Puncak Niaga (M) Sdn Bhd Niaga Holdings Berhad Syarikat Bekalan Air Selangor Sdn Bhd Report....

Annual Report 2011Puncak Niaga Holdings Berhad

092

WATER TREATMENT PLANT OPERATIONS

PNSB operates, manages and maintains

29 WTPs with a combined capacity of 1,930

million litres per day. In 2011, PNSB delivered

703.48 million cubic metres of treated water,

an increase of 1.63% from 692.19 million cubic

metres of treated water produced in 2010.

The increase in the treated water production

was due to higher treated water demand

from Syarikat Bekalan Air Selangor Sdn Bhd

(“SYABAS”).

In 2011, our WTPs achieved an impressive

99.9% compliance with stipulated treated

water quality standards, based on 19,670

samples tested by both the Independent

Laboratory and our Central Laboratory.

As well as quality, we are dedicated to

providing dependability of supply. To ensure

that consumers can rely on a constant supply

of treated water, we endeavour to minimise

unscheduled WTP shutdowns. Although our

WTPs experienced 770.75 hours of shutdowns

for reasons beyond our control in 2011 (as

shown in the table below), this did not result

in interruptions to the consumers’ water

supply, and all of our WTPs consistently met

production demands.

Cause of Shutdown Hours of Shutdown

Raw water violation 531.94

TNB power supply interruption 197.31

Pipe leak/burst 41.50

Total Hours 770.75

The performance of our WTPs in 2011 was

as follows:-

The Sungai Selangor Phase 2 (“SSP2”) WTP

produced 349.92 million cubic metres of

treated water, up 0.46% on the 348.31 million

cubic metres recorded in 2010. The average

daily production increased to 958.68 million

litres from 954.28 million litres in 2010,

exceeding SSP2 WTP’s daily design capacity of

950 million litres.

The 26 WTPs under the Privatisation

Cum Concession Agreement dated

22 September 1994 (“PCCA”) produced 328.82

million cubic metres of treated water, a 3.10%

increased from the 318.92 million cubic metres

recorded in 2010. The 26 WTPs’ production of

treated water in 2011 is the highest since 2007.

The average monthly treated water production

for 2011 was 27.40 million cubic metres as

against 26.58 million cubic metres in 2010.

The WTPs exceeded their monthly designated

quantity of 26.28 million cubic metres as

required in the PCCA.

Operations Review Puncak Niaga (M) Sdn Bhd

2011 WAS ANOTHER SUCCESSFUL YEAR FOR PUNCAK NIAGA (M) SDN BHD (“PNSB”) IN

ITS OPERATIONS OF WATER TREATMENT PLANTS (“WTPS”) AND DAMS IN SPITE OF THE

CHALLENGING SITUATION. PNSB IN 2011 MAINTAINED ITS CONSISTENTLY HIGH QUALITY

AND SAFETY STANDARDS FOR THE WTPS WITH OPTIMUM CAPACITY, RESULTING IN A SUPPLY

OF HIGH QUALITY TREATED WATER THAT SURPASSED THE PREVIOUS YEAR’S LEVELS.

MEANWHILE, A RIGOROUS MAINTENANCE SCHEDULE AND SEVERAL FACILITIES UPGRADES

ENSURED THE PEAK PERFORMANCE OF OUR INFRASTRUCTURE.

Periodical process control

monitoring to ensure optimisation

of water treatment process

093



Wangsa Maju WTP produced 16.75 million

cubic metres of treated water, an increase

of 0.18% on the 16.72 million cubic metres

recorded in the previous year. The average

daily production was 45.89 million litres as

against 45.80 million litres in 2010, exceeding

Wangsa Maju WTP’s daily design capacity of

45 million litres and daily designated quantity

of 31.5 million litres as stated in the Concession

Agreement.

Sungai (“Sg”) Sireh WTP achieved a yearly

treated water production of 6.97 million cubic

metres, 6.19% less than the 7.43 million cubic

metres produced in 2010. The average daily

production was 19.10 million litres compared

to 20.36 million litres in 2010. Sg Sireh WTP’s

daily design capacity is 27.28 million litres.

Sg Lolo (new) WTP achieved a yearly treated

water production of 1,017,998 cubic metres in

2011, 27.3% more than 799,694 cubic metres

produced in 2010. The average daily production

was 2.79 million litres compared to 2.19 million

litres in 2010. Sg Lolo (new) WTP daily design

capacity is 2.5 million litres.

Overall, our 29 WTPs performed well and met

SYABAS’ requirements for treated water as

well as the Drinking Water Quality Standards

as stipulated by the Ministry of Health (“MOH”).

PLANT IMPROVEMENT WORKS

In line with our absolute commitment to

customer satisfaction and staff well-being,

in 2011, PNSB carried out a number of plant

improvement works, focusing on health and

safety measures.

Installation of Auto Chlorine Shut-Off System

During the year, we installed an Auto Chlorine

Shut-Off System at nine of our WTPs to protect

personnel and equipment from chlorine

exposure in the event of a leak. The system is

a battery-powered fail-safe device designed

to provide safety where toxic gas cylinders

are in use. The automatic valve operator

which is mounted on each cylinder will close

the cylinder’s valve upon receiving the signal

for shut-off. The shut-off can be triggered by

sensors such as a gas leak detector, seismic

sensor, fi re alarm, or emergency panic button.

Installation of Pressure Filter System

at Sg Serai WTP

A new Pressure Filter System installed at

Sg Serai WTP addressed the issues of water

quality at this WTP in particular, on the

aluminium violation of treated water. Since

the installation of the Pressure Filter System

completed on 1 April 2011, there has been no

violation of water quality reported.

Installation of Chlorine Scrubber System

at Gombak WTP

The Gombak WTP did not install the Auto

Chlorine Shut Off System and the existing

chlorine leak detection system does not contain

the spread of chlorine gas, to ensure the safety

of the people, especially the WTP staff, in the

event of a chlorine leak. As a contingency plan,

a chlorine scrubber system was installed. The

system neutralises the chlorine gas by using

caustic soda through a random packing bed.

Electrical Load Transfer from

TNB Substation to Consumer Substation

at Rantau Panjang WTP

In response to the inconsistent quality of

the power supply to Rantau Panjang WTP,

PNSB opted to transfer its electrical load

from the existing 33kV TNB Substation

to an 11kV Consumer Substation. Since

the completion of the transfer works on

15 June 2011, Rantau Panjang WTP has

recorded no power supply interruption at all

as opposed to pre-transfer works, whereby

14.42 hours of power failure and 64 incidents

of power transience were reported between

1 January 2011 and 31 December 2011.

Preventive Maintenance:

Inspecting electrical activator

Overall, our 29 WTPs performed well and met SYABAS’ requirements for treated water as well as the Drinking Water Quality Standards as stipulated by the Ministry of Health (“MOH”).


094

Rehabilitation and Upgrade of

Automated Filter Operation for Sg Batu WTP

Rehabilitation and upgrade works for Sg Batu

WTP’s fi ltration automation system were

carried out to enhance the system’s effi ciency,

functionality and reliability whilst increasing

Sg Batu WTP’s operation and maintenance

effi ciency. The incorporation of the SCADA

System has enabled the fi lter backwashing

process to be conducted automatically for

better process control.

WATER FILTER PERFORMANCE

We continuously and constantly monitor the

water fi lter performance by tracking each

fi lter’s running hours as fi ltration is the fi nal

step in the water treatment process, removing

fi ne suspended solids remaining after the

clarifi cation process, and further cleansing

and polishing the treated water.

Details of the Filter Performance Monitoring

are set out under “Preserving Our

Environment” section on pages 159 and 160

of this Annual Report.

Raw Water Drawn for Treatment

The following table summarises the amount of

raw water drawn from the various rivers and

dams for treatment at PNSB’s WTPs in 2011.

No. Source Volume Withdrawn (m3)

1 Sg Bernam 10,687,310

2 Sg Batang Kali 4,155,650

3 Sg Dusun 404,414

4 Sg Inki 2,284,940

5 Sg Tengi 686,370

6 Sg Gerachi 1,806,680

7 Sg Darah 170,070

8 Sg Selangor 367,377,893

9 Sg Gombak 26,707,207

10 Sg Ampang 6,960,253

11 Sg Rangkap 3,911,735

12 Sg Kepong 773,395

No. Source Volume Withdrawn (m3)

13 Sg Rumput 285,045

14 Sg Langat 212,437,706

15 Sg Serai 410,244

16 Sg Lolo 1,265,321

17 Sg Pangsoon 1,402,091

18 Sg Labu 1,030,130

19 Sg Sireh 9,405,039

20 Batu Dam 41,311,879

21 Klang Gates Dam 55,780,400

22 Tasik Subang Dam 3,734,000

Total 752,987,773

DAM OPERATIONS

PNSB operates and maintains the Sg Langat,

Klang Gates and Tasik Subang Dams.

Performance in 2011 was good, and there was

no critical storage drawndown at any of the

dams. During the year, total annual rainfall at

two of the three dams’ catchments areas was

lower than the mean average rainfall (based on

data from 1998 to 2010), as shown below:-

Mean average Annual rainfall Variance rainfall 1998 – against 2011 2010 averageDam (mm) (mm) (%)

Sungai Langat

Dam 2,347.00 2,456.97 -4.48

Klang Gates

Dam 2,903.40 2,818.27 3.02

Tasik Subang

Dam 2,303.10 2,469.28 -6.73


Korean delegates’ visit to SSP2 WTP

095


Our operators at the Dams are guided by the

Reservoir Operations Rules Curves (“RORC”)

method to monitor, analyse and forecast

the rainfall pattern and levels in the dams’

catchment areas. This allows us to make the

right decision during critical situations and

to meet the demand from the WTPs whilst

conserving as much reservoir water as

possible.

At Sg Langat and Klang Gates Dams, the

reservoir levels were maintained above RORC

No. 1 throughout 2011 while the Tasik Subang

Dam’s reservoir level was slightly below

RORC No. 1 from the end of August 2011 until

mid-September 2011. All three dams,

with proper and effective planning on dam

management operation, met the WTPs’

demands.

With prudent, proper and effective planning on

management of the dams, PNSB ensures the

sustainability of water supply in Selangor and

the Federal Territories of Kuala Lumpur and

Putrajaya.

To ensure the safety and stability of the dams,

PNSB completed the Dam Safety Inspections

for the Tasik Subang, Klang Gates and Sg Langat

Dams. Conducted by independent consultants

in May 2011, the fi eld inspections covered all

major dam structures, M&E equipment, fl ood

routing analysis and instrumentation analysis.

In 2011, we fulfi lled our corporate social

responsibility by allowing various stakeholders

to visit the dams with the objective of giving

the visitors an educational understanding of

the function and operation of dams. Details

of the Dams CSR Visitation are set out under

“Engagement With Our Community” section

on page 170 of this Annual Report.

CERTIFICATIONS

ISO 14001 Environmental Management System

The ISO 14001 Environmental Management

System certifi cation is to ensure that the

operation and maintenance of the WTP

complies with the Environmental Guidelines

and Requirements.

SSP2 WTP became the fi rst WTP in Malaysia in

2003 to gain the Environmental Management

System accreditation and this certifi cation has

been successfully maintained until to date

without any signifi cant non-compliance.

ISO 9001: 2008 Quality Management System

In 2010, 20 WTPs and Regional Offi ces under

PNSB management were upgraded from

ISO 9001:2000 Quality Management System

(“QMS”) certifi cation to ISO 9001:2008 QMS

certifi cation, following the introduction of a

new International Standard for QMS.

In line with PNSB’s commitment and standard

to carry out the operation and maintenance

of the WTPs under PNSB management in

line with established international standards,

PNSB has initiated the process of obtaining ISO

9001:2008 QMS certifi cation for the remaining

nine WTPs. The certifi cation is expected to be

achieved in 2012.

This refl ect PNSB’s commitment to a rigorous

quality management system in managing the

WTPs.

OHSAS 18001:2007 Safety Management System

The SSP2 WTP obtained OHSAS 18001:2007

Safety Management System certifi cation in

2010.

In 2011, 27 of our WTPs and three Regional

Offices had OHSAS 18001:2007 Safety

Management System certifi cation.


Gas Saving Tips

Drive steadily.

Slowing down or

speeding up waste fuel.


096


INFORMATION AND

COMMUNICATIONS TECHNOLOGY (“ICT”)

In 2011, PNSB launched various initiatives

to strengthen PNSB’s core operations via

seamless and effi cient communications and

IT systems.

Data Verifi cation

In 2011, the Operation and Maintenance

Department (“OMD”) in collaboration with the

Information Technology (“IT”) Department,

developed the e-MJC application. The e-MJC

application collects data from WTPs, analyses

it, and transmits it via the internet to PNSB’s

Headquarters. The system commenced

operation in January 2012.

This newly developed e-MJC application had

expedited the transfer of data gathered at WTP

to OMD at PNSB’s Headquarters.

PREVENTIVE MAINTENANCE

Predictive & Preventive Plant Maintenance

Throughout 2011, we undertook rigorous

monitoring and maintenance of plant

and equipment to ensure the smooth and

continuous operation of all the 29 WTPs.

Predictive and preventive maintenance

followed the annual maintenance plan, and

performance was closely monitored by two

maintenance software systems namely,

Maximo and Maintpro.

In 2011, our personnel conducted 26,240

preventive maintenance works in the areas of

mechanical, electrical and instrumentation as

compared to 25,826 preventive maintenance

works in 2010. This was a 1.6% increase in

preventive maintenance works compared to

the previous year (“Increase of Maintenance

Works”) and the Increase of Maintenance

Works was mainly due to the installation of

additional equipment into the WTP operating

systems.

Of the preventive maintenance works which

we completed in 2011, 12,226 were in the

mechanical section, 8,839 were in the electrical

section, and 5,175 were in the instrumentation

section.

Preventive IT Maintenance

Preventive IT Maintenance is important

to ensure that all systems are running

smoothly. PNSB’s IT Department continuously

supports and maintains all the 29 WTPs

via its programme of scheduled preventive

IT maintenance. For servers and critical

equipment, preventive IT maintenance is

conducted every three months while the

non-critical equipment cycle is every six

months. In addition, our computers and

printers are updated with software patches

and antivirus versions.

Using the latest technology, the IT Department

is able to achieve its Service Level Agreement

(“SLA”) standards in ensuring that all systems

are running effi ciently with minimal downtime.

INNOVATIVE AND

COST-CUTTING MEASURES

In its relentless drive to fi nd innovative

and cost-cutting measures to improve the

operations of the Company and WTPs, PNSB

on a yearly basis conducts Innovative &

Creative Circle (“ICC”) sessions to encourage

personnel to produce innovative inventions or

measures. In 2011, the Company achieved and

garnered the prestigious Excellent Award for

its cost-cutting and innovative project, namely

“Unstable micro sand in the Actifl o process”

at the International ICC Conference Quality

Creative Circle 2011 held in Yokohama, Japan

from 11 to 15 September 2011. Details of the

activities and achievement of the Company’s

ICC Programme are set out under “Quality

Policy & Report” section on page 206 of this

Annual Report.

Visit by PUSPANITA

representatives to SSP2 WTP

097


Operations Review Syarikat Bekalan Air Selangor Sdn Bhd

CHALLENGES

Due to rapid development in Selangor and


Putrajaya, the population in the Klang Valley

is expected to increase on current trend in

the coming years, and the demand for treated

water in Selangor, being the most populous

state in Malaysia, and the Federal Territories of

Kuala Lumpur and Putrajaya is also expected

to increase.

Against this backdrop, the demand for water

in Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya had steadily

increased in 2011 in step with population and

development growth, but was not met by any

new water supply sources. Based on SYABAS’

data, in 2011, SYABAS distributed treated

water to about 7.5 million consumers.

In 2011, some parts of the Klang Valley already

experienced low water pressure while others

took a longer time to recover after major

breakdowns particularly during periods of

peak demand. This was due to reserve capacity

falling below 5% of the average demand,

making it diffi cult for SYABAS to meet the

peak demand which, historically had risen by

7% above average demand. This situation will

worsen in future unless additional interim and

long term water sources are developed by the

Government to avoid the impending water

crisis (“Additional Water Sources”). The delay

in the implementation of the Langat 2 WTP

project, whose completion date is uncertain,

would result in the expected shortage of

water supply commencing in 2012 unless

the Additional Water Sources are developed

quickly.

The uncertainty and delay in the Proposed

Restructuring since 2008 continued, further

adding to the constraints.

The Government’s freezing of the SYABAS

CAPEX programme, ongoing since 2008,

prevented urgently-needed investment in

the rehabilitation and upgrading of water

infrastructure in the Klang Valley although

absolutely critical works which are limited in

numbers and funding were approved by the

Government. The CAPEX freeze also inhibited

reductions in Non Revenue Water (“NRW”),

which in turn forced SYABAS to increase

its bulk purchase from water treatment

operators and reduced reserve margin.

There were frequent pipe bursts and leaks

due to the old age of infrastructure, which

increased SYABAS’ operational costs and

increased consumers’ complaints about the

many interruptions resulting from repairs to

old burst/leaking pipes. The rehabilitation and

upgrading of water infrastructure in the Klang

Valley is necessary both for the upgrading

of water services to consumers and for the

reduction of NRW.

SYARIKAT BEKALAN AIR SELANGOR SDN BHD (“SYABAS”), BEING THE SOLE WATER

DISTRIBUTOR FOR SELANGOR AND THE FEDERAL TERRITORIES OF KUALA LUMPUR AND

PUTRAJAYA, CONTINUED TO FACE MANY OBSTACLES AND CHALLENGES IN 2011 NAMELY, THE

UNRESOLVED PROPOSED RESTRUCTURING OF THE WATER INDUSTRY IN SELANGOR AND THE

FEDERAL TERRITORIES OF KUALA LUMPUR AND PUTRAJAYA (“PROPOSED RESTRUCTURING”)

CONCURRENTLY WITH NO WATER TARIFF ADJUSTMENT NOR COMPENSATION IN LIEU BY

THE SELANGOR STATE GOVERNMENT, AND THE FREEZE ON SYABAS CAPITAL EXPENDITURE

EXCEPT FOR LIMITED CRITICAL WORKS. DESPITE THESE OBSTACLES AND CHALLENGES,

THE COMMITMENT, DEDICATION AND HARD WORK OF BOTH THE MANAGEMENT AND STAFF

ENABLED SYABAS TO CONTINUE TO DELIVER, EXCEEDING EXPECTATIONS PERFORMANCE

IN 2011.

World Water Day 2011 Celebration

on 22 March 2011


098


Since the refusal of the Selangor State

Government from 1 January 2009 to either

approve the implementation of the water tariff

adjustment or to pay compensation in lieu

thereof, SYABAS has suffered a consequential

loss in revenue and severe cashflow

constraints, which has resulted in SYABAS’

amassing growing debts which have also led

to legal proceedings, which are still ongoing,

for SYABAS’ inability to make full payment for

the cost of water purchased from the water

treatment operators.

Although the Federal Government has stepped

forward to assist the water industry in Selangor

in 2011 as highlighted in the Chairman’s

Message, there is no long term solution on the

table. Unless and until a unanimous solution

is reached for the water services industry in

Selangor, SYABAS will continue to face the

ever increasing challenges and adversities as

mentioned above.

Despite the many issues and challenges

faced by SYABAS, SYABAS was able to meet

the high expectations and high demand

of the consumers in Selangor and the

Federal Territories of Kuala Lumpur and

Putrajaya in 2011 mainly as a result of the

dedication, commitment and absolute sense

of responsibility to the consumers of the

Management and staff of SYABAS, and in

addition, enhancement by SYABAS of its

operational effi ciency which focused on

improvement in service level to consumers,

the details of which are set out under the

heading “Achievements” below.

ACHIEVEMENTS

Undeterred by the challenging issues which

SYABAS faced in 2011, SYABAS to the best

of its ability, continued to maintain the high

service levels as required by the Concession

Agreement dated 15 December 2004 signed

between SYABAS, the Federal Government

and the Selangor State Government (“SYABAS

Concession Agreement”) and the Ministry

of Health’s (“MOH”) National Standard for

Drinking Water Quality (2004) (“NSDWQ”),

exceeding the 2011 performance targets

which SYABAS set for itself, which were higher

than the requirements of SYABAS Concession

Agreement.

With limited funding for CAPEX investment,

SYABAS focused on operational effi ciency in a

bid to continue to supply good quality treated

water to consumers. Operational effi ciencies

such as the review and improvement of existing

standard operating procedures (“SOP”), the

introduction of new SOP, internal innovations

and cost optimization, and internal training

and motivation for the workforce focusing

on improvements in consumer service were

implemented by SYABAS during 2011.

As an interim but cost effective measure,

prior to pipe replacement, SYABAS also

implemented a pressure management

programme to reduce NRW and the frequency

of pipe bursts and leaks in Selangor and the


Putrajaya.

The Intelligent Pressure Management System

(“IPMS”) called i2O technology is being applied

by SYABAS in 84 selected areas [District

Metering Zones (“DMZ”)] using intelligent

modulators including time and fl ow based

pressure management. Results from 76 of

these IPMS have generated additional savings

of up to 196 m3/d/DMZ of water loss, as well

as reducing NRW, pipe bursts and leaks,

energy costs of water pumping and treatment

and reduced operational activities due to

Undeterred by the challenging issues which SYABAS faced in 2011, SYABAS to the best of its ability, continued to maintain the high service levels as required by the Concession Agreement.

099



lesser site visits required for pressure-setting

adjustments.

For the same reason, SYABAS is also currently

embarking on a consumer database drive

to allow SYABAS to send Short Messaging

Services (“SMS”) and email alerts in the event

of scheduled and/or major unscheduled water

disruptions at the affected consumers’ areas.

Customer service levels exceeded those of

2010. SYABAS responded to 99.23% of all water

quality complaints within 30 minutes, and

achieved the KPI requiring calls to be picked up

within six seconds and the call abandonment

rate to the lowest possible level. The SYABAS

Concession Agreement establishes targets for

pipe repair times, while SYABAS sets its own

targets which are even more stringent. In 2011,

the Company signifi cantly out-performed both

sets of targets.

During the year, SYABAS boosted its Billing

Collection Effi ciency to 99.9% from 98.5%

the previous year, exceeding the target rate

of 99.5%. At RM1,650.00 million, the water

purchase for 2011 refl ected an increase

over 2010’s fi gure of RM1,570.00 million but

was below the target of RM1,652.00 million.

Meanwhile, the Distribution Cost was 0.23

per m3 exceeding 2010’s fi gure of RM0.21

per m3 and well below the target of 0.27 per m3.

Despite SYABAS CAPEX freeze, the average

NRW level for Selangor and the Federal

Territories of Kuala Lumpur and Putrajaya was

computed as 32.31%, slightly lower for 2011

than the 2010’s NRW level of 32.45% and lower

than the NRW target of 33.43%. Details of NRW

are set out under the heading “Non Revenue

Water” of this Operations Review.

In 2011, SYABAS also earned a Malaysian

Society for Occupational Safety & Health

(“MSOSH”) Gold Awards for all its ten districts.

WATER DISTRIBUTION SERVICES

In 2011, SYABAS distributed a daily average of

4,143 MLD of treated water to about 7.5 million

residential and commercial consumers in

Selangor and the Federal Territories of Kuala

Lumpur and Putrajaya. This amounted to

80 MLD (2%) of treated water more than in 2010.

SYABAS maintains 26,145 km of water pipes;

1,469 service reservoirs, elevated water tanks

and suction tanks; and 557 booster pumping

stations. The numbers of these assets

increased by between 3%, 6% and 12% over

the previous year’s count, respectively. Water

supply coverage is 100% in urban areas and

99% in rural areas.

NON REVENUE WATER (“NRW”)

Progress to Date

In the seven years since the SYABAS

Concession Agreement took effect, SYABAS

has successfully achieved a progressive

reduction in NRW from 42.78% as at 1 January

2005 to 32.31% as at 31 December 2011, which

can be summarised as follows:-

Water Metered Input Consumption NRWPeriod (MLD) (MLD) MLD %

A 3,766 2,155 1,611 42.78

B 4,143 2,804 1,339 32.31

B-A +377 +649 - 273 -10.47

Note:

A denotes 1 January 2005

B denotes 31 December 2011

SYABAS participated in

Second IWA Development

Congress and Exhibition 2011

on 21 November 2011


100


Despite a severely limited budget and approved

CAPEX, SYABAS managed to conduct a

number of NRW Reduction works in 2011, and

these NRW Reduction works contributed to the

improved water loss fi gures as shown on page

099 under NRW of this Annual Report.

NRW Reduction works in 2011

Some 454 mechanical bulk meters (2” and

above) were replaced, the NRW savings is

being evaluated.

Under an approved program of RM170.0

million, a pipe replacement programme for

210 km of pipes, is being implemented in

stages for 30 of the most critical areas in the

Klang Valley. Installation commenced in 2011

and should be completed by 2014.

NRW Phases 2 and 3 programs of SYABAS’

maintenance works on 992 DMZ, including

installation of advanced Pressure Management

and Active Leakage Detection and Control

were continued. These works realised savings

of 56 MLD in 2011 and are estimated to save a

further 28 MLD by mid-2012.

SYABAS in-house teams also engaged in a

number of NRW activities throughout 2011,

namely, reservoir overfl ow monitoring and

maintenance at 80 DMZ established under

the Kementerian Tenaga Air dan Komunikasi

(“KTAK”) DMZs and 112 Pressure Management

Zones (“PMZs”).

In 2011, Suruhanjaya Perkhidmatan Air Negara

(“SPAN”) approved the implementation of

large-area pressure management for four

zones and the installation of advance pressure

management for 20 zones in KTAK DMZs.

The expected savings from these works are

estimated at 3.5 MLD and 4 MLD, respectively.

The programs are expected to be completed in

2012 to realise the expected savings.

As there are factors outside SYABAS’ control

such as CAPEX freeze which affect its ability to

reduce the NRW, SYABAS has proposed to the

Selangor State Government and SPAN to revise

the NRW KPI target in SYABAS Concession

Agreement to allow for the impact of these

uncontrollable factors. Based on SYABAS’

evaluation, the proposed revised KPI target is

36.27% as compared to actual achievement

of 32.31% in 2011. The proposed revised

KPI target is subject to the Selangor State

Government’s consideration and approval.

CAPEX Works

Under the privatisation of water supply services

in Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya, SYABAS, as the

concessionaire, planned and allocated capital

expenditure under its CAPEX programme for

the upgrading and rehabilitation works of the

distribution assets.

CAPEX program for 2011 are principally funded

from RPS 2009 (RM65.24 million) and RPS

2010 (RM131.6 million) and SYABAS internal

funding (RM187.6 million).

In year 2011, a total expenditure of RM88.54

million has been invested to upgrade and

rehabilitate the distribution infrastructure

including replacement and/or repairing of

leaking water tanks and slopes, improvement

works to low pressure areas, improvement

works for enhancement of water quality,

pumphouse upgrading and rehabilitation

works, ICT upgrading works, old pipes

replacement works, etc.

The cumulated total amount of CAPEX

expenditure from 1 January 2005 to

31 December 2011 amounted to RM2,340.56

million.

Speech by SYABAS’ CEO,

YBhg Dato’ Ruslan at the Signing

Ceremony of MOU with NIOSH

101



Visit by Kumpulan Wang

Simpanan Pekerja (“KWSP”)

to SYABAS Headquarters

on 11 July 2011

As part of interim mitigation project on

expected water shortage, on 20 October

2010, SPAN and Kementerian Tenaga,

Teknologi Hijau dan Air Malaysia (“KeTTHA”)

approved RM285.0 million for the program.

Of this amount, SPAN and KeTTHA approved

RM170.0 million to SYABAS for CAPEX for pipe

replacement. Based on the CAPEX for pipe

replacement, an allocation of RM16.5 million

was approved for 2011 with the balance of

RM153.5 million for Investment from 2012

until 2014. Eight pipe replacement packages

were tendered in July 2011 and fi ve packages

were tendered in November 2011. Out of the 13

packages tendered and awarded in 2011, one

package at Jalan Sg Baru, Kg Baru has so far

been completed.

On 2 November 2011, SYABAS submitted

and presented to SPAN the fourth operating

period CAPEX programme (1 January 2012

to 31 December 2014) in which the total cost

for all new projects is RM2,325.57 million and

RM655.0 million was planned for year 2012.

However, due to the current CAPEX freeze and

cashfl ow constraint, it is expected only a very

limited amount of which would be approved for

implementation.

Operation Command Centre (“OCC”) and the

Geographical Information System (“GIS”)

The OCC, fi rst launched on 2 November 2010,

allows SYABAS to monitor, operate and manage

its water distribution network in Selangor and


Putrajaya and take fast remedial action in the

event of any distribution natural abnormality.

The OCC is the primary component of the

RM27.5 million Supervisory Control and Data

Acquisition (“SCADA”) Project approved and

funded by KeTTHA. The OCC is Malaysia’s most

advanced and comprehensive clean water

distribution operations centre. Nevertheless,

this is the stage 1 SCADA Program which

covers only a part of the distribution system.

The OCC has three key elements:

• The SCADA wireless system, which

collects real-time measured fi eld data that

normally varies with time, and remotely

controls distant machinery in real-time.

• The Geographical Information System

(“GIS”), which stores and manages

the network infrastructure database

according to geographical location.

• The hydraulic operation model, which is

a tool deployed to simulate distribution

network flow conditions between

measuring points in real-time, and hence

provide a comprehensive overview of the

network’s fl ow, pressure and reservoir

water levels.

The status of implementation of the

GIS-related works as at 31 December 2011

was as follows:-

Phase 1A – Development of GIS (Infrastructure

and Application)

The GIS captures information on pipeline and

reservoir information for all ten districts and

as of 31 December 2011, registered 26,145 km

length of pipeline, 1,469 service reservoirs and

557 booster pumping stations.

Phase 1B – Development of GIS (Geo-Coding)

2,566 major consumers (“C”) have been

geo-coded in their respective districts, as

follows: Petaling (682 C), Klang/Shah Alam

(372 C), Kuala Lumpur (669 C), Sabak Bernam

(8 C), Hulu Langat (178 C), Kuala Selangor

(48 C), Hulu Selangor (56 C), Kuala Langat

(68 C), Sepang (148 C), and Gombak (337 C).


102


Phase 2 – Development of SCADA and

Integration of SCADA with GIS and Network

Modelling

The OCC receives live data on water levels,

pressure power supply trips, faulty measuring

instruments, faulty Remote Telemetry Units

(“RTUs”), incidents of vandalism, etc., from

250 RTUs. Upon receiving such alerts, SYABAS

acts accordingly to resolve the issues in the

shortest possible period.

Phase 3 – Hydraulic Model

Hydraulic models for all ten districts were

completed and are undergoing calibration

for improved accuracy. The models are being

deployed for use of planning and operations.

WATER QUALITY ENHANCEMENT

For year 2011, SYABAS complies fully with

the MOH’s NSDWQ and Quality Assurance

Programme (“QAP”), as well as maintaining

the Mandatory Level of Service (“MLS”) as

stipulated in SYABAS’ CA.

For this purpose, MOH has taken 32,408

samples from 729 sampling stations and

SYABAS has taken 21,211 samples from the

remaining 371 sampling stations.

In 2008, SYABAS initiated a Water Quality

Improvement Master Plan (“WQIM Plan”) to

ensure consumer confi dence in the water

quality, and in 2011 continued to implement

the following programmes under the

WQIM Plan.

Air Scouring Programme (“AS Programme”)

The AS Programme is designed to

systematically fl ush all the reticulation pipes

using compressed air. In 2011, 9,153 km

were identifi ed to be cleaned out of a total of

12,644 km of reticulation pipes of diameters

up to 200 mm. The remaining 3,491 km pipe

length could not be cleaned due to the freeze

on SYABAS CAPEX spending, which prevented

SYABAS from installing the necessary valves

and fi ttings required before air scouring can be

carried out.

The AS Programme has contributed to the

reduction in water quality complaints.

Reservoir Cleaning and Inspection

Programme (“RCI Programme”)

In 2011, 1,028 active reservoirs were registered

under this programme to be inspected twice a

year. Ten reservoirs were cleaned manually

during the year, whilst 24 were cleaned by the

open scour fl ushing method. Target reservoirs

for cleaning were selected based on turbidity

violations identifi ed during 2011 inspections.

Immediate Response To Consumer Complaints

In 2011, SYABAS achieved an average

compliance rate of 100% response time to

attend to water quality complaints within half

an hour and to undertake remedial actions

within 24 hours.

Consumer Awareness & Education

Programme (“CAE Programme”)

The CAE Programme with media coverage

is ongoing with emphasis on consumers’

understanding of the quality of water supplied

to the premises and related issues and their

responsibility for maintaining their own

internal plumbing system and internal storage

tanks. Consumers have greatly benefi ted from

SYABAS’ efforts in the CAE Programme.

For further details of the CAE Programme,

please turn to “Preserving Our Environment”

section on pages 161 and 162 of this Annual

Report.

Briefi ng on SYABAS’ Operation

Command Centre

103



BILLING & COLLECTION

SYABAS revenue and cash fl ow rely heavily upon

the effectiveness of its Billing and Recovery

Department, and efforts are constantly made

to enhance the systems and processes for peak

effi ciency. As at 31 December 2011, the total

number of active water supply accounts was

1,793,580, up 3.5% on the 1,732,193 accounts

registered in 2010.

Total billings rose 2.9% to RM1.530 billion

against the RM1.487 billion recorded in 2010.

The Table A above shows billing records

over the last seven years, demonstrating a

cumulative growth exceeding 46%.

Total bill payments collected in 2011 amounted

to RM1.529 billion, representing a 3.3%

increase on the RM1.480 billion collected

the year before. Overall, SYABAS achieved

a collection effi ciency of 99.9% in 2011 as

compared to 98.5% the previous year.

Total receivables as at 31 December 2011

stood at RM163.0 million, 2.7% lower than the

RM167.5 million posted in 2010. The debtors’

day level (accounts receivable), averaged a

manageable 39 days, as compared to 41 days

in 2010, due to the aggressive monitoring and

control that was put in place for recovery of

debts by SYABAS.

Disconnections as enforcement for

collection, increased by 11.0% from

139,977 disconnections in 2010 to 155,409

disconnections in 2011.

Migration of Bulk Meter Accounts to Individual

Meter Accounts (“Migration”)

The Migration process is still slow and the

success rate can best be achieved by making

the process mandatory. KeTTHA and SPAN

now have the intention and are in the process

to make the Migration mandatory.

As at 31 December 2011, SYABAS had

completed the Migration of only 230 bulk meter

accounts involving 49,963 individual accounts.

The Table B below shows the Migration from

Bulk Meter Accounts to Individual Meter

Accounts up to 31 December 2011:-

2006 - 2011 2011

Approved applications 496 75

No of accounts approved 93,958 16,926

No of approved

applications migrated 230 60

No of accounts 49,963 12,440

Table B - Migration from Bulk Meter Accounts to Individual Meter Accounts

Year 2005 2006 2007 2008 2009 2010 2011

Billing (RM Million) 1,070.3 1,265.9 1,333.10 1,395.2 1,437.7 1487.20 1,529.53

Growth (%) 9% 18% 5% 5% 3% 3.5% 2.8%

Cumulative Growth (%) 9% 27% 32% 37% 40% 43.5% 46.3%

Table A - Billing Records

Water Facts

The overall amount of

water on our planet has

remained the same for

two billion years.


104


INFORMATION AND COMMUNICATION

TECHNOLOGY (“ICT”)

In 2011, the Information, Communication and

Technology (“ICT”) Department continues

to provide high quality, reliable service and

support to SYABAS and create effi cient and

secure environment to increase productivity

and promote sustainability with the users, as

follows:-

(i) Maintain an up-to-date ICT infrastructure.

(ii) Upgrade for SYABAS Enterprise

Communication Backbone (SECOB)

from Streamyx to TM Premier IPVPN

Service over Metro-Ethernet technology,

enhances existing network performance

with faster access to SYABAS Integrated

Water Management System (SWIMS)

applications.

(iii) Meet the internal users’ needs from time

to time. In 2011, the ICT Department

has attended to 120 numbers of system

enhancements requests.

(iv) With SYABAS’ implementation of SAP

Electronic Financial Management Systems

(“EFMS”) in 2011, the ICT Department

has integrated the in-house applications,

namely iJob, iClaim, iRefund, iUtilities

with SAP EFMS.

The following application systems were

enhanced and completed, ready to be rolled

out in 2012:-

• The Development Plan Approval

Submission Management System

(eDPLAS) which enables online

‘development plan’ submission by

consultant and approval online by SYABAS.

• The Point of Sale (iPOS) system to replace

the current RM20.00 system to process

payment at SYABAS’ counters. It integrates

with SYABAS’ billing system to check the

consumer account status.

• The iMigrasi system which processes

online migration application.

To keep up with changing needs, early in 2011,

the ICT Department rolled out a new design

of eMesra intranet portal, a One-Stop Centre

for all electronic communication between

SYABAS’ employees, departments and district.

The new eMesra intranet portal is refreshing,

inviting and made it easier for employees

to communicate, to seek information and

accessing SYABAS’ daily operation application.

In conclusion, the ICT Department has

accomplished all of its goals for 2010-2011.

Public Awareness Programme

held at Tesco Shah Alam

on 29 October 2011


at Pangsapuri Bustan,

Shamelin, Cheras

on 17 December 2011

105


Operations Review Puncak Oil & Gas Sdn Bhd GOM Resources Sdn Bhd

(formerly known as Global Offshore Malaysia Sdn Bhd)

OIL & GAS

As the Group already has tremendous

strengths in the natural resources arena, this

new venture makes excellent sense. With the

ever-increasing global demand for energy, far

from being a sunset industry, Oil & Gas is an

industry with huge potential.

The regional forecast for the oil and gas

sector is promising. At a three-day Offshore

Asia Conference in February 2012, there was

a consensus that oil is on an upward trend,

and the industry’s capital expenditure is likely

to reach record levels in the coming year. All

activities are increasing, which will present

opportunities in new frontier areas through

innovations in products, services and working

methods. Geographically diverse exploration is

on the rise; deepwater continues to dominate

short-term expenditure; and fl oating liquefi ed

natural gas is another growing niche market.

In Malaysia, experts concur that, although

the mature fi elds are in decline, the largest

producers are developing new projects that

should help to offset falling output. Analysts

forecast that Malaysia’s average output will

rise from 632,200 barrels per day in 2012 to a

new peak of 881,000 in 2017. They also predict

continuing growth in the country’s gas volumes

and exports.

[Source: Business Monitor International, Malaysia Oil and

Gas Report Q2 2012]

PUNCAK OIL & GAS SDN BHD

In 2011, our initiatives started to bear fruit. As

reported in the Executive Chairman’s Message,

on 28 September 2011, PNHB’s wholly-owned

subsidiary, POG completed the acquisitions of

the total equity of both GOM Resources Sdn Bhd

(formerly known as Global Offshore Malaysia

Sdn Bhd) (“GOM Resources”) and KGL Ltd

(“KGL”) (“Acquisitions”). These Acquisitions

provided a platform for PNHB’s entry into the

Oil & Gas industry.

GOM Resources is involved in the business

of construction and subsea services and

marine support services to the offshore Oil

& Gas industry in Malaysia whilst KGL is

the registered and benefi cial owner of the

pipelaying barge “DLB 264”.

On 23 December 2011, POG was awarded

a contract from Perunding Ranhill

Worley-Muhibbah Consortium to provide a

workbarge, workboat and support vessels

for a regasifi cation facilities project at Sungai

Udang, Melaka for Petronas Gas Bhd. The

workbarge is to accomodate up to 300 persons

on board while the work boat is used for

anchor handling and towing. The contract

also includes catering for contractor’s live-in

personnel. Project is expected to be completed

by end of the year.

Looking forward, prospects for the new venture

into the Oil & Gas industry are bright. POG is

well-positioned to bid for projects in regions

across the world where Petroliam Nasional

Berhad (“PETRONAS”) is a player.

KGL’s pipelaying

Derrick Lay Barge (“DLB”) 264

Gas Saving Tips

Car pool to reduce

travel monotony and

save cost.

IN 2009, PUNCAK NIAGA HOLDINGS BHD (“PNHB”) EXPANDED ITS CORPORATE VISION BEYOND

THE WATER INDUSTRY BY DECLARING ITS INTENTION TO EMERGE AS A SIGNIFICANT PLAYER

IN THE OIL & GAS SECTOR WHICH CULMINATED IN THE ACQUISITIONS OF TWO SIZEABLE OIL

& GAS COMPANIES BY PUNCAK OIL & GAS SDN BHD (“POG”) AS FURTHER ELABORATED IN

THE SECTIONS BELOW.


106

Operations Review Puncak Oil & Gas Sdn Bhd GOM Resources Sdn Bhd

(formerly known as Global Offshore Malaysia Sdn Bhd)

GOM RESOURCES SDN BHD

(FORMERLY KNOWN AS GLOBAL OFFSHORE

MALAYSIA SDN BHD) (“GOM RESOURCES”)

GOM Resources is involved in the business of

engineering, procurement, installation and

commissioning (“EPIC”) contracting services,

subsea services and marine support services

to the offshore Oil & Gas industry in Malaysia.

GOM Resources has been awarded by

PETRONAS the Integrated Transportation

and Installation of Offshore Facilities contract

for “Pipelay Barge Package A” for Petronas

Carigali Sdn Bhd. GOM Resources had a proven

track record in undertaking oil and gas works,

both at home and abroad.

GOM Resources has a range of expertise

from simple jobs to highly complex jobs

involving pipelay barge “DLB 264”. It has

also successfully overcome challenging

environments, obstacles and circumstances,

even in the harshest conditions.

In response to the strong demand for the

decommissioning of platforms, pipe-lines and

other subsurface facilities, GOM Resources

is building a committed team with a wealth

of skills and experience so as to enable POG,

GOM Resources and PNHB to deliver

exceptional results for PETRONAS. The

contribution from the Oil & Gas industry will

provide the Group with sustainable income and

profi t and enable the transfer of capabilities

and expertise from GOM Resources to POG

and highlight any areas where our resources

need to be upgraded.

POG Group are looking at off-shore pipe

laying, transportation and installation and

construction, locally and internationally. We

are actively tendering for works in these areas.

Our long term business plan is to go into

exploration and production (E&P) in Malaysia

as well as regionally. In order for us to do so,

we are looking at partnering foreign E&P

companies in marginal (Risk Service Contract)

and brownfi eld developments. We are also

looking into the potential of participating

in downstream mega projects and other

developments in Sabah.

POG Group will continue to grow its Oil & Gas

operations organically and/or by merger and

acquisition, and aims to become a worthwhile

contributor to the Group’s profi tability within

the next two years.

Pre-commissioning work carried

out by GOM Resources.

POG Group will continue to grow its Oil & Gas operations organically and/or by merger and acquisition.

107


Business Expansion

MALAYSIA

Sarawak

Puncak Niaga Holdings Berhad (“PNHB”) extended its business activities in water related construction to Sarawak via a 40:60 unincorporated joint venture between PNHB and Quality Concrete Holdings Bhd namely, Konsortium Puncak Niaga Holdings Bhd – Quality Concrete. Konsortium Puncak Niaga Holdings Bhd – Quality Concrete clinched a RM667.32 million contract for a Rural Water Supply Project in Sarawak (“Sarawak BALB Project”) from the Rural and Regional Development Ministry.

The Sarawak BALB Project, which is part of the Federal Government’s initiative to improve the living standards of the rural population in Sarawak, will cover over 91,000 households and will increase clean water provision for rural areas from 59% to 90% by end of 2012.

To date, Konsortium Puncak Niaga Holdings Bhd – Quality Concrete has been awarded 15 work orders, the scope of which includes reticulation works, pipe-laying, the construction of three WTPs, booster pumping stations and reservoirs spread over six Divisions from Kuching to Sibu.

So far, four work orders have been successfully completed on time and the remaining work orders are expected to be completed by the end of 2012.

Kelana Jaya

In November 2011, Syarikat Prasarana Negara Bhd awarded Puncak Niaga (M) Sdn Bhd (“PNSB”) a RM15.3 million contract under the Kelana Jaya (KLJ) Line Extension Project involving the relocation works of SYABAS mains and Indah Water Konsortium Sdn Bhd (“IWK”) sewer pipes. The project is scheduled for completion by the end of June 2012.

Project Mass Rapid Transit (MRT) Lembah Klang

Through a competitive tender process, PNSB has been awarded the works for Relocation of

Existing Sewerage & Water Main For Cochrane Launching Shaft – Package D2 by Syarikat Prasarana Negara Berhad under Projek Mass Rapid Transit Lembah Kelang: Jajaran Sungai Buloh-Kajang. The scope of works is the relocation of SYABAS main pipes and to carry out cement/sand grouting for existing sewer main pipes under the existing road. The project was completed on 15 March 2012.

CHINA

In recent years, the economy of the People’s Republic of China (“PRC”) has proven its resilience in the face of fi nancial turmoil elsewhere in the world. The collapse in international export markets in 2009 initially hit the PRC economy hard, but it rebounded, quickly returning to growth. In February 2011, it overtook Japan to become the world’s second-largest economy (source: BBC).

China’s GDP in the coming decade is predicted to advance, albeit at a slower rate of 7.3%, in contrast to the average of 10.7% it has registered over the past ten years. In the coming year, Beijing plans to exercise prudent fi scal policies to hold consumer prices stable.

In 2009-2015, China has vowed to double its spending on environmental protection, and analysts state that the possible increase to CNY 3.1 trillion (USD 454 billion) will benefi t equipment manufacturers in water treatment, air pollution control, and also developers in the renewable energy sector (source: Bloomberg).

The PNHB Group entered the Chinese market in 2008, seizing the tremendous growth opportunities afforded by the PRC’s rapid rate of development. Today, our work in China, comprising both water supply and wastewater projects, is one of the linchpins of our regional expansion strategy.

Our 98.65% owned Singapore subsidiary, Sino Water Pte Ltd (“Sino Water”) is leading the campaign to capture a greater share of the Chinese market. Sino Water is collaborating with and directing a number of local Chinese provincial subsidiaries in matters of project execution.

Kelana Jaya (KLJ)

Line Extension Project

- pipe laying works


108

Business Expansion

Lushan Water Supply Project Located in Lushan County, Pingdingshan City, Henan Province

Luwei (Pingdingshan) Water Co Ltd, a Sino Water 91.34% owned China subsidiary, currently supplies water to approximately 6,000 consumer accounts in Lushan County Township from the existing 2 million-litre-per day (“MLD”) underground pumping stations, with the daily supply ranging from 1.4 MLD to 1.8 MLD. Water is abstracted from underground and supplied directly to consumers by fi ve pumping stations.

Lushan Water Supply Project involves the rehabilitation of the existing water supply system in Lushan County Township and the construction of a new 30 MLD water treatment plant (“30 MLD WTP”) under Phase 1, together with the laying of a 14.56 km length of raw water pipeline and a new reticulation pipeline in Lushan County Township.

The construction of the 30 MLD WTP was completed in 2010. As at 31 December 2011, the laying of the raw water pipelines was 99.36% completed and was subsequently fully completed in end of February 2012. Upon completion of the pipelines, water from Zhaopingdai Reservoir will be conveyed to the 30 MLD WTP for the commencement of testing & commissioning works. The 30 MLD WTP is expected to be operational by early July 2012, supplying treated water to the consumers in Lushan County Township. With that, the private wells will be gradually closed and this will mark a new era for water supply in Lushan County.

The cost of the construction of the 30 MLD WTP and the laying of the distribution pipeline is 66% funded by a World Bank Loan.

A 30km reticulation pipeline will be laid or replaced to cover the supply of treated water for approximately 130,000 people in Lushan County Township. To date, some 24 km of the reticulation pipeline work is completed, with a further 6 km to be laid and/or replaced by August 2012. Approximately 18,000 new consumer accounts are expected to be connected to this pipeline network by 2015. In

the next two years, more effi cient systems for registering water usage, billings, collections and customer service will be established for implementation in 2012/2013 in Lushan County Township to serve the estimated 130,000 population.

Binzhou Wastewater Project Located in Yangxin County, Binzhou City, Shandong Province.

The project, headed by Sino Water’s 100% owned China subsidiary, Xinnuo Water (Binzhou) Co. Ltd., involves the construction of a 30 MLD wastewater treatment plant (“WWTP”) in two phases of 15 MLD each.

The WWTP will treat wastewater from the nearby factories that house the tanneries, building material manufacturers, and chemical producers. The wastewater pipelines from these factories have already been laid and are connected to the inlet of the WWTP. At the completion of the project, the waste from these factories, estimated at 15 MLD, will be channeled to the WWTP for further treatment before being discharged into the nearby river.

The construction of the Phase 1 15 MLD wastewater plant and the M & E works has been completed. The WWTP’s testing and commissioning is curently ongoing.

With the completion and operational commencement of the new Binzhou WWTP, the current environmental degradation caused by industrial waste will be signifi cantly reduced, resulting in a better environment for Laodian Town in general and the Chenlou Industrial Park in particular.

Luancheng Dayu Water Supply Project Located in Luancheng County, Shijiazhuang City, Hebei Province

Sino Water’s 80% owned China subsidiary, Luancheng Dayu Water Supply Co Ltd, has been supplying water to 3,493 consumers in Luancheng County Township, with the daily supply ranging from 1.8 MLD to 2.5 MLD. Water is abstracted from underground and supplied directly to consumers by ten pumping stations.

Lushan Water Supply Project

- Treated Water Pump House

Lushan Water Supply Project

- Administration Offi ce

109


Business Expansion

Refl ecting delays in the commencement of the South-to-North Water Diversion Project by the Central Government of China, the construction of the proposed 15 MLD WTP to supply treated water for domestic use and the proposed 50 MLD WTP to supply water for industrial use, is now scheduled to begin in 2015 or 2016 and expected to be completed by 2017/2018.

Yuanshi Industrial Water Supply ProjectLocated in Yuanshi County, Shijiazhuang City, Hebei Province

Sino Water’s 80% owned China subsidiary, Hebei Sino Panlong Industrial Water Supply Co Ltd, supplies water abstracted fromBa-Yi Reservoir directly to the thermal plant in Yuanshi County by gravity fl ow via a 15.5 km pipeline. There were no major construction works in 2011.

BUSINESS DEVELOPMENT IN INDIA AND INDOCHINA

The acute need to improve water supply and sanitation in India and Indochina, and the governmental budgets allocated to these works, present the Group with immense opportunities for overseas business development.

India

After a return to trend growth in fi scal year 2010-11, India’s economic growth is likely to slow to 7-8 percent in the next two years. The slowdown is a result of uncertainties weighing down investment, tighter macroeconomic policies intended to fi ght still-high infl ation, and the base effect of the strong agricultural rebound in FY2010-11. Slow growth in core Organization for Economic Cooperation and Development (“OECD”) countries means domestic drivers for growth will have to be strengthened. This would include progress on important structural reforms, and further measures to achieve fi scal consolidation and reorient government spending towards investment and growth. Even then, risks from the uncertain international environment are high. Policymakers would do well in reviewing crisis preparedness at this time.

(Source: World Bank, Economic Update)

On 10 March 2011, PNHB acquired 9,999 equity shares of Rs10/- each in Puncak Niaga Infrastructures & Projects Private Limited (“PNIP Pte Ltd”), representing 99.99% of the total issued and paid-up share capital of PNIP Pte Ltd. The remaining 0.01% (one equity share of Rs10/-) was held by Puncak Niaga (India) Sdn Bhd, with a benefi cial holding vesting with PNHB. PNIP Pte Ltd was set up to facilitate PNHB’s expansion plans to pursue business development efforts to secure new business in India.

On 15 March 2011, PNHB entered into a Memorandum of Understanding (“MoU”) with Ramky Infrastructure Limited (“RIL”) to form an exclusive collaboration in the form of an unincorporated joint venture aimed at sourcing potential water and water-related projects in India. The MoU lapsed on 14 March 2012.

Vietnam

Growth for the six Southeast Asian economies, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam is projected to average 5.6% during 2012 – 2016. Global uncertainties and natural disasters shed a negative light on the growth prospects of the region but compared with sluggish OECD economies, overall Southeast Asia will have a solid growth performance through 2016.

(Source: OECD Southeast Asian Economic Outlook)

Recognising these opportunities, on 3 March 2011, PNHB set up a Representative Offi ce in Ho Chi Minh City to explore and identify potential water supply and water related projects in Vietnam. The Vietnam Representative Offi ce will also look into the possibility of collaboration with local partners in Vietnam.

On 3 March 2011, PNHB set up a Representative Offi ce in Ho Chi Minh City to explore and identify potential water supply and water related projects in Vietnam.

Water Facts

Pure water has a

neutral PH of 7


110

Delivering Service Excellence

SYABAS’ CLIENT CHARTER

The public will be notifi ed of scheduled interruptions of

water supply exceeding 24 hours through mass media

at least two days in advance. However, SYABAS will

endeavor to notify the public seven days in advance of such

interruptions.

Walk-in consumers at SYABAS’ Districts Offi ces and

Headquarters are attended to within 15 minutes.

Any enquiries or written complaints through PUSPEL,

telephone, fax, e-mail, Short Messaging Services (“SMS”),

Multimedia System (“MMS”) and mails will be acknowledged

within 30 minutes after receipt. The company will revert

within 24 hours to inform the consumers on the remedial

action to be taken.

For mails received, correspondence executives will call the

senders upon receiving the mails if the contact numbers

are available.

In delivering service excellence, creating awareness,

educating and managing the complaints response

immediately, we, the customer service department, as the

focal point of SYABAS will be responsible to deliver both

the expectations of the consumers and the management.

Consumers’ satisfaction will be our key driver towards a

total consumer’s experience.

Technical visit by

Pengurusan Pusat Dialisis

Negeri Selangor and the

Federal Territories of Kuala

Lumpur and Putrajaya at

SYABAS’ PUSPEL Contact Centre

Syarikat Bekalan Air Selangor Sdn Bhd

(“SYABAS”) provides its customers with quick,

courteous and excellent service through its

highly acclaimed and award winning one-stop

contact centre, Pusat Perkhidmatan Pelanggan

(“PUSPEL”). At PUSPEL, customers receive

prompt feedback on all water and water supply

related queries, reports and complaints in


Lumpur and Putrajaya. PUSPEL’s logo with

the service motto, “Friendly, Committed, and

Trusted” was launched on 10 January 2009 as

a symbol of our relentless efforts and ongoing

commitment to consumers.

PUSPEL operates 24 hours a day, 365 days a

year. Customers may interact with PUSPEL

staff via toll-free number, facsimile, Short

Messaging Service (“SMS”), emails and letters.

PUSPEL’s staff practise “SMART” principles

in their daily work, namely, S – Smile,

M – Manageable, A – Accessible, R – Reliable

and T – Timely.

111



PUSPEL maintains a Customer Database

Management (“CDM”) section. PUSPEL is

targeting a total of 1.6 million contacts for

the CDM, who can expect to receive water

disruption notices directly in SYABAS’ areas

of operations. As at 31 December 2011, a total

of 591,603 data of consumers’ accounts with

mobile numbers or email addresses had been

collected.

Consumers can also follow PUSPEL via social

network tools, namely Twitter and Facebook,

where users can receive information regarding

water disruptions in real-time for scheduled

and unscheduled disruptions. In addition,

PUSPEL continues to introduce workable

initiatives and innovations that are geared

towards increasing effi ciency and productivity

at the workplace, while striving to minimise

costs.

PUSPEL is a highly acclaimed and integrated

consumer contact centre established by

SYABAS as one of several consumer-oriented

efforts and initiatives for the benefi t of the

consumers and the general public. PUSPEL

has been entrusted to undertake vital roles

in ensuring that consumers and the general

public receive the highest level of services

as prescribed in the Concession Agreement.

PUSPEL is part of a Customer Service

Department within SYABAS which comprises

fi ve major integrated core functions namely

PUSPEL/Contact Centre, Counter Services,

Unit Kerjasama Informasi Pelanggan

(“YAKIN”), Industrial Consumer Unit (“ICU”),

and Customer Database Management

(“CDM”).

To ensure an immediate response to

customer complaints, our PUSPEL agents

are always ready to service consumers.

According to SYABAS’ Client Charter, all

enquiries, complaints and requests should

be acknowledged within 30 minutes after

receipt, and remedial actions should be taken

within 24 hours. Based on reports, in 2011,

PUSPEL met 100% of SYABAS’ Client Charter’s

requirements.

All cases are recorded in our complaint

management system known as the Pivotal

System. The communication between PUSPEL

and the ten SYABAS’ District Offi ces is also

via the Pivotal System to ensure diligent and

timely follow-up. Thus, Contact Centre agents

are able to update consumers on the current

status of their enquiries or complaints.

COUNTER SERVICE

PUSPEL constantly seeks to enhance its

relationship with its customers. Walk-in

customers can expect to be served within 15

minutes, in accordance with SYABAS’ Client

Charter, and all counters adhere to PUSPEL’s

code of ethics, “M.E.S.R.A.” which carries the

meaning, M – “Minat” (Interest), E – “Efi sien”

(Effi cient), S – “Sabar” (Patience), R – “Ramah”

(Friendly) and A – “Adil” (Just).

For 2011, PUSPEL achieved a Quality

Management System (“QMS”) rating of only a

three minute waiting period and a nine minute

serving time, an achievement surpassing

SYABAS’ Client Charter’s requirement.

In 2011, the ten District Offi ces served

360,954 customers over the counter. In a bid

to further improve our service, we conducted

Professional Customer Service Training to

equip our counter staff to handle customer

queries in a courteous, polite and thoughtful

manner. To further ensure our quality of

service, our Head of Unit regularly conducts

district site visits to check that all counter

staff are adequately briefed and groomed for

the smooth running of the counter services

and to provide the best of services in line with

our service motto, “Friendly, Committed and

Trusted”.

Additionally, all counter services sections

submit consumer survey forms twice a year

to PUSPEL Headquarters, giving consumer

feedback and suggesting ways to improve our

services in the future.

In 2011, the ten District Offi ces served 360,954 customers over the counter.


112


PUSPEL’s “follow@puspel” online interaction

channels on the social networks, Twitter

and Facebook which allow our customers

to connect with SYABAS and to lodge their

complaints or queries easily and effortlessly,

are progressing well and have created very

impactful experience to the consumers

since their launch on 14 January 2010. As at

25 January 2012, PUSPEL had gained a total

of 2,267 followers on Twitter and 3,497 friends

and fans on Facebook. SYABAS is continuously

seeking to make these online interaction

channels more effective and interesting for our

consumers.

Counter Service serves as a “one stop

solution center” at all ten SYABAS’ District

Offi ces. Among services provided at the

counter are: new applications, opening new

accounts, closing accounts, change of account

ownership, bill payment, checking and printing

of bills, payment of arrears, disconnection of

service on request, reconnection of service,

work order change meter, meter testing, meter

lost/faulty, refund of deposit, buying water via

tanker and renting of static tank and general

inquiries. To meet consumers’ expectations,

we seek to deliver these services in a manner

that is committed, reliable and courteous, with

our speed of response as the key indicator.

CONTACT CENTRE

PUSPEL toll free number, 1-800-88-5252,

continues to be widely publicised for the

benefi t of the consumers in Selangor and

the Federal Territories of Kuala Lumpur

and Putrajaya. Consumers are assured that

their complaints are attended to and will be

addressed immediately. In 2011, PUSPEL

recorded 290,371 cases resulting from 640,242

calls received and handled. 223,551 cases

were closed during the year. In order to deliver

service excellence, it is our policy that all calls

received must be picked up in less than 6

seconds and the handling time must be within

3 minutes. In 2011, we achieved this target with

calls answered in an average of 3.03 seconds.

Meanwhile, the average handling time per call

agent is 2 minutes and 51 seconds.

Besides contacting the call centre, consumers

are encouraged to interact via our non-voice

channels such as e-mail, letter, SMS, fax,

Facebook and Twitter. In delivering service

excellence, we are ensuring that we have

various channels available for consumers to

contact and interact with us easily and without

hassle.

PUSPEL Statistics

2006 2007 2008 2009 2010 2011

Calls received and handled 630,666 583,052 600,865 567,970 538,525 640,242Cases for investigation and remedial action 231,845 227,098 196,813 204,430 202,270 223, 551Remaining Calls * 398,821 355,954 404,052 363,540 336,255 416,691

* The remaining calls were either repeat calls, enquires about payment and billing, reports of pipe bursts and pipe leaks, reports on water theft and other matters.

Technical visit by PUSPANITA at

SYABAS’ PUSPEL Contact Centre

113



The number of calls received and handled in 2011 increased by 18.9% to 640,242 calls compared to 538,525 calls in 2010.

The Petaling District had the highest number of cases (69,789 cases), followed by the Klang District and the Kuala Lumpur District with 52,784 and 41,819 cases, respectively.

Below is a summary of pipe leaks and pipe bursts cases reported in 2010 and 2011:

2010 2011

Pipe Leaks 84,848 72,824Pipe Bursts 4,067 5,093

All of the above cases were repaired and attended within the targeted time as shown below:-

SYABAS’Pipe Corrective internal Measurement Action target Achieved (Target) (hour) (hour)

200 mm 1 day 4 2.09201-600 mm 2 days 10 6.97601-1,200 mm 3 days 16 10.85 1,200mm 4 days 20 6.75

Breakdown of Cases for Investigation and Remedial Action in 2011

Type of Cases 2010 2011

Water Supply Problems 165,209 174,572Billing Problems 20,371 23,890Faulty Water Meters 8,043 13,024Disconnection 8,352 11,744Others 295 321

TOTAL 202,270 *223, 551

Note: * A total of 223,551 cases out of 290,371 cases were

closed for 2011.

Cases of water supply problems increased from 165,209 in 2010 to 174,572 in 2011, a rise of 5.67%. During this time, cases of billing problems also rose by 17.3% to 23,890 cases in 2011, up from 20,371 cases in 2010. The cases on faulty water meters issue also rose from 8,043 cases in 2010 to 13,024 cases in 2011.

In spite of the increase in cases for investigation and remedial action in 2011, PUSPEL received 159 calls from consumers that commended its effi ciency and initiative.

In 2011, PUSPEL acknowledged all calls and correspondences within 30 minutes after receipt. 99.23% of calls and correspondences surpassed this target. The PUSPEL Contact Centre KPIs were established to ensure that staff handle each call in the most effi cient and effective way. Below are our achievements in 2011:-

KPI

Achieved

Criteria KPI Set in 2011

% of Not 1% 0.35%abandoned calls (hourly average)Average answering 6.0 3.03time (seconds) seconds secondsAverage call 3 minutes 2 minuteshandling time 51 seconds(minutes) % of call feedback 100% 122% As illustrated above, PUSPEL’s call centre exceeded all its KPIs targets for 2011.

Calls received by PUSPEL for year 2011

Month Volume of calls

January 42,543February 42,958March 54,306April 56,630May 52,075June 71,774July 56,488August 47,051September 48,927October 56,801November 53,269December 57,420

TOTAL 640,242

Average calls received per day = 1,788

Visit by students from

Universiti Putra Malaysia to

SSP2 WTP

Technical visit by Government

Senior Offi cers from INTAN


114

Visitors are always welcome to visit our PUSPEL

Contact Center as we encourage knowledge

sharing and exchange of information as well

as discussions about areas of common interest

in relation to treated water supply. This helps

us to improve our services, to become a quality

role model for other companies.

In 2011, SYABAS hosted the following

technical visits by various agencies at SYABAS’

Headquarters and at the PUSPEL Contact

Centre:-

Date Visitors

7 March 2011 Government Senior Offi cers

from INTAN

23 March 2011 Water, Energy Consumer

Association and Global

Environmental Centre

24 March 2011 Malaysian Environmental NGO

(MENGO)

25 March 2011 Yayasan Anak Warisan Alam

and Pusat Aduan Pengguna

Nasional

5 April 2011 Persatuan Pekilang-pekilang

Malaysia

6 April 2011 Representative of Tamil Nesan

7 April 2011 Public Utility Board, Singapore

10 May 2011 Representative from Industri

Perdagangan Zon Bebas

Utama

16 May 2011 National Water and

Wastewater Organisation

of Iran

18 May 2011 Persatuan Suri dan Anggota

Wanita Perkhidmatan

Awam Malaysia (PUSPANITA)

21 June 2011 Persatuan Pentadbiran

Industri Bangi

22 June 2011 Air Kelantan Sdn Bhd

11 July 2011 Top Management of Kumpulan

Wang Simpanan Pekerja

(KWSP)

18 July 2011 Tenaga Nasional Berhad (TNB)

19 July 2011 Lembaga Zakat Selangor (LZS)

21 November Delegation from the 2nd IWA

2011 Development Congress and

Exhibition 2011

Date Visitors

29 November Representative from

2011 Pengurusan Pusat Dialisis

Negeri Selangor and the

Federal Territories of

Kuala Lumpur and Putrajaya

6 December Representative from Pusat

2011 Dialisis Negeri Selangor,

Wilayah Persekutuan

Kuala Lumpur and Putrajaya

Unit Kerjasama Informasi Pelanggan

(“YAKIN”)

To meet the needs of customers in Selangor

and the Federal Territories of Kuala Lumpur

and Putrajaya, the SYABAS’ Customer Service

Department has a separate unit, YAKIN,

which is community based. YAKIN engages

in activities such as conducting site visits,

briefi ngs on pipe replacement programmes

and dialogue sessions to promote consumer

relationships with Residents’ Associations,

“Ketua Kampong/Ketua Taman” and various

agencies in order to give personalised service,

creating awareness on issues related to water

supply and providing educational programmes

to the community. A total of 2,922 activities and

programmes were conducted in 2011.

YAKIN also performs domestic consumer

education activities via dialogue sessions,

briefi ngs and presentations, product and

services demonstrations, public relations and

community based programmes.


Sua Mesra Programme at

Little India

PUSPEL’s Call Agents attending

to telephone calls

115


Skuad Ronda YAKIN and Sua Mesra are

two of the main programmes spearheaded

by YAKIN as its vehicles for enhancing

consumer relationships and delivering

educational activities. Sua Mesra programme

focuses on briefi ngs, dialogues and product

demonstrations and allow a free fl ow of

communication between SYABAS and the

consumers on matters related to water issues.

Skuad Ronda YAKIN programme is a customer

relationship programme comprising personnel

from YAKIN, Operation & Maintenance and

Water Quality Departments of SYABAS

together with the community leader, business

community and consumers of a particular

location randomly check the standard and

quality of water supplied by SYABAS at that

particular area. It’s an approach by SYABAS as

a form of assurance that SYABAS only supply

quality water to the consumers.

In 2011, YAKIN successfully conducted a total

of 278 consumers education and awareness

programmes/activities which involved

domestic consumers in Selangor and the


Putrajaya. The positive response received

from the consumers involved indicates that

consumer satisfaction is our priority.

The unit exceeded its KPI targets for 2011,

which were as follows:-

AchievementsActivity KPI in 2011

Dialogues 40 99

Social & Welfare 40 179

Visits 2280 2644

Below are the KPIs set for 2011 for consumer

educational activities (“Activities”) by area :

AchievementsArea KPI in 2011 (Average (Average per month) per month)

Gombak 8 Activities 31 Activities

Hulu Langat 8 Activities 29 Activities

Hulu Selangor 8 Activities 24 Activities

Klang 8 Activities 22 Activities

Kuala Langat 8 Activities 29 Activities

Kuala Lumpur 8 Activities 45 Activities

Kuala Selangor 8 Activities 17 Activities

Petaling Jaya 8 Activities 40 Activities

Sabak Bernam 8 Activities 19 Activities

Sepang 8 Activities 22 Activities

Total 80 278

All areas exceeded the KPI requirement for the

number of Activities that were conducted on

average per month.

Kuala Lumpur, being the area that conducted

the highest number of Activities on average per

month basis, exceeded the KPI requirement

by 462%, having 45 Activities on average per

month as compared to eight activities per

month as per the KPI requirement.

Aside from interactive programmes with the

local communities, YAKIN operates a system

to notify community leaders and residential

associations of scheduled Water Supply

Disruptions (“WSD”). YAKIN is sensitive to

resident feedback on WSDs, and sends out

notices to Community Heads and Residential

Associations two working days prior to the

scheduled WSD so that residents in the

affected areas can prepare for the temporary

water shortage. A total of 35,774 notices were

sent by YAKIN in 2011 comprising of 34,009

SMSes and 1,765 emails.


Gas Saving Tips

Newer gas stoves

use pilot-less ignition,

which saves gas.


116

In 2011, there were 2,326 cases of scheduled

WSDs. In the event of a scheduled water

disruption, the public will be notifi ed by

SYABAS at least two days in advance via mass

media / fl yers as stipulated in SYABAS’ Client

Charter. However, SYABAS will endeavour

to inform the public seven days in advance of

such interruptions.

During a major unscheduled water disruption

such as a burst pipe or failure of water

treatment plants which would affect a huge

number of consumers, SYABAS will activate an

Emergency Response Plan (“ERP”) to ensure

the most effective response with minimal

disruption to the consumers. In 2011, 15 cases

of ERP activation were recorded.

INDUSTRIAL CONSUMER UNIT (“ICU”)

The ICU, PUSPEL’s customer service arm for

industrial customers, provides a single point of

enquiry for all industrial consumers who have

problems with their water supply.

The unit is responsible for enhancing public

relations, building rapport with industrial

customers and creating business visibility

through relationships with various industrial

bodies. The ICU team is responsible for

promoting good public relations, rapport and

visibility through visits to individual consumers

and trade associations by sending advance

notice on scheduled maintenance, handle

cases reported by trade consumers and

participating in trade programmes. A total

of 11,666 SMSes and 10,238 emails on these

notices were sent by the ICU in 2011.

Among the ICU’s other duties are disseminating

information on water disruption, collecting

data and updating the database of industrial

customer profi les, conducting awareness

programmes, and taking action on all cases

reported by industrial customers.

The ICU also actively alerts the Industrial,

Commercial and Trade Associations to water

supply related matters, as well as information

on other SYABAS’ services and products. The

unit constantly updates PUSPEL headquarters

with monthly activity reports, the data from

which is monitored, analysed and compiled.

In 2011, ICU staff visited a total of 2,590 trade

consumers and ran 163 programmes which

include:

• Dialogue/Briefi ngs (Sua Mesra)

- 81 programmes

• Public Relation Programs

(Sports, Gotong Royong etc)

- 77 programmes

• Educational Programmes

( Visits to PUSPEL, WTPs etc)

- 5 programmes


SYABAS participated in

GREEN EXPO 2011 held at

Tunku Abdul Rahman College,

Setapak

117


Water Quality surveillance

by Central Laboratory

Delivering Quality

PUNCAK NIAGA (M) SDN BHD (“PNSB”)

Water Quality Surveillance Programme

(“WQS Programme”)

PNSB has implemented via its Central

Laboratory (“CL”) a WQS Programme to ensure

it consistently delivers a high quality water

supply to its customers. Raw and treated

water at the Water Treatment Plants (“WTPs”)

is monitored through the WQS Programme to

ensure the water quality meets or surpasses

the standards stipulated by the Ministry of

Health (“MOH”) and is in accordance with

MOH’s Quality Assurance Programme (“MOH’s

QAP”).

The testing and monitoring of raw and treated

water is carried out at PNSB’s CL and is verifi ed

by an Independent Accredited Laboratory.

PNSB ensures that the water quality always

complies with MOH’s National Standard for

Drinking Water Quality (2004) (“NSDWQ”). We

also conduct bacteriological tests every day at

all our WTPs which are more stringent than

the weekly tests that are normally required.

Water Safety Plan

The World Health Organization (“WHO”), in

the third edition of its Guidelines for Drinking

Water Quality, has promoted the development

and implementation of risk management

strategies to ensure the safety of drinking

water supplies through the control of

hazardous constituents in water from source

to consumers’ taps.

WHO’s approach is termed the Water Safety

Plan (“WSP”) and involves a comprehensive

risk assessment and risk management

approach with built-in Hazard Analysis and

Critical Control Point (“HACCP”) principles

that encompass all steps in water supply from

catchment to consumer to ensure the safety of

our drinking water supplies. The WSP concept

was fully endorsed by the International Water

Association’s Bonn Charter for Safe Drinking

Water.

Australia, Europe, Latin America, the

Caribbean and Singapore have adopted WSP

into their water quality management to ensure

a high standard of drinking water supplies.

In line with PNSB’s mission to consistently

provide high quality water to consumers, PNSB

has initiated plans to adopt the WSP concept

as a tool to manage drinking water quality and

launched the implementation of WSP in 2010.

In 2011, PNSB’s WSP Steering Committee

developed the required WSP manual and

procedures. Through workshops that were

held between July and October 2011, WSP was

developed for fi ve WTPs, namely Sungai (“Sg”)

Langat, Sg Batu, North Hummock, Wangsa

Maju and SSP2 WTPs. PNSB will implement

the WSP at these WTPs in 2012 through

controlling the identifi ed Critical Control

Points (“CCP”) and by monitoring and verifying

the effectiveness of the WSP.

Central Laboratory (“CL”)

PNSB’s CL, which is certifi ed for MS ISO/IEC17025,

is responsible for conducting water quality

surveillance of raw and treated water at all

WTPs operated by PNSB which adheres to the

MOH’s NSDWQ.

In June 2009, CL successfully renewed

the accreditation certifi cation with seven

additional water quality parameters, making

the total accredited water quality analysis as

24 numbers that consist of microbiological,

Group 1 (physical) and Group 2 (inorganic)

water quality parameters listed in MOH’s

NSDWQ. As part of the on-going laboratory

services enhancement, CL aims to obtain

accreditation for MS ISO/IEC17025 for all water

quality analysis conducted.


118

Based on the water quality monitoring carried out by CL, treated water compliance achieved was 99.9% and raw water compliance achieved was 89.0%.

Delivering Quality

CL has been equipped with an Inductively

Coupled Plasma-Mass Spectrometer

(“ICP-MS”) and a Gas Chromatography-Mass

Spectrometer (“GC-MS”), which will increase

the laboratory’s capability for testing heavy

metals, pesticides and herbicides under Group

3 and Group 4 of the MOH’s NSDWQ. Currently,

the laboratory is in the process of obtaining

accreditation for 20 heavy metal parameters

analysed by the ICP-MS. CL will proceed

to obtain accreditation for these additional

GC-MS parameters once the testing methods

have been established and suffi cient data has

been collected.

CL also provides laboratory testing services for

various activities such as for Puncak Research

& Development, environmental investigations

conducted by WTPs, and process improvement

studies by the Operation & Maintenance

Department.

Other than water quality testing, CL also offers

support to ensure smooth operation of WTPs

as listed below:

• Conducting laboratory assessment for

all WTPs to ensure that the laboratory at

the WTP is maintained in good working

condition.

• Purchasing laboratory consumables and

equipment for all WTPs.

• Conducting maintenance, servicing and

calibration of laboratory equipment used

at all the WTPs to ensure uninterrupted

water quality testing.

• Assisting in the water quality monitoring at

affected WTPs during plant shutdown due

to raw water pollution.

• Providing training for WTP staff in relation

to water quality testing and maintenance

of laboratory and testing equipment.

• Conducting analysis of WTP process

chemical supplied to ensure compliance

with specifi cations so as not to affect plant

production and quality.

• Conducting sieve analysis of fi lter media

for compliance with specifi cation prior to

usage at the WTPs.

Overall, CL achieved 99.9% sampling for

both raw and treated water for all WTPs

operated by PNSB in 2011, an improvement of

approximately 0.1% as compared with 2010.

100% sampling could not be achieved due to

plant shutdown caused by raw water pollution

at Sg Sireh WTP in March 2011.

The 2011 water quality analysis breakdown

as conducted by CL in 2011 and the appointed

Independent Laboratory is as shown below:

Analysis conducted Item for PNSB’s WTP By appointed By Central Independent Laboratory Laboratory

Raw water 6,645 8,151

Treated water 11,524 8,146

Total 34,466

Based on the water quality monitoring carried

out by CL, treated water compliance achieved

was 99.9% and raw water compliance achieved

was 89.0%.

Out of 19,670 analyses conducted for treated

water, 17 cases of non-compliance were

detected, which were mainly due to aluminium

residue which are above the permissible limit

at Sg Serai and Sg Sireh WTPs.

Details of the non-compliance for treated

water at the Sg Serai and Sg Sireh WTPs are

set out under the “Research & Process Unit of

Water Quality and Research Section” below.

119


Sample analysis for

process improvement

Delivering Quality

Research & Process Unit of Water Quality and

Research Section

There were a range of projects and studies

carried out by the Research and Process Unit

(“RPU”) of Water Quality and Research Section

(“WQRS”) in 2011 as part of PNSB’s initiatives

to improve water treatment effi ciencies and to

ensure quality of water supply. The different

categories of project undertaken by RPU

consist of process improvement, water quality,

fi lter performance monitoring and value

added projects. Descriptions of the projects

undertaken by RPU in 2011 are as follows:-

Process Improvement

Process improvement comprises the process

of fi ne-tuning at the WTPs with the objective

to improving the treatment process for

water quality enhancement and production

cost optimisation. RPU also plays the role

of providing solutions for continuous water

treatment process optimisation.

(1) Process Improvement at Sg Sireh WTP

The violation at Sg Sireh WTP was due to

raw water quality problem that normally

occurred during wet season. Numerous

studies have been conducted by PNSB to

improve its treated water quality and some

are ongoing. The treatment of raw water

at Sg Sireh WTP has always required a

high dosage of alum that subsequently

resulted in a high aluminium residue in

the treated water. This is due to the raw

water characteristics of low alkalinity

and high turbidity, and the presence of

organic matter especially aquatic humic

substances.

Various chemicals were tested for at the

plant such as ferric chloride, activated

carbon and sodium aluminate. Although

the laboratory scale study using ferric

chloride showed better fl oc formation

with lower dosage compared to alum,

high colour was observed in the settled

water due to residual iron. Jar tests using

activated carbon and sodium aluminate

as feed chemical were also found to be

ineffective as the use of both activated

carbon and alum resulted in higher settled

water colour and turbidity compared to

when using alum alone for coagulation.

Hence, alum was still found to be the

better coagulant at the plant.

In collaboration with Puncak’s Research

& Development Centre, the use of two

types of equipment has been studied to

optimise the treatment process at Sg Sireh

WTP. A Photometric Dispersion Analyser

(“PDA”) can determine the optimum

coagulant dosage and measure the fl oc

strength while UV 254 can measure the

level of organic matter in the raw water.

As both types of equipment can improve

the treatment process and water quality,

PNSB has plans to install both equipment

at the plant in 2012.

(2) Process Improvement at North Hummock

WTP

In 2011, North Hummock WTP experienced

short fi lter running hours with the fi lter

media cracking and the presence of

mudballs. Assessment and analysis

indicated that the surface of the fi lter

media grain showed a high level of iron

present in comparison with aluminium

and manganese.

Subsequently, a laboratory-scale study

was conducted in September 2011 to

evaluate the effectiveness of different

chemicals namely, chloride of lime,

caustic soda and oxalic acid in fi lter media

cleaning. The study found that oxalic

acid had highest removal of iron (85.2%

reduction), aluminium (92.6% reduction)

and manganese (100% reduction) in

comparison with chloride of lime and

caustic soda. The summarised test results

are as set out in Table A on page 120 of this

Annual Report.


120

Delivering Quality

Based on these results, a plant trial using oxalic acid for fi lter media cleaning will be piloted at one of the fi lters at North Hummock WTP which is expected to commence in 2012.

(3) Ammonia Removal Studies along Sg Langat

Basin, namely Sg Langat, Cheras Mile 11,

Bukit Tampoi and Salak Tinggi WTPs

WTPs located downstream of Sg Langat such as Sg Langat Basin, Cheras Mile 11, Bukit Tampoi and Salak Tinggi WTPs are prone to ammonia pollution. At these WTPs, the ammonia level is monitored on an hourly basis so that prompt action can be taken should the plant be required to shut down due to high levels of ammonia.

Ammonia removal studies using alternative chemical, namely aluminosilicate have been conducted in case there is ever a shortage of supply due to plant shutdown as a result of ammonia pollution.

Based on monitoring of the pilot plant trial conducted at Bukit Tampoi WTP from 22 October 2009 to 1 July 2010, it was observed that the use of aluminosilicate in combination as feed chemical and fi lter medium could increase the plant’s ability to remove ammonia.

Due to the encouraging findings, implementation of aluminosilicate dosing at Salak Tinggi WTP has been considered in an effort to increase production for the plant. The proposed installation of an aluminosilicate dosing system at the plant’s intake is targeted to be initiated in 2012.

(4) Process Improvement at Sg Serai WTP

In 2008, Sg Serai WTP was once shutdown due to raw water quality deterioration in view of the landslides occurring upstream of the raw water intake. Jar tests showed that the raw water could be treated by using both soda ash and alum. Following the installation of the necessary pre-treatment system and plant trial, the plant resumed operations and again supplied water to consumers.

Since operations resumed, the plant encountered frequent treated water violations involving aluminium due to the absence of a fi ltration system to trap fi ne fl ocs escaped from the clarifi er. Plans to upgrade the plant to a full treatment plant have been submitted for approval under CAPEX works but are yet to be approved.

Consequently, a pressure fi lter was installed as a temporary measure to complete the treatment process and solve the violation problem. Since the operation commenced in April 2011, the plant has been able to supply treated water that complies with the MOH’s NSDWQ.

Percentage removal, at optimum concentration Initial Chloride Caustic OxalicParameter level of lime soda acid (%) (10%) (10%) (15%)

Iron (%) 0.725 29.5 17.1 85.2

Aluminium (%) 0.269 24.9 75.1 92.6

Manganese (%) 0.003 0 33.3 100

Note: The study was conducted using sand media sample from Filter No. 7 of North Hummock WTP

Table A - Summary of Findings for Filter Media Cleaning Study at North Hummock WTP

Water Quality testing

Pipeline Inspection

121


Delivering Quality

(5) Process Improvement at Sg Rumput WTP

Sg Rumput WTP adopted UF membrane

technology in 1997 to produce treated

water. Since upgrading to full treatment

using membrane technology, shutdowns

due to high raw water turbidity has been

reduced. However, as the plant has been

operating for four years, a thorough

assessment was conducted to ascertain

the membrane performance.

It was found that the membrane condition

had deteriorated and the membrane had

become coated with mud, which originated

from the raw water it was treating.

Eventhough the fi lter water still meets

the required standard, PNSB is currently

considering replacing the membrane

module to improve further the treated

water quality.

Water Quality Monitoring

In order to ensure the quality of the supplied

treated water to consumers, activities such as

river water quality index programme, treated

water reservoir water quality monitoring and

the monitoring of ammonia level are being

carried out at four critical WTPs.

Water Quality Index Programme

(“WQI Programme”)

A Water Quality Index (WQI) Programme is

conducted on a monthly basis for all WTPs

to determine the cleanliness and suitability

of the raw water for drinking water supply,

aquaculture and irrigation purposes. Details

of the WQI Programme and its fi ndings in

2011 are detailed in the “Preserving Our

Environment” section on pages 152 to 166 of

this Annual Report.

Balancing Reservoir Water Quality Monitoring

Balancing Reservoir Water Quality Monitoring

is conducted on a quarterly basis to determine

whether the reservoir requires cleaning to

ensure that the treated water supply is of high

quality at all times. Details of the Balancing

Reservoir Water Quality Monitoring are set out

in the “Preserving Our Environment” section

on pages 152 to 166 of this Annual Report.

Ammonia Level Monitoring Along Sg Langat

Basin

For early detection and necessary action should

the WTPs shut down due to high ammonia

level, the ammonia level at four critical WTPs

along the Sg Langat Basin namely Sg Langat,

Cheras Mile 11, Bukit Tampoi and Salak Tinggi

WTPs are closely monitored on an hourly basis.

In 2011, a total of nine incidences of pollution

occurred where WTPs were shutdown, in

addition to three incidences of water supply

interruptions.

Based on Ammonia Level Monitoring

conducted in 2011, the Summary of Daily

Ammonia Level in the raw and treated water at

the Four WTPs along Sg Langat Basin in 2011

were as summarised below:-

Ammonia WTP Level (mg/L) Raw Water Treated Water Min - Max Min - Max (Average) (Average)

Sungai 0.00 - 0.80 (0.09) 0.00 - 0.16 ( 0.01)

Langat

Cheras 0.00 - 1.50 ( 0.30) 0.00 - 0.07 (0.00)

Mile 11

Salak 0.02 - 2.07 (0.92) 0.00 - 0.96 (0.19)

Tinggi

Bukit 0.04 - 1.50 (0.58) Old :

Tampoi 0.00 - 0.14 (0.01)

New :

0.00 - 0.24 (0.01)

Note: MOH’s standard reading for ammonia level is 1.50 mg/L for both raw and treated water.

A Water Quality Index (WQI) Programme is conducted on a monthly basis for all WTPs to determine the cleanliness and suitability of the raw water for drinking water supply, aquaculture and irrigation purposes.


122

Launching of

World Water Day 2011

celebration

Delivering Quality

Filter Performance Monitoring

Filtration is the fi nal step in the water treatment

process, removing fi ne suspended solids

remaining after the clarifi cation process, and

further cleansing and polishing the treated

water. Monitoring fi lter performance, most

importantly tracking the running hours

headloss fi gures, is critical to ensure that the

fi lter remains in good operating condition.

When a given fi lter has reached its specifi ed

number of running hours or its headloss level,

backwashing is initiated.

Details of the Filter Performance Monitoring

are set out in the “Preserving Our Environment”

section on pages 152 to 166 of this Annual

Report.

Value-Added Project

Other value-added project carried out by

RPU in 2011 is the evaluation of various

compact WTP for use during crisis comprising

conventional treatment and membrane

treatment technology.

SYARIKAT BEKALAN AIR SELANGOR

SDN BHD (“SYABAS”)

Water Quality Improvement Master Plan

Drinking water quality has always been

SYABAS’ top priority. Water quality results

reported in the year ended 31 December 2011

indicated that SYABAS continued to meet the

high standards as set out in MOH’s NSDWQ

and Quality Assurance Programme (“QAP”).

It also complied with the requirement of

the Mandatory Level of Service specifi ed

under the Concession Agreement dated

15 December 2004 signed between SYABAS,

the Federal Government and the State

Government of Selangor (the “Concession

Agreement”).

As part of the policy to continuously improve

water quality, SYABAS has been aggressively

implementing its Water Quality Improvement

Master Plan and the results have been

excellent. The continuous water quality

monitoring at 1,100 water sampling stations

located at the WTP outlets, balancing reservoir

outlets, service reservoirs and distribution

mains has shown that water quality violations

have been greatly reduced. This has resulted

in a reduction of water quality complaints by

consumers compared to the previous years.

Of a total of water quality analyses carried

out by SYABAS and the MOH in 2011, 99.47%

complied with MOH’s NSDWQ with zero

violations for microbiological parameters.

Such compliance level are well within the

acceptable range stipulated by QAP and

stipulated by MOH. Any occurrence of

specifi c incidence of non-compliance with

the standards is taken seriously and SYABAS

investigates thoroughly and, where necessary,

does everything possible to correct any faults.

AIR SCOURING PROGRAMME (“ASP”)

The ASP is designed to systematically clean all

the reticulation pipes. This was done on a six

month cycle in 2008, on a nine month cycle in

2009 and has been done on a 12 month cycle

since 2010. A total of 29 air scouring machines

have been purchased for this purpose. In 2011,

a total of 9,150 km (data as at 31 December 2011)

of air scouring works were performed at

districts’ workable ASP Zones (for reticulation

pipes of sizes between 100 – 200 mm

diameters). The changes made to the cleaning

time period (cycle/frequency) from six months

cycle in 2008 to 12 months cycle in 2011 was

mainly due to the reduction in water quality

complaints. However, approximately 28% of

the reticulation main pipe system could not be

cleaned by the air scouring method and have

been declared as non-workable ASP Zones due

to the unavailability of facilities in the network

such as air insertion point, isolation and scour

valves in the ASP Zones. It was projected that

these facilities would be installed in stages

starting from 2008 onwards depending on the

available and approval from the authorities for

budget under CAPEX. As at 31 December 2011,

the expenditure for installation of the facilities

was RM6.5 million.

123


Inspection at Actifl o Plant,

SSP2 WTP

Delivering Quality

The ASP cleaning of the reticulation system

has contributed to the reduction in water

quality violations and consumers’ water quality

complaints.

AIR SCOURING WORKS

FROM 2009 UNTIL 2011

* Extent of Air Scouring Works 2009 2010 2011Month (Km) (Km) (Km)

Jan 0 904.79 879.67

Feb 0 750.01 725.20

Mar 1,094.18 978.39 1,022.96

Apr 1,095.28 926.08 978.32

May 1,053.78 922.87 887.80

June 1,055.96 903.81 876.52

July 1,235.05 857.83 827.63

Aug 1,096.37 676.60 658.92

Sept 719.63 587.98 591.37

Oct 1,001.33 790.18 707.52

Nov 689.05 699.49 640.31

Dec 202.02 516.68 353.78

Grand

Total 9,242.65 9,514.71 9,150.00

* Notes:I. 2009 (data as at 31 December 2009) – Air Scouring

frequency is on a nine month cycle. Air scouring work started in March 2009).

II. 2010 (data as at 31 December 2010) - Air Scouring frequency is on a 12 month cycle. Air scouring work started in January 2010).

III. 2011 (data as at 31 December 2011) - Air Scouring frequency is on a 12 month cycle. Air scouring work started in January 2011).

IV. Total Air Scouring data (workable/non-workable) for 2010 onwards was based on updated actual/latest information from the online system (WQMS & GIS).

RESERVOIR CLEANING &

INSPECTION PROGRAMME (“RCP”)

Under this programme all service reservoirs

are cleaned manually and thereafter inspected

every six months to test the water quality using

‘depth-samplers’. Subsequent cleaning of

the reservoirs are conducted if water quality

violations are detected.

SYABAS’ distribution system has more

than 1,100 service reservoirs but as at

31 December 2011, 1,028 reservoirs were

active. All these reservoirs have been cleaned

since 2005 except those newly brought

into service.

Under the RCP programme, water quality in

these reservoirs was inspected twice in 2011.

Following this inspection, ten reservoirs were

manually cleaned and 24 were cleaned by

scour fl ushing to remove the sediments at the

bottom of the reservoirs. Wherever possible,

SYABAS minimises water supply interruption

during the cleaning programme by using

the by-pass valves and piping system at the

reservoirs.


124

The Concession Agreement stipulates that the quality of water supplied to consumers must comply with the limits provided by MOH’s NSDWQ.

Delivering Quality

WATER QUALITY SURVEILLANCE

PROGRAMME (“WQS PROGRAMME”)

Quality Assurance Programme by MOH

The Concession Agreement stipulates that

the quality of water supplied to consumers

must comply with the limits provided by

MOH’s NSDWQ. Water quality supplied from

WTPs into SYABAS’ distribution system is

systematically and randomly monitored by

MOH by way of sampling and testing under

QAP. Based on violations recorded by MOH for

residual chlorine, Total Coliform, E. Coli and

aluminium, the percentage violation for each

parameter was well within the QAP limits. In

2011, a monthly average of 2,816 water samples

was taken and 10,418 tests or analyses were

carried out by MOH. The samples were taken

from designated water sampling stations

located at the various WTP outlets, balancing

reservoir outlets, service reservoir outlets

and the distribution system. A total of 125,015

analyses were carried out by MOH in 2011, and

of these, 99.47% complied with MOH’s NSDWQ

with zero violations recorded for microbiological

parameters. The chemical violations

were mostly for parameters Fluoride and

Aluminium which originated from the WTPs.

This result is an improvement from 2010 when

99.21% complied with MOH’s NSDWQ, well

within the MOH’s QAP levels for each of the

parameters.

The summary of 2010 and 2011 MOH’s Water

Quality Assessment for all parameters is as

follows:

MOH Results For 2010 - 2011 2011 2010 Nos. Of Nos. Of Compliance Compliance Tests Violations (%) (%)

125,015 667 99.47 99.21

In-house Water Quality Assessment

In June 2006, SYABAS started an in-house

Water Quality Sampling and Testing

Programme based on the same frequency of

sampling and nature of parameters as listed

in MOH’s NSDWQ. In 2011, grab samples were

collected by personnel from the districts’

Water Quality Units from the designated 1,100

sampling stations to be analysed in-situ and

sent to a third party accredited laboratory

for analysis. Based on the existing number

of sampling stations and the frequency of

sampling according to NSDWQ, a monthly

average of 1,768 samples was taken and

6,327 analyses carried out. The results also

showed that the water quality was within

the requirement of MOH and the Mandatory

Level of Service, whereby 99.46% of the total

of 75,926 analyses had complied with MOH’s

NSDWQ.

The summary of the 2010 and 2011 In-House

Water Quality Assessment for all parameters

is as follows:

MOH Compliance Based on QAP Limit For 2010 - 2011 2011 2010 Nos. Of Nos. Of Compliance Compliance Tests Violations (%) (%)

75,926 407 99.46 98.91

125


Sponsorship drive with

the Federation of Malaysian

Consumers Associations

(“FOMCA”)

Delivering Quality

IMMEDIATE RESPONSE

TO CONSUMER COMPLAINTS

The objective is to achieve a quick initial

response time on all water quality complaints

from consumers followed by resolution

of the complaint. Beginning March 2009,

the initial response time for water quality

complaints was set at half an hour and, as at

31 December 2011, compliance with this

half-hour response time was 99.23%.

The scope of work covers initial investigation

involving in-situ testing of physical parameters

and the taking of necessary remedial actions

or advice to the consumers. A Water Quality

Consumer Complaint’s Report has also to be

submitted. Consumers normally complaint

about the aesthetic aspect of the drinking

water, hence, the fi eld testing on physical

parameters (turbidity, colour, residual

chlorine and pH) using portable test-kits to

identify the level and nature of contaminants

in the distribution system. If the initial results

obtained show no water quality violation, the

consumers will be advised to check their

internal plumbing system. If violations are

detected, appropriate remedial actions are

taken and the distribution system is re-tested

to ensure the contaminants have been removed

from the system.

The main reasons for not achieving the 100%

target was that some complaints were received

at night. All complaints received are recorded

and investigated to enable improvements

to take place. The most frequent area of

consumer complaint is when long-term

suspended solids or iron deposits arising from

very fi ne sediment or corrosion in water mains

have been disturbed by fl ow fl uctuations.

The total number of consumer complaints

received from 1 January 2011 – 31 December 2011

was 2,346, of which 22.03% were due to internal

plumbing problems.

Table B below shows the number of water

quality complaints from 1 January 2011 –

31 December 2011 and the half-hour response

time achievement.

ITEM Jan Feb Mar April May June July Aug Sept Oct Nov Dec

*No. of 123 147 202 130 124 185 166 145 151 120 123 213

complaints

received

1 Hour 99.4 99.5 99.6 100 100 99.5 99.1 98.83 99.42 99.38 100 98.9

Response

Time (%)

Half Hour 99.4 98.6 99.6 100 99.4 99.5 99.1 98.2 99.4 99.4 100 98.5

Response

Time (%)

Total 180 208 240 167 163 221 232 171 173 161 157 273

No. of

Complaints

* Note: Excluding complaints due to Internal Plumbing and carried forward violation from WTPs.

Table B - Water Quality Complaints 2011


126

Delivering Quality

SYABAS’ event held at

GREEN EXPO 2011

Table C - Trend of Consumer Complaints from January 2007 – December 2011

MONTH

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2007 337 292 291 262 321 207 300 327 247 201 284 210

2008 310 212 224 233 430 271 212 210 240 227 199 138

2009 212 355 180 189 305 338 318 407 182 275 320 254

2010 218 358 415 300 203 290 217 348 175 638 179 173

2011 180 208 240 167 163 221 232 171 173 161 157 273

100

200

300

400

500

600

700

TO

TA

L

Consumer Awareness &

Education Programme (“CAE Programme”)

The CAE Programme with media coverage

is ongoing with an emphasis on consumers’

understanding of the quality of water supplied

to their premises and related issues, and

their responsibility for maintaining their own

internal plumbing system and internal storage

tanks. Consumers have greatly benefi ted from

SYABAS’ efforts in the CAE Programme.

For further details of the CAE Programme,

please turn to “Preserving Our Environment”

section on pages 152 to 166 of this Annual

Report.

Research And Development (“R&D”) Centre

In 2011, the PNHB Group continued its strides

to improve the quality and reliability of water

supply by the Group and sought to collaborate

with local and international R&D institutions

and universities on projects relating to

water, wastewater and the environment with

the objective to advancing in technological

development and competencies within the

fi elds of water, wastewater, environment and

health.

Through R&D, the PNHB Group continuously

strives to improve the quality, sustainability

and reliability of Malaysia’s water supply

through various projects to modernize and

advance the nation’s water technology. Our

R&D Team actively brainstorm and develops

ideas to further improve water operational

effi ciency and cost control at the WTPs.

127


Launching of 25th Briged

Penyelamat Sungai (“BPS”)

Programme

Delivering Quality

KWI - PRC Collaboration

In this respect, in 2011, PNHB’s wholly owned

subsidiary, Puncak Research Centre Sdn Bhd

(“PRC”) engaged in a number of exchanged

visitation programmes with K-Water Institute

(“KWI”), the Republic of Korea’s leading

water specialised research institute in the

year 2011. The aim was to boost the research

and technical collaboration between the two

parties.

Among PRC’s collaborative research initiatives

with KWI pursuant to the Memorandum of

Understanding signed by PRC with KWI on

27 October 2010 for a period of three years are:

• Evaluating the treatment process for

iron and manganese, in respect of long

term water quality changes in river bank

fi ltration.

• Optimising advanced membrane water

treatment systems.

• Advancing technology for groundwater

utilisation, groundwater use of riverine

areas, assessing fi eld applications by

constructing test beds, riverbank fi ltration

and artifi cial storage and recharge.

DHI-PRC Collaboration

PRC also entered into a Collaboration

Agreement with DHI Denmark (“DHI”), a

global leader in the fi eld of water treatment

on 15 March 2007, which has since been

extended till 14 March 2013. Under the

PRC-DHI Collaboration, in 2011, PRC has

completed a full study on the effectiveness of

the in-organic coagulants on highly colored

water, which was carried out at Sg Sireh WTP.

The main coagulants studied were Alum,

Poly Aluminium Chloride (“PACl”), Acacia,

Poly Aluminium-ferric-chloride (“PAF”) and

Aluminium Chlorohydrate (“ACH”). Of these,

only ACH stand out to be the better coagulant as

compared to Alum. ACH’s residual aluminium

is lower than that of Alum. However, in term of

cost, ACH’s cost is fi ve times more expensive

than Alum, hence is less cost-effective.

UPM–PRC Collaboration

Under the UPM-PRC collaboration, which

is valid until 5 June 2013, PRC is studying

the use of natural coagulants as alternative

coagulants for the WTPs. The studies have the

ultimate objective of replacing chemical based

coagulants. In the initial stage, six natural

coagulants were found to be suitable, namely

Moringa Oleifera, Jatropha Curcas, Chitin

Chitosan, Dragonfruit foliage, Aspergillus

Flavus and Sago starch.

In June 2011, PRC completed the evaluation

on the natural coagulants. Based on

extensive evaluation, Chitin Chitosan and

Jatropha Curcas proved to be the best natural

coagulants. In terms of the performances of

the natural coagulants compared to Alum,

both Chitin Chitosan and Jatropha Curcas

achieved 4.8 and 6.2 NTU respectively versus

Alum’s 2.2 NTU. However, the Chitin Chitosan

and Jatropha Curcas natural coagulants are

ten times more expensive.

Other Research Activities

R&D Centre has also embarked on the

following research activities:-

(a) Wangsa Maju WTP – From the studies on

composting the WTPs’ residue (sludge)

using microbes via a biological treatment,

R&D’s evaluations revealed that the

sludge can be converted into a good soil

conditioner. The metal contents of the

treated sludge dropped by up to 70% while

the nutrient contents increased by up to

300%. However, the Nitrogen, Phosphorus

and Kalium (“NPK”) contents are still not

favourable for the treated sludge to be

considered as organic fertilizer.

(b) Wangsa Maju WTP - Evaluating the treated

sludge as effective micro-organism mud

balls resulted in turbidity and colour

removal of 50% and 25%, respectively.


128

Delivering Quality

BPS Programme at

Sekolah Kebangsaan

Sijangkang, Kuala Lumpur

(c) Sg Sireh WTP - The trials performed at Sg

Sireh WTP water yielded zero addition of

Aluminium residuals.

(d) Sg Selangor WTP - Evaluating the sludge

dewatering systems using the tube

concept to conclude that the concept can

yield a space saving of up to 98.5%. It

can be used as an alternative to a Sludge

Treatment Plant, and as a quick solution to

waste issue with the authority.

(e) Wangsa Maju WTP - Based on the results

obtained via Permulab testing and Lafarge

Cement Plant’s (“Lafarge”) internal

testing, the sludge is mainly composed of

aluminium oxide, iron oxide and silica oxide

and fulfi lled Lafarge’s acceptance criteria.

With the other heavy metal content also

found to be acceptable, Lafarge concluded

that the sludge can be accepted for safe

disposal through resource recovery by

co-processing in a cement klin. Lafarge

has agreed to co-pilot the testing of ten

tons of sludge from Wangsa Maju WTP

with disposal fees to be borne by PNSB.

R&D Centre will arrange for approval for

this pilot testing.

(f) Sg Langat WTP - A Training Pilot Plant

(“TP Plant”) was developed via the

collaboration between the Operation

& Maintenance Department, the R&D

Centre, the Engineering & Project

Department and the Training Department.

The TP Plant will be used in training for

new operators, as a refresher for senior

operators, and as exposure for new water

engineers as well as for staff competency

assessment. The development of the

plant was assisted by a research study

done in collaboration with Universiti Putra

Malaysia. The study involved the testing of

the natural coagulants on a pilot scale at

Sg Langat WTP.

CRISIS MANAGEMENT AT PNSB

In delivering high quality, sustainable and

expeditious services to our customers and

stakeholders in particular during crisis

periods, we regard our capacity to deal with

crisis periods, as an important aspect of our

corporate social responsibility. To this end, we

are prepared at any time to deal and offer our

assistance with respect to issues or problems

that are related to raw water and treated water

and/or our services, within or beyond our

control. With our years of experience in the

industry, we have expeditiously solved many

crisis over the years.

PNSB initiated a Crisis Management Plan

(“CMP”) and the WTP Emergency Response

Plan (“ERP”) in 2001. The CMP and ERP are

reviewed on a yearly basis and updated, if

required. Both plans ensure the most effective

response to any form of emergency, crisis

or disaster on our premises with minimal

disruption to the Group’s business operations.

Both plans also protect the Group’s corporate

image.

We have ten intervention teams at plant level

and at various regional offi ces. These teams

are trained to handle chlorine and other

chemicals, in addition to being trained in

search and rescue.

129


Delivering Quality

The CMP was activated ten times in 2011 due to the following incidents:-

Date Incident

2 February 2011 Bukit Tampoi WTP (old) shutdown due to treated water pipe burst

11 February 2011 Bukit Tampoi WTP (new) shutdown due to treated water pipe burst

26 March 2011 – 3 April 2011 Sg Sireh WTP shutdown due to raw water pollution

7 May 2011 Cheras Mile 11 WTP shutdown due to raw water pollution

14 May 2011 Gombak WTP shutdown due to raw water pollution

18 May 2011 Cheras Mile 11 WTP shutdown due to raw water pollution

1 June 2011 Sg Langat WTP shutdown for upgrading, maintenance and asset

replacement works

22 November 2011 Cheras Mile 11 WTP shutdown due to raw water pollution

25 November 2011 SSP2 WTP reduced water production due to failure of Transformer

No. 1

5 December 2011 SSP2 WTP reduced water production due to raw water high turbidity

Water Facts

97% of the earth’s water

is in the oceans.


130

131


BuildingSustainability

As with our business operations, the fundamental aim

of our CSR activities is to build sustainability. Quality,

value, service, innovation and trust lie at the heart of

our commitment both to our stakeholders and to society

at large. Our people are engaged in our CSR activities,

frequently taking initiatives as well as implementing

those activities launched by the Group.

Education – particularly for the young in environmental

awareness and responsibility, remain as a key pillar and

success story of our CSR initiatives.


132

The Group recognises that our employees

are core assets of the Group. We believe in

providing not just a job but career development

and advancement for deserving, committed

and diligent employees together with a place

where everyone is given the opportunity

to grow, to mature and to nurture their

skills. We are proud of the diversity of the

workforce across all of the Group’s operations.

All employees are given equal treatment

and discrimination is never tolerated.

Due to the nature of our business and in a

rapidly-changing environment, the health

and safety of our employees and those who

are involved in our supply-chain operations is

always a priority.

An Occupational, Health and Safety (“OH&S”)

management system has been established at

Puncak Niaga (M) Sdn Bhd (“PNSB”), as have

other positive initiatives including obtaining

ISO 18001 certifi cation and garnering various

health and safety awards. As part of our effort

to promote a healthy culture at the work place,

we continue to hold employee engagement

activities to boost the spirit of solidarity,

teamwork, a sense of belonging and conducive

environment.

EMPLOYEE PROFILE

Puncak Niaga Holdings Berhad

(“PNHB”) Group

PNHB Group employed a total of 4,540

personnel as at 31 December 2011, locally

and overseas. This represented an increase

of approximately 6.9% compared to 4,245

personnel employed in 2010. We continue to

promote diversity in the workplace. Any forms

of discrimination, including discrimination

based on age, gender, ethnicity or background,

is not tolerated.

The breakdown of the Group’s employees

by ethnic group, excluding employees in the

People’s Republic of China (“PRC”) is 91.3%

Malays, 2.3% Chinese, 5.4% Indians and 1.0%

others.

As shown in Table A below, the majority of

the Group’s workforce (excluding employees

in the PRC) consists of non-executive

personnel (71.3%) with executives at 22.2%

and management at 6.5%. Due to the nature

of our work, which involves a lot of manual

labour, our total employment by gender

ratio is approximately 3:1 (3,260 Men: 1,105

Women). At executive and management levels,

the gender ratio is closed to 3:1 (970 men: 283

women).

Valuing Our People

The Group recognises that our employees are core assets of the Group. We believe in providing not just a job but career development and advancement for deserving, committed and diligent employees.

PNHB’s participation in

Federation of Public Listed

Companies (“FPLC”)

1st Inter-Media Bowling Cup 2011

Category Gender Ethnic Group Non Management Executive Executive Male Female Malay Chinese Indian Others Total

PNSB 98 279 716 860 233 987 53 29 24 1,093

SYABAS 157 629 2,381 2,326 841 2,912 39 201 15 3,167

GOM 14 39 11 46 18 50 6 2 6 64

POG 14 23 4 28 13 37 2 2 0 41

PRC 16 9 150 105 70 0 175 0 0 175

Note: PNSB denotes Puncak Niaga (M) Sdn Bhd SYABAS denotes Syarikat Bekalan Air Selangor Sdn Bhd GOM denotes GOM Resources Sdn Bhd (formerly known as Global Offshore Malaysia Sdn Bhd) POG denotes Puncak Oil & Gas Sdn Bhd PRC denotes The People’s Republic of China

Table A - Breakdown of the Group’s Employees by category, gender and ethnic group

133


No

. of

Em

plo

yee

s400

350

300

250

200

150

100

50

0 30 30-39 40-49 50

Age Group

382

340

265

106

Valuing Our People

Puncak Niaga (M) Sdn Bhd (“PNSB”)

PNSB is a private limited company in the

PNHB Group of Companies. PNSB handles

the operations, maintenance, management,

construction, rehabilitation and refurbishment

of water treatment facilities. PNSB had 1,093

employees as at the end of 2011. Out of the

total number, 860 employees (78.7%) were

male and 233 (21.3%) were female.

The employment by gender ratio (men to

women) is approximately 4:1 due to the nature

of PNSB’s operations, which involve a lot of

manual labour.

PNSB Workforce Breakdown

by Ethnic Group


by Category

More than half (65.51%) of PNSB’s employees

were non-executives while 25.52% were

executives and the remaining 8.97% were at

the Management level.


by Age Group

Employee Turnover

The turnover rate in 2011 for PNSB was 7.14%

as compared with 11.0% for 2010. 91.03% of

PNSB’s employees are permanent staff, with

the remaining 8.97% being contract workers.

The tables below present PNSB’s employees

turnover for 2011.

PNSB Employee Turnover by Category

Category Turnover (%)

Management 1.43

Executive 3.17

Non-Executive 2.54

Total 7.14

PNSB Employee Turnover by Gender

Gender Turnover (%)

Female 2.14

Male 5.00

Total 7.14

Malay (987 E)

Chinese (53 E)

Indian (29 E)

Others (24 E)

Management(98 E)

Executive(279 E)

Non-Executive(716 E)

90.30%

2.20%

8.97%

25.52%

65.51%

2.65%4.85%

Total Employees (“E”) : 1,093


PEKA’s Fishing Competition 2011


134

4.96%75.18% 19.86%


Management(157 E)

Executive(629 E)

Non-Executive(2,381 E)

6.35%1.23% 0.47%

Malay (2,912 E)

Chinese (39 E)

Indian (201 E)

Others (15 E)

91.95%


Valuing Our People

PEKA’s Walkaton

- Walk For Your Heart 2011

PNSB Employee Turnover by Ethnic Group

Ethnic Group Turnover (%)

Malay 5.23

Chinese 1.35

Indian 0.32

Others 0.24

Total 7.14

PNSB Employee Turnover by Age Group

Age Group Turnover (%)

30 2.75

30-39 2.29

40-49 1.46

50 0.64

Total 7.14

Note : Turnover rates are derived from staff terminations,

retirements and expiry of contracts.

SYARIKAT BEKALAN AIR SELANGOR

SDN BHD (“SYABAS”)

SYABAS is a private limited company in

the PNHB Group of Companies, which

carries out the distribution of treated

water within Selangor and the Federal

Territories of Kuala Lumpur and Putrajaya.

SYABAS had a total of 3,167 employees as at

31 December 2011. Out of the total number,

2,326 employees (73.4%) were male and

841 (26.6%) were female.


women) is approximately 3:1 due to the nature

of SYABAS’ operations, which involve a lot of

manual labours.

SYABAS Workforce Breakdown

by Ethnic Group


by Category

135


Valuing Our People

More than half (75.18%) of SYABAS’ employees

were non-executives, while 19.86% were

executives and the remaining 4.96% were at

the Management level.


by Age Group

Employee Turnover

The turnover rate in 2011 for SYABAS was

6.03% as compared with 7.9% for 2010.

95.3% of SYABAS’ employees are permanent

staff, with the remaining 4.7% being contract

workers. The tables below present SYABAS’

employees turnover for 2011.

SYABAS Employee Turnover by Category


Management 0.45

Executive 2.20

Non Executive 3.38

Total 6.03

SYABAS Employee Turnover by Gender

Gender Turnover (%)

Female 1.83

Male 4.20

Total 6.03

SYABAS Employee Turnover by Ethnic Group


Malay 5.46

Chinese 0.33

Indian 0.16

Others 0.08

Total 6.03

SYABAS Employee Turnover by Age Group


31 3.71

31-40 1.71

40 0.61

Total 6.03



PUNCAK OIL & GAS SDN BHD (“POG”)

POG is a private limited company in the

PNHB Group of Companies, which currently

is involved in exploration for the production

of oil and gas and other materials and the

provision of offshore and onshore engineering

works. POG had a total of 41 employees as at

31 December 2011. Out of the total number,

28 employees (68.3%) were male and

13 (31.7%) were female.


women) is approximately 2:1.

PEKA’s Bubur Lambok 2011

during the month of Ramadhan

No

. of

Em

plo

yee

s

0

200

400

600

800

1000

1200

1400

30 30-39 40-49 50

Age Group

1,319

1,079

403366 Visit to Vitagen factory by the

children of PEKA’s members


136

Valuing Our People

Malay (37 E)

Chinese (2 E)

Indian (2 E)

Others (0 E)

5% 5%

10% 34%

90%

56%

No

. of

Em

plo

yee

s

2

4

6

8

10

12

14

16

0 30 30-39 40-49 50

Age Group

12

15

10

Staff Expedition to Gunung Nuang

Total Employees (“E”) : 41


Management(14 E)

Executive(23 E)

Non-Executive(4 E)

5511

POG Workforce Breakdown

by Ethnic Group

Note: There were no employees belonging to the ‘Others’

ethnic group category.


by Category

More than half (56%) of POG’s employees were

non-executives, while 10% were executives and

the remaining 34% were at the Management

level.


by Age Group

Employee Turnover

The turnover rate in 2011 for POG was 23.07%.

60.98% of POG’s employees are permanent

staff, with the remaining 39.02% being contract

workers. The tables below present POG’s

employee turnover for 2011.

POG Employee Turnover by Category


Management 1.71

Executive 8.42

Non-Executive 12.94

Total 23.07

POG Employee Turnover by Gender

Gender Turnover (%)

Female 7.02

Male 16.05

Total 23.07

POG Employee Turnover by Ethnic Group


Malay 20.89

Chinese 1.25

Indian 0.62

Others 0.31

Total 23.07

POG Employee Turnover by Age Group


19-30 14.18

31-40 6.55

41-58 2.34

Total 23.07



137


Valuing Our People

Malay (50 E)

Chinese (6 E)

Indian (2 E)

Others (6 E)

9.38% 3.12% 9.38%

78.12%

60.94%

17.19% 21.87%SYABAS participated in the

Malidur Rasul Celebration 2011

in Putrajaya



Management(14 E)

Executive(39 E)

Non-Executive(11 E)

No

. of

Em

plo

yee

s

0

5

10

15

20

25

30

30 30-39 40-49 50

Age Group

26

19

109

GOM Resources Sdn Bhd (Formerly known as Global Offshore Malaysia Sdn Bhd) (“GOM Resources”)

GOM Resources is a private limited company in the POG Group of Companies, which is involved in providing offshore personnel services and renting of machinery and vessels. GOM Resources had a total of 64 employees as at 31 December 2011. Out of the total number, 46 employees (71.9%) were male and 18 (28.1%) were female. GOM Resources also utilised third party manpower resources and project contract workers with a total workforce of approximately 159 for the Derrick Lay Barge (“DLB”) 264 barge.

The employment by gender ratio (men to women) is approximately 2:1.

GOM Resources Workforce

Breakdown by Ethnic Group


Breakdown by Category

More than half (60.94%) of GOM Resources’ employees were executives, while 17.19% were non-executives and the remaining 21.87% were Management level.


Breakdown by Age Group

Employee Turnover

The turnover rate in 2011 for GOM Resources

was 16.88% as compared with 14% for the year

2010. 68.75% of GOM Resources’ employees

are permanent staff, with the remaining

31.25% being contract workers. The tables

below present GOM Resources’ employees

turnover for 2011.

GOM Resources Employee Turnover

by Category


Management 3.78

Executive 10.71

Non Executive 2.39

Total 16.88


by Gender

Gender Turnover (%)

Female 5.13

Male 11.75

Total 16.88


138


by Ethnic Group


Malay 15.28

Chinese 0.91

Indian 0.46

Others 0.23

Total 16.88

GOM Employees Turnover by Age Group


30 years 3.89

30-39 years 9.09

40-45 years 3.90

Total 16.88



The People’s Republic of China

(“PRC”) Operations

The Group’s operations in the PRC employ in

total 175 employees as at 31 December 2011,

all of whom were hired on a contract basis. Out

of the total number, 105 employees (60%) were

male and 70 (40%) were female.


women) is approximately 2:1. 100% of the PRC

workforce are Chinese.

PRC Operations Workforce

Breakdown by Category

PRC Operations Workforce

By Age Group

More than half (85.71%) of PRC’s employees

were non-executives, while 5.15% were at

executive level and the remaining 9.14% were

at the Management level.

Employee Turnover

The turnover rate in 2011 for PRC Operations

was 1.4% as compared with 2.7% for 2010.

BEST PRACTICE AT THE WORKPLACE

Group Employee Benefi ts

PNSB/SYABAS/POG

The Group offers a comprehensive employee

benefi ts package which includes competitive

salary packages with insurance coverage for

the immediate family, housing and car loan

interest subsidies, interest-free assisted

education loans as well as Tabung Kebajikan,

computer, personal loans, medical benefi ts

that cover outpatient treatment, hospitalisation

and surgical, dental and maternity benefi t for a

maximum of up to fi ve surviving children. We

also contribute more than the statutory rate

of employer’s contribution to the Employees

Provident Fund (“EPF”) for employees who

have served more than two years.

Valuing Our People

5.15%9.14%

85.71%

SYABAS’ Senamrobik

Perdana event


Management(16 E)

Executive(9 E)

Non-Executive(150 E)

No

. of

Em

plo

yee

s 50

60

40

30

20

10

0 30 30-39 40-49 50

Age Group

38

60

54

23

Employees participated in the

Earth Day 2011 celebration

139


Valuing Our People

The Group’s competitive remuneration

packages enable us to recruit and retain

talented and productive employees. Through

the Malaysian Employers Federation (“MEF”)

and other external sources, we review the

Group’s employees’ benefi ts package from

time to time to ensure that the Group is at

least at par with the prevailing market in

terms of proposed remuneration for the

Group employees. The Group ensures that our

employees are adequately remunerated at all

times and in accordance with the prevailing

market conditions and the cost of living.

As part of our responsibility as a water treatment

and distribution Group and to ensure that we

meet the relevant requirements and criteria as

imposed by the relevant authorities, we require

our employees, especially employees on the

ground to put in long working hours round the

clock under very challenging conditions. We

ensure that our employees are provided with

the appropriate benefi t packages, facilities

and assistance to ensure that their well being

and safety are well taken care of at all times

and that they are continuously appreciated and

rewarded for their hard work.

PRC Operations

To ensure that our PRC employees are

compensated adequately for their work,

we abide by the minimum wage as set by

the PRC local authorities. Although all PRC

employees are hired on a contractual basis,

our PRC employees also receive benefi ts

such as overtime pay, leave in lieu, pension

fund contributions, unemployment fund

contributions, housing fund contributions,

medical insurance, work injury insurance

and maternity insurance, as required by PRC

Labour Laws and the Social Contribution Act.

All local PRC employees have their medical

costs covered by a PRC Medical Insurance

Contribution plan.

Expatriate staff are covered by hospitalisation,

medical and personal insurance. A subsistence

allowance is also provided to our PRC

employees for any outstation duties.

Although PRC Labour Laws allow the forming

of a union, there were no unions formed by our

PRC employees. We do not hire those below

the age of 18, which is the minimum age to

commence working under PRC Labour Laws.

None of our operations was identifi ed as having

a signifi cant risk of incidents of forced labour.

RECOGNISING EMPLOYEES’ SUPPORT

PNSB/SYABAS/POG/GOM RESOURCES/

PRC OPERATIONS

We strongly believe in rewarding our

employees for their commitment, dedication

and hard work.

To recognise good work and to motivate

productivity, employees with excellent

performances are duly awarded with merit

bonuses, salary increments and promotions.

In appreciation of the employees’ contributions,

in 2011 SYABAS held a “Majlis Penyerahan

Pampasan Kepada Kakitangan Serta Waris

Keluarga Kakitangan SYABAS” on 19 August 2011

for existing employees.

Career Development

The Group has a human capital retention

policy to retain the best employees, to provide

avenues for employee development and

advancement, and to equip the employees

with the necessary skills as they grow with

the Group.

With a structured performance evaluation

framework in place and an emphasis on

self development and career development

and advancement, we believe that we have

managed to retain and groom the best

employees in the Group.

Our employees engaging

in group discussion on operation

matters

Conduct of seminar for

our employees


140

Valuing Our People

PNSB

Performance appraisal exercises are

conducted for all our confi rmed employees

twice a year.

The Independent Employees Performance

Review Committee (“IEPRC”) is responsible

for reviewing, evaluating and harmonising

the assessment and scoring as rated by the

Heads of Departments/Divisions. The fi nal

recommendation of the review is submitted

to the Executive Committee for approval and

decision on the appropriate rewards based on

the individual performance of the employees

and the Company’s performance. The IEPRC

also makes recommendations to the EXCO

on the appropriate actions to be taken against

those employees whose performance is not up

to the Company’s performance requirements.

Non-performing employees undergo

counselling to improve their performance and

their performance is reviewed for six months

on a monthly basis.

SYABAS

At SYABAS, employee performance appraisal

is conducted twice yearly. This involves a

discussion session on performance which

is called the ‘Challenge Session’. Following

SYABAS’ performance appraisal process in

2011, 111 employees were rewarded with

promotion effective January 2012. Through

the ‘Challenge Session’, the Company and the

Senior Management are able to constantly

monitor the employees’ performance and

address the challenges faced by the employees

in excelling at their work.

POG/GOM RESOURCES

At POG and GOM Resources, performance

appraisal exercises are conducted for all our

confi rmed employees twice a year.

PRC OPERATIONS

Our PRC operations conduct performance

appraisal exercises once a year.

Training

At PNSB and SYABAS, we are committed

to equipping our employees with the best

available resources and training to enable them

to carry out their responsibilities and prepare

them for the challenges of a knowledge-based

and demanding industry, as well as to enhance

the productivity and competitiveness of the

Group. In addition to in-house training, PNSB

and SYABAS send their employees for external

training, locally and overseas.

Details of the number of training sessions

(in-house and external) conducted for PNSB

and SYABAS in 2010 and 2011 are set out in

Table B above.

At PNSB and SYABAS, we are committed to equipping our employees with the best available resources and training.

Category PNSB SYABAS Total 2010 2011 2010 2011 2010 2011

Management

(including Directors) 87 102 149 157 236 259

Executive 205 265 511 617 716 882

Non-Executive 508 650 2,175 2,318 2,683 2,968

Total personnel trained 800 1,017 2,835 3,092 3,635 4,109

77.1% 92.2% 92.9% 97.6% 85.6% 96.4%

Note: For both companies, the majority of training was provided to non-executive employees.

Table B - Conduct of 2011 Training Sessions (in-house and external)

PEKA’s Volleyball Tournament 2011

141


Valuing Our People

PNSB’s and SYABAS’ number of training

sessions increased in 2011 as compared to

2010. PNSB trained 92.2% of its employees

in 2011 while SYABAS trained 97.6% of its

employees in 2011. 4,109 employees of the

Group attended training in 2011 as shown in

Table B on page140 of this Annual Report.

Our training was conducted in fi ve broad

categories namely, personal and leadership

development, positive mindset, functional/

knowledge, supplementary knowledge, and

external training (local/overseas) (“Five Broad

Categories”). Training enabled the employees

to develop interpersonal, leadership and

language skills, plus job functional skills/

knowledge and health and safety knowledge.

Our training department also organised

motivational talks for the organisation.

New employees are required to attend a

comprehensive Induction Programme (“IP”).

At PNSB, the IP was for a duration of two days

whereas at SYABAS, the IP was for a duration

of three days.

The breakdown of PNSB’s and SYABAS’

training in the Five Broad Categories for 2011

are as set out in Table C above.

PNSB spent RM798,952.98 on training, 4.9%

up on the 2010 training cost. This amounts to

approximately RM785.60 per employee for an

average of 24 hours of training.

SYABAS spent RM640,858.64 in 2011 which

benefi ted 3,092 staff (97.6% of all SYABAS

employees).

Category PNSB SYABAS No of No of No of No of Programmes Participants Programmes Participants

Personal & Leadership Development 20 128 4 120

Positive Mindset 17 190 17 1,147

Functional/ Knowledge 118 1,380 102 4,171

Supplementary Knowledge 41 427 329 8,001

External Training (Local/ Overseas) 100 246 71 125

TOTAL 296 2,371 523 13,564

Note: Employees may attend more than one training session.

Table C - Breakdown of PNSB’s and SYABAS’ training in Five Broad Categories for 2011

Category PNSB (RM) SYABAS (RM) 2010 2011 2010 2011

In-house 377,643.61 RM250,604.32 366,921.12 271,278.31

External 382,323.61 RM436,086.66 228,691.87 369,580.33

TOTAL 759,967.22 RM798,952.98 595,612.99 640,858.64

Table D - Cost of Training for PNSB and SYABAS for 2010 and 2011

PEKA’s Badminton Tournament

at Setia Alam

PEKA’s Motivational Programme

for the children of PEKA’s members


142

Valuing Our People

PRC Operations

Our PRC Operations spent RM3,045.00 on

training in 2011. This equates to RM17.40 per

employee.

Listening to Our Employees

Listening to and working in tandem with

our employees is vital for the growth of our

business and our organisation. It means

building a shared vision of the business within

the competitive environment.

We constantly engage and interact with all

our employees through our Monthly Staff

Assemblies and staff meetings at Divisional

and Departmental levels. Our Senior

Management adopts a hands-on approach

and engages with our employees regularly.

Listening to our employees, acting on their

views and involving them in improving

our business are very important to us. We

encourage a two-way communication for

all levels at the workplace vis-à-vis sharing

information and knowledge.

Collective Bargaining Agreement

The Management of SYABAS and the Kesatuan

Pekerja-pekerja PUAS Berhad employees

met seven times during 2011.

Employees at our PRC operations are allowed

to form a union, in accordance with PRC Labour

Laws. However, as at 31 December 2011,

there were no unions formed by our PRC’s

employees.

Ensuring Quality and Work Ethics

In line with good corporate governance,

the Group has several Codes of Conduct

and Policies which express and support the

strategies that steer the Group to achieve its

Key Performance Indicators. These Codes are:

PNHB/PNSB

• Standard Operating Procedures

• Corporate Disclosure Policy

• Information Technology Policies (Software

Licence Policy, IT Security Policy and

Copying Software Statement)

• Investor Relations Policy

• Health, Safety & Environmental Policy

• Quality Policy

• Risk Management Policy

• Sexual Harassment Policy

SYABAS


• Quality Telephone Ethics

• Standard People Practices Handbooks

• Sexual Harassment Policy

• Corporate Responsibility Policy

• Code of Business Ethics

• Service Counter Ethical Code

• Health, Safety & Environment Policy

POG


• Quality Policy

• Health, Safety and Environment Protection

Policy

• Drug & Alcohol Abuse Policy

• Smoking Policy

• Stop Work for Safety Policy

GOM Resources


• Quality Policy

• Health, Safety and Environment Protection

Policy

• Drug & Alcohol Abuse Policy

• Smoking Policy

• Stop Work for Safety Policy

PRC Operations

We have an Anti-Corruption Policy in place in

our PRC operations. If any of our employees

are found to have violated this policy, their

employment with us will be terminated. There

were no reported incidences of corruption

in 2011.

Visit to Vitagen factory by the

children of PEKA’s members

Launching of

25th BPS Club Programme on

24 June 2011 at Sg Langat WTP

143


Valuing Our People

Caring for Staff

PNSB and SYABAS recognise the importance

of providing staff with an adequate work-life

balance. The Association of Water Supply

Workers for Selangor, Kuala Lumpur and

Putrajaya (Persatuan Kakitangan Bekalan

Air Selangor, Wilayah Persekutuan Kuala

Lumpur dan Putrajaya) (“PEKA”) set up on

15 September 2006 is a staff association

established to provide welfare assistance and

to foster social and cultural bonds between the

Group’s employees and the community.

In 2011, PEKA organised various events that

included recreational activities, sporting

events, and cultural and religious programmes.

They were:

1. Recreational Activities

• Fraser’s Hill Photography

on 15 January 2011

• Expedition to Gunung Rajah, Pahang

on 30 April 2011 to 2 May 2011

• Visit to Langkawi, Kedah

on 2 July 2011 to 3 July 2011

• Expedition to Gunung Nuang,

Selangor on 2 July 2011 to 3 July 2011

2. Sporting Events

• PEKA International Jamboree

Mountain Bike on 26 March 2011

• PNSB and SYABAS football match

on 23 April 2011

• Bowling Competition SYABAS

Management – 4 May 2011

• Senamrobik Perdana on 14 May 2011

• “Walkathon - Walk For Your Heart”

on 28 May 2011

• Bowling Competition PEKA 2011

on 18 June 2011, 13 July 2011 and

25 November 2011

• Fishing Competition on 25 June 2011

• Launching of (1) Hari Alam Sekitar (2)

Kelab Berbasikal SYABAS

on 25 June 2011

• Volleyball Tournament

on 16 July 2011

• Futsal Competition on 30 July 2011

• Golf Tournament fund raising event

on 30 July 2011

• GYM SYABAS in conjunction with

World Heart Day on 8 October 2011

• Badminton Tournament

on 19 November 2011

3. Cultural & Religious Programmes

• Monthly Solat Hajat dan

Majlis Bacaan Yassin

• Monthly Majlis Tazkirah

• Maulidur Rasul celebration

on 15 February 2011

• Kursus Pengurusan Jenazah

on 14 May 2011

• Seminar on understanding

the value of religion and culture

on 16 June 2011

• Visit to Glass Temple, Johor

on 23 July 2011

• Religious Discussion :

Ahlan Wasahlan Ya Ramadhan

on 30 July 2011

• Bubur Lambok PEKA

on 11 August 2011

• Qiamullail Ramadhan

on 20 August 2011

• Majlis Ibadah Qurban

on 8 November 2011

• Majlis Berkhatan PEKA

on 10 December 2011

4. Other Events

• PEKA’s 5th Annual General Meeting

on 19 March 2011

• Hari Bumi Sedunia 2011 held

on 23 April 2011

• Motivational Programme for

Excellent Students on 8 June 2011

and 24 August 2011

• Seminar on Morality in a Family

on 9 July 2011

• Visit to Pusat Perlindungan Remaja

Bermasalah on 16 August 2011

• Breast Cancer Awareness

on 22 October 2011

PEKA’s International Jamboree

Mountain Bike 2011

PEKA’s Majlis Berkhatan 2011


144

Valuing Our People

• Seminar on “Crime Prevention is

Ours” on 12 November 2011

• Breast Cancer Examination and Basic

Medical Checkup on 26 November 2011

• PEKA’s children visit to Vitagen

factory on 21 December 2011

• Monthly Assembly

Our Executive Directors and Senior

Management actively participated in

these programmes to give support and

encouragement to the employees.

ENSURING HEALTH AND SAFETY

As a responsible and caring employer, we

always ensure that our employees are treated

well and fairly. The Group takes responsibility

for preventing any work-related injuries

or illnesses. Throughout 2011, the Group

demonstrated to the best of its ability, its

business-wide commitment to improving

health and safety at our workplace.

PNSB

Occupational Health and

Safety Assessment Series (OHSAS)

As one of Malaysia’s leading water companies,

in September 2011 PNSB was awarded with the

Occupational Health And Safety Assessment

Series (“OHSAS”) 18001:2007 certifi cations for

27 Water Treatment Plants (“WTP”) and three

Regional Offi ces. This OHSAS 18001:2007

Award attests to PNSB’s compliance with

international OH&S management system

specifi cations and to the Company’s exemplary

standards in delivering a high quality potable

water supply as well as to its excellent health

and safety practices at workplace.

Prior to this prestigious accreditation, PNSB

established an OH&S management system,

which aims to eliminate or minimise risk

to employees and other parties within its

operations. Amidst the rapid expansion

throughout the region, PNSB has been

investing in establishing, maintaining and

improving OH&S across its operations. Hazard

Identifi cation, Risk Assessment and Risk

Control comprise the requirements of OHSAS

18001.

Our Occupational Health and

Safety Management Performance

PNSB provides the necessary safety and

health mechanisms for the employees who

may be exposed to hazards while performing

their duties. Apart from complying with

statutory requirements, PNSB has its own

internal controls to achieve optimum results

for OH&S at the workplace. Since 2004, PNSB

had a Corporate Health & Safety Committee,

to ensure full compliances with OH&S

requirements in the workplace.

For proper implementation of OH&S

procedures, PNSB’s employees and

permanent contractors must be adequately

trained in three categories namely, Statutory

Requirements, Competency Training and

General Training. All Water Treatment Plants

(“WTPs”) and dams staff are required to

undergo a minimum of two man-days of

training annually while permanent contractors

must undergo at least one man-day of training

a year.

In 2011, Health, Safety and Environment

(“HSE”) induction training, mock drills as well

as Emergency Response Plan (“ERP”) training

were carried out at all the 28 WTPs and the

three dams to ensure staff are responsive and

ready in the event of emergencies or crises.

ERP drills were conducted to familiarise and

to measure the level of readiness among our

employees in responding to unforeseeable

crisis situations. In addition, our Safety and

Health Offi cers conducted 31 Site Safety

Inspections at the WTPs and dams.

The objective of these programmes is to

ensure that all our WTPs and dams comply

with safety regulations and adhere to the

safety management system established within

PNSB.

Mock Safety Drill

145


Valuing Our People

In 2011, PNSB implemented the following

OH&S programmes:-

1. Fire Fighting Training for ERP Team

Four sessions of Fire Safety Training were

held from September to December 2011 at

the Akademi Bomba & Penyelamat Kuala

Kubu Baru. The training was attended by a

total of 120 staff from various WTPs, dams

and the Headquarters.

The objective of the training was to

expose the staff to fi re safety equipment,

to enhance their knowledge of fi re safety

and to educate them on how to handle fi re

during an emergency. A knowledge of fi re

safety is useful not only at the workplace

but at home and other premises too.

2. Overhead Crane Safety Training

Pursuant to the requirements of the

Occupational Safety & Health Act (“OSHA”)

1994, Safety and Health Committee

Regulation 1997, PNSB successfully

organised Overhead Crane Safety

Training for HSE Committee members

on 17, 18 and 24 October 2011 at Central

Region, Southern Region and SSP2 WTP,

respectively.

The objective of the training was to comply

with PNSB’s OHSAS 18001 Management

System Procedure, Safe Operation of

Overhead Crane and Lifting Devices. Crane

and lifting devices are heavy machinery

and minor mistakes in handling the

equipment can cause critical situations

in many industries and construction

operations.

3. Chemical Handling and Spillage Training

Chemicals are often hazardous.

Carelessness and negligence in handling

chemicals may cause serious and even

fatal injuries. Consequently, proper

training and awareness on chemical

handling is a must for the water treatment

staff who are directly involved in handling

chemicals.

On 10 to 11 November 2011 and 15 to

16 November 2011, PNSB organised

Chemical Handling and Spillage Training

at the Southern and Central Region offi ces,

respectively. The two-day training involved

theoretical and practical sessions.

4. Emergency Preparedness and

Response Plan

PNSB’s Emergency Preparedness and

Response Plan has been continuously

implemented and improved and in 2011,

the following took place:-

• Modifi cation of the siren signal system

to better distinguish the type of alarm.

• Reorganisation and retraining of the

fi re fi ghting and rescue team and plant

support team for increased effi ciency.

• One major mock drill and three minor

mock drills were conducted at each of

the WTPs and dams, both internally

and externally, with the collaboration

of external parties such as chemical

supplier.

5. Health and Safety Management

Improvement for Contractors

PNSB has implemented a clear health

and safety management policy for its

contractors by conducting contractors

HSE briefi ngs at Headquarters’ level.

The system was put in place to enhance

the health and safety performance of

contractors working in or for PNSB.

Safety and Health Training


146

Valuing Our People

6. External Inspection

A corporate audit on health and safety

management system was performed in

2011 by the OHSAS 18001 Internal Auditors

for compliance with OH&S requirements

and improvement of the health

management system. We are pleased to

announce that PNSB is in full compliance

with the statutory requirements regulated

by Department of Occupational Safety and

Health (“DOSH”).

Lost Time Injury (“LTI”)

There was one accident that occurred in

2011, at the Northern Region, resulting in the

reduction of man-hours with zero LTI. Details

of LTI in 2011 are as set out in Table E above.

We are proud to announce that since its

commission in July 1998, SSP2 WTP has

demonstrated a high level of commitment

to health and safety standards at the

workplace and its practices and procedures

have constantly followed the Integrated

Management System covering ISO 9001

(Quality), ISO 14001 (Environment) and OHSAS

18001 (Safety) Management Systems. It is

worth noting that, since September 2002, the

LTI has included contractors’ and suppliers’

man hours after they have undergone extensive

health and safety training and familiarisation

at SSP2 WTP.

The total man hours with Zero LTI are as

follows :

Million Man HoursWTP with Zero LTI

SSP2 WTP 4,129,620.81

Wangsa Maju WTP * 1,066,036.67

Sg Sireh WTP 311,503.08

Central Region 2,928,853.74

Southern Region 2,275,875.37

Northern Region 3,082,185.59

PNSB HQ 2,943,975

* Note: Wangsa Maju WTP has had zero LTI since

18 July 1998

Training for SYABAS water tanker

drivers during the ERP Operation

Accidents/Incidents Occurred in 2011 Wangsa Sg SSP2 Maju Sireh Central Southern Northern PNSB Type of Incident WTP WTP WTP Region Region Region HQ

LTI 0 0 0 0 0 1 0

Medical Treatment 0 0 0 0 0 0 0

First Aid 0 0 0 0 0 0 0

Near Miss 0 0 0 0 0 0 0

Property Damage 0 0 0 0 0 0 0

Spillage 0 0 0 0 0 0 0

Fire 0 0 0 0 0 0 0

Dangerous

Occurrence 0 0 0 0 0 0 0

Chemical Release 0 0 0 0 0 0 0

Explosion 0 0 0 0 0 0 0

Total 0 0 0 0 0 1 0

Table E - Breakdown of Loss Time Injury in 2011

147


Valuing Our People

ACHIEVEMENTS IN THE AREA OF

OCCUPATIONAL HEALTH AND SAFETY

AWARDS

1. Malaysian Society of Occupational Safety

& Health (“MSOSH”) Award:

At the MSOSH Excellence Award 2011 held

on 22 July 2011, fi ve of PNSB WTPs won

the following awards:-

WTP Award

SSP2 WTP Class 1 Gold Award,

Wangsa Maju WTP Class 1 Gold Award

Cheras Mile 11 WTP Class 1 Gold Award

Gombak WTP Class 1 Gold Award

Rantau Panjang WTP Class II Gold Award

2. National Council of Occupational Safety &

Health (“NCOSH”) Award:

At the NCOSH Excellence Award 2011 held

on 21 December 2011, PNSB’s SSP2 WTP

won the Gold Trophy Award under the water

utility sector. SSP2 WTP also received the

Grand Award Trophy for NCOSH from the

Minister of Human Resource, YBhg Datuk

Seri Dr S. Subramaniam.

CERTIFICATIONS

1. ISO 9001:2008 Certifi cation for Nine (9)

WTPs and Central Laboratory

In April 2010, all Regional Offi ces and

20 WTPs obtained the internationally

recognised standard ISO 9001:2008

Quality Management System (“QMS”)

Certifi cation. This ISO 9001:2008 QMS

Certifi cation was upgraded in 2008 from

the ISO 9001:2000 Certifi cation.

PNSB is in the process of applying for

the same internationally recognised

standard ISO 9001:2008 QMS Certifi cation

for the remaining nine WTPs. This is to

refl ect PNSB’s commitment to Quality

Management in managing the WTPs.

The ISO 9001:2008 QMS Certifi cation for

the nine WTPs is expected to be achieved

by the end of 2012.

The Central Laboratory has been certifi ed

for the ISO/IEC 17025:2005-General

Requirement for the Competence of

Testing and Calibration Laboratories in

June 2006. The Central Laboratory intends

to obtain ISO 9001:2008 QMS Certifi cation

to make improvements to existing systems

in terms of QMS.

SYABAS

SYABAS operates a Health, Safety &

Environment (“HSE”) Policy backed by Top

Management to provide a safe and healthy

workplace at all times, and to ensure that its

business is conducted to the highest standards.

SYABAS endeavours to:

• Recognise health, safety and environment

objectives as an integral part of its

business performance.

• Implement a continually improved HSE

management system.

• Establish and periodically review its safety

and environmental objectives and targets.

• Comply with all applicable HSE legal and

other requirements to which SYABAS

subscribes.

• Provide sufficient information,

instruction, training and supervision to

enhance employees’ health, safety and

environmental consciousness so that

work is performed in a safe manner.

• Minimise waste and continually prevent

pollution in all activities.

• Investigate any incidents whose fi ndings

can be used to develop and continually

improve health, safety and environmental

conditions and performance.

SYABAS’ Occupational Safety and Health

(“OSH”) programmes are coordinated to

ensure that we are able to harmonise and

make OSH part of the workplace culture.

PEKA International Jamboree

Mountain Bike 2011 Event


148

Valuing Our People

In 2011, SYABAS implemented the following

OSH programmes:-

OHSAS 18001:2007 Certifi cation Programme

SYABAS has selected three Districts namely

the Petaling, Hulu Langat and Kuala

Lumpur Districts for the OHSAS 18001:2007

Certification Programme. SYABAS is

still undergoing the various stages of the

Certifi cation Programme.

The objective of the certifi cation is to assess

the safety management system that has been

implemented in SYABAS. SYABAS’ safety

management system documentation has been

established since 2008 and encompasses

procedures on maintaining a safe and healthy

working environment and controlling hazard

and risk at the workplace involving workers,

contractors and the public.

SYABAS NIOSH Safety Card (“SNSC”)

Programme

An SNSC Programme was conducted to

enhance the compliance standards under the

provisions of Section 15(2)(c) of Occupational

Safety & Health Act (“OSHA”) 1994 which

requires employers to provide information,

instruction, training and supervision to ensure

the safety and health of contractors who work

at SYABAS’ premises.

SYABAS signed a Memorandum Of

Understanding with NIOSH on 22 February 2011

and the fi rst training was conducted on

29 September 2011. As at 31 December 2011,

a total of 15 training sessions involving 430

participants had been conducted for SYABAS’

staff responsible for monitoring contractors

on site.

The training for contractors commenced on

15 January 2012 and the Safety Cards will be

provided to them one week after completing

the course and pass the test.

HSE Internal Audit

The objectives of the HSE Internal Audit are:-

• To evaluate the effectiveness and effi ciency

of the implemented documents.

• To propose corrective action and improvement

in all cases of non-conformance.

Two HSE Internal Audits each were conducted

at all District Offi ces. SYABAS appointed 50

Internal Auditors to assist in the HSE Internal

Audit exercise for 2011. The internal audit at

each District Offi ce was conducted by seven

auditors (fi ve from the District itself and two

representatives from HSE Headquarters).

A total of 249 Non-Conformance Requests

(“NCR”) had been raised from all the audits

conducted and all had been rectifi ed and

closed within the agreed timeframe.

Site Safety Inspection (“SSI”)

SSIs are conducted on a monthly basis with the

objective to ensure that all SYABAS’ premises

and contractors comply with the requirements

and provisions of the OSHA 1994 so as to

protect the safety of SYABAS’ staff.

In 2011, a total of 183 numbers of SSIs were

conducted at various locations, namely pump

houses, reservoirs, project sites, stores and

offi ce buildings. 366 NCRs were raised during

the inspection and forwarded to the respective

Districts for their corrective action. All NCRs

have since been resolved and closed.

Confi ned Space Emergency Drill

The objective of the Confi ned Space Emergency

Drill programme is to enhance the skills and the

knowledge of workmen who work in confi ned

spaces. The programme includes steps to be

taken in an emergency situation while working

in a confi ned space, and instruction on how to

operate rescue equipment.

Confi ned Space Safety training

149


Valuing Our People

SYABAS conducted a Confined Space

Emergency Drill on 1 December 2011 to

comply with Clause 12 of the Industry Code of

Practice for Safe Working In A Confi ned Space

2010. Those who attended the programme

were competent Authorised Gas Testers,

Secretaries of Works and those who work in

confi ned space. In attendance, too, was an

expert from Hospital Kajang and his comments

have been incorporated into SYABAS’

improvement strategy.

Defensive Riding

HSE has initiated a programme in collaboration

with SYABAS, MSOSH and SOCSO to raise

awareness of the importance of road

safety, safe riding methods and emergency

preparedness. The programme provided

information about types of motorcycles and

the safety aspects of motorcycle riding,

accident statistics and actions to be taken by

motorcyclists in accident situations.

The launching ceremony for the programme

was held on 15 November 2011. The

programme consists of one theory session

and one practical session. The programme

was conducted over ten times between

31 October 2011 and 30 November 2011 for a

total of 300 staff. At the end of each session, all

participants were given a test to evaluate their

understanding of the course.

HSE Training

In 2011, SYABAS conducted 55 HSE training

sessions involving 1,734 staff, to provide

awareness of HSE matters and to equip them

with adequate information and knowledge

about safety, covering mandatory issues,

competency and general training.

Authorised Entrant and Standby Person

(“AESP”) in Confi ned Space training was

conducted at NIOSH for staff who work in

confi ned spaces. The training informs staff

of their responsibilities as AESPs, safety

measures that need to be taken while working

in a confi ned space and equipment to be used

in confi ned spaces. Authorised Gas Tester

Refresher training was also conducted for

SYABAS’ 12 Authorised Gas Testers (AGT).

SYABAS had selected 30 staff from

Headquarters and District Offi ces to act as

First Aiders and they have now been trained

by the Malaysian Red Crescent, Hulu Langat.

SYABAS also had invited external parties to

share their knowledge and give training to our

staff. There was a Health Talk by the Federal

Health Department, “Taklimat Pencegahan

Kebakaran” from the Fire Rescue Department

and many other talks and training sessions.

Blood Donation Campaign

The Blood Donation Campaign was

successfully conducted at all Districts Offi ces

involving SYABAS’ staff and the public. The

campaign is part of SYABAS’ Corporate Social

Responsibility (“CSR”) programmes to benefi t

the community.

Fire Drill Programme

The Fire Drill Programme was successfully

conducted at all District Offices with

co-operation from the Fire Rescue

Department. The main purpose of this

programme is to comply with Section 13 of

the Factories & Machinery Act 1970 (Safety,

Health Welfare).

External Inspections

In 2011, the Department of Occupational

Safety and Health (“DOSH”) inspected 29 Air

Scouring Machines in accordance with Factory

Machinery Act (“FMA”) 1967 regulations

regarding the renewal of Certifi cate of

Fitness for machinery. The inspection of the

Air Scouring Machines complied with DOSH

regulations.

Safety harnesses training

for the contractors


150

Valuing Our People

Lost Time Injury (“LTI”)

SYABAS aspires to complete accident and

incident reports within three days to ensure

cases are resolved quickly.

As at the end of 2011, SYABAS had recorded

6,689,313 manhours without LTI. This statistic

includes the ten District Offi ces covered

by SYABAS.

PARTICIPATION IN AWARDS

National Council of Occupational Safety and

Health (“NCOSH”) Award 2011

Ten District Offi ces participated in the

NCOSH Award 2011 to gauge the level of

implementation of safety and health practices

at the workplace.

AWARDS

Malaysian Society of Occupational Safety and

Health (“MSOSH”) OSH Award 2011

The objective of the participation is to

evaluate and assess the effectiveness

and continuously improve our safety and

health management system. SYABAS has

participated in this award since 2008. On

22 July 2011, seven District Offi ces namely

Kuala Lumpur, Klang, Petaling, Gombak,

Sepang, Hulu Selangor and Kuala Selangor

obtained Gold Class I Awards and three

District Offi ces namely, Hulu Langat, Kuala

Langat and Sabak Bernam obtained Gold

Class II Awards.

CERTIFICATION

ISO 19001:2008 Certifi cation Programme

SYABAS has embarked on obtaining ISO

9001:2008 certifi cation for Human Resource

and Administration to gain recognition of the

international standard of our human resources

practices.

One Manual and 45 procedures have been

developed or improved so as to obtain

this certifi cation. The certifi cation audit is

scheduled to be conducted in May 2012.

SECURITY SERVICES

The Group’s premises are secured by the

Auxiliary Police, whose duty is to create and

maintain a safe working environment for

employees and to protect the Group’s assets

and facilities. It is therefore vital that the

Auxiliary Police project a good image to the

public as they perform the task of overseeing

the security of the Group’s premises and

employees, as well as being responsible and

be involved and investigating any breach of

security matters of the Group.

As at 31 December 2011, 342 PNHB Auxiliary

Police had undergone basic training conducted

by Polis Di Raja Malaysia (“PDRM”) at the

Police Training Centre at Jalan Semarak,

Kuala Lumpur (“PULAPOL”). Training is also

conducted annually to ensure PNHB’s Auxiliary

Police personnel are constantly equipped to

carry out their various duties. The shooting

training is conducted twice a year to ensure the

Auxiliary Police have good shooting skills and

are able to maintain fi rearms effi ciently.

The types of training conducted included the

use and maintenance of fi rearms effi ciently,

protocol for carrying out duties, training

on various laws and enactments, and the

proper protocol for arresting offenders and

approaching civilians. Additionally, members

of the Auxiliary Police team undergo physical

fi tness examinations twice a year to ensure

that they are fi t and meet the mandatory

requirement to always stay fi t and able to

perform on the job.

Golf Amal Championship PEKA 2011

Recreation Activity at Fraser’s Hill

151


Valuing Our People

MANAGING OUR SUPPLIERS ANDCONTRACTORS

PNSB

As at 31 December 2011, PNSB had enlisted 178 contractors as panel contractors, suppliers or consultants. To ensure the quality of the contractors’ or consultants’ services, we have incorporated clauses in our contracts which state that any work done has to be of the highest quality and must conform to our standard practice. If contractors, suppliers or consultants fail to meet such desired standards, PNSB has the right to reject the goods or services provided by them.

In addition, contractors, suppliers or consultants are selected based on the following, using a scouring system:

1. Financial and operating strength.2. Past and current performance record.3. Licence or certifi cation from government

and regulatory bodies.4. History of satisfactory performance with

other companies.5. Registration with relevant government

agencies or bodies.

We do not condone contractors who are unable to provide proper services, thereby putting us and the consumers at risk by causing water supply disruptions and other inconveniences or dangers. We do not hesitate to penalise or terminate contractors who do not practise safety at the work site or who fall short of our requirements by:-

• Use of inappropriate tools/equipment at site.

• Causing road safety issues.• Late delivery.• Lack of safety measures on site.• Poor work quality. • Lack of personnel protective equipment

on site.

We are pleased to report that in 2011, there were no contractors, suppliers or consultants suspended from service.

SYABAS

There were a total of 299 contractors, suppliers and service providers registered with SYABAS. In addition to that, SYABAS has registered 148 panel contractors for pipes and meters to carry out emergency works for 10 SYABAS’ District Offi ces. Like PNSB, SYABAS has a procurement policy with which contractors, suppliers and service providers are appointed. Their appointment and selection is also based on other than commercial terms, but include sound and proven track records of their technical capability.

To ensure quality of works and services, contractors and suppliers and service providers are given the following as guidelines:

• Garis Panduan Kontraktor, Pembekal dan Penyedia Perkhidmatan.

• Garis Panduan Bagi Kerja-Kerja Penyenggaraan Paip SYABAS.

Their works are monitored and checked at all times by the respective Superintendent Offi cer (“SO”) or SO’s representatives for each work and contract. Several contractors were suspended by SYABAS in 2011 due to the following reasons:

• Failure to complete work on time.• Failure to supply goods within the agreed

schedule.• Failure to supply goods according to

SYABAS’ specifi cations.• Failure to comply with safety aspects at

construction sites.• Failure to have SPAN registrations

renewed. • Failure to renew relevant permits or

licences with statutory authorities, i.e PKK, CIDB, SPAN, MOF, ST and SSM.

• Failure to wear SYABAS T-shirts or name tags during working hours.

Gas Saving Tips

Remove excess weight

from trunk of car.

SYABAS’ Safety Handbook

for Contractors at the work site


152

Puncak Niaga Holdings Berhad (“PNHB”)

recognises the environmental impact resulting

from its operations and continues to minimise

this effect. As we operate in the water industry,

environmental aspects are involved in every

area of our business. Our commitment to

preserving the environment is inculcated into

all relevant aspects including raw and treated

water quality, water safety and public health.

The quality of water supplied is routinely

monitored at both the Water Treatment

Plants (“WTP”) and the distribution networks

regularly. This ensures that high quality water

is continuously supplied to our consumers.

Our environmental initiatives also include

energy performance, waste and effl uents

management. Waste generated by our

activities arises from the production of residue

from our WTPs. In order to reduce stress

on the environment, Syarikat Bekalan Air

Selangor Sdn Bhd (“SYABAS”) also monitor

and incorporates consideration for carbon

footprint in programmes which are in-line with

its vision of preserving the environment.

At PNHB, our environmental commitment is

also nurtured within our workplace. This is

refl ected in various environmental initiatives

being practised at our offi ces including

reducing paper consumption, and applying 3R

(Reduce, Reuse, Recycle) activities and energy

conservation practices. We carefully monitor

our carbon footprint performance so as to

better manage the emissions derived from the

activities of the Company, and its employees,

suppliers and contractors.

SYABAS takes its corporate environmental

responsibility for the protection, conservation

and enhancement of the natural environment

very seriously. One of SYABAS’ most tangible

commitments to the sustainability of water

resources in Selangor is its Environmental

Surveillance Section (“ESS”), a division fully

responsible for monitoring issues relating

to the environment within the six water

catchment areas in Selangor.

Since the inception of ESS, SYABAS has

developed Water Resources Surveillance

Programmes through its Sanitary Surveys,

its Water Quality Index (“WQI”) Programme,

Environmental Impact Studies and

investigations of raw water quality violations.

These programme provide close and effective

monitoring of the water catchment areas, with

special focuses on:

• Preservation and/or improvement to raw

water quality

• Identifying and monitoring potential

pollution sources and activities

• Making appropriate recommendations

to stakeholder groups including water

operators, government departments,

government agencies and civil society

Various pollution sources were identifi ed as

contributing to water resources pollution,

thereby affecting water treatment and supply,

namely:

• Illegal sand mining

• Industrial activities that directly or

indirectly discharge untreated waste into

the rivers

• Untreated or partially treated sewage

discharges

• Illegal solid waste dumping

• Effl uence from landfi lls

• Land clearing

• Animal husbandry activities

• Leachate from old and existing solid waste

dumping sites

SYABAS has highlighted these concerns to

the authorities, and is working closely with

the Department of Environment (Jabatan

Alam Sekitar) (“DOE” or “JAS”) Selangor

and Selangor Water Management Authority

(Lembaga Urus Air Selangor) (“LUAS”)

and other relevant authorities at state and

federal levels to prevent pollution. Through

these relationships, SYABAS supports the

enforcement agencies’ efforts to mitigate

incidences of pollution, and to ensure

environmental care.

Preserving Our Environment

Earth Day 2011 celebration

153



SYABAS is also a member of various Selangor

State Government committees, namely:

• Jawatankuasa Tetap Alam Sekitar Negeri

Selangor

• Jawatankuasa Tetap Infrastruktur dan

Kemudahan Awam Negeri Selangor

• Jawatankuasa Pengurusan Lembangan

Sungai (“Sg”) Negeri Selangor

• Pasukan Petugas Lembangan Sg Selangor

• Pasukan Petugas Lembangan Sg Langat

• Pasukan Petugas Lembangan Sg Klang

Raw Water Quality and Violations

Raw water pollution is one of the leading

causes of WTP shutdowns and operational

interruptions.

To determine pollutant levels in raw water

sources, we monitor raw water quality

violations at 31 water intakes located within

six water catchment areas operated by

Puncak Niaga (M) Sdn Bhd (“PNSB”), Syarikat

Pengeluar Air Sungai Selangor Sdn Bhd

(“SPLASH”) and Konsortium ABASS Sdn

Bhd (“Konsortium ABASS”). For the 27 water

intakes operated by PNSB, the water quality

data is compiled based on the monthly Water

Quality Reports.

The raw water quality is monitored according

to the parameters set out under the

Recommended Raw Water Quality Limit of the

Ministry of Health’s (“MOH”) National Standard

for Drinking Water Quality (2004) (“NSDWQ”)

which are categorised into:-

1. Microbiological

2. Group I (Physical)

3. Group II (Inorganic matter)

4. Group III (Heavy metals)

5. Group IV (Pesticides)

6. Group V (Radioactivity)

The following Chart A illustrates the annual raw

water quality violations and plant shutdown

cases from 1995 until 2011.

Raw water pollution is one of the leading causes of WTP shutdowns and operational interruptions.

Chart A - Annual Raw Water Quality Violations & Plant Shutdowns (1995-2011)

Total Raw Water Quality ViolationsPlant Shutdown Due to Raw Water Quality Violations

0

273

0

511

8587 76 75 99 102

171 166 164123

225277 247

21 7 9

522

658

804

1044957

909

802 810 796 830

1008

12681319

1085

1485

200

400

600

800

1000

1200

1400

No

. of

Ra

w W

ate

r Q

ua

lity

Vio

lati

on

&

Fre

qu

en

cy

of

Pla

nt

Sh

utd

ow

n

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


154

Based on the raw water quality data from PNSB

in 2011, the number of violations decreased by

17.7% to 1,085 from 1,319 in 2010.

The breakdown of the violated parameters in

2010 and 2011 is as shown below:

Total Raw Water Quality ViolationsParameter group Recorded 2010 2011

Microbiological 556 496

Group I - Physical 511 409

Group II - Inorganic matter 240 176

Group III - Heavy metals 11 1

Group IV - Pesticides 0 0

Group V - Radioactivity 1 3

Total 1,319 1,085

Based on the analysis conducted, most of the

raw water quality violations had occurred in

the Sg Langat, Sg Selangor and Sg Bernam

River basins as illustrated below:-

Total Raw Water Quality Violations Total RecordedCatchment Area WTP(s) 2010 2011

Sg Langat 8 512 416

Sg Selangor 6 325 286

Sg Bernam 4 217 188

Sg Kelang 8 44 27

Sg Buluh 2 27 20

Sg Tengi 1 194 148

Total 29 1,319 1,085

As mentioned earlier, raw water pollution is

one of the leading causes of WTP shutdowns

and water supply interruptions. When

such incidences occur, an environmental

investigation is conducted to identify the

source of the raw water pollution.

As soon as the source is identifi ed, authorities

such as the National Water Services

Commission (“Suruhanjaya Perkhidmatan Air

Negara”) (“SPAN”), JAS Selangor and LUAS

will be informed for further action. Following

this, full investigation reports are forwarded

to these authorities and other government

agencies such as the Ministry of Energy, Green

Technology and Water (“Kementerian Tenaga,

Teknologi Hijau dan Air”) (“KeTTHA”), the

Selangor State Government and the respective

municipal councils.

Cooperation from these authorities is

necessary for action to be taken against

the perpetrators of the pollution.

Recommendations and solutions are also

put forward to ensure that such incidences of

pollution will not occur again.

In 2011, a total of nine incidences of pollution

occurred where WTPs were shutdown, in

addition to numerous incidences of water

supply interruptions. The details of these

incidences are as set out in Table A on page 155



2011 BPS Membership

Recruitment Drive at Sekolah

Menengah Kebangsaan

Darul Ehsan

155



Shutdown Type of Probable sourceNo. Date WTP hours pollution of pollution

1. 6 January 2011 Sg Rumput 3 hrs High raw High loading of silt

water turbidity due to heavy rainfall

2. 26 March 2011 Sg Sireh 171.5 hrs High raw Problematic raw

water colour water quality

requiring

very high

alum dosage

3. 7 May 2011 Cheras 7.75 hrs Diesel spillage Domestic and

Mile 11 industrial effl uent

4. 14 May 2011 Gombak 3.25 hrs Diesel spillage Source of pollution

could not be identifi ed

5. 18 May 2011 Cheras 7.25 hrs Diesel spillage Domestic and

Mile 11 industrial effl uent

6. 21 November Cheras 9 hrs Diesel spillage Suspected effl uent

2011 Mile 11 discharge from

industrial area

7. 22 November Cheras 9 hrs Diesel spillage Suspected effl uent

2011 Mile 11 discharge from

industrial area

8. 29 November Sg Rumput 3 hrs High raw High loading of silt

2011 water turbidity due to heavy rainfall

9. 5 December Rantau 8 hrs High raw River bank collapse

2011 Panjang water turbidity at upstream of

Sg Kerling, near the

Selangor-Pahang border

due to heavy rainfall

Table A - Record of Plant Shutdown Cases Due to Raw Water Pollution in 2011

“Misi Bantuan Bekalan Air Bersih”

to fl ood victims in Johor


156

Shutdown Type of Probable sourceNo. Date WTP hours pollution of pollution

1. Monthly Sg Langat - High raw Discharge from sand

water turbidity mining area near Sg Sub,

and colour tributary of Sg Langat

2. 8 April 2011 SSP2 - High fl uoride Suspected effl uent

level in raw water discharge from upstream

industrial area

3. 5 December SSP2 - High raw River bank collapse

2011 water turbidity upstream of Sg Kerling, near

the Selangor-Pahang border

due to heavy rainfall

Table B - Record of Water Supply Interruptions due to Raw Water Pollution in 2011

Upon a detailed breakdown and evaluation of the Water Quality Index (“WQI”) of the 31 intakes for

2010 and 2011 as below, 5 stations (16.1%) were categorized under Class I in 2011, 21 stations

(67.8%) fell under Class II, and 5 stations (16.1%) under Class III. Compared to 2010, generally,

the number of water intakes that were categorised under Classes I and III decreased in 2011,

hence, resulting in more water intakes being classifi ed under Class II.

Table C - Record of WQI of the 31 Intakes for Year 2010 and 2011

Year 2010 Year 2011WQI No. of No. ofClass WTP WTP WTP WTP

I 8 Kuala Kubu Bharu, Kalumpang, 5 Sg Pangsoon,

Sg Pangsoon, Sg Lolo, Sg Lolo, Ampang Intake,

Sg Serai, Gombak, Sg Rangkap, Sg Rumput

Ampang Intake, Sg Rumput

II 16 Bernam River Headworks, 21 Bernam River Headworks,

Rantau Panjang, North North Hummock, Batang Kali,

Hummock, Batang Kali, Kuala Kubu Bharu,

Sg Selisek, Sg Dusun, Kalumpang, Sg Selisek,

Sg Tengi, Sg Buaya, Sg Dusun, Sg Tengi,

Sg Langat, Bukit Nanas, Sg Buaya, SSP2,

Sg Batu, Sg Rangkap, Sg Langat, Sg Serai,

Kepong, Wangsa Maju, Bukit Nanas, Sg Batu,

SSP1, SSP3-Rasa Gombak, Kepong,

Wangsa Maju, SSP1,

SSP3- Badong, SSP3- Rasa,

Semenyih


Launching of World Water Day 2011

157


Year 2010 Year 2011WQI No. of No. ofClass WTP WTP WTP WTP

III 7 SSP2, Sg Sireh, Bukit Tampoi, 5 Rantau Panjang, Sg Sireh,

Cheras Mile 11, Salak Tinggi, Bukit Tampoi, Cheras Mile 11,

SSP3-Badong, Semenyih Salak Tinggi

IV 0 None 0 None

V 0 None 0 None

Total 31 31

Note :• The WQI was derived from water quality data obtained from Monthly Reports submitted by PNSB (27 intakes) and

monthly raw water sampling carried out by SYABAS (SSP1, SSP3- Badong, SSP3-Rasa and Semenyih intakes) in 2010 and 2011

• Name of WTP in bold – The WTP fell into a lower class compared to the previous year• Name of WTP in bold italic – The WTP improved to higher class compared to the previous year


The raw water quality at four water intakes

was found to be improving, namely Sg Rangkap

WTP (Class II to Class I), SSP2 WTP, SSP3-

Badong WTP and Semenyih WTP (Class III to

Class II). Meanwhile, four water intakes were

downgraded from Class I to Class II quality,

namely Kuala Kubu Bharu WTP, Kalumpang

WTP, Sg Serai WTP and Gombak WTP; and one

intake, namely Rantau Panjang deteriorated

from Class II to Class III.

Ammonia Level Monitoring

Ammonia Level Monitoring was conducted on

an hourly basis at four critical WTPs along the

Sg Langat Basin, namely Sg Langat, Cheras

Mile 11, Bukit Tampoi and Salak Tinggi WTPs to

ensure early preparation and necessary action

should the WTPs be required to shutdown due

to high ammonia levels.

Details of the Ammonia Level Monitoring

along the Sg Langat Basin are as set out in the

“Delivering Quality” section on pages 117 to 129


SANITARY SURVEYS

The sanitary survey is a programme conducted

to assess the general impact that human

activities have on raw water resources and

their corresponding quality. It is also carried

out to assess the effi ciency of the WTPs’

treatment process corresponding to the raw

water components as well as the treated water

quality in the distribution lines.

In 2011, a total of nine sanitary surveys were

jointly conducted with MOH and WTP operators

at the following study areas and the surveys

covered the WTP processes and distribution

area:-

I. North Hummock WTP

II. Rantau Panjang WTP and SSP2 WTP

III. Sg Selangor Distribution Area

(Sabak Bernam)

IV. Salak Tinggi WTP

V. Sg Serai WTP

VI. Sg Selangor Distribution Area (Petaling)

VII. Bukit Tampoi WTP

VIII. Sg Batu WTP

IX. Kalumpang WTP

Technical visit by

Persatuan Pekilang-pekilang

Malaysia (FMM) to SSP2 WTP


158

Based on these surveys, several human

activities that might have raw water pollution

impacts were identifi ed such as land clearing,

illegal sand mining, stone quarries, open

landfi lls and illegal waste dumping sites

with no leachate treatment facilities. These

surveys facilitate early detection and provide

a general idea about the potential sources of

contamination and plant shutdown during the

occurrence of pollution events.

The fi ndings of the surveys together with

recommendations thereon are highlighted

to the relevant agencies and authorities to

mitigate pollution incidents and manage

environmental risk before any of the WTP’s

operation and water supply are jeopardised.

ENVIRONMENTAL IMPACT STUDY (“EIS”)

In 2011, land use assessment for the EIS was

carried out for Sg Selangor, Sg Langat, Sg

Bernam, Sg Klang, Sg Tengi and Sg Buloh

catchment areas.

Land use within the water catchments refers

to various natural or human activities that may

result in contamination of raw water and cause

deterioration to its quality. The pollution may

affect the raw water quality to the point where

water treatment processes are unable to cope,

consequently leading to a disruption in the

drinking water supply.

In addition to land use assessment, raw water

quality monitoring and WQI assessment were

also carried out for the water intakes in 2011

on a monthly basis in order to determine the

current raw water quality.

The EIS programme provides information on

the current condition of the raw water quality

and pollution issues faced within the water

catchments.

Treated Water Quality

The Water Quality Surveillance Monitoring

Programme for all the 29 WTPs managed by

PNSB is conducted by the Central Laboratory

as well as an independent accredited laboratory

appointed by PNSB. The programme is carried

as per requirement stated in the Concession

Agreements and MOH’s NSDWQ.

Based on the water quality surveillance

monitoring programme carried out for

January – December 2011, treated water

compliance achieved was 99.9% as against

MOH’s NSDWQ as depicted below:

Number Number of of % of Period analysis compliances compliances

January –

December

2011 19,366 19,349 99.9

Note: The above is based on analysis by Central Laboratory and Independent Laboratory

In addition to the above, treated water quality

performance was also gauged using the

indicators for Quality Assurance Programme

(“QAP”) by MOH. Based on the monitoring

conducted for January – December 2011 by

Central Laboratory, Independent Laboratory

appointed by PNSB and WTPs, treated water

quality produced by all the 29 WTPs complied

with MOH’s requirement as shown below:

Parameter QAP (% violation) 2011

E. Coli 0.4 0

Free residual

chlorine (FRC) 2.3 0.001

E. Coli & FRC 0.2 0

Turbidity 2.0 0.0004

Aluminium 10.2 1.18

Note: The above is based on analysis by Central Laboratory, Independent Laboratory and WTPs

The above show that treated water produced by

PNSB has high percentage of compliances as

well as meeting MOH’s requirements.




159


Reservoir Water Quality Monitoring

The treated water from WTPs will be stored in

reservoirs prior to distribution by SYABAS to

consumers.

In order to ensure that high quality water is

continuously supplied to consumers, routine

Reservoir Water Quality Monitoring at different

depths is conducted on quarterly basis.

The status of water quality in the reservoir

is monitored through the analysis of water

quality parameters such as pH, turbidity,

colour, aluminium, iron and manganese. The

monitoring results are used to determine

whether the reservoir requires fl ushing or

cleaning.

Based on the monitoring conducted in 2011,

a total of seven reservoirs were identifi ed and

cleaned either manually or by using a robotic

method. These reservoirs were:

1. Sg Sireh

2. Sg Buaya

3. North Hummock

4. Gombak

5. Cheras Mile 11

6. Sg Serai

7. Sg Lolo (Old)

Filter Performance Monitoring

Filtration is the fi nal step in the water

treatment process, removing fi ne suspended

solids remaining after the clarifi cation

process. Monitoring fi lter performance, most

importantly tracking the running hours is

critical to ensure that the fi lter remains in good

operating condition. When a given fi lter has

reached its specifi ed number of running hours

or its headloss level, backwashing is initiated.

The Research & Process Unit (“R&P”)

constantly monitors fi lter performance by

tracking each fi lter’s running hours. Based on

the monthly statistics for a total of 174 fi lters

operating at our 29 WTPs, the breakdown

of the fi lter running hours is as tabulated in

Table D above.

Since PNSB assumed the management of the

29 WTPs in 2005, it has implemented various

initiatives which have resulted in tremendously

improved fi lter running hours. As a result,

there were no fi lters with short running hours

in 2011 (less than 30 hours).

Firstly, R&P conducted treatment process

studies at the Sg Rangkap, Cheras, Bukit

Nanas and Rantau Panjang Old WTPs, to

ensure effi ciency and other treatment process

prior to the fi ltration process, as ineffi cient

treatment would burden the fi lters. The results

of the studies have also resulted in the review

of fi lter operation procedures.


BPS activities at

“Karnival Sayangi Selangor”

held at I-City Shah Alam

Filter Run Time Per Month As December 2010 As December 2011(hours) No. of filters % No. of filters %

60 - 72 78 45.6 79 46.7

40 - 60 69 40.4 72 42.6

30 - 40 18 10.5 18 10.7

30 6 3.5 0 0

Total 171 100 169 100

Table D - Breakdown of the filter running hours.

* Note : Some of the filters were not in operation as they were either under repair or on standby.


160

Secondly, PNSB initiated plant improvement

works which included refurbishing some of

the older fi lters and installing fi lter monitoring

instruments. 14 of the WTPs namely, Sg Buaya,

Batang Kali, KKB, Sg Tengi, Sg Selisek, Rantau

Panjang Old, Rantau Panjang New, North

Hummock, Bukit Nanas, Sg Rangkap, Bukit

Tampoi Old, Bukit Tampoi New, Sg Langat

and Cheras Mile 11 WTPs have recorded more

effective fi lter performance following this

initiative.

PNSB continues to carry out filter

refurbishment works as the need arises, and

the Gombak and Sg Batu WTPs’ fi lters were

refurbished in 2011.

R&P will continue to monitor and perform

studies to further improve the running hours

with the objective to achieving a backwashing

cycle of 72 hours, or whenever fi lter headloss

reaches 1.8 metres, whichever occurs fi rst.

PUBLIC AWARENESS PROGRAMME

ON ENVIRONMENTAL PROTECTION

AND CONSERVATION

The Group successfully organised

and/or participated in various environmental

awareness campaigns and activities in 2011 in

a bid to highlight the impact of environmental

pollution, and the need to preserve and

conserve our water resources (“Activities”).

The Activities were as follows:-

1. Delivering environmental talk and

facilitating demonstration of river water

quality testing with students and the public

at the 25th River Rescue Brigade (“Briged

Penyelamat Sungai”) (“BPS”) Club

Programme with the theme “1 Sungai

1 Tanggungjawab 1 Kita” at Sg Langat

WTP on 24 June 2011, offi ciated by the

Deputy Prime Minister’s wife, YAB Puan

Sri Noorainee Abdul Rahman. The details

of the participating schools at the event

are set out in the “Engagement with Our

Community” section on pages 167 to 174


2. Delivering a talk on PNSB’s and

SYABAS’ operations with activities and

demonstrations including members’

recruitment drive for BPS as part of

the Educational Outreach Programme

(“Program Pelestarian Pendidikan”) (“3P”)

at schools. The details of the participating

schools at the event are set out in the

“Engagement with Our Community”

section on pages 167 to 174 of this

Annual Report.

3. The 2011 BPS Membership Recruitment

Drive were conducted by BPS at schools.

The details of the participating schools

are set out in the “Engagement with Our



4. Setting up and manning a World Water

Day 2011 exhibition booth at SYABAS’

Headquarters from 22 March 2011 to

26 March 2011. The details of the

participating schools at the event are

set out in the “Engagement with Our



5. SYABAS’ Exhibition in conjunction with an

Offi cial Visit by the Deputy Prime Minister,

YAB Tan Sri Muhyiddin Hj Mohd Yassin, at

Sekolah Kebangsaan Sijangkang, Kuala

Langat on 29 March 2011.

6. BPS facilitation of activities in conjunction

with the World Water Day 2011 celebration

by the Selangor State Government and

LUAS at Dataran Kemerdekaan, Shah

Alam on 2 April 2011.

7. Public Awareness Programme for the

public, the details are as set out in the

“Engagement with Our Community”

section on pages 167 to 174 of this

Annual Report.



celebration in Shah Alam

161


8. Official Visits from the following

authorities, bodies and the public:-

a. Persatuan Pekilang-pekilang

Malaysia (FMM) at SSP2 WTP on

5 April 2011.

b. Public Utility Board, Singapore at

Operation Command Centre on

7 April 2011.

c. TYT Mohamed Saheb Al-Daragi,

Menteri Perumahan dan Pembinaan

Iraq at Wangsa Maju WTP on

25 April 2011.

d. Representative from Industri

Perdagangan Zon Bebas Utama at

Auditorium, SYABAS Head Offi ce on

10 May 2011.

e. National Water and Wastewater

Organisation of Iran at SYABAS’

Auditorium on 16 May 2011.

f. Persatuan Suri dan Anggota Wanita

Perkhidmatan Awam Malaysia

(PUSPANITA) to SYABAS Head Offi ce

at PUSPEL, Command Centre and

Auditorium on 18 May 2011.

g. Persatuan Pentadbiran Industri

Bangi at SYABAS Auditorium,

Command Centre and PUSPEL on

21 June 2011.

h. Air Kelantan Sdn Bhd at SYABAS

Auditorium on 22 June 2011.

i. Top Management of KWSP to Klang

Gates Dam, Wangsa Maju WTP and

SYABAS on 11 July 2011.

j. Tenaga Nasional Berhad to SYABAS

Head Offi ce on 18 July 2011.

k. Lembaga Zakat Selangor to SYABAS

Head Offi ce on 19 July 2011.

l. Delegation from the 2nd IWA

Development Congress and

Exhibition 2011 at Wangsa Maju

WTP and SYABAS Head Offi ce on

21 November 2011.

m. Representative from Pengurusan

Pusat Dialisis Negeri Selangor

and the Federal Territories of

Kuala Lumpur and Putrajaya at

Auditorium, Command Centre and

PUSPEL on 29 November 2011 and

6 December 2011.

Consumer Awareness and

Education Programme (“CAE Programme”)

The Consumer Awareness Programme (“CAP”)

is an education campaign that was initiated

by SYABAS in early 2008 to create immediate

consumer awareness of water quality issues.

It exposes consumers to the stringent

water quality monitoring activities carried

out by MOH and SYABAS. In a bid to educate

consumers, the CAE Programme with media

coverage includes educational events, as well

as issuing print and electronic advertisements

and infomercials on SYABAS. The programme

also emphasises the role of consumers in

enhancing water quality, such as by inspecting

and maintaining internal piping systems and

internal storage tanks and engaging licensed

plumbers to ensure that inspections and

cleaning are carried out professionally. It

also counters misconceptions about using

household water fi lters, which can sometimes

contribute to the deterioration of water quality

at the consumers’ premises. Besides this,

the programme educates the consumers to

actively fulfi l their roles and responsibilities

in preserving the quality of water supplied to

their premises by maintaining the internal

plumbing system.


Launching of World Water Day 2011


162

Since 2010, CAPs have been carried out on

a bigger scale than in previous years at both

the headquarters and district levels. The

knowledge to be imparted is also delivered in

a more interactive atmosphere in the form of

educational talks, dialogues, exhibitions and

demonstrations, which are not only limited to

water quality issues. Thus, the programme

also touches on other water supply issues

such as low water pressure, pipe bursts/leaks,

billing problems, etc. Demonstrations of the

quality of water supplied were also carried out

at consumers’ premises, including residential

areas, commercial areas and at organisations

such as educational and medical institutions.

To ensure continuous improvement of the

programme, Guidelines for Consumer

Awareness and Education Programme were

developed in 2010, together with the consumer

feedback survey to evaluate the impact and

effectiveness of the programme. Comments

and suggestions received from consumers

have enabled SYABAS to further enhance our

efforts in ensuring that the supply of treated

water is always clean and safe for consumption.

Summary of CAP organised by Headquarters

and Districts from Year 2007 to 2011

YEAR 2007 2008 2009 2010 2011

CAP 5 16 3 15 20

events

organised

by

Headquarters

CAP NA 532 957 185 179

events

organised

by

Districts

Note: NA – Not Available. CAP at districts level was only introduced in 2008.

Waste Management

Waste generated by our activities is generally

residue (from our water treatment facilities),

paper waste, and construction waste (from our

projects and maintenance programme). Our

biggest waste issues arise from the generation

of residue from our WTPs.

In 2011,

1. SSP2 WTP produced a total of 335,124

metric tonnes (“MT”) of treatment residue.

2. Wangsa Maju WTP produced a total of

32.26 MT of treatment residue.

WTP Residue Treatment

SSP2 and Wangsa Maju WTPs are equipped

with sludge treatment facilities (“STF”) to treat

the residue.

DOE has approved our application for special

management of scheduled waste for the Bukit

Badong Depository Area to be developed for

the residues from the SSP2 and Wangsa Maju

WTPs. The construction of the depository area

is ongoing and is expected to be completed

by 2012.

Reducing Paper Usage

In 2011, PNSB’s paper usage increased by

24.5% as compared to 2010. This increase was

attributed to the increase in the Company’s

tender submissions, business proposals and

the increased in staff recruitment.

At SYABAS, we utilise paper for our daily

operations. Based on internal records, our

paper consumption rose from 2009 until 2011.

In 2009, the A4 paper consumption stood at

52.28 ton which is equivalent to 14.11 ton of

carbon dioxide (“CO2”). In 2010, the paper

consumption increased by 2.68 ton (5.13%),

and this increasing trend continued in 2011,

with paper consumption increasing by 5.01 ton

(9.12%).


Visit by the students from


SSP2 WTP


Chin Hock Methodist Sunday School

to SSP2 WTP

163


SYABAS Paper Consumption (A4)

from 2009 to 2011

2009 2010 2011

Paper 52.28 54.96 59.97

Consumption (ton)

Carbon Emission 14.11 14.84 16.19

(ton of CO2)*

*Note : Office paper produces 0.27 metric ton of carbon equivalent (“MTCE”) per ton of paper (Source: The US EPA report, Solid Waste Management and Greenhouse Gases A :Life-Cycle Assessment of Emission and Sinks 3rd Edition, 2006)

The Group will continue to intensify efforts to

reduce paper consumption by adopting green

practices. As a start, we have encouraged the

dissemination of information electronically.

Reducing Construction Waste

SYABAS requires all its contractors to clean up

waste generated from maintenance activities.

These contractors are monitored frequently to

ensure full compliance.

Further information is provided in the

section entitled “Managing Our Suppliers

And Contractors under “Valuing Our People”

section on page 151 of this Annual Report.

Use of Resources

Raw Water Drawn for Treatment

The following table summarises the amount of

raw water drawn from the various rivers and

dams for treatment at PNSB’s WTPs in 2011.

Source of VolumeNo. raw water Withdrawn (m3)

1. Sg Bernam 10,687,310

2. Sg Batang Kali 4,155,650

3. Sg Dusun 404,414

4. Sg Inki 2,284,940

5. Sg Tengi 686,370

6. Sg Gerachi 1,806,680

7. Sg Darah 170,070

8. Sg Selangor 367,377,893

9. Sg Gombak 26,707,207

10. Sg Ampang 6,960,253

11. Sg Rangkap 3,911,735

12. Sg Kepong 773,395

13. Sg Rumput 285,045

14. Sg Langat 212,437,706

15. Sg Serai 410,244

16. Sg Lolo 1,265,321

17. Sg Pangsoon 1,402,091

18. Sg Labu 1,030,130

19. Sg Sireh 9,405,039

20. Batu Dam 41,311,879

21. Klang Gates Dam 55,780,400

22. Tasik Subang Dam 3,734,000

TOTAL 752,987,773

The current climate changes make weather

patterns harder to predict, making it more

important than ever to continuously plan and

monitor the fl ow and volume of water in the

rivers from which we obtain raw water so as to

ensure optimisation of raw water abstraction

from the rivers.

Water Utilization

Water is used for cleaning and maintenance

works such as WTP fi lter backwashing,

reservoir and storage tank cleaning, cleaning

of pipelines, and fl ushing.


SYABAS’ participation at

the Green EXPO 2011 held at

Tunku Abdul Rahman College,

Setapak


164

We constantly endeavour to fi nd new ways to

further reduce water usage. Already, we have

cut plant water losses by adopting wash water

recovery and by increasing the fi lter backwash

cycle to 72 hours. In addition, to clean the

pipelines, since 2007, SYABAS has used air

scouring technology instead of conventional

fl ushing, which has resulted in less water

usage in cleaning the pipelines. In 2011,

operational water usage at SYABAS decreased

by 19.08% compared to the fi gures reported

in 2010.

Reducing water losses makes for more

effective utilisation of precious water

resources. Between 2005, when it started

operations, and 31 December 2011, SYABAS

has managed to reduce water losses from

42.78% in 2005 to 32.31% in 2011, a reduction

of about 10.47%. This has resulted in a saving

of about 273 MLD of water in physical losses.

SYABAS’ water consumption across all

its offi ces saw a 27.89% increase in 2011

(55,663m3) compared to the previous fi gure of

43,522 m3 in 2010.

In 2011, water usage at PNSB increased

by 6.78% (1,054m3) compared to the usage

amount of 15,555 m3 in 2010.

The Group also provides technical advice

to the authorities on rainwater harvesting

and presented various technical papers on

environmental issues and protection.

Electricity Consumption

The water industry is electricity-intensive. At

PNSB, the WTPs’ pumping systems account

for the highest electricity consumption, while

SYABAS requires electricity to drive its 498

pumping stations.

The Group’s electricity consumption in 2011

was as set out below:-

• At the Wisma Rozali (headquarters),

electricity consumption was successfully

reduced by 1.75% from 2010 to 2011.

• At the WTPs, electricity consumption

increased by 0.92% from 2010 to 2011. The

increase resulted from a 1.63% increase in

the volume of water produced.

• At SYABAS, further measures were

taken and continue to be taken to reduce

electricity usage at booster pumping

stations and offi ce buildings.

Although our electricity optimisation

programme is ongoing at the WTPs, only

relatively small reductions in electricity

consumption are possible as the WTPs are

operating at optimal effi ciency in terms of

electricity consumption.

Energy Effi ciency Initiatives

However, in order to make savings wherever

possible, in 2011, PNSB conducted a few

initiatives at SSP2 WTP, and the initiatives

were as follows:-

1) Replacement of Fluorescent Light to Low

Bay Light at Lime Plant Stream C & D

• Estimated saving =

RM3,286.62 per year


We constantly endeavour to fi nd new ways to further reduce water usage.

0

10000

20000

30000

40000

50000

6000046,300

14,22415,555

16,609

55,663

43,522

Wa

ter

Co

ns

um

pti

on

(m

3)

Company

SYABAS PNSB

Our Water Consumption

(2009-2011)

2009 2010 2011



SSP2 WTP

165


2) Reuse Sampling Water for WTP usage at

Filtration Plant


RM127,334.00 per year

3) Decommission Coagulation Mixers at

Coagulation process Actifl o Plant



4) Refurbishment of Treated Water Pump P2

at TWPS



Use of Raw Materials

We are also pleased to report that PNSB

utilised a total of 42,923.96 MT of chemicals in

the water production process in 2011.

As at 31 December 2011, total production

of treated water at all 29 WTPs was

703,477,920 m3 and about 0.061058 kg of

chemicals were required to treat 1 m3 of water.

The amount of chemical usage for 2011 is

equivalent to the amount of chemicals usage

last year.

Carbon Emissions

The fi rst time we reported our Carbon

Emissions based on the Green House Gas

(“GHG”) Protocol was in 2009.

Concerned with global environmental issues,

especially climate change, Malaysia has

adopted a voluntary target of a reduction

of up to 40 per cent in the ratio of its carbon

emissions to gross domestic product (“GDP”)

to be achieved between 2005 and 2020. The

commitment was announced by our Prime

Minister, YAB Datuk Seri Mohd Najib Tun Haji

Abdul Razak during the United Nations Climate

Change Conference held in Copenhagen in

December 2009.

To play its role in reducing environmental

stress, SYABAS is also planning to position the

company on a low-carbon path, which in is line

with our vision to ensure the preservation of

the environment. In May 2010, SYABAS initiated

the Carbon Footprint Initiative Programme

(“CFIP”) setting a baseline for carbon

emissions arising from SYABAS operations

starting in 2010.

Emission quantifi cation was based on the 2006

Intergovernmental Panel on Climate Change

(“IPCC”) Guidelines for National Greenhouse

Gas Inventories, the UNEP Tool and Guidelines

for Calculating Greenhouse Gas Emissions for

Businesses & Non-Commercial Organisations

and the Department for Environment, Food

and Rural Affairs UK (“DEFRA”).

The Table E below summarises the carbon

emissions by source and quantity for 2010

and 2011. Based on the information gathered

in 2011, the electricity consumption (Scope 2)

contributed 97% (103,653 t CO2) to SYABAS’

carbon footprint and the fuel consumption by

the company’s vehicles (Scope 1) contributed

3% (3,557 t CO2).

GHG Source Unit 2010 2011

Electricity

(Scope 2) t CO2 103,539 103,653

Transport

(Scope 1) t CO2 3,475 3,557

Total t CO2 107,014 107,210

Note: SYABAS Carbon Footprint is based on emission factor published by GreenTech Malaysia for electricity in Malaysia (0.683 t CO

2 /Mwh)

Table E - SYABAS CO2 Emission in 2010 and 2011


Water Facts

A person consumes

more than 16,000 Gallons

of water in his life time.


166

To ensure that SYABAS’ staff are collectively

committed to the CFIP, an integrated working

group was formed in December 2011. The main

task of the working group are to ensure that

all relevant stakeholders are consulted and

involved in the programme, to conduct studies

on proposed carbon reduction measures and

to develop a SYABAS Climate Change Policy.

The SYABAS’ CFIP includes short

term programmes that promote green

habits/culture among staff, suppliers and

contractors, to medium term programmes

which emphasise increasing energy effi ciency,

and long term programmes that include

studies on the potential to generate renewable

energy.

In summary, SYABAS’ CFIP is a voluntary

programme that embodies SYABAS’

environmental aspirations which will

encourage economic development and

positively contribute to the mitigation of

climate change.

Compared with estimated carbon emissions

arising from electricity consumption in 2010,

in 2011 Scope 2’s estimated carbon emissions

declined by 1.75%.

2010 2011

Locations MT CO2 -eq MT CO

2 -eq

Wisma Rozali 1,249.52 1,227.61

WTPs 158,260.07 159,708.37

SYABAS 107,014.00 107,210.00

Total 266,523.59 268,145.98


2011 BPS Membership

Recruitment Drive at

Sekolah Kebangsaan St Mary

0

2010 2011

50

100

150

200

Scope 2 Emissions Arising from

Electricity Usage in 2010 and 2011

SYABASWTPsWisma Rozali

MT

CO

2-E

Q (

‘00

0)

Year

107.0

158.3 159.7

107.2

1.21.2

167


For Puncak Niaga Holdings Berhad (“PNHB”),

Corporate Social Responsibility (“CSR”)

comprises activities that safeguard the

interests of the environment, communities,

employees, shareholders and other affected

parties as an integral part of the Group’s

strategy for long-term, sustainable value

creation.

We have a policy that specifi cally addresses

various areas, including:

• The environment

To promote and carry out activities

to minimise the risk of pollution and

degradation of our environment.

• Employees

To respect the rights and diversity of our

employees by providing conducive working

conditions and equal opportunities.

• Ethics

To promote high standards of integrity and

professionalism.

• Relationship with consumers, suppliers

and partners

To satisfy consumers’, suppliers’ and

partners’ needs and provide a high quality

of customer service and business practice.

• Community involvement

To support philanthropic and charitable

giving and encourage our employees to

help local communities.

• Engagement with stakeholders

To listen to and engage with local

communities in a responsible and caring

manner.

Saving, protecting and nurturing the diversity

of life on earth while helping to protect our

sources of clean drinking water is fundamental

to our CSR. For this purpose, Syarikat

Bekalan Air Selangor Sdn Bhd (“SYABAS”)

has developed the tagline “Nurturing

Relationships” to represent its commitment to

environmental preservation as a core element

in its CSR efforts. We continue to contribute

to maintain our recognition as a caring

organization towards our community.

COMMUNITY INVESTMENT

As a caring organisation, Puncak Group

contributes to community initiatives each

year. In 2011, Puncak Niaga (M) Sdn Bhd

(“PNSB”) and SYABAS contributed a total

amount of RM2,793,454.00 to various

causes, via sponsorship and community

care. Some of these included the “Turun Ke

Padang” Programme, donations to charitable

organisations, sponsorship of community

events, and of educational programmes and

events organised for the Group’s employees.

River Rescue Brigade

(“Briged Penyelamat Sungai”) (“BPS”)

In 2011, our River Rescue Brigade (“BPS”)

held various events involving educational

and entertainment activities, such as

dramatic and choral performances, poetry

readings, colouring contests, IQ tests, BPS

presentations, jungle trekking, cycling,

gotong-royong to clean the river, and water

related talks and exhibitions to educate the

public and students from primary, secondary

and tertiary levels on water in general and on

the importance of conserving and protecting

our water resources, in particular.

Engagement With Our Community


to the fl ood victims in Malacca


168


These events were:

1. World Water Day 2011 on 22 March 2011 to

26 March 2011 at SYABAS’ Headquarters

and District Offi ces.

1,500 students from the following schools,

polytechnic and universities participated

in the event:-

1. SMK Taman Dato’ Harun,

Jalan Klang Lama

2. SK USJ 2, Subang Jaya

3. SMK Jeram, Kuala Selangor

4. Politeknik Shah Alam

5. SK Bangsar, Kuala Lumpur

6. SJK (T) Jalan Bangsar, Kuala Lumpur

7. SMK Gombak Setia, Gombak

8. SMK Aminuddin Baki, Kuala Lumpur

9. SM Teknik, Kuala Selangor

10. SK Gombak Utara, Gombak

11. SMK Seri Puteri, Cyberjaya

12. SMK Bandar Tun Razak,

Kuala Lumpur

13. SK Pendidikan Khas, Shah Alam

14. SJK (C) Onn Pong 2, Ampang

15. SK Taman Tun Dr. Ismail 1,

Kuala Lumpur

16. SMK Raja Lumu, Klang

17. SK Seksyen 13, Shah Alam

18. Politeknik Shah Alam

19. UiTM, Shah Alam

20. UiTM, Melaka

21. Universiti Malaya

22. Universiti KL

Note:

SJK (T) denotes Sekolah Jenis Kebangsaan Tamil

SJK (C) denotes Sekolah Jenis Kebangsaan Cina

SK denotes Sekolah Kebangsaan

SMK denotes Sekolah Menengah Kebangsaan

SM denotes Sekolah Menengah

UiTM denotes Universiti Teknologi MARA

2. World Water Day 2011 celebration on

2 April 2011 launched by the Selangor

State Government and Lembaga Urus

Air Selangor at Dataran Kemerdekaan,

Shah Alam.

BPS facilitated activities such as quiz,

exhibitions and membership drive at

the event.

3. Launching of the 25th BPS Club

Programme with the Deputy Prime

Minister’s wife, YAB Puan Sri Noorainee

Abdul Rahman on 24 June 2011 at Sungai

(“Sg”) Langat WTP with the theme

“1 Sungai 1 Tanggungjawab 1 Kita”.

300 students from the following schools

participated in the event:-

1. SK Cheras Jaya

2. SJK (C) Sungai Chua

3. SJK (T) Ampang

4. SMK Tinggi Kajang

5. SMK Abdul Jalil

6. SMJK (C) Yu Hua

7. SK Lembah Jaya, Ampang

Note:





SMJK (C) denotes Sekolah Menengah Jenis

Kebangsaan Cina



169


4. The 2011 BPS Membership Recruitment

Drive.

In an effort to increase students’

knowledge of conservation and protection

of the environment especially river water

which is a source of drinking water, BPS

conducted the 2011 BPS Membership

Recruitment Drive by setting up a BPS

Club as a co-curriculum club at the

following schools:-

1. SK Batu Belah, Klang on 14 May 2011

(fi rst school to set up a BPS Club)

2. SJK (C) Sungai Chua, Kajang

on 4 October 2011.

3. SK Cheras Jaya on 7 October 2011.

4. SK Bangsar on 12 October 2011.

5. SMK Tinggi Kajang on 13 October 2011.

6. SK St Mary on 2 November 2011.

7. SK Gombak Utara on 3 November 2011.

8. SMK Darul Ehsan on 9 November 2011.

9. SK Seri Tiram, Kuala Selangor

on 17 November 2011.

10. SK Kajang on 18 November 2011.

Note:




BPS Club’s activities are conducted in

these schools every week for two hours

per week. The activities include drawing

and colouring competitions and essay

writing.

5. 2011 BPS Exploration Programme.

The 2011 BPS Exploration Programme was

offi cially launched by the Deputy Prime

Minister’s wife, YAB Puan Sri Noorainee

Abdul Rahman during the 25th BPS Club

Programme held at Sg Langat WTP on

24 June 2011.

The second 2011 BPS Exploration

Programme was held on 30 July 2011

together with 36 BPS Club members and

four teachers from Sekolah Kebangsaan

Batu Belah, Klang. The BPS Exploration

Programme exposed the students to the

in-depth processes for water treatment

conducted by PNSB. Students interacted

with organisers via questions and answers

on the water treatment processes during

the programme.

6. Educational Outreach Programme

(“Program Pelestarian Pendidikan”) (“3P”).

We organised monthly 3P programmes,

conducted in collaboration with the BPS

Club, to help educating children in primary,

secondary and tertiary schools about the

importance of preserving rivers and the

environment. A membership drive for the

BPS Club was also conducted during the

3P programmes. Many schools within the

area of our operations have benefi ted from

this programme. The participating schools

for the 3P programmes in 2011 were as

follows:-

1. SK Selayang Baru (1), Gombak

on 29 June 2011.

2. SK Bukit Bangkong (A), Sepang

on 30 June 2011.

3. SJK (T) Ladang Glenmarie,

Shah Alam on 18 July 2011.

4. SK Batu Belah, Klang on 26 July 2011

5. SK Kajang, Hulu Langat

on 28 July 2011.

6. SK Olak Lempit, Kuala Langat

on 13 October 2011.

Note:




We organised monthly 3P programmes, conducted in collaboration with the BPS Club, to help educating children in primary, secondary and tertiary schools about the importance of preserving rivers and the environment.


170


7. Public Awareness Programme.

In 2011, BPS also facilitated activities such

as drawing and colouring competitions,

exhibitions and membership drive for the

public at the following venue:-

1. Tesco, Puchong on 30 April 2011.

2. Tesco, Shah Alam on 29 October 2011.

3. Pangsapuri Kenari Court,

Pandan Indah on 12 November 2011.

4. Pangsapuri Laksamana,

Batu Caves on 10 December 2011.

5. Pangsapuri Bustan Shamelin,

Cheras on 17 December 2011.

8. Exhibitions.

In conjunction with the offi cial visit by

the Deputy Prime Minister, YAB Tan Sri

Muhyiddin Hj Mohd Yassin, to Sekolah

Kebangsaan Sijangkang, Kuala Langat

on 29 March 2011, BPS took part in an

exhibition designed to raise awareness

of the need to preserve and conserve our

water resources.

In conjunction with the “Karnival Sayangi

Selangor” organised by Barisan Nasional

Selangor at I-City Shah Alam, from

28 December 2011 to 31 December 2011

to promote the spirit of 1Malaysia amongst

the people of Selangor, BPS also took

part in an exhibition to raise awareness

of issues relating to water resources and

conducted a BPS membership drive.

9. Program Jalinan Mesra BPS 2011.

For “Program Jalinan Mesra BPS 2011”,

BPS held Majlis Berbuka Puasa during

the month of Ramadhan with offi cers

from the Ministry of Education (“MOE”) at

Putrajaya International on 5 August 2011,

with offi cers from the Selangor Education

Department at Shah Alam Convention

Centre on 12 August 2011 and with

offi cers from the Wilayah Persekutuan

Education Department at Quality Hotel,

Kuala Lumpur on 18 August 2011. The

Programme aims to strengthen the

relationship between the Company and

MOE and the Education Departments,

and to show our appreciation and to thank

them for approving our BPS programmes.

10. Visits to Dams, PNSB’s WTPs, SYABAS’

Auditorium, Operation Command Centre

and PUSPEL.

School Venue Date

Kolej Empangan 16 March

Komuniti Klang Gates, 2011

Temerloh Hulu Klang

Sekolah SSP2 WTP 30 July

Kebangsaan & Batang 2011

Batu Belah, Berjuntai

Klang Intake

Faculty of SSP2 29

Architecture, WTP November

Universiti 2011

Putra

Malaysia

Chin Hock SSP2 8

Methodist WTP December

Sunday 2011

School,

Perak


at Tesco Shah Alam

171


As at December 2011, there were 4,630 BPS

club members, comprising students from

218 primary/secondary/tertiary schools in


Lumpur and Putrajaya, an increase of 426

students on the 2010 fi gure.

TABUNG BUDI

Tabung Budi was founded on 24 August 2010

by SYABAS’ and PNSB’s staff. The “Program

Bantuan Bekalan Air Tabung Budi” was

launched by PEKA at the Headquarters of

SYABAS, Jalan Pantai Bahru, Kuala Lumpur

on 22 October 2010. This programme as

inspired by YBhg Tan Sri Rozali Ismail, our

Executive Chairman, focuses on helping the

poor, homeless, single parents, disabled

and those in need. Contributions received

from PEKA members, employees of SYABAS/

PNSB, individuals and corporate bodies

are used to help these people. As at end

December 2011, a total of RM1,721,771.41

had been used to fi nance the extension and

installation of water pipes, repair leaks and pay

outstanding water bills. As of December 2011,

a total of 187 families had benefi ted from the

“Program Bantuan Bekalan Air Tabung Budi”.

The Tabung Budi team has introduced “Majlis

Turun Padang Tabung Budi” whereby a

presentation ceremony is held at recipients’

residence. The event is usually headed by

the PEKA President together with SYABAS’

management representatives accompanied

by contributors. During this event, which

happens on a weekly basis, water meters are

re-installed at the recipients’ residences.

In 2011, the Tabung Budi team held several

auspicious events namely, ”Majlis Pemimpin

Bersama Rakyat 1Malaysia” held on

29 March 2011 at Sijangkang, Selangor

whereby the Deputy Prime Minister, YAB Tan

Sri Muhyiddin Yassin, delivered Tabung Budi

water supplies to eight recipients. Other events

included ”Program Khas Ihsan Ramadhan

Tabung Budi” which was held on 26 August

2011 at the Fishermen’s Village Teluk Gong,

Klang and ”Program Kayuhan Amal Tabung

Budi Satu SYABAS” on 24 September 2011

at Kuala Selangor in conjunction with World

Heart Day and Kuala Selangor Independence

Month.

OTHER CORPORATE

RESPONSIBILITY EVENTS

1. Sponsorship and Donations 2011

We receive hundreds of requests for

contributions and initiatives every year.

While we review and respond to all external

requests for sponsorship, the emphasis of

our sponsorship is on creating or pursuing

activities that provide the most effective

contribution to, and are best aligned with,

our business objectives. We follow a set of

guidelines to help us determine where to

best place our resources:

• Events that enhance relations between

us and the government

• Events that strengthen our brand and

reputation

• Events that promote a greater

awareness, understanding and

appreciation of our services

• Events that augment educational

standards, especially to the benefi t of

the underprivileged

• Events or activities that provide

assistance to individuals to start up

small businesses that are aligned with

the company’s business strategy

• Events or activities that enable us to

connect to consumer groups


Tabung Budi Programmes

extended to the needy


172


• Events or activities that leverage

opportunities associated with the

sponsorship

• Events or activities by individuals

or organisations that are able to

demonstrate effective community

support and involvement

• Events or activities that offer value

propositions across all segments of

society

• Events or activities that are able

to account effectively for how the

investment is to be spent and the

outcome of the event /activities

The communities that benefi ted from

our 2011 sponsorship and donation drive

included:-

1. Federation of Malaysian Consumers

Associations (FOMCA)

on 18 January 2011

2. Persatuan Bekas Polis Malaysia

on 11 February 2011

3. Malaysian Environmental NGO

(MENGO) on 5 April 2011

4. Majlis Belia Hindu Malaysia

on 13 April 2011

5. Pejabat Pelajaran Bangsar Dan Pudu

on 7 June 2011

6. Sekolah Kebangsaan Kajang

on 7 June 2011

7. Kawasan Rukun Tetangga, Taman

Pantai Sepang Putra on 8 June 2011

8. Pengakap Malaysia Daerah Hulu

Selangor on 14 June 2011

9. Menara Kuala Lumpur on 6 July 2011

10. Pusat Latihan Polis Kuala Lumpur

on 6 July 2011

11. Breast Cancer Welfare Association

Malaysia on 21 July 2011

12. Majlis Sukan India Selangor (SISC)

on 4 August 2011

13. Pusat Khidmat Ahli Parlimen Hulu

Selangor on 19 October 2011

2. Social Responsibilities for 2011

(1) On 22 March 2011, in conjunction with

the World Water Day 2011 celebration,

we organised a programme

simultaneously at SYABAS’

Headquarters, at the District Offi ces in

Selangor and the Federal Territories

of Kuala Lumpur and at PNSB’s WTPs.

(2) As of December 2011, a total of

187 families had benefi ted from

the Program Bantuan Bekalan Air

Tabung Budi. Auspicious events were

organised by the Tabung Budi Team as

elaborated above under the headline

“Tabung Budi”.

(3) We organised ‘Gotong-Royong’

activities with the following parties in

2011:-

(a) On 22 January 2011, with

Kementerian Wilayah Persekutuan

dan Kesejahteraan Bandar at

Bukit Bintang, Kuala Lumpur.

(b) On 22 January 2011, with MBPJ

and Residents of Seksyen 5,

Petaling Jaya in conjunction with

‘Program Mesra Alam’.

(c) On 29 January 2011, with orphans

at Rumah Anak-anak Yatim Pure

Life Society, Puchong.

(d) On 12 March 2011, with JKKP at

Meru, Klang.

(e) On 13 March 2011, with KRT Jalan

Reko at Jalan Reko, Kajang.

(f) On 13 March 2011, with residents

of Apartment Teratai, Hulu

Selangor.

(g) On 19 March 2011, with residents

of Seksyen 6, Wangsa Maju.

(h) On 8 May 2011, with residents of

Kampung Melayu Ampang, Zon 9.

(i) On 4 October 2011, with

Businessman Association at

Rawang.

(j) On 12 November 2011, with Bukit

Bintang Central Committee.

Breast Cancer Awareness Talk

at Tropicana Medical Centre

Biro Hawa’s visit to

Pusat Perlindungan Wanita

Baitul Ehsan

173


(4) On 2 February 2011, we launched a

‘Misi Bantuan Bekalan Air Bersih’ at

SYABAS’ Headquarters and together

with Rejimen Pakar Pengendalian

Air Ke-60 RAJD, we reached out by

supplying clean potable water to the

fl ood victims in Johor.

(5) On 8 February 2011, we organised a

presentation of a donation to Palm

Grove’s Resident Association, Klang.

(6) On 8 February 2011, we launched a

second ‘Misi Bantuan Bekalan Air

Bersih’ at SYABAS’ Operation and

Maintenance Offi ce, Sg Besi, Kuala

Lumpur to supply clean potable water

to the fl ood victims in Johor.

(7) We organised ‘Gotong-Royong’

activities in conjunction with our

‘Program Tanggungjawab Social

Korporat Wilayah Selangor’ as

follows:-

(a) At Surau As-Sakinah, Kuala Kubu

Bharu on 12 February 2011.

(b) At Tanah Perkuburan Islam

Bukit Lagong, Selayang on

28 February 2011.

(c) At Surau Imam Jalal, Kampung

Sungai Gulang-gulang on

9 April 2011.

(d) At Rumah Amal Chesire, Selayang

on 23 April 2011.

(e) At Rumah PPRT Batu 11,

Kuala Langat on 30 April 2011.

(f) At Tanah Perkuburan Kampung

Sg Apong and Kampung Teluk

Rhu on 20 May 2011.

(g) At the residence of Tabung Budi’s

candidate, Encik Kamarulzaman

Bin Ahmad on 31 May 2011.

(8) We participated in the blood donation

programmes during the year.

(9) On 26 February 2011, we participated

in the launching ceremony of

‘1Malaysia Youth Entrepreneurs

Club’ held at the Memorial Tunku

Abdul Rahman.

(10) On 1 March 2011, we launched

a ‘Misi Bantuan Bekalan Air

Bersih’ at SYABAS’ Operation and

Maintenance Offi ce, Sg Besi, Kuala

Lumpur to supply clean potable

water to the fl ood victims in Malacca.

(11) On 23 April 2011, in conjunction with

Earth Day 2011, we held senamrobik

activities at SYABAS’ District Offi ces.

(12) On 23 April 2011, we organised a

“Program Mengecat” at Rumah

Pam Bukit Jugra with the residents

of Kampung Permatang Pasir, Bukit

Jugra.

(13) On 28 May 2011, PEKA organised

a walkathon, ‘Walk For Your Heart

Peka 2011’ at Wisma Rozali, Shah

Alam.

(14) On 31 July 2011, we launched a

‘Misi Bantuan Bekalan Air Bersih’

at SYABAS’ Headquarters to supply

clean potable water to the fl ood

victims in Port Dickson.

(15) In conjunction with the month of

Ramadhan, on 5 August 2011,

PEKA organised a charity

programme for Rumah

Amal Anak Yatim Yayasan

Pembangunan Insan Nasional,

Kuala Langat.

(16) On 9 August 2011, we participated

in a ‘Gotong-Royong’ in conjunction

with ‘Program Berbuka Puasa’ with

DYMM Sultan Selangor at Masjid

DiRaja Alauddin Kampung Bandar.


Educational Outreach Programme

at Sekolah Jenis Kebangsaan

(Tamil) Ladang Glenmarie,

Shah Alam

Water Facts

A small drip of water

can add up to 25 gallons

per day


174


(17) In conjunction with the month of

Ramadhan:-

(a) On 16 August 2011 and

23 August 2011, we organised

‘Program Jejak Fakir’ at 8 and

7 locations in Petaling and

Gombak Districts, respectively.

(b) We organised ‘Program

Memasak Bubur Lambuk Dan

Penyerahan Bubur Lambuk’

and donations contributions.

(c) On 23 August 2011 and

25 August 2011, we organised

‘Program Sumbangan Ihya

Ramadhan’ at Wilayah Kuala

Langat and Wilayah Kuala

Selangor, respectively giving

donations to the poor.

(18) On 24 September 2011, we organised

‘Program Kayuhan Amal Satu

SYABAS Tabung Budi’ in conjunction

with ‘Bulan Kemerdekaan & Hari

Jantung Sedunia 2011’.

(19) On 8 October 2011, we participated

in ‘Program Nurani Rakyat Sayangi

Selangor Bersama the Prime

Minister YAB Datuk Seri Mohd Najib

Tun Haji Abdul Razak’.

(20) On 29 November 2011, we

participated in the ‘Majlis

Pelancaran dan Persiapan Misi

Bantuan Banjir’ organised by

Rejimen Pakar Pengendalian Air

ke-60 RAJD (AW).

(21) On 3 December 2011, together with

Majlis Perbandaran Kajang, we

contributed our workforce to clean

up Kajang Town which was affected

by a fl ash fl ood.

(22) On 12 December 2011, we

participated in the Programme,

Green EXPO 2011 which was held

in Tunku Abdul Rahman College,

Setapak.

(23) SYABAS hosted visits by various

agencies, both local and overseas,

at SYABAS’ Headquarters and

at PUSPEL Contact Centre, as

detailed in the “Delivering Service

Excellence” section on page 114 of

this Annual Report.

(24) PNSB also hosted visits by various

agencies, both local and overseas

at PNSB’s Headquarters, dams and

WTPs, as follows:-

Date Visitors

5 April Persatuan

2011 Pekilang-pekilang

Malaysia

25 April TYT Mohamed

2011 Saheb Al-Daragi,

Menteri Perumahan

dan Pembinaan Iraq

18 May 2011 Persatuan Suri Dan

Anggota Wanita

Perkhidmatan Awam

(PUSPANITA)

19 May 2011 JKKK Mukim Bagan

Nakhoda Oman

11 July 2011 Top Management of

Kumpulan Wang

Simpanan Pekerja

(KWSP)

21 Delegation from the

November 2nd IWA Development

2011 Congress And

Exhibition 2011

(25) We celebrated the major festivals in

Malaysia with the less fortunate by

giving them donations.

Program Kayuhan Amal Satu

SYABAS Tabung Budi

175


12 JAN 2011

SYABAS’ Ramah Mesra

Programme with the

President of Federation

of Malaysian Consumers

Associations (FOMCA), YBhg

Datuk Marimuthu Nadason

24 JAN 2011

Consumer Awareness

Programme on Water

Quality Kuala Lumpur

2 FEB 2011

Launched a mission of

supplying clean water


together with Rejimen

Pakar Pengendalian

Air Ke-60 RAJD (AW)

22 FEB 2011

Signing Ceremony of

the Memorandum of

Understanding (MOU)

with NIOSH for Safety

Card Training Modules

SYABAS-NIOSH

4 MAY 2011

Providing assistance to

fl ood victims in Sg Serai,

Hulu Langat

18 MAY 2011

Technical Visit by

Persatuan Suri dan Anggota

Wanita Perkhidmatan Awam

Malaysia (PUSPANITA)

1-3 JUNE 2011

POG’s participation

at Oil and Gas Asia

Pacifi c Conference 2011

(“OGA 2011”)

24 JUNE 2011

Launching of 25th

BPS Club Programme

27 JUNE 2011

PNHB’s 14th Annual

General Meeting held at

Concorde Hotel Shah Alam

Corporate Events

22 FEB 2011

Technical Visit by

Sri Lanka Water Board

15-17 MAR 2011

PNSB’s & SYABAS’

Exhibition in conjunction

with the Opening

Ceremony of the 2nd Asia

Pacifi c Regional Water

Conference and Exhibition

(APRWC 2011)

22 MAR 2011

Launching Ceremony of

PNSB’s & SYABAS’ World

Water Day 2011 celebration

29 MAR 2011

Tabung Budi event on

“Majlis Pepimpin Bersama

Rakyat 1Malaysia” at

Sijangkang offi ciated by

YAB Tan Sri Muhyiddin Hj

Mohd Yassin, Timbalan

Perdana Menteri Malaysia

7 APR 2011

Technical Visit by Public

Utility Board, Singapore

23 APR 2011

Perdana SYABAS’ aerobics

session in conjunction with

Hari Bumi 2011 – ‘1 Bumi,

1 SYABAS, 1 Semangat’

25 APR 2011

Offi cial Visit by TYT

Mohamed Saheb Al-Daragi,

Housing and Construction

Minister of Iraq

28 JUNE 2011

PNHB Group’s Executive

Chairman, YBhg Tan Sri

Rozali Ismail was awarded

the “Technology CEO

of the Year – Global” Award

4 JUL 2011

PNHB Group’s

Executive Chairman,

YBhg Tan Sri Rozali Ismail

received the title “Brigedier

Jeneral (Kehormat)

Pakar Pengendalian

Air-Ke-60 RAJD (AW)”

11 JUL 2011

Technical Visit by

Kumpulan Wang Simpanan

Pekerja (KWSP)22 FEB

2 FEB

18 MAY

24 JUNE

4 JUL

28 JUNE

27 JUNE

28 JUL 2011

PNHB Group’s Executive

Chairman, YBhg Tan Sri

Rozali Ismail was awarded

the “Masterclass Leader”

Award at the International

Standard Quality (“ISQ”)

Award 2011

23 AUG 2011

Programme “Sebening

Kasih Aidilfi tri” together

with the orphanage from

Yatim Tengku Ampuan

Rahimah (RACTAR), Klang

14 SEP 2011

PNHB was awarded

the “Industry Excellence

Award – Water Sector” at

the launching ceremony of

5th Edition Malaysia 1000

24 SEP 2011

Programme “Kayuhan Amal

Satu SYABAS Tabung Budi”

in conjunction with Malaysia

Independent month &

World Heart Day 2011

4 OCT 2011

PNHB received a

Commendation for

Integrated Reporting

at the ACCA Malaysia

Sustainability Reporting

Awards (MaSRA) 2011


176

29 NOV 2011

‘Majlis Pelancaran

dan Persiapan

Misi Bantuan Banjir’

organised by

Rejimen Pakar

Pengendalian Air

ke-60 RAJD (AW)

29 NOV 2011

Study Visit by

Faculty of Architecture,

Universiti Putra Malaysia

12-14 DEC 2011

SYABAS’ exhibition

in conjunction with

“Green EXPO 2011” at

Kolej Tunku Abdul Rahman

28-31 DEC 2011

SYABAS’ exhibition

in conjunction with

“Karnival Sayangi Selangor”

8 OCT 2011

Programme “Nurani

Rakyat Sayangi Selangor”

together with

YAB Datuk Seri Mohd Najib

Tun Haji Abdul Razak,

the Prime Minister

13 OCT 2011

PNSB was awarded the

“11th Malaysia HR Awards

2011 Employer of

Choice – Silver Award”

20 OCT 2011

Tabung Budi programme for

the needy in Kuala Selangor

2 NOV 2011

Technical Visit by P’ohang

Municipal Assembly, Korea

21 NOV 2011

Technical Visit by the

delegation from

2nd IWA Development

Congress & Exhibition

Corporate Events

14 JUL 2011

PNHB’s visit to the

GHKL’s Radiotherapy

and Oncology Wards

19 JUL 2011

Technical Visit by

Lembaga Zakat Selangor

to SYABAS

20 JUL 2011

PNHB Group’s

Executive Chairman,

YBhg Tan Sri Rozali

Ismail was awarded the

prestigious “Entrepreneur

of the Year 2011” Award

at the Asia Pacifi c

Entrepreneurship

Awards 2011

22 JUL 2011

PNSB received fi ve gold

awards and SYABAS

received ten gold awards

at MSOSH Award Ceremony

held at One World Hotel

14 JUL

8 OCT

29 NOV

14 SEP

20 OCT

2 NOV

20 JUL

Accountability

178Corporate Disclosure Policy

179Statement On Corporate Governance

193Statement On Internal Control

195Audit Committee Report

201Risk Management Policy & Report

204Investor Relations Policy & Report

206Quality Policy & Report

207Health, Safety And Environmental Policy

208SyAbAS’ Corporate Responsibility Policy

209Statement Of Directors’ ResponsibilityFor Preparation Of Financial Statements


178


Corporate Disclosure Policy

As a responsible corporate citizen, Puncak Niaga is totally committed to upholding the highest standards of transparency, accountability and integrity in the disclosure of all material information on the Company to the investing public in an accurate, clear, complete and timely manner in accordance with the corporate disclosure requirements as set out in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The primary objectives of Puncak Niaga’s Corporate Disclosure Policy are:-

1. To promote and maintain market integrity and investor confidence.

2. To provide equal access to the Company’s material information in an accurate, clear, timely and complete manner and to avoid selective disclosure to the investing public.

3. To exercise due diligence such that information disseminated to the investing public will be as far as possible accurate, clear, timely and complete.

4. To put in place an efficient management of information procedure that promotes accountability for the dissemination of material information to the investing public.

5. To build good investor relations with the investing public based on the principles of trust, honesty, openness, transparency and sound understanding of the Company.

To achieve its objectives, the Company will endeavour to undertake the following:-

1. ESTAbLISH POLICIES AND PROCEDURES

• Ensure written policies and procedures of the Company (“Puncak Niaga’s Corporate Disclosure Policy and Procedure”) that encompass the Corporate Disclosure Policy and other requirements relating to corporate disclosure as set out in the Main Market Listing Requirements of Bursa Securities.

• Appoint a senior officer of the Company to oversee and coordinate disclosures to ensure the Company complies with the Main Market Listing Requirements of Bursa Securities.

• Ensure that only designated persons are the Company’s spokespersons.

• Ensure due compliance with Puncak Niaga’s Corporate Disclosure Policy And Procedure.

2. EXERCISE DUE DILIGENCE AND PREPARATION

• Ensure that the persons responsible for disseminating material information to the investing public, exercise due diligence in ensuring that information to be released is accurate, clear, timely and complete.

• Ensure that due care is observed when briefing and responding to analysts, institutional investors, the media and the investing public.

3. USE OF INFORMATION TECHNOLOGy

• Take advantage of current information technology to disseminate information to the investing public.

Our commitment to the above Policy is driven by the Board of Directors of the PNHB Group and implemented by the Management.

179


Statement On Corporate Governance

COMPLIANCE STATEMENT

The Board of Puncak Niaga is pleased to state that Puncak Niaga is in compliance with the Best Practices in Corporate Governance as set out in Part 2 of the Malaysian Code on Corporate Governance (Revised 2007) (“Code”) and has subscribed and remain firmly committed to the principles of good corporate governance as set out in Part 1 of the Code to strive for highest standards of corporate governance within the Group. The Group believes that the principles of good corporate governance are integral to Puncak Niaga’s growth and ability to promote the confidence of its stakeholders and enhancing long-term shareholders value through improving corporate performance and accountability of Puncak Niaga whilst taking into account the interest of all stakeholders. The Board is therefore committed to ensure that the Principles and Best Practices of Corporate Governance are applied throughout Puncak Niaga Group in the best interests of all stakeholders.

Since 2003, the Board has adopted a Board Charter, which provides guidance on how business is to be conducted in line with international best practices and standards of good corporate governance. In 2004, the Board has also adopted a Corporate Disclosure Policy and Procedure, which was formulated in line with the ‘Guide On Best Practices In Corporate Disclosure’ issued by the Task Force on Corporate Disclosure Best Practices established by Bursa Malaysia Securities Berhad (“Bursa Securities”). From time to time, the Group continues to monitor, refine and revamp its financial objectives, goals, policies and procedures, controls and risk management framework to meet the evolving corporate environment.

The Company’s governance framework enables the Board to provide strategic guidance and effective oversight of management, clarifies the role and responsibilities of the Board and Management and ensure a balance of authority.

The Board of Puncak Niaga is therefore pleased to report on how the Group has subscribed and applied the principles as set out in Part 1 of the Code and the Best Practices in Corporate Governance as set out in Part 2 of the Code and the extent to which it has complied with the Best Practices during the year 2011.

bOARD OF DIRECTORS

(a) THE bOARD The Group is helmed by an effective and experienced

Board, comprising individuals of caliber and credibility with necessary skills and experience from a diverse blend of professional backgrounds. With the adoption of the Board Charter, the Board members, whether acting in their individual capacities or as a whole, share the common objective of ensuring that the Vision and Mission of the Company as set out in this Annual Report, are achieved and the Group meets its responsibilities to its stakeholders.

Each Board member is fully aware of the fiduciary duties and responsibilities and the various legislations and regulations affecting his conduct as Director of the Company, and as such, takes full responsibility for the performance of the Company and of the Group.

The role of the Executive Chairman is separate from that of the Managing Director. The Board Charter sets out the specific responsibilities to be discharged by the Board members collectively and the individual roles expected from the Executive Chairman, Managing Director, Executive Directors and Non-Executive Directors.

YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh is the Company’s Senior Independent Non-Executive Director, to whom shareholders’ concerns may be conveyed. His profile is set out on page 059 of this Annual Report.


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(b) bOARD COMPOSITION

For compliances with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Securities and the Code, the Company, through the Nomination Committee of the Company, annually reviewed the required mix of skills, experience and competencies and other qualities of the Board of the Company.

The Board of Puncak Niaga comprises ten (10) Members, of whom four (4) are Executive Directors and six (6) are Non-Executive Directors. The current composition of the Board of Puncak Niaga is in compliance with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Securities with one-third of the Board being independent and of which the Company feels is a balanced Board and appropriate to constitute an effective Board.

The three (3) Independent Non-Executive Directors of the Company fulfil the criteria of independence as set out in the definition of “Independent Director” under Paragraph 1.01 (Definitions) of the Main Market Listing Requirements of Bursa Securities.

The Independent Non-Executive Directors are persons of caliber and credibility and exercise independent and sound judgement and act in the best interests of the Company and its shareholders, in particular the minority shareholders since they do not engage in the day-to-day management of the Company and do not participate in any business dealings and are not involved in any other relationship with the Company to ensure that they discharge their duties and responsibilities effectively, void of conflict of interests situations. The Independent Non-Executive Directors provide the relevant checks and balances and ensuring that high standards of corporate governance are sustained.

The composition of the Board brings to the Group a diverse wealth of skills, knowledge as well as a balanced mix of experience and expertise to effectively discharge the Board’s responsibilities for competent stewardship of the Group. Together, the Board spearheads the Group’s growth and future direction.

The profile of the Board Members are set out on pages 052 to 062 of this Annual Report.

None of the Directors has any convictions for any offences within the past ten (10) years (other than traffic offences, if any) or has any conflict of interests with the Company or has any family relationship with any Director and/or major shareholder of the Company.

(c) bOARD MEETINGS

The Board met five (5) times in 2011, all at the Board Room on 12th Floor, Wisma Rozali, No. 4, Persiaran Sukan, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan, details of which are as follows:-

Day Date Time Thursday 24 February 2011 12.00 noon Tuesday 26 April 2011 12.15 p.m. Tuesday 31 May 2011 12.10 p.m. Thursday 25 August 2011 11.30 a.m. Wednesday 23 November 2011 12.40 p.m.

The details of the respective Director’s attendance at the above Board Meetings are as follows:-

No. of Name Meetings of Director Designation attended %

Tan Sri Executive 5 out of 5 100 Rozali Ismail Chairman

Dato’ Hashim Managing 5 out of 5 100 Mahfar Director

Dato’ Ruslan Non-Independent 5 out of 5 100 Hassan Non-Executive Director

Dato’ Ir Non-Independent 5 out of 5 100 Lee Miang Koi Non-Executive Director

Tan Sri Dato’ Independent 5 out of 5 100 Hari Narayanan Non-Executive Govindasamy Director

Tan Sri Dato’ Independent 5 out of 5 100 Seri Dr Non-Executive Ting Chew Peh Director

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No. of Name Meetings of Director Designation attended %

Dato’ Syed Chief Operating 5 out of 5 100 Danial Syed Officer Ariffin

Tengku Non-Independent 5 out of 5 100 Dato’ Rahimah Non-Executive Almarhum Director Sultan Mahmud

Tan Sri Dato’ Independent 5 out of 5 100 Ahmad Fuzi Non-Executive Haji Abdul Razak Director

Ng Wah Tar Executive Director 5 out of 5 100 Corporate Finance

Board meetings are scheduled to be held regularly, at least five times in a financial year with sufficient notice for all Board Meetings of issues to be discussed. The dates for Board Meetings for the ensuing financial year are scheduled well in advance and the Board has formal schedule of matters specifically reserved for the Board’s discussion and/or approval. All issues discussed and all decisions made during the Board Meetings will be properly recorded by the Company Secretaries and reviewed by the Board for completeness and accuracy.

Additional Board Meetings may be called as and when significant issues arise and which require the Board’s decision.

In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions enclosing all relevant information to enable the Board to make informed decisions. All circular resolutions approved by the Board will be tabled for notation and confirmation at the next Board Meeting.

(d) DIRECTORS’ CODE OF ETHICS

The Directors continue to observe a code of ethics based on the code of conduct expected of Directors of companies as set out in the Company Directors’ Code of Ethics established by the Companies Commission of Malaysia.

(e) SUPPLy OF INFORMATION AND ACCESS TO ADVICE

The Directors are familiar and aware of their duties and responsibilities as well as the implementation of good corporate governance and compliance practices in the Group.

Each Board member is supplied with full, adequate, unrestricted and quality information on a timely basis to enable them to effectively discharge their duties and responsibilities. Except under exceptional circumstances, Board members are given at least seven days’ notice before any Board Meeting is held and the comprehensive Board papers are circulated to the Board members at least two (2) working days prior to the date of the Meeting to facilitate the Directors to peruse the Board papers and to review the issues to be deliberated at the Board Meeting well ahead of the meeting date. Where necessary, the Company’s personnel will be called upon by the Board during the Board Meetings to present and to clarify any Board papers presented.

All Board members are expected to participate actively in Board deliberations and to bring the benefit of their particular knowledge, skills and abilities to the Board. Where a potential conflict with his duties or of interests as Director arises, it is mandatory for the Director concerned to declare the fact and nature of his interests and extent of the conflict at a Board Meeting and abstain from the deliberation and decision-making process. In the event the proposal requires shareholders’ approval, the interested Board members will abstain from voting on the resolution at the General Meeting and will ensure that persons connected to them also abstain from voting on the proposal.

The Company Secretaries organise and attend all Board Meetings and ensure that all issues discussed with the conclusions are minuted accurately in the minutes of each meeting and that all records are kept properly at the registered office of the Company.


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The Board is regularly updated and kept informed by the Company Secretaries and the Management of the requirements such as restriction in dealing with the securities of the Company and updates as issued by the various regulatory authorities including the latest developments in the legislations and regulatory framework affecting the Group. The Board has unrestricted and constant access to and interaction with the Senior Management of the Company. Each Board member also has full access to the advice and services of the full time Company Secretaries.

Where necessary, the Directors may, whether collectively as a Board or in their individual capacities, seek external and independent professional advice from experts on any matter in furtherance of their duties as they may deem necessary and appropriate at the Company’s expense.

(f) COMPANy SECRETARIES The Company Secretaries ensure that Board procedures

are both followed and reviewed regularly and have the responsibilities in law to ensure that each Board member is made aware of and provided with guidance as to their duties, responsibilities and powers. They are also responsible for ensuring the Group’s compliance with the relevant statutory and regulatory requirements.

(g) APPOINTMENT OF DIRECTORS

All Board appointments and removals (if any) thereof are approved by the Board upon the recommendation of the Nomination Committee. The Board, through the Nomination Committee, has established a formal and transparent procedure in relation to the assessment of candidates for Board appointments as well as for assessing the effectiveness of the Board as a whole, the Committees of the Board and the contributions of each individual Director, including the Independent Non-Executive Directors and the Managing Director. The Board, through the Nomination Committee, also reviews the required mix of skills, experience and other qualities of the Directors annually to ensure that the Board continues to function effectively and efficiently. During the financial year under review, there were no changes to the Board composition.

(h) EVALUATION OF bOARD EFFECTIVENESS

As in the previous years, the Board has, with the assistance of the Company Secretaries, conducted an annual peer evaluation of the Board’s effectiveness in the following key areas:-

(i) Compliance; (ii) Board Meetings; (iii) Board Functions; (iv) Board Structure; (v) Board Committees; (vi) Board Operations; (vii) Board Chairman’s Roles and Responsibilities; (viii) Financial and Operational Reporting; (ix) Planning and Objectives; (x) Risk Assessment; (xi) New Business Opportunities and Projects; (xii) Human Resources; and (xiii) Directors’ Observations and Additional Comments.

The 2011 performance evaluation of the Board has been structured to ensure a balanced and objective review by the Directors for the above key areas.

Following the evaluation, the Board concluded that the Board as a whole and its committees had performed well, were effective and had all the necessary skills, experience and qualities to lead the Company.

(i) bOARD COMMITTEES

The Board has delegated specific responsibilities to the Board Committees whose functions and authorities are spelt out in their respective terms of reference. The Board Committees will observe the same rules of conduct and procedures as the Board, unless otherwise determined by the Board. A summary of the various Board Committees at PNHB level and their composition are as follows:-

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Compliance, Internal Control and Risk Policy Audit Remuneration Nomination Committee Name of Director Committee Committee Committee (CICR)

Tan Sri Rozali Ismail Executive Chairman

Dato’ Hashim Mahfar Head Managing Director

Dato’ Ruslan Hassan Non-Independent Non-Executive Director

Dato’ Ir Lee Miang Koi Non-Independent Non-Executive Director

Dato’ Syed Danial Syed Ariffin Chief Operating Officer

Tan Sri Dato’ Hari Member Member Member Narayanan Govindasamy Independent Non-Executive Director

Tan Sri Dato’ Seri Dr Ting Chew Peh Chairman Member Member Chairman Independent Non-Executive Director

Tengku Dato’ Rahimah Member Almarhum Sultan Mahmud Non-Independent Non-Executive Director

Tan Sri Dato’ Ahmad Member Chairman Chairman Fuzi Haji Abdul Razak Independent Non-Executive Director

Mr Ng Wah Tar Member Member Executive Director, Corporate Finance

Note :

(1) The Audit Committee comprises non-executive directors, a majority of whom are independent directors (compliance with Paragraph 15.09 of the Main Market Listing Requirements of Bursa Securities)

(2) The Remuneration Committee comprises wholly or mainly of non-executive directors (as recommended in the Code) (3) The Nomination Committee comprises wholly of non-executive directors, a majority of whom are independent (as recommended in the Code)


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The Board Committees exercise transparency and full disclosure in their proceedings. Where applicable, issues are reported to the Board with the appropriate recommendations by the Board Committees.

In order to expedite the Board’s decision-making process at the operating companies’ level, an Executive Committee (“EXCO”) was established at Puncak Niaga (M) Sdn Bhd (“PNSB”), Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) and Puncak Oil & Gas Sdn Bhd (“POG”). PNSB’s and POG’s EXCO comprise of Executive Directors and Senior Management whereas SYABAS’ EXCO comprise of only Executive Directors. Both PNSB’s and SYABAS’ EXCO Meetings are scheduled to be held on weekly basis to deliberate on matters requiring the Board’s mandate in between the Board Meetings. POG’s EXCO Meetings are scheduled to be held every fortnight. The Board of Directors of Sino Water Pte Ltd (“Sino Water”), the Company’s 98.65% owned Singapore subsidiary company meets in Malaysia to deliberate on operational matters.

The Board has also established the Limits of Authority (“LOA”) for the Group’s operational management matters with the relevant level of authority accorded to the Management. The LOA is continuously reviewed to ensure adequacy, efficiency and integrity in the Group’s internal control systems and management information systems. The Board provides the leadership necessary to enable the Group’s business objectives to be met, whilst ensuring that the Company’s obligations to its stakeholders are met.

(j) RE-ELECTION OF DIRECTORS

Articles 98 and 99 of the Company’s Articles of Association (“Articles”) provide that one third of the Directors shall retire from office by rotation at each Annual General Meeting and all Directors shall retire from office at least once every three (3) years but, shall be eligible and may offer themselves for re-election.

Upon the recommendation of the Nomination Committee, the following Directors shall retire at the forthcoming Fifteenth Annual General Meeting of the Company and being eligible, had offered themselves for re-election :-

i. YBhg Dato’ Hashim Bin Mahfar, retiring pursuant to Article 98 of the Articles;

ii. YBhg Dato’ Ir Lee Miang Koi, retiring pursuant to Article 98 of the Articles; and

iii. Mr Ng Wah Tar, retiring pursuant to Article 98 of the Articles.

The information on the Directors standing for re-election at the forthcoming Fifteenth Annual General Meeting is contained in the Statement Accompanying the Notice of Annual General Meeting.

DIRECTORS’ REMUNERATION

(a) PROCEDURE, LEVEL AND MAKE UP OF REMUNERATION

The Company has a formal procedure to determine the remuneration of each Board member which are reviewed, from time to time, against market practices. In the case of the Executive Directors, their remuneration are structured so as to link rewards to corporate and individual performance and their remuneration packages comprise a salary, allowances, bonuses and other benefits as normally accorded to similar positions in other comparable companies and sufficiently attractive to retain persons of high calibre. Performance is measured against profits and other targets set from the Company’s annual budget and business plans as well as achievements of targeted returns to shareholders. In the case of the Independent Non-Executive Directors, their remunerations reflect their experience, level of responsibilities and contributions and the time spent attending to the Group’s affairs and they are paid a fixed monthly allowance, leave passage and meeting allowances for each Board and Board Committee meeting that they attend.

The Remuneration Committee is responsible for recommending the remuneration packages of the Directors to the Board. The Board, as a whole, determines the remuneration of the Non-Executive Directors. Individual Directors shall abstain from discussing and voting on their own remuneration at the Board and Remuneration Committee Meetings.

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(b) DISCLOSURE OF DIRECTORS’ REMUNERATION

The details of the remuneration received and receivable by the Company’s Directors from the Company for the financial year ended 31 December 2011 are as follows:-

Employees Leave Provident Name of Director Fees Salaries bonuses Passage Allowance Fund Total (RM) (RM) (RM) (RM) (RM) (RM) (RM)

Tan Sri Rozali Ismail - - - - - - -

Dato’ Hashim Mahfar - - - - - - - Dato’ Ruslan Hassan - - - - - - -

Dato’ Ir Lee Miang Koi - - - - - - -

Dato’ Syed Danial Syed Ariffin - - - - - - -

Tan Sri Dato’ Hari - - - 50,000 74,000 - 124,000 Narayanan Govindasamy

Tan Sri Dato’ Seri Dr - - - 50,000 100,000 - 150,000 Ting Chew Peh

Tengku Dato’ Rahimah - - - - 8,000 - 8,000 Almarhum Sultan Mahmud

Tan Sri Dato’ Ahmad Fuzi - - - 50,000 74,000 - 124,000 Haji Abdul Razak

Ng Wah Tar - - - - - - -

The remuneration packages of the Directors of the Company received and receivable from the Group for the financial year ended 31 December 2011 are categorised into the appropriate components as follows:-

Executive Directors Non-Executive Directors (RM) (RM)

Fees - - Salaries 8,255,460 - Bonuses 2,396,175 - Benefits-in-kind 405,646 - Employees Provident Fund 1,777,361 - Leave Passage 663,582 150,000 Other staff expenses 3,754,200 256,000

Total 17,252,424 406,000


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There is no Directors’ Share Options Scheme in the Company during the financial year ended 31 December 2011.

(d) DIRECTORS’ TRAINING

The Directors keep themselves abreast on the latest regulatory and corporate governance developments, besides enhancing professionalism and knowledge to enable them to discharge their duties effectively.

For the financial year ended 31 December 2011, the Directors have attended training programmes, seminars and conferences organised by the Company and the various training providers covering areas such as :-

• 2nd Asia Pacific Regional Water Conference And Exhibition 2011

• Program Taklimat Khas & Forum ETP & Teraju Bersempena Mesyuarat Agung DPMMS

• Taklimat Media Inisiatif Penjanna Kekayaan Baru & Pembangunan Eko-Sistem Negara Melangkaui 2021

• Acquaterra International Water Week Conference On Integrated Acqua Solution

• Singapore International Water Week Water Convention 2011

• 4th Annual Offshore Convention South East Asia 2011

• 2nd Asia Pacific Regional Water Conference & Exhibition

• Board Development Program 2011 “Corporate Governance Program”

• The Board’s Responsibility For Corporate Culture – Selected Governance Concerns And Tools For Addressing Corporate Culture And Board Performance

• Corporate Frauds – Detection And Prevention • Sustainable Leadership – Standing Apart From Others • “Corporate Social Responsibility – Value-creation that

goes beyond compliance and philanthropic activities” • Islamic Trade & Finance : The Way Ahead • Khazanah Global Lectures • Business Opportunities In Kazakhstan & Empowering

SMEs In Far Eastern Markets & Impact Of Globalisation On SMEs

• Business Opportunities In Halal Industry & Islamic Banking And Finance : Seeking New Markets

• 7th World Islamic Economic Forum • CFO Show Asia 2011 • Corporate Hedging Seminar – Managing Your Risks

In addition, the Executive Chairman and some Directors have also presented papers at seminars and forums on water-related subjects.

Details of the Directors’ Remuneration at Company and Group levels for the financial year ended 31 December 2011, in bands of RM50,000 are tabulated as follows:-

Company Level Group Level No. of No. of Executive Non-Executive Range of Remuneration per annum Directors Directors No. of Directors

RM1 to RM50,000 – 1 – RM100,001 to RM150,000 – 3 3 RM300,001 to RM350,000 – – 1 RM750,001 to RM800,000 – – 1 RM1,000,001 to RM1,050,000 – – 1 RM1,100,001 to RM1,150,000 – – 1 RM1,800,001 to RM1,850,000 – – 1 RM3,750,001 to RM3,800,000 – – 1 RM8,350,001 to RM8,400,000 – – 1

(c) DIRECTORS’ SHARE OPTIONS

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SHAREHOLDERS’ COMMUNICATION AND INVESTOR RELATIONS POLICy

The Board acknowledges the need for the Company’s shareholders and investors to be informed of all material business and corporate developments concerning the Group in a timely manner. In addition to various announcements made during the year, the timely release of the Group’s consolidated financial results on quarterly basis provides the shareholders and investors with an overview of the Group’s financial and operational performances.

The Company maintains regular and effective communication with its shareholders and stakeholders through one-to-one or group dialogues, participation in investor conferences organised by local and foreign institutional houses, attending to shareholders’ and investors’ e-mails and phone calls enquiries, Company General Meetings and other Company events.

The Annual Report of Puncak Niaga which is produced in line with best corporate governance practices also serves as a key channel of communication with shareholders and investors.

Another communication tool to reach shareholders and investors is via our corporate website, www.puncakniaga.com.my with a direct link to SYABAS’ website, www.syabas.com.my, which can be accessed easily and promptly for information on the Group as an ongoing commitment to provide more easily accessible information to the shareholders and investors.

The Company’s Investor Relations Policy & Report is set out on pages 204 to 205 of this Annual Report.

ACCOUNTAbILITy AND AUDIT

(a) FINANCIAL REPORTING

The Board is responsible for the quality and completeness of publicly disclosed financial reports. In presenting the annual financial statements, quarterly reports and the annual reports to the shareholders of the Company, the Board takes appropriate steps to present a clear and balanced assessment of the Group’s position and prospects. This also applies to other price-sensitive public announcements and reports to the regulatory authorities.

The Group’s financial statements and quarterly announcements, prepared using appropriate accounting policies, consistently and supported by reasonable and prudent judgements and estimates, will be reviewed and deliberated by the Audit Committee in the presence of the External Auditors, Internal Auditors of the Company and the Executive Director of Finance Division prior to recommending them for adoption by the Board. The Audit Committee ensures that the information to be disclosed are accurate, adequate and in compliance with the various disclosure requirements imposed by the relevant authorities. The Board discusses and reviews the recommendations proposed by the Audit Committee prior to its adoption. The Board also ensures accurate and timely release of the Group’s quarterly and annual financial results to Bursa Securities.

The Statement of Directors’ Responsibility in respect of the preparation of the Annual Audited Financial Statements of the Group is set out on page 209 of this Annual Report.

(b) RELATIONSHIP WITH EXTERNAL AUDITORS

The Board maintains a transparent and professional relationship with the Group’s External Auditors. The External Auditors attended four out of five Audit Committee meetings of the Company held during the financial year. These quarterly meetings enabled the exchange of views on issues requiring attention.

A formal mechanism has been established by the Audit Committee to ensure there is frank and candid dialogue with the External Auditors. The Audit Committee will meet the External Auditors twice a year (April and November) without the presence of the Executive Directors and Management. This allows the Audit Committee and the External Auditors the exchange of free and honest views and opinions in matters related to External Auditors’ audit and findings.

A report by the Audit Committee together with its Summarised Terms of Reference is set out on pages 195 to 200 of this Annual Report.


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(c) INTERNAL CONTROL

The Board acknowledges its overall responsibility for maintaining a sound system of internal controls, which provides reasonable assurance in ensuring the effectiveness and efficiency of the Group’s operations and to safeguard shareholders’ investment and its assets and interests in compliance with the relevant laws and regulations as well as the internal financial administration procedures and guidelines.

The Group’s Statement on Internal Control is set out on pages 193 to 194 of this Annual Report.

(d) CORPORATE SOCIAL RESPONSIbILITy

Appendix 9C (Part A, Paragraph 29) of the Main Market Listing Requirements of Bursa Securities requires a listed company to provide a description in its annual report of the corporate social responsibility activities and practices undertaken by the listed company and its subsidiaries.

The Group’s Report on Environmental Issues, Social Accountability and Sustainability Report are set out in “Valuing Our People" section on pages 132 to 151 of this Annual Report, in “Engagement With Our Community” section on pages 167 to 174 of this Annual Report and in “Preserving Our Environment” section on pages 152 to 166 of this Annual Report.

OTHER COMPLIANCE INFORMATION

(a) SHARE bUy bACK The Company did not implement any share buy back or

resale or cancel any of the Company’s treasury shares during the financial year ended 31 December 2011. As at 31 December 2011, the total number of the Company’s treasury shares remained at 2,036,800 ordinary shares of RM1.00 each.

(b) OPTIONS, WARRANTS OR CONVERTIbLE SECURITIES

There were no options, warrants or convertible securities exercised during the financial year ended 31 December 2011 as the options and warrants had expired, lapsed and became void and ceased to be exercisable after the expiry date or the exercisable period respectively.

(c) AMERICAN DEPOSITORy RECEIPT (ADR)/GLObAL DEPOSITORy RECEIPT (GDR)

The Company does not sponsor any ADR or GDR

programme.

(d) SANCTIONS AND/OR PENALTIES

The Company and its subsidiaries, Directors and Management have not been imposed with any sanctions and/or penalties by the relevant regulatory bodies for the financial year ended 31 December 2011.

(e) NON-AUDIT FEES

During the financial year ended 31 December 2011, the Group paid the following non-audit fees to the External Auditors:-

(i) Tax advisory and compliance work – RM187,441.00 (ii) Other non-audit related service – RM392,545.00

Non-audit fees payable to the External Auditors, Messrs Ernst & Young relates to the review of the Statement of Internal Control and other professional services including tax compliance, tax planning and advisory services.

(f) VARIATIONS IN RESULTS

There was no material variation in the Audited Financial Statements for the financial year ended 31 December 2011 contained in this Annual Report as compared with the unaudited consolidated results of the Group for the financial year ended 31 December 2011 which was announced to Bursa Securities on 28 February 2012.

(g) PROFIT GUARANTEE

The Company does not provide any profit guarantee to any parties.

(h) RECURRENT RELATED PARTy TRANSACTION

The Company did not enter into any recurrent related party transaction, which requires the shareholders’ mandate during the financial year ended 31 December 2011.

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(i) MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS

Material contracts entered into by the Company and the Group, which involve the interests of Directors and major shareholders of the Company and its subsidiary companies and material contracts which are still subsisting at the end of the financial year ended 31 December 2011, are as follows:-

Consideration/ Relationship Nature Mode of with Director/ Date of Contract Parties Satisfaction Major Shareholder

15 December 2004 Concession Syarikat Bekalan Not Applicable YBhg Tan Sri Rozali Ismail Agreement Air Selangor Sdn Bhd (”TSRI”) is a major (“SYABAS”), shareholder of PNHB the State Government held directly under his of Selangor Darul Ehsan name and indirectly held and the Government through his 100% equity of Malaysia interest in Central Plus (M) (“Federal Government”) Sdn Bhd (“CPlus”) and Corporate Line (M) Sdn Bhd (“CLine”). PNHB in turn, holds 70% equity interest in SYABAS.

31 December 2004 Shareholders’ PNHB, Kumpulan Not Applicable TSRI is a major shareholder Agreement Darul Ehsan Berhad of PNHB held directly under (KDEB) and SYABAS his name and indirectly held through his 100% equity interest in CPlus and CLine. PNHB in turn, holds 70% equity interest in SYABAS.

23 February 2006 Subscription PNHB, KDEB Not applicable TSRI is a major shareholder Agreement In and SYABAS of PNHB held directly Relation To The under his name and indirectly Subscription For held through his 100% equity Up To RM1.045 interest in CPlus and CLine. Billion Nominal PNHB in turn, holds 70% Value Of equity interest in SYABAS. Redeemable Cumulative Unsecured Loan Stocks Of SYABAS (RCULS)


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8 December 2006 Subscription Puncak Niaga (M) Not applicable TSRI is a major Agreement In Sdn Bhd (“PNSB”) shareholder of PNHB held Relation To The (as the Issuer), directly under his name Issue Of RM435.0 United Overseas Bank and indirectly held through Million Nominal (Malaysia) Bhd his 100% equity interest Value Of (as the Facility Agent in CPlus and CLine. Redeemable and the Issue Agent) PNHB in turn, holds 100% Unsecured and PNHB equity interest in PNSB. Bonds To PNHB

16 August 2007 Sungai Lolo The State Government Not applicable TSRI is a major Water Treatment of Selangor Darul shareholder of PNHB held Plant (Extension) Ehsan and PNSB directly under his name Operation And and indirectly held through Maintenance his 100% equity interest Agreement in CPlus and CLine. PNHB in turn, holds 100% equity interest in PNSB.

16 August 2007 Novation The State Government Not applicable TSRI is a major Agreement In of Selangor Darul Ehsan, shareholder of PNHB held Relation To The PNSB and SYABAS directly under his name Sungai Lolo and indirectly held through Water Treatment his 100% equity interest Plant (Extension) in CPlus and CLine. Operation and PNHB in turn, holds 100% Maintenance and 70% equity interests Agreement in PNSB and SYABAS, respectively.

7 March 2008 Sg Sireh Water The State Government Not applicable TSRI is a major Treatment Plant of Selangor Darul Ehsan shareholder of PNHB held (Extension) and PNSB directly under his name Operation and and indirectly held through Maintenance his 100% equity interest Agreement in CPlus and CLine. PNHB in turn, holds 100% equity interest in PNSB.

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7 March 2008 Novation The State Government Not applicable TSRI is a major Agreement To of Selangor Darul Ehsan, shareholder of PNHB held The Sg Sireh PNSB and SYABAS directly under his name Water Treatment and indirectly held through Plant (Extension) his 100% equity interest Operation and in CPlus and CLine. Maintenance PNHB in turn, holds 100% Agreement and 70% equity interests in PNSB and SYABAS, respectively.

20 February 2009 Supplemental PNHB, KDEB, SYABAS Not applicable TSRI is a major Shareholders’ and Kumpulan shareholder of PNHB held Agreement Perangsang Selangor directly under his name (Transfer of 15% Berhad (KPSB) and indirectly held through equity interest his 100% equity interest in SYABAS in CPlus and CLine. comprising PNHB in turn, holds 70% 750,000 ordinary equity interest in SYABAS. shares of RM1.00 each from KDEB to KPSB)

16 December 2009 Loan Facility SYABAS (Borrower) Not applicable TSRI is a major Agreement and the Federal shareholder of PNHB held (in respect of a Government (Lender) directly under his name loan facility of and indirectly held through RM320,800,000.00 his 100% equity interest only). The details in CPlus and CLine. are set out in the PNHB in turn, holds 70% Audited Financial equity interest in SYABAS. Statements of the Group and the Company for the financial year ended 31 December 2011 on page 320 of this Annual Report


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17 October 2011 Loan Facility SYABAS (Borrower) Not applicable TSRI is a major Agreement and the Federal shareholder of PNHB held (in respect of a Government directly under his name loan facility of (Lender) and indirectly held through RM110,000,000.00 his 100% equity interest only). The details in CPlus and CLine. PNHB are as set out in in turn, holds 70% equity the Audited Financial interest in SYABAS. Statements of the Group and the Company for the financial year ended 31 December 2011 on pages 320 and 321 of this Annual Report. Deed of SYABAS (as the Assignment Assignor) and the Federal Government (as Assignee)

STATEMENT OF GOING CONCERN

Barring any unforeseen circumstances and upon making due and reasonable enquiry into the affairs of the Group, the Board firmly believes that the Group shall continue to operate as a going concern business in the foreseeable future.

This Statement on Corporate Governance has been approved by the Board of PNHB on 26 April 2012.

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Statement On Internal Control

INTRODUCTION

The Malaysian Code on Corporate Governance (Revised 2007) requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets. The Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires Directors of listed companies to include a statement in their annual reports on the state of their internal controls.

RESPONSIbILITy

The Boards of the PNHB Group are responsible for maintaining sound systems of internal control and for reviewing their adequacy and integrity so as to safeguard the shareholders’ investments and the Group’s assets. The Boards and Management have implemented a control system designed to identify and manage risks facing the Group in pursuit of its business objectives. This internal control system, by its nature, can only provide reasonable and not absolute assurance against material misstatement or loss.

The Group has in place ongoing processes for identifying, evaluating, monitoring and managing significant risks faced by the Group during the year. The Management is responsible for the identification and evaluation of significant risks applicable to their respective areas of business and to formulate suitable internal controls. This process is reviewed by the Board of PNHB via a specific Board Committee, namely the Compliance, Internal Control and Risk Policy Committee, which dedicates its time at periodic intervals throughout the year for discussion on this matter. RISK MANAGEMENT FRAMEWORK

Risk Management is firmly embedded in the Group’s management system and is every employee’s responsibility. In October 2001, the Board of PNHB formally approved a systematic risk management structure and process for the Group. Since then, the structure and process have been fully implemented by the Management and employees of the PNHB Group. The Group’s risk management framework is explained in detail in the Risk Management Policy & Report set out on pages 201 to 203 of the Annual Report.

INTERNAL CONTROL SySTEM

The key elements of the Group’s internal control system and assurance processes, inter alia, encompass the following:-

• All major decisions require the final approval of the respective Boards/Executive Committees within the Group (PNHB/PNSB/SYABAS/Sino Water Pte Ltd/POG Group) are only made after appropriate in-depth analysis. The respective Boards/Executive Committees receive regular and comprehensive information covering all Divisions/Departments/Districts in the respective companies within the Group.

• All Divisions and Departments of PNSB and POG Group have clearly documented Procedure Manuals and/or Policies whilst SYABAS has Standard Operating Procedures and/or Polices incorporating control procedures and the scopes of responsibilities and authorities. The Procedure Manuals/Standard Operating Procedures/Policies are updated from time to time to incorporate all elements necessitated by changes in the legislation, industry best practices and business dynamics.

• The Internal Audit Department of PNSB independently reviews the control processes implemented by the Management from time to time and periodically reports on its findings and recommendations to the Audit Committee of PNHB. The duties and responsibilities of PNHB’s Audit Committee are detailed in the Terms of Reference of PNHB’s Audit Committee. The Audit Committee, by consideration of both Internal and External Audit Reports, is able to gauge the effectiveness and adequacy of the internal control system, for presentation of its findings to the Board. The Internal Audit Department of PNSB extends a copy of its Final Internal Audit Reports to the Executive Chairman and Managing Director and summarised Status Reports on its activities are regularly submitted to the Management Committee Meetings.

• The Board of SYABAS established an Audit Committee with its own Terms of Reference on 3 August 2007. The Internal Audit Division of SYABAS extends a copy of its Internal Audit Reports to the Executive Chairman and summarised Status Reports on its activities are regularly submitted to the Management of SYABAS.


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Statement On Internal Control

• The Compliance, Internal Control and Risk Policy Committee, which is chaired by YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh, an Independent Non-Executive Director of PNHB was established in October 2001. This Committee closely monitors the Risk Management process within the Group and the extent of compliance with the Statement on Internal Control requirements.

• The Tender and Contracts Committee of PNSB/POG Group and the Tender Committees of SYABAS ensure transparency and competitive pricing in the award of contracts within the Group.

• A detailed budgeting process has been established for PNSB, SYABAS, Sino Water Pte Ltd and POG Group requiring all Divisions/Departments/Districts to prepare their respective budgets annually. These budgets are then reviewed and approved by the respective Boards/Executive Committees prior to actual implementation each year. The monitoring of actual performance versus budget for PNSB, SYABAS, Sino Water Pte Ltd and POG Group, with major variances being followed up, is done on a monthly basis and Management action is taken to rectify any shortcomings, where necessary.

• PNSB, SYABAS, Sino Water Pte Ltd and POG Group have their own Limits of Authorities that have been approved by their respective Boards.

• Self Assessment Audit Forms (which list all key procedures), have been developed for all Departments of PNSB. With effect from 31 March 2008, all Departments are required to submit a quarterly declaration to the Internal Audit Department as to whether all the key procedures have been complied with.

Guidance for Directors of Public Listed Companies

Since the issuance of the “Statement on Internal Control: Guidance for Directors of Public Listed Companies” (Guidance) in December 2000, the Group has monitored its level of readiness with the Guidance. The Group aims to not just achieve full compliance, but also to improve on the Group’s processes by implementing best business practices in line with international best practice standards. Throughout the year 2011, the Compliance, Internal Control and Risk Policy Committee has closely monitored the Group’s level of readiness with the Guidance.

This Statement on Internal Control has been prepared in accordance with the Guidance and has been approved by the Board of PNHB and reviewed by the external auditors.

For and on behalf of the board of Puncak Niaga Holdings berhad

TAN SRI DATO’ SERI DR TING CHEW PEHChairmanCompliance, Internal Control and Risk Policy Committee

26 APRIL 2012

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Audit Committee Report

The Board of Directors of Puncak Niaga Holdings Berhad (“PNHB”) is pleased to present the report of the Audit Committee for the financial year 2011.

1. MEMbERSHIPS AND MEETINGS

The Audit Committee comprises the following members and details of attendance of each member at the Audit Committee Meetings held during the financial year 2011 were as follows:

Number Number of of Composition Meetings Meetings Percentage of Committee Held Attended (%)

ybhg Tan Sri Dato’ 5 5 100% Seri Dr Ting Chew Peh Chairman/Independent Non-Executive Director

ybhg Tan Sri Dato’ 5 5 100% Hari Narayanan Govindasamy Member/Independent Non-Executive Director yAM Tengku Dato’ 5 5 100% Rahimah Almarhum Sultan Mahmud Member/Non-Independent Non- Executive Director

ybhg Tan Sri Dato’ 5 5 100% Ahmad Fuzi Haji Abdul Razak Member/Independent Non-Executive Director

The Executive Director (Finance Division), Senior Manager/Manager (Internal Audit Department), General Manager (Operation & Maintenance Department) and other members of Senior Management attended these meetings upon the invitation by the Chairman of the Audit Committee. The Group’s external auditors were also invited to attend these meetings where matters relating to the audit of the statutory accounts and/or the external auditors are to be discussed. The Company Secretaries, Madam Tan Bee Lian and Madam Lim Yew Heang are the Secretaries to the Audit Committee.

2. SUMMARy OF ACTIVITIES

During the financial year 2011, the Audit Committee carried out its duties as set out in the Terms of Reference. The main activities carried out by the Audit Committee during the financial year included the following:-

Financial Results

• Reviewed the quarterly and year-to-date unaudited financial results of the Group before tabling to the Board for consideration and approval.

• Reviewed the reports and the audited financial statements of the Company and of the Group together with the external auditors prior to tabling to the Board for approval.

• Reviewed the Group’s Action Plan to address the Practice Note 17 issue.


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External Audit

• Reviewed the external auditors’ scope of work and audit plan for the year and made recommendations to the Board on their appointment and remuneration.

• Reviewed and discussed the external auditors’ audit report and areas of concern highlighted in the management letter, including management’s response to the concerns raised by the external auditors.

• Discussed on significant accounting and auditing issues, impact of new or proposed changes in accounting standards and regulatory requirements.

• Met with the external auditors without the presence of the Management.

Internal Audit

• Reviewed the Internal Audit Plan, programme of resource requirement for the year and assessed the performance of the Internal Audit Department.

• Reviewed the Internal Audit reports, which highlighted the audit issues, recommendations and the Management’s responses and directed action to be taken by the Management to rectify and improve the system of internal control.

• Monitored the implementation of recommendations made by the Internal Audit Department arising from its audits in order to obtain assurances that all key risks and control concerns have been fully addressed.

Related Party Transactions

Reviewed all related party transactions entered into by the Company and the Group.

3. INTERNAL AUDIT FUNCTIONS

Puncak Niaga Holdings berhad (“PNHb”)/Puncak Niaga (M) Sdn bhd (“PNSb”)

PNHB/PNSB has an established independent Internal Audit Department reporting directly to the Audit Committee. The Internal Audit Department assists the Audit Committee in the discharge of its duties and responsibilities. The Internal Audit Department’s primary responsibility is to provide an independent assurance on the adequacy and effectiveness of risk management, governance and internal control.

The Internal Audit Department focuses on regular and systematic review and has conducted evaluation on the internal control, management information systems, and compliance with established procedures including the system for compliance with applicable laws, regulations, rules, directives and guidelines.

The Annual Internal Audit Plan 2011 of the Internal Audit

Department (which was developed based on a risk based approach), was approved by the Audit Committee at the 66th Audit Committee Meeting of the Company held on 25 November 2010. The Internal Audit reports, which highlights internal control weaknesses, were deliberated by the Audit Committee and the recommendations were duly acted upon by the Management.

In 2011, the Internal Audit Department completed a total of 66 major audit assignments covering all the Water Treatment Plants, high-risk areas identified by the Risk Management Scorecard Working Group and adhoc assignments requested by the Senior Management. Examples of key areas audited by the Internal Audit Department during the Financial Year 2011 were Klang Gates, Tasik Subang and Sg Langat Dam Operation, Review of Related Party Transactions, Fixed Assets at Wisma Rozali, Selected Regional Offices and WTPs, Compliance with Tendering Process and Plant Audits of all Water Treatment Plants etc. All audits were performed in-house.

The Internal Audit Department’s role with regards to the Group’s risk management framework is explained in the Risk Management Policy & Report set out on pages 201 to 203 of the Annual Report.

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The total cost incurred by the Internal Audit Department in relation to the conduct of the internal audit function of PNHB/PNSB during the Financial Year 2011 was about RM1.08 million.

As at 31 December 2011, the Internal Audit Department had nine staff (three Accountants, four Engineers and two support staff). Training attended by the Internal Audit Department’s staff in 2011 included the Risk Compliance Summit 2011, Raising Bar on Corporate Governance, Business Writing Skills, ISO 19001,18001,14001 and Risk Based Auditing on Projects.

SyAbAS

Due to the complexity of its water distribution operations which are dissimilar to that of PNSB’s water treatment operations, the Board of SYABAS formally ratified the establishment of the Internal Audit Division on 1 September 2006 and an Audit Committee with its own Terms of Reference was formed on 3 August 2007.

At SYABAS, the audit emphasis for the Financial Year 2011 was to determine whether the financial and other controls were in place to ensure the integrity and accuracy of information in the “Review Documents” submitted for the purpose of tariff adjustment for the 4th Operating Period from 2012 to 2014. Reports on individual components of the tariff review adjustment include the review on revenue – billings and collections, certified amount of program of works, amount spent on purchase of treated water, distribution costs and non-revenue water. Besides the above, the Internal Audit Department also conducted other audits e.g., Bulk Meter and sub meter reading, Administration of Leave and e-leave, Procedures of Cash Float for Report refund, stay-back allowance claims by security Executives, Accuracy of meter in and meter out at DMZ, Internet Perimeter control, effectiveness and management of virus protection and Administration of migration process. Altogether, Internal Audit Department conducted 70 assignments in 2011.

The cost incurred by the Internal Audit Department in relation to the conduct of internal audit function of SYABAS during the year was about RM1.1 million.

4. SUMMARISED TERMS OF REFERENCE OF PNHb’S AUDIT COMMITTEE

A. Composition

The Board shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors), comprising of at least three (3) Directors which fulfils the following requirements:

i. All the members of the Audit Committee must be Non-Executive Directors of the Company (and excluding Alternate Directors) with a majority of them being Independent Directors; and

ii. At least one (1) member of the Audit Committee:

a. must be a member of the Malaysian Institute of Accountants;

b. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:

1. he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

2. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

3. fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.


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The members of the Audit Committee shall elect a Chairman from amongst themselves who shall be an Independent Director. It would be advantageous if the Chairman possesses a strong personality, have knowledge and experience in financial reporting, good leadership skills and is keen to get financial reporting and controls right.

The Chairman of the Audit Committee will maintain

continuous engagement with the Board Members and Senior Management of the Company and the external auditors in order to be kept abreast of matters affecting the Company. All members of the Audit Committee should be financially literate.

If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall within three (3) months of the event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

b. Duties And Responsibilities

In fulfilling its primary objectives, the Audit Committee will need to undertake the following duties and responsibilities:

b.1 Oversee All Matters Relating to External and Internal Audits

i. The Committee shall meet with the external auditors prior to the commencement of the annual audit to review and discuss:

• The Annual Audit Plan with the external auditors, including the scope, nature and areas of audit of the Group;

• The extent of any planned reliance on the work of the internal auditors and the anticipated effect of this reliance on the examination.

• Any significant accounting and auditing problems that the auditors can foresee and impact on the financial statements of any new or proposed changes in accounting standards or regulatory requirements.

Following its review of the plan, the Audit

Committee may request the external auditors to perform additional audit work directed to specific areas of concern to the Committee.

ii. Oversee the Internal Audit Department. The Audit Committee in overseeing the Internal Audit Department will:

• Review the audit programme, scope, performance and findings of the internal auditors.

• Monitor the implementation of the programme so that sufficient internal audit coverage is accorded.

• Assess the capacity of the Internal Audit Department to fulfil its responsibilities by considering, amongst other things, the adequacy of the scope of the Department’s authority as presented in the Department’s charter, the competency, qualifications and experience level of its employees, the degree to which internal auditors are independent of the activities they audit and the reporting relationship between the Head of Internal Audit and Senior Management.

• Review any appraisal or assessment of the performance of the staff of the Internal Audit Department and approve any appointment or termination of senior internal audit staff.

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iii. Review the assistance and cooperation given by the Company’s officers to the external and internal auditors.

iv. Consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal.

v. The external and/or internal auditors shall have the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Audit Committee when required to do so by the Audit Committee.`

vi. Upon the request of the external and/or internal auditors, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matters the auditors believe should be brought to the attention of the Committee.

vii. The Audit Committee may convene meetings with the external auditors and/or internal auditors, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary.

b.2 Evaluate the Standards of Internal Control and Financial Reporting

i. Hold specific discussions with Senior Corporate Management to discuss the overall adequacy of the internal control system.

ii. Meet with the internal and external auditors concerning their evaluation of the system of internal accounting controls.

iii. Consider the nature and disposition of the relevant comments appearing in the reports prepared by the internal auditors and in the external auditors’ management letter.

b.3 Review of Financial Statements

i. Meet with the Management and the external auditors to discuss the annual financial statements of the Company or Group and the results of the audit before recommending approval by the Board.

ii. Review the changes in or implementation of major accounting policy changes, the nature and resolution of any significant accounting and auditing problems encountered during the examination.

iii. It is good practice for the Audit Committee to meet the Management at a regular interval to review the results of the Company or Group, such as quarterly review of the results.

iv. Review the nature of any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of the Management’s integrity.

v. Review the nature of any significant adjustments and unusual events, reclassifications or additional disclosures proposed by the external auditors that are currently significant or may become significant in the future.


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vi. Review the adequacy of disclosure of the impact of any changes during the year in accounting policies, standards and/or regulatory requirements.

vii. Review the reasons for the major fluctuations in financial statement balances for the current year compared to prior years.

viii. Review for any unusual circumstances or situations reflected in the financial statements, including identifying any marginal operations.

ix. Review the nature of any unusual or significant commitments or contingent liabilities.

x. Review of any significant differences between the annual report and other reports, such as reports to the regulatory agencies.

xi. Review for any significant differences in format or disclosure from industry norms.

b.4 Additional Duties and Responsibilities

i. Act upon the Board of Directors’ request to investigate and report on any issues or concerns in regard to the management of the Company.

ii. Such other functions as may be agreed to by the Audit Committee and the Board of Directors.

C. Access To Records

In carrying out their duties and responsibilities, the Audit Committee will in principle have full, free and unrestricted access to all Company records, property and personnel.

D. Meetings and Minutes

i. It is good practice for the Audit Committee to hold a minimum of four (4) meetings a year, although additional meetings may be called at any time at the Chairman’s discretion.

ii. In addition to the Committee members, the Executive Director of Finance Division and the Head of Internal Audit Department will normally be in attendance at the meetings. Representative of the external auditors are to be in attendance at meetings where matters relating to the audit of the statutory accounts and/or the external auditors are to be discussed.

iii. The Chief Executive Officer, other Board Members and/or other appropriate officers may be invited to attend, except for those portions of the meetings where their presence is considered inappropriate, as determined by the Committee Chairman.

iv. The Audit Committee will meet with the external auditors without the Executive Directors present at least twice a year.

v. Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the members of the Board. The Committee Chairman shall report on each meeting to the Board. The Secretary to the Audit Committee shall be the Company Secretary.

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Risk Management Policy & Report

RISK MANAGEMENT POLICy

The Board of Puncak Niaga Holdings Berhad has approved the following Group’s Risk Management Policy Statement:-

“The PNHB Group’s Risk Management Policy is to identify, measure and control risks that may prevent the Group from achieving its objectives.

Our challenge is to apply risk management to all parts of our business to ensure business risks are minimised and opportunities enhanced.

We will achieve, maintain and review a proper risk management system which is implemented by the Management and extended to all employees of the Group. This is the commitment of the Board of Directors.

This policy statement assigns responsibility for risk management to all PNHb Group employees and acknowledges that corporate responsibility lies with the board of Directors of the PNHb Group.” RISK MANAGEMENT REPORT

There are risks faced by all companies in the various facets of their corporate lives. The nature of such risks including systemic, market, employees, economic, legislation, financial and others, need to be identified and managed to reduce the possibility and impact of any adverse effects. Puncak Niaga recognises this and has initiated risk management programmes to ensure its business risks are minimised and opportunities enhanced.

The following steps were taken by the Board of Puncak Niaga in October 2001, for the management of the Group’s corporate risks:-

1. The preparation of the Group’s Risk Management Policy Statement.

2. The formation of the Compliance, Internal Control and Risk Policy Committee (“CICR”) with its own Terms of Reference.

3. The setting up of a Risk Management Section, which reports to the CICR.

As a follow-up from the Strategic Corporate Risk Management Workshop held for the Board and Senior Management in August 2001, information on Risk Management has been fully disseminated to all employees in the form of posters and through the Group’s internal communications network.

In addition, the risk management framework which was established in October 2001 has since then been fully implemented by the Management and employees of Puncak Niaga.

A second Strategic Enterprise-Wide Risk Management Workshop was conducted for Directors and Senior Management staff, by an external consultant on 11 September 2008. COMPLIANCE, INTERNAL CONTROL AND RISK POLICy COMMITTEE (CICR)

The establishment of the CICR was formalised by the Board in October 2001. The members of the CICR comprise the following:-

Chairman : ybhg Tan Sri Dato’ Seri Dr Ting Chew Peh (Independent Non-Executive Director)

Members : ybhg Dato’ Hashim Mahfar Managing Director (Head of Compliance, Internal Control and Risk Policy Committee) Mr Danny Ng Wah Tar Executive Director, Corporate Finance Division Madam Tan bee Lian Executive Director, Corporate Services Division Madam Wong Ley Chan Executive Director, Finance Division Tuan Haji Sonari Solor Senior General Manager, Internal Audit Department Cik Hayati Ab Wahab Senior General Manager, Internal Audit Division - SYABAS

Secretary : Madam Johty Priyatharashani Manager, Internal Audit Department


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A) TERMS OF REFERENCE OF THE CICR

The CICR shall provide assistance to the Board of Directors of Puncak Niaga in discharging its fiduciary responsibilities relating to safeguarding shareholders’ investment and the Group’s assets through a structured approach to Risk Management. The primary responsibilities of the CICR are:-

• Formulating strategies to manage the overall risks associated with the Group’s activities. This entails decisions on:-

• Long-term and short-term strategies. • Justifiable capital allocation based on return per

unit of risk.

• Recommending the appropriate risk management policies and procedures, which shall be reviewed frequently to ensure consistency with fundamental changes in the economy, market conditions and regulations.

• Reviewing periodically the Group’s overall objectives by assessing the current risk portfolio composition and determining the desired exposures of each major area of risk.

• Monitoring and assessing the risk portfolio composition of significant activities of the Group.

• Keeping abreast of both current risk management techniques and theories, and any possible or actual changes in the regulatory environment, and recommending the appropriate action.

b) CICR ACTIVITIES

MEETINGS HELD AND ISSUES COVERED

During the year 2011, the CICR held eight (8) meetings, of which four (4) were chaired by YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh (Chairman of CICR) and four (4) were chaired by YBhg Dato’ Hashim Mahfar (Head of CICR).

At its meetings, the CICR reviewed in detail, the Status Reports prepared by the Risk Management Section. The issues covered include the following:-

1. The level of readiness of PNSB and the respective Divisions and Departments with regards to the “Statement on Internal Control” requirements.

2. The progress of the risk assessment and risk monitoring exercises at Departmental/Divisional and Enterprise-Wide levels. The main risks, controls and management actions are highlighted for the CICR to deliberate.

3. The effective utilisation of the Q-RADAR Corporate Risk Scorecard software to identify, measure and monitor all corporate risks identified within PNSB, Sino Water Pte Ltd and POG Group.

4. Other relevant risk issues affecting the Group, from time to time.

RISK MANAGEMENT SCORECARD WORKING GROUP AND ENTERPRISE-WIDE RISKS

The Group recognises that Risk Management involves a structured approach, combining the efforts of all functions within the Group, to minimise the possibility and impact of unexpected damages so as to contribute towards greater efficiency and better decision-making. The Group’s Enterprise-Wide Risk Profile is reviewed annually to take into consideration changes in the business environment, strategies and functional activities of the Group.

In 2011, given the Group’s venture into the oil & gas industry via its wholly owned subsidiary, POG which acquired 100% equity interests in GOM Resources Sdn Bhd (formerly known as Global Offshore Malaysia Sdn Bhd) and KGL Ltd respectively, a Risk Management Scorecard Working Group (“RMSWG”) Meeting was held on 17 November 2011 among the Executive Directors of PNSB and Senior Management of POG Group to deliberate on the Enterprise-Wide Risk Profile of the Group’s oil & gas business.

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Subsequently, the RMSWG was held at Group level, comprising all Executive Directors of PNSB and Senior Management of PNSB and POG Group on 16 January 2012 to deliberate on the risks highlighted by the different business sectors and determine the Puncak Niaga Group’s Enterprise-Wide Risk Profile for 2012.

The deliberations of the RMSWG were reviewed by the CICR on 10 February 2012. Subsequently, a detailed Board Paper on the Group’s “Top Twelve Enterprise Wide Risks Facing the Puncak Niaga Group for 2012” was tabled during PNHB’s Board of Directors’ Meeting that was held on 28 February 2012.

The Group’s Enterprise-Wide Risk Profile will be re-assessed by the RMSWG on a yearly basis.

QUARTERLy RISK SCORECARD REPORTING (PNSb, SINO WATER PTE LTD AND POG GROUP)

The respective Heads of Divisions and Departments of PNSB, the Managing Director of Sino Water Pte Ltd and the Senior Management of POG Group are responsible for assessing and managing their respective risks. Using the Q-RADAR Corporate Risk Scorecard software, the respective Heads of Divisions and Departments of PNSB, the Managing Director of Sino Water Pte Ltd and the Senior Management of POG Group submit their detailed risk scorecard reports to the Risk Management Section every quarter.

Risk Management Section analyses and summarises the risk scorecard reports received for further deliberation by the CICR.

Q-RADAR CORPORATE RISK SCORECARD SOFTWARE

PNHB, PNSB, Sino Water Pte Ltd and POG Group utilise a risk management tool namely, the Q-RADAR Corporate Risk Scorecard (“CRS”) software to identify, measure and manage all corporate risks affecting PNSB. The CRS software offers a systematic approach to the management of enterprise-wide risks facing corporations and assists the Management of Puncak Niaga to successfully achieve their corporate objectives. The software is web-based and allows authorised users to monitor their respective risks on-line from any location.

In June 2011, the Q-RADAR CRS software (Version 7.3) was upgraded to Version 8.0. Effective quarter ended 30 June 2011, a Corporate Digital Assurance module was implemented to all Risk Scorecard owners whereby they are required to validate and positively assure each individual risk, strength of control and management action. The status of this validation and assurance is reported to the CICR on quarterly basis.

As at 31 December 2011, the Q-RADAR CRS software had 128 authorised users covering 23 Departments /Divisions, including POG Group and Sino Water Pte Ltd.

The Q-RADAR CRS software is administered by the Risk Management Section. RISK MANAGEMENT AT SyAbAS

A Risk Management Workshop was conducted for all relevant Heads (or their representatives) of Divisions and Departments by the Internal Audit Division on 11 August 2009.

Broadly, the topics covered during the Workshop were:

1. Risk Management Awareness.2. Risk Management Thought Process.3. Risk Management Scorecard Software (Q-RADAR).

The Risk Management Working Group (comprising all Heads of Divisions and Departments) deliberated upon the “Enterprise-Wide Risks Facing SYABAS For 2011/2012” on 16 August 2011.

Matters discussed included:

1. Likelihood of risk events happening.2. Evaluation of the consequences of the risk events

happening.3. Confirmation as to whether controls are in place and are

being used to manage the risks.4. Risks ranking from the highest to the lowest to produce a

priority list.


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Investor Relations Policy & Report

As a responsible corporate citizen, Puncak Niaga is totally committed to upholding the highest standards of transparency, accountability and integrity in the conduct of our business activities in the best interest of our shareholders as well as to allow potential investors to make careful and informed investment decisions based on full and transparent disclosure of information.

Puncak Niaga’s Investor Relations Policy aims to build long-term relationships and credibility with our shareholders and potential investors based on trust, honesty, openness, transparency and sound understanding of the Company.

To achieve its objectives, the Company will endeavour to undertake the following:-

1. CREATING QUALITy DIALOGUE

• To create an environment where the effective bilateral communication between the Company and our shareholders and investors both inform and educate through regular, open and transparent provision of relevant and invaluable information over the long-term, which will build mutually beneficial long-term relationships vis-à-vis to foster a clearer understanding of the shareholders’ and investors’ expectations of the Company.

• To engage in quality dialogue with our shareholders and investors whereby the relationship is based on the principles of honesty, openness and transparency and to foster mutual understanding between the Company and our shareholders and investors.

• To reap the benefits of engaging in quality dialogue:-

- Perception on our Company’s risk is reduced; - Enhance feedback of our Company’s performance; - Our Company’s share valuation becomes more

realistic; - Develop confidence in our Management team and

management style; and - Works as a guide in the evaluation of our Company’s

business strategy.

2. INVESTOR COMMUNICATIONS STATEMENT

• To implement an efficient and effective Investor Relations Programme as part of our ongoing shareholders’ and investors’ communication obligations.

• To provide high quality, meaningful and timely information over and above that is required by law in order to improve the shareholders’ and investors’ understanding of our Company.

• To strive for key competence in the area of professional investor relations vide adequate resources and capabilities.

• To earn the trust, respect and confidence of our existing shareholders and investors.

• To build and maintain long-term relationships with our existing shareholders and investors.

• To initiate long-term relationship building with potential shareholders and investors.

Our commitment to the above Policy is driven by the Board of Directors of PNHB Group and implemented by the Management.

INVESTOR RELATIONS REPORT

Investor relations is the means by which listed companies maintain dialogue with their existing shareholders and potential investors. It is a strategic management responsibility to present an accurate picture of corporate performance and prospects, thus enabling the investment community, through an informed market, to determine a realistic share price. As a result, investor relations can have a positive impact on the Company’s market value and cost of capital relative to its industry sector and the overall economic climate.

The year 2011 had been challenging amidst Puncak Niaga’s relentless pursuit to gain leadership in the water industry and to remain focused in achieving our Vision and Mission.

The Board is therefore pleased to report on Puncak Niaga’s investor relations activities during 2011 as follows:-

DIALOGUES WITH INVESTORS

The Top Management of the Group actively engages in meetings, dialogues and briefing sessions with local and foreign institutional groups. In 2011, 14 dialogues and group briefing sessions were conducted with existing and potential investors, local and foreign fund managers and financial analysts from research and asset management houses.

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Investor Relations Policy & Report

INVESTORS’ ACCESS TO INFORMATION

In line with our Investor Relations Policy, Puncak Niaga ensures timely disclosure of information over and above the regulatory authorities’ disclosure requirements so as to enable the investment community to make careful and informed investment decisions on the Company’s securities. Shareholders and investors can contact us at [email protected] and access the Group’s information and corporate announcements at our website, www.puncakniaga.com.my (with a direct link to www.syabas.com.my) or www.bursamalaysia.com. All announcements made to Bursa Malaysia Securities Berhad (“Bursa Securities”) are published shortly after the same is released on Bursa Securities’ website. All shareholders’ queries will be received by the Group Company Secretary who will provide feedback and responses to shareholders’ queries where such information can be made available to the public.

Since 22 October 2004, in our efforts to meet disclosure obligations towards our shareholders, investors and stakeholders, the Group had adopted and implemented the Puncak Niaga Corporate Disclosure Policy (as set out on page 178 of this Annual Report), formulated in line with the ‘Guide On Best Practices In Corporate Disclosure’ issued by Bursa Securities’ Task Force on Corporate Disclosure Best Practices.

ANNUAL GENERAL MEETING (“AGM”)

The Board of Puncak Niaga firmly believes that the AGM is the best forum to promote a closer relationship with our shareholders, enabling us to continue our engagement process with them.

Since 2003, our AGMs have been preceded by a Company Presentation followed by a Question and Answer Session. Our shareholders are updated on the Group’s corporate and financial performances, latest developments and issues of concern to the shareholders. This is especially important as we are the water services provider in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya and our shareholders are our consumers. It is Puncak Niaga’s way of saying ‘We value your views’ and ‘We are here to serve you better’. At the same time, our shareholders’ feedbacks, which are relevant to our operations, are taken into consideration in our business decisions. PNHB’s Annual Report in the form of CD-ROM is sent to the entitled shareholders of the Company at least 21 days prior to the AGM as required by the Companies Act, 1965 and the Main Market Listing Requirements of Bursa Securities.

Since 2007, we have set up the PUSPEL customer service counter at a secretariat room at the AGM venue to enable our shareholders to gain online access to SYABAS’ water related enquiries. In view of our role as a water services provider, we will continue with this practice at our future AGMs for the benefit of our shareholders.

The 2012 AGM will be held on Tuesday, 26 June 2012 at the Concorde Hotel Shah Alam. The Notice of AGM is enclosed with this Annual Report. The results of all resolutions proposed at the 2012 AGM will be posted on Bursa Securities’ website and the Company’s website on the evening of 26 June 2012.

INVESTOR RELATIONS UNIT

The Investor Relations Unit (“IRU”) maintains a database of shareholders and investors who wish to be updated on the Group’s corporate developments and performances via e-mail.

Kindly e-mail us your contact details to the attention of Madam Tan Bee Lian, Group Company Secretary at [email protected] or by mail at Investor Relations Unit, c/o Secretarial Department, Puncak Niaga Holdings Berhad, 10th Floor, Wisma Rozali, No. 4, Persiaran Sukan, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan, should you wish to be included in our database.

Similarly, to enable us to further improve our level of services to the community and our stakeholders, kindly forward your comments, views and concerns to us at [email protected] for public enquiries and [email protected] for investors’ enquiries.

All water-related enquiries in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya, such as complaints on water disruptions, pipe bursts or low water pressure, may be addressed to SYABAS Customer Service Centre, [email protected] or the toll-free line, 1-800-88-5252 or SMS ‘PUSPEL space your complaints/feedback ’ to 39222 or the social networks on Twitter and Facebook, follow@PUSPEL.


206

Quality Policy & Report

QUALITy POLICy

It is the Policy of Puncak Niaga to provide quality services and products to meet the customer requirements and satisfaction.

Puncak Niaga shall strive to consistently adopt and maintain a quality management system based on all regulated requirements, internationally recognised standard which will ensure a planned, systematic, and proactive approach to quality in all aspects of our work.

Puncak Niaga is also committed in providing a safe, harmonious and conducive working environment and continuously equips our employees with knowledge and skill to improve our quality systematically.

Puncak Niaga Quality Management will be characterised by:-

• A culture of continual improvement and teamwork.• Pro-activeness at all levels.• The consistent application of ‘Right First Time Every Time’

principle.• Empowerment of personnel to solve problems expeditiously.

All employees shall share the responsibility to understand and diligently implement the Quality Policy.

INNOVATIVE & CREATIVE CIRCLE (ICC) PROGRAMME

The ICC Programme is a platform to measure staff capability in maximising their knowledge and experience to extend creative ideas in solving work-related issues to increase the Company’s productivity and cost-benefit.

PNSB’s ICC Secretariat (“the Secretariat”) had successfully conducted its sixth ICC Programme. The ICC Programme does not only support productivity enhancement, it is also designed as a channel in developing a customer-centric workforce. The ICC Programme may contribute towards the supply of technically skilled, knowledgeable and innovative workforce who possesses important generic skills such as leadership skills, interpersonal effectiveness, thinking skills, personal and professional effectiveness and effective communication skills. The ICC Programme is a reflection of the Company’s continuous efforts in enhancing productivity and competitiveness.

For the year 2010-2011 ICC Programme, a total of 13 teams initially participated in the ICC Programme. They comprised 2 teams from the Head Office and 11 teams from the Water Treatment Plants.

Based on the criteria set by the Malaysian Productivity Corporation (“MPC”) and after careful consideration, the ICC Secretariat shortlisted 8 teams, with the following 8 projects for final presentation:-

1. Poly pipe burst2. Down time at chlorine plant3. Choking of lime dosing pipe4. Wash water pipe at sludge plant not functioning5. Choking of micro strainer6. Optimising alum dosing7. In-efficient and unsystematic ways of managing staff

personal file8. Cost reduction of lead washer for chlorination system

The 2010-2011 ICC Programme’s final presentation was held on 14 April 2011 at Wisma Rozali and the winning projects were:-

1. Down time at chlorine plant2. Poly pipe burst3. Choking of lime dosing pipe

PNSB received a total of 19 ICC Awards in 2011. At the MPC Mini ICC 2011 held on 26 April 2011, five of our teams won three Gold Awards and two Silver Awards. At the MPC Regional Conventions 2011 held on 27 to 28 June 2011, 20 to 21 July 2011 and 25 to 26 July 2011, six of our teams received four Gold Awards and two Silver Awards, and two teams achieved 3 Gold Star Awards and one team achieved 2 Gold Star Award from the MPC National ICC Convention 2011 held on 19 to 20 October 2011. At the International ICC Conference Quality Creative Circle 2011 held in Yokohama, Japan from 11 to 15 September 2011 our Tag Team succeeded in garnering the prestigious Excellent Award for its cost-cutting and innovative project, namely ‘Unstable micro sand in the Actiflo process’.

The company’s achievement in ICC activities for 2010~2011 was outstanding and excellent.

207


Health, Safety And Environmental Policy

It is the policy of Puncak Niaga Holdings Berhad and its subsidiaries (Puncak Niaga Group) to provide, so far as is practicable healthy, safe and environmental friendly workplace for all employees, contractors, visitors, interested members of society and others, and in the spirit of consultation and cooperation, the Management and employees will together strive to achieve goals and objectives of this Policy.

Without prejudice to the generality of the above statement, the Policy of Puncak Niaga Group is:-

• to provide and maintain a healthy, safe and environmental friendly workplace and system of work, and to continually improve its environment and safety performance;

• to continuously emphasise on the prevention of injury, ill health and pollution in all activities;

• to ensure environmental and safety objectives and targets are set and reviewed;

• to ensure all employees are informed, instructed, trained and supervised on how to perform their jobs safely and without risk to health and without any harm to the environment;

• to investigate all occupational health, safety and environment incidents, and to make corrective measures to ensure the incidents will not recur;

• to comply with all legal and other requirements on health, safety and environment and other good practices which the Group subscribes;

• to review this policy as and when appropriate and to ensure it is understood by all employees and is available to all interested parties.


208

SYABAS’ Corporate Responsibility Policy

At Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”), there is an underlying and long standing commitment to ethical practice based upon the belief that business can be both profitable and responsible. We have always believed that building meaningful long term relationships with employees, suppliers, and communities is good business practice for us and is what our stakeholders expect of us. This is, and always has been, the founding principle of our commitment to Corporate Responsibility (“CR”). SYABAS recognises both the business imperative and the moral obligation to carry out our activities in a socially responsible and environmentally sustainable manner. Leveraging on our long history of social awareness and charitable work, SYABAS’ aim is to contribute to a sustainable future through:-

ENVIRONMENTAL IMPACTS:

We shall manage development activities in order to minimise the risk of pollution and waste;

EMPLOyEES:

We shall respect the rights and diversity of employees, providing good conditions of work and equal opportunities, improving employee satisfaction, whilst enhancing the intellectual capital of SYABAS continuously through training and development;

ETHICS:

We shall encourage high standards of integrity and professionalism throughout SYABAS and providing a framework to manage the risk of unethical behaviour;

RELATIONSHIPS WITH CONSUMERS:

We shall anticipate and satisfy consumers’ needs and providing a high quality of customer service by registering and resolving consumers’ complaints in accordance to our published Client Charter, Mandatory Level of Services and Concession Agreement;

SUPPLIERS AND PARTNERS:

We shall treat all our suppliers fairly whilst delivering enhanced value and social improvements in partnership with them. We will operate in a way that safeguard against unfair business practices and shall encourage suppliers and contractors to adopt responsible business policies and practices for mutual benefit;

COMMUNITy INVOLVEMENT:

We shall support philanthropic and charitable giving, support for and active engagement with local communities through volunteering and other programmes. We shall also support and encourage our employees to help local community organisations and activities in the areas where we operate in;

ENGAGEMENT WITH STAKEHOLDERS:

We shall listen and engage with local communities and responding positively to request for information from our stakeholders in a timely and accurate manner.

209


The financial statements of the Group and Company have been drawn up in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965. The Directors take responsibility in ensuring that the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of the results and the cash flows of the Group and of the Company for the financial year then ended.

Statement Of Directors’ Responsibility For Preparation Of Financial Statements

In preparing the financial statements, the Directors have:

• Selected suitable accounting policies and applied them consistently;

• Made judgements and estimates that are reasonable and prudent;

• Ensured that all applicable accounting standards have been followed; and

• Prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made appropriate enquiries, that the Group and Company and which enables them to ensure that the financial statements comply with the provisions of the Companies Act, 1965.

The Board has the overall responsibility to take all steps as are reasonably open to them to safeguard the assets of the Group to prevent and detect frauds and other irregularities.

Financial Statements

212Definitions

214Directors’ Report

219Statement by Directors

219Statutory Declaration

220Independent Auditors’ Report

222Income Statements

223Statements of Comprehensive Income

224Statements of Financial Position

226Statements of Changes in Equity

231Statements of Cash Flows

233Notes to the Financial Statements

380Supplementary Information


212

Definitions

Except where the context otherwise requires, the following definitions shall apply throughout this Directors’ Report and Audited Financial Statements for the financial year ended 31 December 2011:

“ABASS” : Konsortium ABASS Sdn Bhd“BACP” : Bai Bithaman Ajil Commercial Papers“BAIDS” : RM1,020,000,000 10-Year Al-Bai’ Bithaman Ajil Islamic Debt Securities Primary

Bonds together with Non-Detachable Secondary Bonds“BAMTN” : Bai Bithaman Ajil Medium Term Notes“BIMB” : Bank Islam Malaysia Berhad“BOT” : Build Operate Transfer“BPMB” : Bank Pembangunan Malaysia Berhad“Bursa Securities” : Bursa Malaysia Securities Berhad“BSR” : Bulk Supply Rate“CCOA” : Construction Cum Operation Agreement“CGU” : Cash Generating Unit“CIMB” : Commerce International Merchant Bankers Berhad“CIMB Bank” : CIMB Bank Berhad“CLMSB” : Corporate Line (M) Sdn Bhd“Company” : Puncak Niaga Holdings Berhad“CPMSB” : Central Plus (M) Sdn Bhd“Distribution Area” : the State of Selangor, the Federal Territories of Kuala Lumpur and Putrajaya“DSRA” : Debt Service Reserve Account“EHPL” : Environmental Holding Pte Ltd“EPF” : Employees Provident Fund“Federal Government” : Government of Malaysia“FRS” : Financial Reporting Standards“GESL” : Global Environmental Solutions Ltd“GOM Resources” : GOM Resources Sdn Bhd (formally known as Global Offshore (Malaysia) Sdn Bhd)“Group” : Puncak Niaga Holdings Berhad Group of Companies“Hebei Sino” : Hebei Sino Panlong Industrial Water Supply Co Ltd“HSBC” : HSBC Bank Malaysia Berhad“IRB” : Inland Revenue Board“JAKS-KDEB” : JAKS-KDEB Consortium Sdn Bhd“JNA” : Junior Notes A, the 2001/2016 15-Year Redeemable Unconvertible Junior Notes issued

by PNSB“JVA” : Joint Venture Agreement“KDEB” : Kumpulan Darul Ehsan Berhad“KGL” : KGL Ltd“KHEC” : Kris Heavy Engineering & Construction Sdn Bhd“Konajaya” : Konajaya Sdn Bhd“KeTTHA” : Kementerian Tenaga, Teknologi Hijau dan Air“Luancheng” : Luancheng Dayu Water Supply Co Ltd“LUWEI” : Luwei (Pingdingshan) Water Co Ltd

213


Definitions

“MCPs” : Al-Murabahah Commercial Papers“MMTNs” : Al-Murabahah Medium Term Notes“MOF” : Minister of Finance, Incorporated“MoU” : Memorandum of Understanding“NA” : Not Applicable“NBV” : Net Book Value“NRW” : Non Revenue Water Works“O&M” : Operations & Maintenance“Oasis Water” : Oasis Water Resources Sdn Bhd“PCCA” : Privatisation Cum Concession Agreement“PNOC” : Puncak Niaga Overseas Capital Pte Ltd“PNSB” : Puncak Niaga (M) Sdn Bhd“POG” : Puncak Oil & Gas Sdn Bhd“PRC” : People’s Republic of China“PUAS” : Perbadanan Urus Air Selangor Berhad“RCULS” : Redeemable Convertible Unsecured Loan Stocks of SYABAS“RM” : Ringgit Malaysia“RMB” : Chinese Renminbi“RPS” : Redeemable Cumulative Preference Shares of SYABAS“RUBs” : RM435,000,000 Nominal Value Ten (10)-Year Redeemable Unsecured Bonds of PNSB“RUN” : 2001/2016 15-Year Redeemable Unconvertible Junior Notes issued pursuant to the RUN issue“RZ Management” : RZ Management Services Sdn Bhd“Serba Tiara” : Serba Tiara Sdn Bhd“SGD” : Singapore Dollar“SINO” : Sino Water Pte Ltd“Sino Water (Shanghai)” : Sino Water Environmental Consultancy (Shanghai) Co. Ltd“SPLASH” : Syarikat Pengeluar Air Sungai Selangor Sdn Bhd“SSP 2” : Sungai Selangor Water Supply Scheme Phase 2, Stages I and II“State Government” : State Government of Selangor“SYABAS” : Syarikat Bekalan Air Selangor Sdn Bhd“SYABAS Concession Agreement“ : Concession Agreement dated 15 December 2004 between SYABAS, the Federal

Government and the State Government“USD” : United States Dollar“XINNUO” : Xinnuo Water (Binzhou) Co. Ltd


214

Directors’ Report

DIRECtoRS’ REPoRt

The directors present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.

PRINCIPAl ACtIvItIES

The Group is primarily engaged in the treatment and distribution of treated water to consumers in the State of Selangor, the Federal Territories of Kuala Lumpur and Putrajaya, and in the PRC. During the current financial year, the Group principal activities diversified to the provision of marine spread, onshore and offshore services and engineering works for the oil and gas sector. The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements.

There have been no other significant changes in the nature of the principal activities during the financial year other than those arising from the acquisition of subsidiaries as disclosed in Note 17.

RESultS

GRouP ComPANy Rm Rm

(Loss)/profit net of tax (83,722,201) 3,525,567

Profit/(loss) attributable to:Owners of the parent 9,319,631 3,525,567 Non-controlling interest (93,041,832) –

(83,722,201) 3,525,567

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the following:

(i) the effects arising from the changes in accounting policies due to the adoption of IC Interpretation 12 Service Concession Arrangement (“IC 12”), as disclosed in Note 2.2(iii);

(ii) gain arising from the extinguishment of debt in regards to JNA of RM155,554,087 as disclosed in Note 31(d);

(iii) surplus arising from the revaluation of freehold land, leasehold land and buildings of RM69,087,946 net of deferred tax which was recognised in other comprehensive income as disclosed in Note 13;

(iv) loss arising from the impairment allowance on the amount due from the State Government of tariff compensation of RM75,259,744 as disclosed in Note 6(b); and

(v) gain arising from adjustment for changes in estimate arising from the revision in the estimates of cashflows of long term payables as disclosed in Note 6(a) amounting to RM19,680,001.

215


Directors’ Report

DIvIDENDS

No dividend has been paid or declared by the Company since the end of previous financial year. The directors do not propose to declare any dividends in respect of the current financial year.

DIRECtoRS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Tan Sri Rozali bin IsmailDato’ Hashim bin MahfarDato’ Ruslan bin HassanDato’ Ir Lee Miang KoiDato’ Syed Danial bin Syed AriffinNg Wah TarTan Sri Dato’ Hari Narayanan a/l GovindasamyTan Sri Dato’ Seri Dr Ting Chew PehTengku Dato’ Rahimah binti Almarhum Sultan MahmudTan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak

In accordance with Article 98 of the Company’s Articles of Association, YBhg Dato’ Hashim bin Mahfar, YBhg Dato’ Ir Lee Miang Koi and Mr. Ng Wah Tar shall retire from office by rotation at the forthcoming Fifteenth Annual General Meeting of the Company and, being eligible, had offered themselves for re-election.

DIRECtoRS’ bENEFItS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debenture of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except for Tan Sri Rozali bin Ismail who has deemed interests in a related party, RZ Management, which provides corporate secretarial services to the Group.


216

Directors’ Report

DIRECtoRS’ INtEREStS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares and RUN in the Company and its related corporations during the financial year were as follows:

NumbER oF oRDINARy ShARES oF Rm1.00 EAChNAmE oF DIRECtoR 1.1.2011 ACquIRED SolD 31.12.2011

Direct Interest:Ordinary shares of the CompanyTan Sri Rozali bin Ismail 1,729,000 – – 1,729,000 Dato’ Ir Lee Miang Koi 10,000 – – 10,000

Deemed Interest:Ordinary shares of the CompanyTan Sri Rozali bin Ismail 167,037,114 * – – 167,037,114 *

Tan Sri Dato’ Seri Dr Ting Chew Peh 42,000 ** – – 42,000 **

RuN IN Rm 1.1.2011 ACquIRED REDEEmED 31.12.2011

Direct Interest:RUN of the CompanyDato’ Ruslan bin Hassan 708,125 – (708,125)*** –Dato’ Ir Lee Miang Koi 39,900 – (39,900)*** –

Deemed Interest:RUN of the CompanyTan Sri Rozali bin Ismail 5,145,087 ̂ ^ – (5,145,087) ^^ *** –

* Deemed interest by virtue of 100% shareholding interest in both CPMSB, a substantial corporate shareholder, and in CLMSB, a substantial corporate shareholder of the Company, of which 92.5% is held in his own name and 7.5% in his children’s names.

** Deemed interest by virtue of shares held by spouse, Tay Boon Ling pursuant to Section 134 of the Companies Act, 1965.*** Exercise of Rights via the Put Option Exercise implemented pursuant to the Trust Deed dated 5 September 2001 constituting the Notes(“Trust

Deed”) as set out in the Company’s Notice Of Reminder To The Holders Of The RM546,875,000 Nominal Value Of 15-Year Redeemable Unconvertible Notes (“Notes”) On Their Rights To Exercise The Put Option Pursuant To The Trust Deed dated 13 September 2011. The completion for the Put Option Exercise was on 18 November 2011.

^^ Deemed interest by virtue of 100% shareholding interest in CLMSB, of which 92.5% is held in his own name and 7.5% in his children’s names.

None of the other directors in office at the end of the financial year had any interest in shares and RUN in the Company or its related corporations during the financial year.

holDING ComPANy

The Company has no corporate shareholder being regarded by the directors of the Company as the ultimate holding company nor as the holding company.

217


Directors’ Report

othER StAtutoRy INFoRmAtIoN

(a) Before the income statements, statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) except as disclosed in Note 49, no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) 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 the operations of the Group or of the Company for the financial year in which this report is made.


218

Directors’ Report

SIGNIFICANt EvENtS

In addition to significant events disclosed elsewhere in this report, other significant events are disclosed in Note 47 to the financial statements.

SubSEquENt EvENtS

Details of subsequent events are disclosed in Note 48 to the financial statements. AuDItoRS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 26 April 2012.

DAto’ hAShIm bIN mAhFAR DAto’ SyED DANIAl bIN SyED ARIFFIN

219


Statement by DirectorsPursuant to Section 169 (15) of the Companies Act, 1965

We, Dato’ Hashim bin Mahfar and Dato’ Syed Danial bin Syed Ariffin, being two of the directors of Puncak Niaga Holdings Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 222 to 379 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and the Company as at 31 December 2011 and of its financial performance and cash flows for the year then ended.

The information set out in Note 52 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 26 April 2012.

DAto’ hAShIm bIN mAhFAR DAto’ SyED DANIAl bIN SyED ARIFFIN

Statutory DeclarationPursuant to Section 169 (16) of the Companies Act, 1965

I, Wong Ley Chan, being the officer primarily responsible for the financial management of Puncak Niaga Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 222 to 380 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declaredby the abovenamed Wong Ley Chanat Shah Alam in the State of Selangoron 26 April 2012. WoNG lEy ChAN

Before me,


220

Independent Auditors’ Reportto the members of Puncak Niaga Holdings Berhad (Incorporated in Malaysia)

REPoRt oN thE FINANCIAl StAtEmENtS

We have audited the financial statements of Puncak Niaga Holdings Berhad, which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the income statements and statements of comprehensive income, statements 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 significant accounting policies and other explanatory notes, as set out on pages 222 to 379.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that 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 the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and 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 as at 31 December 2011 and of their financial performance and cash flows for the year then ended.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Notes 3.2, Note 49(g) and Note 49(i) to the financial statements which describes the uncertainty relating to the outcome of the lawsuit filed by a subsidiary of the Company, SYABAS against the Selangor State Government for the recovery of the water tariff compensation.

221


Independent Auditors’ Reportto the members of Puncak Niaga Holdings Berhad (Incorporated in Malaysia)

REPoRt oN othER lEGAl AND REGulAtoRy REquIREmENtS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) 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.

(b) We have considered the financial statements and the auditors’ reports of the subsidiaries which we have not acted as auditors, which are indicated in Note 17 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.

othER mAttERS

The supplementary information set out in Note 52 on page 380 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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 report.

ERNSt & youNG KuA Choo KAI AF: 0039 No.2030/03/14(J) ChARtERED ACCouNtANtS ChARtERED ACCouNtANt

Kuala Lumpur, Malaysia26 April 2012


222

Income StatementsFor the financial year ended 31 December 2011

GRouP ComPANy NotE 2011 2010 2011 2010 (REStAtED) Rm Rm Rm Rm

Revenue 5 2,591,509,091 2,055,523,094 – –

other income 6(a) 320,099,478 122,565,748 79,980,819 72,337,380

Items of expense Raw materials, consumables and maintenance (1,083,109,917) (1,005,538,884) – – Construction contract expense (277,484,524) (138,625,147) – – Cost of providing oil & gas services (236,135,068) – – –Employee benefits expense 8 (269,916,051) (235,461,868) – – Other expenses 6(b) (319,160,429) (148,893,623) (21,204,991) (12,190,488)Depreciation and amortisation expense 6(c) (176,305,767) (165,148,466) (774,562) (850,844)Finance costs 10 (624,459,577) (593,001,037) (49,806,510) (55,602,036)

Share of results- Associates 18 3,172 (1,921) – – - Joint venture 19 (203,235) (76,234) – –

(loss)/profit before tax 6 (75,162,827) (108,658,338) 8,194,756 3,694,012 Income tax expense 11 (8,559,374) 17,068,782 (4,669,189) (3,877,209)

(loss)/profit net of tax (83,722,201) (91,589,556) 3,525,567 (183,197)

Profit/(loss) attributable to:Owners of the parent 9,319,631 (90,925,524) 3,525,567 (183,197)Non-controlling interest (93,041,832) (664,032) – –

(83,722,201) (91,589,556) 3,525,567 (183,197)

Earnings per share attributable to owners of the parentBasic 12 0.02 (0.22)

Diluted 12 N/A N/A

223


Statements of Comprehensive IncomeFor the financial year ended 31 December 2011

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


(Loss)/profit net of tax (83,722,201) (91,589,556) 3,525,567 (183,197)

other comprehensive income/expenses:Foreign currency translation 2,165,771 (3,652,314) – – Revaluation surplus on land and buildings 13 92,117,262 – 12,108,879 – Transfer to deferred tax 36 (23,029,316) – (3,027,220) – Revaluation reserves 69,087,946 – 9,081,659 –

total comprehensive(loss)/income for the year (12,468,484) (95,241,870) 12,607,226 (183,197)

total comprehensive income/(loss) attributable to: Owners of the parent 80,393,762 (94,403,838) 12,607,226 (183,197)Non-controlling interest (92,862,246) (838,032) – –

(12,468,484) (95,241,870) 12,607,226 (183,197)


224

Statements of Financial Position As at 31 December 2011

GRouP ComPANy AS At NotE 2011 2010 1.1.2010 2011 2010 (REStAtED) (REStAtED) Rm Rm Rm Rm Rm

Assets

Non-current assetsProperty, plant and equipment 13 452,829,031 245,323,870 234,313,312 19,600,000 7,620,310 Investment property 14 – – – 8,913,870 9,559,243 Operating financial assets 15 6,584,625 2,475,910 731,654 – – Service concession assets 16 7,677,592,186 7,685,002,446 7,647,906,242 – – Investment in subsidiaries 17 – – – 463,118,040 463,110,960 Investment in associates 18 43,986 39,738 40,504 45,415 44,339 Investment in joint venture 19 1,641,971 5,634,957 5,659,878 – 2,476,927 Held-to-maturity financial assets 20 – – – 265,958,665 254,152,376 DSRA 22 306,891,601 297,271,081 278,605,809 – – Goodwill 23 532,493,313 514,873,012 515,312,455 – – Trade and other receivables 24 1,469,883,064 284,706,684 321,216,439 – – Deferred tax assets 36 425,211,092 399,546,108 361,219,704 – –

10,873,170,869 9,434,873,806 9,365,005,997 757,635,990 736,964,155

Current assetsInventories 26 9,483,743 9,887,761 8,915,340 – – Held-to-maturity financial assets 20 – – – – 285,568,993 Trade and other receivables 24 361,639,078 1,148,918,467 740,550,969 194,628,490 63,763,440 Other current assets 25 105,841,260 21,118,036 22,002,853 86,217 8,912,100 Available-for-sales investments 27 9,408,793 – 4,601,661 – – Tax recoverable 639,110 653,790 2,135,308 – – Short term funds 28 36,281 35,231 30,329,949 – – Cash and bank balances 30 1,268,050,147 1,215,266,678 1,186,201,882 270,325,861 180,088,126

1,755,098,412 2,395,879,963 1,994,737,962 465,040,568 538,332,659

total assets 12,628,269,281 11,830,753,769 11,359,743,959 1,222,676,558 1,275,296,814

Equity and liabilities

Current liabilitiesProvision for retirement benefits 33 2,283,854 1,539,853 1,193,187 – – Loans and borrowings 31 471,168,322 806,392,097 395,665,240 – 285,568,993 Trade and other payables 32 1,387,291,014 1,662,607,522 1,117,677,436 249,872,615 35,872,702 Other current liabilities 34 – 6,546,029 4,161,411 – – Service concession obligations 16 145,497,500 114,760,000 85,597,500 – – Tax payable 27,434,086 14,155,744 26,447,964 590,847 228,041

2,033,674,776 2,606,001,245 1,630,742,738 250,463,462 321,669,736

Net current (liabilities)/assets (278,576,364) (210,121,282) 363,995,224 214,577,106 216,662,923

225


Statements of Financial Position As at 31 December 2011

GRouP ComPANy AS At NotE 2011 2010 1.1.2010 2011 2010 (REStAtED) (REStAtED) Rm Rm Rm Rm Rm

Non–current liabilitiesProvision for retirement benefits 33 20,475,716 19,224,022 17,482,118 – – Loans and borrowings 31 5,040,961,074 4,680,571,099 4,981,104,072 – – Trade and other payables 32 1,205,760,654 9,794,600 11,427,033 – – Government grant 35 285,933,999 282,626,078 237,069,909 – – Deferred tax liabilities 36 – – – 16,516,886 10,538,094 Service concession obligations 16 4,024,041,173 4,170,240,532 4,283,537,529 – –

10,577,172,616 9,162,456,331 9,530,620,661 16,516,886 10,538,094

total liabilities 12,610,847,392 11,768,457,576 11,161,363,399 266,980,348 332,207,830 Net assets 17,421,889 62,296,193 198,380,560 955,696,210 943,088,984 Equity attributable to owners of the parent Share capital 37 411,142,895 411,142,895 411,142,895 411,142,895 411,142,895 Share premium 37 102,878,221 102,878,221 102,878,221 102,878,221 102,878,221 Treasury shares 37 (5,940,688) (5,940,688) (5,940,688) (5,940,688) (5,940,688)Foreign currency translation reserve 37 (1,108,129) (3,094,314) 384,165 – – Revaluation reserve 37 69,087,946 – – 9,081,659 – Other reserve 37 (19,762,784) – – – – Retained earnings 38 (449,192,735) (458,512,366) (326,676,398) 438,534,123 435,008,556 107,104,726 46,473,748 181,788,195 955,696,210 943,088,984 Non-controlling interest (89,682,837) 15,822,445 16,592,365 – – total equity 17,421,889 62,296,193 198,380,560 955,696,210 943,088,984 total equity and liabilities 12,628,269,281 11,830,753,769 11,359,743,959 1,222,676,558 1,275,296,814



Statements of Changes in EquityFor the financial year ended 31 December 2011

226

AttRIbutAblE to oWNERS oF thE PARENt NoN-DIStRIbutAblE DIStRIbutAblE EquIty AttRIbutAblE FoREIGN to oWNERS oF CuRRENCy EquIty, thE PARENt, ShARE ShARE tREASuRy tRANSlAtIoN REvAluAtIoN othER REtAINED NoN-CoNtRollING NotE totAl totAl CAPItAl PREmIum ShARES RESERvE RESERvE RESERvE EARNINGS INtEREStS Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

2011Group

opening balance at 1 January 2011, restated 62,296,193 46,473,748 411,142,895 102,878,221 (5,940,688) (3,094,314) – – (458,512,366) 15,822,445 Total comprehensive (loss)/income (12,468,484) 80,393,762 – – – 1,986,185 69,087,946 – 9,319,631 (92,862,246) transactions with ownersNet premium paid on acquisition of non-controlling interests 17 (19,762,784) (19,762,784) – – – – – (19,762,784) – – Acquisition of non-controlling interests 17 (34,224,947) – – – – – – – – (34,224,947)Acquisition of subsidiaries 17 21,581,911 – – – – – – – – 21,581,911 Total transactions with owners (32,405,820) (19,762,784) – – – – – (19,762,784) – (12,643,036) Closing balance at 31 December 2011 17,421,889 107,104,726 411,142,895 102,878,221 (5,940,688) (1,108,129) 69,087,946 (19,762,784) (449,192,735) (89,682,837)



227


2011Group

opening balance at 1 January 2011, restated 62,296,193 46,473,748 411,142,895 102,878,221 (5,940,688) (3,094,314) – – (458,512,366) 15,822,445 Total comprehensive (loss)/income (12,468,484) 80,393,762 – – – 1,986,185 69,087,946 – 9,319,631 (92,862,246) transactions with ownersNet premium paid on acquisition of non-controlling interests 17 (19,762,784) (19,762,784) – – – – – (19,762,784) – – Acquisition of non-controlling interests 17 (34,224,947) – – – – – – – – (34,224,947)Acquisition of subsidiaries 17 21,581,911 – – – – – – – – 21,581,911 Total transactions with owners (32,405,820) (19,762,784) – – – – – (19,762,784) – (12,643,036) Closing balance at 31 December 2011 17,421,889 107,104,726 411,142,895 102,878,221 (5,940,688) (1,108,129) 69,087,946 (19,762,784) (449,192,735) (89,682,837)



228


2010Group

opening balance at 1 January 2010 1,738,643,837 1,473,801,422 411,142,895 102,878,221 (5,940,688) 384,165 – – 965,336,829 264,842,415 Effects of adopting IC 12 2.2(iii) (1,493,513,716) (1,245,263,666) – – – – – – (1,245,263,666) (248,250,050)

245,130,121 228,537,756 411,142,895 102,878,221 (5,940,688) 384,165 – – (279,926,837) 16,592,365 * Effects of adopting FRS 139 as previously reported (46,749,561) (46,749,561) – – – – – – (46,749,561) –

opening balance at 1 January 2010, restated 198,380,560 181,788,195 411,142,895 102,878,221 (5,940,688) 384,165 – – (326,676,398) 16,592,365 Total comprehensive income, as previously reported 185,134,900 115,290,243 – – – (4,221,355) – – 119,511,598 69,844,657 Effects of adopting IC 12 2.2(iii) (280,376,770) (209,694,081) – – – 742,876 (210,436,957) (70,682,689)Total comprehensive loss, restated (95,241,870) (94,403,838) – – – (3,478,479) – – (90,925,359) (838,032) transactions with owners Acquisition of additional equity interests in subsidiary 68,112 – – – – – – – – 68,112 Dividends on ordinary shares 45 (40,910,609) (40,910,609) – – – – – – (40,910,609) –

Total transactions with owners (40,842,497) (40,910,609) – – – – – – (40,910,609) 68,112

Closing balance at 31 December 2010, restated 62,296,193 46,473,748 411,142,895 102,878,221 (5,940,688) (3,094,314) – – (458,512,366) 15,822,445



229


2010Group

opening balance at 1 January 2010 1,738,643,837 1,473,801,422 411,142,895 102,878,221 (5,940,688) 384,165 – – 965,336,829 264,842,415 Effects of adopting IC 12 2.2(iii) (1,493,513,716) (1,245,263,666) – – – – – – (1,245,263,666) (248,250,050)

245,130,121 228,537,756 411,142,895 102,878,221 (5,940,688) 384,165 – – (279,926,837) 16,592,365 * Effects of adopting FRS 139 as previously reported (46,749,561) (46,749,561) – – – – – – (46,749,561) –

opening balance at 1 January 2010, restated 198,380,560 181,788,195 411,142,895 102,878,221 (5,940,688) 384,165 – – (326,676,398) 16,592,365 Total comprehensive income, as previously reported 185,134,900 115,290,243 – – – (4,221,355) – – 119,511,598 69,844,657 Effects of adopting IC 12 2.2(iii) (280,376,770) (209,694,081) – – – 742,876 (210,436,957) (70,682,689)Total comprehensive loss, restated (95,241,870) (94,403,838) – – – (3,478,479) – – (90,925,359) (838,032) transactions with owners Acquisition of additional equity interests in subsidiary 68,112 – – – – – – – – 68,112 Dividends on ordinary shares 45 (40,910,609) (40,910,609) – – – – – – (40,910,609) –

Total transactions with owners (40,842,497) (40,910,609) – – – – – – (40,910,609) 68,112

Closing balance at 31 December 2010, restated 62,296,193 46,473,748 411,142,895 102,878,221 (5,940,688) (3,094,314) – – (458,512,366) 15,822,445


230


NoN-DIStRIbutAblE DIStRIbutAblE EquIty, ShARE ShARE tREASuRy REvAluAtIoN REtAINED totAl CAPItAl PREmIum ShARES RESERvE EARNINGS Rm Rm Rm Rm Rm Rm

2011Company

opening balance at 1 January 2011 943,088,984 411,142,895 102,878,221 (5,940,688) – 435,008,556

total comprehensive income 12,607,226 – – – 9,081,659 3,525,567

Closing balance at 31 December 2011 955,696,210 411,142,895 102,878,221 (5,940,688) 9,081,659 438,534,123

NoN-DIStRIbutAblE DIStRIbutAblE EquIty, ShARE ShARE tREASuRy REvAluAtIoN REtAINED NotE totAl CAPItAl PREmIum ShARES RESERvE EARNINGS Rm Rm Rm Rm Rm Rm

2010Company

opening balance at 1 January 2010 984,182,790 411,142,895 102,878,221 (5,940,688) – 476,102,362

total comprehensive loss (183,197) – – – – (183,197)

transaction with ownersDividends on ordinary shares 45 (40,910,609) – – – – (40,910,609)

Closing balance at 31 December 2010 943,088,984 411,142,895 102,878,221 (5,940,688) – 435,008,556


231


Statements of Cash Flows For the financial year ended 31 December 2011


operating activities

Receipts from customers 1,918,420,162 1,544,046,826 – – Other income 75,586,861 63,059,024 – 60,000 Payments to water treatment operators (395,739,973) (415,382,482) – – Payments to service consession obligations (190,430,00) (165,427,500) – – Payments for operating expenses (619,928,751) (628,465,430) (4,122,385) (5,299,909)Payments to contractors (301,842,316) (18,800,074) – – Net cash generated from/ (used in) operations 486,065,983 379,030,364 (4,122,385) (5,239,909) Net deposits received 25,852,252 8,376,843 – – Interest paid (216,208,730) (212,480,639) (7,408,244) (9,544,092)Tax paid (44,089,652) (31,986,409) (1,354,811) (1,284,261)Interest received 44,519,034 29,454,923 26,152,673 14,587,384 (189,927,096) (206,635,282) 17,389,618 3,759,031 Net cash inflow/(outflow) from operating activities 296,138,887 172,395,082 13,267,233 (1,480,878)

Investing activities

Acquisition of subsidiaries 17(b) & (c) (49,066,343) – (7,080) (900,002)Acquisition of non-controlling interest 17(b) & (c) (114,207,000) – – – Purchase of property, plant and equipment (14,196,927) (28,620,212) – – Purchase of investment property – – – (42,473)Additions of service concession assets (140,079,491 ) (174,524,923) – – Net advances from/(to) subsidiaries – – 82,990,614 (14,770,000)Net advance to associate (1,076) (1,155) (1,076) (1,155)Net advance to joint venture (239,267) (601,313) (239,267) (1,134,808)Cash flows from investing activities carried forward (317,790,104) (203,747,603) 82,743,191 (16,848,438)


232

Statements of Cash Flows For the financial year ended 31 December 2011



Investing activities

Cash flows from investing activities brought forward (317,790,104) (203,747,603) 82,743,191 (16,848,438)

Purchase of unquoted investments 27 (10,000,000) (80,000,000) – – Proceeds from redemption of Junior Notes A – – – 54,687,500 Proceeds from disposal of BAIDS 336,740,180 – 336,740,180 –Acquisition of BAIDS (342,512,869) – (342,512,869) –Proceeds from disposal of held-to-maturity investment – – 327,967,259 –Disposal of unquoted investments 27 – 86,509,434 – – Proceeds from disposal of property, plant and equipment 230,690 571,552 – – Net cash (outflow)/inflow from investing activities (333,332,103) (196,666,617) 404,937,761 37,839,062

Financing activities

Proceeds from loan and borrowings 444,848,500 11,919,867 – – Issuance of RPS – 131,600,000 – – Dividend paid – (40,910,609) – (40,910,609)Repayment of loan and borrowings (335,141,667) (61,499,798) (327,967,259) (54,687,500)Repayment of obligation under finance leases (8,388,357) (6,042,069) – – Net cash inflow/(outflow) from financing activities 101,318,476 35,067,391 (327,967,259) (95,598,109)

Net increase/(decrease) in cash and cash equivalents 64,125,260 10,795,856 90,237,735 (59,239,925)

Effects of exchange rate changes on cash and cash equivalents (1,720,221) (4,260,506) – –

Cash and cash equivalents at 1 January 1,215,301,909 1,216,531,831 180,088,126 239,328,051 Transfer to DSRA 22 (9,620,520) (7,765,272) – – Deposits held in trust 30 (186,955,104) (162,150,214) – –

Cash and cash equivalents at 31 December 1,081,131,324 1,053,151,695 270,325,861 180,088,126

Cash and cash equivalents comprise: Deposits with licensed banks 1,108,293,684 1,151,081,295 231,152,547 172,211,766 Less: Deposits held in trust 30 (186,955,104) (162,150,214) – – 921,338,580 988,931,081 231,152,547 172,211,766Cash and bank balances 159,756,463 64,185,383 39,173,314 7,876,360 Short term funds 28 36,281 35,231 – –

1,081,131,324 1,053,151,695 270,325,861 180,088,126

233


Notes to the Financial Statements For the financial year ended 31 December 2011

1. CoRPoRAtE INFoRmAtIoN

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Securities. The registered office of the Company is located at 10th Floor, Wisma Rozali, No. 4, Persiaran Sukan, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan.

The Company has no corporate shareholder being regarded by the directors of the Company as the ultimate holding company nor as the holding company.

The Group is primarily engaged in the treatment and distribution of treated water to consumers in the State of Selangor, the Federal Territories of Kuala Lumpur and Putrajaya and in the PRC. In the current financial year, the Group ventures into oil & gas sector. The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are disclosed in Note 17.

There have been no other significant changes in the nature of the principal activities during the financial year other than those arising from the acquisition of two subsidiaries as disclosed in Note 17.

2. SummARy oF SIGNIFICANt ACCouNtING PolICIES

2.1 bASIS oF PREPARAtIoN The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting

Standards and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 January 2011 as described fully in Note 2.2.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Ringgit Malaysia (RM).

2.2 ChANGES IN ACCouNtING PolICIES

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2011, the Group and the Company adopted the following new and amended FRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2011.

EFFECtIvE FoR ANNuAl PERIoDS bEGINNING oN DESCRIPtIoN oR AFtER

• FRS 1: First-time Adoption of Financial Reporting Standards 1 July 2010 • Amendments to FRS 2: Share-based Payment 1 July 2010 • FRS 3: Business Combinations 1 July 2010 • Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations 1 July 2010


234


2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d)

2.2 ChANGES IN ACCouNtING PolICIES (cont’d)

EFFECtIvE FoR ANNuAl PERIoDS bEGINNING oN DESCRIPtIoN oR AFtER

• Amendments to FRS 127: Consolidated and Separate Financial Statements 1 July 2010 • Amendments to FRS 138: Intangible Assets 1 July 2010 • Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives 1 July 2010 • IC Interpretation 12: Service Concession Arrangements 1 July 2010 • IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation 1 July 2010 • IC Interpretation 17: Distributions of Non-cash Assets to Owners 1 July 2010 • Amendments to FRS 132: Classification of Rights Issues 1 March 2010 • IC Interpretation 18: Transfers of Assets from Customers 1 January 2011 • Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011 • Amendments to FRS 1: Limited Exemptions for First-time Adopters 1 January 2011 • Amendments to FRS 1: Additional Exemptions for First-time Adopters 1 January 2011 • IC Interpretation 4: Determining Whether an Arrangement Contains a Lease 1 January 2011 • Improvements to FRS issued in 2010 * 1 January 2011 * Improvements to FRS issued in 2010

The Improvements to FRS issued in 2010 comprise amendments to the following FRS that are effective for annual periods beginning on or after 1 January 2011:

FRS 1 First –time Adoption of Financial Reporting Standards FRS 3 Business Combinations FRS 7 Financial Instruments: Disclosures FRS 101 Presentation of Financial Statements FRS 121 The Effects of Changes in Foreign Exchange Rates FRS 128 Investments in Associates FRS 131 Interests in Joint Ventures FRS 132 Financial Instruments: Presentation FRS 134 Interim Financial Reporting FRS 139 Financial Instruments: Recognition and Measurement IC Interpretation 13 Customer Loyalty Programmes

235





Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and of the Company except for those discussed below:

(i) Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes in accounting for business combinations occurring after 1 July 2010. These changes impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

The revised FRS 3 continues to apply the acquisition method to business combinations but with some significant changes. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs are expensed.

On 28 September 2011, the Group’s subsidiary company, Puncak Oil and Gas Sdn Bhd, acquired additional 60% equity interest in GOM Resources Sdn Bhd and KGL Ltd respectively from their non-controlling interest of which details are disclosed in Note 17(b) & 17(c).

The amendments to FRS 127 require that a change in the ownership interest of a subsidiary (without loss of

control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary.

(ii) Amendments to FRS 7: Improving Disclosures about Financial Instruments

The amended standard requires enhanced disclosure about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a three level fair value hierarchy (Level 1, Level 2 and Level 3), by class, for all financial instruments recognised at fair value. A reconciliation between the beginning and ending balance for Level 3 fair value measurements is required. Any significant transfers between levels of the fair value hierarchy and the reasons for those transfers need to be disclosed. The amendments also clarify the requirements for liquidity risk disclosures with respect to derivative transactions and assets used for liquidity management. The fair value measurement disclosures are presented in Note 42. The liquidity risk disclosures are not significantly impacted by the amendments and are presented in Note 43(b).


236




(iii) IC Interpretation 12 Service Concession Arrangements

IC Interpretation 12 - Service concession arrangements (“IC12”) is effective from 1 July 2010. The change in accounting method was applied restropectively in accordance with FRS 108 on changes in accounting method. As such, the Group consolidated financial statements for the year ended 31 December 2010 were adjusted for the retrospective application of IC 12.

A substantial portion of the Group’s assets is used within the framework of concession or affermage contract granted by certain governing bodies, State Government and Government (“grantors”) on full privatisation. The characteristics of these contracts vary significantly depending on the country and activity concerned.

IC 12 is applicable to concession arrangements comprising a public service obligation and satisfying all of the following criteria:

- the concession grantor controls or regulates the services to be provided by the operator using the asset, the infrastructure, the beneficiaries of the services and prices applied;

- the grantor controls the significant residual interest in the infrastructure at the end of the term of the arrangement.

Pursuant to IC 12, such infrastructures are not recognised in assets of the operator as property, plant and equipment but in financial assets (“financial asset model”) and/or intangible assets (“intangible asset model”) depending on the remuneration commitments given by the grantor.

Financial asset model

The financial asset model applies when the operator has an unconditional right to receive cash or another financial asset from the grantor. In the case of concession services, the operator has such an unconditional right if the grantor contractually guarantees the payment of:

- amounts specified or determined in the contract or

- the shortfall, if any, between amounts received from users of the public service and amounts specified or determined in the contract.

Financial assets resulting from the application of IC 12 are recorded in the Statement of Financial Position under the heading of “Operating financial assets” and recognised at amortised cost.

Pursuant to FRS 139, an impairment loss is recognised if the carrying amount of these assets exceeds the recoverable amount, as estimated during impairment tests. Fair value is estimated based on the recoverable amount, calculated by discounting future cash flows (value in use method).

237





(iii) IC Interpretation 12 Service Concession Arrangements (cont’d)

Revenue associated with this financial model includes:

(i) Revenue determined on a completion basis in the case of construction operating financial assets (in accordance with FRS 111);

(ii) The remuneration of the operating financial asset recorded in revenue from operating financial assets (excluding principal payments);

(iii) Service remuneration.

Intangible asset model

The intangible asset model applies where the operator is paid by the users or where the concession grantor has not provided a contractual guarantee in respect of the recoverable amount. The intangible asset corresponds to the right granted by the concession grantor to the operator to charge users of the public service.

Intangible assets resulting from the application of IC 12 are recorded in the Statement of Financial Position under the heading of “Service concession assets” and are amortised on the water revenue method over the concession period.

Under the intangible asset model, revenue includes:

(i) Revenue recorded on a completion basis, in the case of construction operating financial assets (in accordance with FRS 111);

(ii) Service remuneration.

The Group amortises its intangible asset contained in the concession arrangement by reference to revenue method over the concession period, consistent with the method adopted for the annual financial statements for the financial year ended 31 December 2010. During the financial year under review, it has come to the knowledge of the Group that there are differing views within the accounting fraternity regarding the appropriateness of certain methods in amortising intangible asset contained in a concession arrangement, and the deliberation over this matter is currently ongoing. Pending the finalisation of any consensus by the accounting fraternity over this matter, the Group continues to amortise its intangible asset contained in the concession arrangement by reference to revenue method. The Group will continue to monitor the progress and outcome of the ongoing deliberation, and will review the appropriateness of the existing amortisation method should such need arise in future.


238




(iii) IC Interpretation 12 Service Concession Arrangements (cont’d)

The following shows the impact of the adoption of IC Interpretation 12 to the Group’s financial statements as of and for the year ended 31 December 2010 and 2009:

INCREASE/(DECREASE) 2010 2009 Rm Rm

GRouP

Statements of financial position Property, plant and equipment (1,364,389,459) (1,362,927,652) Project development expenditure (4,497,424,223) (3,994,674,341) Service concession assets 7,685,002,446 7,647,906,242 Operating financial assets 2,475,910 731,654 Deferred tax assets 679,980,256 584,294,307 Inventories (6,624,585) (4,943,386) Other current assets 5,846,231 71,444 Trade and other payables (current) (1,539,853) (1,193,187) Other payables (non-current) (19,224,022) (17,482,118) Service concession obligations (current) 114,760,000 85,597,500 Service concession obligations (non-current) 4,170,240,532 4,283,537,529 Government grant (6,243,470) (5,163,045) Foreign currency translation reserve 742,876 – Accumulated losses (1,455,700,623) (1,245,263,666)

Statements of comprehensive income Revenue 144,008,895 178,005,325 Other income 1,141,098 2,792,963 Raw materials, consumables and maintenance expenses (532,308,281) (531,681,833) Construction contract expenses (131,175,852) (159,375,216) Depreciation and amortisation expenses 360,025,642 324,093,720 Finance costs (218,717,960) (222,079,999) Loss before tax (377,026,458) (408,245,040) Income tax expense 95,836,962 112,800,860 Loss net of tax (281,189,496) (295,444,180)

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2.3 mAlAySIAN FINANCIAl REPoRtING StANDARDS (mFRS FRAmEWoRK)

On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework).

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer.

The Group will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December 2012. In presenting its first MFRS financial statements, the Group will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profits.

The Group is currently assessing the financial effects of the differences between Financial Reporting Standards and accounting standards under the MFRS Framework. Accordingly, the financial performance and financial position as disclosed in these financial statements for the year ended 31 December 2011 could be different if prepared under the MFRS Framework.

The Group considers that it is achieving its scheduled milestones and expects to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2012.

2.4 bASIS oF CoNSolIDAtIoN

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Acquisition method

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination.


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2.4 bASIS oF CoNSolIDAtIoN (cont’d)

Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.11. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

merger method

Acquisition of subsidiaries with agreement dated prior to 1 January 2006 that meets the conditions of merger are accounted for using the merger method. Under the merger method of accounting, the results of subsidiaries are presented as if the merger had been effected throughout the current and previous years. In the consolidated financial statements, the cost of the merger is cancelled with the nominal values of the shares received. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is adjusted against any suitable reserve.

2.5 tRANSACtIoNS WIth NoN-CoNtRollING INtERESt

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to the owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

2.6 FoREIGN CuRRENCy

(a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

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2.6 FoREIGN CuRRENCy (cont’d)

(b) Foreign Currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

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 equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.


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2.7 PRoPERty, PlANt AND EquIPmENt

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

During the current financial year, the Group changed from the cost model to the revaluation model for its freehold land, leasehold land and buildings.

Freehold and leasehold land and buildings are measured at fair value less accumulated depreciation on leasehold land and buildings and impairment losses recognised after the date of valuation. Valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value of the freehold land, leasehold land and buildings at the reporting date.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or disposal of the asset.

During the financial year, upon adopting IC 12, certain classes of property, plant and equipment i.e. freehold land, water meters and concession assets which comprise structures, land and buildings, water treatment plants and equipment, reservoirs, dams and distribution pipes operated and maintained by the Group under the concession agreements were reclassified as infrastructure and construction assets within service concession assets.

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2.7 PRoPERty, PlANt AND EquIPmENt (cont’d)

Freehold land has an unlimited useful life and therefore it is not depreciated. Depreciation of other property, plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets as follows:

- Buildings: 10 to 50 years - Plant and equipment: 4 to 25 years - Office equipment: 4 to 10 years - Furniture and fittings: 5 to 10 years - Motor vehicles: 3 to 10 years - Computers and software: 3 to 5 years - Renovation: 3 to 10 years - Signage: 5 to 10 years - Pipelines: 10 years - Vessel: 15 years - Long term leasehold land: over the leasehold period

Assets under construction included in plant and equipment are not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.8 INvEStmENt PRoPERtIES

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value which reflects market conditions at the reporting date. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the year in which they arise.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value.


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2.8 INvEStmENt PRoPERtIES (cont’d)

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.7 up to the date of change in use.

2.9 SERvICE CoNCESSIoN ASSEtS AND oblIGAtIoNS

The Group accounts for its service concession arrangement (“SCA”) with the governing bodies, State Government and Federal Government under the Intangible Asset model as it receives the right (license) to charge users of public service. Under the Group’s Concession agreements, the Group is granted the sole and exclusive right and discretion during the concession period to manage, occupy, operate, repair, maintain, decommission and refurbish the identified facilities required to provide water services. The legal title to these assets shall remain with the governing bodies, State Government and Federal Government at the end of the concession period.

The Group amortises its intangible asset contained in the concession arrangement by reference to revenue method over the concession period, consistent with the method adopted for the annual financial statements for the financial year ended 31 December 2010 as follows:

Actual water revenue for the year X Accumulated cost of infrastructure Actual water revenue for the year + and construction assets at Projected total water revenue for the beginning of the year subsequent years to the end of the Concession + Additions for the year

The rationale for using the unit of water revenue method is in line with the pattern in which the assets’ economic benefits are consumed by the Group.

The SCA pertain to the fair value of the service concession obligations at drawdown date and construction costs related to the rehabilitation works performed by the Group.

In addition, the Group recognises and measures revenue in accordance with FRS 111, Construction Contracts and FRS 118, Revenue Recognition for the services it performs.

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2.10 oPERAtING FINANCIAl ASSEtS The Group constructs or upgrades infrastructure (construction or upgrade services) used to provide a public

service and operates and maintains that infrastructure (operation services) for a specified period of time. These arrangements may include infrastructure used in a public-to-private service concession arrangement for its entire useful life.

The financial asset model is used when the Group has an unconditional contractual right to receive cash or another

financial asset from or at the direction of the grantor for the construction services.

In the financial asset model, the amount due from the grantor meets the definition of a receivable which is measured at fair value. It is subsequently measured at amortised cost. The amount initially recognised plus the cumulative interest on that amount is calculated using the effective interest method.

Any asset carried under concession arrangement is derecognised on disposal or when no future economic benefits

are expected from its future use or disposal or when the contractual rights to the financial asset expire.

2.11 GooDWIll Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated

impairment losses. For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the

Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.6.

Goodwill and fair value adjustments which arose on acquisitions of foreign operation 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 of acquisition.


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2.12 ImPAIRmENt oF NoN-FINANCIAl ASSEtS The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such

indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“CGU”).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

2.13 SubSIDIARIES

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

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2.14 ASSoCIAtES

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. 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 of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where the date of the audited financial statements used are not coterminous with those of the Group, the share of results is derived at from the last audited financial statements available and management financial statements to the end of the accounting period. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.15 JoINt vENtuRE A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is

subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. The Group recognises its interest in joint venture using equity method of accounting as described in Note 2.14.

Adjustments are made in the Group’s consolidated financial statements to eliminate the Group’s share of intragroup balances, income and expenses and unrealised gains and losses on transactions between the Group and its joint venture.


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2.15 JoINt vENtuRE (cont’d) The financial statements of the joint venture are prepared as of the same reporting date as the Company. Where

necessary, adjustments are made to bring the accounting policies into line with those of the Group.

In the Company’s separate financial statements, its investment in joint venture is stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and the carrying amount is included in profit or loss.

2.16 FINANCIAl ASSEtS

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

(a) Financial assets at fair value through profit or loss Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading

or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial

assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

(b) loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.


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2.16 FINANCIAl ASSEtS (cont’d) (c) held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

(d) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised

within 12 months after the reporting date.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.



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2.17 ImPAIRmENt oF FINANCIAl ASSEtS

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) trade and other receivables and other financial assets carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets has been incurred,

the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.


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2.17 ImPAIRmENt oF FINANCIAl ASSEtS (cont’d)

(b) Available-for-sale financial assets (cont’d)

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.18 CASh AND CASh EquIvAlENtS

Cash and cash equivalents comprise cash at bank and in hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

2.19 CoNStRuCtIoN CoNtRACtS

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.



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2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.20 INvENtoRIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes transportation and handling costs incurred.

2.21 PRovISIoNS Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,

it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.22 GovERNmENt GRANtS

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all conditions attached will be met. Where the grant relates to an asset, the fair value is recognised as deferred capital grant in the statement of financial position and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

Grants that compensate the Group for the cost of asset are recognised as income on a systematic basis over the useful life of asset, using the unit of water revenue method as disclosed in Note 2.9. The cost of assets to which the grants relate to are capitalised as project development expenditure.

2.23 FINANCIAl lIAbIlItIES

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

Financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.


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2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.23 FINANCIAl lIAbIlItIES (cont’d)

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.24 boRRoWING CoStS

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.25 RCulS The RCULS are regarded as compound instruments, consisting of a liability component and an equity component.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar instrument. The difference between the proceeds of issue of the convertible loan stocks and the fair value assigned to the liability component, representing the conversion option is included in equity. The liability component is subsequently stated at amortised cost using the effective interest rate method until extinguished on conversion or redemption, whilst the value of the equity component is not adjusted in subsequent periods. Attributable transaction costs are apportioned and deducted directly from the liability and equity component based on their carrying amounts at the date of issue.

2.26 EmPloyEE bENEFItS

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the EPF in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed. The Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.



254

2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.26 EmPloyEE bENEFItS (cont’d)

(b) Defined benefit plans

The Group operates an unfunded, defined benefit Retirement Benefit Scheme (the “Scheme”) for its eligible employees. The Group’s obligation under the Scheme, calculated using the Projected Unit Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of benefit that employees have earned in return for their service in the current and prior years is estimated. That benefit is discounted in order to determine its present value. Actuarial gains and losses are recognised directly in equity immediately. Past service costs are recognised immediately to the extent that the benefits are already vested, and otherwise are amortised on a straight-line basis over the average period until the amended benefits become vested.

The amount recognised in statement of financial position represents the present value of the defined benefit obligation adjusted for unrecognised actuarial gains and losses and unrecognised past service costs.

2.27 lEASES

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as

operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.28(f).


255


2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.28 REvENuE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) Supply and distribution of treated water to consumers

Water revenue are recognised when the related water is rendered. Water and sewerage are billed every month according to the bill cycles of the customers. As a result of bill cycle cut-off, monthly service revenue earned but not yet billed at the end of the month are estimated and accrued. These estimated are based on historical consumption of the customers.

(b) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.

(c) Construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as describe in Note 2.19.

(d) Rehabilitation works

Revenue from rehabilitation works is recognised and measured by the Group in accordance with FRS 111 and FRS 118 for the services it performs. Costs related to rehabilitation works is recorded as part of SCA.

(e) Interest income

Interest income is recognised using the effective interest method.

(f) Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(g) oil and gas income

Service income is recognised upon rendering of services and income from renting of vessels is recognised on an accrual basis by reference to the underlying rental agreements.

Revenue relating to contracts is accounted for based on the percentage of completion method as determined by the proportion of cost incurred todate against the total estimated costs on contracts where the outcome of the contracts can be reliably estimated. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with customer. Accrued contract revenue attributable to the progress of work performed up to the reporting date for which progress billings have not been rendered is accounted for as unbilled revenue in the statements of financial position.



256

2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.29 RAW mAtERIAlS, CoNSumAblES AND mAINtENANCE ExPENSES

Raw materials, consumables and maintenance expenses represent costs incurred in the production of treated water and maintenance works. These costs are recognised as an expense in the income statement in the year in which the expenses are incurred.

2.30 INComE tAxES

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except: - where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a

transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.


257


2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.30 INComE tAxES (cont’d)

(b) Deferred tax (cont’d)

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.31 SEGmENt REPoRtING

For management purposes, the Group is organised into operating segments based on their services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 46 , including the factors used to identify the reportable segments and the measurement basis of segment information.

2.32 ShARE CAPItAl AND ShARE ISSuANCE ExPENSES

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.33 tREASuRy ShARES

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.



258

2. SummARy oF SIGNIFICANt ACCouNtING PolICIES (cont’d) 2.34 CoNtINGENCIES

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

2.35 FINANCIAl GuRANtEE CoNtRACtS

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognized initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

2.36 ADJuStmENtS, REStAtEmENtS AND REClASSIFICAtIoN oF PREvIouSly ISSuED FINANCIAl StAtEmENtS

IC Interpretation 12: Service Concession Arrangements

The adoption of IC 12 is applied retrospectively and accordingly the comparatives are restated as described in detail in Note 2.2(iii).

A summary of effects of adoption of new accounting standards is disclosed in Note 50.

3. SIGNIFICANt ACCouNtING JuDGEmENtS AND EStImAtES

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 KEy SouRCES oF EStImAtIoN uNCERtAINty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Service Concession Arrangement (“SCA”)

In applying IC Interpretation 12, the Group has made a judgment that the Agreements as discussed in Note 4(b), qualifies under the Intangible Asset model. Refer to the accounting policy on the Company’s SCA for the discussion of Intangible Asset model (see Note 2.2(iii)).


259


3. SIGNIFICANt ACCouNtING JuDGEmENtS AND EStImAtES (cont’d)

3.1 KEy SouRCES oF EStImAtIoN uNCERtAINty (cont’d)

(b) Water tariff compensation

Pursuant to the SYABAS Concession Agreement, and as disclosed in Note 4(b), SYABAS is entitled to impose a water tariff review effective from 1 January 2009 based on a formula contained in the SYABAS Concession Agreement. The revised water tariff rates are to be submitted by SYABAS to the State Government to be gazetted. On 31 March 2008, the revised water tariff was submitted by SYABAS but as at the date of the reporting date, the State Government has not gazetted the revised rates. The directors of SYABAS, in consultation with their solicitors, are of the opinion that SYABAS is entitled to the water tariff compensation recognised in the financial statement of RM1,311,051,925 as disclosed in Note 24.

(c) Estimated useful life of construction vessel

Determining the estimated useful life of the vessel involves considerable amount of judgement in assessing the time length over which future economic benefits embodied in the vessel is to be consumed by the Group. In making such assessment, the directors of the Group have sought professional valuation from industry valuer.

(d) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires estimation of the “value in use” of the CGUs to which the goodwill is allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 December 2011 was RM532,493,313 (2010: RM514,873,012 ). Further details are disclosed in Note 23.

(e) Deferred tax

Deferred tax assets are recognised for all unused tax losses and capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The total carrying value of deferred tax assets recognised by the Group as at 31 December 2011 is RM425,211,092

(2010: RM399,546,108).



260


3.1 KEy SouRCES oF EStImAtIoN uNCERtAINty (cont’d)

(f) Impairment allowance on trade receivables

The Group evaluates the collectability of trade receivables and records provisions for doubtful receivables based on historical collection pattern. These provisions are based on, amongst other things, comparisons of the relative age of accounts and consideration of actual write-off history. The actual level of receivables collected may differ from the estimated levels of recovery, which could impact operating results positively or negatively. As at 31 December 2011, the Group’s gross trade receivables were RM1,863,241,601 (2010: RM1,395,753,186) and the provision for doubtful receivables was RM6,617,704 (2010: RM6,058,089).

During the financial year, the tariff compensation amounting to RM1,311,051,925 were reclassified to long term receivable based on the Group’s estimated timeframe to conclude the litigation and the recovery of the receivables for the State Government that had an allowance for impairment of RM75,259,744.

(g) Government grant

Government grant is recognised as income to compensate the Group for the cost of an asset over the useful life of the asset. The assets to which the grant relate to are amortised over the concession period using the unit of water revenue method as disclosed in Note 2.22. Similarly, the grant is amortised over the same basis to compensate the Group for the expenses incurred.

Due to the long remaining concession period, the Group does not expect a significant risk of changes in the projected water revenue which may cause a material adjustment to the amortisation of government grant in the future financial periods.

(h) material litigations

The Group determines whether a present obligation in relation to a material litigation exists at the reporting date by taking into account all available evidence, including, the opinion of the solicitors. The evidence considered includes any additional evidence provided by events after the reporting date. On the basis of such evidence, the Group evaluates if a provision needs to be recognised in the financial statements. Further details of the material litigations involving the Group are disclosed in Note 49.

(i) Percentage of completion of long-term projects

Revenue and costs of projects with extended duration are recognised by reference to the stage of completion of the contract activity as of the reporting date, based on the ratio of project costs incurred to date to the total estimated costs, taking into account the level of physical completion. This percentage of completion method requires management to make reasonably dependable estimates of progress towards completion of projects.


261



3.2 SIGNIFICANt JuDGEmENt

Recoverability of amount due from State Government

Included in trade receivables is RM1,311,051,925 being the water tariff compensation owing from the State Government for the years 2009, 2010 and 2011 cumulatively. During the financial year 2010, the Directors have instituted legal action claiming for the sum of RM471,642,916 being the compensation due for the period from 1 January 2009 to 31 December 2009 and at the case management held on 28 June 2011, the Kuala Lumpur High Court allowed SYABAS’ application to withdraw with liberty to file afresh by way of a writ of summons with no order as to costs as further disclosed per Note 49(g). As disclosed in Note 49(i), on 8 September 2011, SYABAS filed a Writ and Statement of Claim at the Kuala Lumpur High Court for RM1,054,208,382 being compensation from 1 January 2009 to 31 March 2011. The Directors in assessing the recoverability of this receivables and in consultation with their solicitors, are of the opinion that their case is substantiated by evidence and has merit and hence the amount is likely recoverable from the State Government.

4. AWARD oF CoNCESSIoNS

(a) PNSB was awarded the following concessions by the State Government:

(i) under the PCCA dated 22 September 1994, to take over, operate, maintain, manage, rehabilitate and refurbish existing water treatment plants located in Selangor and Federal Territories of Kuala Lumpur from the date of the PCCA to 31 December 2020;

(ii) under the CCOA dated 22 March 1995, to design, construct, operate, maintain and manage the new water treatment facilities, namely SSP 2 from the date of the CCOA to 31 December 2020; and

(iii) On 17 January 1998, PNSB was given the rights by the Federal Government to develop a water treatment plant and its related facilities in Wangsa Maju. The construction work commenced in January 1998 and was completed in July 1998. Subsequent to the completion, PNSB has been managing, operating and maintaining the water treatment plant. The Concession Agreement in relation to this water treatment plant for a period of 30 years ending 17 July 2028 was finalised and executed with the State Government on 31 December 2004 (“Wangsa Maju WTP Concession Agreement”).

On 31 December 2004, PNSB executed the following agreements in relation to the privatisation of the water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya:

(i) Novation Agreement to the PCCA and the CCOA between the State Government, PNSB and SYABAS, whereby SYABAS shall assume the State Government’s obligations under the PCCA and CCOA in relation to the following, with effect from 1 January 2005:

- purchase and payment of treated water to PNSB;

- the quality of treated water; and

- all operational matters relating to such purchase, payment and quality of treated water.



262

4. AWARD oF CoNCESSIoNS (cont’d)

(a) PNSB was awarded the following concessions by the State Government: (cont’d)

(ii) Novation Agreement to the Wangsa Maju WTP Concession Agreement between the State Government, PNSB and SYABAS, whereby SYABAS shall assume the State Government’s obligations under the Wangsa Maju WTP Concession Agreement in relation to the following with effect from 1 January 2005:

- purchase and payment of treated water to PNSB;

- the quality of treated water; and

- all operational matters relating to such purchase, payment and quality of treated water.

(iii) Supplemental Agreement (in relation to the PCCA dated 22 September 1994) between the State Government and PNSB. PNSB agrees to a two percent (2%) reduction in the amounts outstanding and owing to PNSB under the PCCA as at 30 June 2004. PNSB further agrees to an eight percent (8%) reduction, with effect from 1 July 2004 in the monthly billings to the State Government under the PCCA.

In addition, PNSB shall be responsible for the management and operation of the Klang Gates, Tasik Subang and Sungai Langat Dams.

(iv) Supplemental Agreement (in relation to the CCOA dated 22 March 1995) between the State Government and PNSB. PNSB agrees to a two percent (2%) reduction in the amounts outstanding and owing to PNSB under the CCOA as at 30 June 2004. PNSB further agrees to an eight percent (8%) reduction, with effect from 1 July 2004 in the monthly billings to the State Government under the CCOA.

PNSB and SYABAS had on 16 August 2007, entered into the following two (2) agreements:

(i) Sungai Lolo Water Treatment Plant (Extension) O&M Agreement [“Sg Lolo WTP (Extension) O&M Agreement”] between the State Government and PNSB in relation to the appointment of PNSB as the Operator to operate, manage, maintain and refurbish the raw water intake and the extended treatment plant situated on a 0.5 acre piece of land located in the District of Hulu Langat, Selangor Darul Ehsan and associated works as more fully described in “Appendix 2” of the Sg Lolo WTP (Extension) O&M Agreement, for a concession period commencing on 1 December 2006 and expiring on 31 December 2034; and

(ii) Novation Agreement to the Sg Lolo WTP (Extension) O&M Agreement between the State Government, PNSB and

SYABAS (“Novation Agreement”) in relation to the assumption of all the State Government’s rights, benefits, liabilities and obligations under the Sg Lolo WTP (Extension) O&M Agreement by SYABAS (except on matters relating to land and the maintenance of the raw water quality including matters which are not or are incapable of being exercised by or conferred on SYABAS under the law).

On 7 March 2008, PNSB and SYABAS entered into the following two (2) agreements:

(i) Sungai Sireh Water Treatment Plant O&M Agreement [“Sg Sireh WTP O&M Agreement”] between the State Government and PNSB in relation to the appointment of PNSB as the Operator to operate, manage and maintain the raw water intake and the treatment plant situated on a 6.72 acres piece of land located beside a canal near Sungai Sireh, Tanjung Karang in the District of Kuala Selangor, Selangor Darul Ehsan and associated works pursuant to Clause 3(a) (vi) of the Concession Agreement dated 15 December 2004 between the Federal Government, the State Government and SYABAS, for a concession period of twenty seven (27) years, commencing on 1 April 2007 and expiring on 30 April 2034; and


263


4. AWARD oF CoNCESSIoNS (cont’d)

(a) PNSB was awarded the following concessions by the State Government: (cont’d)

On 7 March 2008, PNSB and SYABAS entered into the following two (2) agreements: (cont’d)

(ii) Novation Agreement to the Sg Sireh WTP O&M Agreement between the State Government, PNSB and SYABAS in relation to the assumption of all the State Government’s rights, benefit, liabilities and obligations under the Sg Sireh WTP O&M Agreement by SYABAS (save and except on matters related to land and the maintenance of the raw water quality including matters which are not or are incapable of being exercised by or conferred on SYABAS under the law).

(b) On 15 December 2004, SYABAS executed a Concession Agreement with the Federal Government and the State Government in relation to the privatisation of the water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. SYABAS is granted the right and authority by the Federal Government and the State Government to undertake the following:

(i) the supply and distribution of treated water to consumers in the Distribution Area; (ii) the purchase of treated water from the three (3) water treatment operators, namely PNSB, SPLASH and ABASS;

(iii) the taking over, upgrading, management, maintenance and protection of all water supply facilities within the Distribution Area;

(iv) the design, construction and completion of new water supply facilities works and the operation, maintenance and protection of the same; and

(v) the right to demand, collect and retain tariff for the supply and distribution of treated water and charges for the sale, rental or installation of water supply facilities, as gazetted by the Federal Government or the State Government.

This Concession Agreement took effect on 1 January 2005, for a period of 30 years ending 31 December 2034.

(c) LUWEI was incorporated on 28 January 2005 to undertake the Lushan County Water Supply Project for a concession period of 30 years commencing from 1 May 2009. Under the concession, LUWEI is to invest, finance, construct, design, operate and maintain a 50,000 m3 per day water treatment plant in Lushan County, Henan Province, China. The Group completed the acquisition of LUWEI on 19 August 2008.

(d) XINNUO was incorporated on 7 April 2008 to undertake the Yangxin County Trade Centre Wastewater Treatment

Project for a concession period of 28 years commencing from 8 November 2007. Under the concession, XINNUO is to invest, finance, construct, design, operate and maintain a 30,000 m3 per day wastewater treatment plant in Laodian Village, Yangxin County, Shandong Province, China. The Group completed the acquisition of XINNUO on 2 July 2008.

(e) Hebei Sino was incorporated on 16 September 2009 to undertake the Yuanshi County Industrial Water Supply Project for a concession period of 30 years commencing from 31 December 2009. Under the concession, Hebei Sino is to invest, finance, design, construct, operate and maintain a 10,000 m3 per day distribution of water to the Industrial Water Supply Construction, and to provide services and charge fee to the users.



264


5. REvENuE

GRouP ComPANy 2011 2010 2011 2010 (REStAtED) Rm Rm Rm Rm

Supply and distribution of treated water to consumers 1,532,897,384 1,488,384,376 – – Water tariff compensation 458,150,923 418,717,266 – – Oil & gas revenue 289,529,044 – – – Construction revenue 310,931,740 148,421,452 – – 2,591,509,091 2,055,523,094 – –

(a) Supply and distribution of treated water to consumers

Mainly consist of the supply and distribution of treated water to consumers in the Distribution Area by SYABAS, with effect from 1 January 2005.

(b) Water tariff compensation

The amount relates to water tariff compensation for the revised water tariff effective from 1 January 2009. The amount is determined by the directors of SYABAS based on the terms of the SYABAS Concession Agreement as disclosed in Note 3.1(b).

The claim for water tariff compensation had been included as amount owing by the State Government under trade receivables as at 31 December 2011.

(c) oil and gas revenue

Oil and gas revenue relates to service income from renting vessels and revenue from contracts and recognised in accordance with note 2.28 (g).

(d) Construction revenue

Construction revenue relates to revenue recognised in accordance with FRS 111 in respect of service under the concession arrangements. Construction revenue is recognised based on the percentage of completion method during the construction phase.

265


6. PRoFIt bEFoRE tAx

The following items have been included in arriving at profit before tax:

(a) other income


Amortisation of: - deferred government grant (Note 35(a)) (4,199,561) (4,029,203) – – - government grant (Note 35(b) & (c)) (3,667,198) (2,715,478) – – Accretion of interest on long term receivable (Note 24(e)) (12,134,199) (13,690,245) – – Interest income: - Junior Notes A – – (49,792,877) (55,534,206) - RCULS (Note 21) – – (11,806,289) (10,912,812) - BAIDS – – (8,895,000) – Finance income from operating financial asset (188,978) (16,297) – – Profit earned from deposits (44,289,735) (37,435,956) (5,451,384) (4,886,716) Income from liquidated ascertained damages from contractors (109,200) (257,424) – – Rental income from land and building (325,700) (242,430) – – Rental income from investment property – – (900,056) (817,176) Unrealised foreign exchange gain – – (3,135,213) (185,247) Income from property developers (Note 6(a)(i)) (43,780,035) (42,688,047) – – Gain on extinguishment of debts in regards to JNA (Note 31(d)) (155,554,087) – – – Adjustment on trade and other payables (Note 32(f)) (19,680,001) – – – Negative goodwill (Note 17(c)) (5,333,824) – – – (Gain)/loss on disposal of BAIDS (6,740,180) – 5,772,689 – Reconnection charges (7,092,172) (6,087,660) – –

(i) Income from property developers represents contributions by developers to improve and upgrade the distribution system.



266


6. PRoFIt bEFoRE tAx (cont’d)

The following items have been included in arriving at profit before tax:

(b) other expenses


Auditors’ remuneration (Note 7) Auditors of the Company - Statutory audit 521,000 475,000 42,000 42,000 - Others 572,860 505,881 14,000 156,650

Other auditors - Statutory audit 470,929 377,387 – – - Others 7,126 9,297 – –

1,571,915 1,367,565 56,000 198,650 others Concession fees 1,000,000 1,000,000 – – Non-Executive Directors’ remuneration (Note 9) 406,000 395,000 406,000 395,000 Impairment loss on other receivables (Note 24) 9,142,903 – 9,130,501 – Bad debt written off 14,919,957 3,847,013 – – Gain from disposal of available-for-sales investments (Note 27) – (1,907,773) – – Bad debts recovered (4,008,696) (5,638,887) – – Reversal of allowance for impairment of trade receivables (Note 24(a)) (518,244) (7,900) – – Property, plant and equipment written off 114,541 55,143 – – Impairment loss on: - property, plant and equipment (Note 13) 7,472,794 461,748 – – - investment property (Note 14) – – – 452,543 - joint venture (Note 19) 4,029,018 550,000 2,716,194 550,000 - goodwill (Note 23) 4,137,344 – – – Impairment of available-for-sales investments (Note 27) 591,207 – – –

267



6. PRoFIt bEFoRE tAx (cont’d)

(b) other expenses (cont’d) GRouP ComPANy 2011 2010 2011 2010 (REStAtED) Rm Rm Rm Rm

others (cont’d) Operating lease: - minimum lease payments on buildings 5,097,927 4,648,649 101,357 – - minimum lease payments on motor vehicle and equipment 6,859,786 7,268,115 – – Unrealised foreign exchange loss 9,001,163 322,229 – 6,509,712 Impairment of long term trade receivables (Note 24) 75,259,744 – – – Provision for foreseeable losses on construction contracts – 3,325,994 – – Realised foreign exchange loss 2,783,180 109,286 – 22,799 Inventory written off 2,422,802 44,510 – – Water royalty 15,785,655 15,522,023 – – Loss/(gain) on disposal of property, plant and equipment 991,439 (251,299) – –

(c) Depreciation and amortisation expense GRouP ComPANy 2011 2010 2011 2010 Rm Rm Rm Rm REStAtED REStAtED

Depreciation of property, plant and equipment (Note 13) - Others 26,791,482 30,242,079 129,189 211,369 - Depreciation of investment property (Note 14) – – 645,373 639,475 26,791,482 30,242,079 774,562 850,844

Amortisation of Service concession assets (Note 16) 149,514,285 134,906,387 – –

176,305,767 165,148,466 774,562 850,844


268


7. AuDItoRS’ REmuNERAtIoN

GRouP 2011 2010 Rm Rm

Auditors of the Company (Note 6(b)) Statutory audit 521,000 475,000 Fees for tax compliance work 180,315 112,600 Other non-audit related services 392,545 393,281

1,093,860 980,881

other auditors (Note 6(b)) Statutory audit 470,929 377,387 Fees for tax compliance work 7,126 9,297

478,055 386,684

1,571,915 1,367,565

ComPANy 2011 2010 Rm Rm

Auditors of the Company (Note 6(b)) Statutory audit 42,000 42,000 Fees for tax advisory compliance work 14,000 15,000 Other non-audit related services – 141,650

56,000 198,650

8. Employee benefits expense


Wages, salaries and bonuses 192,081,515 172,612,442 Defined contribution retirement plan (Note 8(a)) 26,827,452 22,317,983 Defined benefit plan (Note 33) 4,030,312 3,645,421 Other staff related expenses 46,976,772 36,886,022

269,916,051 235,461,868

Included in employee benefits expenses of the Group are the Executive Directors’ remuneration (excluding benefits-in-kind) amounting to RM16,846,778 (2010: RM15,400,524) as further disclosed in Note 9.

269



8. EmPloyEE bENEFItS ExPENSE (cont’d)

The number of persons, including the Company’s Executive Directors, employed by the Group at the end of the financial year was 4,427 (2010: 4,266).

(a) The Group contributes to EPF, the national defined contribution plan. When the contributions have been paid, the Group has no further payment obligations.

9. DIRECtoRS’ REmuNERAtIoN

The details of remuneration receivable by directors of the Company during the year are as follows: GRouP ComPANy 2011 2010 2011 2010 Rm Rm Rm Rm

Executive: Wages, salaries and bonus 10,651,635 11,199,975 – – Defined contribution retirement plan 1,777,361 1,802,413 – – Leave passage 663,582 739,768 – – Other staff related expenses 3,754,200 1,658,368 – –

Total executive directors’ remuneration (excluding benefits-in-kind) (Note 8) 16,846,778 15,400,524 – – Estimated money value of benefits-in-kind 405,646 180,348 – –

Total executive directors’ remuneration (including benefits-in-kind) 17,252,424 15,580,872 – – Non-Executive: Allowances 256,000 245,000 256,000 245,000 Leave passage 150,000 150,000 150,000 150,000

Total non-executive directors’ remuneration (Note 6(b)) 406,000 395,000 406,000 395,000

Total directors’ remuneration (Note 39 (b)) 17,658,424 15,975,872 406,000 395,000


270


9. DIRECtoRS’ REmuNERAtIoN (cont’d)

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

NumbER oF DIRECtoRS 2011 2010

RM100,001 to RM200,000 3 3 RM300,001 to RM400,000 1 1 RM500,001 to RM600,000 – 1 RM700,001 to RM800,000 1 1 RM900,001 to RM1,000,000 – 1 RM1,000,001 to RM1,100,000 1 – RM1,100,001 to RM1,200,000 1 – RM1,800,001 to RM1,900,000 1 – RM1,900,001 to RM2,000,000 – 1 RM2,300,001 to RM2,400,000 – 1 RM3,700,000 to RM3,800,000 1 – RM6,800,001 to RM6,900,000 – 1 RM8,300,001 to RM8,400,000 1 –

10. FINANCE CoStS GRouP ComPANy 2011 2010 2011 2010 (REStAtED) Rm Rm Rm Rm

Finance cost on Islamic banking borrowings - BAIDS 50,046,183 57,069,114 – – - BAMTN 126,806,474 125,875,247 – – Finance cost on conventional borrowings - Government Support Loan 1,454,353 1,670,060 – – - RUN 49,987,557 56,284,659 49,792,877 55,552,384 - JNA 4,156,562 – – – - RM410 million and RM250 million Term Loans 37,308,502 37,260,875 – – - RUBs 38,603,249 38,168,877 – – - RCULS 1,720,324 1,585,402 – – - RPS 19,326,865 18,423,375 – – - MOF loan RM110 million 52,497 – – – - USD31 million term loan 894,764 – – – - Accretion of finance costs in RPS (Note 31(m)) 6,381,330 4,521,490 – –

271



10. FINANCE CoStS (cont’d)


Accretion of interest on service concession obligations 211,930,000 218,710,000 – – Late payment interest to water treatment operators 72,652,309 31,551,478 – – Interest expense on obligation under finance leases 874,807 733,594 – – Bank charges 2,253,009 1,008,591 13,633 49,652 Other interest expenses 10,792 138,275 – –

Total finance costs 624,459,577 593,001,037 49,806,510 55,602,036

11. INComE tAx ExPENSE

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2011 and 2010 are:


Income statements:

Current income tax - Current financial year 58,463,114 24,359,989 1,762,427 1,134,208 - Foreign income tax 78,966 110,941 76,758 61,558 - Overprovision in respect of previous years (1,159,406) (3,213,308) (121,568) (46,760)

57,382,674 21,257,622 1,717,617 1,149,006

Deferred income tax (Note 36) - Origination and reversal of temporary differences (46,707,820) (36,255,049) 2,951,572 2,728,203 - Over provision in respect of previous years (2,115,480) (2,071,355) – –

(48,823,300) (38,326,404) 2,951,572 2,728,203 Income tax recognised in profit or loss 8,559,374 (17,068,782) 4,669,189 3,877,209


272


11. INComE tAx ExPENSE (cont’d)

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2011 and 2010 are as follows:


(Loss)/profit before tax (75,162,827) (108,658,338) 8,194,756 3,694,012

Taxation at Malaysian statutory tax rate of 25% (2010: 25%) (18,790,707) (27,164,585) 2,048,689 923,503 Different tax rates in other jurisdictions (5,709,941) (270,066) 36,121 28,968 Income not subject to tax (1,392,917) – – – Expenses not deductible for tax purposes 34,819,000 14,901,315 2,705,947 2,971,498 Over provision of current tax in prior years (1,159,406) (3,213,308) (121,568) (46,760) Over provision of deferred tax in prior years (2,115,480) (2,071,355) – – Deferred tax assets not recognised 2,908,825 749,217 – –

Income tax expense recognised in profit or loss 8,559,374 (17,068,782) 4,669,189 3,877,209

The corporate tax rate applicable to the Singapore subsidiary of the Group was reduced to 17% for the year of assessment 2010 onwards from 18% for the year of assessment 2009. Under the relevant PRC income tax law, the PRC companies of the Group are subject to corporate income tax rate of 25% on their respective taxable income.

273



12. EARNINGS PER ShARE

Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. However, there is no dilution in earnings per share.

The following tables reflect the profit and share data used in the computation of basic earnings per share for the years ended 31 December:

GRouP 2011 2010 (REStAtED) Rm Rm

Profit/(loss) net of tax attributable to owners of the parent 9,319,631 (90,925,524)

Weighted average number of ordinary shares 409,106,095 409,106,095

Basic earnings per share 0.02 (0.22)

274



13. PRoPERty, PlANt AND EquIPmENt

loNG tERm PlANt ComPutERS, FuRNItuRE CoNStRuCtIoN FREEholD lEASEholD AND SoFtWARE AND AND motoR IN lAND lAND buIlDINGS vESSEl EquIPmENt EquIPmENt FIttINGS vEhIClES RENovAtIoNS SIGNAGE PRoGRESS totAl Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

Cost or valuation: At valuation At cost

Group

At 1 January 2010, restated 2,557,700 79,250,223 41,413,344 – 13,726,873 60,303,997 13,367,739 55,421,901 92,828,142 12,837,844 7,447,285 379,155,048 Additions – 14,803,891 2,849,624 – 3,696,987 3,371,036 1,525,965 14,507,979 1,402,358 18,060 – 42,175,900 Reclassification – – – – – (21,375) 21,375 – – – – – Disposals – – – – (30,400) (250,218) – (472,128) – – – (752,746) Write off – – – – – (260,542) – (17,837) – – – (278,379) Exchange difference – – (14,335) – (40,261) (16,137) (11,498) (20,420) (6,865) – – (109,516)

At 31 December 2010 2,557,700 94,054,114 44,248,633 – 17,353,199 63,126,761 14,903,581 69,419,495 94,223,635 12,855,904 7,447,285 420,190,307 At 1 January 2011 As restated 2,557,700 94,054,114 44,248,633 – 17,353,199 63,126,761 14,903,581 69,419,495 94,223,635 12,855,904 7,447,285 420,190,307 Additions – – – – 6,728,783 4,592,685 983,364 11,656,300 279,798 2,480 1,013,290 25,256,700 Acquisition of subsidiaries – – – 146,970,752 – 747,267 128,000 127,795 476,688 – – 148,450,502 Reclassification – – – – – 13,670 – – (13,670) – – – Disposals – – – – – (64,151) – (3,225,761) – – – (3,289,912) Write off – – – – (38,790) (1,514,989) (8,118) – – – – (1,561,897) Revaluation surplus 242,300 91,869,250 5,712 – – – – – – – – 92,117,262 Elimination of accumulated depreciation on revaluation – (5,263,364) (2,247,924) – – – – – – – – (7,511,288) Exchange difference – – (5,190) 1,592,724 (46) (5,167) 4,008 25,236 11,395 – – 1,622,960

At 31 December 2011 2,800,000 180,660,000 42,001,231 148,563,476 24,043,146 66,896,076 16,010,835 78,003,065 94,977,846 12,858,384 8,460,575 675,274,634

275



13. PRoPERty, PlANt AND EquIPmENt



Group

At 1 January 2010, restated 2,557,700 79,250,223 41,413,344 – 13,726,873 60,303,997 13,367,739 55,421,901 92,828,142 12,837,844 7,447,285 379,155,048 Additions – 14,803,891 2,849,624 – 3,696,987 3,371,036 1,525,965 14,507,979 1,402,358 18,060 – 42,175,900 Reclassification – – – – – (21,375) 21,375 – – – – – Disposals – – – – (30,400) (250,218) – (472,128) – – – (752,746) Write off – – – – – (260,542) – (17,837) – – – (278,379) Exchange difference – – (14,335) – (40,261) (16,137) (11,498) (20,420) (6,865) – – (109,516)

At 31 December 2010 2,557,700 94,054,114 44,248,633 – 17,353,199 63,126,761 14,903,581 69,419,495 94,223,635 12,855,904 7,447,285 420,190,307 At 1 January 2011 As restated 2,557,700 94,054,114 44,248,633 – 17,353,199 63,126,761 14,903,581 69,419,495 94,223,635 12,855,904 7,447,285 420,190,307 Additions – – – – 6,728,783 4,592,685 983,364 11,656,300 279,798 2,480 1,013,290 25,256,700 Acquisition of subsidiaries – – – 146,970,752 – 747,267 128,000 127,795 476,688 – – 148,450,502 Reclassification – – – – – 13,670 – – (13,670) – – – Disposals – – – – – (64,151) – (3,225,761) – – – (3,289,912) Write off – – – – (38,790) (1,514,989) (8,118) – – – – (1,561,897) Revaluation surplus 242,300 91,869,250 5,712 – – – – – – – – 92,117,262 Elimination of accumulated depreciation on revaluation – (5,263,364) (2,247,924) – – – – – – – – (7,511,288) Exchange difference – – (5,190) 1,592,724 (46) (5,167) 4,008 25,236 11,395 – – 1,622,960

At 31 December 2011 2,800,000 180,660,000 42,001,231 148,563,476 24,043,146 66,896,076 16,010,835 78,003,065 94,977,846 12,858,384 8,460,575 675,274,634

276



13. PRoPERty, PlANt AND EquIPmENt (cont’d)



Group

Accumulated Depreciation & Accumulated Impairment: At 1 January 2010, restated – 3,355,407 1,954,034 – 7,842,915 47,548,471 7,460,245 27,032,251 45,982,158 3,666,255 – 144,841,736 Depreciation charge for the year (Note 6(c)) – 908,328 991,600 – 1,349,487 7,007,795 2,251,342 6,700,141 9,701,760 1,331,626 – 30,242,079 Impairment (Note 6(b)) – – 452,543 – 9,205 – – – – – – 461,748 Reclassification – – – – – (15,676) 15,676 – – – – – Disposals – – – – (5,259) (204,357) – (222,877) – – – (432,493) Write off – – – – – (216,961) – (6,275) – – – (223,236) Exchange difference – – (2,066) – (8,541) (4,886) (2,494) (4,579) (831) – – (23,397)

At 31 December 2010 – 4,263,735 3,396,111 – 9,187,807 54,114,386 9,724,769 33,498,661 55,683,087 4,997,881 – 174,866,437 At 1 January 2011 As restated – 4,263,735 3,396,111 – 9,187,807 54,114,386 9,724,769 33,498,661 55,683,087 4,997,881 – 174,866,437 Depreciation charge for the year (Note 6(c)) – 999,629 1,048,963 91,931 1,168,203 6,400,546 2,106,155 4,828,674 8,814,739 1,332,642 – 26,791,482 Acquisition of subsidiaries – – – 23,114,778 – 455,680 9,840 115,016 476,688 – – 24,172,002 Reclassification – – – – – (2,506) – – 2,506 – – – Disposals – – – – – (58,022) – (2,009,761) – – – (2,067,783) Write off – – – – (38,622) (1,401,888) (6,846) – – – – (1,447,356) Impairment (Note 6(b)) – – – – – – – – – – 7,472,794 7,472,794 Elimination of accumulated depreciation on revaluation – (5,263,364) (2,247,924) – – – – – – – – (7,511,288) Exchange difference – – (16,838) 251,491 (64,361) (9,697) (1,633) 8,240 2,113 – – 169,315

At 31 December 2011 – – 2,180,312 23,458,200 10,253,027 59,498,499 11,832,285 36,440,830 64,979,133 6,330,523 7,472,794 222,445,603 Net carrying amount:

At 31 December 2010 2,557,700 89,790,379 40,852,522 – 8,165,392 9,012,375 5,178,812 35,920,834 38,540,548 7,858,023 7,447,285 245,323,870

At 31 December 2011 2,800,000 180,660,000 39,820,919 125,105,276 13,790,119 7,397,577 4,178,550 41,562,235 29,998,713 6,527,861 987,781 452,829,031

277






Group

Accumulated Depreciation & Accumulated Impairment: At 1 January 2010, restated – 3,355,407 1,954,034 – 7,842,915 47,548,471 7,460,245 27,032,251 45,982,158 3,666,255 – 144,841,736 Depreciation charge for the year (Note 6(c)) – 908,328 991,600 – 1,349,487 7,007,795 2,251,342 6,700,141 9,701,760 1,331,626 – 30,242,079 Impairment (Note 6(b)) – – 452,543 – 9,205 – – – – – – 461,748 Reclassification – – – – – (15,676) 15,676 – – – – – Disposals – – – – (5,259) (204,357) – (222,877) – – – (432,493) Write off – – – – – (216,961) – (6,275) – – – (223,236) Exchange difference – – (2,066) – (8,541) (4,886) (2,494) (4,579) (831) – – (23,397)

At 31 December 2010 – 4,263,735 3,396,111 – 9,187,807 54,114,386 9,724,769 33,498,661 55,683,087 4,997,881 – 174,866,437 At 1 January 2011 As restated – 4,263,735 3,396,111 – 9,187,807 54,114,386 9,724,769 33,498,661 55,683,087 4,997,881 – 174,866,437 Depreciation charge for the year (Note 6(c)) – 999,629 1,048,963 91,931 1,168,203 6,400,546 2,106,155 4,828,674 8,814,739 1,332,642 – 26,791,482 Acquisition of subsidiaries – – – 23,114,778 – 455,680 9,840 115,016 476,688 – – 24,172,002 Reclassification – – – – – (2,506) – – 2,506 – – – Disposals – – – – – (58,022) – (2,009,761) – – – (2,067,783) Write off – – – – (38,622) (1,401,888) (6,846) – – – – (1,447,356) Impairment (Note 6(b)) – – – – – – – – – – 7,472,794 7,472,794 Elimination of accumulated depreciation on revaluation – (5,263,364) (2,247,924) – – – – – – – – (7,511,288) Exchange difference – – (16,838) 251,491 (64,361) (9,697) (1,633) 8,240 2,113 – – 169,315

At 31 December 2011 – – 2,180,312 23,458,200 10,253,027 59,498,499 11,832,285 36,440,830 64,979,133 6,330,523 7,472,794 222,445,603 Net carrying amount:

At 31 December 2010 2,557,700 89,790,379 40,852,522 – 8,165,392 9,012,375 5,178,812 35,920,834 38,540,548 7,858,023 7,447,285 245,323,870

At 31 December 2011 2,800,000 180,660,000 39,820,919 125,105,276 13,790,119 7,397,577 4,178,550 41,562,235 29,998,713 6,527,861 987,781 452,829,031


278



loNG tERm lEASEholD lAND RENovAtIoNS totAl Rm Rm Rm At vAluAtIoN At CoSt

Company

At 1 January 2010 and 31 December 2010 8,716,411 892,010 9,608,421

At 1 January 2011 8,716,411 892,010 9,608,421 Revaluation surplus 12,108,879 – 12,108,879 Elimination of accumulated depreciation on revaluation (1,225,290) – (1,225,290)

At 31 December 2011 19,600,000 892,010 20,492,010

Accumulated depreciation:

At 1 January 2010 1,049,201 727,541 1,776,742 Depreciation charge for the year (Note 6(c)) 88,045 123,324 211,369 At 31 December 2010 1,137,246 850,865 1,988,111 At 1 January 2011 1,137,246 850,865 1,988,111 Depreciation charge for the year (Note 6(c)) 88,044 41,145 129,189 Elimination of accumulated depreciation on revaluation (1,225,290) – (1,225,290) At 31 December 2011 – 892,010 892,010

Net carrying amount:

At 31 December 2010 7,579,165 41,145 7,620,310

At 31 December 2011 19,600,000 – 19,600,000

279




Assets pledged as security

Property, plant and equipment of the subsidiaries, PNSB, SYABAS and SINO, with total carrying amount of RM270,713,952 (2010: RM207,081,803) and RM40,158,346 (2010: RM47,600,740) respectively have been charged as security for borrowings as disclosed in Note 31(b), Note 31(e) and Note 31(f).

Leasehold land of the Group with a carrying value of RM161,060,000 (2010: RM82,211,214) has been charged as security for borrowings as disclosed in Note 31(b).

Assets held under finance leases

During the financial year, the Group acquired property, plant and equipment at aggregate costs of RM25,256,700 (2010: RM42,175,900) of which RM11,059,773 (2010: RM13,555,688) were acquired by means of finance leases.

The carrying amount of property, plant and equipment of the Group held under finance leases at the reporting date were:


motor vehicles Cost 35,221,816 33,938,118 Accumulated depreciation (7,223,189) (9,650,949)

Net carrying amount 27,998,627 24,287,169

Impairment of property, plant and equipment

In the previous financial year, the Group impaired the value of the building in Singapore with a carrying amount of RM10,011,786 by RM452,543 and plant and equipment in China carried at RM7,320,301 by RM9,205. Impairment provided for building in Singapore is in accordance with the external valuer’s report dated 28 December 2010 that valued the building using Direct Comparison Method at RM9,559,243.

During the current financial year, the Group has assessed its construction in progress in relation to the proposed 30–storey building. The cost in relation to this consist of preliminary and planning expenses. The Group does not have any concrete plans in the near future for the said construction yet. Hence the Group has decided to recognise an impairment loss of RM7,472,794 (2010: RMNil) in “other expenses” line item of Consolidated Income Statement for the financial year ended 31 December 2011.


280



Revaluation of freehold land, leasehold land and buildings

Freehold land, leasehold land and buildings have been revalued at 31 December 2011 based on valuations performed by accredited independent valuers. The valuations are based on the comparison and cost or contractor’s method that makes reference to similar properties which have been sold.

Details of the values is disclosed in Note 47(r).

If the freehold, leasehold and buildings were measured using the cost model, the carrying amounts would have been as follows:


Freehold land at 31 December: - Cost and net carrying amount 2,557,700 2,557,700

Leasehold land at 31 December: - Cost 94,054,114 94,054,114 - Accumulated depreciation (5,263,364) (4,263,730)

- Net carrying amount 88,790,750 89,790,384

Buildings at 31 December: - Cost 32,982,213 32,982,213 - Accumulated depreciation (2,247,924) (1,850,548)


122,082,739 123,479,749


Leasehold land at 31 December: - Cost 8,716,411 8,716,411 - Accumulated depreciation (1,225,290) (1,137,245)


281



14. INvEStmENt PRoPERty


building At net carrying value: At 1 January 9,559,243 10,608,788 Addition – 42,473 Impairment (Note 6(b)) – (452,543) Depreciation charge for the year (Note 6(c)) (645,373) (639,475)

At 31 December 8,913,870 9,559,243

Fair value 10,000,000 9,559,243

Direct operating expenses in relation to the investment property are immaterial to the Group.

Fair value of investment property

Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued.

In the previous financial year, the Group impaired the value of the building in Singapore rented to Sino was carried at RM10,011,786 by RM452,543. Impairment provided is in accordance with the external valuer’s report dated 28 December 2010 that valued the building using Direct Comparison Method at RM9,559,243.

15. oPERAtING FINANCIAl ASSEtS

The Group has concession arrangements with the various governing bodies or agencies of the government of the People’s Republic of China (the “grantor”) to operate water/wastewater treatment plants. Under the concession agreements, the Group will construct and operate the plants and water distribution networks for Concession Periods of between 25 to 30 years and transfer the plants to the grantors at the end of the Concession Periods. Such concession arrangements fall within the scope of IC Interpretation 12, Service Concession Arrangements. Under IC 12, the revenue for the construction services provided under the arrangements and the corresponding financial assets and/or intangible assets arising are recognised based on the percentage of completion method during the construction phase. The costs for the construction services are included in the “Construction contract expenses” line item in the profit or loss.


282


16. SERvICE CoNCESSIoN ASSEtS AND oblIGAtIoNS

Service Concession Assets

The movements in this account follow: GRouP 2011 2010 (REStAtED) Rm Rm

Cost At 1 January,restated 8,271,004,036 8,099,103,738 Additions 140,079,491 174,524,923 Written off (34,411) – Net exchange differences 2,177,387 (2,624,625)

At 31 December 8,413,226,503 8,271,004,036

Accumulated amortisation

At 1 January,restated 586,001,590 451,197,496 Charge for the year (Note 6(c)) 149,514,285 134,906,387 Written off (14,156) – Net exchange differences 132,598 (102,293)

At 31 December 735,634,317 586,001,590

Net carrying amount 7,677,592,186 7,685,002,446

Service concession assets consist of the fair value of the service concession obigations at drawdown date and construction costs related to rehabilitation works performed by the Group pursuant to the Concession Agreement.

Capital work in progress of rehabilitation work comprise fair value of the consideration receivable for the service delivered during the constuction stage, at 5% mark-up and 14% mark-up on the costs incurred for projects involve consultants and in-house projects respectively.

The Group’s service concession assets include borrowing costs arising from the borrowings for the purpose of the NRW projects. Details of borrowings are disclosed in Note 31. During the financial year, the net borrowing costs capitalised in capital work-in progress amounted to RM414,219 (2010: RM103,719).

Service Concession Obligations

Service concession obligations of the sum of the following: (a) Annual charges and land use charges payable to State Government; and

(b) fixed capacity charges payable to water treatment operators.

283



16. SERvICE CoNCESSIoN ASSEtS AND oblIGAtIoNS (cont’d)

Service Concession Obligations (cont’d)

Service concession obligations are analysed as follows: GRouP 2011 2010 (REStAtED) Rm Rm

Analysed as: Current 145,497,500 114,760,000

Non-current: Later than 1 year but not later than 2 years 177,594,814 145,497,500 Later than 2 years but not later than 5 years 688,002,319 793,334,110 Later than 5 years 3,158,444,040 3,231,408,922 4,024,041,173 4,170,240,532 4,169,538,673 4,285,000,532

17. INvEStmENt IN SubSIDIARIES ComPANy 2011 2010 Rm Rm

unquoted shares, at costs At 1 January 463,110,960 453,907,005 Acquisition of subsidiary – 2 Subscription of additional equity interest in SINO (Note 17(a)) – 3,303,953 Subscription of additional equity interest in POG (Note 17(e)) – 5,900,000 Incorporation of PNIPPL (Note 17(d)) 7,080 –

At 31 December (Note 46) 463,118,040 463,110,960


284


17. INvEStmENt IN SubSIDIARIES (cont’d) PRoPoRtIoN (%) oF oWNERShIP INtERESt NAmE PRINCIPAl ACtIvItIES 2011 2010

Incorporated in malaysia PNSB # *** Operation, maintenance, management, 100 100 construction, rehabilitation and refurbishment of water treatment facilities

SYABAS *** Supply and distribution of treated water 70 70 within Selangor and the Federal Territories of Kuala Lumpur and Putrajaya

Puncak Niaga (India) Sdn Bhd * Dormant 100 100

Puncak Research Centre Sdn Bhd * Research and development and technology 100 100 development for water, wastewater and environment sectors

Puncak Seri (M) Sdn Bhd * Dormant 100 100

NS Water System Sdn Bhd * Dormant 100 100

Puncak Oil & Gas Sdn Bhd *** Exploration for the production of oil and 100 100 gas and other materials and the provision of offshore and onshore engineering works

Incorporated in Singapore SINO ** Investment in water and wastewater 98.65 98.65 projects in PRC

PNOC ** Investment in water, wastewater, 100 100 solid waste, environmental and oil and gas in the Asian countries

Incorporated in India Puncak Niaga Infrastructures Carry out activities of infrastructures, 100 – and Projects Private Limited * constructions and other projects in India

PNIP Pte Ltd * Dormant 99.99 –

Incorporated in malaysia Subsidiaries of PNSb Ideal Water Resources Sdn Bhd * Ceased operations 100 100

Unggul Raya (M) Sdn Bhd * Ceased operations 100 100

Incorporated in malaysia Subsidiary of SyAbAS PUAS *** Ceased operations 70 70

285



17. INvEStmENt IN SubSIDIARIES (cont’d)

PRoPoRtIoN (%) oF oWNERShIP INtERESt NAmE PRINCIPAl ACtIvItIES 2011 2010 Incorporated in PRC Subsidiaries of SINo LUWEI ** Treatment and distribution of water 90.11 86.73 and related services

XINNUO ** Treatment of wastewater and 98.65 98.65 related services

Sino Water (Shanghai) ** Consultancy services for water and 98.65 98.65 wastewater projects

Luancheng** Treatment and distribution of water 78.92 78.92 and related services

Hebei Sino** Distribution of water to industrial areas 78.92 78.92

Incorporated in malaysia Subsidiary of PoG GOM Resources Sdn Bhd* Provide offshore personnel services and renting of machinery and vessels 100 –

KGL Ltd * Offshore leasing of vessels on bareboat basis 100 –

# Subsidiary consolidated using merger accounting method * Audited by firms other than Ernst & Young ** Audited by member firms of Ernst & Young Global in the respective countries *** Audited by Ernst & Young, Malaysia

(a) Subscription of additional equity interest in subsidiary, luWEI by SINo

Sino had invested an additional amount of USD1,120,000 in LUWEI, its 83% owned limited liabilty subsidiary incorporated in Lushan County, Henan Province, PRC under the China Company Law.

The Company was notified on 5 August 2010 by LUWEI that the regulatory authorities of the PRC had issued the “Enterprise Legal Representative Business Licence” dated 23 July 2010 approving the increase of the paid up registered capital of LUWEI to USD3,870,000 from USD2,750,000 previously.

Accordingly, LUWEI became a 87.92% owned subsidiary of Sino with a total investment totalling USD3,402,500.

The additional investment by SINO had thus diluted the equity interest of the minority interest in LUWEI. The dilution has resulted in an additional goodwill on consolidation or RM68,112.

The Company was notified on 26 July 2011 by Luwei Co. Ltd that the regulatory authorities of the People’s Republic of China had issued the “Enterprise Legal Representative Business Licence” dated 25 July 2011 approving the increase of the paid up registered capital of Luwei Co. Ltd to USD5,400,000.00 from USD3,870,000.00 previously.

Accordingly, Luwei became a 91.34% owned subsidiary of Sino Water Pte Ltd on 25 July 2011 with a total investment of USD4,932,500.


286


(b) Acquisition of Gom Resources, by PoG

On 23 May 2011, POG had entered into a Sale and Purchase Agreement with Global International Vessels Ltd (“GIVL”) to acquire 40% interest in GOM Resources for a purchase consideration of RM24,035,760.

On the same date, GIVL and Global Asia Pacific Industries Sdn. Bhd. (“GAPI”) who hold 11% and 49% respectively of the remaining interest in GOM Resources have unconditionally and irrevocably granted to POG the rights to purchase from GIVL and GAPI the remaining shares of GOM Resources at the exercise price during the option period. The option period is one (1) year commencing from 1 July 2011.

The option granted to POG to purchase the remaining interest in GOM Resources equates to POG having a control and the option gives a potential voting rights to POG. Hence, upon completion of the acquisition on 30 June 2011, GOM Resources became a subsidiary of POG.

The fair value of identifiable assets and liabilities of GOM Resources as at date of acquisition were:

CARRyING FAIR vAluE AmouNt Rm Rm

Property, plant and equipment 438,000 438,000 Trade and other receivables 2,641,430 2,641,430 Other current assets 149,405,609 149,405,609 Inventories 5,320,418 5,320,418 Cash and cash equivalents 19,536,076 19,536,076 177,341,533 177,341,533

Trade and other payables (168,591,480) (168,591,480) Deferred tax liabilities (129,000) (129,000) Income tax payable (1,956,860) (1,956,860) (170,677,340) (170,677,340)

Net assets 6,664,193 6,664,193

Total cost of business combination

The total cash of the business combination is as follows: Rm

Cash paid 24,035,760 Less: Cash and cash equivalents of subsidiary acquired (19,536,076)

Net cash outflow on acquisition 4,499,684


287



(b) Acquisition of Gom Resources, by PoG (cont’d)

Goodwill arising on acquisition

Rm

Net identifiable assets 6,664,193 Less: Non-controlling interests (3,998,516)

Group’s interest in fair value of net identifiable assets 2,665,677 Goodwill on acquisition (Note 23) 21,370,083

Cost of business combination 24,035,760

Goodwill on acquisition is attributable to the significant revenue stream that is expected to arise subsequent to the acquisition as well as the oil and gas contracts awarded to GOM Resources. At the date of this report, it has yet to be determined whether the oil and gas contracts do meet the criteria for recognition as a seperable intangible asset under FRS 138.

POG has established a project team to carry out the Purchase Price Allocation (“PPA”) exercise in compliance with FRS3 Business Combinations. The one year period for the PPA exercise ends on 29 June 2012 (one year from the date on completion of the acquisition, i.e. 30 June 2011).The determination of the oil and gas contracts which meet the criteria for recognition as an intangible asset under FRS 138 will only be known upon completion of the PPA exercise.

Impact of acquisition in Statement of comprehensive income

From the date of acquisition, GOM Resources has contributed, before elimination of intragroup transactions, RM283,860,112 and RM5,260,390 respectively to the Group’s revenue and profit net of tax. If the combination had taken place at the beginning of the financial year, revenue and profit net of tax contributed by GOM Resources, before elimination of intragroup transactions would have been RM484,540,928 and RM10,384,862.

Provisional accounting of acquisition

As at 31 December 2011, the fair value of GOM Resources’ identifiable assets and liabilities were determined on a provisional basis as the results of the PPA exercise have not been finalised. Goodwill arising from this acquisition will be adjusted accordingly on a retrospective basis when the purchase price allocation exercise is finalised.

Acquisition of non-controlling interest in GOM Resources

On 23 September 2011, POG exercised its option to purchase the remaining 11% and 49% equity interest in GOM Resources from GIVL and GAPI respectively for a total consideration of RM41,475,000 and the transaction was completed on 28 September 2011. As a result of this acquisition, GOM Resources became a wholly-owned subsidiary of POG.



288


(b) Acquisition of Gom Resources, by PoG (cont’d)

Acquisition of non-controlling interest in GOM Resources (cont’d)

The difference between the consideration and the book value of the interest acquired is reflected in equity as premium paid on acquisition of non-controlling interest as follow:

Rm Additional interest acquired 9,935,383 Less: Consideration paid (41,475,000)

Premium paid on acquisition of non-controlling interest (31,539,617)

(c) Acquisition of KGl ltd (“KGl”), by PoG

On 23 May 2011, POG had entered into a Sale and Purchase Agreement with GIVL to acquire 40% interest in KGL for a purchase consideration of RM45,811,280. Upon completion of the acquisition, GIVL assigned 40% of the shareholder’s loan (RM39,422,841) to POG.

On the same date, GIVL who holds the remaining 60% interest in KGL has unconditionally and irrevocably granted to POG the rights to purchase from GIVL the remaining shares of KGL at the exercise price during the option period. The option period is one (1) year commencing from 1 July 2011.

The option granted to POG to purchase the remaining interest in KGL equates to POG having a control and the option gives a potential voting rights to POG. Hence, upon completion of the acquisition on 30 June 2011, KGL became a subsidiary of POG.

The fair value of identifiable assets and liabilities of KGL as at date of acquisition were:

CARRyING FAIR vAluE AmouNt Rm Rm

Property, plant and equipment 123,840,500 108,178,479 Trade and other receivables 1,188,717 1,188,717 Cash and cash equivalents 1,244,621 1,244,621 126,273,838 110,611,817 Trade and other payables (96,952,038) (96,952,038) Income tax payable (16,142) (16,142) (96,968,180) (96,968,180)

Net assets 29,305,658 13,643,637


289



(c) Acquisition of KGl ltd (“KGl”), by PoG (cont’d)

The effect of the acquisition on cash flows is as follows: Rm Total cost of the business combination/consideration settled in cash 45,811,280 Less: Cash and cash equivalents of subsidiary acquired (1,244,621)

Net cash outflow on acquisition 44,566,659

Negative goodwill arising on acquisition

Rm

Net identifiable assets 29,305,658 Less: Non-controlling interest (17,583,395)

Group’s interest in fair value of net identifiable assets 11,722,263 Negative goodwill on acquisition (Note 6(a)) (5,333,824)

Cost of business combination 6,388,439 Assumption of shareholder’s loan 39,422,841

Consideration paid 45,811,280

Impact of acquisition in Statement of comprehensive income From the date of acquisition, KGL has contributed, before elimination of intragroup transactions, RM21,174,473 and

RM20,846,095 respectively to the Group’s revenue and profit net of tax. If the combination had taken place at the beginning of the financial year, revenue and profit net of tax contributed by KGL, before elimination of intragroup transactions, would have been RM42,004,200 and RM28,154,270 respectively.

Provisional accounting of acquisition

As at 31 December 2011, the fair value of KGL’s identifiable assets, except for property, plant and equipment, and identifiable liabilities were determined on a provisional basis as the results of the purchase price allocation exercise have been not finalised. Goodwill and negative goodwill arising from this acquisition will be adjusted accordingly on a retrospective basis when the purchase price allocation exercise is finalised.

Acquisition of non-controlling interest in KGL

On 23 September 2011, POG exercised its option to purchase the remaining 60% equity interest in KGL from GIVL with a total consideration of RM72,732,000 and the transaction was completed on 28 September 2011. Upon completion of this acquisition, GIVL assigned the remaining 60% of shareholder’s loan (RM60,219,269) to POG. As a result of this acquisition, KGL became a wholly-owned subsidiary of POG.



290



(c) Acquisition of KGl ltd (“KGl”), by PoG (cont’d)

Acquisition of non-controlling interest in KGL (cont’d)

The difference between the consideration, the book value of the interest acquired and the loan assumed is reflected in equity as discount on acquisition of non-controlling interest.

Rm

Additional interest acquired 24,289,564 Assumption of shareholder’s loan 60,219,269 Consideration paid (72,732,000)

Discount on acquisition of non-controlling interest 11,776,833

(d) Incorporation of PNIPPl

PNIP Pte Ltd was incorporated on 10 March 2011 as a private company limited by shares in India under the Indian Companies Act, 1956 (No 1 of 1956). PNIP Pte Ltd is currently dormant and has a paid up share capital of Rs. 1,00,000 (Rupees One Lakh) only divided into 10,000 (Ten Thousand) Equity shares of Rs.10/- each (Rupees Ten) only.

With the Acquisition, PNIP Pte Ltd has become a 99.99% owned subsidiary of Puncak on 10 March 2011 with the remaining 0.01% being held by Ir Tan Hui Kuan, with beneficial holding vesting with the Company. The intended activities of PNIP Pte Ltd is to carry out activities of infrastructures, constructions and other projects in India.

(e) Subscription of additional equity interest in subsidiary, PoG

The Company had on 6 May 2012 subscribed an additional 1,900,000 new ordinary shares of RM1.00 each in the capital of POG, a wholly owned subsidiary of the Company by way of cash and set off against the amount owing by POG to the Company.

The Company had on 30 December 2012 subscribed an additional 4,000,000 new ordinary shares of RM1.00 each in the capital of POG by way of set off against the amount owing by POG to the Company.

18. INvEStmENt IN ASSoCIAtES

GRouP ComPANy 2011 2010 2011 2010 Rm Rm Rm Rm

Unquoted shares, at cost 42,501 42,501 42,501 42,501 Advance 2,914 1,838 2,914 1,838 Share of post-acquisition reserves (1,429) (4,601) – –

43,986 39,738 45,415 44,339

PRoPoRtIoN (%) oF oWNERShIP INtERESt NAmE PRINCIPAl ACtIvItIES 2011 2010 Incorporated in malaysia Oasis Water * Dormant 40 40

Purnama Persada Sdn Bhd * Dormant 50 50

* Audited by a firm other than Ernst & Young

291



18. INvEStmENt IN ASSoCIAtES (cont’d) The summarised financial information of the associates are as follows: GRouP 2011 2010 Rm Rm

Assets and liabilities Current assets 92,298 93,341

Current liabilities (17,290) (26,620)

Results Revenue 11,513 – Expenses (3,226) (2,603) Profit/(loss) for the year 8,287 (2,603)

19. INvEStmENt IN JoINt vENtuRE


Advances to joint venture 8,152,788 7,913,521 6,449,964 6,210,697 Less: Accumulated impairment losses (4,579,018) (550,000) (6,449,964) (3,733,770)

3,573,770 7,363,521 – 2,476,927 Share of net liabilities of the joint venture (1,931,799) (1,728,564) – –

1,641,971 5,634,957 – 2,476,927

PARtICIPAtIoN INtERESt hElD (%) NAmE PRINCIPAl ACtIvItIES 2011 2010

PNHB-Lanco-KHEC Operation and maintenance 70 70 Joint Venture (Unincorporated) * of water supply augmentation

POG-ATSB JV (Unincorporated) * Provision of offshore and 50 50 onshore engineering works

PED-PNSB JV (Unincorporated) * Construction of water treatment facilities 40 40

* Audited by a firm other than Ernst & Young ** No monetary cost was involved in the investment of the joint venture


292


19. INvEStmENt IN JoINt vENtuRE (cont’d)

The aggregate amounts of the current assets, non-current assets, current liabilities, income and expenses related to the Group’s interests in the investment in joint venture are as follows:


Assets and liabilities: Non-current assets 37,665 105,779 Current assets 2,135,436 4,926,247

Total assets 2,173,101 5,032,026

Current liabilities (4,104,900) (6,760,590)

Income and expenses: Income 886,554 2,713,439

Expenses excluding taxation (1,110,875) (2,762,212)

20. hElD-to-mAtuRIty FINANCIAl ASSEtS ComPANy 2011 2010 Rm Rm

Current Junior Notes A (Note 20(a)) – 285,568,993

Non-current RCULS (Note 21) 265,958,665 254,152,376

Total held-to-maturity financial assets 265,958,665 539,721,369

(a) Junior Notes A ComPANy 2011 2010 Rm Rm

Nominal value 546,875,000 546,875,000 Less: Yield to maturity (370,781,250) (370,781,250)

At cost 176,093,750 176,093,750 Cumulative redemption (full/partial) (546,717,259) (218,750,000) Cumulative accretion of yield to maturity 370,623,509 328,225,243

– 285,568,993 Analysed as: Redeemable within 12 months – 285,568,993

293


20. hElD-to-mAtuRIty FINANCIAl ASSEtS (cont’d)

(a) Junior Notes A (cont’d) The Company had subscribed for RM546,875,000 nominal value of JNA issued on 20 November 2001 by its subsidiary,

PNSB, at an issue price of RM0.322 per RM1.00 nominal value of JNA. The JNA are redeemable, unconvertible, unsecured and substantially mirror the structure of the RUN issued by the Company. The proceeds of the JNA was utilised to repay RM168,000,000 of PNSB’s MCPs with the remaining balance utilised for its working capital purposes.

The main features of the JNA are as follows:

(a) The JNA carries a coupon rate of 2.5% per annum receivable semi-annually for the immediate ten (10) years from the date of issue of the JNA and 3.5% per annum receivable semi-annually thereafter for the next five (5) years.

(b) PNSB shall redeem the JNA in ten (10) equal installments each comprising 10% of the aggregate nominal value of all outstanding JNA commencing on the sixth (6th) anniversary of the date of issue of the JNA. On the tenth (10th) anniversary of the date of issue of the JNA, PNSB has the option to redeem the JNA by paying the principal amount outstanding on that date. On the same day, the holders of the JNA also have the option to sell the JNA back to PNSB for a consideration equivalent to the principal amount outstanding on that day.

(c) The JNA was issued back-to-back with the RUN. Proceeds from the RUN was immediately utilised to subscribe for the JNA by the Company. Accordingly, the proceeds from the coupon payments and redemptions of the JNA would be utilised by the Company for coupon payments and redemptions of the RUN.

On 19 November 2010, PNSB undertook the fourth (4th) mandatory partial redemption of RM54,687,500 nominal value of the outstanding RM382,812,500 nominal value of JNA from the Company. Concurrently, the Company utilised the proceeds from the redemption of JNA to undertake a fourth (4th) mandatory partial redemption of RM54,687,500 nominal value of the outstanding RM382,812,500 nominal value of RUN.

On 1 November 2011, the Company entered into a conditional Sale and Purchase Agreement with Acqua SPV Berhad (”Acqua”) and PNSB to sell its entire holdings of PNSB Redeemable, Unsecured, Coupon Bearing Notes of up to RM328,125,000 of nominal outstanding value at a total consideration of RM328,125,000 (”Sale”). The outstanding principal amount includes in the fifth mandatory partial redemption of RM54,687,500. The sale was completed on 18 November 2011. The sale proceeds were utilised to redeem the RUN as disclosed in note 31(c).

The effective interest rate applicable to the JNA at the reporting date was Nil (2010: 16.93%) per annum.



294


21. RCulS


Nominal value 212,000,000 212,000,000 Accretion of finance costs 53,958,665 42,152,376

At amortised cost (Note 20) 265,958,665 254,152,376

On 23 February 2006, SYABAS entered into a Subscription Agreement with the Company and KDEB in relation to the issue of up to RM1,045 million nominal value of RCULS by SYABAS. The RCULS will be issued progressively to the Company and KDEB over the next four (4) years from 2006 to 2009 to finance the operations and capital expenditure requirements of SYABAS under SYABAS Concession Agreement. The commitment by the Company and KDEB to subscribe for the RCULS are up to RM731.5 million (70%) and RM313.5 million (30%) respectively and KDEB’s portion of the commitment were subsequently varied pursuant to a Deed of Ratification and Accession dated 22 January 2009 given by Kumpulan Perangsang Selangor Berhad in favour of the Company and KDEB to 15% each between KDEB and Kumpulan Perangsang Selangor Berhad.

SYABAS had on 9 March 2006, issued RM135.0 million of the RCULS to the Company. Call options were given to KDEB by the Company to purchase RM40.5 million of the RCULS from the Company at an Option Premium of RM0.1035 for every RM1.00 of the RCULS and was payable on 22 February 2007. Interest at the rate of 7% per annum on the nominal value of the RCULS was charged to KDEB and is payable to the Company on the date of purchase of the RCULS by KDEB or on 22 February 2007, whichever is the earlier.

On 22 May 2007, SYABAS issued a further RM77 million of RCULS to the Company.

The RCULS will be redeemed in full by SYABAS on the 21st anniversary of the first issue date at their nominal value.

Each RCULS holder is entitled to exercise its conversion rights to convert the RCULS into new shares in SYABAS at the Conversion Price of RM1 payable for every new share to be issued pursuant to the conversion of the RCULS or such other price as may be agreed between SYABAS and the relevant RCULS holder prior to the Conversion Date.

Until the RCULS have been redeemed or converted into shares of SYABAS, SYABAS shall pay to the RCULS holders, coupon on the nominal value of the RCULS outstanding at a fixed rate of 7% per annum.


Interest on RCULS receivable from SYABAS (Note 6(a)) 11,806,289 10,912,812

295



22. DSRA


DSRA maintained in relation to: - RM1,020,000,000 10-Year BAIDS 244,116,849 236,379,735 - BAMTN Programme and RM410 million and RM250 million Term Loans 62,774,752 60,891,346

306,891,601 297,271,081

(i) Rm1,020,000,000 10-year bAIDS

Under the terms of the agreement for the issue of the RM1,020,000,000 10-Year BAIDS Issuance Facility by its subsidiary, PNSB, a deposit equivalent to twelve (12) months projected payment obligations under the BAIDS that are outstanding at any point in time is required to be placed in a DSRA. This DSRA is maintained with licensed financial institutions. PNSB is not entitled to withdraw any money from the DSRA without prior written consent of the Security Trustee except on condition that the BAIDS have been fully redeemed (Note 31(b)).

The deposits held in the DSRA is maintained for long-term until the full redemption and expiry of the BAIDS on 27 October 2016 (Note 31(b)) and is presently yielding interest income at market interest rates.

The weighted average effective interest rate applicable to the deposits held in the DSRA at the reporting date was 3.16% (2010: 3.14%) per annum.

(ii) bAmtN programme and Rm410 million and Rm250 million term loans

Under the terms of the BAMTN Programme and RM410 million and RM250 million Term Loans facility, SYABAS shall ensure that funds are deposited in the DSRA until the balance held in the DSRA is at least equivalent to the aggregate of profit in relation to the BAMTN and the facilities under the RM410 million and RM250 million Term Loans which will become due and payable in the next six (6) months and the outstanding principal of the BAMTN and the facilities under the RM410 million and RM250 million Term Loans which will become due and payable in the next twelve (12) months (to be built up in twelve (12) equal monthly installments during the preceding twelve (12) months on a straight line basis). This DSRA is maintained with licensed financial institutions.

The deposits are held for long-term until the full redemption/repayment and expiry of the BAMTN Programme and RM410 million and RM250 million Term Loans.

The weighted average effective interest rate applicable to the deposits held in the DSRA for this purpose at the reporting date was 3.18% (2010: 2.98%) per annum.

At the reporting date, the carrying amount of the deposits held in the DSRA approximated its fair value.


296


23. GooDWIll


Net carrying amount: At 1 January 514,873,012 515,312,455 Acquisition of subsidiary - GOM Resources (Note 17(b)) 21,370,083 – Subscription of additional equity interest in subsidiary – 68,112 Impairment (Note 6(b)) (4,137,344) – Exchange differences 387,562 (507,555)

At 31 December 532,493,313 514,873,012

(a) SyAbAS

The goodwill arising from the acquisitions of SYABAS and PUAS was completed on 15 December 2004 and 1 January 2005 respectively. SYABAS assumed the operations of PUAS following the privatisation of the water supply services in Selangor and Federal Territories of Kuala Lumpur and Putrajaya to SYABAS on 1 January 2005.

SYABAS and PUAS are identified as one combined CGU. The recoverable amount of this CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by Management covering the entire concession period of thirty (30) years commencing 1 January 2005 to 31 December 2034. A cash flow projection of more than five (5) years is used as the Directors are of the opinion that there are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill:

(i) tariff increase

The annual rate of tariff increase used in the projections is based on the scheduled tariff and tariff adjustment formula, as set out in the SYABAS Concession Agreement. It is assumed that the agreed tariff will be gazetted and shall take effect for the applicable operating period on the relevant tariff adjustment dates.

(ii) Water purchase costs

The assumptions on the water purchase are made based on the existing agreements with the water treatment operators and water purchase in the future which have been assessed by the Independent Valuers which will be updated by new studies when historical water demand varies significantly from the projected water demand.

For the purpose of the cash flow projections, SYABAS has incorporated escalation rates ranging from 1.5% to 2.5% per annum of the bulk supply rate and fixed capacity payment respectively for projection of the cost of purchasing water from the respective water treatment operators.

297


23. GooDWIll (cont’d)

(a) SyAbAS (cont’d)

(iii) NRW

The NRW rate is projected to reduce based on the targets set in the SYABAS Concession Agreement.

(iv) Capital expenditure

The assumptions on capital expenditure for development and upgrading of distribution system, asset management and replacement programme and NRW reduction programme have been made based on the planned programmes as set out in the Concession Agreement.

(v) Discount rate

The discount rate used in the cash flow projections is 7% per annum.

(vi) Sensitivity to changes in assumptions

There are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

(b) PNSb

This goodwill arose from the acquisition of 17.5% equity interest in PNSB which was completed on 22 October 2008.

The recoverable amount of this CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering the entire Concession Period as disclosed in Note 4. Cash flow projections of more than five (5) years is used as the directors are of the opinion that there are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

The following describes each key assumption on which management has based its cash flow projections to undertake

impairment testing of goodwill:

(i) Production volume

The production volume is based on the actual production or minimum designated quantity as specified under the concession agreements. The production is based on the current capacities and it is assumed that the same capacities apply in the future.

(ii) bSR

BSR used in the projections is based on the scheduled BSR and adjusted by a BSR adjustment formula which accounts for increases in cost components based on expected market rates both of which are, as set out in the respective concession and privatisation agreements. The expected market rates are based on escalation rates of 0.7% to 3%.



298



(b) PNSb (cont’d)

(iii) Capital expenditure

The assumptions on capital expenditure for operational and maintenance of water treatment facilities are based on operational and maintenance requirements set out in the concession and privatisation agreements.

(iv) Discount rate

The discount rate used in the cash flow projections is 11% per annum.

(v) Sensitivity to changes in assumptions


(c) luWEI and luancheng

This goodwill arose from the acquisitions of 83% and 80% equity interest in LUWEI and Luancheng respectively which were completed on 19 August 2008 and 27 July 2009.

The recoverable amount of this CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering the entire Concession Period as disclosed in Note 4. Cash flow projections of more than five (5) years is used as the directors are of the opinion that there are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.

Carrying amount of goodwill allocated to the Group’s CGU is as follows: WAtER AND WAStEWAtER tREAtmENt AND DIStRIbutIoN oF WAtER 2011 2010 Rm Rm Net carrying amount: At 1 January 7,219,936 7,727,491 Less: Impairment (4,137,344) – Add: Net exchange difference 387,562 (507,555)

At 31 December 3,470,154 7,219,936


(i) tariff adjustment

The tariff adjustment used in the projection is based on stated applicable law in PRC. The Concession Agreement allows water tariffs to be adjusted subject to relevant approvals of the relevant authorities. These adjustments will consider factors affecting the operating costs.

299



(c) luWEI and luancheng (cont’d)

The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill: (cont’d)

(ii) Growth rate

The average daily throughput capacity is expected to increase gradually to full capacity for the period between financial year 2012 and financial year 2021. The water treatment plant is expected to maintain 100% throughput capacity starting from financial year 2019 to the end of the concession period.

(iii) Discount rate

The discount rate used in the cash flow projection is 10% to 11% per annum.

(iv) Sensitivity to changes in assumptions


During the financial year, impairment loss was recognised to write down the carrying amount of goodwill attributed to Luancheng due to the protracted time to finalise the Concession Agreement.

(d) Gom Resources

This goodwill arose from the acquisition of 40% equity interest in GOM Resources which was completed on 30 June 2011.

The recoverable amount of this CGU is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management. Cash flow projections of three (3) years is used as the directors are of the opinion that there are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation to exceed its recoverable amount.


(i) budget gross margins and growth

Management determined budgeted gross margin and result based on its secured contracts and its expected order book in line with its expectations of revelant market developments.

(ii) Discount rate

The discount rate used in the cash flow projection is 11% per annum



300



(d) Gom Resources (cont’d)

(iii) Sensitivity to changes in assumptions


24. tRADE AND othER RECEIvAblES


Current

trade receivables Third parties 231,839,291 204,936,019 – – Amount due from State Government - free water (Note 24(f)) 11,670,038 22,985,926 – – Amount due from State Government - tariff compensation (Note 24(b)) – 852,901,002 – – Progress billings receivable 74,589,465 30,223,555 – –

318,098,794 1,111,046,502 – – Less: Allowance for impairment (6,617,704) (6,058,089) – –

Trade receivables, net 311,481,090 1,104,988,413 – –

other receivables Advances and loans to staff 1,519,800 1,056,577 – – Amounts due from subsidiaries (Note 24(c)) – – 194,168,340 63,428,853 Advance to project contractors (Note 24(d)) 13,303,640 6,506,239 – – Interest receivable 3,787,230 4,016,529 184,395 219,205 Amount due from collection agencies 9,393,308 6,796,275 – – Sundry receivables 22,170,701 16,968,991 9,213,520 111,527 Deposits 9,126,212 8,585,443 192,736 3,855

59,300,891 43,930,054 203,758,991 63,763,440 Less: Allowance for impairment (Note 6(b)) (9,142,903) – (9,130,501) –

50,157,988 43,930,054 194,628,490 63,763,440 361,639,078 1,148,918,467 194,628,490 63,763,440

301



24. tRADE AND othER RECEIvAblES (cont’d)


Non-current

trade receivables Long-term receivables 234,090,883 284,706,684 – – Amount due from State Government - tariff compensation (Note 24(b)) 1,311,051,925 – – – Less: Allowance for impairment (Note 6(b)) (75,259,744) – – –

1,469,883,064 284,706,684 – – Total trade and other receivables (current and non-current) 1,831,522,142 1,433,625,151 194,628,490 63,763,440 Add: Cash and bank balances (Note 30) 1,268,050,147 1,215,266,678 270,325,861 180,088,126 Short term funds (Note 28) 36,281 35,231 – – Tax recoverable 639,110 653,790 – –

Total loans and receivables 3,100,247,680 2,649,580,850 464,954,351 243,851,566

(a) trade receivables

Trade receivables are non-interest bearing and are generally on 30 day (2010: 30 day) terms. Other credit terms are assessed and approved on a case-by-case basis. The credit term for the amount due from State Government is 90 days. They are recognised at their original invoiced amounts which represent their fair values on initial recognition.

The balance included an amount due from Serba Tiara amounting to RM62,750,000 (2010: RM50,2000,000) in respect of the supply of bulk quantity of treated water to the State Government as disclosed in Note 24(e).

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables excluding the amount due from State Government is as follows: GRouP 2011 2010 Rm Rm

Neither past due nor impaired 226,589,002 183,942,132 1 to 30 days past due not impaired 22,982,373 17,641,744 31 to 154 days past due not impaired 17,320,327 19,238,530 More than 155 days past due not impaired 44,589,387 31,265,005 84,892,087 68,145,279 Impaired 6,617,704 6,058,089

318,098,793 258,145,500


302



(a) trade receivables (cont’d)

Receivables that are neither past due nor impaired

The above trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 74.3% (2010: 74.4%) of the Group’s trade receivables arise from customers with more than four (4) years of experience with the Group and losses have occurred infrequently.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM84,892,088 (2010: RM68,145,279) that are past due at the reporting date but not impaired.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:


Individually impaired: Trade receivables–nominal amounts 6,617,704 6,058,089 Less: Allowance for impairment (6,617,704) (6,058,089) – – Movement in allowance accounts:


At 1 January 6,058,089 7,081,875 Reversal of impairment losses (Note 6(b)) (518,244) (7,900) (Utilisation)/Reversal of deposit from customers (Note 32(d)) 1,077,859 (1,015,886)

At 31 December 6,617,704 6,058,089

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(b) Amount due from the State Government - tariff compensation

This represents cumulative water tariff compensation receivable for the years ended 31 December 2011 and 2010 respectively arising from the new water tariff as disclosed in Note 3.1(b) and 3.2. During the financial year, the water tariff compensation was reclassified to long term receivable and impaired due to change in the estimated time frame of collection.

Impairment allowance of RM75,259,744 (2010: RMNil) was made in the current financial year. The details are disclosed in Note 3.1(f).

(c) Amount due from subsidiaries

The amount due from subsidiaries are interest free, unsecured and repayable on demand.

(d) Advance to project contractors

Advance to project contractors represents advance made for the purchase of construction materials and will be repaid through contra against progress billings by the project contractors. The amount is unsecured and interest free.

(e) long-term receivables - Serba tiara

The long-term receivables represent an amount due from the State Government, in respect of the supply of bulk quantity of treated water supplied. On 3 February 2005, the State Government entered into a Novation Agreement with Serba Tiara, whereby Serba Tiara shall assume and take over the State Government’s obligations to pay to PNSB RM518.566 million in ten (10) annual installments commencing year 2006.


At 1 January 334,906,684 405,616,000 Long-term receivable repaid (50,200,000) (37,650,000) Effect of adoption FRS 139 – (46,749,561) Accretion of interest on long-term receivable (Note 6(a)) 12,134,199 13,690,245

At 31 December 296,840,883 334,906,684

Maturity of loans and receivables: Due within 1 year included in trade receivables (Note 24(a)) 62,750,000 50,200,000 Due more than 1 year 234,090,883 284,706,684

296,840,883 334,906,684


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(f) Amount due from the State Government - free water

This represents the amount due from State Government on the quantum of free water usage granted by State Government to certain of the Company’s water account holders.

25. othER CuRRENt ASSEtS


Amount due from customer on construction contract (Note 29) 17,987,617 7,574,711 – – Unbilled revenue 74,780,225 – – – Prepayment for project – 8,912,100 – 8,912,100 Prepayments 13,073,418 4,631,225 86,217 – 105,841,260 21,118,036 86,217 8,912,100

(a) unbilled revenue

This amount is accrued contract revenue attributable to the progress of work performed up to the reporting date for which progress billings have not been rendered.

(b) Prepayment for project

The balance relate to the cash consideration paid to GESL amounting to RM Nil (2010: RM8,912,100) for the acquisition of the Agreed Projects in China. The balance has been expensed during the current financial year.

26. INvENtoRIES


Cost Water treatment chemicals 2,602,586 2,828,800 Spare parts and equipment 3,354,384 2,369,961 Fuel 1,182,273 – Mild steel pipe 2,344,500 4,689,000 9,483,743 9,887,761 During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM30,291,748 (2010:

RM29,621,880).

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27. AvAIlAblE-FoR-SAlES INvEStmENtS

GRouP 2011 2010 CARRyING mARKEt CARRyING mARKEt AmouNt vAluE AmouNt vAluE Rm Rm Rm Rm

unquoted At 1 January – 4,601,661 Addition 10,000,000 80,000,000 Impairment (Note 6(b)) (591,207) – Gain from disposal of investment (Note 6(b)) – 1,907,773 Disposal – (86,509,434)

At 31 December 9,408,793 9,408,793 – –

Available-for-sale investments represents fund placements in the RHB Asia Pacific MAQASID fund.

28. ShoRt tERm FuNDS


At 1 January 35,231 30,329,949 Placement 1,050 – Withdrawal – (30,294,718)

At 31 December 36,281 35,231

Short term funds represents fund placement in the Aiman Cash Fund.


306


29. GRoSS AmouNt DuE FRom/(to) CuStomERS FoR CoNStRuCtIoN CoNtRACtS


Construction contracts costs incurred to date 503,568,297 356,199,630 Attributable profits 15,870,246 702,235 Less: Provision for foreseeable losses – (5,200,062)

519,438,543 351,701,803 Less: Progress billings (501,450,926) (350,673,121)

17,987,617 1,028,682

Presented as: Due from customers on construction contract (Note 25) 17,987,617 7,574,711 Due to customers on construction contract (Note 34) – (6,546,029)

17,987,617 1,028,682

The construction contract undertaken by the Group in relation to design and implementation of various water supply scheme.

30. CASh AND bANK bAlANCES


Deposits with licensed banks 1,108,293,684 1,151,081,295 231,152,547 172,211,766 Cash and bank balances 159,756,463 64,185,383 39,173,314 7,876,360

1,268,050,147 1,215,266,678 270,325,861 180,088,126

Included in cash and bank balances of the Group is an amount of RM1,955,104 (2010: RM1,932,339), being deposits held in trust for consumer deposits.

Included in the deposits with licensed banks of the Group are monies of RM185,000,000 (2010: RM160,217,875), representing consumers’ deposits collected by SYABAS with effect from 1 January 2005 following the privatisation of water supply services in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya.

Included in cash and bank balances of the Group, are monies of RM1,832 (2010: RM314,978) arising from government grant, which are only available for NRW works and not for other operational use. NRW refers to such part of the works undertaken by SYABAS for the purpose of reducing non-income generating unaccountable water loss.

307



30. CASh AND bANK bAlANCES (cont’d)

Included in the deposits with licensed banks of the Group, are monies of RM1,896,052 (2010: RM1,540,768) arising from government grants.

Included in cash and bank balances of the Group, are monies of RM40,509 (2010: RM Nil) arising from government loan of RM110 million for water supply mitigation programmes ie Selangor, Kuala Lumpur and Putrajaya.

Included in the deposits with licensed banks of the Group, are monies of RM18,500,000 (2010: RM Nil) arising from government loan of RM110 million.

In prior year, included in the deposits with the licensed banks of the Group is an amount of RM326.8 million which is placed with a third party as disclosed in Note 31(b) and are restricted from use in other operations. During the year, the deposits with licensed bank were uplifted by the Group in connection with the restructuring of the BAIDS Series 4 and 6.

The weighted average effective return applicable to deposits with licensed banks at the reporting date was 3.17% (2010: 2.89%) per annum.

Deposits of the Group with licensed banks have an average maturity of 58 days (2010: 80 days).

For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the reporting date:


Deposits with licensed banks 1,108,293,684 1,151,081,295 231,152,547 172,211,766 Cash and bank balances 159,756,463 64,185,383 39,173,314 7,876,360

1,268,050,147 1,215,266,678 270,325,861 180,088,126 Held in trust (186,955,104) (162,150,214) – – Short term funds (Note 28) 36,281 35,231 – –

Total cash and cash equivalents 1,081,131,324 1,053,151,695 270,325,861 180,088,126


308

31. loANS AND boRRoWINGS


Current Secured: Government Support Loan 7,227,167 7,016,667 – – BAIDS 360,000,000 510,000,000 – – RUN – 284,875,086 – 285,568,993 USD31 million term loan 98,223,500 – – – Obligation under finance leases (Note 40(c)) 5,168,006 4,500,344 – –

470,618,673 806,392,097 – 285,568,993

Unsecured: Lushan MOF Novated World Bank Loan 549,649 – – – 549,649 – – –

471,168,322 806,392,097 – 285,568,993

Non-current Secured: Government Support Loan 39,521,114 46,748,281 – – BAIDS 656,379,299 506,311,210 – – BAMTN 2,049,007,301 2,038,214,663 – – RM410 million and RM250 million Term Loans 659,974,712 659,974,712 – – Government Loan RM320.8 million 320,800,000 320,800,000 – – Government Loan RM110.0 million 7,377,817 – – – Obligation under finance leases (Note 40(c)) 11,966,556 9,962,802 – – RPS 611,593,249 605,211,919 – –

4,356,620,048 4,187,223,587 – –

Unsecured: RUBs 479,216,984 465,745,909 – – RCULS 22,477,060 20,756,736 – – JNA 173,981,676 – – – Lushan MOF Novated World Bank Loan 8,665,306 6,844,867 – –

684,341,026 493,347,512 – –

5,040,961,074 4,680,571,099 – –

Total loans and borrowings 5,512,129,396 5,486,963,196 – 285,568,993


309


31. loANS AND boRRoWINGS (cont’d)

The remaining maturities of the loans and borrowings as at 31 December 2011 are as follows: GRouP ComPANy 2011 2010 2011 2010 Rm Rm Rm Rm

On demand or within one year 471,168,322 806,392,097 – 285,568,993 More than 1 year and less than 2 years 469,647,492 191,401,206 – – More than 2 year and less than 5 years 1,903,767,350 913,145,789 – – 5 years or more 2,667,546,232 3,576,024,104 – –

5,512,129,396 5,486,963,196 – 285,568,993 The BAIDS, RUN, BAMTN, JNA and RUBs are further analysed as follows:

GRouP ComPANy bAIDS RuN 2011 2010 2011 2010 Rm Rm Rm Rm

Nominal value 1,020,000,000 1,020,000,000 546,875,000 546,875,000 Less: Yield to maturity * (15,085,005) (15,085,005) (376,629,915) (376,629,915)

Net proceeds 1,004,914,995 1,004,914,995 170,245,085 170,245,085 Redemption (180,000,000) (150,000,000) (546,023,352) (218,750,000) Issuance 180,000,000 150,000,000 – – Accreted finance cost 11,464,304 11,396,215 375,778,267 333,380,001 1,016,379,299 1,016,311,210 – 284,875,086

GRouP ComPANy bAmtN Rubs 2011 2010 2011 2010 Rm Rm Rm Rm

Nominal value 2,125,000,000 2,125,000,000 435,000,000 435,000,000 Less: Yield to maturity * (125,176,289) (125,176,289) (19,704,683) (19,704,683)

Net proceeds 1,999,823,711 1,999,823,711 415,295,317 415,295,317 Accumulative accreted finance cost 49,183,590 38,390,952 63,921,667 50,450,592 2,049,007,301 2,038,214,663 479,216,984 465,745,909



310



GRouP JNA 2011 2010 Rm Rm

Nominal value 328,125,000 – Gain on extinguishment of debt (155,554,087) –

172,570,913 – Accreted finance cost 1,410,763 –

173,981,676 –

ComPANy RuN 2011 2010 Rm Rm

Nominal value 546,875,000 546,875,000 Less: Yield to maturity * (370,781,250) (370,781,250)

Proceeds from issue 176,093,750 176,093,750 Redemption (546,717,259) (218,750,000) Accreted finance cost 370,623,509 328,225,243

– 285,568,993

* Include debt issuance expenses.

(a) Government Support loan

The Government Support Loan from the Federal Government in 1998 was to finance the construction of the Wangsa Maju Water Treatment Plant and its related facilities. It is secured on all money standing to the credit of the Special Project Account. The Government Support Loan was originally repayable in equal annual installments over a period of twenty (20) years commencing on 11 April 1999. Interest was originally accrued and payable to the Government at the fixed rate of 8% per annum.

On 11 April 2004, the Federal Government restructured the Government Support Loan by reducing the interest rate to 3% per annum retrospectively and accordingly revised the repayment schedule of the loan.

(b) bAIDS/mCPs/mmtNs

On 12 October 2000, PNSB entered into several agreements with United Overseas Bank (Malaysia) Bhd and various parties to raise RM1,020,000,000 10-Year BAIDS and RM350,000,000 MCPs/MMTNs Issuance Facility. Subsequently, on 28 October 2000, PNSB issued the entire BAIDS and RM120,000,000 of the MCPs, the proceeds of which were utilised mainly to repay in full the Revolving Underwriting Facility of RM800,000,000 and Term Loan of RM300,000,000.

311



(b) bAIDS/mCPs/mmtNs (cont’d)

On 19 October 2005, the holders of the BAIDS approved the proposed extension of the BAIDS with the following variations to the BAIDS:

(i) extension of the tenure of the BAIDS with a put and call option for redemptions attached, exercisable on the original maturity dates of the BAIDS as follows:

NomINAl vAluE SERIES Rm mAtuRIty DAtES Series 1 180,000,000 From 27 October 2005 to 27 October 2015 Series 2 180,000,000 From 27 October 2006 to 27 October 2016 Series 3 180,000,000 From 27 October 2007 to 27 October 2011 Series 4 180,000,000 From 27 October 2008 to 27 October 2012 Series 5 150,000,000 From 27 October 2009 to 27 October 2013 Series 6 150,000,000 From 27 October 2010 to 27 October 2014

1,020,000,000

(ii) revision of the profit payment in respect of the BAIDS for the extended tenures.

(iii) allowing PNSB to apply monies in the DSRA for undertaking certain forms of permitted investments.

PNSB has obtained the approval from the Securities Commission on 19 December 2005 to revise the tenure of the BAIDS.

On 24 October 2008, PNSB exercised its call option for the extension of the tenure of Series 4 with nominal value of RM180,000,000 to 27 October 2012. Pursuant to the extension, Series 4 have been placed with a third party over a period of 90 days from 24 October 2008 to 22 January 2009. Subsequently the placement has been rolled over three (3) 90 day periods from 22 January 2009 to 22 April 2009, 22 April 2009 to 22 July 2009, 22 July 2009 to 22 October 2009, one (1) 187 days period from 22 October 2009 to 27 April 2010, one (1) 183 days period from 22 April 2010 to 22 October 2010, one (1) 183 days period from 22 October 2010 to 22 April 2011 respectively. The third party has been granted a put option to redeem Series 4 at anytime during the respective 183 days periods (“Option Periods”).

On 24 October 2010, PNSB exercised the option to extend the tenure of Series 6 with nominal value of RM150,000,000 to 27 October 2014. Pursuant to the extension, Series 6 have been placed with a third party over a period of 92 days from 27 October 2010 to 27 January 2011. Subsequently the placement has been rolled over 32 day periods from 27 January 2011 to 27 February 2011, 27 February 2011 to 27 March 2011, 27 March 2011 to 27 April 2011. The third party has been granted a put option to redeem Series 6 at anytime during the respective 31 days periods (“Option Periods”).



312



As disclosed in Note 30, deposits of RM326.8 million have been placed with the third party during the Option Periods and will be set-off against the BAIDS Series 4 and 6 with nominal value of RM180 million and RM150 million respectively should the put option be exercised by the third party. These put options were exercised by the third party on 1 April 2011 and taken up by the Group.

The facilities for the BAIDS are secured by way of deposit of an aggregate sum in the DSRA equivalent to twelve (12) months projected payment obligations under the BAIDS that are outstanding at any point in time. PNSB is not entitled to withdraw any money from the DSRA without prior consent from the Security Trustee except on condition that the BAIDS have been fully redeemed. In addition, the facilities are also secured by fixed charges over all assets of PNSB, the rights of PNSB under the Concession Agreements, construction contracts and project agreements undertaken by PNSB.

No dividend will be declared and paid by PNSB where inter-alia:

(a) the outstanding balance in the DSRA is less than 1.0 time of the aggregate quantum of the Issuer’s payment obligations under the BAIDS for a period of twelve (12) months commencing from the date on which the dividend is contemplated; or

(b) the Annual Debt Service Cover Ratio and the Forward Debt Service Cover Ratio are less than 1.7 times.

PNSB will also be required to maintain the following financial ratios, which will be measured annually commencing on 31 December 2001:

(i) Interest Cover Ratio of at least 2.0 times;

(ii) Debt Equity Ratio of not more than 4.0 times; and

(iii) Annual Debt Service Cover Ratio of at least 1.25 times.

On 24 June 2011, Acqua SPV Berhad has acquired 100% of BAIDS from all the noteholders.


313




On 20 October 2011, the Company has obtained the indulgence from the noteholder (Acqua SPV Berhad) to extend the maturity date of the series 3 from 27 October 2011 to 27 April 2012. Acqua had granted an extension of BAIDS Series 3 from 27 April 2012 to 27 October 2012 on 13 April 2012.

Acqua has also issued a letter dated 16 April 2012 offering to restructure all outstanding bonds (including BAIDS, RUBs and Junior Notes A), pending the finalisation of detail terms and conditions and legal documentation for the restructuring of all outstanding bonds.

(c) RuN

On 20 November 2001, the Company issued RM546,875,000 Nominal Value 15-Year RUN with 109,374,869 free detachable warrants at an issue price of RM0.322 per RM1.00 nominal value of the RUN on the basis of RM5.00 nominal value of the RUN with one (1) free warrant for every four (4) existing ordinary shares of RM1.00 each held in the Company. The RUN was offered to the entitled shareholders and is constituted by a Trust Deed dated 5 September 2001. The RM176,093,750 proceeds (excluding debt issuance expenses) from the RUN issue was immediately utilised to subscribe for the JNA issued by PNSB. PNSB subsequently, utilised the proceeds to repay RM168,000,000 of its MCPs with the remaining balance utilised for its working capital purposes.

The main features of the RUN and the warrants are as follows:

(a) The RUN carries a coupon rate of 2.5% per annum payable semi-annually for the immediate ten (10) years from the date of the issue of the RUN and 3.5% per annum payable semi-annually thereafter for the next five (5) years.

(b) The Company shall redeem the RUN in ten (10) equal installments each comprising 10% of the aggregate nominal value of all outstanding RUN commencing on the sixth (6th) anniversary of the date of issue of the RUN. On the tenth (10th) anniversary of the date of issue of the RUN, the Company has the option to redeem the RUN by paying the principal amount outstanding on that date. On the same day, the holders of the RUN also have the option to sell the RUN back to the Company for a consideration equivalent to the principal amount outstanding on that day.

(c) The RUN and the warrants are transferable and are quoted on Bursa Securities.

(d) The RUN is secured on the JNA issued by PNSB. The Company is required to create a security account to receive only proceeds from coupon payment and redemption of the JNA by PNSB, and thereafter to pay the coupon payment and redemption of the RUN.

(e) Holders of the warrants have the right to subscribe for new ordinary shares of the Company in cash at any time

during the period commencing one (1) day after the date of issue of the warrants and ending on the date being five (5) years from the date of the issue of the warrants (“Exercise Period”). The exercise price of the warrants is RM2.62 per new ordinary share of the Company subject to adjustments under certain circumstances in accordance with the provisions of the Deed Poll dated 5 September 2001.

(f) The warrants that are not exercised during the Exercise Period will lapse and become void thereafter.



314


(c) RuN (cont’d)

The main features of the RUN and the warrants are as follows: (cont’d)

(g) The new ordinary shares issued arising from the exercise of the warrants during the Exercise Period shall rank pari-passu in all respects with the then existing ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or distributions, the entitlement date of which is prior to the date of allotment of the said new ordinary shares.

The Company is restricted from declaring and paying any dividends:

(i) if there is any amount due but not paid under the RUN; or

(ii) in the event a default has occurred or is continuing and has not been waived.

On 19 November 2010, PNSB undertook the fourth mandatory partial redemption of RM54,687,500 nominal value of the outstanding RM382,812,500 nominal value of JNA from the Company. Concurrently, the Company utilised the proceeds from the redemption of JNA to undertake a fourth mandatory partial redemption of RM54,687,500 nominal value of the outstanding RM382,812,500 nominal value of RUN.

Following the issuance by the Company of the Notice of Reminder to the Noteholders on Their Rights To Exercise The Put Option Pursuant To The Trust Deed dated 5 September 2001 (“Trust Deed”) Constituting The Notes on 13 September 2011 (“Put Option Exercise”) and based on the outcome of the Put Option Exercise whereby as at 18 October 2011, 468 Noteholders holding 515,488,256 Notes (94.26%) have exercised the Put Option Exercise as set out in the Reminder Notice:-

(i) On 24 October 2011, the Company had issued a Circular to Noteholders In Relation To The Suspension Of Trading For The Notes And The Withdrawal Of The Notes From The Official List of Bursa Malaysia Securities Bhd Upon The Completion Of The Call Option Exercise (As Provided Pursuant To Clause 7.2 of the Trust Deed.)

(ii) On 2 November 2011, the Company had issued the Notice of Call Option to the Noteholders of the RM546,875,000 nominal value of 15-Years Redeemable Unconvertible Notes (“Notes”) (“Noteholders”) on the Company’s intention and rights to exercise the call option to redeem the outstanding notes amounting to 31,386,744 Notes (5.74%) which are not already the subject of the exercise by the Noteholders pursuant to the Put Option Exercise.

(iii) Upon completion of the Put Option and Call Option Exercise on 18 November 2011, the Company’s Notes had been withdrawn from the Official List of Bursa Malaysia Securities Berhad on Monday, 21 November 2011 at 9.00 am.


315



(d) JNA

As per Notes 20(a) Acqua has acquired the entire holdings of PNSB JNA from the Company. The terms remain unchanged save and except for the following:

(i) PNSB has agreed to amend, vary and replace Clause 6.9 of the JNA Subscription Agreement dated 5 September 2001 and between PNSB (as issuer); CIMB Investment Bank Berhad (as advisor); and PNHB (as noteholders) (“PNSB Subscription Agreement”)

(ii) The JNA carries a coupon rate of 5.68% per annum and terms of the JNA are set out as follows:

NomINAl vAluE REDEmPtIoN DAtE Rm

18 November 2016 54,687,500 20 November 2017 109,375,000 20 November 2018 109,375,000 20 November 2019 54,687,500

Gross carrying amount 328,125,000 Gain on extinguishment of debts (Note 6(a)) (155,554,087) Accretion of interest 1,410,763 Fair value of the “New” JNA 173,981,676

Fair value is measured in accordance with FRS 139. The fair value is computed based on the future cash outflows discounted using the current interest rate of similar financial liability with similar terms as at 18 November 2011 obtainable from the bond market. This has given rise of a gain on extinguishment of debts of RM155,540,087 recognised in profit or loss.

(e) bACP Programme/bAmtN Programme On 19 September 2005, SYABAS entered into several agreements with a consortium of banks comprising BIMB, CIMB

Bank, CIMB and HSBC in respect of the issue of up to RM200 million nominal value BACP Programme and up to RM3 billion nominal value BAMTN Programme.

On 30 September 2005, SYABAS completed the first issuance of the BAMTN with an aggregate nominal value of RM1.03 billion comprising:

(i) An eight-year RM310 million nominal value tranche;

(ii) A nine-year RM200 million nominal value tranche;

(iii) A ten-year RM200 million nominal value tranche; and

(iv) An eleven-year RM320 million nominal value tranche.



316


(e) bACP Programme/bAmtN Programme (cont’d)

The BAMTN issued on 30 September 2005 will mature beginning 30 September 2013 and on an annual basis, for each series issued. Redemptions will be made at nominal value.

On 18 May 2007, SYABAS further issued BAMTN with an aggregate nominal value of RM365 million, which will mature beginning 18 May 2017 and on an annual basis, for each series issued as follows:

(i) A ten-year RM125 million nominal value tranche;

(ii) An eleven-year RM120 million nominal value tranche;

(iii) A twelve-year RM120 million nominal value tranche; and

On 7 September 2007, SYABAS completed the first issuance of the BACP with an aggregate nominal value of RM10 million, which was fully repaid on 5 October 2007.

On 20 February 2008, SYABAS issued BAMTN with an aggregate nominal value of RM230 million, which will mature beginning 20 February 2020 and on an annual basis, for each series issued as follows:

(i) A twelve-year RM70 million nominal value tranche;

(ii) A thirteen-year RM60 million nominal value tranche;

(iii) A fourteen-year RM50 million nominal value tranche; and

(iv) A fifteen-year RM50 million nominal value tranche.

On 31 October 2008, SYABAS further issued BAMTN with an aggregate nominal value of RM500 million, which will mature beginning 31 October 2016 and on an annual basis, for each series issued as follows:

(i) An eight-year RM125 million nominal value tranche;

(ii) A ten-year RM125 million nominal value tranche;

(iii) A twelve-year RM125 million nominal value tranche; and

(iv) A fifteen-year RM125 million nominal value tranche SYABAS is required to maintain the following financial ratios:

(i) Debt to Equity Ratio of not more than 75:25 from 2005 to 2008, both years inclusive and not more than 70:30 from and including 2009 until the expiry of the BAMTN Programme; and

(ii) Finance Service Cover Ratio of not less than 1.25 times from 2005 to 2008, both years inclusive and not less than 1.50 times from and including 2009 until the expiry of the BAMTN Programme.


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(e) bACP Programme/bAmtN Programme (cont’d)

BACP/BAMTN are sharing the same securities as listed in Note 31(f). In addition, the BACP/BAMTN are also secured by way of the rights over the Escrow Account and the monies standing to the credit thereof.

SYABAS is restricted from declaring and paying any dividends, whereupon:

(i) an Event of Default has occurred, is continuing and has not been waived, or if following such payment or distribution an Event of Default would occur; or

(ii) the Finance Service Cover Ratio is breached or will be breached if calculated immediately following such payment or distribution; or

(iii) the Debt to Equity Ratio is breached or will be breached if calculated immediately following such payment or distribution; or

(iv) the balance outstanding to the credit of the DSRA both before and after the payment is less than the Minimum Required Balance;

provided that conditions (ii) and (iv) shall not be applicable to dividends paid on RPS from year 2015 onwards.

(f) Rm410 million and Rm250 million term loans

SYABAS obtained Term Loan facilities of up to RM410 million and RM250 million from BPMB to part finance the capital expenditure and the Non-Revenue Water reduction programmes (including the operation, maintenance, development and upgrading of the water distribution system over a period of thirty (30) years) respectively.

These Term Loan are repayable as follows from the date of the first drawdown:

Rm410 mIllIoN Rm250 mIllIoN tERm loAN tERm loAN Rm Rm

Month 204 (17 years) 73,240,000 50,000,000 Month 216 (18 years) 77,380,000 50,000,000 Month 228 (19 years) 81,750,000 50,000,000 Month 240 (20 years) 86,370,000 50,000,000 Month 252 (21 years) 91,260,000 50,000,000 410,000,000 250,000,000



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(f) Rm410 million and Rm250 million term loans (cont’d)

The above Term Loans are secured via the following:

- A debenture incorporating fixed and floating charges over all present and future assets of SYABAS, both movable and immovable;

- Assignment of all rights, titles and benefits under the SYABAS Concession Agreement;

- Assignment of all contractual rights, titles and benefits under the Construction Contract (excluding the performance bonds); and

- Assignment over the Designated Accounts (Collection Account, Operating Account, BPMB Disbursement Account, DSRA and Land Use Charges Reserve Account).

Interest is payable annually at the rate of 5.65% (2010: 5.65%) per annum.

(g) Rubs

During the financial year ended 31 December 2006, PNSB restructured RM320,000,000 shareholders’ advances owing to the Company into a new marketable security via the issuance of RM435,000,000 nominal value of RUBs to the Company.

Following the above, the Company sold the RUBs to ATSB for a total consideration of RM418,969,134 (excluding debt issuance expenses), satisfied via a cash consideration of RM132,719,134 and the balance being satisfied via the issuance of 286,250,000 preference shares with par value of RM0.01 in ATSB at an issue price of RM1.00 each. The disposal of the RUBs to ATSB effectively resulted in the Group raising additional borrowings of RM418,969,134 on initial recognition, which will be subsequently measured at amortised cost using the effective interest method.

The maturity date of the RUBs is ten (10) years from the issue date. The RUBs shall bear the following coupon rate payable semi-annually in arrears on the amounts outstanding:

From issue date to Year 5 : 5.50% per annum After Year 5 to Year 10 : 11.00% per annum

Unless previously redeemed, purchased and cancelled, the RUBs shall be redeemed by the issuer at par or at its respective nominal value on the maturity date.

(h) RCulS

On 23 February 2006, SYABAS entered into a Subscription Agreement with the Company and KDEB in relation to the issue of up to RM1,045 million nominal value of RCULS by SYABAS. The RCULS will be issued progressively to the Company and KDEB over the next four (4) years from 2006 to 2009 to finance the operations and capital expenditure requirements of SYABAS under SYABAS Concession Agreement. The commitment by the Company and KDEB to subscribe for the RCULS are up to RM731.5 million (70%) and RM313.5 million (30%) respectively and KDEB’s portion of the commitment were subsequently varied pursuant to a Deed of Ratification and Accession dated 22 January 2009 given by Kumpulan Perangsang Selangor Berhad in favour of the Company and KDEB to 15% each between KDEB and Kumpulan Perangsang Selangor Berhad.


319



(h) RCulS (cont’d)

In the event that any party is unable to subscribe for its portion of the relevant RCULS in full on the issue date, the other party shall thereupon be entitled, but not obliged to subscribe for all, or a portion only, of such RCULS as are unable to be subscribed for. SYABAS had on 9 March 2006 issued RM135.0 million of the RCULS to the Company. Interest at the rate of 7% per annum on the nominal value of the RCULS is payable by SYABAS to the RCULS holders.

On 22 May 2007 and 29 May 2007, SYABAS issued a further RM77 million and RM33 million of RCULS to the Company and KDEB respectively.

The RCULS will be redeemed in full by SYABAS on the 21st anniversary of the first issue date at their nominal value.

Each RCULS holder is entitled to exercise its conversion rights to convert the RCULS into new shares in SYABAS at the Conversion Price of RM1.00 payable for every new share to be issued pursuant to the conversion of the RCULS or such other price as may be agreed between SYABAS and the relevant RCULS holder prior to the Conversion Date.

Until the RCULS have been redeemed or converted into shares of SYABAS, SYABAS shall pay to the RCULS holders, coupon on the nominal value of the RCULS outstanding at a fixed rate of 7% per annum. The RCULS are regarded as compound instruments, consisting of a liability component and an equity component.

The proceeds received from the issue of the RCULS to KDEB have been splitted between the liability component and equity component, representing the fair value of the conversion option. The RCULS issued to KDEB are accounted for in the statement of financial position of the Group as follows:


liability component Nominal value of RCULS 33,000,000 33,000,000 Equity component, net of deferred taxation (held by non-controlling interest) (Note 37) (13,130,387) (13,130,387) Deferred taxation (4,376,796) (4,376,796)

Liability component as at date of issuance 15,492,817 15,492,817 Accretion of finance costs 6,984,243 5,263,919

Liability component as at 31 December (held by non-controlling interest) 22,477,060 20,756,736



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(i) lushan moF Novated World bank loan

This is the loan granted to the PRC government by the World Bank to fund the Water Supply Project in Henan Province, which was novated to LUWEI to finance the construction of a water treatment plant and upgrading of existing pipe network. The total loan amount is USD3,830,000 subject to actual drawdown amount approved by the local PRC government. The loan is unsecured and is repayable quarterly commencing on 31 December 2011 and ending on 31 March 2020.

(j) Government loan Rm320.8 million

On 16 December 2009, SYABAS had entered into a Government Loan Agreement with the Federal Government in respect of a loan facility of RM320.8 million (“Government Loan”) granted to SYABAS by the Federal Government.

The salient terms of the Government Loan Agreement are as follows:

i) Facility Amount : RM320.8 million. ii) Purpose of Loan : Payment for water purchased from the water treatment operators namely, PNSB, ABASS

and SPLASH.

iii) Repayment : The Facility Amount to be repayable over sixteen (16) years beginning on the fifth (5th) year from first (1st) drawdown i.e. grace period of four (4) years.

iv) Default Interest : Eight percent (8.00%) per annum on any overdue principal repayment amount.

v) Events of Default : The Federal Government has the right to call on an event of default without securing or referring to the existing Noteholders and Lenders of SYABAS.

The Government Loan was fully utilised by SYABAS to pay water treatment operators, namely, PNSB, ABASS and SPLASH for water purchased.

(k) Government loan Rm110 million

On 17 October 2011, the Company had entered into a Loan Facility Agreement and Deed of Assignment with the Federal Government in respect of a loan facility of RM110.0 million (“Government Loan”) granted to the Company by the Federal Government.

The salient terms of the Government Loan Agreement are as follows: -

i) Facility Amount : RM110.0 million.

ii) Purpose of Loan : To finance capital expenditure works on old pipe replacement project and upgrading of water supply system upgrading of water supply system project.

iii) Tenure : Twenty (20) years


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(k) Government loan Rm110 million (cont’d)

The salient terms of the Government Loan Agreement are as follows: - (cont’d) iv) Drawdown period : yEAR Rm 2011 18,500,000 2012 63,000,000 2013 28,500,000 110,000,000

2011 2010 Rm Rm

At 1 January – – Drawdown during the year 18,500,000 – Effect of adoption FRS 120 (Note 35(c)) (11,174,680) – Accretion of finance costs 52,497 –

At 31 December 7,377,817 – v) Repayment : The Facility amount to be repayables over eighteen (18) years, commencing on the third

(3rd) year from the first drawdown date.

yEAR Rm PER ANNum 2014 - 2019 550,000 2020 - 2023 1,100,000 2024 - 2027 1,650,000 2028 13,200,000 2029 22,000,000 2030 27,500,000 2031 33,000,000 vi) Special Loan : Deed of Assignment over a Special Loan Account and the credit balances therein. Account and Security

vii) Interest : Three percent (3.0%) per annum. viii) Default Interest : Five percent (5.0%) per annum on any overdue principal repayment amount.

ix) Other Terms : As privately agreed with the Federal Government.



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(l) obligation under finance leases

These obligations are secured by a charge over the leased assets (Note 13). The average discount rate implicit in the leases is 3.01% per annum (2010: 3.24% per annum).

(m) RPS

On 6 May 2005, SYABAS entered into a Subscription Agreement with the MOF in relation to the subscription of 655 million RPS to be issued by SYABAS at a total subscription price of RM655 million. MOF has agreed to subscribe for a total of 655 million RPS of RM0.01 each of SYABAS, to be issued at an issue price of RM1.00 per RPS (a premium of RM0.99 per RPS) within a period of four (4) years, commencing from year 2007 until 2011. The RPS is not convertible into ordinary shares of SYABAS but may be redeemed by SYABAS commencing on 31 December 2021 until 31 December 2025 in five (5) equal tranches of RM131 million nominal value for each of the years.

The subscriptions of the total number of 655 million RPS of RM0.01 each of SYABAS shall be made as follows:

SubSCRIPtIoN PERIoD SubSCRIPtIoN NumbER oF PRICE RPS Rm

15 January 2007 to 14 January 2008 125,400,000 125,400,000 15 January 2008 to 14 January 2009 184,200,000 184,200,000 15 January 2009 to 14 January 2010 213,800,000 213,800,000 15 January 2010 to 14 January 2011 131,600,000 131,600,000

655,000,000 655,000,000

2011 2010 Rm Rm

At 1 January 605,211,919 523,400,000 Subscription during the year – 131,600,000 Effect of adoption FRS 120 (Note 35(b)) – (54,309,571) Accretion of finance costs (Note 10) 6,381,330 4,521,490

At 31 December 611,593,249 605,211,919 On 8 May 2007, SYABAS issued 125.4 million of RPS of RM0.01 each at an issue price of RM1.00 per RPS (a premium of

RM0.99 per RPS) to MOF.

On 11 March 2008, SYABAS has further issued 184.2 million RPS of RM0.01 each at an issue price of RM1.00 per RPS (a premium of RM0.99 per RPS) to MOF.

On 30 March 2009, SYABAS has further issued 213.8 million RPS of RM0.01 each at an issue price of RM1.00 per RPS

(a premium of RM0.99 per RPS) to MOF.

On 26 March 2010, SYABAS has further issued 131.6 million RPS of RM0.01 each at an issue price of RM1.00 per RPS (a premium of RM0.99 per RPS) to MOF.


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(m) RPS (cont’d)

Each RPS shall confer on its holder(s) the following rights:

(i) A fixed cumulative net dividend of 3% per annum on each RPS, payable in cash on a date falling in the financial year ending not earlier than 31 December 2015 (which date is to be determined at the sole discretion of SYABAS), out of profits of SYABAS available for distribution in respect of each financial year or other accounting period of SYABAS prior to such date provided always that no dividend shall be declared or be due and payable except in accordance with the priority of payments set out in the Assignment and Charge I dated 19 January 2005 between SYABAS and the Security Agent.

Net dividend declared for each financial year from the date of issue up to the financial year ending 31 December 2014 shall, once declared be payable in 11 equal installments commencing in the year 2015 and ending in the year 2025. Such installment shall be in addition to the payment of any net dividend declared for the relevant financial year 31 December 2015 and any financial year thereafter.

(ii) Each RPS shall not confer on the holder thereof any right to participate on a return in excess on liquidation, winding up or otherwise of SYABAS, other than redemption, up to the paid-up value of RM1 for each RPS with a par value of RM0.01 and a premium of RM0.99.

(iii) The RPS shall carry no right to receive notice of or to attend or vote at any general meeting of SYABAS other than on a resolution to amend or vary the rights of holders of the RPS.

(iv) SYABAS shall redeem each RPS on the following dates and in the following proportions:

DAtE Rm 31 December 2021 131,000,000 31 December 2022 131,000,000 31 December 2023 131,000,000 31 December 2024 131,000,000 31 December 2025 131,000,000

655,000,000 (v) No RPS shall be convertible into ordinary shares of SYABAS.

(vi) The RPS shall not be transferable in whole or in part and they shall not be listed in Bursa Securities or any other stock exchange.

The RPS shall rank ahead of all other shares issued or to be issued by SYABAS, be it preference, ordinary or otherwise. In addition, SYABAS shall ensure that all advances or loans from shareholders of SYABAS shall, to the extent permissible by law, rank behind the RPS in terms of payment in a winding-up of SYABAS.



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(n) uSD31 million term loan

POG has obtained a short term loan of USD 31 million to part finance the acquisition of the remaining 60% interest in GOM Resources and KGL respectively as disclosed in Note 17(b) and 17(c).

The above term loan is secured via the following: - Charge over all KGL Ltd and GOM Resources shares owned by POG;

- Debenture incorporating a fixed and floating charge over all present and future assets of the POG; and

- Corporate guarantee from the Company for USD 31 million together with interest thereon.

The loan was repayable on 27 October 2011 and had been extended, on a monthly basis, to 27 April 2012. Interest is payable monthly at the rate of 1.75% above one month’s cost of funds.

(o) Effective interest rates

The effective interest rates per annum applicable to the borrowings at the reporting date were as follows:

EFFECtIvE INtERESt RAtE PER ANNum 2011 2010 % %

Group Government Support Loan 3.00 3.00 BAIDS 5.00 - 5.60 4.65 - 8.20 RUN – 16.93 JNA 5.68 – BAMTN 5.00 - 8.24 5.00 - 8.24 RM410 million and RM250 million Term Loans 5.65 5.65 RUBs 8.25 8.25 RCULS 8.02 - 8.50 8.02 - 8.50 Lushan MOF Novated World Bank Loan 1.38 1.38 USD31 million term loan 3.35 – Obligation under finance lease 3.01 3.24


325




(o) Effective interest rates (cont’d)

The effective interest rates per annum applicable to the borrowings at the reporting date were as follows: EFFECtIvE INtERESt RAtE PER ANNum 2011 2010 % % Company RUN – 16.93

32. tRADE AND othER PAyAblES

GRouP GRouP 2011 2010 2011 2010 (REStAtED) Rm Rm Rm Rm

Current trade payables Third parties 489,472,586 958,054,408 – – Amounts due to contractors 39,490,131 24,885,814 – –

528,962,717 982,940,222 – –

other payables Amount due to a subsidiary – – 249,260,364 34,586,342 Finance cost payable 117,349,151 94,363,566 – 943,921 Deposit from consumers 403,239,351 380,325,879 – – Accruals 337,739,795 204,977,855 612,251 342,439 858,328,297 679,667,300 249,872,615 35,872,702

1,387,291,014 1,662,607,522 249,872,615 35,872,702


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32. tRADE AND othER PAyAblES (cont’d)


Non-current trade payables Third parties 1,102,557,144 – – –

other payables Long-term payable (Note 32(e)) 8,162,167 9,794,600 – – Accruals (Note 32(c)) 114,721,344 – – –

122,883,511 9,794,600 – –

Less: Adjustment (Note 6(a), Note 32(f)) (19,680,001) – – –

103,203,510 9,794,600 – – 1,205,760,654 9,794,600 – –

Total trade and other payables 2,593,051,668 1,672,402,122 249,872,615 35,872,702 Add: Loan and borrowings (Note 31) 5,512,129,396 5,486,963,196 – 285,568,993

Total financial liabilities carried at amortised cost 8,105,181,064 7,159,365,318 249,872,615 321,441,695

(a) trade payables

These amounts are non-interest bearing. Trade payables are normally settled on 30-90 days (2010: 30-90 days) terms. Included within the trade payables payable to third parties are RM1,525,365,656 (2010: RM923,786,651) being the

amounts payable by SYABAS to its external water suppliers. These amounts are under litigation as disclosed in Note 49(f) and Note 49(h) respectively.

(b) Amount due to a subsidiary

This amounts is unsecured, non-interest bearing and are repayable on demand.

(c) Accruals

Included in accruals of the Group is an amount of RM42,400 (2010: RM21,000), which is amount due to a subsidiary of CPMSB, a substantial corporate shareholder of the Company.

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32. tRADE AND othER PAyAblES (cont’d) (d) Deposit from water consumers GRouP 2011 2010 Rm Rm

As at 1 January 380,325,879 375,029,777 Addition during the year 47,589,047 49,842,088 Transfer (from)/to trade receivables (Note 24(a)) (1,077,859) 1,015,886 Refund (23,586,082) (45,539,192) Bad debt writen off (11,634) (22,680)

As at 31 December 403,239,351 380,325,879

(e) long-term payable

This refers to the interests payable pursuant to the Supplemental Agreement to the Government Support Loan Agreement. The interest payable as at 11 April 2004 is to be paid over a period of one hundred and fourty four (144) months commencing April 2005.

Long-term payable is analysed as follows: GRouP 2011 2010 Rm Rm

Analysed as: Current 1,632,433 1,632,433 Non Curent: Later than 1 year but not later than 2 years 1,632,433 1,632,433 Later than 2 years but not later than 5 years 6,529,734 6,529,734 Later than 5 years – 1,632,433

8,162,167 9,794,600 9,794,600 11,427,033

(f) Adjustment for changes in estimate

During the financial year ended 31 December 2011, SYABAS revised its estimates of cash outflows for payments to its trade payables resulting from the Court of Appeal’s decision on the SPLASH (Kuala Lumpur High Court Civil Suit No. D-22ND-398-2009) litigation (see Note 49(f)). SYABAS anticipates that the total amount outstanding to its third parties trade payables of RM1,592,029,730 (2010:RM958,054,408) is likely to be paid in the following timeframe:

WIthIN NExt 12 - 24 12 moNthS moNthS Rm Rm

Trade payables carried at amortised cost 489,472,586 1,102,557,144 Accruals – 114,721,344

Arising from the revision in the estimates of cash flows, the previous amounts carried at amortised cost have been adjusted as follows:

tRADE PAyAblES othER PAyAblES CARRIED At CARRIED At AmoRtISED CoSt AmoRtISED CoSt totAl Rm Rm Rm

Amortised carrying amount before revision 1,102,557,144 114,721,344 1,217,278,488 Adjustment for changes in estimate recognised in profit or loss (Note 6(a)) (139,180,927) 119,500,926 (19,680,001) Amortised carrying amount after revision 963,376,217 234,222,270 1,197,598,487


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33. PRovISIoN FoR REtIREmENt bENEFItS

The Group operates unfunded, defined benefit Retirement Benefit Schemes (the “Scheme”) for its eligible employees. Under the Scheme, eligible employees are entitled to retirement benefits of either 0.75 or 1.25 month of their final salary for every year of service with the Group on the attainment of their retirement age of 56 or voluntary retirement age of 50.

movement of provision of retirement benefits is as follows:


At 1 January 20,763,875 18,675,305 Add: Provision for the year (Note 8) 4,030,312 3,645,421 Less: Payment made during the year (2,034,617) (1,556,851)

At 31 December 22,759,570 20,763,875

Maturity of provision: Not later than 1 year 2,283,854 1,539,853 Later than 1 year but not later than 2 years 3,269,880 1,823,754 Later than 2 years 17,205,836 17,400,268

22,759,570 20,763,875 The amounts recognised in the profit or loss are as follows: GRouP 2011 2010 Rm Rm

Current service cost 2,751,615 2,677,740 Interest cost 1,278,697 967,681 Total 4,030,312 3,645,421

The principal actuarial assumptions used are as follows: GRouP 2011 2010 % %

Discount rate 6.50 6.50 Rate of compensation increase 6.00 6.00

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34. othER CuRRENt lIAbIlItIES GRouP 2011 2010 Rm Rm

Amount due to customer on construction contract (Note 29) – 6,546,029

35. GovERNmENt GRANt

(a) A government grant of RM250,000,000 was received by SYABAS in consideration of SYABAS performing its obligations under the SYABAS Concession Agreement. This grant is used solely for the purpose of financing the costs and expenditure of the NRW. NRW refers to such part of the works undertaken by SYABAS for the purpose of reducing non-income generating unaccountable water loss.


Net carrying amount At 1 January 231,031,985 237,069,909 Less: Repayment – (2,008,721) Amortisation (Note 6(a)) (4,199,561) (4,029,203)

At 31 December 226,832,424 231,031,985 (b) On 26 March 2010, the Company has completed the RPS issuance of RM131.6 million by issuing 131.6 million units of

RPS with a nominal of RM0.01 each at an issue price of RM1.00 per RPS (a premium of RM0.99 per RPS) to MOF for cash consideration of RM131.6 million. The amendments to FRS 120 removed the exemption to impute interests on government loan at below market interest rate. RM54,309,571 being the difference between the amount received and the present value of estimated cash flows discounted at market interest rate is accounted for as government grants.


Net carrying amount At 1 January 51,594,093 – Add: Effect of adoption FRS 120 for the RPS (Note 31(m)) – 54,309,571 Less: Amortisation (Note 6(a)) (3,620,638) (2,715,478)

At 31 December 47,973,455 51,594,093


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35. GovERNmENt GRANt (cont’d)

(c) On 17 October 2011, the Company had entered into a Loan Facility Agreement and Deed of Assignment with the Federal Government in respect of a loan facility of RM110.0 million granted to the Company by the Federal Government.The amendments to FRS 120 removed the exemption to impute interests on government loan at below market interest rate. RM11,174,680 being the difference between the amount received and the present value of estimated cash flows discounted at market interest rate is accounted for as government grants.


Net carrying amount At 1 January – – Add: Effect of adoption of FRS 120 (Note 31(k)) 11,174,680 – Less: Amortisation (Note 6(a)) (46,560) –

At 31 December 11,128,120 – Total net carrying amount (a) + (b) + (c) 285,933,999 282,626,078

36. DEFERRED tAx Deferred income tax as at 31 December relates to the following:

AS At RECoGNISED AS At 31 RECoGNISED AS At 1 JANuARy IN PRoFIt DECEmbER ACquISItIoN IN PRoFIt RECoGNISED 31 DECEmbER 2010 oR loSS 2010 oF SubSIDIARy oR loSS IN EquIty 2011 (REStAtED) (REStAtED) (REStAtED) Rm Rm Rm Rm Rm Rm Rm

Group Deferred tax liabilities: Loans & Borrowings – – – – 38,535,831 – 38,535,831 Trade Payable – – – – 10,145,744 – 10,145,744 Interest receivable 7,809,891 2,728,203 10,538,094 – – – 13,489,666 RCULS (1,391,528) (3,124,554) (4,516,082) – (3,381,652) – (7,897,734) Revaluation Reserve – – – – – 23,029,316 23,029,316 Service concession obligations 1,063,351,423 (88,006,488) 975,344,935 – (83,189,678) – 892,155,257 Fair value adjustments on acquisitions of subsidiaries 2,134,202 (281,970) 1,852,232 – (171,194) – 1,681,038

1,071,903,988 (88,684,809) 983,219,179 – (38,060,949) 23,029,316 971,139,118

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36. DEFERRED tAx (cont’d) Deferred income tax as at 31 December relates to the following: (cont’d)

AS At RECoGNISED AS At 31 RECoGNISED AS At 1 JANuARy IN PRoFIt DECEmbER ACquISItIoN IN PRoFIt RECoGNISED 31 DECEmbER 2010 oR loSS 2010 oF SubSIDIARy oR loSS IN EquIty 2011 (REStAtED) (REStAtED) (REStAtED) Rm Rm Rm Rm Rm Rm Rm

Group (cont’d) Deferred tax assets: Tax losses (496,465,830) (74,805,440) (571,271,270) – (105,468,577) – (676,739,847) Property, Plant and Equipment (153,078,427) (34,527,896) (187,606,323) 129,000 (41,905,810) – (229,383,133) Service concession assets (697,046,639) 115,893,481 (581,153,158) – 133,693,165 – (447,459,993) Trade receivables (1,770,469) 255,948 (1,514,521) – (24,180,586) – (25,695,107) Reinvestment allowance (77,153,479) 41,793,847 (35,359,632) – 35,359,632 – – Other payables (7,584,794) 1,793,063 (5,791,731) – (8,437,592) – (14,229,323) Others (24,054) (44,598) (68,652) – (2,774,155) – (2,842,807)

(1,433,123,692) 50,358,405 (1,382,765,287) 129,000 (13,713,923) – (1,396,350,210)

(361,219,704) (38,326,404) (399,546,108) 129,000 (51,774,872) 23,029,316 (425,211,092)

Company Deferred tax liabilities: Interest receivable 7,809,891 2,728,203 10,538,094 – 2,951,572 3,027,220 16,516,886


Presented after appropriate offsetting as follows: Deferred tax assets: (1,396,350,210) (1,382,765,287) – – Deferred tax liabilities: 971,139,118 983,219,179 16,516,886 10,538,094

(425,211,092) (399,546,108) 16,516,886 10,538,094


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36. DEFERRED tAx (cont’d)

Deferred tax assets are recognised for unabsorbed capital allowances, unutilised tax losses and unutilised reinvestment allowances carried forward to the extent that the realisation of the related tax benefit through the future taxable profits is available. The directors are of the opinion that the Group will be able to reduce tax payable in view of future profits and benefits accruing to the Group from the existing water concessions which have been awarded to the Group (Note 4) to which the deferred tax asset relates. The unabsorbed capital allowances, unutilised tax losses and unutilised reinvestment allowances are available indefinitely for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967 and guidelines issued by the tax authority.

Deferred tax assets have not been recognised as follows: GRouP 2011 2010 Rm Rm

Tax losses and capital allowances 13,906,455 2,035,628

37. ShARE CAPItAl, ShARE PREmIum, tREASuRy ShARES, FoREIGN CuRRENCy tRANSlAtIoN RESERvE, othER RESERvE AND RCulS

NumbER oF oRDINAR AmouNt ShARES oF Rm1.00 EACh ShARE ShARE totAl CAPItAl CAPItAl ShARE FoREIGN (ISSuED (ISSuED CAPItAl CuRRENCy AND AND AND REvA- tRAN- Fully tREASuRy Fully ShARE ShARES tREASuRy luAtIoN SlAtIoN othER RCulS PAID) ShARES PAID) PREmIum PREmIum ShARES RESERvE RESERvE RESERvE (NotE 31(h)) Rm Rm Rm Rm Rm Rm Rm Rm At 1 January 2010 411,142,895 (2,036,800) 411,142,895 102,878,221 514,021,116 (5,940,688) – 384,165 – 13,130,387

Exchange differences – – – – – – – (3,478,479) – –

At 31 December 2010 411,142,895 (2,036,800) 411,142,895 102,878,221 514,021,116 (5,940,688) – (3,094,314) – 13,130,387

At 1 January 2011 411,142,895 (2,036,800) 411,142,895 102,878,221 514,021,116 (5,940,688) – (3,094,314) – 13,130,387

Revaluation surplus – – – – – – 69,087,946 – – – Exchange differences – – – – – – – 1,986,185 – – other reserve – – – – – – – – 19,762,784 – At 31 December 2011 411,142,895 (2,036,800) 411,142,895 102,878,221 514,021,116 (5,940,688) 69,087,946 (1,108,129) 19,762,784 13,130,387

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37. ShARE CAPItAl, ShARE PREmIum, tREASuRy ShARES, FoREIGN CuRRENCy tRANSlAtIoN RESERvE, othER RESERvE AND RCulS (cont’d)

NumbER oF oRDINARy ShARES oF Rm1.00 EACh AmouNt 2011 2010 2011 2010 Rm Rm

Authorised: At 1 January/31 December 1,300,000,000 1,300,000,000 1,300,000,000 1,300,000,000

(a) Share capital

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.

(b) treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.

The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.

(c) RCulS

This represents the residual amount of RCULS after deducting the fair value of the liability component. This amount is presented net of transaction costs and deferred tax liability arising from RCULS.

(d) Revaluation reserves The asset revaluation reserve represents increases in the fair value of freehold and leasehold land and buildings, net

of tax.

(e) Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(f) other reserves

This represents the premium paid in acquisition of non-controlling interests in GOM Resources and KCL.

38. REtAINED EARNINGS

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six (6) years, expiring on 31 December 2013, to allow companies to frank dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the Section 108 balance of the Income Tax Act, 1967 (“S.108 balance”) and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the S.108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.


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38. REtAINED EARNINGS (cont’d)

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six (6) years, expiring on 31 December 2013, to allow companies to frank dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the Section 108 balance of the Income Tax Act, 1967 (“S.108 balance”) and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the S.108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company has elected for the irrevocable option to disregard the S.108 balance as at 31 December 2007. Hence, the Company will be able distribute dividends out of its entire retained earnings under the single tier system.

As at 31 December 2011, the Company has tax exempt profits available for distribution of approximately RM1,077,959 (2010: RM1,077,959), subject to the agreement of the Inland Revenue Board.

39. RElAtED PARty tRANSACtIoNS

(a) transactions with related parties

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:


Advances from PNSB – – 644,177,620 9,483,951 Advance to PNSB – – 501 17,097 Repayment to PNSB – – 429,759,100 – Advances to POG – – 105,326,830 2,652,038 Repayment from POG – – – 533,794 Advance to SINO – – 22,175,017 22,823,653 Rental from SINO – – 840,056 757,176 Advances to PNOC – – 1,072,528 – RCULS interest receivable from SYABAS – – 11,806,288 10,912,812 Coupon and discounts on JNA from PNSB – – 49,792,877 55,534,206


Principal repayment of JNA from PNSB – – – 54,687,500 Secretarial fees charged by RZ Management 240,000 240,000 – – Consultancy work charged by WWE Holdings Bhd 1,296,000 – – –

RZ Management and WWE Holdings Bhd are director related corporation.

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39. RElAtED PARty tRANSACtIoNS (cont’d)

(b) Compensation of key management personnel


Short-term employee benefits 14,948,574 14,225,041 256,000 245,000 Defined contribution plan 2,451,781 2,216,734 – – Other staff related expenses 7,524,418 5,374,824 150,000 150,000

24,974,723 21,816,599 406,000 395,000

Included in the total key management personnel are:


Directors’ remuneration (Note 9) 17,658,424 15,975,872 406,000 395,000

40. CommItmENtS

(a) Capital commitments

Capital expenditure as at the reporting date is as follows: GRouP 2011 2010 (REStAtED) Rm Rm

Capital expenditure: Contracts approved and contracted for 21,354,709 48,607,515

Commitment under the terms of the Concession Agreement: - Concession fees 23,000,000 24,000,000 - Contracts approved and contracted for 216,276,962 278,438,035

239,276,962 302,438,035


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40. CommItmENtS (cont’d)

(b) operating lease commitments – as lessee

Future minimum rentals payable for premises under non-cancellable operating leases at the reporting date are as follows: GRouP 2011 2010 Rm Rm

Payable within one year 1,429,795 1,546,554 Payable between one and five years 1,822,195 934,145 Payable after five years 761,807 –

4,013,797 2,480,699

(c) Finance lease commitments GRouP 2011 2010 Rm Rm

minimum lease payments: Not later than 1 year 5,840,720 5,110,666 Later than 1 year but not later than 2 years 4,903,214 4,060,067 Later than 2 years but not later than 5 years 8,248,888 6,922,710

18,992,822 16,093,443 Less: Amounts representing finance charges (1,858,260) (1,630,297)

Present value of minimum lease payables 17,134,562 14,463,146 GRouP 2011 2010 Rm Rm

Present value of payments: Not later than 1 year 5,168,006 4,500,344 Later than 1 year but not later than 2 years 4,347,746 3,636,244 Later than 2 years but not later than 5 years 7,618,810 6,326,558

Present value of minimum lease payables 17,134,562 14,463,146 Less: Amount due within 12 months (Note 31) (5,168,006) (4,500,344)

Amount due after 12 months (Note 31) 11,966,556 9,962,802

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41. FINANCIAl GuRANtEES AND CoNtINGENt lIAbIlItIES


unsecured Trade and performance guarantees extended to third parties 742,933,608 98,750,951 11,221,899 – Corporate gurantee(a) 98,223,500 – 98,223,500 – 172,517,108 98,750,951 109,445,399 –

(a) The Company has assessed the financial gurantee contract of RM98,223,500 and concluded that the gurantee is more likely not be called upon by the banks and accordingly not recognised as financial liability as at 31 December 2011. This is because the gurantee is collateralised by charges over its investments in its subsidiaries, GOM and KGL as disclosed in Note 31.

42. FAIR vAluE oF FINANCIAl INStRumENtS

A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

CARRyING FAIR NotE AmouNt vAluE Rm Rm

At 31 December 2011

Group

Financial assets: Amount due from State Government 24 1,235,792,181 1,113,064,385 Long-term receivables 24 234,090,883 233,339,254

Financial liabilities: Loans and borrowings - Obligations under finance lease 31 (17,134,562) (17,186,292) - Government Support Loan 31 (46,748,281) (40,136,884) - BAIDS 31 (1,016,379,299) (806,854,526) - JNA 31 (173,981,676) (159,173,702) - BAMTN 31 (2,049,007,301) (2,048,352,107) - RM410 million and RM250 million Term Loans 31 (659,974,712) (520,679,585) - Government Loan RM320.8 million 31 (320,800,000) (89,340,172) - Government Loan RM110.0 million 31 (7,377,817) (7,400,778) - RUBs 31 (479,216,984) (258,193,388) - RCULS 31 (22,477,060) (21,376,093) - Lushan MOF Novated World Bank Loan 31 (9,214,955) (8,697,637) - RPS 31 (611,593,249) (671,097,732) Trade and other payables - Long-term payables 32 (8,162,167) (7,952,094) Service concession obligations 16 (4,024,041,173) (1,772,887,494)


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42. FAIR vAluE oF FINANCIAl INStRumENtS (cont’d)

A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value (cont’d)

CARRyING FAIR NotE AmouNt vAluE Rm Rm

At 31 December 2011

Company

Financial assets: RCULS 20 265,958,665 139,875,761

At 31 December 2010

Group

Financial assets: Long-term receivables 24 284,706,684 285,858,351

Financial liabilities: Loans and borrowings - Obligations under finance lease 31 (14,463,146) (14,845,629) - Government Support Loan 31 (53,764,948) (45,237,940) - BAIDS 31 (1,016,311,210) (965,852,486) - RUN 31 (284,875,086) (358,921,644) - BAMTN 31 (2,038,214,663) (2,039,033,053) - RM410 million and RM250 million Term Loans 31 (659,974,712) (539,714,429) - Government Loan 31 (320,800,000) (89,789,364) - RUBs 31 (465,745,909) (338,106,289) - RCULS 31 (20,756,736) (21,921,205) - Lushan MOF Novated World Bank Loan 31 (6,844,867) (6,346,741) - RPS 31 (605,211,919) (563,773,516) Trade and other payables - Long-term payables 32 (9,794,600) (9,016,490) Service concession obligations 16 (4,170,240,532) (1,831,160,231) Company Financial assets: Junior Notes A 20 285,568,993 359,795,916 RCULS 21 254,152,376 140,827,136 Financial liabilities: Loans and borrowings (non-current) - RUN 31 (285,568,993) (359,795,916)


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b. Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

NotE

Other receivables (non-current) - Loans to associates 18 - Loans to fellow subsidiaries 24 Trade and other receivables (current) 24 Trade and other payables (current) 32 Trade and other payable (non-current) 32 Loans and borrowings (current) 31 Loans and borrowings (non-current) 31

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

C. Fair value hierarchy

Fair value of unquoted available-for-sale financial assets is estimated using appropriate valuation techniques.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2 : other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3 : techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data



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C. Fair value hierarchy (cont’d)

As at 31 December 2011, the Group held the following financial instrument at fair value in the statement of financial position:

31 DECEmbER 2011 lEvEl 1 lEvEl 2 lEvEl 3 Rm Rm Rm Rm

Assets measured at fair value

Available-for-sale investment 9,408,793 – 9,408,793 –

43. FINANCIAl RISK mANAGEmENt obJECtIvES AND PolICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.

The Board of Directors regularly reviews and agrees policies and procedures for the management of these risks.

The following sections provide details on the Group’s and Company’s exposure to the above mentioned financial risks and the objectives and policies for the management of these risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from Group’s receivables from water consumers and other receivables.

The Group’s exposure to credit risk is mainly by the individual characteristics of each customers. The Group has set up credit policies which monitors the outstanding balances owing by its water consumers.

For other financial assets (including other investments, cash and bank balances and short term fund) the Group minimises credit risk by dealing exclusively with high credit rated counterparties.

Credit risk concentration profile

At the reporting date, approximately:

- 80% (2010: 77%) of the Group’s trade and other receivables were due from 1 major customer.

As disclosed in Note 3.1(b), the Group has an amount owing by State Government in respect of tariff compensation in lieu of a tariff hike which was to take place with effect from 1 January 2009. Any late or non-repayment by the State Government may have an adverse impact on the cash flows and/or profit of the Group. SYABAS has taken legal action against the State Government as disclosed in Note 49(g) and Note 49(i).

In addition, the Group and its solicitors monitors closely on the status of legal proceedings against the Selangor State Government pertaining to water tariff compensation with the objective to expedite the lengthy process and to resolve the matter amicably, if possible.


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43. FINANCIAl RISK mANAGEmENt obJECtIvES AND PolICIES (cont’d)

(a) Credit risk (cont’d)

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 24. Deposits with banks and other financial institutions, other investment securities and short term funds that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 24.

(b) liquidity risk

Liquidity risk is the risk that the Group or Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.

The Group manages its liquidity risk by establishing budget with the view to ensuring that sufficient bank balances together with stand-by credit facilities to meet the obligations. In addition, the Group negotiate with financial institutions to reschedule and/or restructure the existing credit facilities to coincide with the present operating environment.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2011 oN DEmAND oR WIthIN oNE to ovER FIvE oNE yEAR FIvE yEARS yEARS totAl Group Rm Rm Rm Rm

Financial liabilities: Trade and other payables 1,387,291,014 1,395,858,364 1,632,433 2,784,781,811 Loans and borrowings 471,168,322 2,355,378,990 2,940,173,698 5,766,721,010 Service concession obligations 354,307,500 1,440,230,000 4,861,930,000 6,656,467,500

Total undiscounted financial liabilities 2,212,766,836 5,191,467,354 7,803,736,131 15,207,970,321



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43. FINANCIAl RISK mANAGEmENt obJECtIvES AND PolICIES (cont’d) (b) liquidity risk (cont’d) Analysis of financial instruments by remaining contractual maturities (cont’d)

2011 oN DEmAND oR WIthIN oNE to ovER FIvE oNE yEAR FIvE yEARS yEARS totAl Rm Rm Rm Rm

Company

Financial liabilities: Trade and other payables 249,872,615 – – 249,872,615

Total undiscounted financial liabilities 249,872,615 – – 249,872,615

2010 oN DEmAND oR WIthIN oNE to ovER FIvE oNE yEAR FIvE yEARS yEARS totAl Rm Rm Rm Rm

Group

Financial liabilities: Trade and other payables 1,662,607,522 6,529,733 3,264,867 1,672,402,122 Loans and borrowings 849,770,479 1,087,711,165 3,715,006,869 5,652,488,513 Service concession obligations 329,310,000 1,560,230,000 5,096,237,500 6,985,777,500

Total undiscounted financial liabilities 2,841,688,001 2,654,470,898 8,814,509,236 14,310,668,135

Company

Financial liabilities: Trade and other payables 35,872,702 – – 35,872,702 Loans and borrowings 285,568,993 – – 285,568,993

Total undiscounted financial liabilities 321,441,695 – – 321,441,695


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43. FINANCIAl RISK mANAGEmENt obJECtIvES AND PolICIES (cont’d) (c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

As at 31 December 2011, 99.9% (2010: 99.9%) of the Group’s borrowings carry fixed interest rates. The Group’s income and operating cash flows are therefore substantially independent of changes in market interest rates.

At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s profit net of tax would have been RM25,632(2010: RM708) higher/lower, arising mainly as a result of higher/lower interest expense on floating rate loans and borrowings, higher/lower interest income from floating rate loans to related parties. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group operates primarily in Malaysia but have operations in PRC. Thus, it is exposed to various currencies, mainly USD, SGD and RMB. Foreign currency denominated assets and liabilities together with expected cash flows from probable purchases and sales give rise to foreign exchange exposures.

Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

NEt FINANCIAl ASSEtS hElD IN NoN-FuNCtIoNAl CuRRENCIES SGD uSD totAl FuNCtIoNAl CuRRENCy oF GRouP ComPANIES Rm Rm Rm

At 31 December 2011 USD 81,846 1,542,499 1,624,345 RMB – 9,240,808 9,240,808

81,846 10,783,307 10,865,153



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43. FINANCIAl RISK mANAGEmENt obJECtIvES AND PolICIES (cont’d) (d) Foreign currency risk (cont’d)

NEt FINANCIAl ASSEtS hElD IN NoN-FuNCtIoNAl CuRRENCIES SGD uSD totAl FuNCtIoNAl CuRRENCy oF GRouP ComPANIES Rm Rm Rm

At 31 December 2010 RM 8,940,945 – 8,940,945 USD 208,669 1,751,777 1,960,446 RMB – 6,939,228 6,939,228

9,149,614 8,691,005 17,840,619 Sensitivity analysis for foreign currency risk

PRoFIt/(loSS) NEt oF tAx GRouP ComPANy 2011 2011 Rm Rm

SGD/USD - strengthened 2.8% (2,358) – - weakened 2.8% 2,358 – RMB/USD - strengthened 0.03% 1,970 – - weakened 0.03% (1,970) – USD/RM - strengthened 3.38% (2,975,574) 376,545 - weakened 3.38% 2,975,574 (376,545)

(e) market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of change in market prices (other than interest or exchange rates). The objective of market risk management is to manage and control market risk exposure within the acceptable parameters, while optimising the return.

The Group is exposed to non equity price risk arising from its investment in unit trust instruments. These instruments are classified as short term funds.

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44. CAPItAl mANAGEmENt

The primary objective of the Group’s capital management is to support the Group’s growth strategy and maximise shareholder value with optimal capital structure.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To adjust the capital structure, the Group does not recommend any dividend for the financial year ended 31 December 2011 with the view to conserve its financial resources.

From time to time, the Group purchases its own shares from the market, the timing of these purchase depends on market prices and availability of financial resources.

The Company and its subsidiaries are not subject to externally imposed capital requirements other than certain subsidiaries which are required to maintain certain ratios for the purpose of declaring and payment of dividend.

The Group manages capital using a gearing ratio, which is net debt divided by total capital being the equity attributable to equity holders of the Company plus net debt. The Group includes with in net debts, loans and borrowings, trade and other payables and service concession obligations less cash and bank balance.

At year end, the Group has a net debt of RM11,006,669,590 (2010: RM10,232,830,747) and a total capital of RM11,113,774,316

(2010: RM10,279,304,495) giving rise to a gearing ratio of approximately 99% (2010: 100%).

45. DIvIDENDS

GRouP AND ComPANy 2011 2010 Rm Rm

Recognised during the financial year:

Dividends on ordinary shares: - Final single tier dividend for 2011: 10 sen (2010: 10 sen) per share – 40,910,609

The directors do not recommend any payment of dividend for the current financial year.


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46. SEGmENt INFoRmAtIoN

Segmental analysis is not presented as the Group is primarily involved in the operation, maintenance, construction, rehabilitation and refurbishment of water treatment facilities and the supply and distribution of treated water to consumers in the Distribution Area. The Group operates principally in Malaysia and the overseas business segments are insignificant to the Group.

PER CoNSolIDAtED WAtER WAtER holDING oIl CoN- FINANCIAl DIStRIbutIoN tREAtmENt ComPANy AND GAS StRuCtIoN othERS ElImINAtIoN NotES StAtEmENt 2011 2011 2011 2011 2011 2011 2011 2011 Rm Rm Rm Rm Rm Rm Rm Rm

operating Revenue

Sales to external customers 1,991,048,307 – – 289,529,044 310,931,740 – – 2,591,509,091 Inter-segment sales – 522,891,400 – – 198,249 – (523,089,649) A –

1,991,048,307 522,891,400 – 289,529,044 311,129,989 – (523,089,649) 2,591,509,091

Other income 135,049,092 303,969,840 79,980,818 5,597,181 – 252,369 (204,749,822) A 320,099,478

2,126,097,399 826,861,240 79,980,818 295,126,225 311,129,989 252,369 2,911,608,569 Operating expenses (1,838,928,990) (309,693,940) (21,204,990) (275,332,873) (277,683,709) 549,876,684 A (2,172,967,818)

Share of results - Associates 3,172 3,172 - Joint venture (203,235) (203,235)

Depreciation and amortisation (160,764,339) (14,143,616) (774,563) (212,407) – (410,842) (176,305,767)

Segment results 126,404,070 503,023,684 58,001,265 19,580,945 33,446,280 (358,536) 562,134,921

Finance cost (624,459,577)

Profit before tax (62,324,656)

Assets and liabilities

Investment in associates 45,415 (1,429) 43,986 Segment assets 10,148,772,446 3,301,778,708 1,222,631,143 309,073,227 – 28,481,961 (2,808,362,393) B 12,202,375,092

10,148,772,446 3,301,778,708 1,222,676,558 309,073,227 – 28,481,961 12,202,419,078 Unallocated assets 425,850,203 Total assets 12,628,269,281

Segment liabilities 12,672,701,129 1,824,494,408 249,872,615 321,206,467 – 195,363,154 (2,680,224,467) C 12,583,413,306 Unallocated liabilities 27,434,086

Total liabilities 12,610,847,392


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46. SEGmENt INFoRmAtIoN (cont’d)

PER CoNSolIDAtED WAtER WAtER holDING oIl CoN- FINANCIAl DIStRIbutIoN tREAtmENt ComPANy AND GAS StRuCtIoN othERS ElImINAtIoN NotES StAtEmENt 2010 2010 2010 2010 2010 2010 2010 2010 (REStAtED) (REStAtED) (REStAtED) (REStAtED) (REStAtED) (REStAtED) Rm Rm Rm Rm Rm Rm Rm Rm

operating Revenue

Sales to external customers 1,907,101,643 – – – 148,421,451 – – 2,055,523,094 Inter-segment sales - 507,406,516 – – 689,074 – (508,095,590) A –

1,907,101,643 507,406,516 – – 149,110,525 – (508,095,590) 2,055,523,094

Other income 84,875,990 119,207,225 72,337,380 – – 89,930 (153,944,777) A 122,565,748

1,991,977,633 626,613,741 72,337,380 – 149,110,525 89,930 2,178,088,842 Operating expenses (1,634,938,568) (257,014,474) (12,190,488) – (138,586,650) (11,718,170) 525,928,828 A (1,528,519,522)

Share of results - Associates (1,921) (1,921) - Joint venture (76,234) (76,234)

Depreciation and amortisation (150,878,209) (12,977,728) (850,844) – – (441,685) (165,148,466)

Segment results 206,160,856 356,621,539 59,296,048 – 10,523,875 (12,148,080) 484,342,699

Finance cost (593,001,037)

Profit before tax (108,658,338)

Assets and liabilities

Investment in associates – – 44,339 – – - (4,601) 39,738 Segment assets 9,586,116,247 2,939,701,412 1,275,252,477 – – 27,942,276 (2,398,498,283) B 11,430,514,129

9,586,116,247 2,939,701,412 1,275,296,816 – – 27,942,276 11,430,553,867 Unallocated assets 400,199,902 Total assets 11,830,753,769

Segment liabilities 11,658,161,513 1,861,492,811 321,441,695 – – 174,333,486 (2,261,127,673) C 11,754,301,832 Unallocated liabilities 14,155,744

Total liabilities 11,768,457,576


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46. SEGmENt INFoRmAtIoN (cont’d)

Nature of adjustments and elimination to arrive at amounts reported in the Notes consolidated financial statements

A Inter-segment revenues and expenses are eliminated on consolidation. B The following items are added to/(deducted from) segment assets to arrive at total assets reported in the

consolidated statement of financial position:

2011 2010 (REStAtED) NotE Rm Rm Investment in RCULS 21 (265,958,665) (254,152,376) Inter group intercompany balances elimination (2,588,190,736) (1,904,774,237) Investment in subsidiaries 17 (463,118,040) (463,110,960) Goodwill on consolidation 507,653,077 507,653,077 Investment in Junior Notes A 20(a) – (285,568,993) Reversal of impairment loss in joint venture at group level 1,251,971 1,455,206

(2,808,362,393) (2,398,498,283) C The following items are added to/(deducted from) segment liabilities to arrive at total liabilities reported in the

consolidated statement of financial position:

2011 2010 NotE Rm Rm Investment in Junior Notes A 20(a) – (285,568,993) Investment in RCULS (156,093,250) (144,286,962) Inter group intercompany balances (2,588,190,736) (1,904,774,237) Investment in RUBs 64,059,519 73,502,519

(2,680,224,467) (2,261,127,673)

47. SIGNIFICANt EvENtS

(a) Both PNSB and SYABAS had each received new conditional offers from State Government on 6 January 2011 as follows:

i) PNSB

- Offer price for each ordinary share is RM64.62 per share

- Offer price for each Cumulative Convertible Redeemable Preference Share (“CCRPS”) is RM1.00 for each CCRPS

- Based on the above, the total value offered for the ordinary share and CCRPS in issue as at 31 December 2009 is RM646.2 million and RM48 million respectively.

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47. SIGNIFICANt EvENtS (cont’d)

(a) Both PNSB and SYABAS had each received new conditional offers from State Government on 6 January 2011 as follows: (cont’d)

ii) SYABAS

- Offer price for each ordinary share is RM20.78 per share

- Offer price for each RCULS is RM1.00 for each RCULS

- Based on the above, the total value offered for the ordinary share and RCULS in issue as at 31 December 2009 is RM103.91 million and RM245.0 million respectively.

The offers include the take over of all liabilities of PNSB and SYABAS as at 31 December 2009 subject to negotiation and due diligence.

The Company had sought clarification and confirmation on certain terms. The contents of the reply by State Government did not fully address the issues and concerns raised by PNSB and SYABAS.

The Conditional Offer for PNSB and Conditional Offer for SYABAS (“Conditional Offers”) are, inter alia, conditional upon the Menteri Besar Selangor Incorporated (“MBI”) having, by virtue of acceptance of the Concurrent Offers, acquired or unconditionally contracted to acquire:

i) no less than 100% of the voting shares in SPLASH and ABASS; and

ii) no less than 100% of the ABASS RCPS.

Following the decision made by SPLASH not to accept the Conditional Offer from MBI to acquire all the voting shares in SPLASH, the Company is of the opinion that the Conditional Offers are therefore deemed to have lapsed with no further action to be taken by PNSB and SYABAS respectively.

(b) SYABAS had on 22 February 2011 entered into a MoU with National Institute of Occupational Safety and Health (“NIOSH”)

to establish an arrangement to develop a comprehensive safety training and assessment programme, namely the Occupational Safety and Health – SYABAS NIOSH Safety Card (“OSH - SNSC”) training for SYABAS’ Contractors’ Workers, leading to the award of SYABAS NIOSH Safety Card for SYABAS’ Contractors’ Workers.

The MoU sets out the guidelines on the collaboration between SYABAS and NIOSH on OSH - SNSC training and

assessment programmes for SYABAS Contractors’ Workers and will enable SYABAS to comply with the provision of Section 15(2)(e) of the Occupational Safety & Health Act 1994.

The MoU is valid for a period of two (2) years from the date of execution and may be extended for another two (2) years

or terminated by mutual consent of SYABAS and NIOSH.



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47. SIGNIFICANt EvENtS (cont’d) (c) SYABAS entered into a MoU dated 26 February 2009 with Construction Industry Development Board (“CIDB”) in

respect of the provision of training and development programmes by CIDB to the Bumiputra contractors, suppliers and consultants registered with SYABAS for a period of two (2) years. On 7 March 2011, both parties mutually agreed to extend the duration of the MoU for a further period of two (2) years from 26 February 2011 to 25 February 2013 and all other terms and conditions of the MoU remain unchanged.

(d) The Company had on 10 March 2011, acquired Nine Thousand Nine Hundred and Ninety Nine (9,999) Equity shares of Rs.10/- each (Rupees Ten) only in Puncak Niaga Infrastructures & Projects Private Limited [Corporate Identity Number : U45200TN2011PTC079556] (“PNIP Pte Ltd”), representing 99.99% of the total issued and paid-up share capital of PNIP Pte Ltd at a cash consideration of Rs.99,990/- (Rupees Ninety Nine Thousand Nine Hundred and Ninety) only (the “Acquisition”).

PNIP Pte Ltd was incorporated on 10 March 2011 as a private company limited by shares in India under the Indian Companies Act, 1956 (No 1 of 1956). PNIP Pte Ltd is currently dormant and has a paid up share capital of Rs. 1,00,000 (Rupees One Lakh) only divided into 10,000 (Ten Thousand) Equity shares of Rs.10/- each (Rupees Ten) only.

With the Acquisition, PNIP Pte Ltd has become a 99.99% owned subsidiary of Puncak on 10 March 2011 with the remaining 0.01% being held by Ir Tan Hui Kuan, with beneficial holding vesting with the Company. The intended activities of PNIP Pte Ltd is to carry out activities of infrastructures, constructions and other projects in India.

The Acquisition is to facilitate the Group’s future expansion plans to pursue business developments efforts to secure new businesses in India.

(e) Pursuant to the Collaboration Agreement dated 15 March 2007, Puncak Research and DHI have mutually agreed to extend the Collaboration Agreement for a further period of two (2) years, commencing 15 March 2011 until 14 March 2013 (“Extension”) and that save and except for the Extension, all other terms and conditions of the Collaboration Agreement remain unchanged.

(f) The Company had on 15 March 2011 entered into a MoU with an Indian company namely, Ramky Infrastructure Limited (“RIL”) (the Company and RIL to be collectively referred to as “the Parties”) to collaborate with each other on the basis of mutual exclusivity in an unincorporated joint venture to source for potential water and water related projects in India.

The salient terms of the MoU are as follows:

(i) Purpose Of MoU The MoU sets out the Parties’ respective rights and obligations in the joint participation on the basis of mutual

exclusivity in an unincorporated joint venture known as RIL-PNHB Joint Venture (“JV”) with RIL being the Lead Partner, to source for potential water and water related projects in India, to submit the relevant proposal for the Project(s) and to jointly implement the Project(s) if awarded the same by the relevant authorities.

The actual percentage of participation and interest of the JV to be decided mutually on a case to case basis for each individual Project.


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47. SIGNIFICANt EvENtS (cont’d) The salient terms of the MoU are as follows: (cont’d)

(ii) Validity

The MoU takes immediate effect and is valid for a period of twelve (12) months from the date of the MoU thereof, unless extended by mutual agreement of the Parties.

The MoU with RIL had lapsed on 14 March 2012.

(g) SYABAS had on 15 March 2011 entered into a Software Maintenance and Support Agreement (“SMSA”) with Crowder & Co. Ltd (“Crowder”), a UK based company whereby Crowder will supply and license SYABAS to use the Netbase Water Distribution Management System software as well as to provide maintenance and support services (“the Netbase Management System”).

The salient information of the SMSA:

(i) Purpose of SMSA The SMSA sets out the terms and conditions for Crowder to supply to SYABAS the Netbase Management System

together with a License to use the Netbase Management System and for the provision of maintenance and support services, CrowderCover.

(ii) Validity

The SMSA shall commence on 15 March 2011 and expires on 31 December 2013.

The SMSA enables SYABAS to employ the latest leading edge technology in monitoring and managing the non revenue water (“NRW”) for the benefit of the consumers in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya.



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(h) On 6 April 2011, Malaysian Rating Corporation Berhad (“MARC”) had taken various rating actions on the Selangor water sector issuers, including the rating actions against the Company and its wholly owned and 70% owned subsidiaries, namely PNSB and SYABAS respectively (the Company, PNSB and SYABAS to be hereinafter collectively referred to as the “Group”) which had resulted in the following changes to the ratings for the Group’s debt:-

mINImum PREvIouS CuRRENt RAtING IN ISSuER ISSuE RAtING RAtING tRuSt

The Company RM546.88 million Redeemable, Secured, A- BB+ BBB- Coupon Bearing Notes 2001/2016 (“RUNs”) PNSB RM1.02 billion Bai Bithaman Ajil Islamic A+ BBB A- Debt Securities (“BaIDS”)

RM546.88 million Redeemable Unsecured A- BB+ N/A Coupon Bearing Notes 2001/2016 (“A Notes”)

RM435.0 million Redeemable Unsecured A- BB+ BBB- Bonds (“RUBS”)

SYABAS RM3.0 billion Bai Bithaman Ajil Medium A+ BBB N/A Term Notes (“BBA MTN”)

The rating actions by MARC had resulted in the rating of some of the Group’s debt to fall below the minimum rating under their respective trust deeds. While the current rating prevails, an Event of Default (as defined in the respective trust deeds) exists on some of the Group’s debt wherein the revised rating is below the minimum level. If allowed to remain, further action (if any) by the respective bondholders could result in a default on the Group’s debt obligations.

The Management of the Group had upon consultation with its legal counsel and certain major bondholders of the Group, decided to call for the respective bondholders meeting of the Company and PNSB to seek for certain waivers from the bondholders to address the current situation. The bondholders has agreed to waive the rating requirements for PNSB’s BAIDS and RUBS.

On 10 August 2011, via special resolution passed, Acqua has agreed to waive their right to declare an Event Default and also to remove the rating requirement for the Bonds to be rated by MARC or any other rating agencies.

(i) Puncak Oil & Gas Sdn Bhd (“POG”), a wholly owned subsidiary of the Company, had on 23 May 2011 entered into two (2) separate Sale and Purchase Agreements with Global International Vessels Ltd (“GIVL”), a corporation incorporated in Cayman Islands for the acquisition of 40% equity interest in GOM Resources (“GOM SPA”) and KGL (“KGL SPA”) respectively represented by 300,000 ordinary shares of RM1.00 each in GOM and 80,000 ordinary shares of USD1.00 each in KGL for a cash consideration of USD8,400,000.00 (equivalent to approximately RM25,200,000) and USD15,200,000.00 (equivalent to approximately RM45,600,000) respectively (“Acquisition”). The acquisition were completed on 30 June 2011.


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Under the GOM-Global Asia Pacific Industries Sdn Bhd (“GAPI”) Option, GOM-GIVL Option and KGL-GIVL Option respectively, POG shall have a call option to purchase the remaining sixty percent (60%) of the equity interest in GOM from GAPI and GIVL and in KGL from GIVL, respectively (the “60% Shares”), within one (1) year from the completion of POG’s acquisition of the 40% Shares (“POG Call Option Period”) at the same price per share as the 40% Shares, which in total amount to United States Dollars Thirty Five Million Four Hundred Thousand only (USD35,400,000) (equivalent to approximately RM106.2 million).

On 23 September 2011, POG exercised the call option agreement to acquire the remaining 60% equity interest in GOM Resources and KGL respectively which were completed on 28 September 2011. With the completion, both GOM Resources and KGL are now wholly-owned subsidiaries of POG. The acquisitions have been completed in the current financial year as further described in Note 17(b) and Note 17(c) to the financial statements.

(j) The Company via a 40 : 60 unincorporated joint venture with Quality Concrete Holdings Berhad, namely “Konsortium Puncak Niaga Holdings Bhd – Quality Concrete” had on 23 May 2011 signed a contract for “Rural Water Supply Project In The State Of Sarawak For Years 2010 To 2012” with the Government of Malaysia (“Contract”) at a contract sum of RM667,320,000.

(k) The Company had on 19 April 2011 acquired a 55% stake in Reputable Collection Sdn Bhd (Company No. 927127-M) (“RCSB”) via a subscription of fifty five (55) new ordinary shares of RM1.00 each in RCSB for a total cash consideration of Ringgit Malaysia Fifty Five (RM55.00) only thereby resulting in RCSB becoming a 55% owned subsidiary of the Company on 19 April 2011. RCSB was incorporated on 27 December 2010.

Concurrently, RCSB had acquired a 62.5% stake in Jalinan Handal Sdn Bhd (Company No. 939200-M) (“JHSB”) via a subscription of six hundred and twenty five (625) new ordinary shares of RM1.00 each in JHSB for a total cash consideration of Ringgit Malaysia Six Hundred And Twenty Five (RM625.00) only thereby resulting in JHSB becoming a subsidiary of RCSB on 19 April 2011. JHSB was incorporated on 5 April 2011.

The Company had on 2 June 2011 disposed its entire 55% stake in RCSB comprising fifty five (55) ordinary shares of RM1.00 each in RCSB at a cash consideration of Ringgit Malaysia Fifty Five (RM55.00) only to Rides Star Sdn Bhd (Company No. 232275-H) (“Disposal”).

Following the Disposal on 2 June 2011, JHSB, a 62.5% subsidiary of RCSB also ceased to be a subsidiary of RCSB.

(l) The Company was notified on 26 July 2011 by Luwei Co. Ltd that the regulatory authorities of the People’s Republic of China had issued the “Enterprise Legal Representative Business Licence” dated 25 July 2011 approving the increase of the paid up registered capital of Luwei Co. Ltd to USD5,400,000.00 from USD3,870,000.00 previously. Luwei Co. Ltd is now a 91.34% owned subsidiary of SINO Water with a total investment of USD4,932,500.

(m) On 23 September 2011, the Company’s wholly-owned subsidiary, Puncak Oil & Gas Sdn Bhd accepted a Syndicated 1-month Foreign Currency Term Loan amounting to USD31.0 million from OCBC Bank (Malaysia) Bhd and Hong Leong Bank Bhd (“Lenders”) which was subsequently extended on monthly basis, up to 27 April 2012.



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(n) On 17 October 2011, SYABAS entered into the Loan Facility Agreement and Deed of Assignment with the Government of Malaysia (“Federal Government”) in respect of a loan facility of RM110.0 million granted to SYABAS by the Federal Government (“Government Loan”).

(o) Following the issuance by the Company of the Notice of Reminder to the Noteholders on Their Rights To Exercise The

Put Option Pursuant To The Trust Deed dated 5 September 2001 (“Trust Deed”) Constituting The Notes on 13 September 2011 (“Put Option Exercise”) and based on the Outcome of the Put Option Exercise whereby as at 18 October 2011, 468 Noteholders holding 515,488,256 Notes (94.26%) have exercised the Put Option Exercise as set out in the Reminder Notice:-

(i) On 24 October 2011, the Company had issued a Circular to Noteholders In Relation To The Suspension Of Trading For The Notes And The Withdrawal Of The Notes From The Official List of Bursa Malaysia Securities Bhd Upon The Completion Of The Call Option Exercise (As Provided Pursuant To Clause 7.2 of the Trust Deed.)

(ii) On 2 November 2011, the Company had issued the Notice of Call Option to the Noteholders of the RM546,875,000 nominal value of 15-Years Redeemable Unconvertible Notes (“Notes”) (Noteholders”) on the Company’s intention and rights to exercise the call option to redeem the outstanding notes amounting to 31,386,744 Notes (5.74%) which are not already the subject of the exercise by the Noteholders pursuant to the Put Option.

(iii) Upon completion of the Put Option and Call Option Exercise on 18 November 2011, the Company’s Notes had been withdrawn from the Official List of Bursa Malaysia Securities Berhad on Monday, 21 November 2011 at 9.00 am.

(p) On 1 November 2011, the POG’s wholly-owned subsidiary, GOM Resources had accepted the Credit Facilities from OCBC Bank (Malaysia) Bhd and Hong Leong Bank Bhd comprising:-

(i) USD Revolving Credit (“RC”) Facility and Letter of Credit (“LC”) Facility, collectively up to USD43,887,147 only (with a sub-limit of RM20,000,000 in respect of the LC Facility);

(ii) Bank Guarantee (“BG”) Facility, up to RM50.0 million; and

(iii) Foreign Currency Exchange Line (“FX”) Facility, up to RM95.0 million (which is reflected as credit risk equivalent of RM9.95 million as per the Facility Agreement).

(q) On 1 November 2011, the Company entered into a conditional Sales & Purchase Agreement with Acqua SPV Berhad (“Aqua”) and PNSB to sell its entire holdings of PNSB Redeemable, Unsecured, Coupon Bearing Notes of up to RM328,125,000 of nominal outstanding value at a total consideration of RM328,125,000 (“Sale”). The outstanding principal amount includes in the fifth mandatory partial redemption repayment of RM54,687,500. The sale was completed on 18 November 2011.

(r) Freehold land, leasehold land and buildings have been revalued at 31 December 2011 based on valuations performed by First Pacific Valuers Property Consultants Sdn Bhd. The valuations are based on the comparison or contractor’s method that makes reference to similar properties which have been sold.


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48. EvENtS oCCuRRING AFtER thE REPoRtING DAtE

(a) On 8 February 2012, the Companies Commission of Malaysia had approved the change of name of the POG’s subsidiary, Global Offshore Malaysia Sdn Bhd.

(b) On 29 February 2012, KGL had secured a syndicated term loan facility of USD36 million from two local licensed banks. The loan is scheduled to be drawndown in April 2012.

The said loan is to be secured by first ship mortgage over the Group’s construction vessel, a corporate guarantee from the Company and a letter of undertaking by a director of the Company to provide a personal guarantee subject to certain terms and conditions

(c) On 16 April 2012, Acqua’ a special purpose vehicle set up by Pengurusan Aset Air Bhd (“PAAB”) made an offer to restructure the outstanding borrowings of PNSB which comprise:-

(i) RM1,020,000,000 nominal value Al’ Bai Bithaman Ajil secured serial primary bonds together with non-detachable secondary bonds (“BAIDS”);

(ii) RM435,000,000 nominal value redeemable unsecured bonds (“RUBs”); and

(iii) RM546,875,000 nominal value redeemable unsecured coupon bearing notes (“Junior Notes A”)

On 26 April 2012, PNSB has approved the acceptance of the offer and has authorised management to negotiate the yield spreads on the Bonds on a best effort as well as to execute all relevant documents.

49. mAtERIAl lItIGAtIoNS

(a) Konajaya

On 2 July 2003, Konajaya filed a suit against PUAS. PUAS called on a bank guarantee and demanded the bank (the issuer of the guarantee) to pay PUAS a sum of RM4,895,160 being the amount of a bank guarantee associated to a contract. On 12 March 2004, an inter-partes injunction was granted to Konajaya to stop the bank from honouring the bank guarantee.

The Court of Appeal had on 10 November 2008 directed that the Originating Summons be heard and disposed off as the appeal to the Court of Appeal is now academic and hearing the merits of the grant of the interim injunction will not resolve the issue at hand. The parties had been directed to proceed to apply to the High Court for a date for the hearing and final disposal of the Originating Summons.

The High Court had fixed and heard the matter inter-partes on 4 February 2009 as directed by the Court of Appeal

for purpose of deciding on the setting-aside or the vacating of the interim injunction order of the High Court dated 12 March 2004 restraining PUAS from calling on the Bank Guarantee given by Konajaya. The High Court had delivered its decision by awarding a permanent injunction in place of the interim injunction restraining PUAS from calling on the Guarantee.



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49. mAtERIAl lItIGAtIoNS (cont’d)

(a) Konajaya (cont’d) Pursuant to the solicitors’ advice, PUAS had instructed its solicitors to file an appeal on the decision of 4 February

2009 and to consolidate this with the previous appeal. The Notice of Appeal had been filed in the Court of Appeal on 25 February 2009 and the Record of Appeal had been filed in the Court of Appeal on 28 April 2009.

The Court of Appeal had on 29 October 2009 dismissed PUAS’s appeals with cost.

PUAS’s application for leave to appeal to the Federal Court against the decision of the Court of Appeal in dismissing PUAS’s appeals with costs and the case management for the second appeal on the declaration in the Originating Summons was fixed for hearing on 5 April 2010. At the hearing on 5 April 2010, PUAS’s application was dismissed with cost of RM15,000.00.

The legal process had therefore been exhausted with the decision made by the Federal Court on 5 April 2010.

(b) KhEC

(i) The First Arbitration Proceedings

KHEC, a sub-contractor for the Chennai Water Supply Augmentation Project 1 - Package III (“Chennai Project”), has initially referred certain disputed claims totalling Rs8,44,26,981 (equivalent to approximately RM6.75 million) against PNHB-LANCO-KHEC JV (“the Consortium”), a jointly controlled entity of the Company in India.

Arising from the arbitration proceedings initiated by KHEC, both KHEC and the Consortium have each appointed a qualified civil engineer as their arbitrator respectively, and both arbitrators have selected a retired Judge of the High Court in Chennai, India as the third arbitrator who will also act as the presiding arbitrator of the arbitral tribunal. The arbitral tribunal was officially constituted on 24 September 2005. On 28 September 2005, the Company was informed that the arbitral tribunal has fixed the following dates for the filing of the arbitration cause papers as part of the preliminary procedural formalities:

(i) claim by the claimant, KHEC to be filed before 4 October 2005;

(ii) rejoinder by the respondent, the Consortium to be filed before 18 November 2005; and

(iii) reply rejoinder by the claimant, KHEC to be filed before 5 December 2005.

The Consortium had on 2 January 2006, filed its counter-claim amounting to Rs13,61,61,931 (equivalent to approximately RM10.89 million) against KHEC’s claim of Rs8,44,26,981 (equivalent to approximately RM6.75 million) to the arbitral tribunal in India.

The Statement of Claim lodged by KHEC had subsequently been revised from Rs8,44,26,981 (equivalent to approximately RM6.75 million) to Rs9,84,58,245 (equivalent to approximately RM7.88 million) whilst the counter-claim submitted by the Consortium, had also been revised as per the rejoinder, from Rs13,61,61,931 (equivalent to approximately RM10.89 million) to Rs13,63,39,505 (equivalent to approximately RM10.91 million).


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(b) KhEC (cont’d)

(i) The First Arbitration Proceedings (cont’d) The Company was notified on 4 March 2009 by solicitors acting on behalf of Consortium that the Arbitration Panel

had at its meeting held on 26 February 2009 accepted the letter of withdrawal from the Arbitration Panel dated 18 February 2009 from the arbitrator nominated by KHEC. As such, the date for further meeting of the Arbitration Panel was a to communicated after the appointment of the substitute arbitrator to be nominated by KHEC under Section 15(2) of the Arbitration and Conciliation Act, 1996 of India.

The Company was notified on 25 June 2009 that the first sitting of the newly formed Arbitration Panel for the First Arbitration Proceedings comprising the Presiding Arbitrator, the arbitrator nominated by the Consortium and the substitute arbitrator nominated by KHEC was held on 20 June 2009.

Based on legal advice, the Consortium is of the view that the claim by KHEC is not sustainable. The Arbitration proceedings is currently ongoing in India.

(ii) The Second Arbitration Proceedings

KHEC had commenced a second arbitration proceedings against the PNHB-Lanco members of the Consortium (“the Second Arbitration”) on the basis of the terms of the JVA dated 13 February 2003 and the Supplemental Agreement to the JVA dated 26 March 2003 respectively, entered into between the Company, Lanco Infratech Limited and KHEC whereby KHEC is claiming for loss of profit (inclusive of interest and other cost) amounting to Rs5,44,32,916 (equivalent to approximately RM4.35 million) as they allege that they, despite being a 10% shareowner, received only 4.31% out of the total value of the contract works of the Chennai Project.

The Second Arbitration is being heard by a single arbitrator.

Based on legal advice, PNHB-Lanco members of the Consortium are of the view that it has a good case of defending the claim. The Second Arbitration proceedings is currently ongoing in India.

(c) AbASS

High Court Summons No: D-24NCC-41: 2009

On 5 October 2009, the solicitors of SYABAS were served with an Originating Summons dated 5 October 2009 (“Originating Summons”) from the solicitors acting for ABASS on 8 October 2009.

In the Originating Summons, ABASS sought for, inter alia, the following:

(i) A declaration that the Schedule of Bulk Supply Rates (“BSR”) as set out in the Table of Appendix 1 of the First Supplemental Agreement dated 10 February 2001 (“First Supplemental Agreement”) is to substitute the Schedule of BSR as set out in Table 1 at page 3 of Appendix 5 of the PCCA dated 9 December 2000;



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(c) AbASS (cont’d)

High Court Summons No: D-24NCC-41: 2009 (cont’d)

(ii) A declaration that save for the substitution above to Appendix 5 of the PCCA, the Principles on the Bulk Supply Charge Payment Mechanism (“BSC”), the formulas and calculations of BSC by taking into account of any variable costs of chemicals and electricity tariff and any additional costs as set out at pages 1 to 15 of Appendix 5 of the PCCA remain applicable and are valid, binding and effectual between the parties;

(iii) A declaration that the Addendum to the First Supplementary Agreement executed between the State Government and ABASS on 3 July 2008 is valid, binding and effectual between the parties;

(iv) A declaration that SYABAS is liable to pay to ABASS the full amount of the invoices relating to electricity cost for the period from June 2006 until December 2008 and that judgement be entered for ABASS for the total sum of RM7,410,113.25;

(v) A declaration that SYABAS is liable to pay to ABASS the short payment for electricity cost and purchase of water invoices for the period from January 2009 to April 2009 and that judgement be entered for Konsortium ABASS for the total sum of RM55,691,717.73;

(vi) General damages, interest, costs and such further or other order as deemed fit by the Court.

SYABAS’ solicitors had, on behalf of SYABAS, filed the Memorandum of Appearance to the Kuala Lumpur High Court on 14 October 2009.

The solicitors of SYABAS had, on 5 November 2009, filed an Affidavit in Reply to the Affidavit filed by ABASS in support of their Originating Summons.

SYABAS disputed the amount due and owing in the total sum of RM63,101,830.98 as claimed by ABASS in the Originating Summons.

SYABAS had been advised by its solicitors that the claim by Konsortium ABASS is without basis in law and on the facts and have accordingly prayed that the Originating Summons be dismissed with costs.

The High Court had on 7 May 2010 allowed ABASS’ Originating Summons on the following terms:

i) Judgment is entered in favour of ABASS against SYABAS in the amount of RM70,137,915.21 as at 31 March 2010 with judgment interest at 8% per annum on that amount from the date of judgment to the date of full settlement; and

ii) SYABAS to pay costs of RM20,000 to ABASS.


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(c) AbASS (cont’d)

SYABAS had, on 11 May 2010, filed the Notice of Appeal for the appeal to the Court of Appeal against the decision of the High Court made on 7 May 2010 against SYABAS. The Court of Appeal had on 6 August 2010 allowed SYABAS’ appeal with costs of RM20,000 and the Order of the High Court dated 7 May 2010 was set aside. At the mention held on 24 August 2010, the High Court had struck off SYABAS’ stay application with no order as to costs since the Court of Appeal had allowed SYABAS’ appeal on 6 August 2010.

Pursuant to the decision made by the Court of Appeal in allowing SYABAS’ appeal on 6 August 2010, ABASS had not applied for leave to appeal to the Federal Court within thirty (30) days from the said decision and as such, the case is closed.

(d) JAKS-KDEb

Kuala Lumpur High Court Suit No. D4-22-1452-2006

Both PUAS and SYABAS had been served with:

(i) A Writ of Summons and Statement of Claim dated 6 October 2006;

(ii) Ex-Parte Summons-in-Chambers dated 6 October 2006 (“Ex-Parte SIC”) and its supporting Affidavit affirmed on 6 October 2006;

(iii) Amended Statement of Claim filed on 18 October 2006; and

(iv) An Ex-Parte Injunction Order dated 18 October 2006 (“Ex-Parte Order”);

(hereinafter referred to as “the Suit”) in respect of the Suit, by the solicitors of JAKS-KDEB (the “Plaintiff”) on 19 October 2006.

JAKS-KDEB had commenced legal action against PUAS and SYABAS in respect of an agreement dated 25 October 2001 entered into between JAKS-KDEB and the State Government pertaining to the supply of pipes and fittings in the State of Selangor Darul Ehsan and the Federal Territories of Kuala Lumpur and Putrajaya.

Vide the Ex-Parte SIC, the Plaintiff prayed for the following:

(i) An order to immediately restrain PUAS and/or SYABAS whether by themselves, their agents, servants, directors, contractors, nominees and/or all related parties to PUAS and/or SYABAS and/or assignees and/or successors-in-title or otherwise howsoever by injunction, be restrained from purchasing and/or obtaining and/or being given and/or dealing with and/or receiving all its requirements for the pipes (which includes straight pipes whether whole or in cut lengths of any material including but not limited to mild steel pipes) and fittings (which includes tees, bends, tapes, tapers, collars, flange adaptors, blank flanges, mechanical joints and similar accessories) in respect of all water projects being carried out or to be carried out in the State of Selangor including the Federal Territories of Kuala Lumpur and Putrajaya from any other entities except from the Plaintiff until the disposal of the Plaintiff’s inter-parte application for an injunction;



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(d) JAKS-KDEb (cont’d)

Kuala Lumpur High Court Suit No. D4-22-1452-2006 (cont’d)

Vide the Ex-Parte SIC, the Plaintiff prayed for the following: (cont’d)

(ii) An order to immediately restrain PUAS and/or SYABAS whether by themselves, their agents, servants, directors, contractors, nominees and/or all related parties to PUAS and/or SYABAS and/or assignees and/or successors-in-title or otherwise howsoever by injunction, be restrained from taking any further steps in supplying and/or dealing with all of the above pipes and fittings and/or including negotiations and/or award of contracts with any other entities arising out of and in connection with the purchasing and/or obtaining and/or being given and/or receiving all of its requirements for pipes and fittings in respect of all water projects being carried out or to be carried out in the State of Selangor including the Federal Territories of Kuala Lumpur and Putrajaya until the disposal of the Plaintiff’s inter-parte application for an injunction;

(iii) Costs to be costs in the cause;

(iv) That a date be fixed for the inter-partes hearing of the Plaintiff’s application therein within 21 days from the date of the Ex-Parte Order; and

(v) Such further and other relief as the High Court deems fit.

The above prayers were allowed by the High Court on the application of the Plaintiff’s Ex-Parte SIC in the absence of PUAS and SYABAS or their Solicitors being present in High Court on 18 October 2006. The Plaintiff’s Ex-Parte Order was effective for a period of twenty-one (21) days from 18 October 2006 until the date of the inter-partes hearing which has been fixed on 7 November 2006.

PUAS and SYABAS deny and refute all allegations raised by the Plaintiff in the Suit and have instructed their Solicitors to file an application vide Summons in Chambers dated 1 November 2006 to set aside the Ex-Parte Order and to vigorously defend themselves against the Plaintiff’s claim on the day of the inter-partes hearing fixed on 7 November 2006.

At the hearing on 7 November 2006 (the “Hearing”), the High Court on the application of the Plaintiff’s Solicitors, allowed an adjournment of the Hearing to 17 November 2006 to enable the Plaintiff to prepare a reply affidavit to the affidavit filed by the State Government, the 3rd Defendant to the Suit. Subsequently, the Hearing was adjourned to 20 November 2006.

At the hearing on 20 November 2006, the High Court fixed 22 November 2006 as the date to give its decision on the Inter-Partes application for injunction. The High Court also ordered that no ad-interim order extending the Ex-Parte injunction would be granted for the period from 20 November until 22 November 2006. This means that for this period, SYABAS was free to obtain its pipe supply from any source.

At the hearing on 22 November 2006, the High Court did not grant the injunction order applied for by JAKS-KDEB and

instead proceeded to fix a date for the Case Management on 15 January 2007. However, the High Court had postponed the Case Management to 13 February 2007 and subsequently to 22 March 2007.


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On 22 March 2007, the High Court fixed the Case Management for mention on 4 April 2007. The application by JAKS-KDEB for Discovery against PUAS and SYABAS and Inspection of SYABAS Concession Agreement was also heard on 22 March 2007 and a decision was fixed for hearing on 4 April 2007. At the hearing on 4 April 2007, the High Court allowed the application for Discovery by JAKS-KDEB against PUAS and SYABAS and accordingly, ordered the discovery and inspection of SYABAS Concession Agreement.

Upon consultation with its solicitors on the prospect of filing an appeal, SYABAS has instructed its solicitors to proceed to file an appeal with the Court of Appeal. The appeal was subsequently filed in the Court of Appeal on 3 May 2007. At the hearing on 15 July 2008 at the Court of Appeal, the Court of Appeal has dismissed SYABAS’ appeal against the Order for Discovery by the High Court dated 4 April 2007 ordering disclosure of the Concession Agreement with costs. SYABAS had instructed its solicitors not to proceed with further appeal to the Federal Court. The decision was based primarily on the fact that the Federal Government and State Government did not object to the disclosure of the Concession Agreement at the High Court.

At the hearing on 3 October 2007, the High Court had allowed the application to amend the Statement of Defence, with costs and ancillary costs to be borne by PUAS and SYABAS.

In view of the dissolution of Jabatan Kawalselia Air Selangor (“JKAS”) previously being the recipient of the written notification and written report as stated in High Court Order dated 22 November 2006, SYABAS had instructed its solicitors to file an application in the High Court to amend the said Order by replacing JKAS as the recipient with Suruhanjaya Perkhidmatan Air Negara (“SPAN”) and the said application which was fixed for Hearing on 20 April 2009 was subsequently postponed to 19 May 2009 and 25 June 2009.

The High Court had on 6 July 2009 fixed the Hearing of the First and Second Defendants’ application to amend the High Court Order dated 22 November 2006 to 22 July 2009. The High Court had directed the Plaintiff to file a further Affidavit to state that the Plaintiff intends to add the State Government in the Order in view that the application is only in respect of amending the entity to SPAN.

On 22 July 2009, the High Court had at the Hearing of the First and Second Defendants’ application to amend the High

Court Order dated 22 November 2006 allowed the addition of the words “dan/atau Kerajaan Negeri Selangor” to be added in the Order together with the word “SPAN”. The addition was requested by the Plaintiff and consented by the Selangor State Legal Advisor, representing the 3rd Defendant.

The High Court had subsequently adjourned the matter for Hearing on 30 October 2009 as the 3rd Defendant intends

to oppose the Plaintiff’s application to amend the Statement of Claim. The Hearing was adjourned to 12 November 2009 to enable the 3rd Defendant to file its Affidavit in Reply to the Plaintiff’s Affidavit in Reply. At the Hearing held on 12 November 2009 for the Plaintiff’s application to amend the Statement of Claim, the High Court had fixed the matter for decision on 18 November 2009. At the Case Management held on 18 November 2009, the High Court had allowed the Plaintiff’s application to amend the Statement of Claim and fixed the matter for further Case Management on 12 January 2010. In response, SYABAS has then filed the Amended Statement of Defence on 22 January 2010 and the matter was fixed for further Case Management on 25 March 2010.



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At the Case Management held on 25 March 2010, the High Court adjourned the matter to 5 April 2010 for mention to ascertain whether the matter can proceed by the way of mediation. On 5 April 2010, the High Court had adjourned the matter to 10 May 2010 for Case Management to enable the parties to comply with the High Court’s directions and to fix the matter for trial since the parties were not agreeable to mediate. Further Case Management was held on 4 June 2010 and 4 August 2010 and the next Case Management was fixed on 29 September 2010. The High Court had subsequently adjourned the matter for Hearing on 12 October 2010 with trial date been tentatively fixed on 16 October 2010 and 17 October 2010 subject to reconfirmation at the next Case Management date. At the Case Management held on 12 October 2010, the High Court had fixed the trial dates on 16 December 2010, 17 December 2010, 20 January 2011 and 21 January 2011. The oral submissions will be heard on 24 January 2011 and 25 January 2011.

At the hearing on 17 December 2010, the High Court had vacated the trial date on 20 January 2011 and fixed new trial dates on 28 March 2011 to 31 March 2011. The trial date fixed on 21 January 2011 and the oral submissions dates fixed on 24 January 2011 and 25 January 2011 remain unchanged.

At the trial held on 21 January 2011, the High Court had vacated the dates previously fixed for the oral submissions on 24 January 2011 and 25 January 2011 and fixed additional dates for continued trials on 24 January 2011, 25 January 2011 and 26 January 2011. The trial dates previously fixed on 28 March 2011 to 31 March 2011 remain unchanged. At the trial held on 28 March 2011, the High Court vacated the dates on 30 March 2011 and 31 March 2011. The trial dates on 28 March 2011 and 29 March 2011 remain unchanged. The matter was fixed for further full trial on 5 May 2011, 6 May 2011, 20 May 2011, 8 June 2011, 9 June 2011 and 10 June 2011. Since the trial concluded on 9 June 2011, the trial fixed for 10 June 2011 was vacated and the matter was fixed for decision on 12 September 2011.

The High Court had on 12 Sept 2011 postponed the decision date for the matter to 5 October 2011 as post-trial submissions only closed on 9 September 2011. On 5 October 2011, the High Court had dismissed the plaintiff’s claim against the Defendants which include PUAS and SYABAS. On 3 November 2011, JAKS-KDEB had filed a Notice of Appeal to the Court of Appeal against the decision by the High Court on 5 October 2011.

(e) ADP-PJI Joint venture (“ADP-PJI Jv”)

On 27 February 2009, PNSB was notified by its solicitors on the Points of Claim dated 25 February 2009 served by ADP-PJI JV on 26 February 2009 for arbitration proceedings against PNSB.

The details of the arbitration are as follows:

(i) By way of a Letter of Award dated 5 August 2004, PNSB awarded the design, construction, completion and commissioning of a water treatment plant (“the Works”) for the “Projek Pembinaan Loji/Kolam Takungan dan Paip Utama Telibong dan Telipok, Sabah” (“Sabah Project”) to an unincorporated joint venture known as ADP-PJI JV for a fixed price lump sum of RM65,161,515.01.


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(e) ADP-PJI Joint venture (“ADP-PJI Jv”) (cont’d)

(ii) On 26 December 2007, upon the advice of its solicitors, PNSB issued a notice determining the employment of ADP-PJI JV for, inter alia, a failure to proceed regularly and diligently with the Works. ADP-PJI JV disputed the termination and referred the matter to the Superintending Officer (‘S.O.’) under the contract for a decision. Following the reference to the S.O. for a decision and being dissatisfied with the same, ADP-PJI JV had referred the disputes surrounding the termination of their employment to arbitration.

(iii) ADP-PJI JV via its solicitors had served a Points of Claim dated 25 February 2009 in the arbitration against PNSB via PNSB’s solicitors on 26 February 2009.

(iv) The Points of Claim seeks various reliefs arising from the alleged wrongful determination of ADP-PJI JV’s employment. ADP-PJI JV is claiming for the sum of RM10,080,201.31 for loss, expense and damages, disruption to progress of employment works, failure to pay the amounts certified and for works completed which have not been certified and other breaches of contract or such other sum as ADP-PJI JV may be found entitled to recover from PNSB arising from the alleged wrongful determination of ADP-PJI JV’s employment.

(v) On 27 April 2009, PNSB had served its Points of Defence and Counter Claim in the arbitration stating, among others, that PNSB has rightfully determined the employment of ADP-PJI JV due to ADP-PJI JV’s breaches of the contract for the “Projek Pembinaan Loji/Kolam Takungan dan Paip Utama Telibong dan Telipok, Sabah” and the failure to meet the completion date for the Sabah Project.

PNSB’s Counter Claim involves amongst others, the additional costs incurred in completing the works for the Sabah Project (“Works”), additional costs in respect of the maintenance obligations, management and staff costs, damages, liquidated or general damages by reason of the delay in completion of the Works and overtime claim by the engineers for the purposes of construction supervision.

(vi) PNSB was notified on 1 June 2009 by its solicitors that the latter had been served with ADP-PJI JV’s Reply and Defence to Counterclaim dated 28 May 2009 by the solicitors acting for ADP-PJI JV, which in substance joins issue with PNSB’s Points of Defence and Counterclaim dated 27 April 2009 and reiterates ADP-PJI JV’s earlier position vide its Points of Claim dated 25 February 2009.

(vii) PNSB had on 4 November 2010 closed their case and the Arbitrator had directed for written submissions to be filed by ADP-PJI JV and PNSB by 29 January 2011 and 1 April 2011 respectively and reply, if any, by 2 May 2011.

(viii) The Arbitrator had subsequently allowed PNSB’s solicitors to file in their written submission by 3 May 2011 and correspondingly, ADP-PJI JV’s solicitors is required to submit their reply by 3 June 2011.

(ix) The Respondent’s written submission had been filed with the Arbitrator on 3 May 2011.

(x) The award has yet to be released by the Arbitrator as of to date.



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(f) SPlASh

Kuala Lumpur High Court Civil Suit No. D-22ND-398-2009

On 19 November 2009, SYABAS was served with a Writ and Statement of Claim (“Statement of Claim”) dated 30 October 2009 from the solicitors acting for SPLASH.

SPLASH’s claim is for alleged outstanding amount due and owing in respect of the Supply Charge and Capacity Charge from SYABAS under the Privatisation Agreement dated 24 January 2000, Supplemental Agreement dated 3 February 2005 and the Novation Agreement dated 3 February 2005.

In the Statement of Claim, SPLASH sought for, inter alia, the following:

(i) The sum of RM196,343,723.99 being payment for the invoices;

(ii) Interest on the sum of RM22,495,131.18 which is the Capacity Charge for the month of October 2008 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 February 2009 until the date of full realisation;

(iii) Interest on the sum of RM23,103,687.43 which is the Capacity Charge for the month of November 2008 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 March 2009 until the date of full realisation;

(iv) Interest on the sum of RM19,387,068.61 which is the Capacity Charge for the month of December 2008 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 April 2009 until the date of full realisation;

(v) Interest on the sum of RM28,283,988.12 which is the Capacity Charge for the month of January 2009 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 May 2009 until the date of full realisation;

(vi) Interest on the sum of RM26,653,975.96 which is the Capacity Charge for the month of February 2009 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 June 2009 until the date of full realisation;

(vii) Interest on the sum of RM27,268,760.61 which is the Capacity Charge for the month of March 2009 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 July 2009 until the date of full realisation;

(viii) Interest on the sum of RM24,797,813.57 which is the Capacity Charge for the month of April 2009 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 August 2009 until the date of full realisation;


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(f) SPlASh (cont’d)

Kuala Lumpur High Court Civil Suit No. D-22ND-398-2009 (cont’d)

(ix) Interest on the sum of RM24,353,298.51 which is the Capacity Charge for the month of May 2009 at the rate of one percent (1%) per annum plus the Base Lending Rate of Malayan Banking Berhad on a daily basis from 1 September 2009 until the date of full realisation; and

(x) Costs.

SYABAS had instructed its solicitors to defend the above claims. The solicitors of SYABAS had on 6 January 2010, filed and served SYABAS’ Defence to the claim filed by SPLASH dated 30 October 2009. The High Court had on 26 January 2010 fixed the case for mention on 22 February 2010 and for further case management on 25 March 2010 for SPLASH to amend the Statement of Claim. The High Court had on 30 April 2010 allowed the Plaintiff’s application to amend their Writ of Summons and Statement of Claim by consent. The solicitors of SYABAS had on 18 May 2010 filed and served the Amended Defence dated 18 May 2010.

On 20 August 2010, the High Court adjourned the hearing to 29 September 2010 and allowed the parties to exchange affidavits in the meantime. At the hearing on 29 September 2010, the High Court postponed the hearing for SPLASH’s application under Order 33 Rule 2 for the High Court to determine preliminary issues on the construction of the proportionate payment clauses in the Novation Agreement with SYABAS, to 29 October 2010 whilst SYABAS’ application to reamend the Amended Defence was allowed with costs.

At the hearing on 29 October 2010, the High Court had reserved decision of SPLASH’s application to 12 November 2010.

SPLASH’s application under Order 33 Rule 2 to hear the preliminary issues were allowed by the High Court on 12 November 2010 and the matter was fixed for Hearing on 10 January 2011.

At the Hearing held on 29 November 2010 of the Plaintiff’s application to reamend the Amended Writ of Summons and the Statement of Claim, the High Court fixed the matter for decision on 3 December 2010. The hearing date of the Writ of Summons and the preliminary issues under SYABAS’ application under Order 33 Rule 2 which was originally fixed on 10 January 2011 was vacated and the matter was fixed for hearing on 7 January 2011. At the hearing on 3 December 2010, the High Court had allowed the Application by the Plaintiff to reamend the Amended Statement of Claim and the matter was fixed for hearing on 7 January 2011. The solicitors of SYABAS had filed a notice of appeal against the decision of the High Court dated 12 November 2010 which allowed SPLASH’s Application under Order 33 Rule 2 for the preliminary issues to be heard.

At the hearing held on 7 January 2011 on the Writ of Summons and preliminary issues (Order 33 Rule 2 of the High Court), the High Court fixed the matter for decision on 16 February 2011 which was subsequently fixed for decision on 21 February 2011. The Court of Appeal had fixed the appeal for case management on 17 February 2011. The case management originally fixed on 17 February 2011 by the Court of Appeal for the appeal had been postponed to be fixed on 25 February 2011 upon application by SYABAS’ solicitors pending decision by the High Court on the plaintiff’s claim which had been fixed on 21 February 2011.



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The SYABAS’ appeal against the Order of the High Court on the Plaintiff’s application pursuant to Order 33 of the Rules of the High Court 1980 for the hearing of the preliminary issues had been fixed for Case Management on 22 March 2011. The High Court had brought forward the hearing date of the oral application for stay of the order pending appeal from 6 April 2011 to 29 March 2011. SYABAS’ appeal against the Order of the High Court on the Plaintiff’s application pursuant to Order 33 of the Rules of the High Court 1980 had been adjourned to 5 April 2011.

On 30 June 2011, the Court of Appeal decided in respect of SYABAS’ appeal as follows:

(i) Order of the High Court dated 11 December 2010 allowing the Plaintiff’s application pursuant to Order 33 of the Rules of the High Court 1980 (“1st Appeal”) was not allowed; and

(i) SYABAS’ appeal against the Order of the High Court SYABAS’ dated 21 February 2011 (Civil Appeal W-02 (NCC) 504-2011) (“2nd Appeal”) was allowed in part.

At the hearing of SYABAS’ application for a stay of execution of the Order of the High Court dated 21 February 2011 (“Order”) on 29 March 2011, the High Court extended the order for stay of execution of the Order (excluding the taking of accounts) until the disposal of the appeal. SPLASH was granted liberty by consent to apply to set aside the stay should there be any delay in the disposal of the appeal beyond 7 May 2011. The stay of execution does not prevent SPLASH from applying for accounts of all payments due before the Registrar as there is no stay of the proceedings.

The High Court had 21 February 2011 declared that SYABAS must pay in full and not proportionately and subsequently ordered an account of all payments due to SPLASH in respect of invoices issued after the date of the writ to be taken before the Deputy Registrar of the New Commercial Court on a date to be fixed. The High Court had ordered SYABAS to pay lump sum costs of RM30,000.00 in respect of the Reamended Writ of Summons and the Statement of Claim in lieu of taxation to the plaintiff and also granted SYABAS an interim stay on enforcement of the Judgement until 6 April 2011 pending full argument on stay on merits. The solicitors of SYABAS filed a Notice of Appeal on 22 February 2011 at the Court of Appeal against the decision of the High Court dated 21 February 2011.

The matter which came up for Case Management on 25 February 2011 at the Court of Appeal, was fixed for further Case Management on 22 March 2011, pending the filing of the Records of Appeal for the appeal dated 22 February 2011 against the Decision of the High Court dated 21 February 2011. The appeal against the Decision of the High Court on 21 February 2011 fixed for Case Management on 29 March 2011 was subsequently adjourned to 5 April 2011. The Court of Appeal had fixed the hearing of SYABAS’ appeals against the Orders of the Rules of High Court and the decision of the High Court on 21 February 2011, on 30 May 2011 and the written submissions to be filed by 16 May 2011. The written submissions date was changed from 16 May 2011 to 14 June 2011.

The earlier hearing date fixed on 30 May 2011 was vacated.


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On 27 May 2011, a sealed copy of the Plaintiff’s Summon in Chambers for the hearing of the taking of the accounts pursuant to the Decision of the High Court dated 21 February 2011 was served on SYABAS’ solicitors and the matter was fixed for hearing on 9 June 2011. On 8 June 2011, SYABAS’ solicitors was informed by the Plaintiff’s solicitors that the High Court had approved the Plaintiff’s application to adjourn the hearing for the taking of accounts pursuant to the Decision of the High Court of 21 February 2011 to 24 June 2011. The original hearing date fixed on 9 June 2011 was vacated. The hearing for the taking of accounts pursuant to the Decision of the High Court of 21 February 2011 was adjourned to 1 July 2011 for continuation of hearing. At the High Court hearing held on 1 July 2011 of the Plaintiff’s application for the taking of accounts of all payments due from the Defendant on all invoices issued after the date of the amended Writ of Summons, the Plaintiff’s application was withdrawn with no order as to costs in view of the decision of the Court of Appeal on 30 June 2011.

At the mention on 15 July 2011 at the High Court, the Plaintiff withdrew the application to remove the stay of execution of the Order dated 21 February 2011 with no order as to costs. In respect of the application for interim payment, after hearing counsel for both parties, the Judge fixed the said application and any other application that may be filed for hearing on 22 July 2011. On 20 July 2011, SYABAS’ solicitors was served with a Summons in Chambers dated 19 July 2011 (“SIC”) by the Plaintiff’s solicitors, an application by the Plaintiff for a consequential order for the taking of accounts pursuant to the Decision of the High Court of 21 February 2011. SYABAS had on 21 July 2011 filed its Affidavit pursuant to the SIC. At the hearing held on 22 July 2011, the High Court fixed the mention on 19 August 2011 for the parties to seek clarification from the Court of Appeal on the Court of Appeal’s decision dated 30 June 2011.

The matter was fixed for further mention on 20 September 2011 pending the disposal of the motion of SPLASH to the Court of Appeal (filed on 2 August 2011) for clarification of the Order of the Court of Appeal dated 30 June 2011. On 28 July 2011, SYABAS’ solicitors were notified by SPLASH’s solicitors that the latter intend to file a Notice of Motion for leave to appeal to the Federal Court against the part of decision of the Court of Appeal which was not in their favour. Counsels have perused the Notice of Motion have filed the affidavit to oppose SPLASH’s application. At the case management on SPLASH’s Notice of Motion held on 11 August 2011, the Federal Court fixed the matter for hearing on 17 October 2011. The hearing of SPLASH’s application for leave to appeal to the Federal Court against the decision of the Court of Appeal of 30 June 2011 which was fixed for 17 October 2011 was vacated. The court has fixed the application for case management on 3 November 2011. At the case management held on 3 November 2011 and upon the request of SPLASH’s solicitors, the Federal Court had fixed the next case management on 6 December 2011 pending the hearing and disposal of the two (2) motions of SPLASH in the Court of Appeal (for clarification and to amend the Order dated 30 June 2011).

The Federal Court had at the case management held on 6 December 2011 fixed the matter for further case management on 30 January 2012 pending the hearing and disposal of the two (2) motions of SPLASH in the Court of Appeal (for clarification and to amend the Order dated 30 June 2011).

At the case management held on 30 January 2012, the Federal Court had fixed the matter for further case management on 23 February 2012 pending the hearing and disposal of the two (2) motions of SPLASH in the Court of Appeal (for clarification and to amend the Order dated 30 June 2011).



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On 13 February 2011, the Plaintiff’s solicitors informed the Court of Appeal that the Plaintiff’s applications for motion for clarification and to amend the Order of the Court of Appeal dated 30 June 2011 was fixed for hearing on 20 February 2012.

At the hearing held on 20 February on the Plaintiff’s applications for motion for clarification and to amend the Order of the Court of Appeal dated 30 June 2011 (“Order”), the Court of Appeal had :-

(i) allowed the Order to be amended so that the relevant parts of the Order will read as :-

“ Appeal is allowed in part. Order of the High Court is set aside except the declaration in paragraph 1 of the Order is affirmed subject to the deletion of the words “tanpa mengambil kira keupayaan Defendan untuk membayar kepada Plaintiff jumlah secara penuh”, with no order as to costs”.

(ii) not made any Order on the Motion by SPLASH for clarification.

At the hearing held on 21 February 2011 on the Plaintiff’s two (2) Motions namely, the applications for Interim Payment and Consequential Orders, the Plaintiff had withdrawn their motion for the Interim Payment. The High Court had fixed the hearing for the Consequential Order on 29 March 2012.

At the hearing held on 29 March 2012, the High Court had allowed the plaintiff to withdraw its application and ordered for the application to be struck out with cost of RM15,000 to be awarded to the Company.

On 29 August 2011, SYABAS’ solicitors served a sealed copy of SPLASH’s Notice of Motion and Affidavit in Support which was affirmed on 3 August 2011. The motion for clarification of the decision of the Court of Appeal on 30 June 2011 fixed for hearing on 22 September 2011 has been adjourned to 27 October 2011, pending the clarification at the Court of Appeal and hearing of the notice of motion for leave to appeal to the Federal Court. The matter was fixed for mention on 27 October 2011. The Kuala Lumpur High Court allowed the application by SPLASH to adjourn the hearing on 27 October 2011, pending the clarification at the Court of Appeal and hearing of the notice of motion for leave to appeal to the Federal Court. The applications by SPLASH’s for Consequential Orders and Interim Payment was fixed for hearing on 27 October 2011. On 27 October 2011, the Court has fixed both SPLASH’s application for Consequential Orders and Interim Payment for Mention on 31 October 2011 to fix a new hearing date. SPLASH’s applications for Consequential Orders and Interim Payment came up for Mention on 31 October 2011 and is now fixed for Hearing on 21 February 2012.

On 21 November 2011, SYABAS’ solicitors informed that the Court of Appeal had fixed the Case Management for the motion for clarification and to amend the Order of the Court of Appeal and Decision dated 30 June 2011 on 22 November 2011. At the Case Management held on 22 November 2011 for the Plaintiff’s application on the motion for clarification and to amend the Order of the Court of Appeal and Decision dated 30 June 2011, the Court of Appeal had informed that the Court will write to the parties once the hearing date is fixed.


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(ii) not made any Order on the Motion by SPLASH for clarification. (cont’d)

At the case management held on 23 February 2012 pursuant to the motion by SPLASH for leave to appeal to the Federal Court, the Federal Court had fixed the matter for hearing on 10 May 2012.

At the hearing held on 29 March 2012 on the Plaintiff’s application for a Consequantial Order, the High Court had allowed the Plaintiff to withdraw its application and order for the application with loss of RM15,000 to be awarded to SYABAS.

(g) Kerajaan Negeri Selangor (“ State Government”)

Kuala Lumpur High Court Originating Summons No. D-24NCC-388-2010

On 10 November 2010, SYABAS has instituted legal proceedings against Kerajaan Negeri Selangor (“State Government”) at the High Court in Kuala Lumpur vide Originating Summons No: D-24NCC-388-2010 which was supported by an affidavit in support dated 9 November 2010. In the said Originating Summons, SYABAS is seeking the following relief:

(i) A declaration that upon a true construction of the Concession Agreement dated 15 December 2004, there is a sum of RM471,642,916.00 due and owing from the State Government to SYABAS for the period from 1 January 2009 to 31 December 2009;

(ii) That the State Government do pay the said sum of RM471,642,916.00 to SYABAS forthwith upon making of this Order;

(iii) Costs of the action to be paid by the State Government to SYABAS in any event; and

(iv) Such further or other relief or remedy as the Court shall deem just.

On 18 November 2010, the Originating Summons and the Affidavit in Support were served on the State Government. On 25 November 2010, the State Government’s solicitors entered appearance on behalf of the State Government. The matter came up for case management on 2 December 2010 where the High Court allowed the State Government’s solicitors’ request for a 2 week extension of time to file the State Government’s affidavit in reply and thereafter adjourned the matter for further case management on 16 December 2010. On the case management dated 16 December 2010, the State Government’s affidavit in reply dated 15 December 2010 was served on SYABAS’ solicitors. The High Court then directed SYABAS to file its affidavit in reply by 31 December 2010 and further fixed the matter for Hearing on 11 February 2011. The High Court also directed parties to file their respective submissions by 8 February 2011. The High Court also informed that parties may agree between themselves any extension of time for filing of affidavits provided that the hearing date is not affected. In this regard, the State Government’s solicitors agreed to SYABAS filing the affidavit in reply by 10 January 2011.



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(g) Kerajaan Negeri Selangor (“ State Government”) (cont’d)

Kuala Lumpur High Court Originating Summons No. D-24NCC-388-2010 (cont’d)

On 10 January 2011, SYABAS’ solicitors filed SYABAS’ Affidavit in Reply dated 10 January 2011 in the High Court and served a copy of the same on the State Government’s solicitors. On 24 January 2011, the State Government’s affidavit in reply dated 24 January 2011 was served on SYABAS’ solicitors. On 2 February 2011, SYABAS’ solicitors filed SYABAS’ affidavit (3) dated 28 January 2011 in the High Court and served a copy of the same on the State Government’s solicitors. On 7 February 2011, the State Government’s solicitors served on SYABAS’ solicitors a summons in chambers dated 7 February 2011 (“State Government’s application”) for inter alia, an Order to convert the Originating Summons into a writ action or alternatively that the State Government be given leave to cross-examine the deponent of SYABAS’ affidavits, which was fixed for hearing on 11 February 2011. On 8 February 2011, SYABAS’ solicitors filed the written submission for the Originating Summons. On 10 February 2011, SYABAS’ solicitors filed SYABAS’ affidavit dated 10 February 2011 in Court and served a copy of the same on the State Government’s solicitors to oppose the State Government’s application. On 23 February 2011, the State Government filed their Affidavit in Reply dated 23 February 2011 and served a copy of the same on SYABAS’ solicitors, in reply to SYABAS’ Affidavit dated 10 February 2011 in relation to the State Government’s application.

On 11 February 2011, the High Court decided to hear the State Government’s application first and fixed it for clarification/decision on 28 February 2011. As for the Originating Summons, the High Court fixed the matter for case management on 28 February 2011 immediately after the clarification and/or decision in respect of the State Government’s application.

On 28 February 2011, the High Court allowed the State Government’s application to convert the Originating Summons into a writ action. The matter was fixed for case management on 16 March 2011. The matter was fixed for further Case Management on 30 March 2011 pending the State Government’s official response on its stand in respect of SYABAS’ claim for compensation and tariff adjustment. The current judge for the case had recused himself from hearing the case any further. The matter was fixed for case management before a new judge on 11 April 2011 which subsequently upon written request by SYABAS’ solicitors, was rescheduled to 12 April 2011.

The matter came up for Case Management for the first time before NCCI High Court Judge on 12 April 2011. The parties informed the learned Judge that they are working out the mechanics of the proposed hearing. The learned Judge then fixed a further case management date on 6 May 2011.

The Court has fixed the matter for further case management on 10 May 2011 to enable the defendant’s leading counsel to attend the same. The Court has further fixed the case management on 27 May 2011 pending the defendant’s filing of an application to join the Federal Government as a party to the proceedings. As the defendant had decided not to bring in the Federal Government as a party to the proceedings, the case management on 27 May 2011 was fixed for further case management on 28 June 2011 for SYABAS to take instruction on the mode of action and pleadings.


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(g) Kerajaan Negeri Selangor (“ State Government”) (cont’d)

Kuala Lumpur High Court Originating Summons No. D-24NCC-388-2010 (cont’d)

At the case management held on 28 June 2011, the High Court allowed SYABAS’ application to withdraw with liberty to file afresh by way of a writ of summons with no order as to costs. The withdrawal of the suit by SYABAS with liberty to file afresh with no order as to costs are for the following reasons:-

(i) It was the defendant’s application to convert the originating summons to a writ;

(ii) It will be more appropriate in the circumstances to have proper pleadings rather than the present affidavit form;

(iii) The plaintiff still intend to proceed with the claim by way of a fresh writ action.

On 17 April 2012, the Kuala Lumpur High Court has re-scheduled the case management to 27 April 2012.

(h) AbASS

Kuala Lumpur High Court Writ Summons No: 22NCC-543-2011

SYABAS has been served with a Writ and Statement of Claim (“Statement of Claim”) dated 28 March 2011 from the solicitors acting for ABASS on 30 March 2011.

In the Statement of Claim, ABASS is claiming against SYABAS for, inter alia, the following:-

i) A declaration that SYABAS is liable to make full payment on all invoices issued by ABASS pursuant to the Privatization Cum Concession Agreement dated 9 December 2000, the Supplemental Agreements dated 10 February 2001, 28 August 2001 and 15 February 2005 and the Novation Agreement dated 15 February 2005 particularly in accordance to Section 4.04 (c) of the Novation Agreement and that SYABAS’ liability to make payment in full is not in any way diminished or mitigated by reason of its right to make proportionate payment to the water concessionaires;

ii) Judgment for the sum of RM149,478,553.02;

iii) An account of all payments due to ABASS in respect of invoices issued after the date of the Writ herein be taken by the Honourable Court and an order that SYABAS do pay ABASS all such sums found to be due on the taking of such account;

iv) Interest on the outstanding amount of the invoices for the months from January 2010 to October 2010 at the rate of 1 % per annum plus the base lending rate of Malayan Banking Berhad calculated on daily basis until the date of full payment by SYABAS;

v) Interest on the outstanding amount of the previous outstanding invoices for the months from June 2006 to

December 2009 in the sum of RM6,218,522.57;



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(h) AbASS (cont’d)

Kuala Lumpur High Court Writ Summons No: 22NCC-543-2011 (cont’d)

vi) Alternative to prayers (3) and (4) above, interest at the rate of 8 % per annum on the outstanding amount of each of the outstanding invoices to be calculated from the respective due date until the date of full payment by SYABAS;

vii) Damages for breach of contract; and

viii) Costs.

SYABAS is required to enter appearance within 8 days from 30 March 2011 and the Court fixed the matter for Case Management on 12 April 2011.

SYABAS’ solicitors filed the Memorandum of Appearance in relation to the Suit on 4 April 2011 and the same had been served on the Plaintiff’s solicitors on 5 April 2011.

The High Court fixed the matter for Case Management on 12 April 2011. At the Case Management on 12 April 2011, the High Court fixed a further Case Management on 30 May 2011 in order for SYABAS to file its Defence latest by 6 May 2011 and for ABASS to file its reply (if any).

SYABAS’ Defence and Counterclaim had been filed in Court and a copy thereof served on the solicitors of Konsortium ABASS respectively, on 6 May 2011.

The matter came up for Case Management on 30 May 2011 and the Court has fixed 7 July 2011 for Mention pending SYABAS’ reply to the Plaintiff’s Reply & Defence to counterclaim.

At the Case Management held on 7 July 2011, the Court fixed the next Case Management on 29 July 2011 for the defendant to file a reply affidavit to the plaintiff’s application pursuant to Order 33 Rule 2 Rules of the High Court 1980 for certain preliminary issues to be heard before the trial of other questions or issues in the action, and also for the defendant to serve the application for leave to issue a third party notice on the relevant parties.

At the Case Management on 29 July 2011 the High Court fixed a further Case Management date on 26 August 2011 to

fix a hearing date for the plaintiff’s application pursuant to Order 33 Rule 2 Rules of the High Court 1980 for certain preliminary issues to be heard before the trial of other questions or issues in the action, and also for the defendant’s application for leave to issue a third party notice on the relevant parties.

On 29 July 2011, SYABAS had filed a reply affidavit to the plaintiff’s application pursuant to Order 33 Rule 2 Rules of the High Court 1980 for certain preliminary issues to be heard before the trial of other questions or issues in the action, and had served the application for leave to issue a Third Party Notice on the relevant parties.


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The High Court has further fixed 19 August 2011 for the plaintiff to file a reply affidavit and for SYABAS to reply, if any, on 26 August 2011. The High Court has also fixed a further Case Management date on 26 August 2011 for the High Court to fix a hearing date and on 11 August 2011, the High Court also fixed 26 August 2011 for the plaintiff to file its reply affidavit in respect of the plaintiff’s application pursuant to Order 33 Rule 2 and also the defendant’s application for leave to issue a third party notice. On the same case management date, the defendant is to inform the High Court whether it wishes to file any further affidavits in respect of the three applications.

At the case management held on 26 August 2011, the High Court has fixed the next case management on 26 September 2011 for the defendant to file its reply affidavits and for the parties to exhaust all their affidavits in respect of the plaintiff’s application pursuant to Order 33 Rule 2, the defendant’s application for leave to issue a third party notice and also the defendant’s application to amend the Defence and Counterclaim.

At the case management held on 26 September 2011, the High Court has fixed the next case management on 5 October 2011 to fix a hearing date in respect of the plaintiff’s application pursuant to Order 33 Rule 2, the defendant’s application for leave to issue a third party notice and also the defendant’s application to amend the Defence and Counterclaim.

At the case management held on 5 October 2011, the High Court has fixed the hearing on 21 October 2011 in respect of the defendant’s application for leave to issue a third party notice and also the defendant’s application to amend the Defence and Counterclaim and further fixed the hearing on 21 November 2011 in respect of the plaintiff’s application pursuant to Order 33 Rule 2.

On 21 October 2011, the High Court has fixed 31 October 2011 for Decision in respect of the defendant’s application for leave to issue a third party notice and the defendant’s application to amend the Defence and Counterclaim. On 31 October 2011, the Court was postponed the Decision in respect of the defendant’s application for leave to issue a third party notice and the application to amend the Defence and Counterclaim to 3 November 2011. The High Court had on 3 November 2011 allowed both the defendant’s application for leave to issue a third party notice and the application to amend the Defence and Counterclaim. The High Court fixed a further case management date on 17 November 2011 to enable the defendant to serve the third party notice on the State Government of Selangor and to deliver the Amended Defence and Counterclaim. The plaintiff had appealed to the Judge in chambers against the decisions of the High Court to allow SYABAS’ application for leave to issue a third party notice and application to amend the Defence and Counterclaim. The Court has fixed both appeals for hearing on 23 November 2011.

Pursuant to the Third Party (Selangor State Government) filing the memorandum of appearance on 17 November 2011, the matter is now fixed for further case management on 23 November 2011 for SYABAS to file the Summons for Third Party Directions. On 21 November 2011, the High Court had adjourned the hearing for the Plaintiff’s application pursuant to Order 33 Rule 2 to 13 January 2012.

At the hearing held on 13 January 2012, pursuant to the Plaintiff’s application for trial of the preliminary issues pursuant to Order 33 Rule 2, the High Court had adjourned the matter pending the disposal of the hearing of the motion for clarification by SPLASH at the Court of Appeal and the leave to appeal at the Federal Court. The case was fixed for mention on 13 February 2012.



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The plaintiff’s Notices of Appeal to the Judge in chambers against the decisions of the High Court on 3 November 2011 came up for hearing on 23 November 2011. After hearing submission from the counsel, the High Court adjourned the matter for decision on 8 December 2011. At the case management held on 23 November 2011, the High Court was informed that the Summons for Third Party Directions was filed on 23 November 2011 and the matter was fixed for hearing on 30 November 2011.

At the hearing held on 30 November 2011, for the Summons for Third Party Directions, the Kuala Lumpur High Court ordered that:-

i) The defendant serve its Statement of Claim on the Third Party within fourteen (14) days from 30 November 2011, who shall plead thereto within fourteen (14) days;

ii) The Third Party be at liberty to appear at the trial of this action and take such part as the Judge shall direct, and be bound by the result of the trial;

iii) The question of liability of the Third Party to indemnify the defendant be tried at the trial of this action, but subsequent thereto; and

iv) The costs of this application be costs in the cause and in the Third Party proceedings.

The High Court had fixed a further case management on 5 January 2012.

On 8 December 2011, the High Court had dismissed the plaintiff’s Notices of Appeal against the decisions dated 3 November 2011 in allowing the defendant’s application to issue a third party notice and to amend the Defence and Counterclaim, with costs awarded to the defendant.

SYABAS’ Statement of Claim on the Third Party was filed in Court and served on the plaintiff’s and Third Party’s solicitors on 14 December 2011.

At the case management held on 5 January 2012, the Court had fixed the next case management on 20 January 2012 for the defendant to file a reply to the Third Party’s defence.

At the case management held on 20 January 2012, the High Court had fixed the trial dates tentatively on 19 March 2012 to 21 March 2012. The High Court also fixed the case management for the matter on 13 February 2012, 5 March 2012 and 12 March 2012, pending the outcome of the Plaintiff’s application for trial of preliminary issues pursuant to Order 33 Rule 2 which was fixed for mention on 13 February 2012.

The Defendant had been served with a sealed copy of the State Government’s application to set aside the Third Party notice and statement of claim by the Defendant on 2 February 2012. The application was fixed for case management on 13 February 2012.


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At the case management held on 13 February 2012 in relation to the State Government’s application to set aside the Third Party notice and Statement of Claim by the Defendant, the High Court had fixed the matter for further case management on 5 March 2012.

At the case management held on 13 February 2012 in relation to the State Government of Selangor’s application to set aside the Third Party notice and Statement of Claim by the Defendant, the High Court had fixed the matter for further case management on 5 March 2012. At the case management held on 5 March 2012, as the Judge had recused himself, the High Court would transfer the matter to another court and inform the Parties once new dates are fixed for the said matter. The Company’s solicitors had on 15 March 2012 informed that the High Court had by way of letter dated 14 March 2012 informed the Parties that the case would be heard by a new Judge and the matter was fixed for case management on 16 March 2012. At the case management held on 16 March 2012, the High Court had fixed the matter for further case management on 20 April 2012.

In the PNHB’s earlier separate announcements on the SPLASH case (KL High Court Civil Suit No. D-22NCC-398-2009), the Court of Appeal had fixed 20 February 2012 for clarification of its decision dated 30 June 2011 and that the application for leave by SPLASH to appeal to the Federal Court arising from the decision of the Court of Appeal dated 30 June 2011 had been fixed for case management on 23 February 2012 at the Federal Court.

At the mention held on 13 February 2012, the High Court had adjourned the matter in relation to the Plaintiff’s application for trial of preliminary issues pursuant to Order 33 Rule 2 to 5 March 2012, pending the clarification at the Court of Appeal and the case management at the Federal Court in the SPLASH case. On 5 March 2012, the learned Judge recused himself from hearing the matter in relation to the Plaintiff’s application for trial of preliminary issues pursuant to Order 33 Rule 2. Accordingly, the case will be referred for transfer to another court and a new date to be advised by the High Court Registry in due course. The trial dates tentatively fixed from 19 to 21 March 2012 had been vacated.

The High Court had by way of a letter dated 14 March 2012 informed the Parties that the case would be heard by a new Judge and the matter is fixed for Case Management on 16 March 2012 which was subsequently further fixed to 20 April 2012.

On 20 April 2012, the parties informed the Court that they have no objection that the learned Judge is hearing the matter. The Court directed as follows:

(a) The application by the Third Party Notice and the Statement of Claim against the Third Party is fixed for Hearing on 28 June 2012 with submissions in reply (if any) to be filed on or before 15 June 2012; and



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On 20 April 2012, the parties informed the Court that they have no objection that the learned Judge is hearing the matter. The Court directed as follows: (cont’d)

(b) The Plaintiff’s application for Trial of Preliminary Issues pursuant to Order 33 Rule 2 is fixed for Hearing on 10 August 2012.

The Plaintiff’s application for Interim Payment is fixed for Mention on 10 August 2012.

(i) Kerajaan Negeri Selangor (“ State Government”)

Kuala Lumpur High Court Suit No: 22NCC-1478-09/2011 - SYABAS vs State Government

On 8 September 2011, SYABAS has instituted legal proceedings against the State Government via the filing of a Writ and Statement of Claim at the High Court for a sum of RM1,054,208,382 being compensation from 1 January 2009 to 31 March 2011 from the State Government under the term of the Concession Agreement dated 15 December 2004 between SYABAS, the Federal Government and the State Government.

In the Statement of Claim, SYABAS is praying for the following Orders:-

i) A declaration that upon a true construction of the Concession Agreement dated 15 December 2004, there is a sum of RM1,054,208,382.00 due and owing from the State Government to SYABAS for the period from 1 January 2009 to 31 March 2011;

ii) That the State Government do pay the said sum of RM1,054,208,382.00 to SYABAS forthwith upon making of the Order;

iii) Costs of the action be paid by the State Government to SYABAS in any event; and

vi) Such further or other relief or remedy as the Court shall deem just.

At the case management held on 10 October 2011, the State Government’s solicitors informed the High Court that the Memorandum of Appearance was filed on 30 September 2011 and an application for leave to file Defence was filed in the Kuala Lumpur High Court on 10 October 2011. The Court then fixed a further case management on 4 November 2011 for further directions. On 14 October 2011, the Court allowed the defendant to file the Defence latest by 4 November 2011 and the plaintiff to file the Reply latest by 18 November 2011. The Court maintained the case management scheduled on 4 November 2011 to monitor the progress of the suit. On 4 November 2011, the State Government’s solicitors informed the Court that the Defence was filed on 4 November 2011. The Court directed SYABAS to file the notice to attend pre-trial case management after filing the Reply by 18 November 2011.The Court fixed the next case management on 29 November 2011.


377



(i) Kerajaan Negeri Selangor (“ State Government”) (cont’d)

Kuala Lumpur High Court Suit No: 22NCC-1478-09/2011 - SYABAS vs State Government (cont’d)

On 21 November 2011, SYABAS’ Reply had been filed in the High Court and served on the defendant’s solicitors on 18 November 2011.

At the case management held on 29 November 2011, the High Court had fixed a further case management on 14 December 2011 for SYABAS to file the notice to attend pre-trial case management upon the close of pleadings and for the State Government to apply for leave to issue a third party notice against the Federal Government.

The matter which came up for case management on 14 December 2011 was fixed for mention on 23 December 2011 in order to fix a hearing date for the defendant’s application for leave to issue a Third Party Notice against the Federal Government, which was filed in Court on 14 December 2011.

At the mention held on 23 December 2011, the Federal Government had objected to the defendant’s application for leave to issue a Third Party Notice against the Federal Government. The High Court had fixed the matter for another case management on 26 January 2012 and hearing on 16 February 2012.

At the case management held on 26 January 2012 for the defendant’s application to issue a third party notice (in Enclosure 13), the High Court had fixed 8 February 2012 for the plaintiff to file in an affidavit in reply to the defendant’s affidavit dated 25 January 2012 and further fixed 13 February 2012 for parties to file their respective submissions simultaneously. The hearing date previously fixed on 16 February 2012 was maintained.

At the hearing held on 16 February 2012, the Defendant’s application for leave to issue a Third Party Notice against the Federal Government (“Application”), the High Court had allowed the Defendant’s Application with no order as to cost and had further fixed the matter for case management for Third Party Direction on 5 March 2012, and Trial of the main Suit on 29 May 2012 and 30 May 2012, respectively.

On 5 March 2012, the Kuala Lumpur High Court had fixed the matter for case management on 28 March 2012 to allow the State Government and the Federal Government to file and serve their respective pleadings in the third party proceedings.

On 28 March 2012, the Kuala Lumpur High Court had fixed the matter for further case management on 17 April 2012 to allow the parties to finalise the issues to be tried, bundle of documents and list of witnesses. The High Court had also fixed two (2) further trial dates for the matter on 14 and 15 June 2012 in addition to the 29 and 30 May 2012 which had been fixed earlier. The High Court had rescheduled the call management for application of the Defendant to 27 April 2012.



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(j) SPlASh vs State Government

Shah Alam High Court Civil Suit No : 21NCVC-34-2011 - SPLASH vs State Government

On 28 October 2011, the Company received a Third Party Notice issued by the State Government.

In the suit, SPLASH had commenced action against the State Government for the sum of RM563,732,669.62 together with costs and interest. The State Government claims against the Company in the event of the State Government’s liability to SPLASH, an indemnity for the said sum together with costs and interest. The company is required to enter appearance to the Third Party Notice within twelve (12) days of the service of the Notice and has appointed solicitors to act on its behalf in the matter.

On 1 November 2011, the SYABAS’s solicitors had filed the memorandum of appearance to the Third Party Notice at the Shah Alam High Court and served on the State Government’s solicitor.

The Plaintiff had withdrawn the Writ of Summons dated 8 March 2012 with liberty to file afresh. As such, the Third Party Notice dated 3 October 2011 filed by the Defendant against SYABAS to join SYABAS as third party in the main suit is now rendered academic.

50. EFFECtS IF ADoPtIoN oF NEW ACCouNtING StANDARDS

(a) Impact on the Group’s statement of financial position as at 31 December 2010.

AS PREvIouSly ADJuStmENt/RE- REPoRtED ClASSIFICAtIoN AS REStAtED Rm Rm Rm

Statement of financial position Property, plant & equipment 1,609,713,329 (1,364,389,459) 245,323,870 Project development expenditure 4,497,424,223 (4,497,424,223) – Service concession assets – 7,685,002,446 7,685,002,446 Operating financial assets – 2,475,910 2,475,910 Deferred tax assets/(liabilities) (280,434,148) 679,980,256 399,546,108 Inventories 16,512,346 (6,624,585) 9,887,761 Other current assets 15,271,805 5,846,231 21,118,036 Trade and other payables (current) 1,664,147,375 (1,539,853) 1,662,607,522 Other payables (non-current) 29,018,622 (19,224,022) 9,794,600 Service concession obligations (current) – 114,760,000 114,760,000 Service concession obligations (non-current) – 4,170,240,532 4,170,240,532 Government grant 288,869,548 (6,243,470) 282,626,078 Foreign currency translation reserve (3,837,190) 742,876 (3,094,314) Retained earnings/ (Accumulated losses) 997,188,257 (1,455,700,623) (458,512,366)


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50. EFFECtS IF ADoPtIoN oF NEW ACCouNtING StANDARDS (cont’d)

(b) Impact on the Group’s income statement for the financial year ended 31 December 2010.


Income statements Revenue 1,911,514,199 144,008,895 2,055,523,094 Other income 121,424,650 1,141,098 122,565,748 Raw materials, consumables and maintenance expenses (473,230,603) (532,308,281) (1,005,538,884) Construction contract expenses (7,449,295) (131,175,852) (138,625,147) Depreciation and amortisation expenses (525,174,108) 360,025,642 (165,148,466) Finance costs (374,283,077) (218,717,960) (593,001,037) Profit/(Loss) before tax 268,368,120 (377,026,458) (108,658,338) Taxation (78,768,180) 95,836,962 17,068,782

(c) Impact on the Group’s statement of financial position as at 1 January 2010.


Statement of financial position Property, plant & equipment 1,597,240,964 (1,362,927,652) 234,313,312 Project development expenditure 3,994,674,341 (3,994,674,341) – Service concession assets – 7,647,906,242 7,647,906,242 Financial assets – 731,654 731,654 Deferred tax assets/(liabilities) (223,074,603) 584,294,307 361,219,704 Inventories 13,858,726 (4,943,386) 8,915,340 Other current assets 21,931,409 71,444 22,002,853 Trade and other payables (current) 1,118,870,623 (1,193,187) 1,117,677,436 Other payables (non-current) 28,909,151 (17,482,118) 11,427,033 Service concession obligations (current) – 85,597,500 85,597,500 Service concession obligations (non-current) – 4,283,537,529 4,283,537,529 Government grant 242,232,954 (5,163,045) 237,069,909 Retained earnings/ (Accumulated losses) 918,587,268 (1,245,263,666) (326,676,398)

51. AuthoRISAtIoN oF FINANCIAl StAtEmENtS FoR ISSuE

The financial statements for the year ended 31 December 2011 were authorised for issue in accordance with a resolution of the directors on 26 April 2012.



380


52. SuPPlEmENtARy INFoRmAtIoN – bREAKDoWN oF REtAINED EARNINGS INto REAlISED AND uNREAlISED

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2011 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Main Market Listing Requirements, as issued by the Malaysian Institute of Accountants.

GRouP ComPANy Rm Rm

Total retained earnings of the Company and its subsidiaries - Realised (264,358,880) 416,456,222 - Unrealised (395,177,082) 22,077,901

(659,535,962) 438,534,123 Total share of retained earnings/(accumulated losses) from associated companies: - Realised (1,429) – - Unrealised – –

Total share of retained earnings/(accumulated losses) from jointly controlled entities: - Realised 1,251,971 – - Unrealised – –

(658,285,420) 438,534,123 Less: Consolidation adjustments 209,092,685 –

Total group (accumulated losses)/retained earnings as per consolidated accounts (449,192,735) 438,534,123


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ANAlySIS oF ShAREholDINGS

Authorised Share Capital : RM1,300,000,000.00Issued and Paid-Up Share Capital : RM411,142,895.00 comprising 411,142,895 ordinary shares of RM1.00 each Class of Shares : Ordinary shares of RM1.00 eachVoting Rights : One vote per ordinary share

DIStRIbutIoN oF ShAREholDINGS

SIzE oF ShAREholDERS No. oF ShARES hElD ShAREholDINGS mAlAySIAN FoREIGNER totAl mAlAySIAN FoREIGNER totAl No % No % No % No % No % No % Less than 100 458 4.54 3 0.03 461 4.57 12,210 * 84 * 12,294 *100 – 1,000 1,409 13.96 14 0.14 1,423 14.10 1,049,975 0.26 8,945 * 1,058,920 0.261,001 – 10,000 6,252 61.96 85 0.84 6,337 62.80 25,220,054 6.16 345,261 0.08 25,565,315 6.2410,001 – 100,000 1,568 15.54 62 0.61 1,630 16.15 49,159,939 12.02 2,388,370 0.58 51,548,309 12.60100,001 – 20,455,303 213 # 2.11 # 22 0.22 235 # 2.33 # 158,959,077 # 38.86 # 33,090,395 8.09 192,049,472 # 46.95 #

(less than 5% of the issued share capital) 20,455,304 (5% of 5 0.05 0 0 5 0.05 138,871,785 33.95 0 0 138,871,785 33.95the issued share capital) and above TOTAL 9,905 # 98.16 # 186 1.84 10,091 # 100.00 # 373,273,040 # 91.25 # 35,833,055 8.75 409,106,095 # 100.00 #

Notes:* Negligible# Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 26 April 2012.

lISt oF toP thIRty SECuRItIES ACCouNt holDERS AS PER RECoRD oF DEPoSItoRS(Without aggregating the securities from different securities accounts belonging to the same Depositors)

% oF ISSuED AND PAID-uP No. NAmE oF ShAREholDER No. oF ShARES hElD ShARE CAPItAl #

1. CImb Group Nominees (tempatan) Sdn bhd 39,000,000 9.53 Pledged Securities Account For Corporate Line (M) Sdn Bhd (WWE Holdings)

2. Rhb Capital Nominees (tempatan) Sdn bhd 33,000,700 8.07 Pledged Securities Account For Central Plus (M) Sdn Bhd (681055)

3. lembaga tabung haji 23,476,000 5.74

4. AmSec Nominees (tempatan) Sdn bhd 21,920,000 5.36 Pledged Securities Account – AmBank (M) Berhad For Central Plus (M) Sdn Bhd

Note :# Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 26 April 2012.

Distribution Schedule Of Equity Securities As At 26 April 2012


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5. Citigroup Nominees (tempatan) Sdn bhd 21,475,085 5.25 Employees Provident Fund Board

6. hSbC Nominees (Asing) Sdn bhd 20,112,450 4.92 Exempt An For JPMorgan Chase Bank, National Association (Bermuda) 7. uobm Nominees (tempatan) Sdn bhd 19,900,000 4.86 Pledged Securities Account For Central Plus (M) Sdn Bhd (PCB)

8. hlG Nominee (tempatan) Sdn bhd 18,015,000 4.40 Pledged Securities Account For Central Plus (M) Sdn Bhd (CCTS)

9. Central Plus (m) Sdn bhd 15,441,337 3.77

10. AmanahRaya trustees berhad 15,339,440 3.75 Amanah Saham Wawasan 2020 11. AmSec Nominees (tempatan) Sdn bhd 11,918,200 2.91 AmTrustee Berhad For Central Plus (M) Sdn Bhd (CS-CPLUS)

12. hSbC Nominees (Asing) Sdn bhd 6,173,300 1.51 BNY Brussels For Powershares Global Water Portfolio

13. Citigroup Nominees (tempatan) Sdn bhd 4,812,800 1.18 Exempt An For Eastspring Investments Berhad 14. hlG Nominee (tempatan) Sdn bhd 3,585,000 0.88 Pledged Securities Account For Corporate Line (M) Sdn Bhd 15. ECml Nominees (tempatan) Sdn bhd 2,979,600 0.73 Pledged Securities Account For Ng Yim Hoo (001) 16. maybank Nominees (tempatan) Sdn bhd 2,500,000 0.61 Pledged Securities Account For Corporate Line (M) Sdn Bhd (41210162038A) 17. Citigroup Nominees (tempatan) Sdn bhd 2,341,700 0.57 Employees Provident Fund Board (RHB INV) 18. maybank Nominees (tempatan) Sdn bhd 2,000,000 0.49 Etiqa Insurance Berhad (Life Par Fund)



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19. maybank Nominees (tempatan) Sdn bhd 1,838,000 0.45 Etiqa Takaful Berhad (Family PRF EQ)

20. Central Plus (m) Sdn bhd 1,738,250 0.42

21. Rozali bin Ismail 1,729,000 0.42 22. KAF trustee berhad KAF Fund Management Sdn Bhd For KAF Seagroatt & Campbell Berhad 1,660,040 0.41 23. Employees Provident Fund board 1,494,000 0.37 24. ECml Nominees (tempatan) Sdn bhd Pledged Securities Account For Leong Kam Chee (002) 1,370,000 0.33 25. hSbC Nominees (Asing) Sdn bhd Exempt An For BSI SA (BSI BK SG-NR) 1,300,000 0.32 26. lim twee yong 1,083,200 0.26 27. CImSEC Nominees (tempatan) Sdn bhd CIMB Bank For Mak Ngia Ngia @ Mak Yoke Lum (MM0749) 1,040,000 0.25 28. maybank Nominees (tempatan) Sdn bhd Etiqa Insurance Berhad (Par Fund 2) 1,000,000 0.24 29. CImSEC Nominees (tempatan) Sdn bhd CIMB For Yap Lim Sen (PB) 993,000 0.24 30. Abdul Aziz bin hashim 944,800 0.23 totAl 280,180,902 68.47




384

DIRECtoRS’ INtERESt IN oRDINARy ShARES AS PER REGIStER oF DIRECtoRS’ ShAREholDINGS

No. oF ShARES hElD IN thE ComPANy DIRECt INDIRECtNo NAmE oF DIRECtoR INtERESt %# INtERESt %#

1. YBhg Tan Sri Rozali Bin Ismail 1,729,000 0.42 167,037,114 + 40.83 +

2. YBhg Dato’ Hashim Bin Mahfar – – – –3. YBhg Dato’ Ruslan Bin Hassan – – – –4. YBhg Dato’ Ir Lee Miang Koi 10,000 ** – –5. YBhg Dato’ Syed Danial Bin Syed Ariffin – – – –6. YBhg Tan Sri Dato’ Hari Narayanan Govindasamy – – – –7. YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh – – 42,000 ^ 0.01 ̂8. Mr Ng Wah Tar – – – –9. YAM Tengku Dato’ Rahimah Binti Almarhum Sultan Mahmud – – – –10. YBhg Tan Sri Dato’ Ahmad Fuzi Bin Haji Abdul Razak – – – –

Notes :+ Deemed interest by virtue of 100% equity interest each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd of which 92.5% is held in own

name and 7.5% is held in his children’s names, respectively.^ Deemed interest by virtue of shares held by spouse, Tay Boon Ling pursuant to Section 134 of the Companies Act, 1965.# Excluding a total of 2,036,800 PNHB Shares bought back and retained as treasury shares as at 26 April 2012.** Negligible

SubStANtIAl ShAREholDERS bASED oN thE REGIStER oF SubStANtIAl ShAREholDERS(Excluding bare trustees)

No. oF ShARES hElD IN thE ComPANy DIRECt INDIRECtNo NAmE oF SubStANtIAl ShAREholDER INtERESt %# INtERESt %#

1. YBhg Tan Sri Rozali Bin Ismail 1,729,000 0.42 167,037,114 + 40.83 +

2. Central Plus (M) Sdn Bhd 17,179,587 4.20 104,753,900 * 25.61 *

3. Corporate Line (M) Sdn Bhd 18,627 ** 45,085,000 * 11.02 *

4. Employees Provident Fund Board 1,494,000 0.37 23,816,785 ^ 5.82 ^

5. Lembaga Tabung Haji 23,476,000 5.74 – –

Notes :+ Deemed interest by virtue of 100% equity interest each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd of which 92.5% is held in own

name and 7.5% is held in his children’s names, respectively.* Held in nominee name(s).^ Shares held and managed by Portfolio Managers.# Excluding a total of 2,036,800 PNHB Shares bought back and retained as treasury shares as at 26 April 2012.** Negligible


385


DAtE oF ACquISItIoN/ NEt booK REmAINING DESCRIPtIoN & DAtE oF vAluAtIoN (v) vAluE lEASEholD ExIStINGloCAtIoN (IF APPlICAblE) lAND AREA (Rm) tENuRE (ExPIRy DAtE) uSE

building & Adjacent landWisma Rozali 01/08/2005/ 12,952 sq.m 54,000,000 99 years 91 years Office No. 4 & 6, Persiaran Sukan 31/12/2011 (v) Leasehold expiring on PremisesSeksyen 13 22/01/2102 and40100 Shah Alam Vacant LandSelangor Darul Ehsan

office lotsNo. 8 Eu Tong Sen Street 03/10/2008/ 86 sq.m 99 years 88 years Office# 22-85, The Central N/A (v) Leasehold expiring on PremisesSingapore 059818 8,913,871 01/01/2100

No. 8 Eu Tong Sen Street 26/09/2008 60 sq.m 99 years 88 years Office# 22-86, The Central N/A (v) Leasehold expiring on PremisesSingapore 059818 01/01/2100

vacant landH.S.(D) 142037 14/02/1998/ 10,364 sq.m 19,600,000 99 years 88 years Rented outPT 32, Seksyen 14 31/12/2011 (v) Leasehold expiring on to a car parkBandar Shah Alam 17/12/2099 operatorDistrict of PetalingSelangor Darul Ehsan

vacant landH.S.(D) 226605, PT 332 06/04/2006 691 sq.mH.S.(D) 226606, PT 333 06/04/2006 711 sq.m 1,267,188 Freehold N/A NoneH.S.(D) 226607, PT 334 06/04/2006/ 862 sq.mMukim Pekan N/A (v)Subang JayaDaerah PetalingSelangor Darul Ehsan

vacant landH.S.(D) 6163, PT 10653 16/02/2007/ 331,438 sq.m 99 years 90 years None 31/12/2011 (v) Leasehold expiring on 24/10/2101 119,000,000 H.S.(D) 6164, PT 10654 213,092 sq.m NoneH.S.(D) 6165, PT 10655 # 229,299 sq.m Rented outH.S.(D) 6166, PT 10656 229,733 sq.m NoneMukim Of Ijok District Of Kuala SelangorSelangor Darul Ehsan# Included a single storey building complete with parking facilities

List of Properties As At 31 December 2011


386

DAtE oF ACquISItIoN/ NEt booK REmAINING DESCRIPtIoN & DAtE oF vAluAtIoN (v) vAluE lEASEholD ExIStINGloCAtIoN (IF APPlICAblE) lAND AREA (Rm) tENuRE (ExPIRy DAtE) uSE

4 Storey ShophouseNo. 12, Jalan Todak 5 21/03/2007/ 238 sq.m 1,900,000 99 years 81 years OfficePusat Bandar Seberang Jaya 31/12/2011 (v) Leasehold expiring on Premises13700 Perai 21/10/2092Pulau Pinang

office lotNo. 20-1 & 20-2 01/02/2008/ 164 sq.m 1,900,000 Freehold N/A OfficeJalan Presiden F U1/F 31/12/2011 (v) PremisesAccentra Business ParkGlenmarie, Seksyen U140150 Shah Alam(Lot 63191, H.S. (D) 224581No. hakmilik 211790District Of PetalingSelangor Darul Ehsan)

vacant landNo. 8, Jalan Sultan Mahmud 02/07/2008/ 2,058 sq.m 1,300,000 Freehold N/A None21080 Kuala Terengganu 31/12/2011 (v)Terengganu(Lot 2119, Mukim of Batu BurukDistrict Of Kuala TerengganuTerengganu Darul Iman)

vacant landH.S. (D) 2605, PT 1563 01/08/2010/ 159,996 sq.m 16,500,000 99 years 84 years NoneMukim Jeram 31/12/2011 (v) Leasehold expiring onDistrict Of Kuala Selangor 1/12/2095Selangor Darul Ehsan

List of Properties As At 31 December 2011

387


GRI Index

GRI G3.1 INDEx PAGES

PRoFIlE DISCloSuRES

Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organisation 16-241.2 Description of key impacts, risks, and opportunities 22-23

organisational Profile

2.1 Name of the organisation Front Cover2.2 Primary brands, products, and/or services 44-492.3 Operational structure of the organisation 44-492.4 Location of organisation’s headquarters 282.5 Number of countries where the organisation operates 28-292.6 Nature of ownership and legal form 44-492.7 Markets served 28-292.8 Scale of the reporting organisation 252.9 Significant changes during the reporting period 16-242.10 Awards received in the reporting period 40-43

Report Parameters

3.1 Reporting period 253.2 Date of most recent previous report 253.3 Reporting cycle As and when required3.4 Contact point for questions regarding the report or its contents 283.5 Process for defining report content 253.6 Boundary of the report 253.7 Specific limitations on the scope or boundary of the report 253.8 Basis for reporting on joint ventures, subsidiaries, etc 25, 44-493.9 Data measurement techniques and the bases of calculations 163-1643.10 Explanation of the effect of any re-statements of information 16-243.11 Significant changes from previous reporting period 16-243.12 Table identifying the location of the Standard Disclosures GRI G3.1 Content Index3.13 Policy and current practice with regard to seeking external assurance for the report 25

Governance, Commitments, and Engagement

4.1 Governance structure of the organisation 180-1814.2 Indicate whether the Chair of the highest governance body is also an executive officer X4.3 Independent and/or non-executive members of the Board 1804.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 180-1814.5 Linkage between compensation and the organisation’s performance 184-1864.6 Processes in place to ensure conflicts of interest are avoided 180, 1994.7 Qualifications and expertise of the Board 52-85, 182


388


PRoFIlE DISCloSuRES

4.8 Internally developed statements of mission or values, codes of conduct, and principles Our Vision and Mission4.9 Identification and management of economic, environmental, and social performance, conduct, and principles 1884.10 Processes for evaluating the highest governance body’s own performance 182, 1844.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation 2014.12 Externally developed economic, environmental, and social charters, principles. 1674.13 Memberships in associations 324.14 List of stakeholder groups engaged by the organisation 152,1674.15 Basis for identification and selection of stakeholders with whom to engage 23-244.16 Approaches to stakeholder engagement 167-1704.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics 23, 98

PERFoRmANCE INDICAtoRS : ECoNomIC

Economic Performance

EC1 Direct economic value generated and distributed 87-88EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change 163, 165EC3 Coverage of the organisation’s defined benefit plan obligations 138-139EC4 Significant financial assistance received from government 21, 128, 171

market Presence

EC5 Standard entry level wage vs. local minimum wage 138-139EC6 Policy, practices, and proportion of spending on locally-based suppliers 151EC7 Procedures for local hiring 132

Indirect economic impacts EC8 Development and impact of infrastructure investments and services provided primarily for public benefit 167-174EC9 Understanding and describing significant indirect economic impacts 65, 100, 112

PERFoRmANCE INDICAtoRS : ENvIRoNmENtAl

materials

EN1 Materials used by weight or volume 165EN2 Percentage of materials used that are recycled input materials 165

GRI Index

389


GRI Index


Energy

EN3 Direct energy consumption by primary energy source 164-165EN4 Indirect energy consumption by primary source 164-165EN5 Energy saved due to conservation and efficiency improvements 164-165EN6 Initiatives to provide energy-efficient or renewable energy 166EN7 Initiatives to reduce indirect energy consumption and reductions achieved 164-166

Water

EN8 Total water withdrawal by source 164-165EN9 Significant impact of withdrawal of water 164-165EN10 Percentage and total volume of water recycled and reused 164-165 biodiversity

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas XEN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas XEN13 Habitats protected or restored XEN14 Strategies, current actions, and future plans for managing impacts on biodiversity XEN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations X

Emissions, Effluents and Waste

EN16 Total direct and indirect greenhouse gas emissions by weight 165-167EN17 Other relevant indirect greenhouse gas emissions by weight 165-167EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved 165-167EN19 Emissions of ozone-depleting substances by weight N/AEN20 NOx, SOx, and other significant air emissions by type and weight XEN21 Total water discharge by quality and destination 164-165EN22 Total weight of waste by type and disposal method 162-163EN23 Total number and volume of significant spills 155EN24 Weight of transported, imported, exported, or treated waste deemed hazardous 117EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff Operations Review Products and Services

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation 152-167EN27 Percentage of products sold and their packaging materials that are reclaimed by category N/A

Compliance

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations 123-144


390


transport

EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce 165

overall

EN30 Total environmental protection expenditures and investments by type 164-165

PERFoRmANCE INDICAtoRS : SoCIAl - lAbouR PRACtICES AND DECENt WoRK

Employment

LA1 Total workforce by employment type, employment contract, and region 133-138LA2 Total number and rate of employee turnover by age group, gender, and region 133-138LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations 138-139LA15 Return to work and retention rates after parental leave, by gender X

labour/management Relations

LA4 Percentage of employees covered by collective bargaining agreements 142LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements 4,115,116

occupational health and Safety

LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs 144LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region 146LA8 Education, training, counselling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases 145-146LA9 Health and safety topics covered in formal agreements with trade unions 145-146

training and Education

LA10 Average hours of training per year per employee by employee category 140-141LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings XLA12 Percentage of employees receiving regular performance and career development reviews 140

GRI Index

391


GRI Index


Diversity and Equal opportunity

LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity 133-138LA14 Ratio of basic salary of men to women by employee category 138-139

PERFoRmANCE INDICAtoRS : SoCIAl - humAN RIGhtS

Diversity and Equal opportunity

HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening 138-140HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken 151HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained 140-141

Non-Discrimination

HR4 Total number of incidents of discrimination and actions taken 132

Freedom of Association and Collective bargaining

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights 142

Child labour

HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour 139

Forced and Compulsory labour

HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour 139

Security Practices

HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations 150

Indigenous Rights

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken N/A


392


Assessment

HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments 132

Remediation

HR11 Number of grievances related to human rights filed, addressed, and resolved through formal grievance mechanism 142

PERFoRmANCE INDICAtoRS : SoCIEty

local Community

SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting 167-174SO9 Operations with significant potential or actual negative impacts on local communities 167-174, 113SO10 Prevention and mitigation measured implemented in operations with significant potential or actual negative impacts on local community 115-121

Corruption

SO2 Percentage and total number of business units analysed for risks related to corruption 142SO3 Percentage of employees trained in organisation’s anti-corruption policies and procedures 142SO4 Actions taken in response to incidents of corruption 142

Public Policy

SO5 Public policy positions and participation in public policy development and lobbying XSO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country X

Anti-competitive behaviour

SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes X

Compliance

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations 123-144

GRI Index

393


GRI Index


PERFoRmANCE INDICAtoRS : PRoDuCt RESPoNSIbIlIty

Customer health and Safety

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures 34PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes 112-113

Product and Service labelling

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements 111-112, 114-116PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes 112-113PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction 110

marketing Communications

PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship XPR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes X

Customer Privacy

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data 111

Compliance

PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services X

Note : The disclosed GRI indicators above refer to fully or partially disclosed data.

X : Not Available. We will continue to improve our data collection and monitoring processes for improved disclosure levels in future reports.

N/A : Not Applicable. These indicators have been found to be irrelevant or not directly related to our nature of operations.

I/We (full name of shareholders as per NRIC, in CAPITAL LETTERS)NRIC No./ Company No. (new) (old)of (full address)being a Member/Members of Puncak Niaga Holdings Berhad hereby appoint (full name of proxy as per NRIC, in CAPITAL LETTERS) NRIC No. (new) (old)of (full address)

or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us and on my/our behalf at the Fifteenth Annual General Meeting of Puncak Niaga Holdings Berhad to be held at Concorde I, Concorde Hotel Shah Alam, Level 2, No. 3, Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Tuesday, 26 June 2012 at 10.00 a.m. and at any adjournment thereof, as indicated below:-

No. RESolutIoN FoR AGAINSt1. To receive the Audited Financial Statements of the Group and of the Company for the financial

year ended 31 December 2011 together with the Reports of the Directors and Auditors thereon. 2. To re-elect YBhg Dato’ Hashim bin Mahfar as Director of the Company. 3. To re-elect YBhg Dato’ Ir Lee Miang Koi as Director of the Company. 4. To re-elect Mr Ng Wah Tar as Director of the Company.5. To re-appoint Messrs Ernst & Young as the Auditors of the Company and to authorise the

Directors of the Company to fix their remuneration. SPECIAl buSINESS6. Ordinary Resolution: To empower the Directors of the Company to issue shares pursuant to

Section 132D of the Companies Act, 1965.7. Special Resolution: To approve the Proposed Amendments to the Articles of Association of the Company.

Please indicate with a cross (X) how you wish your votes to be cast in respect of each Resolution. In the absence of specific directions, your proxy will vote or abstain as he thinks fit.

Signed this day of 2012

Signature(s)/Common Seal of ShareholderNRIC/Company No. : Tel. No. :

Notes:1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 18 June 2012 (General Meeting Record of Depositors)

shall be entitled to attend, speak and vote at this Fifteenth Annual General Meeting.2. A member entitled to attend and vote at the Meeting is entitled to appoint another person to attend and vote in his stead.3. A proxy need not be a Member of the Company and the provision of Section 149(1)(b) of the Act shall not apply to the Company. There shall be no restriction

as to the qualification of the proxy.4. A Member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting provided that, (a) where a Member is an authorised nominee as defined in the Central Depositories Act, it may appoint up to two (2) proxies in respect of each Securities

Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. (b) where a Member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account

namely, Omnibus Securities Account, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Securities Account it holds with ordinary shares of the Company standing to the credit of the said Omnibus Securities Account.

Where a Member appoints two (2) or more proxies (as the case maybe), the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney or if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power of attorney. If this Proxy Form is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under an Authorisation Document which is still in force, no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointed under a power of attorney, it should be accompanied by a statement reading “signed under a power of attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the power of attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed with this Proxy Form.

6. Any corporation which is a member of the Company may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its representative at the Meeting in accordance with Article 82 of the Company’s Articles of Association.

7. The instrument appointing the proxy must be deposited at the Office of the Company’s Share Registrar, Tricor Investor Services Sdn Bhd at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia not less than 48 hours before the time set for holding the Meeting or any adjournment thereof.

Number of shares held Please fill in CDS Account No.

Proxy Form

Share Registrar forPuncak Niaga holdings berhad (416087-u)

Tricor Investor Services Sdn Bhd (118401-V)

Level 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurMalaysia

PlEASE FolD hERE

PlEASE FolD hERE

StAmP

Corporate Directory

PUNCAK NIAGAHOLDINGS BERHAD Wisma RozaliNo. 4, Persiaran Sukan Seksyen 13, 40100 Shah Alam Selangor Darul Ehsan Tel : +603-5522 8589 Fax : +603-5522 8598e-mail (general): [email protected] (investors):[email protected]:www.puncakniaga.com.my

PUNCAK NIAGA (M) SDN BHDWisma RozaliNo. 4, Persiaran Sukan Seksyen 13, 40100 Shah Alam Selangor Darul Ehsan Tel : +603-5522 8589 Fax : +603-5522 8598

BRANCH OFFICES

Kuala Terengganu Offi ce 201BJalan Sultan Zainal Abidin20000 Kuala TerengganuTerengganu Darul ImanTel : +609-623 8589Fax : +609-624 8589

Penang Offi ce No. 12, Jalan Todak 5Pusat Bandar Seberang Jaya13700 Perai, Pulau PinangTel : +604-397 8589

Sarawak Offi ceLot 10864 & 10865Section 64KTLD, Jalan Mendu93200 Kuching, SarawakTel : +6082-332 589Fax : +6082-337 589

Sri Aman Site Offi ce1st Floor, Lot 440Block 3, Jalan Council95000 Sri Aman, SarawakTel : +6083-320 335Fax : +6083-320 340

Sarikei Site Offi ce1st Floor, No. 82CWisma CS KuaJalan Masjid Lama96100 Sarikei, SarawakTel : +6084-656 206Fax : +6084-656 208

SUBSIDIARY OFFICES

In Malaysia

SYARIKAT BEKALAN AIRSELANGOR SDN BHD(SYABAS) SYABAS Head Offi ceJalan Pantai Baharu59200 Kuala LumpurTel : +603-2282 6244/ +603-2088 5400Fax : +603-2282 7976e-mail: [email protected]: www.syabas.com.my

PUSAT PERKHIDMATANPELANGGAN (PUSPEL)Toll Free Helpline:1-800-88-5252Fax : +603-2295 5168SMS to 39222 type PUSPEL space

your complaints/feedbacke-mail: [email protected]: follow@puspel (on Twitter and Facebook)

PUNCAK OIL & GAS SDN BHDUnit 12-1, Level 12No. 11, Jalan 16/11Pusat Dagang Seksyen 1646350 Petaling JayaSelangor Darul EhsanTel : +603-7958 5533Fax : +603-7956 7375

GOM RESOURCES SDN BHD(formerly known as Global Offshore Malaysia Sdn Bhd)Level 4 & 17, Tower 1 ETIQA Twin Towers 11, Jalan Pinang50450 Kuala Lumpur Tel : +603-2177 4600Fax : +603-2166 8867

PUNCAK RESEARCH CENTRE SDN BHDWisma RozaliNo. 4, Persiaran Sukan Seksyen 13, 40100 Shah AlamSelangor Darul EhsanTel : +603-5522 8589Fax : +603-5522 8598

In Labuan

KGL LTD.c/o Lot 1, 2nd FloorWisma SiamlohJalan Kemajuan87007 Federal Territory of LabuanTel : +608-741 7810Fax : +608-742 4220

In Singapore

SINO WATER PTE LTDPUNCAK NIAGA OVERSEASCAPITAL PTE LTDNo. 8, Eu Tong Sen Street#22-85 & #22-86, The CentralSingapore 059818Tel : +65-6224 9220 (Main Line) +65-6222 6936/ +65-6222 7926Fax : +65-6222 6812

In China

SINO WATERENVIRONMENTALCONSULTANCY (SHANGHAI) CO. LTDUnit 301, No. 398, City GatewayCaoxi (North) RoadXuhui District200030 ShanghaiPeople’s Republic of ChinaTel : +86-21-6090 5282Fax : +86-21-6090 5281

LUWEI (PINGDINGSHAN) WATER CO. LTD No. 6, ShunCheng Road (East)Lushan County, Henan Province467300People’s Republic of ChinaTel/Fax : +86-375-589 1036

XINNUO WATER (BINZHOU) CO. LTDChenlou Industrial &Commerce ParkLaodian VillageYangxin CountyShandong Province251802People’s Republic of China

LUANCHENG DAYU WATER SUPPLY CO. LTD No. 17, Xinyuan RoadLuancheng CountyHebei Province051430People’s Republic of ChinaTel/Fax : +86-311-8803 1652

HEBEI SINO PANLONG INDUSTRIAL WATER SUPPLYCO. LTDNo. 117, Renmin RoadYuanshi CountyHebei Province051130People’s Republic of ChinaTel/Fax : +86-311-8463 8813

In India

PUNCAK NIAGAINFRASTRUCTURES &PROJECTS PRIVATE LIMITED1, Kutchery Road, MylaporeChennai - 600004Tamil Nadu, IndiaTel : +91-44-4210 2058Fax : +91-44-4210 2028 REPRESENTATIVE OFFICE

In Vietnam 16F, Saigon Tower29, Le Duan StreetDistrict 1, Ho Chi Minh CitySaigon, VietnamTel : +84-8-3520 7701Fax : +84-8-3823 6288

[email protected]@puspel on

Puncak Niaga Holdings Berhad (416087-U)

Wisma Rozali, No 4, Persiaran Sukan, Seksyen 13,

40100 Shah Alam, Selangor Darul Ehsan, Malaysia

T +603 5522 8589

F +603 5522 8598

E [email protected]

www.puncakniaga.com.my/investors.html

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