and unrestricted
by the Board and the Secretary will ensure that all
access to all information within the Group and direct
appointments are properly made, and that legal and
access to the advice and services of the Secretary
regulatory obligations are met.
Meetings
Attended
Dato’ Sri Ir. Mohd Zin bin
Mohamed
14/15
Datuk Elias bin Kadir *
10/10
The Nomination and Remuneration Committee also
13/15
Pn. Ruhaizah binti Mohamed
Rashid
12/15
who is responsible for ensuring that Board meeting
(i)
The Board
procedures are followed and that applicable rules
and regulations are complied with. At each meeting
annually reviews the effectiveness of the Board as
The Group recognises the important role played by
of the Board, the Secretary appraises the Board on
a whole, its committees and the contribution of
the Board in the stewardship of the Group’s direction
the Group’s compliance obligations and highlights
each individual Director, as well as the President.
13/15
and operations, and ultimately, the enhancement
non-compliances with legal, regulatory and statutory
The Nomination and Remuneration Committee will
11/15
of long-term shareholders’ value. To fulfill this role,
rules and guidelines, if any.
ensure that all assessments and evaluations carried
Datuk Kamaruzaman bin Hj.
Mohd Noor
15/15
14/15
En. Harun bin Hj. Johari
11/15
the Board is responsible for the overall corporate
governance of the Group, including its strategic
out are properly documented and filed.
The notices of meetings and board papers are
direction, establishing goals for management and
distributed to the Directors prior to Board meetings
monitoring the achievement of these goals.
to provide Directors with sufficient time to deliberate
(v) Re-election of Directors
In accordance with the Company’s Articles of
Sr. Ahmad Zainuddin bin Hj.
Jamaluddin **
9/10
proceedings and resolution passed at each meeting
Association, one-third (1/3) of the Directors, shall
Pn. Jamela binti Mohd Syed ***
0/2
are properly minuted and filed by the Secretary.
retire from office, at least once in three (3) years. The
Dr. Aminuddin bin Adnan ****
5/5
on issues to be raised at the Board meetings. All
(ii)
Board Balance
The current Board has ten (10) members comprising
one (1) Non-Executive Chairman, one (1) Managing
retiring Directors can offer themselves for re-election.
The Directors are also regularly updated and advised
The Directors who are appointed during the financial
Director/President, three (3) Non-Independent Non-
on new regulations, guidelines or directives issued
year are subject to re-election by shareholders at
Executive Directors and 5 (five) Independent Non-
by the relevant regulatory authorities, if any.
the next Annual General Meeting held following their
Executive Directors.
appointments. Directors over seventy (70) years
The Board also avails itself of independent
of age are required to submit themselves for re-
The Board comprises professionals drawn from
professional advice as and when necessary in
appointment annually in accordance with section
various backgrounds, bringing in-depth and diversity
furtherance of their duties, at the Company’s
129(6) of the Companies Act, 1965.
in experience, expertise and perspectives to the
expense. Additionally, the Board invites the senior
Group’s business operations. The Board is satisfied
management to brief the Board from time to time on
that the current Board composition fairly reflects the
interests of the shareholders in the Company. The
profiles of the members of the Board are set out in
this Annual Report on pages 4 - 9.
Note:*
** *** **** Appointed on 2 May 2012
Appointed on 27 April 2012
Resigned on 24 February 2012
Resigned on 30 April 2012
(vii)
Directors’ Training
The Directors are encouraged to attend any relevant
For the forthcoming Annual General Meeting,
training program to further enhance their knowledge
matters being deliberated, as they are able to help
Selvarajoo a/l Manikam, Norazura binti Tadzim
to enable them to discharge their responsibilities
bring insight into these matters.
and Ruhaizah binti Mohamed Rashid will retire by
more effectively.
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B. DIRECTORS’ REMUNERATION
non-executive
Directors
and
non-
independent non-executive Directors.
The Minister of Finance Incorporated as the Special
Shareholder of the Company determines the
• ensure that Executive Directors abstain
members of the BPC.
• approve extension of time for supply,
works and services within 4 - 6 month.
(b) Responsibilities
the Company for the financial year under review are
follows:-
The Board of Directors is of the view that the
• recommend to the Board on award of
of
remuneration
by
appropriate
Meetings
There were nine (9) meetings held during the
senior management (all staff at the
financial year and the attendance record is
Heads of Department level and above)
as follows:-
and make recommendation to the Board
• endorse remuneration packages for
direct negotiation above RM500,000 up
Meetings
Attended
to RM300 million;
objective of the Code.
C. BOARD COMMITTEES
open tender above RM100 million up to
RM300 million;
The Board of Directors delegates certain of its
governance responsibilities to the following Board
Committees, which operate within clearly defined
restricted tender above RM50 million up
terms of reference, to assist the Board in discharging
to RM300 million;
its responsibilities:Audit Committee
The Audit Committee Report for the financial year
(ii) RM5 million;
• approve
open
tender
procurement
exercises for value of RM20 million to
pages 22 - 26.
RM100 million;
• approve restricted tender procurement
exercises for value of RM5 million to
Formerly known as Tender Committee ‘A’ (“TCA”),
RM50 million;
the committee is now called the BPC with effect
from 11 September 2012.
• approve open tender variation orders
(“VO”) up to 10% or RM2 million of
(a) Composition
the original contract sum above RM20
million to RM100 million whichever is
The BPC comprises at least three (3)
9/9
7/9
Sr. Ahmad Zainuddin bin Hj.
Jamaluddin *
4/4
lower;
members, made up of both independent
• approve restricted tender VO up to 10%
• recommend to the Board on appropriate
board size and ensure that any director
term
limits
within
the
Articles
of
Association are adhered to, including:
(i) at every Annual General Meeting, 1/3
of the Board retires; or (ii) every Director
* Appointed on 11 September 2012
retires at least once in 3 years;
(“NRC”)
to do so similarly;
Note:-
• review annually the Board’s mix of skills
and experiences to ensure it is in line
(a)Composition
under review is set out in this Annual Report on
Board Procurement Committee (“BPC”)
Mohd Noor (Chairman)
(iii) Nomination and Remuneration Committee

• approve emergency purchase above
(i)
decisions in respect of their remuneration
(c) The responsibilities of the BPC shall be as
set out in this Annual Report on pages 95 - 96.
components and bands is sufficient to meet the
from the deliberations and voting on
package;
The details of the remuneration of the Directors of
disclosure
payments for Executive Directors;
The Board shall appoint the Chairman and
and the Non-Executive Directors.
and (ii) annual increments and ex-gratia
sum above RM5 million to RM50 million
whichever is lower; and
remuneration of the Managing Director/President
or RM2 million of the original contract
The NRC shall comprise of at least three (3)
Directors, exclusively non- executive and the
majority of which are independent.
(b) Responsibilities
The responsibilities of the NRC shall be as
follows:• review individual remuneration packages
for all Directors including the Chairman
and recommend to the Board on; (i) all
elements of the remuneration packages
including the terms of employment,
reward structure and fringe benefits;
with the Company’s requirements;
• coordinates
evaluation
process
of
Directors and the collective Board
including the Board of the subsidiary
companies;
• proactively
maintains
a
pipeline
of
potential appointees to the Board and/or
committees;
• oversee
the
Company’s
development
future
leaders
of
the
and
human capital and make appropriate
recommendations to the Board;
ANNUAL REPORT 2012
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• review any proposed change to the
• access to the full company records,
organisation structure of the Company
enable easy and convenient access to up-to date
properties and personnel;
(ii)
(main chart) and make appropriate

• obtain independent professional advice
The Board has the overall responsibility for
(ii)
Annual General Meeting (“AGM”)
Shareholders are notified of the meeting twenty one
and efficient operations, internal controls and
(21) days before the meeting.
compliance with laws and regulations.
maintaining a system of internal controls, which
and expertise necessary to perform its
• review
any
proposed
change
in
duties; and
provides reasonable assessments of effective
compensation structure or personnel
policies including terms and conditions
Internal Control
information relating to the Group.
• access to advice and services of the
of employment for Executives and
F. ACCOUNTABILITY AND AUDIT
Company Secretary.
(iii)
Relationship with Auditors
Non-Executives and make appropriate
(d) recommendations to the Board;
Meetings
(i)
Financial Reporting
The
Board
has
established
a
transparent
relationship with the external auditors through the
• review any proposal for the recruitment,
promotion,
salary
resignation
(optional
increment
retirement)
and
of
There were five (5) meetings held during the
It is the Board’s responsibility to ensure that the
Audit Committee, which has been accorded the
financial year and the attendance record is
financial statements are prepared in accordance
authority to communicate directly with the external
as follows:-
the President and all Senior Vice
Presidents and make the appropriate
Dato’ Sri Zakaria bin Hj.
Bahari (Chairman)
Pn. Ruhaizah binti
Mohamed Rashid
• review any proposal for retrenchment or
voluntary separation exercise and make
the appropriate recommendations to the
Board;
(iv) • review any proposal for the payment of
(c)Authority
The NRC shall have the authority to do the
following:-
Board effectively to the Audit Committee in terms
5/5
the Group’s financial position and prospects. The
of compliance with the accounting standards and
Directors are also responsible for keeping proper
other related regulatory requirements.
5/5
accounting records, safeguarding the assets of the
Group and taking reasonable steps to prevent and
5/5
Risk Management Committee
(i) Dialogue
between
and
The Group recognizes the importance of keeping
is disseminated via the Group’s annual report and
quarterly performance reports. The Group also
maintains a website at www.ktmb.com.my to
IN
The Directors are required to prepare the financial
have taken the necessary steps and actions as
statements for each financial year that give a true and fair
follows:-
view of the state of affairs of the Group and of the Company
at the end of the financial year, and of the results and cash
selecting suitable accounting policies and
flow of the Group and of the Company for the financial year
applying them consistently;
then ended.
(b) stating
whether
applicable
accounting
standards have been followed;
The Directors consider that, in preparing the financial
statements for the financial year ended 31 December
2012, the Group has used appropriate accounting policies
(c)
shareholders informed of the Group’s business
and corporate developments. Such information
STATEMENT
In preparing the financial statements, the Directors
Shareholders
RESPONSIBILITY
RESPECT OF FINANCIAL STATEMENTS
(a)
Companies
G.
DIRECTORS’
enable detection of fraud and other irregularities.
E.SHAREHOLDERS
appropriate recommendations to the
Board.
as to present a balanced and fair assessment of
Report on pages 19 - 20.
Board; and
within the Company and make the
highlight matters requiring the attention of the
financial year under review is set out in this Annual
appropriate recommendations to the
the total number of approved positions
auditors. The external auditors in turn are able to
approved accounting standards in Malaysia so
The Risk Management Committee Report for the
bonus or salary review and make the
• review any proposal for an increase in
with the Companies Act 1965 and the applicable
Meetings
Attended
making judgements and estimates that are
and applied them consistently and made judgments and
reasonable and prudent; and
estimates that are reasonable and prudent. The Directors
also consider that all applicable approved accounting
(d)
preparing the financial statements on a going
standards have been followed and confirm that the financial
concern basis, having made reasonable
statements have been prepared on a going concern basis.
enquiries and assessments on the resources
of the Group on its ability to continue further
The Directors are responsible for ensuring that the Group
business in the foreseeable future.
and the Company keep accounting records that disclose
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The Malaysian Code on Corporate Governance issued in
Risk Management
reasonable accuracy at any time of the financial position
March 2012 sets out as a principle that the Board of a company
of the Group and of the Company and which enable
should establish a sound risk management framework and
In order to achieve a sound system of risk management and
them to ensure that the financial statements comply with
internal control system.
internal control, the Board and Management are responsible
to ensure the risk management and control framework is
the provisions of the Companies Act 1965 and Financial
Reporting Standards in Malaysia.
The Board is pleased to present the Statement on Internal
embedded into the culture, processes and structures of the
Control, which outlines the nature and scope of internal controls
Company. The framework is responsive to changes in the
of the Company during the financial year under review, and up
business environment and clearly communicated to all levels.
to the date of this Annual Report.
The Board strongly believes that prudent risk management
Board Responsibility
is vital for business sustainability and the enhancement of
shareholder’s value.
The Board is responsible for overseeing the adequacy,
integrity and effectiveness of risk management and the internal
Internal Control
control system that are essential facets of effective corporate
governance in order to safeguard shareholders’ investments
In view of the importance of maintaining a sound internal
and the Company’s assets. However, such systems are
control system, the Board has extended the responsibilities
designed to manage rather than eliminate the risk failure to
of determining the quality, adequacy and effectiveness of
achieve business objectives. In addition, it should be noted
the Company’s control environment to the Audit Committee.
that the systems could only provide reasonable assurance
The Internal Audit Department reports directly to the Audit
against material misstatement or loss or the occurrence of
Committee. The Head of Internal Audit Department has
unforeseeable circumstances.
the relevant qualifications and is responsible for providing
assurance to the Board that the internal controls are operating
The Board has delegated its role to committees at the Board
effectively. Internal auditors carry out their functions according
level that have primary risk management and internal control
to the standards set by recognised professional bodies.
oversight responsibilities:
Internal auditors also perform regular reviews and appraisals
of the effectiveness of the governance, risk management and
• Board Audit Committee – with oversight over the
internal controls processes within the Group. Major findings are
effectiveness of the governance, risk management and
then reported upwards to the Board, where appropriate, for
internal control processes.
remedial measures and corrective actions to be taken.
• Board Risk Management Committee – with oversight
over risk management.
Other Key Elements of the Control Process
Management assists the Board in identifying, evaluating,
The Board is committed to maintain a strong internal control
monitoring and reporting of risks and internal control, taking
structure for the proper conduct of the Group’s business
appropriate and timely corrective actions as needed, and
activity. The key elements include:
providing assurance to the Board that the Company’s
• An organisational structure with defined lines of
risk management and internal control system is operating
responsibility and delegation of authority together with
adequately and effectively, in all material aspects.
a hierarchical structure of reporting and accountability;
ANNUAL REPORT 2012
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• 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
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
enhancement of shareholders’ value in today’s rapidly
activities.
• Review of key business variable and the monitoring
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
each of whom is determined by the Board.
• Adequate insurance and physical safeguards on major
assets are in place to ensure assets of the Group are
(“RMC”)
to
develop
and
oversee
the
implementation of an enterprise-wide risk management
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
ethical standards and conduct at work; and
At least one (1) member of the RMC should
B. Risk Management Committee (“RMC”)
have significant railway operating or technology
• Maintenance of proper accounting records, consistent
application
of
appropriate
accounting
policies
experience. Additionally, as a qualification for
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
estimates, and preparation of the financial statements
the RMC are encouraged to participate in related
(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)
to
and presiding over RMC meetings, preparing
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
effective and have not resulted in any material loss, contingency
finance and accounting, legal compliance,
or uncertainty.
environmental impact, personnel policy,
Conclusion
assessing
and
and
providing
network
oversight
operations,
(iii)
Committee Meetings
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
management accounts received.
The RMC may request that any officer or other
(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
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
to, the RMC.
There were three (3) meetings held during the
ANNUAL REPORT 2012
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20
financial year and the attendance record is as
such risks or exposures; (iii) and Company’s
follows:-
underlying policies with respect to the risk
assessment and risk management;
Meetings
Attended
Mohd Noor (Chairman)
3/3
Pn. Ruhaizah binti Mohamed
Rashid
2/3
Dr. Aminuddin bin Adnan *
1/1
En. Afzar bin Zakariya
2/3
Note:-
consult from time to time with the Board
on issues relating to responsibilities of the
Committee;
(f)
conduct an annual self-evaluation of the
performance of the RMC, including its
effectiveness and compliance with its Terms
of Reference;
(g)
* Resigned on 30 April 2012
(iv)
(e)
review and re-assess the adequacy of its
Terms of Reference and amend as the RMC
deems appropriate; and
Key Responsibilities
The following responsibilities are set forth as a guide
with the understanding that the RMC may diverge
as appropriate given the circumstances. The RMC
is authorised to carry out these and such other
responsibilities assigned by the Board from time to
time and take any actions reasonably related to the
(h)
report regularly to the Board on RMC
findings, recommendations and any other
matters the RMC deems appropriate or at
the Board’s requests and maintain minutes
or other records of RMC meetings and
activities.
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;
(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
The Board of Directors is pleased to present the Audit
ix) 29 Nov 2012 – 63rd AC Meeting
Committee (AC) Report for the financial period ended 31
x) 18 Dec 2012 – Special AC Meeting
1.5
December 2012.
Details of the members’ attendance are as follows:
MEMBERSHIP
Directors
consist of five (5) Non-Executive Directors, a majority of whom
is Independent. The Chairman of the Committee shall be an
Independent Non-Executive Director.
The Board shall review the term of office of the members of the
Committee once every five (5) years.
COMPOSITION AND ATTENDANCE
Designation
Chairman
Member
Member
Member
(Appointed on 27 April 2012)
viii)21 Sept 2012 – Special AC Meeting
the internal audit process and where necessary
(1) or more members.
to ensure that the appropriate action is taken
8/10
8/10
7/7
1/2
TERMS OF REFERENCE OF THE AUDIT COMMITTEE
on the recommendations of the internal audit
2 Scopes and Function
1.1 The Committee shall have the authority to
c) Any appraisal or assessment of the performance
of members of the Internal Audit and to review
operations in compliance with statutory obligations,
the annual Performance Management System
policies, procedures, regulations and prudent business
of Internal Audit staff;
practices, the Committee is responsible to the Board of
e)Consider the adequacy of Internal Audit
function’s structure and organisation, as well as
appraise and recommend recruitment, transfers,
2.2
To review with the External Auditor, before the audit
appointments and promotions of members of
commences, the nature and scope of the audit and
the Internal Audit which is to be subsequently
their audit plan.
endorsed by the Nomination and Remuneration
Committee;
2.3
To review and report to the Board the quarterly
f) Appraise and recommend the annual salary
and year-end financial statements of the Company,
increments of members of the Internal Audit in
focusing on:
accordance with the Company policy; and
a)Any changes in accounting policies and
if required, to assist it in its work by providing all
g) Be informed of resignations of Internal Audit
practices;
necessary information and explanation.
The Committee shall have direct access to the
staff members and provide the resigning staff
b) Significant adjustments arising from the audit;
member an opportunity to submit his reasons
c) The going concern assumption; and
for resigning.
d)Compliance with accounting standards and
Company’s External and Internal Auditors and
other legal requirements.
provide a link between these Auditors and the
1.4
the Internal Audit;
and any question of resignation or dismissal.
All employees are directed to co-operate with
Board.
To consider and recommend to the Board, the
appointment of the External Auditor, the audit fee
the Committee and to be present at its meetings,
1.3
be it internal or external, which in its opinion
beneficial for the enhancement of members of
2.1
subsidiaries and to request for any information it
Member
d) Appraise and recommend any training/course,
Directors for the following:
investigate any activity of the Company and its
considers as relevant to its activities.
function;
In its role to ensure proper management of the business
1Authority
iv) 17 May 2012 – 60th AC Meeting
vii) 30 Aug 2012 – 62nd AC Meeting
several documents in like form each signed by one
Member
work;
attended
10/10
iii) 17 April 2012 – 59th AC Meeting
vi) 12 Jul 2012 – 61st AC Meeting
it has the necessary authority to carry out its
meetings
ii) 17 Feb 2012 – 58th AC Meeting
v) 08 June 2012 – Special AC Meeting
resources of the internal audit function and that
as valid and effectual as if it had been passed
b) The internal audit programmed and results of
10/10
During the financial year 2012, AC held ten (10) meetings.
i) 19 Jan 2012 – 57th AC Meeting
not being less than three (3) members shall be
constituted. Any such resolution may consist of
1.2
To review in respect of the Internal Audit Department:
a) The adequacy of the scope, functions and
Number of
Pn. Hajjah Jamela binti Mohd Syed
The AC comprises the directors listed below:
Pn. Hajjah Jamela binti Mohd Syed
(Resigned on 25 February 2012)
2.6
by a meeting of the Committee duly called and
The AC shall be appointed by the Board of Directors and shall
Directors
A circular resolution in writing signed by a majority of
the members for the time being or their alternates,
2.7
To review and report to the Board on the adequacy
and the integrity of the Company’s internal control
2.4 To discuss problems and reservations arising
systems and management information systems,
from the interim and final audits and any matter
including systems for compliance with applicable
the External Auditor may wish to discuss, in the
laws, rules, directives and guidelines.
It is also authorised to obtain such independent
professional advice it considers necessary to
absence of the Management, if necessary.
investigate any activity within its Terms of Reference.
2.5
To review the External Auditor’s management letter
and Management’s response.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
23
22
2.8
To propose to the Board the best practices on
to vote on the question of issue, shall not have a
The Internal Audit activity should monitor and evaluate the
organisation from their regular responsibilities assigned to
disclosure in financial results and annual reports of
casting vote.
effectiveness of the organisation’s risk management, control
them.
the Company in line with the principles set out in the
Malaysian Code of Corporate Governance, other
and governance systems encompassing the:
3.5
applicable laws, rules, directives and guidelines.
The External Auditor may request a meeting if
Independence
they consider necessary. Upon the request of the
a) Reliability and integrity of financial and operational
auditor, the Chairman of the Audit Committee shall
2.9
information;
To propose that Management has in place an
convene a meeting of the Committee to consider
b) Effectiveness and efficiency of operations;
function. This independence is achieved through organisational
adequate system of risk management.
any matter the auditor believes should be brought
c) Safeguarding of assets; and
status and objectivity.
to the attention of the Directors.
2.10 To consider any related party transactions that may
arise within the Company or its subsidiaries.
d) Compliance with laws, regulations and contracts.

3.6
The Company Secretary shall be the Secretary of
a) Organisational Status
Responsibility and Authority
the Committee.
2.11 To
consider
the
major
findings
of
internal
investigations and Management’s response.
2.12 To consider and examine other matters as defined
INTERNAL AUDIT CHARTER
3Meetings
Meetings shall be held at least four (4) times a year,
1. The responsibilities of Internal Audit within the organisation
the Audit Committee, or Board of Directors, and
are established by this Charter in accordance with
administratively to the President of the Company. This
prescribed Auditing Standards.
reporting relationship is to promote independence and
to ensure broad audit coverage, adequate consideration
2.Internal Audit has the authority to access records,
To establish the scope and activities of the Internal Audit
personnel and physical properties at any location relevant
function within the organisation consistent with The Institute
to the performance of engagements. It is expected
of Internal Auditor’s Standards for the Professional Practice of
that departments or activities under review will provide
Internal Auditing.
every possible assistance to facilitate the progress of the
although additional meetings may be called at the
Chairman’s discretion. Notice of Meetings shall be
The Head of Internal Audit reports functionally to
Purpose
by the Board.
3.1
Independence is essential to the effectiveness of Internal Audit
engagement.
Nature
circulated to the members one (1) week in advance.
of engagement communications and appropriate action
on engagement recommendations.
b) Individual Objectivity
The Internal Auditor’s objectivity is not adversely
affected when the auditor recommends standards of
3. The Head of Internal Audit has direct communication with
control for systems or reviews procedures before they
Internal auditing is an independent, objective assurance and
the Board, Audit Committee, or other appropriate governing
are implemented. The auditor’s objectivity is considered
3.2 The quorum necessary for the transaction of
consulting activity designed to add value and improve an
authority. The Head of Internal Audit will submit to the Audit
to be impaired if the auditor designs, installs, drafts
business of the Audit Committee Meeting may be
organization’s operations. It helps an organization accomplish
Committee an annual engagement work schedule including
procedures for, or operates such systems.
fixed by the members and unless so shall be two (2).
its objectives by bringing a systematic, disciplined approach to
of staffing plan and financial budget for approval. The Audit
evaluate and improve the effectiveness of risk management,
Committee will receive all final audit reports. Each year a
control, and governance processes.
report of Internal Audit activities will be presented to the
3.3
The Head of Finance, the Head of Internal Audit and
a representative of the External Auditor may attend
Audit Committee and the Board for their information.
Code of Ethics – Principles
Internal auditors are applying and uphold the following
meetings by invitation.
Objective
Questions arising at any meeting shall be decided
The objective of Internal Audit is to assist the Board, Audit
duplicate efforts, all audit effort will be co-ordinated. To this
by a majority of votes, each member having one
Committee and Management in the effective discharge of
end, the Head of Internal Audit will co-ordinate its audit
The integrity of internal auditors establishes trust and thus
vote and in case of equality of votes the Chairman
their responsibilities in establishing cost-effective controls,
work with that of the External Auditors.
provides the basis for reliance on their judgment.
shall have a second or casting vote. Save that where
assessing risks, recommending measures to mitigate those
two members form a quorum, the Chairman of a
risks and assuring proper governance process. In this regard,
5.In accordance with Auditing Standards, Internal Audit
meeting at which only such a quorum is present,
Internal Auditors furnish Management with independent
has no direct responsibility for or authority over any of the
Internal auditors exhibit the highest level of professional
or that which only two (2) members are competent
analysis, appraisals, counsel and information on the activities
activities reviewed. An Internal Audit review and appraisal,
objectivity in gathering, evaluating, and communicating
they review.
therefore, does not in any way relieve managers in the
information about the activity or process being examined.
principles:
4. In order to ensure adequate audit coverage and to minimise
3.4
1.Integrity
2.Objectivity
ANNUAL REPORT 2012
ANNUAL REPORT 2012
25
24
Internal auditors make a balanced assessment of all the
2.2
relevant circumstances and are not unduly influenced by
their own interests or by others in forming judgments.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
27
26
Not accept anything that may impair or be presumed
to impair their professional judgment.
2.3
Disclose all material facts known to them that, if
not disclosed, may distort the reporting of activities
3.Confidentiality
under review.
Internal auditors respect the value and ownership of
information they receive and do not disclose information
3.Confidentiality
without appropriate authority unless there is a legal or
professional obligation to do so.
4.Competency
Internal auditors:
3.1
Internal auditors apply the knowledge, skills, and experience
needed in the performance of internal audit services.
Prudent in the use and protection of information
acquired in the course of their duties.
3.2
Rules of Conduct
Not use information for any personal gain or in
any manner that would be contrary to the law or
detrimental to the legitimate and ethical objectives
CHAIRMAN OF THE BOARD
of the organization.
1.Integrity
On behalf of the Board of Directors and the Management
4.Competency
Internal auditors:
1.1
1.2
4.1
OVERVIEW
Engage only in those services for which they have
the necessary knowledge, skills, and experience.
4.2
Perform internal audit services in accordance with
Not knowingly be a party to any illegal activity,
the International Standards for the Professional
or engage in acts that are discreditable to the
Practice of Internal Auditing (Standards).
profession of internal auditing or to the organization.
1.4
year ended 31 December 2012.
Observe the law and make disclosures expected by
the law and the profession.
1.3
Report and Audited Financial Statement for the financial
Internal auditors:
Perform their work with honesty, diligence, and
responsibility.
Respect and contribute to the legitimate and ethical
objectives of the organization.
2.Objectivity
of KTMB, it gives me great pleasure to present the Annual
4.3 Continually improve their proficiency and the
Financial Results
There had been mixed growth and declines for the period
under review.
effectiveness and quality of their services.
Total revenue from the core businesses increased slightly
from RM352.6 million in 2011 to RM361.0 million in 2012.
There was a business improvement in the ETS services
due to increase in the number of passengers.
Internal auditors:
KTMB losses increased from RM119.9 million to RM283.9
2.1
Not participate in any activity or relationship that
million, despite management efforts to increase revenue,
may impair or be presumed to impair their unbiased
reduce expenditure and improve efficiency.
assessment. This participation includes those
activities or relationships that may be in conflict with
At the Group level, KTMB net losses had also increased
the interests of the organization.
from RM103.4 million to RM240.1 million mainly due
to higher operating cost and loss of business in the
Commuter and Intercity segment.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
29
28
CORE BUSINESSES
In this connection, during the year, KTMB has proactively
KTM Intercity
Cargo Services
For the year ended 2012, the ETS had shown greater
Revenue from Cargo Services continued to show growth of
improvement overall since the service was introduced in August
1.8% to RM127.4 million compared to RM125.2 million in the
2010. The 2012 revenue had shown an increase of 33.5% from
previous year.
pursued strategies in the following core business areas:
The rail operating business is an essential and integral
component of the service industry, which has great potential for
KTM Komuter
further growth. KTMB has always been the nations established
player in the land transportation sector, moving passengers and
The year 2012 saw the transformation of KTM Komuter through
RM23.9 million to RM31.9 million. The number of passengers
goods throughout the railway network in Peninsular Malaysia.
the provision of better quality of service, with the acceptance of
also increased to 33.3% from 0.9 million in 2011 to 1.2 million
Containerized and cement traffic remained the Cargo Services
38 electric trains from China better known as MyKomuter Six
in 2012. KTM Intercity is expecting an increase in revenue and
major commodity. Containerized traffic brought in RM46.8
Car Set (SCS).
ridership should the level of service especially in the area of
million while cement traffic contributed RM44.5 million.
punctuality can be improved.
Most of the containerized traffic revenue originated from the
Our rail network strategically links the industrial growth centres
in the hinterland to the sea ports such as Pelabuhan Pulau
Pinang, Pelabuhan Klang, Pelabuhan Pasir Gudang and
Through the initiative under the National Key Result Areas
Pelabuhan Tanjung Pelepas. It also serves as the backbone
(NKRA) by the Government, a total of RM1.9 billion was
KTM Intercity contributed RM81.6 million to KTMB’s revenue
for Landbridge services that connect cross-border movements
allocated to purchase 38 new SCS that will help improve the
in 2012 compared to RM91.8 million in 2011 which showed
of cargo between Malaysia and Thailand. Complementing the
quality of the commuter services.
a decrease of 11.1%. The number of passengers for the year
Traditional commodity such as sugar recorded RM10.7 million
2012 recorded a ridership of 3.1 million compared to 3.7 million
while revenue from the fertilizer train contributed RM3.9 million.
rapid development of other modes of transportation, such as
transportation of the South Thai Cargo (STC) from Padang
Besar to North Butterworth Container Terminal.
road, sea and air, KTMB continues to focus on providing safe,
MyKomuter can accommodate more than 1,000 passengers
in 2011 which is a 16.2% reduction. The decrease in revenue
To cover the losses of the Singapore service sector, KTMB had
efficient and reliable rail services for passengers and goods.
at any one time and has facilities such as intercoms, LCD
and ridership was influenced by a series of incidents throughout
developed a new cargo terminal at Gelang Patah station. The
information display, Dynamic Route Map, Priority Seating Zone,
the year as well as the effect of the closure of Tanjung Pagar
terminal was opened for operations in the first quarter of 2012
two Ladies’ Coaches, CCTV and Wheel Chair area.
station in Singapore.
and contributed RM3.8 million in terms of revenue for KTMB.
KTMB is optimistic that with MyKomuter, passenger’s waiting
KTMB continues to provide customers with a viable and
time will be shortened from 30 minutes to 15 minutes and
competitive cargo services in the most cost-effective manner.
will double the daily commuter service users from 95,000 to
Capitalising on its established rail infrastructure, KTMB planned
200,000 a day in the near future.
to capture significant market share of the cargo and haulage
businesses, especially in the transportation of commodities
such as containerised cargo, cement and sugar.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
31
30
THE WAY FORWARD
ACKNOWLEDGEMENT
KTMB will continue its efforts to become a viable business
On behalf of the Board of Directors, we would like to express
entity at the operational level and increase its efficiency.
our appreciation to the Management and staff, for their services
Towards this end, KTMB will continue to manage its core
rendered during the year and also to thank all of KTMB’s valued
businesses effectively, improve cost-effectiveness and monitor
customers for their continued patronage and support.
performance in line with our “Ontime Everytime” tagline.
We would also like to record our appreciation to the
Prospect and Challenges
Railwaymen’s Union of Malaya (RUM) and Senior Officers
Association (SOA) for their continued support and cooperation.
We are confident that all the three Strategic Business Units
The year 2013 will mark a new chapter in the history of KTMB.
(SBU) have the potential to perform well in 2013 with increased
It is hoped that the staff at all levels will continue to give their full
volume and improved revenue. The Government’s focus on
support and dedication to the company in meeting the future
encouraging the public to utilise public transport would also
challenges ahead.
escalate the demand for rail services in the coming years.
Lastly, we would like to take this opportunity to express our
The challenge for KTMB is to expeditiously prepare itself in
gratitude to the Ministry of Finance, the Land Public Transport
terms of hardware, software and personnel to cater for the
Commission, the Ministry of Transport and the Railway Asset
growing expectations and increasing demands. In this context,
Corporation for their guidance, invaluable assistance and
KTMB would continue to accord priority to the development of
support in the past year.
human capital so as to ensure the company is a reliable and
cost effective rail transport operator.
Chairman
Keretapi Tanah Melayu Berhad
Review of Operations
Review of Operations
The year 2012 had been a very promising and progressive
between Ipoh- Kuala Lumpur and vice versa. The ETS services
period for KTMB. KTMB contributed in a big way to the national
has also been increased to 18 services daily from Monday
transportation agenda.
to Thursday and 22 services from Friday to Sunday, which
ANNUAL REPORT 2012
ANNUAL REPORT 2012
35
34
Review of Operation
resulted in 33.3% increase in ridership from 0.9 million in 2011
In the area of rail transportation, KTMB has undertaken many
to 1.2 million passengers in 2012. With the completion of the
mega railway projects with the assistance of the Government
electrified double track in certain areas by 2013 and 2014,
that will bring long term development both in terms of economic
the coverage of ETS will be all the way to Gemas and Padang
growth as well as significant improvement in rail transportation
Besar. KTMB is in the process of buying new ETS sets to
both in passengers and cargo services.
increase the frequency and reach of its services to more areas
by 2016.
In terms of passenger conveyance, KTMB has over the years
through Government funding introduced new services i.e.
Another major milestone in 2012 is the introduction of KTMB’s
Electric Train Service (ETS) and Six Car Sets (SCS) Commuter
SCS to fulfill the ever growing demand for efficient public
services to improve the frequency of trains to fulfill the demand
transport in the Klang Valley. KTMB has introduced 38 units
from the general public.
of SCS to service the Klang Valley transport needs. With the
introduction of the new services KTMB is able to provide
ETS with 5 sets of 6-car coaches was introduced to provide
efficient and comfortable commuter services to the Klang Valley
frequent services between Ipoh and Kuala Lumpur. When it
passengers. It also reduced the waiting time from 30 minutes
started in 2010 it was only providing 10 services a day with
to 15 minutes in 2012 during the peak hours. Punctuality
an average of 1,000 passengers daily, but over the last three
of commuter services also increased in 2012. KTMB also
(3) years the passenger load has increased tremendously and
introduced additional services i.e. 24 hours services during
today we are transporting approximately 4,000 passengers
special occasions like New Year, Chinese New Year and
Thaipusam and also additional services during school holidays
applications, customer service, leadership, team building and
and Hari Raya celebrations.
other management aspects.
Cargo business has also significantly contributed to the revenue
KTMB had earlier initiated the development of the National
of KTMB with an increase of 1.8 % in its revenue from RM125.2
Occupational Skills Standards (NOSS) in 11 different categories
million in 2011 to RM127.4 million in 2012.
together with the other rail operators in Malaysia. All NOSS were
approved and endorsed by the Skills Development Department
KTMB also took another major step in safety and security
under the Ministry of Human Resources. Following this, KTMB
by placing our own auxiliary police personnel on commuter
had moved on and initiated the implementation of the National
services to ensure safety of the passenger. To ensure safer
Dual Training System/Sistem Latihan Dual Nasional (SLDN)
and uninterrupted travel on train, KTMB also continued its
with the aim of certifying the competency of its skilled workers.
awareness program to educate the people living along the
track.
A total of 1,250 employees are currently undergoing the SLDN
program which is expected to be completed and certified in
KTMB also stressed the importance of obtaining international
the year 2014. With the availability of certified skilled workers
certification in work processes, resulting in the Commuter
at various levels, the next milestone for KTMB is to open the
Depot in Sentul achieving ISO 9001:2008 certification in 2012.
program to other local and international rail operators.
One of the major factors in KTMB’s success is the well trained
KTMB is also collaborating with the Malaysian Industry-
and dedicated work force totaling 5,490 i.e. 531 executive
Government Group for High Technology (MiGHT) to assist
and 4,959 non-executive. Towards maintaining this excellent
Malaysia in reducing the shortage of skilled workers within the
record, KTMB embarked on a wider scale of training program in
rail industries and also becoming the Rail Center of Excellence
year 2012 in line with the Government Transformation Program.
in the South East Asia region.
In the year 2012, a total of 3,334 employees attended
KTMB has intensified its marketing through the mainstream
training in various disciplines such as train operations, rolling
media and has used the media effectively by disseminating
stock maintenance, overhead line maintenance, track safety,
its various offering to the general public. One of the major
signaling & communication systems and maintenance,
promotions in 2012 was the 50% discount for Malaysian
occupational safety and health at workplace, computer system
citizens who are earning below RM 3,000 which started on
has allocated RM528.6 million under the 10th Malaysia Plan
With significant amount of investment in the electrified double
for the upgrading of rolling stock. Besides, procurement
track, KTMB will contribute in the reduction of carbon emission
of 12 units of new passenger coaches (Air Conditioned
by replacing the current fleet of diesel locomotives with
Second Class Coaches/ASC), 2 units of Air Conditioned
additional 10 ETS sets to be purchased in the near future.
Buffet Coaches (ABC) and 2 units of Power Generating Car
(PGC) have been implemented under the Kumpulan Wang
Amanah Pengangkutan Awam (KWAPA) allocation. The testing
and commissioning works on these coaches and PGC is in
1 November 2012 and will end on 31 October 2013. The
progress and the delivery in stages is expected to start in June
response has been tremendous with 140,000 subscribing to
the Kad Komuter 1Malaysia so far.
2013.
KTM Komuter also offered the following promotions from
Major integration works are also taking place currently to
integrate KTMB stations with other rail operators i.e. Subang
March to September 2012 i.e. distributed 100,000 vouchers
Jaya (LRT), Sungai Buloh (MRT), Kajang (MRT) and KL Sentral
worth RM2 to the public to be used on commuter travel, 50%
(MRT). All these integration works will provide seamless travel
discounted fare on weekly ticket, as well as free rides for
for the people.
students, disabled persons and senior citizens. KTMB also
embarked on distributing free newspapers to the commuters
With substantial amount of money spent on developing rail
in the Klang Valley area. KTMB has also conducted many
infrastructure, the volume of both passengers and cargo is
familiarization trips for media especially on the new SCS
expected to increase 5 folds in the near future, which will result
services. KTMB being a social-minded transporter has also
in tremendous increase in revenue for KTMB.
offered different kinds of discounts to senior citizens, school
children as well as disabled persons. The Ladies Coach, which
was introduced in 2010, received a major boost when the new
SCS introduced additional coaches i.e. from one dedicated
sector, the Government has approved 6 projects amounting to
coach to two dedicated coaches.
a total cost of RM299.7 million.
As rail is a catalyst in the development of the economy of the
As of 31 December 2012, the Upgrading of Bandar Tasik Selatan
country, there are many on-going projects, which are being
undertaken by KTMB through Government funding. The major
and far most important is the double tracking project from
Seremban - Gemas and Ipoh - Padang Besar which is being
undertaken and on-going at the moment. Both of the projects
are expected to be completed in 2013 and 2014 respectively.
KTMB also replaced one of the oldest tunnel in the country i.e.
Bukit Berapit tunnel with the stage opening of its new tunnel 3
km in length on 22 April 2013. The year 2013 will also see the
opening of Bukit Merah Marine Viaduct. Rembau will also have
a brand new station, which is expected to be opened in 2013.
To achieve the targets outlined in the National Key Result Area
(NKRA) in improving urban public transport for the railway
Station and Provision of Universal Facilities at ten commuter
stations have been completed, whereas Provision of CCTV and
Passenger Information System (PIS) and Construction of EMU
Depot at Seremban are expected to complete by June 2013
and December 2013 respectively.
Meanwhile, two projects namely the Remodelling of the
Signalling System between Port Klang Junction - Batu Junction
and Provision of Automatic Fare Collection (AFC) system at the
commuter stations are on-going and is expected to complete
by 2014.
In line with KTMB’s efforts to meet the increasing demand for
passenger and cargo services, the existing capacity of rolling
stock will be upgraded. Pursuant to this, the Government
ANNUAL REPORT 2012
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36
Review of Operation
Corporate Calendar
Corporate Calendar
B
24 April 2012
E
19 January 2012
6 March 2012
Goodies distribution to passengers in conjunction of Chinese
MyKomuter trial run with members of media (KL Sentral
Y.B. Dato’ Sri Kong Cho Ha, Minister of Transport Site Visit to
New Year Celebration at KL Sentral Station.
Station – Kajang Station – KL Sentral Station) at KL Sentral
the new Bahau Station.
Station.
9 May 2012
31 January 2012
C
Media briefing at Batu Caves Station on additional Komuter
8 March 2012
services for Thaipusam celebrations at Batu Caves Station.
The Launching of MyKomuter by Y.A.B. Tan Sri Muhyiddin
23 February 2012
A
F
KTM Berhad Labour Day celebrations at KTMB Headquarters.
G
G
Yassin, Deputy Prime Minister of Malaysia at KL Sentral
21 May 2012
Station.
ETS the official transportation for Indian Hockey Players
in conjunction of Sultan Azlan Shah Cup 2012 Hockey
International Railway Standards. A seminar jointly organized
D
by KTMB and Railway International Standards Centre, Japan
31 March 2012
and officiated by Y.B Tan Sri Dato’ Seri Syed Hamid bin Syed
Media Briefing on MyKomuter at KTMB Headquarters.
Tournament at Stadium Azlan Shah, Ipoh, Perak.
Jaafar Albar, Chairman of SPAD at InterContinental Hotel,
Kuala Lumpur.
B
A
E
C
D
F
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40
Corporate Calendar
21 June 2012
H
J
14 September 2012
31 October 2012
3-7 December 2012
Groundbreaking Ceremony of KTMB EMU Seremban Depot
Recognition Ceremony of ISO 9001:2008 Certificate, EMU
MyKomuter Familiarization Trip (Phase 2) with members of
ASEAN Railways CEOs’ (ARCEOs’) Conference in Yangon,
by Y.B Dato’ Sri Kong Cho Ha, Minister of Transport at
Sentul Depot.
media at KL Sentral Station.
Myanmar.
4 November 2012
29 December 2012
Seremban Station.
24 – 28 September 2012
K
M
3 July 2012
33 Joint Conference between KTMB -SRT in Pattaya,
Study visit by Switzerland Delegates at Train Control &
The first time ever in Komuter history, a wedding reception
Visit by the Minister of Transport, Y.B Dato’ Sri Kong Cho Ha
Thailand.
Command Centre (TCCC), KL Sentral.
was held at Sentul Station. The newly-wed took a ride on
rd
to the multi-storey car park at Serdang Station.
MyKomuter to Sentul Station. The coverage of the wedding
10 October 2012
L
14 November 2012
ceremony is to make known that KTMB offer space for such
activities.
23 August 2012
Handover Ceremony of Emergency Response Plan Manual
Study visit to KTMB by the East Japan Railway Company (1st
Study visit to KTMB by the Governor’s Bureau of the State
between JBPM / KTMB and ERP at Taman Wahyu Station.
Group).
18 October 2012
27 November 2012
KTMB participated in Sayangi Selangor Carnival at I-City,
Press Conference on Komuter 1Malaysia Card at KL Sentral
Study visit to KTMB by the East Japan Railway Company (2nd
Shah Alam.
Station.
Group).
29-30 December 2012
Railway of Thailand.
13 September 2012
I
MyKomuter Fun Ride with school children from Seremban to
Kuala Lumpur.
I
L
H
J
K
M
ANNUAL REPORT 2012
ANNUAL REPORT 2012
43
42
Corporate Calendar
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
Directors’ Report
The Directors of KERETAPI TANAH MELAYU BERHAD hereby submit their report and the audited financial statements of the
During the financial year, the paid up share capital of the Company was increased from RM902,559,000 to RM1,137,459,000 by
Group and of the Company for the financial year ended 31 December 2012.
way of issuance of 234,900,000 ordinary shares of RM1 each at RM1 per ordinary share for working capital purposes. The new
ordinary shares issued rank pari passu with the then existing ordinary shares of the Company.
Principal Activities
The Company has not issued any debentures during the financial year.
The principal activities of the Company are railway transportation operations and the provision of related railway services in Peninsular
Malaysia and Singapore. The Company operates these activities pursuant to a licence issued by the Ministry of Transport.
Share Options
The principal activities of its subsidiaries are described in Note 13 of the financial statements.
No options have been granted by the Company to any parties during the financial period to take up unissued shares of the
Company.
There have been no significant changes in the nature of these activities during the financial year.
No shares have been issued during the financial period by virtue of the exercise of any option to take up unissued shares of the
Results Of Operations
Company. As at the end of the financial period, there were no unissued shares of the Company under options.
The results of operations of the Group and of the Company for the financial year are as follows:
Other Statutory Information
The Group
The Company
RM’000
RM’000
(240,156)
(283,950)
16
-
(240,140)
(283,950)
Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made
out, the directors took reasonable steps:
Loss for the financial year attributable to:
Owners of the Company
Non-controlling interest
(a)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for
doubtful debts and had satisfied themselves that there were no known bad debts and that adequate allowance had been
made for doubtful debts; and
(b)
In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been
to ensure that any current assets which were unlikely to realise their book value in the ordinary course of business had been
written down to their estimated realisable values.
substantially affected by any item, transaction or event of a material and unusual nature.
As of 31 December 2012, the Group and the Company have a capital deficiency of RM983,022,000 and RM1,205,226,000
Dividends
respectively as a result of losses incurred in the current and prior financial years. As mentioned in Note 3 to the Financial Statements,
the financial statements of the Group and of the Company have been prepared on the basis of accounting principles applicable to a
No dividend has been paid or declared by the Company since the end of the previous financial year. The directors do not recommend
going-concern which presumes that the Group and the Company will continue to receive financial support from Minister of Finance
any dividend payment in respect of the current financial year.
(Incorporated) to enable the Group and the Company to operate as a going-concern in the foreseeable future. The appropriateness
of the application of going-concern as a basis of preparation of the financial statements of the Group and of the Company is
Reserves And Provisions
dependent on the continued financial support from Minister of Finance (Incorporated).
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial
Other than as mentioned in the preceding paragraph, at the date of this report, the Directors are not aware of any circumstances:
statements.
(a)
statements of the Group and of the Company inadequate to any substantial extent; or
Issue Of Shares And Debentures
As approved by the shareholders in the Extraordinary General Meeting (“EGM”) held on 30 October 2012, the authorised share
capital of the Company was increased from RM1,000,000,000 to RM2,000,000,000 by the creation of an additional 1,000,000,000
new ordinary shares of RM1 each.
which would render it necessary to write off any bad debts or the amount of the allowance for doubtful debts in the financial
(b)
which would render the values attributed to the current assets in the financial statements of the Group and of the Company
misleading; or
ANNUAL REPORT 2012
ANNUAL REPORT 2012
Directors’ Report
47
46
(Incorporated in Malaysia)
(c)
which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and
Directors’ Interests
of the Company misleading or inappropriate; or
None of the Directors holding office at 31 December 2012 had any interest in the ordinary shares of the Company and of its related
(d)
not otherwise dealt with in this report or financial statements which would render any amount stated in the financial
corporations during the financial year.
statements of the Group and of the Company misleading.
Directors’ Benefits
At the date of this report, there does not exist:
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit
(a)
any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the
secures the liabilities of any other person; or
financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of a contract
made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company
(b)
any contingent liability in respect of the Group and of the Company which has arisen since the end of the financial year.
in which the Director has a substantial financial interest.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company
the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the
to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Company to meet their obligations as and when they fall due.
Holding Company
In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the
end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and
The Company is a subsidiary of Minister of Finance (Incorporated), a body corporate incorporated pursuant to the Minister of
of the Company for the financial year in which this report is made.
Finance (Incorporated) Act, 1957 (Revised 1989).
Directors
Auditors
The following directors served on the Board of the Company since the date of the last report:
The auditors, Messrs. Deloitte KassimChan, have expressed their willingness to continue in office.
Dato’ Sri Ir. Mohd Zin bin Mohamed
Signed on behalf of the Board
Selvarajoo a/l Manikam
in accordance with a resolution of the Directors,
Dato’ Sri Zakaria bin Bahari
Rosli bin Abdullah
Harun bin Johari
Ruhaizah binti Mohamed Rashid
________________________________________
Sr. Ahmad Zainuddin bin Jamaluddin
DATO’ SRI IR. MOHD ZIN BIN MOHAMED
Norazura binti Tadzim
Datuk Kamaruzaman bin Mohd Noor
In accordance with Article 104 of the Company’s Articles of Association, Selvarajoo a/l Manikam, Norazura binti Tadzim and
Ruhaizah binti Mohamed Rashid retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves
________________________________________
for re-election.
DATUK ELIAS BIN KADIR
Kuala Lumpur
16 May 2013
ANNUAL REPORT 2012
ANNUAL REPORT 2012
49
48
Directors’ Report
50
Independent Auditors’ Report
51
To The Members Of KERETAPI TANAH MELAYU BERHAD
Report on the Financial Statements
the financial statements of the Group and of the Company have been prepared on the basis of accounting principles applicable to a
going-concern which presumes that the Group and the Company will continue to receive financial support from Minister of Finance
We have audited the financial statements of KERETAPI TANAH MELAYU BERHAD, which comprise the statements of financial
(Incorporated) to enable the Group and the Company to operate as a going-concern in the foreseeable future. The appropriateness
position of the Group and of the Company as of 31 December 2012 and the statements of comprehensive income, statements
of the application of going-concern as a basis of preparation of the financial statements of the Group and of the Company is
of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of
dependent on the continued financial support from Minister of Finance (Incorporated).
significant accounting policies and other explanatory information, as set out on pages 53 to 155.
Report on Other Legal and Regulatory Requirements
Directors’ Responsibility for the Financial Statements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
The directors of the Group and the Company are responsible for the preparation of these financial statements so as to give a true
and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
(a)
requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act;
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
(b)
We have considered the financial statements and auditors’ reports of the subsidiaries of which we have not acted as
auditors, as mentioned in Note 13 to the Financial Statements, being financial statements that have been included in the
financial statements of the Group;
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
(c)
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and
are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group
perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
and we have received satisfactory information and explanations as required by us for these purposes; and
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of
(d)
The audit reports on the accounts of the subsidiaries were not subject to any qualification and did not include any adverse
comment made under Section 174 (3) of the Act.
the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control
relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that
Other Matters
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
1. As stated in Note 2 to the financial statements, the Company adopted Malaysian Financial Reporting Standards on 1
January 2012 with a transition date of 1 January 2011. These standards were applied retrospectively by directors to the
comparative information in these financial statements, including the statement of financial position as at 31 December
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
2011 and 1 January 2011, and the statement of comprehensive income, statement of changes in equity and statement
of cash flows for the year ended 31 December 2011 and related disclosures. The application of these Standards have not
Opinion
affected the comparative information as previously reported in accordance with Financial Reporting Standards. We were
not engaged to report on these comparative information which is now presented in accordance with Malaysian Financial
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as
Reporting Standards and hence, it is unaudited. Our responsibilities as part of our audit of the financial statements of the
of 31 December 2012 and of their financial performance and cash flows for the year then ended in accordance with Malaysian
Company for the year ended 31 December 2012 have, in these circumstances, included obtaining sufficient appropriate
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in
audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially affect the
Malaysia.
financial position as of 31 December 2012 and financial performance and cash flows for the year then ended.
Emphasis of Matters
2. This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this
respectively as a result of losses incurred in the current and prior financial years. As mentioned in Note 3 to the Financial Statements,
report.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
For The Year Ended 31 December 2012
3. The financial statements of the Company for the year ended 31 December 2011 were audited by another firm of auditors
The Group
2012
2011
whose report dated 28 June 2012 expressed an unmodified opinion on those statements.
Note
RM’000
RM’000
RM’000
RM’000
5
454,671
440,963
360,988
352,560
(533,414)
(494,814)
(466,358)
(427,142)
Gross loss
(78,743)
(53,851)
(105,370)
(74,582)
Other operating income
103,120
75,977
95,077
79,929
Administrative expenses
(59,943)
(54,580)
(43,206)
(35,803)
Other operating expenses
(203,030)
(79,747)
(193,368)
(73,612)
Results from operating activities
(238,596)
(112,201)
(246,867)
(104,068)
1,272
2,255
545
1,384
(29,675)
(17,823)
(29,269)
(17,237)
(266,999)
(127,769)
(275,591)
(119,921)
35,006
24,106
-
-
Revenue
DELOITTE KASSIMCHAN
The Company
2012
2011
Cost of services
AF 0080
Chartered Accountants
KAMARUL BAHARIN BIN TENGKU ZAINAL ABIDIN
Partner - 2903/11/13 (J)
Finance income
Chartered Accountant
Finance costs
16 May 2013
6
Operating loss
Share of profit of equity- accounted investees,
net of tax
Loss before tax
7
(231,993)
(103,663)
(275,591)
(119,921)
Income tax (expense)/credit
10
(8,147)
210
(8,359)
-
(240,140)
(103,453)
(283,950)
(119,921)
Foreign currency translation differences of
foreign operations
(21)
(33)
-
-
Other comprehensive loss for the year, net
of tax
(21)
(33)
-
-
(240,161)
(103,486)
(283,950)
(119,921)
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
ANNUAL REPORT 2012
ANNUAL REPORT 2012
Statements Of Comprehensive Income
53
52
Statements Of Financial Position
55
54
Statements Of Comprehensive Income
The Group
The Group
2012
2011
Note
RM’000
RM’000
Loss for the year
RM’000
RM’000
1.1.2011
Note
RM’000
RM’000
RM’000
Property, plant and equipment
11
148,646
269,980
277,830
Investment properties
12
2,035
2,092
2,149
Investments in associates
14
157,831
145,545
135,212
Other investment
15
140
170
170
Long-term receivables
16
-
-
69,216
Deferred tax assets
17
-
3,107
498
420,894
485,075
ASSETS
Non-current Assets
(240,156)
(103,463)
(283,950)
(119,921)
16
10
-
-
(240,140)
(103,453)
(283,950)
(119,921)
Total comprehensive loss attributable to:
31.12.2011
The Company
2012
2011
Loss attributable to:
31.12.2012
(240,177)
(103,496)
(283,950)
(119,921)
16
10
-
-
(240,161)
(103,486)
(283,950)
(119,921)
Total Non-current Assets
308,652
Current Assets
Inventories
18
48,950
42,303
45,428
Trade and other receivables
19
201,042
87,987
84,112
Deposits and prepayments
19
28,925
4,339
5,786
3,094
10,007
9,842
26,093
40,438
87,723
308,104
185,074
232,891
5,507
-
-
Total Current Assets
313,611
185,074
232,891
Total Assets
622,263
605,968
717,966
Tax recoverable
Cash and bank balances
Non-current assets classified as held for sale
20
21
EQUITY AND LIABILITIES
Capital and Reserves
The accompanying Notes form an integral part of the financial statements.
Share capital
22
1,137,459
902,559
882,559
Redeemable Cumulative Convertible
Preference Shares (“RCCPS”)
23
50,583
50,583
50,583
ANNUAL REPORT 2012
ANNUAL REPORT 2012
As Of 31 December 2012
As Of 31 December 2012
The Group
The Company
Note
Reserves
24
Accumulated losses
Equity attributable to owners of the Company
Non-controlling interests
Capital deficiency
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
(303)
(282)
(249)
(2,170,857)
(1,930,701)
(1,827,238)
(983,118)
(977,841)
(894,345)
96
80
70
(983,022)
(977,761)
(894,275)
31.12.2012
31.12.2011
1.1.2011
Note
RM’000
RM’000
RM’000
11
126,551
250,079
257,887
Investments in subsidiaries
13
6,649
6,649
6,649
Investments in associates
14
25,830
25,830
25,830
Other investment
15
140
170
170
159,170
282,728
290,536
ASSETS
Non-current Assets
Non-current Liabilities
Loans and borrowings
25
1,172,666
1,153,593
1,142,195
Redeemable Convertible Cumulative
23
17,976
16,814
15,697
Deferred tax liabilities
17
1,442
3,190
1,371
Deferred gain
26
-
-
69,216
Government grants
27
284
362
38,852
Provisions
28
4,934
5,756
6,578
Retirement benefit obligations
29
90,392
85,486
92,196
1,287,694
1,265,201
1,366,105
Total Non-current Liabilities
Total Non-current Assets
Current Assets
Inventories
18
48,950
42,303
45,428
19
182,043
70,779
69,230
Deposits and prepayments
19
24,833
2,618
4,570
907
9,277
9,177
1,988
7,623
53,583
Total Current Assets
258,721
132,600
181,988
Total Assets
417,891
415,328
472,524
Tax recoverable
20
Current Liabilities
Trade and other payables
30
166,346
144,683
146,736
25
140,501
161,000
88,917
Provisions
28
822
822
822
29
9,879
9,879
7,284
43
2,144
2,377
317,591
318,528
246,136
1,605,285
1,583,729
1,612,241
622,263
605,968
717,966
Current tax liabilities
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
EQUITY AND LIABILITIES
Capital and Reserves
Share capital
22
1,137,459
902,559
882,559
Redeemable Cumulative Convertible
23
50,583
50,583
50,583
Accumulated losses
(2,393,268)
(2,109,318)
(1,989,397)
Capital deficiency
(1,205,226)
(1,156,176)
(1,056,255)
ANNUAL REPORT 2012
ANNUAL REPORT 2012
57
56
The Company
Note
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Non-current Liabilities
25
1,168,192
1,149,184
1,138,861
23
17,976
16,814
15,697
Government grants
27
285
362
38,852
Provisions
28
4,934
5,756
6,578
29
90,392
85,486
92,196
The Group
Note
Share
Capital
RM’000
Non distributable
Reserves
RCCPS
- Other
- Equity
Reserves
RM’000
RM’000
Attributable
to Equity
Holders
NonAccumulated
of the Controlling
losses
Company
Interests
RM’000
RM’000
RM’000
Net
RM’000
Total Non-current Liabilities
1,281,779
1,257,602
30
190,761
144,783
145,305
25
139,876
158,418
83,184
Provisions
28
822
822
822
29
9,879
9,879
7,284
341,338
313,902
236,595
1,623,117
1,571,504
1,528,779
417,891
415,328
472,524
Total Liabilities
Total Equity and Liabilities
Total comprehensive loss
for the year
Issue of ordinary shares for
cash
22
882,559
50,583
(249)
(1,827,238)
(894,345)
70
(894,275)
-
-
(33)
(103,463)
(103,496)
10
(103,486)
20,000
-
-
-
20,000
-
20,000
902,559
50,583
(282)
(1,930,701)
(977,841)
80
(977,761)
-
-
(21)
(240,156)
(240,177)
16
(240,161)
234,900
-
-
-
234,900
-
234,900
1,137,459
50,583
(303)
(2,170,857)
(983,118)
96
(983,022)
1,292,184
Current Liabilities
Total Current Liabilities
Balance as of
1 January 2011
Balance as of
31 December 2011/
1 January 2012
Total comprehensive loss
for the year
Issue of ordinary shares for
cash
Balance as of
31 December 2012
22
ANNUAL REPORT 2012
ANNUAL REPORT 2012
Statement Of Changes In Equity
59
58
The Company
Note
Balance as of 1 January 2011
Issue of ordinary shares for cash
22
Share
RCCPS -
Accumulated
Capital
Equity
losses
Net
RM’000
RM’000
RM’000
RM’000
882,559
50,583
(1,989,397)
(1,056,255)
-
-
(119,921)
(119,921)
20,000
-
-
20,000
The Group
2012
2011
The Company
2012
2011
RM’000
RM’000
RM’000
RM’000
(231,993)
(103,663)
(275,591)
(119,921)
96,581
91,686
90,552
87,957
57
57
-
-
Impairment loss on property, plant and
equipment
84,643
20,600
84,643
20,600
Finance costs
29,675
19,487
29,269
18,901
Increase in liability for defined benefit plans
16,408
13,848
16,408
13,848
Allowance for doubtful debts of trade and
other receivables
3,394
3,332
2,522
1,984
Property, plant and equipment written off
910
2,174
910
2,174
Provision for inventory
205
-
205
-
Amortisation of Government grants
(78)
(78)
(78)
(78)
(1,272)
(2,255)
(545)
(1,384)
(25,892)
(1,265)
(578)
(1,198)
(4,006)
(3,808)
(3,327)
(2,004)
Share of results of associates
(35,006)
(24,106)
-
-
Claims from the Government for uneconomic
services
(40,827)
(28,820)
(40,827)
(28,820)
- associated company
-
-
(22,720)
(13,773)
- subsidiaries
-
-
(1,756)
(1,109)
30
-
30
-
(107,171)
(12,811)
(120,883)
(22,823)
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss before tax
Adjustments for:
Balance as of 31 December 2011/
1 January 2012
Issue of ordinary shares for cash
Balance as of 31 December 2012
22
902,559
50,583
(2,109,318)
(1,156,176)
-
-
(283,950)
(283,950)
234,900
-
-
234,900
1,137,459
50,583
(2,393,268)
(1,205,226)
Depreciation of property, plant and
equipment
Depreciation of investment property
Finance income
Gain on disposal of property, plant and
equipment
Reversal of allowance of doubtful debts of
trade and other receivables
Dividend income:
Impairment loss on other investment
Operating Loss Before changes in Working
Capital
ANNUAL REPORT 2012
ANNUAL REPORT 2012
Statements Of Cash Flows
61
60
Statement Of Changes In Equity
The Group
2012
2011
Note
RM’000
RM’000
The Group
2012
2011
The Company
2012
2011
RM’000
Note
RM’000
RM’000
RM’000
RM’000
124,900
20,000
124,900
20,000
10,116
73,624
10,000
75,234
-
-
11,000
-
(30,959)
-
(28,542)
-
(341)
-
-
-
Utilisation of stimulus package from
Government
-
(38,412)
-
(38,412)
Net Cash From Financing Activities
103,716
55,212
117,358
56,822
RM’000
(Increase)/Decrease in:
(7,897)
(2,052)
(11,837)
323
Inventories
(6,852)
3,125
(6,852)
3,125
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance ofordinary shares
Proceeds from short-term borrowings
Advances from subsidiaries
Increase/(Decrease) in:
32,807
8,271
33,979
9,802
Repayment of short-term borrowings
Increase in deposits pledged
Cash Used In Operations
The Company
2012
2011
(89,113)
(3,467)
(105,593)
(9,573)
(9,620)
(18,370)
(9,099)
(17,784)
Income tax paid
(10,283)
(878)
-
-
Retirement benefits paid
(11,502)
(17,963)
(11,502)
(17,963)
(823)
(823)
(823)
(823)
30,002
28,820
30,002
28,820
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(14,665)
(46,786)
(5,635)
(45,960)
(91,339)
(12,681)
(97,015)
(17,323)
Effects of foreign exchange rate changes
(21)
(33)
-
-
40,438
87,257
7,623
53,583
26,093
40,438
1,988
7,623
Interest paid
Housing loan interest paid
Claims for uneconomic services received
Net Cash Used In Operating Activities
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant and equipment
(ii)
(54,114)
(111,072)
(53,242)
(107,051)
Proceeds from disposal of property, plant and
equipment
Interest received
3,080
5,727
1,243
5,326
1,272
2,255
545
1,384
22,720
13,773
22,720
13,773
-
-
2,756
1,109
(27,042)
(89,317)
(25,978)
(85,459)
Dividends income:
- associates
- subsidiaries
Net Cash Used In Investing Activities
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR
(i)
ANNUAL REPORT 2012
ANNUAL REPORT 2012
63
62
(i)
Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position
Keretapi Tanah Melayu Berhad is a public limited liability company, incorporated and domiciled in Malaysia. Save and except
amounts:
for one (1) ordinary share owned by the Federal Land Commissioner, all of the equity of the Company is owned by the
1.
GENERAL INFORMATION
Ministry of Finance (Incorporated), a body corporate established in Malaysia.
The Group
2012
2011
RM’000
RM’000
The Company
2012
2011
RM’000
The principal activities of the Company are railway transportation operations and the provision of related railway services in
Peninsular Malaysia and Singapore. The Company operates these activities pursuant to a licence issued by the Ministry of
RM’000
Transport. The principal activities of its subsidiaries are described in Note 13. There have been no significant changes in the
nature of these activities during the financial year.
Deposits place with
Licensed banks
Financial institutions
Less: Deposits pledged with licensed banks
20,894
28,319
-
-
350
-
-
-
21,244
28,319
-
-
(341)
-
-
-
The registered office and principal place of business of the Company is located at Tingkat 1, Ibu Pejabat Korporat KTMB,
Jalan Sultan Hishamuddin, 50621 Kuala Lumpur.
The financial statements of the Group and of the Company were authorised by the Board of Directors for issuance on
16 May 2013.
2. 20,903
28,319
-
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial
(ii)
5,190
12,119
1,988
7,623
26,093
40,438
1,988
7,623
Purchase of Property, plant and equipment
During the financial year, the Group’s additions of property, plant and equipment with an aggregate cost of RM61,824,000
(2011: RM111,072,000) of which RM7,185,000 (2011: RMNil) were received from Development Agreement as explained in
Note 21 and RM525,000 (2011: RMNil) were acquired by the mean of hire-purchase.
Reporting Standards (“MFRSs”), International Financial Reporting Standards and the provisions of the Companies Act,
1965 in Malaysia.
Adoption of Malaysian Financial Reporting Standards
The Group’s and the Company’s financial statements for the financial year ended 31 December 2012 have been prepared
in accordance with MFRSs for the first time. In the previous financial years, these financial statements were prepared in
accordance with Financial Reporting Standards (“FRSs”).
The transition to MFRSs is accounted for in accordance with MFRS 1: First-time Adoption of Malaysian Financial Reporting
Standards, with 1 January 2011 as the date of transition. The adoption of MFRSs has not affected the amounts reported on
the financial statements of the Group and of the Company as the restatement has no effect on the net results for the current
and previous financial years. There is also no effect on retained earnings. Consequently, reconciliations of its equity reported
in accordance with FRSs to its equity in accordance with MFRSs for the date of transition to MFRSs in the Group’s and the
Company’s most recent annual financial statements are not being presented.
MFRSs and IC Interpretations (“IC Ints.”) Issued but Not Yet Effective
At the date of authorisation for issue of these financial statements, the new and revised Standards and IC Interpretations
which were in issue but not yet effective and not early adopted by the Group and the Company are as listed below:
ANNUAL REPORT 2012
ANNUAL REPORT 2012
Notes To The Financial Statements
65
64
MFRS 7
Financial Instruments: Disclosures [Amendments relating to Mandatory Effective Date of MFRS 9 and Amendments to MFRS 7 and MFRS 132: Offsetting Financial Assets and Financial Liabilities and the related
Transition Disclosures (IFRS 9 issued by International Accounting Standards Board (“IASB”) in November disclosures
2009 and October 2010 respectively)]2
MFRS 7
Financial Instruments: Disclosures (Amendments relating to Disclosures - Offsetting Financial Assets and Liabilities)1
The amendments to MFRS 132 clarify existing application issues relating to the offset of the financial assets and financial
liabilities requirements. Specifically, the amendments clarify the meaning of “currently has a legally enforceable right of set-
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in October 2009)
off” and “simultaneous realisation and settlement”.
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in November 2010)3
MFRS 10
Consolidated Financial Statements
The amendments to MFRS 7 introduce new disclosure requirements relating to rights of offset and related arrangements for
MFRS 10
Consolidated Financial Statements (Amendments relating to Transition Guidance)1
financial instruments under an enforceable master netting agreements or similar arrangements. Both MFRS 132 and MFRS
MFRS 11
Joint Arrangements
7 require retrospective application upon adoption.
MFRS 11
Joint Arrangements (Amendments relating to Transition Guidance)1
MFRS 12
Disclosure of Interests in Other Entities1
MFRS 12
Disclosure of Interests in Other Entities (Amendments relating to Transition Guidance)1
MFRS 13
Fair Value Measurement1
MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement
MFRS 101
Presentation of Financial Statements (Amendments relating to Presentation of Items of Other of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and
Comprehensive Income)
measurement of financial liabilities and for derecognition.
3
1
1
MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures
4
MFRS 119
Employee Benefits (IAS 19 as amended by IASB in June 2011)1
MFRS 127
Separate Financial Statements (IAS 27 as amended by IASB in May 2011)1
The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) (“MFRS 9”)
MFRS 128
Investments in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2011)1
relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” which became immediately effective on the
MFRS 132
Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial issuance date of 1 March 2012 amended the mandatory effective date of MFRS 9 to annual periods beginning on or after 1
Liabilities)5
IC Int. 20
January 2015 instead of on or after 1 January 2013, with earlier application still permitted as well as modified the relief from
Stripping Costs in the Production Phase of a Surface Mine
1
Amendments to MFRSs contained in the document entitled Annual Improvements 2009 - 2011 Cycle issued in July 20121
restating prior periods. MFRS 7 which was also amended in tandem with the issuance of the aforementioned amendments
introduces new disclosure requirements that are either permitted or required on the basis of the entity’s date of adoption
and whether the entity chooses to restate prior periods.
1
Effective immediately on issuance date of 1 March, 2012
2
Effective for annual periods beginning on or after 1 January, 2013
3
Effective for annual periods beginning on or after 1 January, 2015 instead of 1 January, 2013 immediately upon the
issuance of Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and
Key requirements of MFRS 9 are described as follows:
(a)
All recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition and
MFRS 7 relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” on 1 March, 2012
Measurement to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are
4
Effective for annual periods beginning on or after 1 July, 2012
held within a business model whose objective is to collect the contractual cash flows, and that have contractual
5
Effective for annual periods beginning on or after 1 January, 2014
cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at
amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are
The directors anticipate that the abovementioned Standards and IC Interpretations will be adopted in the annual financial
measured at their fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may
statements of the Group and of the Company when they become effective and that the adoption of these Standards and
make an irrecoverable election to present subsequent changes in the fair value of equity instrument (that is not held
IC Interpretations will have no material impact on the financial statements of the Company in the period of initial application.
for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.
A brief description of the significant new MFRSs and Amendments to MFRSs that have been issued and may applicable to
the Group and the Company is set out below:
(b)
With regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9
requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit
risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in
the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or
loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or
loss. Previously, under FRS 139, the entire amount of the change in the fair value of the financial liability designated
as at fair value through profit or loss was presented in profit or loss.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
67
66
MFRS 10, MFRS 11, MFRS 12, MFRS 127 and MFRS 128
Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income
In November 2011, a package of five Standards on consolidation, joint arrangements, associates and disclosures was
The amendments to MFRS 101 retain the option to present profit or loss and other comprehensive income in either a single
issued, including MFRS 10, MFRS 11, MFRS 12, MFRS 127 (IAS 27 as amended by IASB in May 2011) and MFRS 128
statement or in two separate but consecutive statements. However, the amendments to MFRS 101 require additional
(IAS 28 as amended by IASB in May 2011).
disclosures to be made in the other comprehensive income section such that items of other comprehensive income are
grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that will be
Key requirements of these five Standards are described below.
reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive
MFRS 10 replaces the parts of MFRS 127 Consolidated and Separate Financial Statements that deal with consolidated
comprehensive income either before tax or net of tax.
income is required to be allocated on the same basis – the amendments do not change the option to present items of other
financial statements. IC Int. 112 Consolidation - Special Purpose Entities will be withdrawn upon effective date of MFRS 10.
Under MFRS 10, there is only one basis for consolidation, which is control. In addition, MFRS 10 includes a new definition
The amendments also introduce new terminology for the statement of comprehensive income and income statement.
of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its
Under the amendments to MFRS 101, the “statement of comprehensive income” is renamed “statement of profit or loss
involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor’s
and other comprehensive income” and the “income statement” is renamed the “statement of profit or loss”.
returns. Extensive guidance has been added in MFRS 10 to deal with complex scenarios.
The amendments will be applied retrospectively upon adoption and hence, the presentation of items of other comprehensive
MFRS 11 replaces MFRS 131 Interests in Joint Ventures. MFRS 11 deals with how a joint arrangement of which two or
income will be modified accordingly to reflect the changes. Other than the abovementioned presentation changes, the
more parties have joint control should be classified. IC Int. 113 Jointly Controlled Entities - Non-monetary Contributions
application of the amendments to MFRS 101 would not result in any impact on profit or loss, other comprehensive income
by Venturers will be withdrawn upon the effective date of MFRS 11. Under MFRS 11, joint arrangements are classified as
and total comprehensive income.
joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast,
under MFRS 131, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly
MFRS 119 (IAS 19 as amended by IASB in June 2011)
controlled operations. In addition, joint ventures under MFRS 11 are required to be accounted for using the equity method of
accounting, whereas jointly controlled entities under MFRS 131 can be accounted for using the equity method of accounting
The amendments to MFRS 119 change the accounting for defined benefit plans and termination benefits. The most
or proportionate consolidation.
significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments
require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and
MFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements,
hence eliminate the ‘corridor approach’ permitted under the previous version of MFRS 119 and accelerate the recognition
associates and/or unconsolidated structured entities. In general, the disclosure requirements in MFRS 12 are more extensive
of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other
than those in the current standards.
comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial
position to reflect the full value of the plan deficit or surplus. Further, the interest cost and expected return on plan assets
In July 2012, the amendments to MFRS 10, MFRS 11 and MFRS 12 were issued to clarify certain transitional guidance on
used in the previous version of MFRS 119 are replaced with a “net-interest” amount, which is calculated by applying the
the application of these MFRSs for the first time.
discount rate to the net defined benefit liability or asset.
MFRS 13
The amendments to MFRS 119 require retrospective application.
MFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements.
Amendments to MFRSs: Annual Improvements 2009 - 2011 Cycle
The Standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value
measurements. The scope of MFRS 13 is broad; it applies to both financial instrument items and non-financial instrument
The Annual Improvements 2009 – 2011 Cycle include a number of amendments to various MFRSs. The amendments to
items for which other IFRSs require or permit fair value measurements and disclosures about fair value measurements,
MFRSs include:
except in specified circumstances. In general, the disclosure requirements in MFRS 13 are more extensive than those
required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value
• Amendments to MFRS 101 Presentation of Financial Statements
hierarchy currently required for financial instruments only under MFRS 7 Financial Instruments: Disclosures will be extended
• Amendments to MFRS 116 Property, Plant and equipment; and
by MFRS 13 to cover all assets and liabilities within its scope.
• Amendments to MFRS 132 Financial Instruments: Presentation
ANNUAL REPORT 2012
ANNUAL REPORT 2012
69
68
Amendments to MFRS 101
The results of subsidiaries acquired or disposed during the year are included in the consolidated statement of comprehensive
income from the effective date of acquisition and up to the effective date of disposal, as appropriate.
MFRS 101 requires an entity that changes accounting policies retrospectively, or makes a retrospective restatement of
reclassification to present a statement of financial position as at the beginning of the preceding period (third statement of
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
financial position). The amendments to MFRS 101 clarify that an equity is required to present a third statement of financial
line with those used by other members of the Group.
position only when the retrospective application, restatement or reclassification has a material effect on the information
in the third statement of financial position and that related notes are not required to accompany the third statement of
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
financial position. Hence, the adoption of the amendments when it becomes effective will affect the presentation of the third
statement of financial position and related notes in the future periods.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests of noncontrolling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate share
of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisitionby-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those
The amendments to MFRS 116 clarify that spare parts, stand-by equipment and servicing equipment should be classified
interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive
as property, plant and equipment when they meet the definition of property, plant and equipment in MFRS 116 and as
income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
inventory otherwise.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.
The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted
3.
The amendments to MFRS 132 clarify that income tax relating to distribution to holders of an equity instrument and to
at the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the
transaction costs of an equity transaction should be accounted for in accordance with MFRS 112 Income Taxes.
Company.
SIGNIFICANT ACCOUNTING POLICIES
Where the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i)
the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous
Basis of Accounting
carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts
previously recognised in other comprehensive income in relation to the subsidiary are accounted for in the same manner as
The financial statements of the Company have been prepared under the historical cost convention. Historical cost is
would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former
generally based on the fair value of the consideration involved in exchange for assets and liabilities.
subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under
MFRS 139 Financial Instruments : Recognition and Measurement or, when applicable, the cost on initial recognition of an
investment in an associate or jointly controlled entity.
respectively as a result of losses incurred in the current and prior financial years. The financial statements of the Group
and of the Company have been prepared on the basis of accounting principles applicable to a going-concern which
Business Combinations
presumes that the Group and the Company will continue to receive financial support from its holding company, Minister of
Finance (Incorporated) to enable the Group and the Company to operate as a going-concern in the foreseeable future. The
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each
appropriateness of the application of going-concern as a basis of preparation of the financial statements of the Group and
acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or
of the Company is dependent on the continued financial support from Minister of Finance (Incorporated).
assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred.
Basis of Consolidation
Where applicable, the consideration for the acquisition includes any asset of liability resulting from a contingent consideration
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end
arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the
of financial reporting period. Control is achieved where the Company has the power to govern the financial and operating
cost of acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of
policies of an entity so as to obtain benefits from its activities.
contingent consideration classified as an asset or liability are accounted for in accordance with relevant MFRSs. Changes
in the fair value of contingent consideration classified as equity are not recognised.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
71
70
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting.
remeasured to fair value at the acquisition date and the resulting gain or loss, if any, is recognised in profit or loss. Amounts
Under the equity method, the investment in associates is carried in the consolidated statement of financial position at cost
arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive
adjusted for post-acquisition changes in the Group’s share of net assets of the associates. The Group’s share of the net
income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.
profit or loss of the associates is recognised in the consolidated statement of comprehensive income.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under MFRS 3
Where there has been a change recognised directly in the equity of the associates, the Group recognises its share of such
(revised) are recognised at their fair value at the acquisition date, except that:
changes. In applying the equity method, unrealised gains and losses on transactions between the Group and the associates
are eliminated to the extent of the Group’s interest in the associates. After application of the equity method, the Group
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and
measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively;
determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment
in the associates. The associates are equity accounted for from the date the Group obtains significant influence until the
date the Group ceases to have significant influence over the associates.
• liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards
are measured in accordance with MFRS 2 Share-based Payment; and
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of
the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost
• assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for
of the investment is recognised immediately in profit or loss.
Sale and Discontinued Operations are measured in accordance with that Standard.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any long-term
If the initial accounting for a business combination is incomplete by end of the reporting period in which the combination
interests that, in substance, form part of the Group’s net investment in the associates, the Group does not recognise further
occurs, the Group reports provisional amounts for the items of which the accounting is incomplete. Those provisional
losses, unless it has incurred obligations or made payments on behalf of the associate.
amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have
The most recent available annual financial statements of the associates are used by the Group in applying the equity
affected the amounts recognised as of that date.
method. Where the dates of the financial statements used are not coterminous with those of the Group, the share of
results is arrived at from the last annual financial statements available and management financial statements to the end of
The measurement period is the period from the date of acquisition to the date the Group obtains complete information
the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances.
about facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year.
In the Company’s separate financial statements, investments in associates are stated at cost less accumulated impairment
Investments in Subsidiaries
losses.
Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain
On disposal of such investments, the difference between net disposal proceeds and their carrying amount is included in
benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible
profit or loss.
are considered when assessing whether the Group has such power over another entity.
Goodwill on Consolidation
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less accumulated impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
Goodwill arising on the acquisition of subsidiary represents the excess of cost of the acquisition over the Group’s interest in
included in profit or loss.
the fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities, and is initially recognised as an asset at
cost and subsequently measured at cost less any accumulated impairment losses.
Investment in Associates
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGU”) expected
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment
venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but
annually, or more frequently when there is an indication that the unit may be impaired.
not in control or joint control over those policies.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
73
72
If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to
(iii)
Foreign Operations
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis
of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent
The results and financial position of foreign operations that have a functional currency different from the presentation
period.
currency (Ringgit Malaysia “RM”) of the consolidated financial statements are translated into RM as follows:
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on
-
disposal.
Assets and liabilities for each statement of financial position presented are translated at the closing rate
prevailing at the end of the reporting period;
-
Foreign Currencies
Income and expenses for each statement of comprehensive income are translated at average exchange
rates for the year, which approximates the exchange rates at the dates of the transactions; and
(i)
Functional and Presentation Currency
-
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January,
The individual financial statements of each entity in the Group are measured using the currency of the primary
2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency
economic environment in which the entity operates (“the functional currency”). The consolidated financial statements
of the foreign operations and translated at the closing rate at the end of the reporting period. Goodwill and
are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.
fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 January, 2006 are
deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the date
(ii) of acquisition.
Foreign Currency Transactions
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
Financial Instruments
functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing
at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign
(i)
Initial recognition and measurement
currencies are translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at
fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair
A financial asset or financial liability is recognised in the statement of financial position when, and only when, the
value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
Group becomes a party to the contractual provisions of the instrument.
not retranslated.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial
included in profit or loss for the period except for exchange differences arising on monetary items that form part of
instrument.
the Group’s net investment in foreign operations. Exchange differences arising on monetary items that form part of
the Group’s net investment in foreign operations, where that monetary item is denominated in either the functional
(ii)
Financial instrument categories and subsequent measurement
currency of the reporting entity or the foreign operations, are initially taken directly to the foreign currency translation
reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss.
The Group categorises financial instruments as follows:
Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations,
where that monetary item is denominated in a currency other than the functional currency of either the reporting
Financial assets
entity or the foreign operations, are recognised in profit or loss for the period. Exchange differences arising on
monetary items that form part of the Company’s net investment in foreign operations, regardless of the currency of
Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or
the monetary item, are recognised in profit or loss in the Company’s financial statements or the individual financial
loss’ (FVTPL), ‘held to maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’.
statements of the foreign operation, as appropriate.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial
recognition.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or
loss for the period except for the differences arising on the translation of non-monetary items in respect of which
gains and losses are recognised directly in other comprehensive income. Exchange differences arising from such
non-monetary items are also recognised directly in other comprehensive income.
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Effective Interest Method
(ii)
Held-to-maturity Investments
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial
cash receipts through the expected life of the financial assets, or (where appropriate) a shorter period, to the net
recognition, held-to-maturity investments are measured at amortised cost using the effective interest method
carrying amount on initial recognition.
less any impairment, with revenue recognised on an effective yield basis.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified
(iii)
AFS Financial Assets
as at FVTPL.
AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified
(i)
as loans and receivables, held-to-maturity investment or financial assets at FVTPL. All AFS assets are
Financial Assets At FVTPL
measured at fair value at the end of the reporting period. Gains and losses arising from changes in fair value
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated
are recognised in other comprehensive income and accumulated in the investments revaluation reserve,
as at FVTPL.
with the exception of impairment losses, interest calculated using the effective interest method, and foreign
exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment
A financial asset is classified as held for trading if:
is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the
investment revaluation reserve is reclassified to profit or loss.
•
it has been acquired principally for the purpose of selling it in the near term; or
•
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages
AFS equity investments that do not have a quoted market price in an active market and whose fair value
together and has a recent actual pattern of short-term profit-taking; or
cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such
it is a derivative that is not designated and effective as a hedging instrument.
unquoted equity investments are measured at cost less any identified impairment losses at the end of the
•
reporting period.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial
recognition if:
Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the
dividends is established.
•
•
such designation eliminates or significantly reduces measurement or recognition inconsistency that
would otherwise arise; or
The fair value of AFS monetary assets denominated in that foreign currency is determined in that foreign
the financial asset forms part of a group of financial assets or financial liabilities or both, which is
currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and
managed and its performance is evaluated on a fair value basis, in accordance with the Group’s
losses that are recognised in profit or loss are determined based on the amortised cost of the monetary
documented risk management or investment strategies, and information about the grouping is
asset. Other foreign exchange gains and losses are recognised in other comprehensive income.
provided internally on that basis; or
•
it forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial
(iv)
Loans and Receivables
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability)
to be designated as at FVTPL.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Loans and receivables are measured at amortised cost using the effective
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
interest method, less any impairment. Interest income is recognised by applying the effective interest rate,
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or
except for short-term receivables when the recognition of interest would be immaterial.
interest earned on the financial asset and is included in the “other operating income and expenses” line item
in the statements of comprehensive income.
Financial liabilities
Financial liabilities are initially measured at fair value, net of transaction costs. It is subsequently measured at
amortised cost using the effective interest method, with the interest expense recognised on an effective yield basis.
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The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
The effective interest method is a method of calculating the amortised cost of a financial liability and of
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period to the
estimated future cash payments through the expected life of the financial liability, or (where appropriate) a
net carrying amount on initial recognition.
shorter period, to the net carrying amount on initial recognition.
(i)
Financial Liabilities at FVTPL
Derecognition
Financial liabilities are classified as FVTPL when the financial liability is either held for trading or it is designated
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows
as at FVTPL.
from the financial asset expire or the financial asset is transferred to another party without retaining control or
substantially all risks and rewards of the assets. On derecognition of a financial asset, the difference between
A financial liability is classified as held for trading if:
the carrying amount and the sum of the consideration received (including any new asset obtained less any
new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in
•
it has been acquired principally for the purpose of repurchasing in the near term; or
•
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages
•
profit or loss.
together and has a recent actual pattern of short-term profit-taking; or
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract
it is a derivative that is not designated and effective as a hedging instrument.
is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the
carrying amount of the financial liability extinguished or transferred to another party and the consideration
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
recognition if:
Property, Plant and Equipment
•
such designation eliminates or significant reduces a measurement or recognition inconsistency that
would otherwise arise; or
•
(i)
Recognition and measurement
the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group’s
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated
documented risk management or investment strategy, and information about the grouping is provided
impairment losses.
internally on that basis; or
•
it forms part of a contract containing one or more embedded derivatives, and FRS 139 Financial
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability)
attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing
to be designated as at FVTPL.
the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost
of materials and direct labour.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest
For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.
paid on the financial liability and is included in the ‘other gains and losses’ line item in the statements of
comprehensive income.
Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the
(ii)
Other Financial Liabilities
functionality of the related equipment is capitalised as part of that equipment.
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair value
at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged
Other financial liabilities are subsequently measured at amortised cost using the effective interest method,
between knowledgeable willing parties in an arm’s length transaction after proper marketing wherein the parties had
with interest expense recognised on an effective yield basis.
each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment
is based on the quoted market prices for similar items when available and replacement cost when appropriate.
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When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for
Assets held for sale
as separate items (major components) of property, plant and equipment.
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
The gains or losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within
Leases
“other income” or “other expenses” respectively in profit or loss.
(i)
(ii)
Finance lease
Subsequent costs
Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
of ownership to the lessee. All other leases are classified as operating leases.
item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost
can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present
servicing of property, plant and equipment are recognised in the profit or loss as incurred.
value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to
the lessor is included in the statement of finance position as a finance lease obligation.
(iii)Depreciation
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted
a constant rate of interest on the remaining balance of the liabilities. Finance charges are charged directly against
for cost, less its residual value.
income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance
with the Group’s general policy on borrowing costs.
Depreciation is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their
(ii)
Operating lease
useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold
land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are
Leases, where the Group does not assume substantially all the risks and rewards of the ownership are classified as
ready for their intended use.
operating leases and, the leased assets are not recognised on the Group’s statement of financial position.
The estimated useful lives for the current and comparative periods are as follows:
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the
Buildings
Plant and machinery
50 years
leased asset are consumed. Lease incentives received are recognised in profit or loss as an integral part of the total
8 years
lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in
Container yards
20 years
Infrastructure
10 years
Rolling stocks
Coaches
which they are incurred.
20 - 30 years
Inventories
20 years
Rail and road vehicles
8 years
Inventories comprising of spare parts, fuels and other consumables which are not intended for resale, are stated at original
Computer
5 years
purchase price plus costs incurred in bringing them to their existing location and condition less any allowance for obsolete
Office equipment
5 years
inventories. Allowance is made for obsolete, slow-moving and defective inventories.
Furniture and fittings
5 years
Renovation
10 years
Statements of Cash Flows
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate at end of the
financial year.
The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.
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Cash and cash equivalents, which comprise deposits with licensed banks and other financial institutions, cash on hand
If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets
and at bank, are short-term, highly liquid investments and are readily convertible to cash with insignificant risks of changes
that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period
in value.
at the same time.
Impairment
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets (known as cash-
(i)
generating unit). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated
Financial assets
to a cash-generating unit or a group of cash-generating units that are expected to benefit from the synergies of the
All financial assets (except for investments in subsidiaries and associates) are assessed at each reporting date
combination.
whether there is any objective evidence of impairment as a result of one or more events having an impact on the
estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less
recognised. For an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective
costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a
evidence of impairment.
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or cash-generating unit.
An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows discounted
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its
at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an
estimated recoverable amount.
allowance account.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured
are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit or the group
as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the
of cash-generating units and then to reduce the carrying amount of the other assets in the cash-generating unit (or
asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an
a group of cash-generating units) on a pro rata basis.
available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in
other comprehensive income is reclassified from equity to profit or loss.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and
or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
is measured as the difference between the asset’s carrying amount and the present value of estimated future cash
the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the
flows discounted at the current market rate of return for a similar financial asset.
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are
Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through profit
credited to profit or loss in the financial year in which the reversals are recognised.
or loss.
Equity instruments
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related
to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the
impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised
(i)
Issue expenses
in profit or loss.
Costs directly attributable to issue of instruments classified as equity are recognised as a deduction from equity.
(ii)
Other assets
(ii)
Preference share capital
The carrying amounts of other assets (except for inventories, deferred tax asset and assets arising from employee
benefits) are reviewed at the end of each reporting period to determine whether there is any indication of impairment.
Preference share capital is classified as equity if it is non-redeemable, or is redeemable but only at the Group’s
option, and any dividends are discretionary. Dividends thereon are recognised as distributions within equity.
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Preference share capital is classified as financial liability if it is redeemable on a specific date or at the option of the
The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the
equity holders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest expense
curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of
in profit or loss as accrued.
plan assets, change in the present value of defined benefit obligation and any related actuarial gains and losses and
past service cost that had not previously been recognised.
Employee Benefits
(iv)
(i)
Termination benefits
Short term employee benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are
possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date.
measured on an undiscounted basis and are expensed as the related service is provided.
Termination benefits for voluntary redundancies are recognised as expenses if the Group has made an offer
encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are
Group and the Company has a present legal or constructive obligation to pay this amount as a result of past service
discounted to their present value.
provided by the employee and the obligation can be estimated reliably.
Provisions
(ii)
Defined contribution plan
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
The Group’s contributions to statutory pension funds are charged to profit or loss in the year to which they relate.
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
Once the contributions have been paid, the Group has no further payment obligations.
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
(iii)
Defined benefit plans
Contingent liabilities
The Group’s net obligation in respect of defined benefit retirement plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in return for their service in the current and
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably,
prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and
the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible
the fair value of any plan assets are deducted. The discount rate is the yield at the end of the reporting period on
obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are
high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that
also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed
annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the
Revenue and other income
Group, the recognised asset is limited to the net total of any unrecognised past service costs and the present value
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to
(i)Services
the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding
requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable
Revenue from services rendered is recognised in profit and loss net of discounts as and when the services are
during the life of the plan, or any settlement of the plan liabilities.
performed. If it is probable that discounts will be given and the amount can be measured reliably, then the discount
is recognised as a reduction of revenue.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees
is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To
(ii)
Claims from the Government for uneconomic services
the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
Claims for uneconomic services are recognised on an accrual basis and is based on an annual budget submitted
The Group recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive
income and all expenses related to defined benefit plans in personnel expenses in profit or loss.
to the Government of Malaysia.
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(iii)
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
Rental income
assets is deducted from the borrowing costs eligible for capitalisation.
Rental income from property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental
Income Tax
income from subleased property is recognised as other income.
Income tax comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that
(iv)
Interest income
it relates to a business combination or items recognised directly in equity or other comprehensive income.
Interest income is recognised as it accrues using the effective interest method in profit or loss.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
by the end of the reporting period, and any adjustment to tax payable in respect of previous years.
(v)
Dividend income
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive
assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the initial
payment is established, which in the case of quoted securities is the ex-dividend date.
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor
taxable profit nor loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
(vi)
Management fee
when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.
Management fees are recognised in profit or loss when management services are rendered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
(vii)
Government grants
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Government grants that compensate the Group for the cost of an asset are recognised initially as deferred income
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
at fair value when there is reasonable assurance that they will be received and that the Group will comply with the
the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are
conditions associated with the grant and are then recognised in profit or loss as other income on a systematic basis
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
over the useful life of the asset.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as and when it
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a
is granted and claimed. Any unutilised portion of the tax incentive is recognised as a deferred tax asset to the extent that it
systematic basis in the same periods in which the expenses are recognised.
is probable that future taxable profits will be available against which the unutilised tax incentive can be utilised.
Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
(i)
Critical judgments in applying the Company’s accounting policies
recognised in profit or loss using the effective interest method.
In the process of applying the Company’s accounting policies, which are described in Note 3, management is of the
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
opinion that there are no instances of application of judgement which are expected to have a significant effect on the
that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the
amounts recognised in the financial statements.
cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset
is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended
use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities
necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.
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(ii)
Key sources of estimation uncertainty
5.REVENUE
Management believes that there are no key assumptions made concerning the future, and other key sources of
estimation uncertainty at the end of each reporting period, that have a significant risk of causing a material adjustment
The Group
2012
2011
to the carrying amounts of assets and liabilities within the next financial year other than as follows:
The Company
2012
2011
RM’000
RM’000
RM’000
RM’000
198,945
192,913
127,383
125,186
Passenger services
81,204
91,781
81,204
91,781
based on value-in-use calculations. Based on these calculations, an impairment loss of RM84,643,000 were
Commuter services
79,309
82,824
79,309
82,824
recognised for the financial year ended 31 December 2012 as shown in Note 11.
Electric train services
31,886
23,939
31,886
23,939
Parcel and mail services
22,500
20,686
379
10
40,827
28,820
40,827
28,820
454,671
440,963
360,988
352,560
Impairment of property, plant and equipment
Freight and haulage services
The Group has assessed, based on certain impairment indications, that several of its assets may be impaired or
impairment in previous financial years may be reversible. The recoverable amounts of the assets were determined
Allowance for doubtful debts
Allowance for doubtful debts is made based on the evaluation of collectability and aging analysis of accounts and
on management’s estimate. A considerable amount of judgement is required in assessing the ultimate realisation
of these receivables, including the creditworthiness and the past collection history of each customer. If the financial
conditions of the customers with which the Group deals were to deteriorate, resulting in an impairment of their ability
to make payments, additional allowance may be required.
6.
FINANCE COSTS
The Group
2012
2011
The Company
2012
2011
RM’000
RM’000
RM’000
RM’000
19,008
10,324
19,008
10,324
9,505
6,371
9,402
6,019
- Al Bai Bithaman Ajil financing
177
234
-
-
- RCCPS
570
570
570
570
- Others
415
324
289
324
29,675
17,823
29,269
17,237
Interest expense of financial liabilities that are not at fair
value through profit or loss:
- Term loans
- Bank borrowings
ANNUAL REPORT 2012
ANNUAL REPORT 2012
89
88
7.
LOSS BEFORE TAX
(Continued)
Loss before tax is arrived at after charging (crediting)/charging :
The Group
2012
2011
Depreciation of property, plant and equipment (Note 11)
The Company
2012
2011
RM’000
RM’000
RM’000
RM’000
96,581
91,686
90,552
87,957
The Group
2012
2011
Lease rental of locomotives
other receivables
RM’000
RM’000
RM’000
(4,006)
(3,808)
(3,327)
(2,004)
84,643
20,600
84,643
20,600
Rental income from third parties**
(38,056)
(4,174)
(37,946)
(1,737)
19,809
20,224
19,809
20,224
(40,827)
(28,820)
(40,827)
(28,820)
Allowance for doubtful debts of trade and other
receivables
RM’000
Reversal of allowance for doubtful debts of trade and
Impairment loss on property, plant and equipment
(Note 11)
The Company
2012
2011
Dividend income
3,394
3,332
2,522
1,984
- associates
-
-
(22,720)
(13,773)
Property, plant and equipment written off
910
2,174
910
2,174
- subsidiaries
-
-
(1,756)
(1,109)
Rental of premises
793
31
163
31
-
-
(288)
(288)
Hire of plant and equipment
411
6,213
411
460
Auditor’s remuneration
364
421
240
242
Director’s fees
100
76
96
74
Depreciation of investment properties (Note 12)
57
57
-
-
project was concluded and full settlement has been made on 28 March 2011. Detail of the arrangement explained in Note
Impairment loss on other investment
30
-
30
-
21.
Provision for inventory
205
-
205
-
Net unrealised gain on foreign exchange
(33)
(33)
-
-
Reversal of provision of bonus
(64)
-
-
-
Amortisation of Government grant
(78)
(78)
(78)
(78)
- loan stock
(490)
(490)
(490)
(490)
- fixed deposits
(752)
(1,732)
(17)
(861)
(30)
(33)
(30)
(33)
(1,807)
(1,228)
(1,807)
(1,228)
(25,892)
(1,265)
(578)
(1,198)
Finance income
- staff loans
Hiring of machines
Gain on disposal of property, plant and equipment *
Management fees from subsidiaries
*
Included in this income is recognition of sale of land by KTMB (Prai) Sdn Bhd, a subsidiary of Keretapi Tanah Melayu Berhad
“KTMB” to Prima Prai Sdn Bhd, based on developmental agreement signed on 15 September 1995. The development
** Included in rental income from third parties is income from property rental that was derecognised in financial year 2011
amounting to RM20,094,989 due to uncertainty in the ownership of the said income.
In 2011, the Auditor General has audited Railway Assets Corporation “RAC” financial statements and in their opinion that
RAC is the rightful owner of the land and building. RAC was established in 1992 under Railway Act 1991 with the main
purpose of taking over all assets and liabilities of KTMB.
Due to this, there is no recognition of income from property rental in KTMB’s financial statements for year ended
31 December 2011.
In 2012, a decision was reached between RAC and KTMB whereby KTMB able to recognise the income from property
rental up to agreed cut-off date and thereafter the management of rental income from properties will be managed by RAC.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
91
90
8.
EMPLOYEE BENEFITS
9.
KEY MANAGEMENT PERSONNEL COMPENSATION
Remuneration received from the Group
2012
The Group
2012
2011
The Company
2012
2011
The Group
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
132,409
129,568
119,295
115,224
2,149
1,963
-
-
319
-
13
63
24
419
12,022
12,697
-
-
Dr Aminuddin bin Adnan
(resigned on 30.04.2012)
168
-
21
142
-
331
18
-
-
2
-
20
505
-
34
207
24
770
Dato’ Sri’ Ir. Mohd Zin bin
Mohamed
-
96
-
63
36
195
-
9
-
25
-
34
-
9
-
34
-
43
Rosli bin Abdullah
-
9
-
38
-
47
Harun bin Johari
-
9
-
16
-
25
Ruhaizah binti Mohamed
Rashid
-
1
-
24
-
25
Sr. Ahmad Zainuddin bin
Jamaluddin
-
-
-
31
-
31
between the commercial and subsidised rates of interest pertaining to staff housing loans, had to be settled by the
-
5
-
34
-
39
corporatised entities concerned. The outstanding claims against the Company as referred to in Note 28 amounted to
Datuk Kamaruzaman
bin Mohd Noor
-
7
-
37
-
44
Jamela binti Mohd Syed
-
9
-
1
-
10
Wages and salaries
Bonus
Incentives
Director’s remuneration:
Executive Directors
Ch’ng Seong Keng
Directors of the Company
- salaries
487
490
487
490
- other emoluments
239
94
239
94
18
18
-
-
2
6
-
-
Employees Provident Funds
19,195
17,702
17,403
15,888
Increase in liability for defined benefit plan (Note 29)
16,408
13,848
16,408
13,848
26
42
26
42
80,427
65,194
76,808
63,829
263,382
241,622
230,666
209,415
Directors of subsidiaries
- salaries
- other emoluments
Provision for housing loan interest
Other benefits
The Government of Malaysia issued a directive to all corporatised entities that with effect from July 1994, the difference
RM5,756,000 (2011: RM6,578,000).
Non-Executive Directors
ANNUAL REPORT 2012
ANNUAL REPORT 2012
93
92
2012
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Abd Rahim bin Daud
-
2
-
-
-
2
Nik Roslini binti Raja Ismail
-
5
-
-
-
5
-
5
-
-
-
5
The Group
Remuneration received from the Company
2012
Other
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
319
-
13
63
24
419
168
-
21
142
-
331
487
-
34
205
24
750
Mohamed
-
96
-
58
36
190
-
9
-
25
-
34
-
9
-
31
-
40
Rosli bin Abdullah
-
9
-
38
-
47
Harun bin Johari
-
9
-
16
-
25
The Company
Executive Directors
-
166
-
303
36
505
Total Directors’
Remuneration
505
166
34
510
60
1,275
Other key management
personnel:
Short-term employee
benefits
Employee Provident Funds
3,317
-
399
306
-
4,022
-
-
-
408
-
408
Rashid
-
1
-
24
-
25
4,430
Sr. Ahmad Zainuddin bin
Jamaluddin
-
-
-
26
-
26
-
5
-
34
-
39
Datuk Kamaruzaman
bin Mohd Noor
-
7
-
37
-
44
-
9
-
1
-
10
3,317
-
399
714
-
Other key management personnel comprises persons other than the Directors of Group entities, having authority and
responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
95
94
2011
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Abd Rahim bin Daud
-
2
-
-
-
2
-
5
-
-
-
5
-
5
-
-
-
5
-
166
-
290
36
492
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
490
-
-
94
12
596
18
-
-
6
-
24
508
-
-
100
12
620
Mohamed
-
60
-
14
19
93
-
9
-
7
-
16
-
8
-
11
-
19
Rosli bin Abdullah
-
4
-
12
-
16
Harun bin Johari
-
4
-
9
-
13
Puan Sri Dato’ Aida Boey
binti Abdullah
-
4
-
-
-
4
Rashid
-
-
-
1
-
1
-
-
-
6
-
6
Dato’ Othman bin Abd
Razak
-
1
-
-
-
1
Dato’ Mani Usilappan
-
1
-
-
-
1
Datuk Kamaruzaman
bin Mohd Noor
-
-
-
6
-
6
Dr Kader bin Sultan Md
Ismail
-
4
-
-
-
4
-
8
-
8
-
16
-
4
-
5
-
9
Total Directors’
Remuneration
Executive Directors
487
166
34
495
60
1,242
personnel:
Short-term employee
benefits
The Group
2,866
-
234
282
-
3,382
-
-
-
350
-
350
2,866
-
234
632
-
3,732
Ch’ng Seong Keng
ANNUAL REPORT 2012
ANNUAL REPORT 2012
97
96
2011
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Abd Rahim bin Daud
-
9
-
-
-
9
-
9
-
5
-
14
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
490
-
-
94
12
596
490
-
-
94
12
596
Mohamed
-
60
-
13
19
92
-
9
-
7
-
16
-
8
-
8
-
16
Rosli bin Abdullah
-
4
-
12
-
16
Harun bin Johari
-
4
-
9
-
13
The Company
Executive Directors
-
125
-
84
19
228
Total Directors’
Remuneration
508
125
-
184
31
848
personnel:
Short-term employee
benefits
3,357
-
-
204
-
3,561
-
-
-
456
-
456
Puan Sri Dato’ Aida Boey
binti Abdullah
-
4
-
-
-
4
4,017
Rashid
-
-
-
1
-
1
-
-
-
6
-
6
Dato’ Othman bin Abd
Razak
-
1
-
-
-
1
Dato’ Mani Usilappan
-
1
-
-
-
1
Datuk Kamaruzaman
bin Mohd Noor
-
-
-
6
-
6
Dr Kader bin Sultan Md
Ismail
-
4
-
-
-
4
-
8
-
8
-
16
-
4
-
5
-
9
3,357
-
-
660
-
ANNUAL REPORT 2012
ANNUAL REPORT 2012
99
98
10.
Major components of income tax expense/(credit) include:
Other
Benefits -
Salary
Fees
Ex- Gratia
Emoluments
in - kind
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
The Group
2012
2011
-
9
-
-
-
9
-
9
-
5
-
14
-
125
-
80
19
224
Current year
Under/(Over)provision in prior years
490
125
-
174
31
820
personnel:
RM’000
RM’000
RM’000
RM’000
552
2,391
-
-
6,236
(1,811)
8,359
-
6,788
580
8,359
-
(1,175)
(571)
-
-
2,534
(219)
-
-
1,359
(790)
-
-
8,147
(210)
8,359
-
Deferred tax expense (Note 17):
Current year
Under/(Over)provision in prior years
Short-term employee
benefits
The Company
2012
2011
Estimated tax payable:
Abd Rahim bin Daud
Total Directors’
Remuneration
INCOME TAX EXPENSE/(CREDIT)
3,060
-
-
204
-
3,264
-
-
-
395
-
395
3,060
-
-
599
-
3,659
ANNUAL REPORT 2012
ANNUAL REPORT 2012
101
100
A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense
11.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
103
102
PROPERTY, PLANT AND EQUIPMENT
at the effective income tax rate of the Company is as follows:
The Group
The Group
2012
2011
RM’000
Loss before tax
Tax at statutory tax rate of 25%
Share of tax of associates
RM’000
The Company
2012
2011
RM’000
RM’000
(231,993)
(103,663)
(275,591)
(119,921)
(57,998)
(25,916)
(68,898)
(29,980)
(9,949)
(5,715)
-
-
33,549
3,188
24,972
2,874
Tax effects of:
Non-deductible expenses
Non-taxable income
Freehold land
and buildings
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
Under
construction
RM’000
Total
RM’000
Cost
12,953
1,408,494
112,006
49,605
1,583,058
Additions
103
88,811
7,300
14,858
111,072
Disposals
-
(2,207)
(7,382)
-
(9,589)
As of 1 January 2011
Reclassification
Write-offs
-
13,363
20,541
(33,904)
-
(68)
(903)
(3,153)
-
(4,124)
12,988
1,507,558
129,312
30,559
1,680,417
(12,871)
-
(6,382)
-
50,308
30,263
50,308
27,106
(3,662)
-
-
-
Additions
7,568
804
5,139
48,313
61,824
Under/(Over)provision of current tax in prior year
6,236
(1,811)
8,359
-
Disposals
(450)
(4,711)
(1,923)
-
(7,084)
Under/(Over)provision of deferred tax in prior years
2,534
(219)
-
-
Reclassification
-
58,888
416
(59,304)
-
Write-offs
-
(7,243)
-
-
(7,243)
20,106
1,555,296
132,944
19,568
1,727,914
Deferred tax asset not recognised during the year
Adjusted of loss under Section 44A of Income Tax Act,
1967-Group relief for Companies
8,147
(210)
8,359
-
As of 31 December 2011/
1 January 2012
As of 31 December 2012
The Group
Freehold land
and buildings
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
The Group
Under
construction
RM’000
Accumulated depreciation
812,199
90,083
-
904,728
204
78,719
12,763
-
91,686
Disposals
-
(75)
(5,052)
-
(5,127)
Write-offs
(2)
(368)
(1,580)
-
(1,950)
Depreciation for the year
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
Under
construction
RM’000
Total
RM’000
Accumulated impairment loss
2,446
Freehold land
and buildings
RM’000
Total
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
ANNUAL REPORT 2012
ANNUAL REPORT 2012
105
104
1,740
385,970
12,790
-
400,500
-
20,600
-
-
20,600
1,740
406,570
12,790
-
421,100
-
84,643
-
-
84,643
1,740
491,213
12,790
-
505,743
8,767
210,325
9,133
49,605
277,830
8,600
210,513
20,308
30,559
269,980
13,661
99,220
16,197
19,568
148,646
Impairment loss for the year
1 January 2012
2,648
890,475
96,214
-
989,337
2,247
84,986
9,348
-
96,581
Disposals
(190)
(4,265)
(1,605)
-
(6,060)
Write-offs
-
(6,333)
-
-
(6,333)
4,705
964,863
103,957
-
1,073,525
1 January 2012
Net book value
The Company
Freehold land
and buildings
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
The Company
Under
construction
RM’000
Cost
1,307,709
97,754
49,605
1,458,373
Additions
103
88,811
3,279
14,858
107,051
Disposals
-
(2,207)
(2,553)
-
(4,760)
Reclassification
Write-offs
Under
construction
RM’000
Total
RM’000
-
13,363
20,541
(33,904)
-
(68)
(903)
(3,153)
-
(4,124)
3,340
1,406,773
115,868
30,559
1,556,540
1,027
719,169
79,790
-
799,986
68
78,719
9,170
-
87,957
Disposals
-
(75)
(557)
-
(632)
Write-offs
(2)
(368)
(1,580)
-
(1,950)
1,093
797,445
86,823
-
885,361
74
82,353
8,125
-
90,552
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
3,305
Freehold land
and buildings
RM’000
Total
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
ANNUAL REPORT 2012
ANNUAL REPORT 2012
107
106
1 January 2012
1 January 2012
Additions
440
607
3,882
48,313
53,242
Disposals
(1)
(4,206)
(627)
-
(4,834)
Disposals
-
(4,610)
(889)
-
(5,499)
Write-offs
-
(6,333)
-
-
(6,333)
Reclassification
-
58,888
416
(59,304)
-
Write-offs
-
(7,243)
-
-
(7,243)
1,166
869,259
94,321
-
964,746
3,780
1,454,415
119,277
19,568
1,597,040
(a)
The Company
Freehold land
and buildings
RM’000
Plant and
machinery,
infrastructure,
container
yards, rolling
stocks and
rail vehicles
RM’000
Computer,
road
vehicles,
office
equipment,
furniture and
fittings and
renovation
RM’000
The Group’s freehold land and buildings comprise:
Accumulated
The Group
depreciation and
Under
construction
RM’000
Cost
impairment
Net book value
RM’000
RM’000
RM’000
3
-
3
12,950
4,186
8,764
12,953
4,186
8,767
3
-
3
12,985
4,388
8,597
12,988
4,388
8,600
3
-
3
20,103
6,445
13,658
20,106
6,445
13,661
Total
RM’000
Freehold land
Buildings
Accumulated impairment losses
Impairment loss for year
1,740
385,970
12,790
-
400,500
-
20,600
-
-
20,600
1,740
406,570
12,790
-
421,100
-
84,643
-
-
84,643
1,740
491,213
12,790
-
505,743
1 January 2012
Freehold land
Buildings
Net book value
538
202,570
5,174
49,605
257,887
507
202,758
16,255
30,559
250,079
874
Freehold land
Buildings
93,943
12,166
19,568
126,551
(b)
The Company has been granted the exclusive use and occupation of parcels of railway land and other property,
plant and equipments vested in the Railway Assets Corporation by the Government of Malaysia.
(c)
Prime movers, trailers and side loaders of a subsidiary with a net book value of RM3,075,601 (31 December 2011:
RM5,326,209) and (1 January 2011: RM5,891,136) were pledged to banks for banking facilities granted to that
subsidiary as referred to in Note 25.
(d)
Buildings of a subsidiary with a net book value of RM5,903,463 (31 December 2011: RM6,242,617) and (1 January
2011: RM6,378,301) have been pledged to banks for banking facilities granted to that subsidiary as disclosed in
Note 25.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
109
108
(e)
Included in property, plant and equipment of the Group and the Company are assets acquired under Government
The value in use was determined by discounting the future cash flows generated from the continuing use of the cash
grants, as disclosed in Note 27, costing:
generating unit and was based on the following key assumptions:
•
Plant and machinery, infrastructure, rolling
stocks, trailers, prime movers and rail
vehicles
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Cash flows were projected based on historical information, actual operating results and available management
budgets/forecast covering a five-year period.
•
Revenue growth was projected as follows:
(i)
1,165
1,165
years and 6% per annum growth rate for year 2014 – 2017, (31 December 2011: a continuous 10%
1,165
- 20% per annum growth rate) and (1 January 2011: a continuous 10% per annum growth rate).
(ii)
(f)
For Cargo Services : the growth for year 2013 is based on average monthly trends for the past three
For Intercity Services : 22% per annum growth in 2013, 13% per annum growth rate for 2014, 5%
growth rate for year 2015 – 2017, (31 December 2011 and 1 January 2011: a continuous 5% per
Measurement of the recoverable amount of cash generating units (“CGU”)
annum growth rate).
(iii)
Impairment losses have been recognised in the following line items of the statement of comprehensive income:
•
For Commuter, revenue is projected based on average train set available.
Railway operating expenses were projected based on 11% escalation rate per annum for Cargo
(31 December 2011 and 1 January 2011: 3% per annum escalation rate).
•
The Group and the Company
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
(11,284)
7,701
119,525
- Intercity services
10,646
8,067
107,730
- Commuter services
85,281
4,832
38,371
84,643
20,600
265,626
- Cargo services
Personnel expenses were projected based on 5% annual increment and salary adjustment of 8% for every 3
years (31 December 2011 and 1 January 2011: 3.5% annual increment and salary adjustment of 8% every
3 years).
•
Fuel cost is assumed to be based on fixed subsidised price for the entire cash flows period.
•
Ticket prices are assumed to be fixed based on 2012 prices.
•
Management assumes the annual uneconomic service claim from the Government of Malaysia will be
•
A pre-tax discount rate of 6.6% per annum (31 December 2011 and 1 January 2011: 6.6%) was applied in
available throughout the period of the cash flows.
determining the recoverable amount.
The values assigned to the key assumptions represent management’s assessment of future trends and are based
Following continuing significant operating losses, an impairment test was conducted by management to determine
whether the recoverable amount of property, plant and equipment used in operations exceed its carrying amount.
For the purpose of the impairment test, the property, plant and equipment were divided into three (3) independent
cash generating units (“CGUs”):
i)
Cargo services
ii)
Intercity services
iii)
Commuter services
on external sources and historical data.
During the year, the carrying amount of the above CGUs have been fully impaired as of 31 December 2012. The
management is of the opinion that the remaining amount with net carrying amount of RM126,551,000 has no
indication that these assets are impaired.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
111
110
12.
Details of the Company’s subsidiaries are as follows:
INVESTMENT PROPERTIES
Buildings
RM’000
The Group
Total
RM’000
Cost
Name of Subsidiaries
Country of
Incorporated
Effective Equity
Interest
2012
%
2011
%
Held by the Company
As of 1 January 2011/31 December 2011/1 January 2012/
31 December 2012
2,846
2,846
Multimodal Freight Sdn. Bhd.
Malaysia
Provision of haulage freight forwarding and
related services
100
100
KTM Distribution Sdn. Bhd.
Malaysia
Management of warehouses, office space
and the provision of parcel and courier
services
100
100
KTMB (Car Park) Sdn. Bhd.
Malaysia
Car park operator
100
100
KTMB Catering Services Sdn. Bhd.
Malaysia
Dormant
- Caterers and proprietor of restaurants
100
100
KTMB (Sentul) Sdn. Bhd.
Malaysia
Property investment
100
100
KTMB Consultancy Services
Sdn. Bhd.
Malaysia
Dormant
- Provision of railway consultancy services
100
100
KTMB (Brickfields) Sdn. Bhd.
Malaysia
Dormant
- Property investment
100
100
ET Sdn. Bhd.
Malaysia
Dormant
100
100
KTMB (Sungei Petani) Sdn. Bhd.
Malaysia
Dormant
100
100
KTMB Heritage Hotel Sdn. Bhd.
Malaysia
Dormant
- Operator of hotels,restaurants and cafes
and related services
100
100
KTMB (Prai) Sdn. Bhd.
Malaysia
Property investment
100
100
Dormant
- Provision of freight forwarding services
100
100
As of 31 December 2011/1 January 2012
(697)
(697)
(57)
(57)
(754)
(754)
(57)
(57)
(811)
(811)
Net book value
13.
(2,149)
(2,149)
As of 31December 2011
(2,092)
(2,092)
As of 31December 2012
(2,035)
(2,035)
INVESTMENTS IN SUBSIDIARIES
Held through subsidiaries
31.12.2012
The Company
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Unquoted shares at cost
6,849
6,849
6,849
Less: Accumulated impairment losses
(200)
(200)
(200)
6,649
6,649
6,649
MMF Logistics Pte. Ltd.#
Singapore
Syarikat Pengangkutan Rel Utara
Sdn. Bhd.#
Malaysia
Provision of freight forwarding services
63
63
Kiriman Ekspres Sdn. Bhd.
Malaysia
Dormant
- Provision of door to door parcel delivery
services
100
100
Car park operator
100
100
Property investment
100
100
KTMB Parking Pte. Ltd.#
KTMB (Railway Village) Sdn. Bhd.
Singapore
Malaysia
# The financial statements of these companies were examined by auditors other than the auditors of the Company.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
113
112
14.
Details of the associates, which are all incorporated in Malaysia, are as follows:
INVESTMENTS IN ASSOCIATES
The Group
Unquoted loan stocks at cost
Share of post-acquisition reserves
At 31 December
The Company
Unquoted loan stocks at cost
At 31 December
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
21,255
21,255
21,255
7,000
7,000
7,000
28,255
28,255
28,255
129,601
117,315
106,982
157,856
145,570
135,237
(25)
(25)
(25)
157,831
145,545
135,212
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
18,855
18,855
18,855
7,000
7,000
7,000
25,855
25,855
25,855
(25)
(25)
(25)
25,830
25,830
25,830
Name of Associates
Effective Equity
Interest
2012
%
2011
%
Held by the Company
Fiberail Sdn. Bhd.
Provision of services to install, manage, operate and
maintain an optical fibre telecommunication system
36
36
Ipoh Cargo Terminal Sdn.Bhd.
Inland clearance depot operator
30
30
Syarikat Perjalanan Terus Butterworth Dormant
Kuala Lumpur Sdn. Bhd. @
- Provision of bus services
25
25
Rail Tech Industries Sdn. Bhd. #
26
26
Admiral Cove Development Sdn. Bhd. Property and resort development
20
20
Kuala Lumpur Sentral Sdn. Bhd.
Property development
26
26
Admiral Hill Hotel Sdn. Bhd.
Hotel resort and related tourist development
20
20
Property development
30
30
Dormant
- Manufacture of rolling stock, repair and maintenance
services
Held through a subsidiary:
Sentul Raya Sdn. Bhd.
@
Currently under liquidation.
#
In 1994, the Company acquired a 50% equity interest in Rail Tech Industries Sdn. Bhd. (“RTI”), a company
incorporated in Malaysia for a cash consideration of RM1; In accordance with the joint venture and shareholder’s
agreements entered into with UMW Corporation Sdn. Bhd., it was the intention of both parties that the proportion of
the shareholding in RTI for the Company and UMW Corporation Sdn. Bhd. shall at all times be 26:74 respectively.
Hence, the results of RTI have been equity accounted based on the 26% shareholding.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
115
114
The summarised financial statements of the associates are as follows:
16.
LONG TERM RECEIVABLE
The long term receivable represented the non-cash consideration of the phased development, construction and completion
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
of the Railway Village to be satisfied by its associate, Sentul Raya Sdn. Bhd. (“SRSB”) (refer to Note 14).
The Company received a letter from SRSB dated 24 December 2007 indicating that approval from relevant authorities
Assets and liabilities
Current assets
on the development of the Railway Village has only been granted on 14 August 2007. In view of the delays in obtaining
297,158
294,301
279,725
Non-current assets
1,260,783
1,355,969
1,300,804
completion date of the Railway Village project is to be delayed.
Total assets
1,577,941
1,650,270
1,580,529
In 2011, the Group decided that as the recognition of the long term receivable and the corresponding deferred gain (refer
approval from the relevant authorities, the Company, KTMB (Sentul) Sdn. Bhd. and SRSB have mutually agreed that the
to Note 26) is pending on the successful completion of the Railway Village (the progress of which is not wholly within the
Current liabilities
584,696
656,699
605,441
control of the Group), the amount should only be disclosed as a contingent asset and not recorded in the statement of
Non-current liabilities
348,714
340,454
398,683
financial position. The long term receivable and the corresponding gain will be recorded upon the completion of the Railway
Village.
Total liabilities
933,410
997,153
1,004,124
Revenue
266,469
257,959
307,373
Profit for the year
104,597
67,307
43,844
17.
DEFERRED TAX ASSETS AND LIABILITIES
Results
The Group
2012
2011
RM’000
RM’000
RM’000
RM’000
(83)
(873)
-
-
Transfer to/(from) profit or loss (Note 10)
(1,359)
790
-
-
At end of year
(1,442)
(83)
-
-
At beginning of year
15.
OTHER INVESTMENTS
31.12.2012
The Group
RM’000
Shares Unquoted
31.12.2011
RM’000
The Company
2012
2011
1.1.2011
RM’000
Certain deferred tax assets and liabilities have been offset in accordance with the Group’s accounting policy. The following
is an analysis of the deferred tax balances (after offset) for statements of financial position purposes:
Non-current
Available-for-sale financial assets
Less: Impairment loss
Total assets
355
355
355
(215)
(185)
(185)
140
170
170
The Group
2012
2011
Deferred tax assets
The Company
2012
2011
RM’000
RM’000
RM’000
RM’000
2,327
3,107
-
-
(3,769)
(3,190)
-
-
(1,442)
(83)
-
-
ANNUAL REPORT 2012
ANNUAL REPORT 2012
117
116
Deferred tax assets/(liabilities) provided in the financial statements are in respect of the tax effects of the following:
The Group
2012
2011
RM’000
RM’000
The Company
2012
2011
RM’000
18.INVENTORIES
The Group and The Company
31.12.2012
31.12.2011
RM’000
Deferred tax assets
Temporarily differences arising from provisions
Unabsorbed capital allowances
2,309
3,107
-
-
18
-
-
-
2,327
3,107
-
-
The Group
2012
2011
RM’000
RM’000
RM’000
RM’000
45,207
39,591
42,889
Fuel
2,036
1,800
1,035
Others
1,707
912
1,504
48,950
42,303
45,428
31.12.2012
The Group
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Spare parts
The Company
2012
2011
RM’000
1.1.2011
RM’000
RM’000
19.
TRADE AND OTHER RECEIVABLES
Temporarily differences arising from property, plant
and equipment
(3,769)
(3,190)
-
-
As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits
Trade
which would give rise to deferred tax assets are recognised to the extent that it is probable that future taxable profits will
Trade receivables
be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Less : Allowance for doubtful debts
51,440
50,738
47,887
(12,516)
(12,225)
(12,701)
38,924
38,513
35,186
Amounts due from associates
1,353
1,227
1,526
(373)
(373)
(373)
As of 31 December 2012, the estimated amount of temporary differences arising from trade receivables, unused tax losses,
unabsorbed capital allowances, the tax effects of which are not recognised in the financial statements due to uncertainty
of their realisation, is as follows:
2012
2011
RM’000
RM’000
980
854
1,153
449,858
475,781
39,904
39,367
36,339
(35,380)
(36,558)
Inventories
(13,296)
(13,092)
Non-trade
(100,271)
(95,365)
Amount due from Government of Malaysia
148,769
26,770
31,294
(952)
(952)
(952)
147,817
25,818
30,342
Temporary difference arising from:
Retirement benefits obligations
Provision
Unused tax losses
Unabsorbed capital allowances
(5,756)
(6,578)
(822,498)
(706,025)
(1,148,106)
(1,092,379)
Other receivables
(1,675,449)
(1,474,216)
36,746
48,886
31,251
(33,016)
(33,919)
(21,515)
3,730
14,967
9,736
ANNUAL REPORT 2012
ANNUAL REPORT 2012
119
118
31.12.2012
The Group
31.12.2011
RM’000
RM’000
Amount due from associates
18,685
16,929
16,789
(9,094)
(9,094)
(9,094)
9,591
7,835
7,695
161,138
48,620
47,773
87,987
The Company
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Trade receivables
17,442
19,478
18,143
(2,365)
(2,266)
(2,660)
15,077
17,212
15,483
Amounts due from subsidiaries
2,038
876
1,263
1,353
1,227
1,526
(373)
(373)
(373)
980
854
1,153
18,095
18,942
17,899
148,769
26,770
31,294
(952)
(952)
(952)
147,817
25,818
30,342
39,055
50,873
33,426
(33,016)
(33,919)
(21,515)
6,039
16,954
11,911
Amounts due from subsidiaries
1,174
1,583
2,056
(352)
(353)
(352)
822
1,230
1,704
18,364
16,929
16,468
(9,094)
(9,094)
(9,094)
9,270
7,835
7,374
182,043
70,779
69,230
1.1.2011
RM’000
201,042
31.12.2012
84,112
Trade
Deposits and prepayment consist of:
Refundable deposits
Prepayment
31.12.2012
The Group
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
298
316
1,317
28,627
4,023
4,469
28,925
4,339
5,786
Non-trade
Other receivables
ANNUAL REPORT 2012
ANNUAL REPORT 2012
121
120
Deposits and prepayments consist of:
31.12.2012
The Company
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Refundable deposits
Prepayment
138
185
262
24,695
2,433
4,308
24,833
2,618
4,570
Deposits placed with licensed banks
31.12.2012
The Company
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
-
-
34,000
1,988
7,623
19,583
1,988
7,623
53,583
Deposits with financial institutions earn an average interest at 3.30% (3.20% in 31 December 2011 and 3.20% in 1 January
2011) per annum and have an average maturity period of 31 days to 240 days (31 days to 240 days in 31 December 2011
Amount due from subsidiaries and associates
and 31 days to 240 days in 1 January 2011).
Included in the amount due from subsidiaries and associates are freight and haulage services that are subject to normal
21.
ASSETS HELD FOR SALE
trade terms. The amount is repayable within a fixed term of 30 days.
The other amount due from subsidiaries and associates which arises mainly from payment on behalf are non-trade in
The Group
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
5,507
-
-
nature, unsecured, interest free and repayable on demand.
Assets held for sale
KTMB (Prai) Sdn Bhd, a subsidiary of the Company has received 33 units of condominiums and apartments from Prima
The amount due from Government of Malaysia which arises mainly from receivables for subscription of shares and payment
Prai Sdn Bhd (“Developer”) as part of the consideration of sale of land in Prai, Penang. Based on the agreement, dated
on behalf are non-trade in nature, unsecured, interest free and repayable on demand.
15 September 1995, KTMB (Prai) will receive cash consideration of RM11,143,970, staff quarters and office space with the
CASH AND BANK BALANCES
to build the office space and in exchange transferred 33 units of condominiums and apartments in Prai with the equivalent
value equivalent to RM7,128,000 and RM5,200,000 respectively. Due to financial the constraint, the Developer was unable
20.
value.
31.12.2012
The Group
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
20,553
28,319
52,259
350
-
2,056
5,190
12,119
33,408
26,093
40,438
87,723
Deposits placed with:
Licensed banks
Financial institutions
Management had decided that the 33 units of condominiums and apartments are to be disposed off and accordingly, have
been classified as asset held for sale.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
123
122
22.
The Special Shareholder has the right to appoint any person, but not more than six at any time, to be Government-
SHARE CAPITAL
appointed Directors.
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
994,300
994,300
994,300
Issued during the year
1,000,000
-
-
At end of year
1,994,300
994,300
994,300
The Special Shareholder has the right to require the Company to redeem the Special Share at par at any time by serving
written notice upon the Company and delivering the relevant share certificate.
Authorised:
Ordinary shares of RM1 each:
The Special Shareholder shall be entitled to repayment of the capital paid up on the Special Share in priority to any
repayment of capital to any other members.
The Special Shareholder does not have any right to participate in the capital or profits of the Company.
Certain matters which vary the rights attached to the Special Share can only be effective with the consent in writing of the
10% Redeemable Cumulative Convertible
Preference Shares (“RCCPS”) of RM0.10 each
Special Shareholder, in particular matters relating to the creation and issuance of additional shares which carry different
5,700
5,700
5,700
*
*
*
Special rights redeemable preference share of RM1
voting rights, the dissolution of the Company, substantial disposal of assets, amalgamations, mergers and takeovers.
23.
2,000,000
1,000,000
REEDEMABLE CONVERTIBLE CUMULATIVE PREFERENCE SHARES (“RCCPS”)
1,000,000
31.12.2012
31.12.2011
Issued and fully paid:
Ordinary shares of RM1 each:
902,559
882,559
852,559
Issued during the year
234,900
20,000
30,000
*
*
*
1,137,459
902,559
882,559
Special rights redeemable preference share of RM1
At end of year
* Consists of 1 special rights redeemable preference share of RM1 each.
As approved by the shareholders in the Extraordinary General Meeting (“EGM”) held on 30 October 2012, the authorised
share capital of the Company was increased from RM1,000,000,000 to RM2,000,000,000 by creation of an additional
RCCPS of RM0.10 each
major decisions affecting the operations of the Company are consistent with Government policies. The Special Shareholder,
which may only be the Government or any representative or person acting on its behalf, is entitled to receive notices of
meetings but not to vote at such meetings of the Company. However, the Special Shareholder is entitled to attend and
speak at such meetings.
RM’000
5,700
5,700
5,700
share pursuant to the Subscription Agreement dated 26 July 1999 with the following salient features:
(i)
A tenure of thirty years with a fixed preference dividend of 10% per annum (the “Fixed Dividend”) on the nominal
value of the Preference Shares.
(ii)
The Fixed Dividend is to be cumulative and paid out of the profits available for distribution in respect of each financial
year. Any amounts remaining unpaid shall be accumulated and be paid in the following year(s) and the preference
shareholder shall be entitled to impose late payment charges of 8% per annum on the unpaid amount of the Fixed
Dividend or an option to convert the aggregate of the amount equal to any arrears or accrual to the Fixed Dividend
and interest of 8% imposed thereon into fully paid ordinary shares, and
RM1,137,459,000 by way of issuance of 234,900,000 ordinary share of RM1 each at RM1 per ordinary share for working
The Special Share enables the Government of Malaysia through the Minister of Finance Incorporated to ensure that certain
RM’000
The 10% Redeemable Convertible Cumulative Preference Shares (“RCCPS”) are issued at a premium of RM0.90 each per
During the financial year, the issued paid up share capital of the Company was increased from RM902,559,000 to
Special Rights Redeemable Preference Share (“Special Share”)
RM’000
Issued and fully paid:
1,000,000,000 new ordinary shares of RM1 each.
capital purposes. The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company.
1.1.2011
(iii)
The Preference Shares shall be convertible into ordinary shares on the basis of one new ordinary share for one
Preference Share and will be redeemable at RM1.05 for each Preference Share upon maturity at the end of the
thirtieth anniversary.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
125
124
The proceeds received from the issue of the RCCPS have been segregated between the liability component and the equity
25.
LOANS AND BORROWINGS
component. The fair value of the liability component is estimated based on the present value of the dividend obligation whilst
the equity component represents the fair value of the conversion option. The RCCPS are accounted for in the statements
The Group
of financial position of the Group and of the Company as follows:
31.12.2012
31.12.2011
RM’000
57,000,000 RCCPS of RM0.10 each
RM’000
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Unsecured
1.1.2011
Term loan 1*
156,546
153,220
151,167
RM’000
Term loan 2*
560,924
550,862
540,927
Term loan 3*
116,444
113,525
111,841
5,700
5,700
5,700
Term loan 4*
28,970
28,588
28,400
RCCPS share premium
51,300
51,300
51,300
Term loan 5*
305,308
302,989
306,526
Liability component at initial recognition
(6,417)
(6,417)
(6,417)
1,168,192
1,149,184
1,138,861
Equity components
50,583
50,583
50,583
Bank overdraft
49,876
80,491
42,594
Revolving credits
90,000
80,000
40,590
1,308,068
1,309,675
1,222,045
2,865
2,939
2,991
581
595
610
RCCPS - liability component movement
At 1 January - Fair value recognised as liability
component
16,814
15,697
6,417
-
-
8,208
570
570
570
Al Bai Bithaman Ajil Loan IX (“ABBA IX”)
592
547
502
Al Bai Bithaman Ajil Loan X (“ABBA X”)
1,162
1,117
9,280
17,976
16,814
15,697
Interest accrued - opening balance adjustment
Interest accrued - recognised in profit or loss
(Note 6)
Penalty on late payment of interest
Secured
Al Bai Bithaman Ajil Loan VIII (“ABBA VIII”)
Total interest payable
Hire-purchase payables
Bank overdraft
At 31 December
-
-
827
1,653
1,384
-
-
-
4,639
5,099
4,918
9,067
1,313,167
1,314,593
1,231,112
24.RESERVES
Exchange fluctuation reserve
The exchange fluctuation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign operations whose functional currencies are different from that of the Group’s functional currency. It is
also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in
foreign operations, regardless of the currency of the monetary items.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
127
126
The Group
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
The Company
Current
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Current
Unsecured
Unsecured
Bank overdraft
49,876
80,491
42,594
Bank overdraft
49,876
78,418
42,594
Revolving credits
90,000
80,000
40,590
Revolving credits
90,000
80,000
40,590
139,876
158,418
83,184
1,168,192
1,149,184
1,138,861
Total current portion
Secured
Hire purchase payables
358
242
-
Al Bai Bithaman Ajil Loan IX (“ABBA IX”)
222
222
222
Al Bai Bithaman Ajil Loan X (“ABBA X”)
45
45
45
Bank overdraft
-
-
4,639
Al Bai Bithaman Ajil Loan VIII (“ABBA VIII”)
-
-
827
140,501
161,000
88,917
1,172,666
1,153,593
1,142,195
Total current portion
Total non-current portion
Total non-current portion
* Refer to loan from the Government of Malaysia
Security
The Islamic term financing and term loan facilities of a subsidiaries are secured by way of the following:
(i)
ABBA IX and ABBA X are secured first fixed charges of a subsidiary’s buildings, ownership claim over the buildings
amounting RM5,903,463 (31 December 2011: RM6,242,617 and 1 January 2011: RM6,378,301) as disclosed in
Note 11.
The Company
(ii)
Unsecured
Term loan 1*
156,546
153,220
151,167
Term loan 2*
560,924
550,862
540,927
Term loan 3*
116,444
113,525
111,841
Term loan 4*
28,970
28,588
28,400
Term loan 5*
305,308
302,989
306,526
1,168,192
1,149,184
1,138,861
Bank overdraft
49,876
78,418
42,594
Revolving credits
90,000
80,000
40,590
1,308,068
1,307,602
1,222,045
Bank overdraft of a subsidiary is secured by an ownership claim over certain prime movers and trailers as disclosed
in Note 11.
26.
DEFERRED GAIN
On 11 September 1995, a subsidiary, KTMB (Sentul) Sdn. Bhd. (“KSSB”), entered into a sale and purchase agreement with
its associate, Sentul Raya Sdn. Bhd. (“SRSB”) for the transfer of parcels of land (referred to as the “Mixed Development Site”)
for the purpose of an integrated development incorporating commercial complexes and buildings, residential buildings,
entertainment and tourist facilities. The Company had procured the Government of Malaysia to revoke the reservation status
of the land and approval had been obtained for the alienation of the said parcels of land.
On 30 December 1995, the Company together with KSSB entered into a Joint Venture Agreement (as amended by various
supplementary agreements in 2000 and 2001) (“JVA”) with Taiping Consolidated Berhad (“TCB”) (now known as YTL Land
& Development Berhad), the holding company of SRSB, for the purpose of carrying out the following via SRSB:
a)
the construction of the Railway Village; and
b)
the development and construction of the Mixed Development Project.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
129
128
The consideration for the transfer of the Mixed Development Site and the minimum return pursuant to the JVA to be derived
28.PROVISIONS
by the Company based on KSSB’s shareholding in SRSB comprised the following:
a)
b)
31.12.2012
31.12.2011
cash consideration of RM36,400,000 of which RM4,000,000 was refundable;
RM’000
RM’000
payment in kind to KSSB by way of phased development, construction and completion of the Railway Village (which
is to comprise apartments and certain infrastructures, facilities and amenities to be constructed on the freehold
Government claims
land belonging to KSSB’s wholly owned subsidiary) by SRSB by the end of financial year 2007 at its sole cost
As of 1 January
6,578
7,400
9,223
and expense of which the total project costs there-of was at 21 December 2000, estimated to be not less than
Provisions used during the year
(822)
(822)
(822)
RM69,216,000; and
Reversal of provisions during the year
-
-
(1,001)
payment of share of actual profit of SRSB.
As of 31 December
5,756
6,578
7,400
The above consideration and minimum return are conditional upon completing of the transfer of entire Mixed Development
Non-current
4,934
5,756
6,578
Site to SRSB. The transfer of the Mixed Development Site to SRSB had been completed in 2011.
Current
822
822
822
The long term receivable and the corresponding gain will be recorded upon the completion of the Railway Village (refer to
As of 31 December
5,756
6,578
7,400
c)
Note 15).
27.
1.1.2011
RM’000
The entire provision was in respect of claims by the Government of Malaysia on the difference between the commercial and
GOVERNMENT GRANTS
subsidised rate of interest, pertaining to staff loans (Note 8).
31.12.2012
31.12.2011
RM’000
RM’000
1.1.2011
29.
RETIREMENT BENEFIT OBLIGATIONS
RM’000
31.12.2012
31.12.2011
Plant and equipment
As of 1 January
362
440
518
Amortisation
(78)
(78)
(78)
As of 31 December
284
362
440
1.1.2011
RM’000
RM’000
RM’000
Present value of unfunded obligations
132,545
130,020
114,505
Unrecognised actuarial losses
(32,274)
(34,655)
(15,025)
Total retirement benefits
100,271
95,365
99,480
93,955
85,486
92,196
6,316
9,879
7,284
100,271
95,365
99,480
Other
As of 1 January
-
38,412
-
Additions
-
-
62,238
Utilisation
-
(38,412)
(23,826)
As of 31 December
-
-
38,412
284
362
38,852
Non-current
Current
Total retirement benefits
The Group operates an unfunded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible employees. The
Total
Group’s obligation under the Scheme is determined based on the latest actuarial valuation by an independent actuary dated
5 April 2013. Under the Scheme, eligible employees are entitled to retirement benefits varying between 50% and 100% of
their final salary on attainment of the retirement age of 56.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
131
130
All confirmed permanent employees (both executives and non-executives) hired on or prior to 31 July 1997 are entitled to
The expense is recognised in the following line items in the profit or loss:
retirement benefits as follows:
Years of Service (YOS)
Retirement Benefits
Up to 5 years
0.50 x YOS x SAL
More than 5 years and up to 10 years
0.75 x YOS x SAL
More than 10 years
1.00 x YOS x SAL
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
16,408
13,848
13,540
Actuarial assumptions
Years of service (YOS) – service from 1 August 1992
Final monthly salary (SAL) – last drawn monthly basic salary
Principal actuarial assumptions at the end of the reporting period (expressed as weighted averages):
Movement in the present value of the defined benefit obligations
31.12.2012
31.12.2011
31.12.2012
1.1.2011
Benefits paid by the plan
Current service costs and interest
Defined benefit obligations as of 31 December
1.1.2011
%
%
%
6.0
6.0
6.2
RM’000
RM’000
RM’000
95,365
99,480
91,173
Expected rate of salary increase
(11,502)
(17,963)
(5,233)
- Executive
6.0
6.0
6.0
16,408
13,848
13,540
- Non executive
6.0
6.0
6.0
100,271
95,365
99,480
Discount rate
Defined benefit obligations as of 1 January
31.12.2011
30.
TRADE AND OTHER PAYABLES
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
93,762
73,725
58,736
7,974
7,974
7,974
Accrued expenses
21,799
12,445
10,340
Other payables
33,499
34,173
46,983
Unearned revenue
1,754
1,994
2,402
Deposits
6,498
13,410
20,301
Interest payable
1,060
962
-
72,584
70,958
88,000
166,346
144,683
146,736
Expense recognised in the profit or loss
The Group
31.12.2012
31.12.2011
Trade
1.1.2011
Trade payables
RM’000
RM’000
RM’000
Current service costs
7,296
6,800
6,723
Non-trade
Interest on obligation
7,415
6,718
6,395
Amount due to associates
Actuarial losses
1,697
330
422
16,408
13,848
13,540
ANNUAL REPORT 2012
ANNUAL REPORT 2012
133
132
The Company
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
The significant related party transactions of the Group and the Company, other than key management personnel
compensation (see Note 9), are as follows:
The Company
2012
2011
RM’000
RM’000
(4,212)
(3,027)
Management fee
(120)
(120)
Dividend income
(945)
(840)
12,036
10,749
Management fees
(120)
(120)
Dividend income
(811)
-
(48)
(48)
-
(50)
Trade
Trade payables
90,449
65,986
51,318
Subsidiary companies
Non-trade
Amount due to subsidiaries
46,927
33,585
32,986
7,974
7,974
7,974
Accrued expenses
11,985
10,638
5,197
Other payables
24,114
10,261
33,627
Unearned revenue
1,754
1,994
2,402
Deposits
6,498
13,382
11,801
Interest payable
1,060
963
-
100,312
78,797
93,987
190,761
144,783
145,305
Trade payables are non-interest bearing and the normal trade credit terms granted to the Group and the Company is up to
90 days (2011: 90 days).
Multimodal Freight Sdn Bhd
Freight services revenue
Freight services cost
KTM Distribution Sdn Bhd
KTMB (Car Park) Sdn Bhd
Management fees
Dividend income
2012
2011
Amount due to subsidiaries and associates
Amounts due from subsidiaries and associates arose mainly from advances given and collections made on behalf, which
are non-trade in nature, unsecured, interest-free and repayable on demand.
31.
RELATED PARTIES
RM’000
RM’000
Dividend income
(22,720)
(13,773)
Wayleave income
(4,757)
(4,757)
(5,210)
(4,660)
(340)
(340)
(490)
(490)
Related parties
Fiberail Sdn Bhd
Identity of related parties
Ipoh Cargo Terminal Sdn Bhd
For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the
Freight services revenue
Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party
Equipment storage
in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to
common control or common significant influence. Related parties may be individuals or other entities.
Kuala Lumpur Sentral Sdn Bhd
Interest income
Key management personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the Group either directly or indirectly. The key management personnel includes all the Directors
of the Group, and certain members of senior management of the Group.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
135
134
32.
FINANCIAL INSTRUMENTS
The Company
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
140
170
170
182,043
70,799
69,230
138
185
262
1,988
7,623
53,583
184,309
78,757
123,245
1,308,068
1,307,602
1,222,045
32.1 Capital Management
Financial Assets
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability
Available-for-sale:
to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future
Other investment
development of the business.
Loans and receivables:
32.2 Categories of financial instruments
Group
Refundable deposits
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
Financial Assets
Financial Liabilities
Available-for-sale:
Other investment
140
170
170
201,042
87,987
84,112
298
316
1,371
26,093
40,438
87,723
227,573
128,911
173,322
Amortised cost:
Loans and receivables:
Refundable deposits
Redeemable Convertible Cumulative Preference
Shares
Amortised cost:
1,313,167
1,314,593
1,231,112
15,697
145,305
1,516,805
1,469,199
1,383,047
17,976
16,814
15,697
166,346
144,683
146,736
1,497,489
1,476,090
1,393,545
The Group has exposure to the following risks from its use of financial instruments:
Redeemable Convertible Cumulative Preference
Shares
16,814
144,783
32.3 Financial risk management
Financial Liabilities
17,976
190,761
•
Credit risk
•
Liquidity risk
•
Market risk
32.3.1
Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its
receivables from customers and investment securities.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing
basis.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
137
136
Exposure to credit risk, credit quality and collateral
The ageing of trade receivables of the Group as at the end of the reporting period was:
Individual
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is
represented by the carrying amounts in the statement of financial position.
The Group
Gross
impairment
Net
RM’000
RM’000
RM’000
1,123
-
1,123
-
13,933
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired
are measured at their realisable values. A significant portion of these receivables are regular customers
31.12.2012
that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality
Not past due
of the receivables. Any receivables having significant balances past due more than 90 days, which are
Past due 1 - 30 days
13,933
deemed to have higher credit risk, are monitored individually.
10,185
-
10,185
Past due more than 90 days
27,552
(12,889)
14,663
52,793
(12,889)
39,904
2,790
-
2,790
12,342
-
12,342
13,710
-
13,710
23,123
(12,598)
10,525
51,965
(12,598)
39,367
2,963
-
2,963
Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals,
limits and monitoring procedures. Credit risks are minimised and monitored by limiting the Group’s
associations to business partners with high creditworthiness. Trade receivables are monitored on an
ongoing basis via Group management reporting procedures.
The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents and
non-current investments, arises from default of the counterparty, with a maximum exposure equal to the
carrying amount of these financial assets.
31.12.2011
Not past due
The Group does not have any significant exposure to any individual customer or counterparty nor does it
have any major concentration of credit risk related to any financial instruments.
1.1.2011
Not past due
11,523
-
11,523
11,757
(65)
11,692
23,170
(13,009)
10,161
49,413
(13,074)
36,339
ANNUAL REPORT 2012
ANNUAL REPORT 2012
139
138
The ageing of trade receivables of the Company as at the end of the reporting period was:
The movements in the allowance for doubtful debts during the financial year were:
Individual
Gross
impairment
Net
RM’000
RM’000
RM’000
260
-
260
7,150
-
7,150
5,377
-
5,377
8,046
(2,738)
5,308
20,833
(2,738)
18,095
The Company
The Group
2012
31.12.2012
Not past due
At 1 January
Reclass to subsidiaries
Allowance for doubtful debts
RM’000
RM’000
RM’000
RM’000
(12,598)
(13,074)
(2,639)
(3,033)
-
-
-
374
(3,024)
(3,332)
(798)
(1,984)
2,733
3,808
699
2,004
(12,889)
(12,598)
(2,738)
(2,639)
Reversal of allowance of doubtful
debts
At 31 December
Investments and other financial assets
31.12.2011
Not past due
2011
The Company
2012
2011
376
-
376
6,728
-
6,728
6,269
-
6,269
8,208
(2,639)
5,569
Investments are allowed only in liquid securities and only with counterparties that have a credit rating
equal to or better than the Group. Transactions involving derivative financial instruments are with approved
21,581
(2,639)
32.3.2
1.1.2011
Not past due
financial institutions.
18,942
92
-
92
5,798
-
5,798
5,233
(4)
5,229
9,809
(3,029)
6,780
20,932
(3,033)
17,899
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.
ANNUAL REPORT 2012
ANNUAL REPORT 2012
141
140
The table below summarises the maturity profile of the Company’s financial liabilities as at the end of the reporting period based
Maturity analysis
on undiscounted contractual payments:
The Group
Carrying
amount
RM’000
Contractual Contractual
interest rate cash flows
%
RM’000
Under 1
year
RM’000
1 - 2 year
RM’000
2 - 5 year
RM’000
More than
5 years
RM’000
31.12.2012
The Group
-
-
29,639
167,954
Term loan 2 - unsecured*
550,862
8.00
708,951
-
-
-
708,951
113,525
8.00
150,648
-
-
22,598
128,050
28,588
4.00
30,822
-
-
9,247
21,575
302,989
4.00
345,215
-
-
-
345,215
Hire - purchase payables
1,384
3.00
1,384
242
325
817
-
2,939
4.05
4,349
222
222
666
3,239
595
4.05
889
45
45
134
665
16,814
8.00
24,885
-
-
-
24,885
Revolving credits
80,000
4.25
83,400
83,400
-
-
-
Bank overdraft
80,491
8.00
86,916
86,916
-
-
-
144,683
144,683
144,683
-
-
-
1,476,090
1,779,735
315,508
592
63,101
1,400,534
-
29,639
167,954
560,924
8.00
708,951
-
-
-
708,951
116,444
8.00
150,648
-
-
22,598
128,050
28,970
4.00
30,822
-
-
9,247
21,575
305,308
4.00
345,215
-
-
-
345,215
Hire - purchase payables
1,653
3.46
1,653
352
386
915
-
Al Bai Bithaman Ajil Loan
2,865
4.05
3,915
222
444
666
2,583
581
4.05
799
45
90
134
530
Redeemable Convertible
IX - secured
X - secured
Cumulative Preference
Shares
Shares
17,976
8.00
24,885
-
-
-
24,885
Revolving credits
90,000
4.25
91,060
91,060
-
-
-
Bank overdraft
49,876
8.00
56,091
56,091
-
-
-
166,346
-
166,346
166,346
-
-
-
1,777,978
314,116
920
63,199
1,399,743
1,497,489
*
*
More than
5 years
RM’000
197,593
-
2 - 5 year
RM’000
8.00
197,593
X - secured
1 - 2 year
RM’000
153,220
8.00
Under 1
year
RM’000
156,546
IX - secured
%
RM’000
31.12.2011
Carrying
amount
RM’000
Refer to loan from the Government of Malaysia
ANNUAL REPORT 2012
ANNUAL REPORT 2012
143
142
Carrying
amount
RM’000
The Group
%
RM’000
Under 1
year
RM’000
1 - 2 year
RM’000
2 - 5 year
RM’000
More than
5 years
RM’000
1.1.2011
The Company
Carrying
amount
RM’000
%
RM’000
Under 1
year
RM’000
1 - 2 year
RM’000
2 - 5 year
RM’000
More than
5 years
RM’000
31.12.2012
151,167
8.00
197,593
-
-
22,628
174,965
156,546
8.00
197,593
-
-
29,639
167,954
540,927
8.00
708,951
-
-
-
708,951
560,924
8.00
708,951
-
-
-
708,951
111,841
8.00
150,648
-
-
6,686
143,962
116,444
8.00
150,648
-
-
22,598
128,050
28,400
4.00
30,823
-
-
7,592
23,231
28,970
4.00
30,822
-
-
9,247
21,575
306,526
4.00
345,215
-
-
-
345,215
305,308
4.00
345,215
-
-
-
345,215
Shares
17,976
8.00
24,885
-
-
-
24,885
Revolving credits
90,000
4.25
91,060
91,060
-
-
-
Bank overdraft
49,876
8.00
56,091
56,091
-
-
-
190,761
-
190,761
190,761
-
-
-
1,796,026
337,912
-
61,484
1,396,630
VIII - secured
827
7.00
836
836
-
-
-
IX - secured
2,991
9.55
9,142
2,909
2,757
2,441
1,035
X - secured
610
9.55
1,868
593
563
500
212
Shares
15,697
8.00
24,977
-
-
-
24,977
Revolving credits
40,590
4.25
40,590
40,590
-
-
-
Bank overdraft - secured
4,639
8.00
4,639
4,639
-
-
-
- unsecured
42,594
7.80
42,594
42,594
-
-
-
146,736
-
146,736
146,736
-
-
-
1,704,612
238,897
3,320
39,847
1,422,548
1,393,545
*
1,516,805
*
ANNUAL REPORT 2012
ANNUAL REPORT 2012
145
144
The Company
Carrying
amount
RM’000
%
RM’000
Under 1
year
RM’000
1 - 2 year
RM’000
2 - 5 year
RM’000
More than
5 years
RM’000
The Company
Carrying
amount
RM’000
%
RM’000
Under 1
year
RM’000
1 - 2 year
RM’000
2 - 5 year
RM’000
More than
5 years
RM’000
1.1.2011
31.12.2011
153,220
8.00
197,593
-
-
29,639
167,954
151,167
8.00
197,593
-
-
22,628
174,965
550,862
8.00
708,951
-
-
-
708,951
540,927
8.00
708,951
-
-
-
708,951
113,525
8.00
150,648
-
-
22,598
128,050
111,841
8.00
150,648
-
-
6,686
143,962
28,588
4.00
30,822
-
-
9,247
21,575
28,400
4.00
30,823
-
-
7,592
23,231
302,989
4.00
345,215
-
-
-
345,215
306,526
4.00
345,215
-
-
-
345,215
Shares
15,697
8.00
24,977
-
-
-
24,977
-
-
-
Shares
16,814
8.00
24,885
-
-
-
24,885
Revolving credits
80,000
4.25
83,400
83,400
-
-
-
Revolving credits
40,590
4.25
40,590
40,590
Bank overdraft
78,418
8.00
84,691
84,691
-
-
-
Bank overdraft
42,594
7.80
42,594
42,594
144,783
144,783
144,783
-
-
-
145,305
-
145,305
145,305
-
-
-
1,469,199
1,770,988
312,784
-
61,484
1,396,630
1,686,696
228,489
-
36,906
1,421,301
*
1,383,047
*
-
ANNUAL REPORT 2012
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147
146
32.3.3
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
USD
Denominated in
SGD
THB
RM’000
RM’000
RM’000
Trade receivables
-
954
-
-
1,415
-
Trade payables
(1,806)
(2,159)
(1,912)
Exposure in the statement of
financial position
(1,806)
210
(1,912)
USD
Denominated in
SGD
THB
RM’000
RM’000
RM’000
-
580
-
The Group
other prices will affect the Group’s financial position or cash flows.
1.1.2011
Currency risk
The Group is exposed to transactional currency risk primarily through sales and purchases that are
denominated in currency other than the functional currency of the operations to which they relate. The
currencies giving rise to this risk are primarily United States Dollar, Singapore Dollar and Thai Baht.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating
entities are kept to an acceptable level.
The Company
Exposure to foreign currency risk
31.12.2012
The Group’s exposure to foreign currency (a currency which is other than the currency of the Group
Trade receivables
entities) risk, based on carrying amounts as at the end of the reporting period was:
The Group
USD
Denominated in
SGD
THB
RM’000
RM’000
RM’000
31.12.2012
579
-
(3,080)
-
(4,579)
Exposure in the statement of
financial position
(3,080)
1,159
(4,579)
-
552
-
31.12.2011
Trade receivables
-
822
-
-
579
-
-
828
-
Trade payables
(3,080)
-
(4,579)
Trade payables
(1,547)
-
(1,912)
Exposure in the statement of financial
position
(3,080)
1,401
(4,579)
Exposure in the statement
of financial position
(1,547)
1,380
(1,912)
Trade receivables
-
852
-
-
954
-
-
828
-
-
1,415
-
Trade payables
(1,547)
(30)
(2,792)
Trade payables
(1,806)
(2,159)
(1,912)
Exposure in the statement of financial
position
(1,547)
1,650
(2,792)
Exposure in the statement
of financial position
(1,806)
210
(1,912)
31.12.2011
-
Trade payables
Trade receivables
1.1.2011
Trade receivables
ANNUAL REPORT 2012
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149
148
Currency risk sensitivity analysis
Exposure to interest rate risk
The exposure to currency risk of foreign exchange is not material and hence, sensitivity analysis is not
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,
presented.
based on carrying amounts as at the end of the reporting period was:
Interest rate risk
The Group
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
20,903
28,319
54,315
(1,173,291)
(1,154,102)
(1,143,289)
(1,152,388)
(1,125,783)
(1,088,974)
(139,876)
(160,491)
(87,823)
31.12.2012
31.12.2011
1.1.2011
RM’000
RM’000
RM’000
The Group’s investments in fixed rate instruments and its fixed rate borrowings are exposed to a risk
of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings
Fixed rate instruments
are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity
Financial assets
securities and short term receivables and payables are not significantly exposed to interest rate risk.
Floating rate instruments
Cash flow interest rate risk is the risk that the future flows of a financial instrument will fluctuate because
of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial
instrument will fluctuate due to changes in market interest rates. As the Group has no significant interestbearing financial assets, the Group’s income and operating cash flows are substantially independent of
The Company
changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in
nature and have been mostly placed in fixed deposits.
Fixed rate instruments
Financial assets
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating
-
-
34,000
(1,168,192)
(1,149,184)
(1,138,861)
(1,168,192)
(1,149,184)
(1,104,861)
(139,876)
(158,418)
(83,184)
rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the
Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix
of fixed and floating rate borrowings.
Floating rate instruments
Interest rate risk sensitivity analysis
(a)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through
profit or loss, and the Group does not designate derivatives as hedging instruments under a fair
value hedged accounting model. Therefore, a change in interest rates at the end of the reporting
period would not affect profit or loss.
(b)
Cash flow sensitivity analysis for variable rate instruments
It is estimated that a change of 1% in interest rates at the end of the reporting period would have
increased/(decreased) post-tax profit or loss of the Group and of the Company by RM1,320,000
(2011: RM1,203,700) and RM1,305,000 (2011: RM1,188,100) respectively. This analysis
assumes that all other variables, in particular interest rates, remain constant.
ANNUAL REPORT 2012
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151
150
32.4 Fair value of financial instruments
The Group
Carrying
The Company
Carrying
The carrying amounts of cash and cash equivalents, trade and other receivables, short term receivables and
amount
Fair value
amount
Fair value
payables and short term borrowings approximate fair values due to the relatively short term nature of these financial
RM’000
RM’000
RM’000
RM’000
instruments.
1.1.2011
The fair values of other financial assets and liabilities, together with the carrying amounts shown in the statement of
Financial assets
financial position, are as follows:
Other investments
The Group
Carrying
Long term receivables
The Company
Carrying
amount
Fair value
amount
Fair value
RM’000
RM’000
RM’000
RM’000
Malaysia
140
*
140
*
-
-
2,860
#
10,571
#
10,571
#
147,817
#
147,817
#
-
-
2,967
#
8,848
#
8,527
#
30,342
#
30,342
#
1,143,289
1,143,289
1,138,861
1,138,861
15,697
15,697
15,697
15,697
-
-
32,986
#
Preference Shares
*
It is not practicable to estimate the fair value of the Group’s and the Company’s unquoted shares and
long term receivables because of the lack of quoted market prices and the inability to estimate fair value
1,171,638
1,171,638
1,168,192
1,168,192
17,976
17,976
17,976
17,976
-
-
46,927
#
7,924
#
7,974
#
without incurring excessive costs. However, the Group and the Company do not anticipate the carrying
amounts recorded at the end of the reporting period to be significantly different from the values that would
Preference Shares
-
*
-
Amount due from Government of
Amount due from Government
of Malaysia
170
*
Financial assets
Amount due from subsidiaries
*
31.12.2012
Other investments
170
69,216
be eventually received.
#
It is not practicable to estimate the fair value of the amounts due to/from related parties and Government of
Malaysia due principally to the inability to estimate the settlement date without incurring excessive costs as
these amounts lack a fixed repayment term. However, the Group and the Company do not anticipate the
31.12.2011
carrying amounts recorded at the end of the reporting period to be significantly different from the values that
Financial assets
Other investments
would be eventually received or settled.
170
*
170
*
-
-
2,106
#
The methods and assumptions used by the management to determine fair values of financial instruments other than
8,689
#
8,689
#
those whose carrying amounts reasonably approximate their fair values are as follows:
25,818
#
25,818
#
Amount due from Government
of Malaysia
Fair value has been determined using discounted estimated cash flows. The discount rates used are the current
1,152,718
1,152,718
1,149,184
Preference Shares
market incremental lending rates for similar type of lending, borrowing and leasing arrangements.
1,149,184
16,814
16,814
16,814
16,814
-
-
33,585
#
ANNUAL REPORT 2012
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153
152
32.4.1 Fair value hierarchy
33.
CAPITAL COMMITMENTS
The Group
2012
The table below analyses financial instruments carried at fair value, by valuation method. The different
levels have been defined as follows:
•
•
RM’000
RM’000
RM’000
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Capital expenditure
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
Approved and contracted for
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
82,216
112,935
79,172
110,428
274,865
205,232
261,024
188,932
357,081
318,167
340,196
299,360
2011
-
1,959
-
1,959
2012
3,080
8,493
3,080
8,493
2013
9,227
-
9,227
-
Approved but not contracted for
•
2011
RM’000
The Company
2012
2011
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Level 1
Level 2
Level 3
Total
RM’000
RM’000
RM’000
RM’000
Lease obligations on rental of locomotive:
The Group
31.12.2012
Financial assets
34.
Other investment
Unquoted company
-
-
140
140
the supplementary agreement dated 19 February 2003) with Malaysian Resources Corporation Berhad (“MRCB”) and
Sdn Bhd (“KLSSB”).
Financial assets
Other investment
-
-
170
170
On 18 April 1997, KLSSB entered into a Concession Agreement (as amended by the supplementary agreement dated
10 March 1999) with the Government of Malaysia and Syarikat Tanah dan Harta Sdn Bhd to undertake the obligation to
construct a new railway central station on the Kuala Lumpur Brickfields railway yard (“KL Sentral Project”) in exchange for
1.1.2011
being granted title to the surrounding commercial development lands.
Financial assets
Other investment
Unquoted company
On 18 April 1996, Keretapi Tanah Melayu Berhad (“KTMB”) entered into a Joint Venture Agreement (as amended by
Pembinaan Redzai Sdn Bhd (“PRSB”) to set out the mutual rights and obligations as shareholders in Kuala Lumpur Sentral
31.12.2011
Unquoted company
JOINT VENTURE ARRANGEMENT
-
-
170
170
MRCB guarantees to KTMB that the return to KTMB’s investment in the KL Sentral Project shall not be less than Ringgit
Malaysia One Hundred and Fifteen Million (RM115,000,000) only (“KTMB’s Return”), which shall be paid by KLSSB
by 31 December 2012 or within sixty (60) days upon completion of the KL Sentral Project, whichever shall be the earlier
(“Payment Date”). KTMB’s Return will be paid less any dividend and capital repayment that have already been distributed
to KTMB by KLSSB.
MRCB further guarantees that if the amount paid to KTMB by KLSSB by the Payment Date shall be less than KTMB’s
Return, MRCB shall pay to KTMB in cash the difference between the amount of cash received by KTMB and the amount
equivalent to KTMB’s Return (“the Deficit”) within sixty (60) days after the Payment Date.
As of 31 December 2012, KTMB decided, the recognition of KTMB’s Return amount should only be disclosed as a contingent
asset and not recorded in the statement of financial position upon the certainty of the receipt obtained from relevant party.
ANNUAL REPORT 2012
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154
156
Statement By Directors
Declaration By The Officer
Primarily Responsible For The Financial Management Of The Company
The Directors of KERETAPI TANAH MELAYU BERHAD state that, in their opinion, the accompanying financial statements are drawn
I, HAZALINA BINTI ABDUL RAHMAN, being the Officer primarily responsible for the financial management of KERETAPI TANAH
up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
MELAYU BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct
of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company
and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
as of 31 December 2012 and of the financial performance and the cash flows of the Group and of the Company for the year ended
Declarations Act, 1960.
on that date.
Signed on behalf of the Board
in accordance with a resolution of the directors,
__________________________________
HAZALINA BINTI ABDUL RAHMAN
Subscribed and solemnly declared by the abovenamed HAZALINA BINTI ABDUL RAHMAN at KUALA LUMPUR on this 16th day
of May 2013.
________________________________________
DATO’ SRI IR. MOHD ZIN BIN MOHAMED
Before me,
__________________________________
COMMISSIONER FOR OATHS
_______________________________________
DATUK ELIAS BIN KADIR
16 May 2013
ANNUAL REPORT 2012
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157