Strength - Puncak Niaga...84 Operations Review - Puncak Niaga (M) Sdn Bhd 90 Operations Review -...

Strengthin Unity

Puncak Niaga Holdings Berhad (“PNHB”) is a diverse team of many

hands but one mind. Each of our team members has different talents,

but all of us unite in strength as one team to achieve the Company’s

vision, mission and goal.

Our goal is to serve our stakeholders and our nation by responsible

custodianship of the natural environment. We believe in mutual

responsibility and mutual prosperity, and we aim to build a sustainable

business by means of mutual effort. We also believe that growth –

whether individual or corporate – is best achieved by unity in strength

and teamwork.

This is the focus of our 2012 Annual Report.

DATE

26 June 2013 (Wednesday)

TIME

10.00 am

VENUE

Concorde 1

Concorde Hotel Shah Alam, Level 2

No. 3, Jalan Tengku Ampuan Zabedah C9/C

40100 Shah Alam, Selangor Darul Ehsan

16th

Annual General Meeting

Our Mission

Our Vision

To meet the increasing challenges in the demand for high quality water

supply, wastewater and environmental systems through the continuous

implementation of high quality standards, effi cient services, human

capital development, innovative technologies and operational systems.

To share our experience and offer our expertise through Smart Business

Partnerships, Public Private Partnerships or other innovative business

models.

To actively participate in local, regional and global business opportunities

with linkages to the Company’s core activities, waste water & solid waste

management, environment management and oil & gas sectors.

To actively support and participate in programmes and activities aimed

at uplifting the community’s living standards and value systems in line

with the aspirations of Vision 2020.

To address national and international concerns pertaining to the

protection, conservation and enhancement of the natural environment

we live in.

To Be A Leading Regional Integrated Water, Wastewater And

Environmental Solutions Provider And To Emerge As A Signifi cant Player

In The Oil & Gas Sector.

Contents4 2012 Key Highlights

5 Puncak Values

8 Executive Chairman’s Message

17 About This Report

18 Corporate Profi le

20 Corporate Information

23 PNHB Group Fact Sheet

26 Our Role In The Water Supply System

27 Milestones

30 Puncak News

32 Corporate Achievements

35 Corporate Structure

36 Organisation Structure - PNSB

38 Organisation Structure - SYABAS

40 Organisation Structure - POG

41 Organisation Structure - GOM Resources

44 Board Of Directors’ Profi le

55 Board Of Directors

56 Key Personnel Profi le - PNSB

62 Key Personnel Profi le - SYABAS

71 Key Personnel Profi le - Sino Water

72 Key Personnel Profi le - POG & GOM Resources

78 Five-Year Financial Highlights

79 Five-Year Group Performance

80 Share Price & Volume Traded

81 Financial Calendar

84 Operations Review - Puncak Niaga (M) Sdn Bhd

90 Operations Review - Syarikat Bekalan Air Selangor Sdn Bhd

98 Operations Review - Puncak Oil & Gas Sdn Bhd,

GOM Resources Sdn Bhd And KGL Ltd.

101 Business Expansion

105 Delivering Service Excellence

111 Delivering Quality

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Contents

126 Valuing Our People

150 Preserving Our Environment

164 Engagement With Our Community

170 Corporate Events

174 Statement On Corporate Governance

196 Statement On Internal Control

198 Audit Committee Report

204 Risk Management Policy & Report

208 Corporate Disclosure Policy

209 Corporate Social Responsibility Policy

210 Health, Safety And Environmental Policy

211 Investor Relations Policy & Report

214 Quality Policy & Report

216 Statement Of Directors’ Responsibility For Preparation Of Financial Statements

218 Financial Statements

418 Distribution Schedule Of Equity Securities

422 List Of Properties

424 GRI Index

431 Notice Of Annual General Meeting

436 Appendix A Of The Notice Of Annual General Meeting

437 Statement Accompanying The Notice Of Annual General Meeting

Proxy Form

Corporate Directory

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Annual Report 2012 Puncak Niaga Holdings Berhad

In 2012...We operate, manage and maintain 29 WTPs with a combined capacity

of 1,930 million litres per day.

Our expansion into the Oil & Gas sector gained traction, a success that

contributed signifi cantly to the Group’s fi nancial results for 2012.

RM3.74billion

For the fi nancial

year ended

31 December 2012,

the Group’s revenue

advanced 44.5%

to RM3.74 billion.

RM778.0million

Revenue for our

Oil & Gas Division

almost tripled to

RM778.0 million

in 2012.

RM232.68 million

The Group achieved a profi t

after taxation of RM232.68 million

for the fi nancial year ended

31 December 2012.

99.5%Achievement in overall 2012

collection effi ciency.

711.00 millionOur WTPs delivered

711.00 million cubic

metres of treated water

in 2012.

7.5 million

We distributed a daily average

of 4,322 MLD of treated water to

about 7.5 million consumers.

99.8%Our WTPs achieved an

impressive 99.8% compliance

with stipulated treated water

quality standards.

2012Key

Highlights

4

Puncak Niaga Holdings Berhad Annual Report 2012

Puncak Values

OUR COMPANY’S VALUES, THE PUNCAK VALUES SHAPE

OUR ORGANISATIONAL CULTURE AND GUIDE THE WAY WE

RUN OUR BUSINESS. THEY ARE INTEGRATED INTO OUR

BUSINESS PROCESSES AND OUR CORE VALUES.

At PUNCAK, we are and continuously seek to be:

PASSIONATEabout our business for sustainable performance.

UNITED as one in our corporate responsibility strategy to align with our Vision to be the Leading Regional Integrated Water, Wastewater And Environmental Solutions Provider And To Emerge As A Signifi cant Player In The Oil & Gas Sector.

NURTURE our human capital towards an exemplary workforce.

CORPORATE GOVERNANCEguides the way we run our business in an evolving global business environment.

ACCOUNTABLE for all our actions and engagement process with our stakeholders.

KNOWLEDGEABLE in all aspects of our business operations and continue to be the trusted and reliable provider of clean water supply.

5

Working together means sharing the task and multiplies our success


ExecutiveChairman’s

Message

Dear valued Shareholders and Stakeholders,

Throughout 2012, Puncak Niaga Holdings Berhad (“PNHB”) and the Group (“PNHB Group”

or the “Group”) remained unwavering in its dedication to building sustainable value for the

benefi t of its stakeholders, and above all in its total commitment to serving its customers and

to protecting the environment.

Throughout the year, in our core business of water supply and distribution, the PNHB Group

was proactive not only in supplying an important public utility, but in meeting business

challenges such as ensuring excellent water distribution services and quality water supply to

meet the growing consumers’ expectations within various constraints including adequacy of

treated water to meet the demand.

In addition to this, the Group had to face the many challenges in relation to the protracted

proposed restructuring of the water services sector in Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya (“Proposed Restructuring”), and the issue in relation to the water

tariff adjustment for the third and fourth operating periods commencing 1 January 2009 and

ended 31 December 2011 and commencing 1 January 2012 and ending 31 December 2014,

respectively (“Water Tariff Adjustment”) or compensation in lieu thereof as provided under

the Concession Agreement dated 15 December 2004 signed between Syarikat Bekalan Air

Selangor Sdn Bhd (“SYABAS”), the Federal Government and the Selangor State Government

(“SYABAS Concession Agreement”).

Our expansion into the Oil & Gas sector gained traction, a success that contributed

signifi cantly to the Group’s fi nancial results for 2012.

YBHG TAN SRI

ROZALI ISMAIL

Executive Chairman

of PNHB Group

8


ExecutiveChairman’s Message

It is therefore pleasing to report that, despite the challenges, the Group remain focused to achieve its Vision to become a Leading Regional Integrated Water, Wastewater And Environmental Solutions Provider And To Emerge As A Signifi cant Player In The Oil & Gas Sector.

We recognise the importance of continuously enhancing and nurturing the skills and dynamism of our people; of seeking out and nurturing talented and energetic employees in all key business areas for succession planning; of fostering smart, forward-thinking innovation; and of inculcating a culture of high performance and teamwork within the workforce with a shared vision, mission and goal as the path towards achieving the Group’s Vision. Leveraging on the strengths of our people, PNHB’s theme for the Annual Report 2012 is, “Strength in Unity”, focusing on team leadership.

BACKGROUND

In 2012, a number of factors combined to depress world economic growth. Stresses in the Eurozone intensifi ed, exacerbated by doubts about the ability of European policymakers to resolve the crisis. The United States economy slowed, with output and employment weakening during the year. In addition, domestic demand continued to lose momentum in key emerging market economies. Specifi cally, in developing Asia, growth is estimated to have decreased to less than 7% in the fi rst half of 2012.

(Source: International Monetary Fund World Economic Review 2012 and World Economic Outlook 2013.)

Despite this, the local economy proved surprisingly resilient and Malaysia made further progress towards its goal of becoming a high-income, developed nation. To counter the negative impact on Malaysia’s growth of the problems in the global economy, the Government introduced a National Transformation Policy (“NTP”). The NTP effectively consolidates several transformation programmes, strengthening domestic demand and steering the nation in its mission to achieve inclusive and sustainable growth.

The timely implementation of the Tenth Malaysia Plan projects and other NTP programmes partly cushioned the domestic economy from the effects of a weaker external sector and enabled the nation to record a creditable growth of 5.1% in the fi rst half of 2012. With the implementation of programmes under the NTP intensifying, plus the related multiplier effects, the economy should now be on an upward trend, as of the second half of 2012.

(Source: Economic Report 2012/2013, Ministry of Finance, Malaysia)

Against this backdrop, on behalf of the Board of Directors of PNHB, I am pleased to present the Annual Report and the Audited Financial Statements of the Company and Group for the fi nancial year ended 31 December 2012.

FINANCIAL PERFORMANCE

For the fi nancial year ended 31 December 2012, the Group’s revenue advanced 44.5% to RM3.74 billion from RM2.59 billion for the fi nancial year ended 31 December 2011. The increase in revenue was mainly due to claimed higher water tariff compensation arising from the scheduled tariff hike which should have been gazetted on 1 January 2012, combined with the revenue contribution from the Oil & Gas sector.

Meanwhile, the Group achieved a profi t after taxation (“PAT”) of RM232.68 million compared to the loss after taxation of RM83.13 million recorded in the preceding year. This commendable profi t performance enhanced the basic earnings per share from 2.42 sen in 2011 to 58.20 sen in 2012.

The Group achieved a segment profi t before interest and tax (“segment PBIT”) of RM945.99 million compared to RM549.89 million recorded in the preceding year. The increase in segment PBIT was mainly due to higher segment PBIT from the Water Distribution and Oil & Gas Segment of RM610.60 million and RM83.44 million respectively.

We recognise

the importance

of continuously

enhancing and

nurturing the skills

and dynamism

of our people

9


Dividend

The Board of Directors is pleased to propose a fi nal single tier dividend of 5 sen per ordinary

share for the fi nancial year ended 31 December 2012 (2011: Nil).

CHALLENGES

The issue of the Proposed Restructuring has remained unresolved since July 2008. No progress

was achieved during the year under review, and neither has the Water Tariff Adjustment nor

the compensation in lieu thereof under the SYABAS Concession Agreement been settled.

The legal suits in relation thereto involving Konsortium ABASS Sdn Bhd (“Konsortium

ABASS”), SYABAS, Puncak Niaga (M) Sdn Bhd (“PNSB”) and the Selangor State Government

are ongoing.

On 20 February 2013, the Company received two letters from Kumpulan Darul Ehsan

Berhad (“KDEB”) on behalf of the Selangor State Government in relation to the Proposed

Restructuring offering on the indicative terms and conditions for the proposed acquisition

of 100% equity in PNSB and 70% equity of PNHB in SYABAS not already owned by KDEB

(“KDEB Offers”).

On 6 March 2013, after full deliberation of the indicative terms and conditions of the KDEB

Offers and after considering the advice of the Adviser appointed by the Company to assist

in evaluating the KDEB Offers, the Company announced that the Board of Directors was

unable to reach a fi nal decision to even consider giving approval-in-principle or acceptance

in principle to KDEB given the incomplete and inconclusive nature of the KDEB Offers as well

as the position taken by Pengurusan Aset Air Berhad (“PAAB”). The Board of Directors was

also not ready to convene an Extraordinary General Meeting of the Company for the purpose

of tabling the KDEB Offers to the shareholders of the Company for consideration.

The amount of compensation in lieu of the Water Tariff Adjustment claimed in the suit by

SYABAS against the Selangor State Government under the SYABAS Concession Agreement

is RM1,054.20 million for the period from 1 January 2009 to 31 March 2011. Total Water

Tariff Adjustment for the period from 1 January 2009 to 31 December 2012 amounted to

RM2,486.97 million.

To date, SYABAS is still unable to make full payment for water purchases from the four

water treatment operators, namely PNSB, Konsortium ABASS, SPLASH and Konsortium Air

Selangor Sdn Bhd. The cashfl ow problem also reduces the fi nancing capacity of SYABAS to

carry out its Capital Expenditure (“CAPEX”) programme to reduce the Non Revenue Water

(“NRW”) and rehabilitate the old distributions assets.

The Selangor State Government’s decision in 2008 to freeze the SYABAS CAPEX programme

(which includes replacement of old and aging pipes and others) until the Proposed

Restructuring is accepted and implemented, remained unchanged and continued into

2012. With a substantial part of the planned programmes withheld for so many years, this

has restricted SYABAS from providing quality service to the consumers and has resulted

in numerous and frequent pipe bursts and water supply interruptions and has jeopardised

SYABAS’ efforts to improve the water distribution services to the consumers. At present,

only ad hoc initiatives classifi ed as extremely critical works are approved by the National

Water Services Commission [Suruhanjaya Perkhidmatan Air Negara] (“SPAN”). Besides

replacement of old and aging pipes and others, SYABAS is also not able to further reduce

the NRW level due to such restriction.

10


Message


In May to July 2012, the water crisis in Hulu Langat areas affecting 209,678 consumer

accounts was due to insuffi cient treated water. The crisis was temporarily resolved with

the completion of the second stage distribution work in relation to the new Sg Labu WTP.

Nevertheless, water supply has remained at a crisis state since July 2012 with the reserve

margin standing at below 3% most of the time and resulting in occasional water interruptions

in several areas. The critical water supply situation will persist and continue into 2013 with an

increase in demand but limited additional distributable treated water capacity.

The water crisis at Gombak and Kuala Lumpur Districts at the beginning of 2013 was due

to the technical problems at the pump house in Wangsa Maju resulting from many years of

continuous overloading beyond its original design capacity. The crisis was fi nally resolved in

mid January 2013 after the installation of bypass pipes with approval of the authorities. The

authorities had in March 2012 approved SYABAS’ previous proposal to build an additional

pump house at Wangsa Maju and the construction of the pump house is currently undertaken

by the Selangor State Government. The water crisis had caused considerable hardship to

the affected consumers and these circumstances underline the vital need for the water woes

in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya to be resolved swiftly.

The Selangor State Government on 4 December 2012 indicated its intention to terminate the

Operation and Maintenance Agreement dated 7 March 2008 in respect of the Sg Sireh WTP

between PNSB and the Selangor State Government, and the Novation Agreement dated

7 March 2008 in respect of the Sg Sireh WTP between PNSB, SYABAS and the Selangor

State Government. On 18 February 2013, PNSB instituted legal proceedings against the

Selangor State Government on the matter. The suit is currently ongoing.

The Group’s Oil & Gas unit has successfully completed contracts with Kebabangan Petroleum

Operating Company Sdn Bhd (“KPOC”), Newfi eld Peninsula Malaysia Inc (“Newfi eld”),

Exxonmobil Exploration and Production Malaysia Inc (“Exxonmobil”) and Hess Exploration

& Production Malaysia BV (“Hess”) in 2012. GOM Resources Sdn Bhd’s (“GOM Resources”)

major contract, the Integrated Transportation and Installation of Offshore Facilities Package

A : DLB 264 has been extended for one more year in 2013 with a further option to extend

in 2014. Aside from its core business of transportation and installation, GOM Resources will

have to explore other viable areas of business within the Oil & Gas sector and continue to

look out for potential project acquisitions, both domestically and overseas.

ACHIEVEMENTS

None of the challenges we faced during the year dented the Group’s determination to fulfi l its

commitments to its various stakeholders and above all to consumers. I am therefore pleased

to record that the Group exceeded all of its KPIs. The Group had provided a good supply

of clean, treated water and had continued to manage the ever-increasing demand for water

within Selangor and the Federal Territories of Kuala Lumpur and Putrajaya.

Moreover, despite the fi nancial constraints affecting the whole of our concession business,

signifi cant sums were invested in upgrading the Water Treatment Plants (“WTP”) we operate.

Other critical works and strategic programmes were also prioritised, including Research and

Development (“R&D”) and Information and Communication Technology (“ICT”).

In the Oil & Gas sector, the Group performed up to expectation and was awarded by KPOC

the Integrated Transportation and Installation of Offshore Facilities contract for one more year

in 2013 with an extension option of one year.

Across all of its water treatment operations, PNSB has rigorously adhered to the Integrated

Management System covering ISO 9001:2008 (Quality), ISO 14001 (Environment) and

OHSAS 18001:2007 (Safety) Management Systems. The three Regional Offi ces of PNSB

also adhered to the Integrated Management System with ISO 9001:2008 (Quality).

11



Three SYABAS districts were accredited with OHSAS 18001:2007 (Health and Safety).

In addition, SYABAS’ Human Resources & Administration Department was awarded with

ISO 9001:2008 certifi cation in 2012.

For Oil & Gas operations, GOM Resources adhered to the Integrated Management System

covering ISO 9001:2008 (Quality), ISO 14001:2004 (Environment), OHSAS 18001:2007

(Occupational, Health and Safety) and ISO/TS29001:2010 (Petroleum, Petrochemical and

Natural Gas Industries – Sector Specifi c Quality) Management Systems.

CORPORATE DEVELOPMENTS

Oil & Gas

The Oil & Gas sector is a massive potential growth area for the Group and our initial foray into

the sector has met with commendable success in its infant stage as, after just one full year of

operation, GOM Resources results had a positive impact on the Group’s results, contributing

approximately 20.8% of the Group’s revenue in 2012.

The Group’s Oil & Gas capabilities currently involve construction and subsea services and

marine support services to the offshore Oil & Gas industry in Malaysia. The Oil & Gas unit is

exploring many other areas, both mid-stream and upstream and is looking to expand locally

and overseas. During the year, GOM Resources set up the Exploration & Production Division

to evaluate business development opportunities, locally and overseas.

Looking forward, the Group is confi dent and hopeful of clinching more Oil & Gas projects to

achieve its Vision to become a signifi cant player in this sector and to constantly enhance the

sustainability of the Group’s businesses.

Water Related Construction Projects

The Group’s ongoing water related construction projects in Sarawak are coming to an end,

with total completion of three (3) remaining work orders expected by June 2013. The Group

is working towards securing more new water related construction contracts in 2013. There is

undoubtedly a potential growth area for PNHB not only in construction but also in operation

and maintenance. In the year ahead, we will continue to dedicate our resources to business

development efforts in this area.

Overseas Expansion

Asia is expected to be the world’s next growth centre. Such growth is creating a substantial

increase in demand for resources in both the consumer and the industrial markets, which in

turn offers the Group tremendous opportunities for business expansion.

(Source: The European Magazine January-February 2013)

The Group has amassed considerable experience of successfully managing large scale

water projects in India and China, and this experience will stand us in good stead as we

bid for further contracts in water/wastewater and water/wastewater related projects across

developing Asia.

In China, we continue to make good with our current projects. We are also actively exploring

fresh potential investments in other provinces of China. Meanwhile in ASEAN, we are looking

into the possibility of bidding for water/wastewater and water/wastewater related projects

via Government-to-Government arrangements and joint ventures with reliable local partners.

For this reason, in 2013, PNHB’s wholly owned subsidiary, Puncak Oil & Gas Sdn Bhd

(“POG”) is in the process of setting up a branch offi ce in Turkmenistan and incorporated

a wholly owned limited company in The Republic of the Union of Myanmar, namely GOM

12


Message

The Oil & Gas

sector is a massive

potential growth

area for the Group

and our initial

foray into the

sector has met

with commendable

success in its

infant stage


Resources Limited, with the objective to undertake potential business of transportation and

installation of pipelines and other services for the onshore and offshore operations of the Oil

& Gas industry.

Corporate Exercise

In conjunction with PNHB’s fund raising exercise and to reward the existing PNHB

shareholders for their continued support in the Company, on 27 September 2012, PNHB

announced the proposed issue of up to 40,910,609 free Warrants in PNHB (“Warrants”) on

the basis of one Warrant for every ten existing ordinary shares of RM1.00 each in PNHB held

(“PNHB Shares”) (“Proposed Free Warrants Issue”), and a fi ve-year Redeemable Convertible

Secured Sukuk Ijarah (“Convertible Ijarah Sukuk”) of up to RM165.00 million in nominal value

(“Proposed Convertible Ijarah Sukuk Issue”) (“The Proposals”). The Proposals will enable

shareholders to participate in a PNHB derivative without cost as well as giving them an

opportunity to increase their equity participation in PNHB. The Proposals will also further

strengthen PNHB’s capital base and market capitalisation, enabling PNHB to raise funds

for working capital purposes without incurring fi nancing cost and to raise funds at fi xed and

reasonable cost to pursue potential acquisitions and/or investment opportunities.

The Proposals had been approved by the relevant authorities and an Extraordinary General

Meeting will be convened by the Company in end May 2013 to seek the shareholders’

approval for the Proposals.

CORPORATE & ENVIRONMENTAL SOCIAL RESPONSIBILITY

Corporate Responsibility (“CR”) within PNHB is guided by a CR strategy which refl ects the

Group’s Vision to be a Leading Regional Integrated Water, Wastewater And Environmental

Solutions Provider And To Emerge As A Signifi cant Player In The Oil And Gas Sector. In

day-to-day operations, we continue to increase shareholder value and respond to societal

needs. We develop the nation by providing a new generation of innovative services and

solutions. These efforts really make a difference to our communities, the world today and

future generations.

PNHB believes that everyone deserves access to clean water. We are committed to delivering

outstanding quality and reliable service at an affordable price. Our R&D team continues to

evaluate the best possible water treatment processes and water distribution operations to

deliver high water quality to the public. It is part of the Group’s commitment to deliver reliable

and trusted quality service.

Our Research & Development Centre has collaborated with the Ministry of Defence under the

“Penjodohan Initiatif Kementerian Pertahanan dengan Menteri Tempatan” and successfully

developed a mobile water purifi cation prototype ‘JERNIH’ that is able to meet the demand

of a population of 500, tapping from the Army experience in Bamyan, Afganistan. ‘JERNIH’

was showcased at the recently concluded Langkawi International Maritime & Aerospace

Exhibition (LIMA) 2013, held in Langkawi from 26 March 2013 to 30 March 2013 and received

good reviews from visitors to LIMA 2013.

Our stakeholders can signifi cantly affect our business viability. We continue to prioritise

the importance of actively engaging with our stakeholders to understand their views and

concerns. Our effective stakeholder engagement including visits, philanthropic activities,

educational programmes, awareness sessions and participations in various events have

helped us to shape our business. I am pleased to witness the Group’s active role in its mission

in assisting fl ood victims in Selangor, Perak and Terengganu which was extended to help the

needy. As a good corporate citizen, PNHB continues to assist the Government in addressing

current issues concerning the water shortage by introducing educational sessions for the

public to provide accurate information on water status and ways to save water.

13



We continue to integrate CR into every aspect of our business. PNSB, SYABAS and GOM

Resources recognise the importance of providing staff with an adequate work-life balance.

Our “Program Bantuan Bekalan Air Tabung Budi” was launched in 2010 to help the poor,

homeless, single parents, the disabled and those in need. Contributions received from

PEKA members, employees of SYABAS/PNSB, individuals and corporate bodies are used

to help these people. Tabung Budi continues to fi nance payment of water bill arrears, water

connection charges, repair of water pipes and meter stands; installation of water supply for

new water account, installation and reconnection charges on water supply to recipients’

residences and payment of monthly bills.

In 2012, Tabung Budi held 40 events covering 10 districts namely, Klang, Petaling, Kuala

Lumpur, Hulu Selangor, Kuala Selangor, Sepang, Gombak, Kuala Langat, Hulu Langat and

Sabak Bernam.

PNHB is acutely aware of the importance of protecting the natural environment. The Group is

wholeheartedly committed to the preservation and conservation of the environment, especially

rivers, which are the main sources of raw water. PNHB’s Environmental Surveillance section

continuously monitors environmental conditions in the catchment areas that provide us with

raw water.

PNHB runs a variety of programmes, the most noteworthy being the River Rescue

Brigade (Briged Penyelamat Sungai) (“BPS”), to promote a sense of environmental

responsibility amongst the general public. This programme teaches students from

primary/secondary/tertiary schools in Selangor and the Federal Territories of Kuala Lumpur

and Putrajaya about the vital importance of protecting the environment.

During the United Nations Climate Change Conference (“COP15”) in Copenhagen in December

2009, Prime Minister YAB Datuk Seri Mohd Najib Tun Haji Abdul Razak announced an

initiative to achieve a 40% reduction in carbon and other greenhouse gas (“GHG”) emissions

by 2020. In 2012, we implemented various green initiatives and I am proud to announce that

our operational footprint has improved as a result.

Our focus for 2013 will be to support our transformation into a next-generation water and

water related specialist and a signifi cant player in oil & gas industry with a strong focus on

sustainability. This includes continuous innovation and service excellence; sustaining a high

level of commitment; sustaining shareholders’ confi dence; and enhancing PNHB’s reputation

in the marketplace by responding to societal needs.

CORPORATE GOVERNANCE

PNHB operates a rigorous corporate governance regime that aims to ensure a fair deal for all

its stakeholders and is imbued with the principles of transparency, integrity and accountability.

Our objective is not only to maintain the highest ethical standards but to build a business

which is sustainable in the long term and which contributes signifi cantly to environmental

protection, wealth-creation and nation-building.

Recognising the importance of the role of Directors of public listed companies, the Malaysian

Code on Corporate Governance 2012 (“MCCG 2012”) was launched in 2012 with the fi rst

reporting on compliance with MCCG 2012 to be by public listed companies whose fi nancial

year end is 31 December 2012. The focus of MCCG 2012 is to strengthen the structure and

composition of the Boards of Directors of public listed companies in Malaysia. PNHB has

ensured compliance where possible with the recommendations as provided by MCCG 2012

as detailed in the Statement On Corporate Governance, set out on pages 174 to 195 of this

Annual Report; including amendments to the Listing Requirements of the Main Market of

Bursa Malaysia Securities Berhad.

PNHB is committed to demonstrating transparency, integrity, accountability and achieving

sustainability across its operations for the benefi t of our customers, shareholders, stakeholders

and business associates.

14


Message


ACCOLADES AND ACCOMPLISHMENTS

PNHB received two awards from the Federation of Public Listed Companies Berhad (“FPLC”),

namely, the Top 10 Companies Highest Sponsorship Recognition Award 2010/2011 - CSR

in Sport Activities and the Top 10 Companies Most Active in Professional Development

Participation in Seminars and Conferences by FPLC in June 2012.

On 6 May 2012, SYABAS achieved the Anugerah Promosi Gaya Hidup Sihat Melalui Sukan

for the Anugerah Industri Sukan Negara 2012.

PNSB received a total of 25 Innovative & Creative Circle (“ICC”) Awards in 2012, surpassing

the previous year’s performance. At the Mini ICC Convention 2012 organised by the

Malaysian Productivity Corporation (“MPC”), on 8 May 2012, six PNSB teams won four Gold

Awards and two Silver Awards. The Regional ICC Convention 2012 held in June and July

2012 saw 12 PNSB teams brought home nine Gold Awards and three Silver Awards. At the

National ICC Convention 2012 held from 15-17 October 2012, three teams earned 2-Star

Gold Awards and three teams won 3-Star Gold Awards. PNSB’s R.O.T. II Team was one of the

top 10 teams from Service Sector and they will participate in the International Convention on

Quality Creative Circle (“ICQCC”) 2013 in Taiwan. PNSB’s AIM Team earned the 3-Star Gold

Award at the ICQCC 12 on 16 October 2012.

On 11 October 2012, PNSB achieved the Bronze Award for the 12th Malaysia HR Awards

2012 Employer of Choice.

On 27 October 2012, PNHB received the Socrates International Award in Oxford, United

Kingdom.

PNSB’s Central Laboratory’s/SSP2 WTP Laboratory’s high standards for training, health and

safety earned them the Institut Kimia Malaysia (“IKM”) Laboratory Excellence Award 2012

on 30 November 2012.

In 2012, the Sg Selisek, Kalumpang, Sg Batu, Bukit Tampoi, Wangsa Maju and SSP2

WTPs won Gold (Class I) Awards from the Malaysian Society for Occupational Safety &

Health (“MSOSH”), while the Sg Dusun and Ampang Intake WTPs received Gold (Class II)

Awards from MSOSH. The National Council of Occupational Safety & Health (“NCOSH”)

honoured the Sg Langat WTP with a Gold Trophy Award under the water utility sector on

30 October 2012.

SYABAS also achieved MSOSH recognition in 2012. Seven districts, namely Kuala Lumpur,

Hulu Langat, Petaling, Gombak, Sabak Bernam, Hulu Selangor and Kuala Selangor obtained

Gold (Class I) Awards. Three districts, Kuala Langat, Sepang and Klang, earned the Gold

(Class II) Awards.

PROSPECTS

Economic Prospects

Mainly due to the Eurozone crisis, the debt problem in Japan and the US, and the slowdown

in China, the global economy is not expected to be in prosperous shape until at least 2018.

Indeed, in 2013, activity is forecast to remain tepid in many economies. Nevertheless, the

International Monetary Fund is predicting a slight rebound for the global economy to 3.6%

growth this year. The recovery is expected to limp along in the major advanced economies,

though growth should remain at a fairly healthy level in many emerging markets and

developing economies.

(Source: International Monetary Fund World Economic Review 2012 and World Economic

Outlook 2013.)

OIL & GAS

SAVING TIPS

Aggressive driving

wastes gas

15



In 2013, the Malaysian economy is expected to strengthen further and to grow at a faster rate of 4.5% to 5.5% in support of improving exports and strong domestic demand.

The external trade-related industries are anticipated to benefi t from stronger global growth, particularly during the second half of the year. Domestic demand, meanwhile, is expected to grow by 5.6% and will remain the main engine of growth in 2013, underpinned by strong private sector expenditure. Private consumption is projected to expand 5.7% driven by higher disposable income arising from the improved employment outlook, fi rm commodity prices, and the wealth generated by the stable performance of the stock market stimulated by strong domestic economic activities.

(Source: The Economic Report 2012/2013, Ministry of Finance, Malaysia.)

Group Prospects

The Group remains totally committed to supporting a Governmental restructuring of the water services sector in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya on a “willing buyer willing seller” basis. PNHB maintains its conviction that such restructuring must be benefi cial to all parties, and especially to the public at large.

In the environmental sector, the Group is actively looking into the provision of solutions to the sewerage and solid waste sectors in Malaysia and overseas. The Group is also seeking opportunities in the construction sector.

Meanwhile, initial successes in the Oil & Gas arena augur well for the Group’s future. The Group is hopeful to clinch more Oil & Gas projects and to invest in or acquire other Oil & Gas assets to further expand its business in line with its Vision to become a signifi cant player in this fi eld locally and overseas.

Looking ahead, the Group is thus determined to continue in its quest to achieve sustainable long-term growth by continuous, prudent expansion into niche areas within the water, wastewater, Oil & Gas and construction sectors.

APPRECIATION

At the end of another year of major and positive achievements in the face of considerable challenges, I would like to record, on behalf of the Board, our profound appreciation of the skills, dedication and teamwork consistently displayed by our Management and staff, which made such a tremendous contribution to the Group’s ongoing development and growth.

I would also like to convey our thanks to our customers, investors, fi nanciers and business partners for their unfailing support; and to the Government and the various government authorities, agencies and non-governmental organisations for the guidance and cooperation they provided during the year.

Finally, I wish to express my appreciation of the exceptional energy and commitment so consistently displayed by my colleagues on the Board of Directors and by the Group’s Management team who have kept the Group on track with its Vision.

Looking forward, despite the many challenges in anticipation, I am convinced that in 2013, PNHB will once again, with full commitment and support from the Board of Directors, Management team, staff, the shareholders and the stakeholders, continue to fulfi l our obligations by delivering the highest levels of service to our customers, protecting the environment, and achieving the results that our stakeholders so rightly expect.

TAN SRI ROZALI ISMAIL

Executive Chairman

29 April 2013

16


Message


PUNCAK NIAGA HOLDINGS BERHAD (“PNHB”) CONTINUES TO DELIVER TO THE

EXPECTATION OF ITS STAKEHOLDERS ON TRANSPARENCY AND COMPREHENSIVE

DISCLOSURES. WE CONTINUE TO REPORT ON OUR PERFORMANCES IN THE

TRIPLE-BOTTOM-LINE: ECONOMIC, ENVIRONMENT AND SOCIAL ASPECTS.

OUR INTEGRATED REPORTING WHICH INCLUDES THE FINANCIAL AND

OPERATIONS ASPECTS OF OUR BUSINESS, AND THE FULL REPORT PROVIDES

A CLEAR, COMPREHENSIVE AND TRANSPARENT REPRESENTATION OF PNHB’S

PERFORMANCE TO OUR STAKEHOLDERS.

Our integrated reporting creates value over the short, medium and long term. This Report

comprehensively illustrates the Group’s performances and achievements in fi nancial and

non-fi nancial areas. We have endeavoured to present our data in the most accurate manner

possible, using quantitative indicators where relevant. We aim to provide detailed disclosures

on those areas which are deemed to be material. This information includes areas of our

business which have a great infl uence on our businesses and a high level of potential impact

on our stakeholders.

The Corporate Social Responsibility (“CSR”) section of this Report provides information

on PNHB’s impacts on the environment and community in which it operates and how the

environment and community impact its businesses. The principle framework used is the

Global Reporting Initiatives (“GRI”), GRI G3.1 Guidelines. This Report has been prepared to

adhere to an application level of A. Other guidelines include the Bursa Malaysia Securities

Berhad CSR Guidelines as well as the ISO 26000 Guidance on Social Responsibility. The GRI

G3.1 Content Index which can be found on pages 424 to 430 of this Annual Report serves as

an interactive navigation tools and refl ects our disclosure on each indicator outlined by the

GRI. We will continue to improve the level of disclosures in our future Reports.

In order to quantify the progression of our CSR sustainability milestones, the achievements

in 2012 have been compared against previous years. Certain regulatory performance data

contained in PNHB’s 2012 Annual Report is subject to regulatory audit.

This Report is available to all stakeholders in hard copy on request and can be downloaded

from our corporate website.

SCOPE OF REPORTING

Reporting Period:

1 January to 31 December 2012

Coverage:

PNHB Group including all of its subsidiaries, local and overseas

Date of Publication:

4 June 2013

17

About This Report


CorporateProfi le

18OUR COMPANY

THE PUNCAK NIAGA HOLDINGS BERHAD (“PNHB”) GROUP IS THE LEADING REGIONAL INTEGRATED WATER, WASTEWATER AND ENVIRONMENTAL SOLUTIONS PROVIDER AND AN EMERGING SIGNIFICANT PLAYER IN THE OIL & GAS SECTOR. PNHB IS AN INVESTMENT HOLDING COMPANY WHILST ITS SUBSIDIARIES ARE PRINCIPALLY INVOLVED IN THE OPERATION, MAINTENANCE, MANAGEMENT, CONSTRUCTION, REHABILITATION AND REFURBISHMENT OF WATER TREATMENT FACILITIES, THE SUPPLY AND DISTRIBUTION OF TREATED WATER WITHIN THE STATE OF SELANGOR AND THE FEDERAL TERRITORIES OF KUALA LUMPUR AND PUTRAJAYA, UNDERTAKING OFFSHORE INSTALLATION CONTRACT WORK SPECIFICALLY IN THE AREAS OF INTEGRATED TRANSPORTATION AND INSTALLATION OF OFFSHORE FACILITIES AS WELL AS UNDERTAKING RESEARCH AND DEVELOPMENT AND TECHNOLOGY DEVELOPMENT FOR THE WATER, WASTEWATER AND ENVIRONMENT SECTORS.

Established on 7 January 1997, PNHB was listed on the Main Board of Bursa Malaysia Securities Berhad (now known as the Main Market of Bursa Malaysia Securities Berhad) on 8 July 1997. As at the end of 31 December 2012, PNHB’s market capitalisation stood at RM482.7 million. It is the fi rst water treatment and supply concession company to be listed on Bursa Malaysia Securities Berhad under the Infrastructure Project Company guidelines issued by the Securities Commission.

OUR CORE BUSINESS AND CAPABILITIES

Our subsidiary, Puncak Niaga (M) Sdn Bhd (“PNSB”) which holds fi ve water treatment concessions with the Selangor State Government, is the nation’s second largest water supply concessionaire, operating, managing and maintaining 29 water treatment plants with a combined capacity of 1,930 million litres per day. PNSB undertook the fi nance, design, construction, operation, management and maintenance of the Sungai Selangor Phase 2 Water Treatment Plant with a design capacity of 950 million litres per day at a cost of RM1.28 billion which was completed on 1 January 2001, one year ahead of schedule. Subsequently, PNSB completed the Wangsa Maju Water Treatment Plant with a design capacity of 45 million litres per day at a cost of RM122.0 million in a record time of six months in July 1998, during the water crisis. These early completion of projects clearly exemplifi es the PNHB Group’s excellent capabilities in managing and undertaking large-scale water supply projects in Malaysia.

Under a separate concession agreement with the Federal Government and the Selangor State Government, our other subsidiary, Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) supplies treated water to consumers in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya to a population of 7.5 million including industrial and commercial users, with a total registration of 1.857 million consumer accounts as at 31 December 2012. SYABAS also undertakes the maintenance of 26,425 km of water pipes, 1,527 service reservoirs, elevated water tanks and suction tanks and 589 booster pumping stations within the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya.

In mid 2008, PNHB Group entered the China market via its 80% owned subsidiary, Sino Water Pte Ltd (“Sino Water”), a company incorporated in Singapore which focuses primarily on potential markets in China. PNHB had on 15 December 2010 further increased its stake in Sino Water to 98.65%. Sino Water has established various subsidiaries in the People’s Republic of China to undertake potable water and wastewater projects in several provinces in China.

To facilitate PNHB Group’s overseas expansion plans in water and our new business sectors in the Asian countries, in mid 2010, PNHB formed a wholly owned Singapore subsidiary, Puncak Niaga Overseas Capital Pte Ltd, which will spearhead our entry into Vietnam, Cambodia, Laos and other Asian countries.

In March 2011, PNHB set up a Representative Offi ce in Ho Chi Minh City, Saigon, Vietnam to explore potential business opportunities in Vietnam.

On 10 March 2011, PNHB formed a 99.99% owned subsidiary in India, Puncak Niaga Infrastructures & Projects Private Limited which will focus primarily on potential markets in India.


CorporateProfi le

19On 23 May 2011, PNHB’s wholly owned subsidiary, Puncak Oil & Gas Sdn Bhd (“POG”) entered into Agreements to acquire 40% equity interest in two (2) oil and gas entities, namely GOM Resources Sdn Bhd (“GOM Resources”) and KGL Ltd. (“KGL”) with proven track records in undertaking oil and gas works for Petronas which will enable Puncak Group to make further forays and strengthen its presence as a signifi cant company in the oil and gas industry. The 40% equity acquisitions of GOM Resources and KGL were completed on 30 June 2011.

On 28 September 2011, POG completed the acquisitions of the remaining 60% equity interest in GOM Resources and KGL thereby resulting in both GOM Resources and KGL becoming wholly owned subsidiaries of POG.

On 9 January 2013, PNHB’s wholly-owned subsidiary, POG had incorporated a wholly-owned limited company in The Republic of the Union of Myanmar (“Myanmar”), namely, GOM Resources Limited to explore potential business opportunities in Myanmar.

On 1 March 2013, Sino Water’s wholly-owned subsidiary, Sino Water Environmental Consultancy (Shanghai) Co Ltd established a Liaison Offi ce in Chengdu, Sichuan Province, China to explore potential business opportunities in Sichuan Province.

Our customer contact centre, PUSPEL which is manned by a team of highly trained call agents operates 24 hours daily and provides customers with a convenient and effective way to contact SYABAS on water supply matters. In May 2007, PUSPEL received the 2007 Malaysia Water Award for Excellence in Customer Service Management from the Malaysian Water Association.

On 8 October 2010, PUSPEL was awarded the special award, “The Best Emerging Contact Centre” category for Government Link Company by Contact Centre Association of Malaysia at Customer Relationship Management & Contact Centre Association of Malaysia Award 2010 in recognition of PUSPEL’s excellent customer service to all water users in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya.

Out of the manpower strength of more than 4,000 employees in the PNHB Group, more than half comprise Management, professionals, technical and supervisory executives with core competencies in engineering, accountancy, legal, management, administration and business; which are instrumental in supporting the Group’s businesses and operations.

OUR COMMITMENT TO CORPORATE CITIZENSHIP

The PNHB Group is committed to upholding the principles of good corporate governance and core values such as quality, value, service, innovation and trust in the conduct of our business which are integral to our success over the years. We have received various repeat awards and accolades for good governance, annual reporting, occupational safety and health; and environmental and social reporting.

In line with our corporate vision and mission, we seek to be environmentally responsible in the protection, conservation and enhancement of the natural environment, particularly in the management aspect of the water resources, which is relevant to our business operations. Our River Rescue Brigade (“Briged Penyelamat Sungai”) programme which was initiated by our Executive Chairman in 1998 is a programme which aims to educate the younger generation on the importance of the conservation and protection of the environment, especially the rivers. To-date, we have enlisted 5,595 school children and 281 schools in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya into the programme. In November 2007, our River Rescue Brigade was accorded an Honourable Mention at the inaugural Prime Minister’s Corporate Social Responsibility (CSR) Award 2007. Another programme, the Educational Outreach Programme (“Turun Ke Padang”) launched in 1999, is an extension of the River Rescue Brigade which aims to educate the primary and secondary school and tertiary level children located within our areas of operations on the importance of river preservation. The objectives of these programmes are to ensure the continuous supply of clean water as well as to enlighten them on the roles played by PNSB and SYABAS in the water treatment and water distribution processes respectively.

OUR FUTURE PLANS

As the PNHB Group seeks to grow its business and deliver value to the stakeholders, we will look into expanding our operations in areas related to our core business and other sectors such as the oil & gas sector, and competencies within Malaysia and undertaking projects in other countries such as India, China and the ASEAN countries.


BOARD OF DIRECTORS

Yang Berbahagia

Tan Sri Rozali Ismail

Executive Chairman

Yang Berbahagia

Dato’ Ruslan Hassan

Non-Independent

Non-Executive Director

Yang Berbahagia

Dato’ Ir Lee Miang Koi

Non-Independent


Yang Berbahagia

Dato’ Syed Danial Syed Ariffi n

Chief Operating Offi cer

Yang Berbahagia Tan Sri Dato’

Hari Narayanan Govindasamy

Independent



Seri Dr Ting Chew Peh

Independent


Yang Amat Mulia Tengku Dato’

Rahimah Almarhum

Sultan Mahmud

Non-Independent


Yang Berbahagia

Tan Sri Dato’ Ahmad Fuzi

Haji Abdul Razak

Independent


Mr Ng Wah Tar

Executive Director

Corporate Finance Division

CorporateInformation

COMPANY SECRETARIES

Madam Tan Bee Lian

(MAICSA 7006285)

Madam Lim Yew Heang

(MAICSA 7007653)

REGISTERED OFFICE

10th Floor, Wisma Rozali

No. 4, Persiaran Sukan

Seksyen 13

40100 Shah Alam

Selangor Darul Ehsan

Tel : +603-5522 8428

Fax : +603-5512 0220

PRINCIPAL OFFICE

Wisma Rozali


Seksyen 13

40100 Shah Alam


Tel : +603-5522 8589

Fax : +603-5522 8598

e-mail (general):

[email protected]

e-mail (investors):

[email protected]

Website : www.puncakniaga.com.my

BRANCH OFFICES

Kuala Terengganu Offi ce

201B, Jalan Sultan Zainal Abidin

20000 Kuala Terengganu

Terengganu Darul Iman

Tel : +609-623 8589

Fax : +609-624 8589

Penang Offi ce

No. 12C, Jalan Todak 5

Pusat Bandar Seberang Jaya

13700 Perai, Pulau Pinang

Tel : +604-397 8589

Sarawak Offi ce

Lot 10864 & 10865

Section 64, KTLD

Jalan Mendu

93200 Kuching, Sarawak

Tel : +6082-332 589

Fax : +6082-337 589

Sri Aman Site Offi ce (Zone 1):

1st Floor, Lot 440

Block 3, Jalan Council

95000 Sri Aman, Sarawak

Tel : +6083-320 335

Fax : +6083-320 340

Sarikei Site Offi ce (Zone 2):

1st Floor, No. 82C

Wisma CS Kua

Jalan Masjid Lama

96100 Sarikei, Sarawak

Tel : +6084-656 206

Fax : +6084-656 208

Sabah Offi ce:

No. 5, 1st Floor, Block A

Lorong Plaza Permai 1

Alamesra, Sulaman Coastal Highway

88400 Kota Kinabalu

Sabah

Tel : +6088-486 070

Fax : +6088-486 069

SUBSIDIARY OFFICES

MALAYSIA

Puncak Niaga (M) Sdn Bhd’s

(“PNSB”) Office

Wisma Rozali

No. 4, Persiaran Sukan,

Seksyen 13

40100 Shah Alam


Tel : +603-5522 8589

Fax : +603-5522 8598

Syarikat Bekalan Air Selangor

Sdn Bhd’s (“SYABAS”) Office

SYABAS Head Offi ce

Jalan Pantai Baharu

59200 Kuala Lumpur

Tel : +603-2282 6244 /

+603-2088 5400

Fax : +603-2282 7976

e-mail : [email protected]

Website : www.syabas.com.my

Network : follow@puspel

(on Twitter and Facebook)

20



Puncak Oil & Gas Sdn Bhd’s Office

Level 17, Tower 1

Etiqa Twins

No. 11, Jalan Pinang

50450 Kuala Lumpur

Wilayah Persekutuan

Tel : +603-2176 2000

Fax : +603-2176 2100


GOM Resources Sdn Bhd’s Office

Level 15, 16 & 17, Tower 1

Etiqa Twins

No. 11, Jalan Pinang

50450 Kuala Lumpur

Wilayah Persekutuan

Tel : +603-2176 2000

Fax : +603-2176 2100


KGL Ltd.’s Office

c/o Lot 1, 2nd Floor

Wisma Siamloh

Jalan Kemajuan

87007 Federal Territory of Labuan

Tel : +608-741 7810

Fax : +608-742 4220


SINGAPORE

Sino Water Pte Ltd’s and

Puncak Niaga Overseas Capital

Pte Ltd’s Offi ce

No. 8, Eu Tong Sen Street

#22-85 & #22-86

The Central

Singapore 059818

Tel : +65 6224 9220 (Main Line) /

+65 6222 7926

Fax : +65 6222 6812

CHINA

Sino Water Environmental

Consultancy (Shanghai) Co. Ltd

Unit 301, No. 398

City Gateway

Caoxi (North) Road

Xuhui District

200030 Shanghai

People’s Republic of China

Tel : +86-21-6090 5282

Fax : +86-21-6090 5281

Liaison Offi ce

Level 28, One Aerospace Center

No. 7, Xin Guang Hua Street

Jin Jiang District

610016 Chengdu

People’s Republic of China

Tel : +86 28 6283 3442/

43/46/48

Fax : +86 28 6283 3550

Luwei (Pingdingshan) Water Co. Ltd

No. 6, ShunCheng Road (East)

Lushan County

Henan Province

467300 People’s Republic of China

Tel / Fax : +86-375-589 1036

Xinnuo Water (Binzhou) Co. Ltd

Chenlou Industrial & Commerce Park

Laodian Town

Yangxin County

Shandong Province


Tel / Fax : +86-543-898 3008

Luancheng Dayu Water Supply

Co. Ltd

No. 17, Xinyuan Road

Luancheng County

Hebei Province


Tel / Fax : +86-311-8803 1652

Hebei Sino Panlong Industrial

Water Supply Co. Ltd

No. 117, Renmin Road

Yuanshi County

Hebei Province


Tel / Fax : +86-311-8463 8813

INDIA

Puncak Niaga Infrastructures &

Projects Private Limited

No. 12, 7th Main Road

First Floor

Kasturibai Nagar

Adyar

Chennai 600020

Tamil Nadu, India

Tel : +91-44-4210 2058

Fax : +91-44-4210 2028

MYANMAR

GOM Resources Limited

c/o No. 79, Taw Win Road

Dagon Township

11191 Yangon

Myanmar

Tel : +95-973 999911/

+95-973 999966

Fax : +95-1221 789

REPRESENTATIVE OFFICE

VIETNAM

The Representative Offi ce

of Puncak Niaga Holdings Berhad

16F, Saigon Tower

29, Le Duan Street

District 1, Ho Chi Minh City

Saigon, Vietnam

Tel : +84-8-3520 7601

Fax : +84-8-3520 7604

21


DATE AND PLACE OF

INCORPORATION

7 January 1997, Malaysia

COMPANY NUMBER

416087-U

AUDITORS

Messrs Ernst & Young (AF 0039)

TAX ADVISORS

Ernst & Young Tax Consultants

Sdn Bhd

PRINCIPAL BANKERS

RHB Bank Berhad (6171-M)

CIMB Investment Bank Berhad

(18417-M)

AmIslamic Bank Berhad (295576-U)

CIMB Bank Berhad (13491-P)


SOLICITORS

Messrs Adnan Sundra & Low

Messrs Belden

Messrs Lee Hishammuddin

Allen & Gledhill

Messrs Marcia Ng & Associates

Messrs Skrine

Messrs Soo Thien Ming & Nashrah

Messrs Sreenevasan Young

Messrs Zul Rafi que & Partners

SHARE REGISTRAR

(place where all registers

of securities are kept)

Tricor Investor Services Sdn Bhd

(118401-V)

Level 17, The Gardens North Tower

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Tel : +603-2264 3883

Fax : +603-2282 1886

STOCK EXCHANGE LISTING

Main Market

Bursa Malaysia Securities Berhad

Infrastructure Project

Companies Sector

INDICES

FTSE Bursa Malaysia Kuala Lumpur

FTSE Bursa Malaysia Emas

Syariah Index

AUDIT COMMITTEE

Chairman:



Members:



Yang Amat Mulia Tengku Dato’

Rahimah Almarhum Sultan Mahmud


Ahmad Fuzi Haji Abdul Razak

Secretaries:

Madam Tan Bee Lian

Madam Lim Yew Heang

REMUNERATION COMMITTEE

Chairman:



Members:





Mr Ng Wah Tar

Secretaries:

Madam Tan Bee Lian

Madam Lim Yew Heang

NOMINATION COMMITTEE

Chairman:



Members:





Secretaries:

Madam Tan Bee Lian

Madam Lim Yew Heang

COMPLIANCE, INTERNAL

CONTROL AND RISK POLICY

COMMITTEE (CICR)

Chairman:



Members:

Mr Ng Wah Tar

Madam Tan Bee Lian

Madam Wong Ley Chan

Tuan Haji Sonari Solor

Cik Hayati Ab Wahab

Secretary:

Madam Johty Priyatharashani

D/O Tiagarajah

22


PNHB GroupFact SheetPNHB FACT SHEET

as at 31 December 2012

AUTHORISED SHARE CAPITAL

RM1,300,000,000

PAID-UP SHARE CAPITAL

RM411,142,895

(comprising 411,142,895 ordinary shares

of RM1.00 each)

PNSB FACT SHEET


Number of PNSB’s 29

Water Treatment Plants

Number of Water Treatment Plants 26

with ISO Certifi cations

SYABAS FACT SHEET


Number of SYABAS’ 1.857 million

Consumer Accounts

Maintenance of water pipes 26,425 km

Number of service reservoirs, 1,527

elevated water tanks

and suction tanks

Number of pumping stations 589

GOM RESOURCES

FACT SHEET


Number of

Barge vessel 1

GROUP MANPOWER AS AT 25 APRIL 2013

Category No. of Gender Race (In Malaysia) Race (Overseas)of Employees Personnel Male Female Malay Chinese Indian Others Malay Chinese Indian

Management 327 237 90 251 40 11 7 – 17 1

Executive 1,115 607 508 1,004 50 34 17 1 8 1

Non-Executive 3,340 2,727 613 3,002 5 172 19 – 141 1

Total 4,782 3,571 1,211 4,257 95 217 43 1 166 3

Grand Total 4,782 4,782 4,782

23


PNHB GroupFact Sheet

LIST OF CORPORATE MEMBERSHIPS

1. Malaysian Water Association (MWA) Member since 1994

2. Malaysia South-South Association (MASSA) Member since 1995

3. Federation of Public Listed Companies (FPLC) Member since 1997

4. Malaysian Employers Federation (MEF) Member since 1999

5. Malaysian Industry-Government Group

for High Technology (MIGHT) Member since 2001

6. Malaysian-German Chamber of Commerce and

Industry (MGCC) Member since 2002

7. National Institute of Occupational Safety and Health (NIOSH) Member since 2002

8. American Water Works Association (AWWA) Member since 2002

9. Malaysian-French Chamber of Commerce and

Industry (MFCCI) Member since 2002

10. Malaysia-Russia Business Council Member since 2002

11. British Malaysian Chamber of Commerce (BMCC) Member since 2003

12 Malaysia-Japan Economic Association (MAJECA) Member since 2003

13. Commonwealth Partnership for Technology

Management (CPTM) Member since 2003

14. Institute of Marketing Malaysia (IMM) Member since 2003

15. South East Asian Water Utilities Network (SEAWUN) Member since 2004

16. Malaysian Islamic Chamber of Commerce (MICC) Member since 2006

17. Singapore Water Association Member since 2006

18. Malaysian Investors Relations Association (MIRA) Member since 2008

19. Water Association of Selangor, Kuala Lumpur and

Putrajaya (SWAn) Member since 2008

20. Malaysian Nature Society (MNS) Member since 2009

21. Environmental Management & Research Association of

Malaysia (ENSEARCH) Member since 2009

22. Malaysia-Europe Forum (MEF) Member since 2011

23. Malaysia Oil & Gas Service Council Member since 2011

24. Malaysia External Trade Development Corporation (MATRADE) Member since 2012

25. Arab-Malaysian Chamber of Commerce Member since 2012

26. EU-Malaysia Chamber of Commerce and Industry Member since 2012

24


PNHB GroupFact Sheet

MANPOWER ANALYSIS

as at 25 April 2013

GROUP

MALAYSIA

OVERSEAS

Breakdown by Job Category



Breakdown by Race

Breakdown by Race

Breakdown by Gender

Malay

Chinese

Indian

Others

Malay

Chinese

Indian

Management

Executive

Non-Executive

Management

Executive

Non-Executive

Management

Executive

Non-Executive

Male

Female

25

23%

7%

70%

24%

6%

7%

11%

69%

83%

75%

25%

92%

2%

5%

1%

97%

2% 1%


SCHEMATIC DIAGRAM OF WATER TREATMENT SYSTEM

RIVERS DAMS

Our Role In The Water

Supply System

26

National Water Services

Commission(SPAN)

Ministry of Health (MOH)

- water quality

REGULATORY AUTHORITIES

Manages

river basin

upstream

beginning 3

nautical miles

from the sea

Oversees

environment

issues

concerning

rivers

Flood control

and river

management

Po

licy,

Pla

nn

ing

, E

nfo

rcem

en

t an

d S

urv

eill

an

ce b

y G

overn

men

t A

gen

cie

s

Department ofEnvironment

(DOE)

Department ofIrrigation and

Drainage Malaysia(DID)

Selangor WaterManagement

Authority(LUAS)

Water Meter(Condominium / Flat)

Water Meter(Industrial / Factory)

Water Meter(Residential Home)

Water Meter(Government / Institutional)

Water Meter(Shopping Centre)

Water Meter(Office)

Raw WaterPump

BandScreen

To River / Sludge Lagoons

Clear Water Tank

SedimentationTank

FiltrationTank

Coagulation&

FlocculationTank

Hydrated Lime

Sodium Silicoflouride

Chlorine

Intake

Grit Chamber

Aerator

Coagulant

MixingChannel

FilterGallery

TreatedWaterPump

BoosterStation

ReservoirWaterTower

ServiceReservoir

BulkMeters

BalancingReservoir

• Puncak Niaga (M) Sdn Bhd (PNSB)

• Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH)

• Konsortium ABASS Sdn Bhd

• Konsortium Air Selangor Sdn Bhd (KASB)

• Puncak Niaga (M) Sdn Bhd (PNSB)

• Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH)

• Konsortium ABASS Sdn Bhd

Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS)

Consumers

OPERATORS

Dam Operators in Selangor

WTP Operators in Selangor

Water Supply Distributor

for Selangor, Kuala Lumpur

and Putrajaya


Milestones

27

8 JULListing on the Main Board

of the KLSE (now known as

Main Market of Bursa Malaysia

Securities Berhad effective

3 August 2009) and launching

of Puncak Niaga Holdings

Berhad’s (“PNHB”) Homepage.

16 OCTSigning Ceremony of Turnkey

Construction Contract between

PNSB and Seni Kembara-

Hazama-Central Energy-OTV

Consortium for the construction

of Stage 2 of SSP2 Water

Treatment Plant (“WTP”).

19 APRPNHB received the Certificate

of Approval by Lloyd’s Register

Quality Assurance ISO

9002:1994,EN ISO 9002:1994,

BS EN ISO 9002:1994, MS

ISO 9002:1994 for Quality

Management System of

Wangsa Maju WTP.

6 NOVPNHB was awarded the

NACRA 2001 Industry

Excellence Award under the

‘Construction & Infrastructure

Project Companies’ category.

PNSB received the

Occupational Safety &

Health Award 2000

Gold Award for SSP2 WTP.

10 NOVPNHB was awarded the

Anugerah Citra Laporan

Tahunan 2001 by Dewan

Bahasa dan Pustaka.

4 JANPNHB was included in the

KLSE Composite Index

(now known as FTSE Bursa

Malaysia Kuala Lumpur

Composite Index).

9 APRSigning Ceremony of the

Second Amendment to the

Construction Cum

Operation Agreement.

1 DECPNHB was included in the

Morgan Stanley Capital

International Standard Index.

14 MARRivercare Campaign I for

school children was launched

by YB Datuk Haji Mohd Khalid

Mohd Yunus, the former

Deputy Minister of Education.

20 JULOfficial Ceremony to

mark the release of initial

100 MLD of treated

water at SSP2 WTP.

26 MAR PNHB Group’s Executive

Chairman, YBhg Tan Sri

Rozali Ismail was awarded

the Asia Water Management

Excellence Award 2002 under

the Individual Award Category.

31 OCT PNHB was awarded the

NACRA 2002 Industry

Excellence Award under the


Project Companies’ Category.

20 FEB PNHB received the Asiamoney

Corporate Governance Poll

2002 Award for ‘Best Corporate

Governance Standards in the

Utilities Sector in Malaysia’.

14 JUN PNHB received the Institute

of Public Relations Malaysia

IPRM Crystal Award 2002

under the Environmental

Relations Category for the River

Rescue Brigade Programme

and the Voluntary Relations

Category for the Educational

Outreach Programme.

12 OCTPNHB won the KLSE Corporate

Excellence Award 2000 for

Main Board Companies

and the KLSE Corporate

Sectoral Award 2000 for

Main Board Infrastructure

Project Companies.

8 NOVPNHB was honoured with

the NACRA 2000 Industry

Excellence Award for the


Project Companies’ category.

1997

1998

1999

2000

2001

2002

2003

8 JUL

14 MAR

9 APR


2004

2005 2007 2008

2006

Milestones

28

13 FEB PNHB was awarded the

KLSE Corporate Sectoral

Award 2003 for Main Board

by Bursa Malaysia.

15 DECConcession Agreement for

the Privatisation of Water

Supply Distribution in Selangor

and the Federal Territories of

Kuala Lumpur and Putrajaya

between SYABAS, the

Federal Government and the

Selangor State Government.

31 DEC Handover Ceremony of the

26 WTPs in Selangor, Kuala

Lumpur and Putrajaya from

CGE Utilities (M) Sdn Bhd to

PNSB at Bukit Nanas WTP.

1 JAN YAB Dato’ Seri Dr Mohd Khir

Toyo officiated the ceremony

to mark the commencement

of operations of SYABAS at

SYABAS’ Headquarters.

19 JAN YBhg Tun Dr Lim Keng Yaik, the

former Minister of Energy, Water

and Communications, witnessed

the Signing Ceremony of the

Financing Facilities Agreement

between SYABAS and a panel

of financial institutions at

Hotel Istana Kuala Lumpur.

22 MAY PNHB was shortlisted under the

Social Reporting Category for

ACCA Malaysia Environmental

And Social Reporting Awards

(MESRA) 2007 [now known as

ACCA Malaysia Sustainability

Reporting (MaSRA) Awards].

11 NOV SYABAS was awarded the

Malaysian Business Ethics

Excellence Award 2008 under

the Large Company Category.

17 NOV & 15 DEC PNSB received the Integrated

Management System (IMS)

Certification for the Provision of

Construction Services certified

by URS Certification (M) Sdn

Bhd (URS) and accredited

under United Kingdom

Accredited Service (UKAS).

19 NOV PNHB was awarded the

NACRA 2008 Industry

Excellence Award for

Main Board Construction

& Infrastructure Project

Companies Category.

15 MAR Signing Ceremony of the

Collaboration Agreement

between Puncak Research

Centre Sdn Bhd and DHI

Water • Environment •

Health Denmark.

30 MAR Handover Ceremony of

Sg Sireh WTP from Kumpulan

Perangsang Selangor Berhad

to PNSB.

15 MAY SYABAS garnered the

2007 Malaysia Water

Award (Management

Category) for PUSPEL.

26 JUNE PNSB’s ‘Ekspedisi

Menuju Puncak’ at Mount

Kinabalu, Sabah.

14 NOV PNSB received an Honourable

Mention for its River Rescue

Brigade at the Prime

Minister’s Corporate Social

Responsibility Awards 2007.

16 OCT PNHB announced a capital repayment of up to RM767.84 million via a cash distribution to reward its shareholders.

28 NOV Official Opening Ceremony of Wisma Rozali, Shah Alam, Selangor.

31 DEC

1 JAN

28 NOV

14 NOV


2009

2011

2010

9 DECThe Highest Award In

The Malaysian Business

Ethics Excellence Award

2010/2011 (Main Category

Of Large Company) were

awarded to both PNSB and

SYABAS, respectively.

Milestones

29

10 JAN SYABAS launched PUSPEL’s

new logo with the service

motto “Friendly, Committed

and Trusted” as a symbol

of SYABAS’ ongoing

commitment to provide the

best services to consumers.

19 MAY SYABAS was awarded

Silver Awards for Innovation

in “Information Technology,

Computer Software and

Training Category” and “Solution

Technology in Water Manager”

at Water Inno Awards 2009 –

Malaysian Water Association.

13 AUG PNHB was the winner

for Integrated Reporting

in an Annual Report

at ACCA Malaysia

Sustainability Reporting

Awards (MaSRA) 2009.

1 DEC PNHB was awarded the

Certificate of Merit at National

Annual Corporate Report

Awards (NACRA) 2009.

22 FEBSigning Ceremony of the

Memorandum of Understanding

(“MOU”) with NIOSH for Safety

Card Training Modules

SYABAS-NIOSH.

23 MAYPNHB’s wholly owned

subsidiary, Puncak Oil & Gas

Sdn Bhd (“POG”) entered into

Agreements to acquire 40%

equity interest in two (2) oil

and gas entities, namely GOM

Resources Sdn Bhd (“GOM

Resources”) and KGL Ltd.

(“KGL”) (“Acquisitions”). The

Acquisitions will enable Puncak

Group to make further forays

and strengthen its presence

as a significant company in

the oil and gas industry.

12 SEPPNSB’s ICC Tag Team

was awarded the Excellent

Award at the International

Convention on Quality

Creative Circle 2011 Award.

14 SEPPNHB was awarded the

“Malaysia 1000 Industry

Excellence Award –

Water Sector” at the

launching ceremony of 5th

Edition Malaysia 1000.

28 SEPPOG completed the acquisitions

of the remaining 60% equity

interest in GOM Resources

and KGL thereby resulting

in both GOM Resources

and KGL becoming wholly

owned subsidiaries of POG.

4 OCTPNHB received a

Commendation for Integrated

Reporting of Annual Report

at the ACCA Malaysia


Awards (“MaSRA”) 2011.

13 OCT PNSB was awarded

the “11th Malaysia HR

Awards 2011 Employer of

Choice – Silver Award”.

14 JAN SYABAS launched PUSPEL

on social networks,

“follow@puspel”

on Twitter and Facebook.

13 APRIL Two of SYABAS’ teams were

awarded Gold Awards at

the Innovative & Creative

Circle Central Region

Mini Convention 2010.

8 OCTSYABAS/PUSPEL was

awarded the Best Emerging

Contact Centre Award 2010

at the Customer Relationship

Management & Contact

Centre Association of

Malaysia Award 2010.

2 NOVThe Official Launch of

SYABAS’ Operation

Command Center (“OCC”).

8 NOVPNHB was the winner

for Integrated Reporting

in an Annual Report

for ACCA Malaysia


Awards (MaSRA) 2010.

14 JAN

8 OCT

22 FEB


Puncak News

30


Puncak News

30


Puncak News

31


Puncak News

31


CorporateAchievements

32

MINI INNOVATIVE & CREATIVE CIRCLE (ICC)

CONVENTION 2012

Malaysian Productivity Corporation:

Gold Award

awarded to PNSB’s ICC Sepakat Team

on 8 May 2012


CONVENTION 2012


Gold Award

awarded to PNSB’s ICC U’Suker Team

on 8 May 2012


CONVENTION 2012


Gold Award

awarded to PNSB’s ICC Smart Response Team

on 8 May 2012


CONVENTION 2012


Gold Award

awarded to PNSB’s ICC AL-QEMI Team

on 8 May 2012


CONVENTION 2012


Silver Award

awarded to PNSB’s ICC 1 Wangsa Team

on 8 May 2012


CONVENTION 2012


Silver Award

awarded to PNSB’s ICC OMIT Team

on 8 May 2012

NATIONAL INNOVATIVE & CREATIVE

CIRCLE (ICC) CONVENTION 2012


3-Star Gold Award

awarded to PNSB’s ICC R.O.T II Team

on 15 – 17 October 2012




3-Star Gold Award


on 15 – 17 October 2012




3-Star Gold Award

awarded to PNSB’s ICC TAG Team

on 15 – 17 October 2012




2-Star Gold Award

awarded to PNSB’s ICC Smart Response

Team on 15 – 17 October 2012




2-Star Gold Award


on 15 – 17 October 2012




2-Star Gold Award

awarded to PNSB’s ICC Tenaga Tengah

Team on 15 – 17 October 2012

Anugerah Industri

Sukan Negara 2012 –

Promosi Gaya Hidup

Sihat Melalui Sukan

awarded to SYABAS

on 6 May 2012



33

REGIONAL INNOVATIVE & CREATIVE



Gold Award

awarded to PNSB’s ICC AIM Team

on 26 – 27 June 2012




Gold Award

awarded to PNSB’s ICC R.O.T II Team

on 18 – 19 July 2012




Gold Award


on 18 – 19 July 2012




Gold Award

awarded to PNSB’s ICC TAG Team

on 17 – 18 July 2012




Gold Award

awarded to PNSB’s ICC Smart Response

Team on 26 – 27 June 2012




Gold Award


on 26 – 27 June 2012




Gold Award

awarded to PNSB’s ICC Tenaga Tengah

Team on 4 – 5 July 2012




Gold Award

awarded to PNSB’s ICC 3EQ Team

on 4 – 5 July 2012




Gold Award

awarded to PNSB’s ICC QI Team

on 26 – 27 June 2012




Silver Award

awarded to PNSB’s ICC Sepakat Team

on 17 – 18 July 2012




Silver Award

awarded to PNSB’s ICC HR Crew Team

on 17 – 18 July 2012




Silver Award

awarded to PNSB’s ICC D’Kristal Team

on 26 – 27 June 2012

INTERNATIONAL

CONVENTION ON

QUALITY CREATIVE

CIRCLE 2012

3-Star Gold

awarded to PNSB’s

ICC AIM Team on

16 October 2012

REGIONALL INNOVATIVVE & CREATTIVE REGIONAAL INNOVATTIVE & CREAATIVE REGIONNAL INNOVAATIVE & CREATIVE

MALAYSIAN SOCIETY FOR OCCUPATIONAL SAFETY AND

HEALTH (“MSOSH”) AWARD ON 6 JULY 2012:

MSOSH Gold (Class I) Award

- SSP2 WTP

- Wangsa Maju WTP

- Bukit Tampoi WTP

- Sg Batu WTP

- Kalumpang WTP

- Sg Selisek WTP

MSOSH Gold (Class II) Award

- Sg Dusun WTP

- Ampang Intake WTP

IANANAN SOSOSOCIECIECIETY YY FORFORFOR OOCOET TIONANAAL SL SL SAFAFAF TY Y ANDANDAND ETMALMALMALAYSAYSAYSIIA



34

Socrates

International Award

awarded to PNHB

on 27 October 2012

The 1st Malaysia

Achievement Awards 2012

Special Individual

Achievement Category

awarded to YBhg Tan Sri

Rozali Ismail on

23 February 2012

Federation of Public Listed Companies Berhad (“FPLC”) – Top 10 Companies Highest Sponsorship Recognition Award 2010/2011 - CSR in Sport Activities awarded to PNHB on 19 June 2012

IKM Laboratory Excellence Award

awarded to PNSB’s Central Laboratory/

SSP2 WTP Laboratory on 30 November 2012

12th Malaysia HR Awards 2012

Employer of Choice – Bronze Award

awarded to PNSB on 11 October 2012

NATIONAL COUNCIL

OF OCCUPATIONAL

SAFETY & HEALTH

AWARD

Gold Trophy Award

under water utility sector

awarded to Sg Langat

WTP on 30 October 2012

MALAYSIAN SOCIETY FOR OCCUPATIONAL SAFETY AND

HEALTH (“MSOSH”) AWARD ON 6 JULY 2012:

MSOSH OSH Gold (Class I) Award

- SYABAS Kuala Lumpur District

- SYABAS Hulu Langat District

- SYABAS Petaling District

- SYABAS Gombak District

- SYABAS Sabak Bernam District

- SYABAS Hulu Selangor District

- SYABAS Kuala Selangor District

MSOSH OSH Gold (Class II) Award

- SYABAS Kuala Langat District

- SYABAS Sepang District

- SYABAS Klang District

FedFederaerattion

FPLC Recognition Award – Top 10 Companies Most Active in Professional Development Participation in Seminars and Conferences by FPLC awarded to PNHB on 19 June 2012


CorporateStructure

35

100%PUNCAK NIAGA (M) SDN BHD

operation, maintenance, management, construction, rehabilitation and refurbishment of water treatment facilities

100%PUNCAK OIL & GAS SDN BHD

offshore logistics service provider and marine management

100%PUNCAK RESEARCH CENTRE SDN BHD

research & development and technology development for water, wastewater and environment sectors

100%PUNCAK SERI (M) SDN BHD

dormant

100%PUNCAK NIAGA (INDIA) SDN BHD

dormant

100%NS WATER SYSTEM SDN BHD

dormant

100%PUNCAK NIAGA INFRASTRUCTURES &

PROJECTS PRIVATE LIMITEDcarry out activities of infrastructures,

constructions and other projects in India

ASSOCIATE COMPANY

50%PURNAMA PERSADA SDN BHD

dormant

ASSOCIATE COMPANY

40%OASIS WATER RESOURCES SDN BHD

dormant

70%SYARIKAT BEKALAN AIR SELANGOR SDN BHD

supply & distribution of treated water within Selangor and the Federal Territories of Kuala Lumpur & Putrajaya

100%PUNCAK NIAGA OVERSEAS CAPITAL PTE LTD

investment in water, wastewater, solid waste, environmental and oil & gas in Asian countries

98.65%SINO WATER PTE LTD

investment in water and wastewater projects in China

100%IDEAL WATER

RESOURCES SDN BHDceased operation

100%GOM RESOURCES

SDN BHD offshore installation contractor for integrated transportation & installation of offshore facilities

100%GOM RESOURCES LIMITED

dormant

100%SINO WATER

ENVIRONMENTAL CONSULTANCY

(SHANGHAI) CO LTD

consultancy services for water and wastewater

projects

100%XINNUO WATER

(BINZHOU) CO LTD

treatment of wastewater and related services

91.94%LUWEI

(PINGDINGSHAN) WATER CO LTD

treatment and distribution of

water and related services

83.99%LUANCHENG DAYU WATER

SUPPLY CO LTDtreatment and distribution of

water andrelated services

80%HEBEI SINO PANLONG

INDUSTRIAL WATER SUPPLY

CO LTDdistribution of water to

industrial areas

100%PERBADANAN URUS AIR SELANGOR BERHAD

ceased operation

100%UNGGUL RAYA (M) SDN BHD

ceased operation

100%KGL LTD.

offshore leasing of vessels on bareboat basis

INVESTMENT HOLDING


OrganisationStructure -

PNSB

36

BOARD OF DIRECTORS

EXECUTIVE CHAIRMANYBhg Tan Sri Rozali Ismail

MANAGING DIRECTORYBhg Dato’ Syed Danial Syed Ariffin

FINANCE DIV

EXECUTIVE DIRECTORMadam Wong Ley Chan

HUMAN RESOURCES & ADMINISTRATION DIV

EXECUTIVE DIRECTORPuan Faridatulzakiah

Mohd Bakhry

BUSINESS DEVELOPMENT DIV

EXECUTIVE DIRECTORYBhg Dato’ Nasir Khan Illadad Khan

CORPORATE FINANCE DIV

EXECUTIVE DIRECTORMr Ng Wah Tar

CONTRACT & PROCUREMENT DEPTSENIOR GENERAL MANAGERPuan Hafizah Ahmat

INFORMATION TECHNOLOGY DEPTGENERAL MANAGEREncik Azlan Shah Tan Sri Rozali

FOOD & BEVERAGE DEPTSENIOR MANAGEREncik Hamzah Awang Kechik

INSURANCEDEPTSENIOR MANAGEREncik Shahrin Abd Karim

FINANCE & ACCOUNTS DEPT(TREASURY, AR & AP)ASSISTANT GENERAL MANAGEREncik Mohammad Shahree Shamsuddin

FINANCE & ACCOUNTS DEPT(FINANCIAL ACCOUNTING)ASSISTANT GENERAL MANAGERMadam Winnie Chia Li Koon

COMPENSATION & BENEFITS DEPTASSISTANT GENERAL MANAGEREncik Hairulizam Muhamad Kastawi

CORPORATE FINANCE DEPTASSISTANTGENERAL MANAGERMr Nicholas Chew Keng Meng

BUSINESS DEVELOPMENT DEPTASSISTANT GENERAL MANAGEREncik Helmi Faisal Fuad

MANPOWER PLANNING & RECRUITMENT DEPTSENIOR MANAGERPuan Aida Yuhana Zainul Ariff

INDUSTRIAL RELATIONS DEPTSENIOR MANAGERVacant

HUMAN CAPITAL DEVELOPMENT DEPTSENIOR MANAGERVacant

SPECIAL FUNCTIONS DIV

EXECUTIVE DIRECTORYBhg Datuk Mohd Yunus Mohd Amin

PROTECTIVESERVICESDEPTGENERAL MANAGERVacant

PROPERTY MANAGEMENT DEPTSENIOR MANAGERVacant

ADMINISTRATION DEPTSENIOR MANAGERVacant

GENERAL MANAGERVacant


OrganisationStructure -PNSB

37

CHIEF OPERATING OFFICERIr Tan Hui Kuan

ENGINEERING/PROJECT

DEVELOPMENT DIV

EXECUTIVE DIRECTORIr Ausamah Darwish

Mohd Daud

STRATEGIC RESOURCE & PUBLIC

RELATIONS DIV

EXECUTIVE DIRECTORYBhg Datuk Dr

Muzahet Masruri

OPERATION & MAINTENANCE DIV

EXECUTIVE DIRECTORTuan Haji Abd Rashid

Abd Satar

CORPORATE SERVICES DIV

EXECUTIVE DIRECTORMadam Tan Bee Lian

HEALTH, SAFETY, ENVIRONMENTAL & QUALITY MANAGEMENT DEPTGENERAL MANAGEREncik Johari Pawanchik

OPERATION & MAINTENANCE DEPTASSISTANT GENERAL MANAGERTuan Haji Hussin Masrin

RESEARCH & DEVELOPMENT (R&D) CENTREMANAGEREncik Aminuddin Ismail

HEALTH, SAFETY, QUALITY & MANAGEMENT SECTMANAGERVacant

WATER QUALITY & RESEARCH SECTSENIOR MANAGERMadam Teh Yeok Sien

DAM SECTMANAGEREncik Jaffry Rabu

TECHNICAL SUPPORTSECTSENIOR MANAGERVacant

PROCUREMENT SECTMANAGERVacant

WTP OPERATION

NORTHERN REGION & SSP II ASSISTANT GENERAL MANAGER Ir Abdul Samad Sulaiman

CENTRAL REGION SENIOR MANAGER Encik Ismail Hassan

SOUTHERN REGION SENIOR MANAGER Encik Zairi Zainuddin

INTERNAL AUDIT DEPTSENIOR GENERAL MANAGERTuan Haji Sonari Solor

SECRETARIAL DEPTGENERAL MANAGERMadam Jenny Lim Yew Heang

LEGAL DEPTGENERAL MANAGERMadam Christina Lee Chin Kee

PUBLIC RELATIONSDEPTSENIOR GENERAL MANAGERVacant

STRATEGIC RESOURCE CENTREASSISTANT GENERAL MANAGERPuan Raja Rozaila Raja Azman

LOCAL PROJECT DEPTGENERAL MANAGERTuan Syed Badli Shah Syed Mansoor

INTERNATIONAL PROJECT DEPTGENERAL MANAGERIr Yong Onn Fatt

SARAWAK OFFICESENIOR PROJECT MANAGERMr Chai Ming Lu

Note:

and DIV denote Division

and DEPT denote Department/Centre

and SECT denote Section

denotes WTP Operation

denotes Region


Organisation Structure -

SYABAS

38

EXECUTIVE CHAIRMANYBhg Tan Sri Rozali Ismail

CHIEF EXECUTIVE OFFICERYBhg Dato’ Ruslan Hassan

SPECIAL TASK DEPTSPECIAL ASSISTANT TO EXECUTIVE CHAIRMAN / EXECUTIVE DIRECTOR SPECIAL TASK DEPARTMENT & BUMIPUTERA ENTREPRENEUR PARTICIPATION & DEVELOPMENT Encik Mohamad Isa Mohd Yassin

INTERNAL AUDIT DEPTSENIOR GENERAL MANAGER Cik Hayati Ab Wahab

SECRETARIAL DEPTASSISTANT GENERAL MANAGERMadam Lau Pueh Geok

CORPORATE AFFAIRS DIV

EXECUTIVE DIRECTOREncik Abdul Halem Mat Som

HUMAN RESOURCE & ADMINISTRATION DIV

EXECUTIVE DIRECTORTuan Haji Zainuddin Othman

FINANCE DIV

EXECUTIVE DIRECTORMadam Karen Chan Yit Hwa

DISTRICT DEPTASSISTANT GENERAL MANAGER Encik Mat Saman Mat Soom

NORTHERN REGION

SABAK BERNAMASSISTANT GENERAL MANAGER Puan Roslina Ab Lazid

KUALA SELANGORASSISTANT GENERAL MANAGER Encik Kamarul Bahrain Ahmad

HULU SELANGORSENIOR MANAGEREncik Ahmad Fuad Zainudin

GOMBAKSENIOR MANAGEREncik Mohamad Zahir Mohamad Hasan

NORTHERN REGION

SABAK BERNAMEncik Zairul Fahmie Mohd Tarmiji(Acting)

KUALA SELANGOREncik Ezarif Hasnol Basri(Acting)

HULU SELANGOREncik Muhammad Za’im Zaki Che Mohd Nasir (Acting)

GOMBAKPuan Sharifah Fairus Syed Jaafar

CENTRAL REGION

PETALINGGENERAL MANAGER Encik Ahmad Suhaidin Ismail

KUALA LUMPURGENERAL MANAGER Mr Kelvin Siew Weng Hoe

CENTRAL REGION

PETALINGEncik Yusran Yusof

KUALA LUMPUREncik Ahmad Sharul Ishak(Acting)

SOUTHERN REGION

KUALA LANGATASSISTANT GENERAL MANAGER Encik Surani Naim

HULU LANGATASSISTANT GENERAL MANAGER Encik Abdul Halim Ishak

KLANGSENIOR MANAGEREncik Khairul Anuwar Ismail

SEPANGMANAGER Ir Wan Amzari Abdul Halim

SOUTHERN REGION

KUALA LANGATEncik Hafizulamin Yahya(Acting)

HULU LANGATEncik Muhammad Lokhman Che Ab Rahman (Acting)

KLANGEncik Syamsul Kamal Tajudin

SEPANGEncik Ezrul Azzim Wahid

HEAD OF DISTRICT SECRETARY OF WORKS

LEGAL & ENFORCEMENT DEPTGENERAL MANAGEREncik Armiy Rais Ahmad Sharifuddin

CONTRACT & PROCUREMENT DEPTGENERAL MANAGER Encik Wan Abd Aziz Wan Muda

CORPORATE COMMUNICATIONS & PUBLIC AFFAIRS DEPTASSISTANT GENERAL MANAGER Ms Priscilla Alfred

CUSTOMER SERVICEDEPTGENERAL MANAGER Encik Mohd Yaman Mohd Zin

HUMAN RESOURCE DEPTGENERAL MANAGER Encik Abd Latif Ismail

ADMINISTRATION DEPTGENERAL MANAGER Encik Taufik Afendy Othman

SECURITY DEPTASSISTANT GENERAL MANAGER Encik Ismail Hj Ibrahim

FINANCE &ACCOUNTS DEPTGENERAL MANAGER Ms Lee Chin Shin

BILLING & RECOVERY DEPTGENERAL MANAGER Encik Shahruddin Ab Rahman

BOARD OF DIRECTORS


Organisation Structure -SYABAS

39

WATER QUALITY, ASSET & STRATEGIC RESOURCES DIV

EXECUTIVE DIRECTORPuan Roowina Merican

A Rahim Merican

OPERATION DIV

EXECUTIVE DIRECTORTuan Haji Yusof Saroji

PLANNING DIV

EXECUTIVE DIRECTORTuan Haji Sanusi Sulieman

PROJECT & NON REVENUE WATER DIV

EXECUTIVE DIRECTOREncik Yusof Badawi

CHIEF OPERATING OFFICER (COO)YBhg Dato’ Ir Lee Miang Koi

WATER QUALITY & ASSET DEPTASSISTANT GENERAL MANAGER Vacant

ASSET SECT ASSISTANT GENERAL

MANAGER Encik Muhamad Zuki Mat Zin

WATER QUALITY SURVEILLANCE SECTSENIOR MANAGER Encik RoskhamdiKamaluddin

STRATEGIC RESOURCES DEPTASSISTANT GENERAL MANAGER Vacant

NON REVENUE WATER (NRW) DEPTGENERAL MANAGER Tuan Haji Ariff Ibrahim

PROJECT MANAGEMENT DEPTGENERAL MANAGER Ir Ahmad Marzuki Hashim

CONTRACT ADMINISTRATION DEPTSENIOR MANAGER Puan Rohaniah Mohd Danan

NETWORK & INSTRUMENTATION DEPTASSISTANT GENERAL MANAGER Encik Mohamad Khatta Daem

PLANNING AND DESIGN DEPTGENERAL MANAGER Mr Khor Tse Tong

INFORMATION & COMMUNICATION TECHNOLOGY DEPTSENIOR GENERAL MANAGER Tuan Haji Mohd Suhaimi Rafie

DEVELOPMENT DEPTGENERAL MANAGER Puan Rosmizah Ahmad

OPERATION & MAINTENANCE DEPTASSISTANT GENERAL MANAGER Tuan Haji Mohd Yunus Othman

MECHANICAL & ELECTRICAL DEPTASSISTANT GENERAL MANAGER Encik Mohd Yusri Abu Samah

Note:


and DEPT denote Department

and SECT denote Section

denotes Head of District

denotes Secretary of Works

denotes Region

denotes District

TECHNICAL DEVELOPMENT DIV

EXECUTIVE DIRECTORIr V Subramaniam

TECHNICAL DEVELOPMENTDEPTASSISTANT GENERAL MANAGERVacant


OrganisationStructure -

POG

40

CORPORATE

HEALTH, SAFETY &

ENVIRONMENT DEPT

SENIOR MANAGER

Encik Engku Hasan Wardi

MARINES

SERVICES DEPT

VICE PRESIDENT

Puan Halizah Kamarudin

PUNCAK OIL & GAS SDN BHD

FINANCE &

ACCOUNTS DIV

SENIOR MANAGER

Encik Huzaimi Mohd Idoris

BOARD OF DIRECTORS

EXECUTIVE CHAIRMAN

YBhg Tan Sri Rozali Ismail

PRESIDENT

Encik Mohamed Sabri Mohamed Zain

Note:



(727671-P)

TENDER &

CONTRACT DIV

VICE PRESIDENT

Ir Nasir Ismail


OrganisationStructure -GOMResources

41

BOARD OF DIRECTORS

CHAIRMAN

YBhg Tan Sri Dato’ Sri Dr Wan

Abdul Aziz Wan Abdullah

PRESIDENT

Encik Mohamed Sabri Mohamed Zain

EXECUTIVE VICE CHAIRMAN

YBhg Tan Sri Rozali Ismail

INTERNAL

AUDIT DEPT

CORPORATE QUALITY, HEALTH,

SAFETY & ENVIRONMENT DEPT

SENIOR MANAGER

Encik Itan AK Panyin

CORPORATE &

BUSINESS

DEVELOPMENT DIV

SENIOR

VICE PRESIDENT

YBhg Dato’

Hashim Mahfar

EXPLORATION &

PRODUCTION DIV

VICE

PRESIDENT

Tuan Haji Abu

Samad Nordin

HUMAN RESOURCE &

ADMINISTRATION DIV/

INFORMATION

TECHNOLOGY DIV

VICE

PRESIDENT

YBhg Dato’ Mat

Hairi Ismail

TENDER &

CONTRACT DIV

VICE

PRESIDENT

Ir Nasir Ismail

FINANCE &

ACCOUNTS DIV

VICE

PRESIDENT

Madam Yan

Siew Ching

LEGAL

DEPT

ASSISTANT

VICE PRESIDENT

Puan Haslinda

Abu Bakar

OPERATIONS DIV

SENIOR

VICE PRESIDENT

Encik Angat

Anum Lingoh

BUSINESS

DEVELOPMENT DEPT

VICE PRESIDENT

Encik Jamel Salleh

STRATEGIC

PLANNING DEPT

ASSISTANT

VICE PRESIDENT

Encik Zohrab Zolkipli

SPECIAL

PROJECT DEPT

VICE PRESIDENT

Encik Azman Shabudin

COMMERCIAL

& RISK DEPT

VICE PRESIDENT

Encik Zameri Embong

Note:



SECRETARIAL

DEPT

ASSISTANT

VICE PRESIDENT

Madam Chang

Siew Khim

(205375-V)

Teamwork is what spurs our people to attain extraordinary results


YBHG TAN SRI ROZALI ISMAIL IS THE FOUNDER OF PUNCAK NIAGA (M) SDN BHD

(“PNSB”), THE EXECUTIVE CHAIRMAN OF PUNCAK NIAGA HOLDINGS BERHAD

(“PNHB”) GROUP AND SUBSTANTIAL SHAREHOLDER OF PNHB. HE WAS APPOINTED

TO THE BOARD OF PNHB ON 24 APRIL 1997.

A Bachelor of Laws Degree holder from the University of Malaya in 1981, YBhg Tan Sri Rozali

began his career as Legal Advisor with the Urban Development Authority (UDA) before joining

Bank Islam (M) Berhad in 1983. Together with a few pioneer bank staff, he conceptualised the

fi rst institution of Islamic banking in Malaysia. Subsequently, in 1987, he started his own legal

practice as an Advocate and Solicitor for seven years, specialising in corporate, property and

banking works.

Board ofDirectors’

Profi le

44

YBHG TAN SRI

ROZALI ISMAIL

Aged 56

Malaysian

Executive Chairman

of PNHB Group


In 1989, YBhg Tan Sri Rozali set up a family-owned company and embarked into the property

development sector, with involvement in several development projects in the Klang Valley,

Kuantan and Johor. Under the banner of Puncak Alam Housing Sdn Bhd, he developed a new

township known as Bandar Baru Puncak Alam. The family-owned company also ventured

into the utility business in 1989 with the setting up of PNSB. Due to his vast experience in

various fi elds, he was entrusted by the Selangor State Government, via PNSB, to manage

the water treatment plants for the whole of the State of Selangor Darul Ehsan and the Federal

Territory of Kuala Lumpur. PNHB was subsequently incorporated in January 1997 as the

holding company of PNSB and was listed on the Main Board of Bursa Malaysia Securities

Berhad (effective 3 August 2009 known as Main Market of Bursa Malaysia Securities Berhad)

on 8 July 1997.

YBhg Tan Sri Rozali was conferred a Fellowship Award by the Institute of Marketing

Malaysia (IMM) on 6 November 2001 for his invaluable contributions to promote the growth

and development of the Malaysian property market. In recognition of his outstanding

contributions in championing management excellence and best practices in the Malaysian

water and wastewater industry, YBhg Tan Sri Rozali was awarded the prestigious Asia Water

Management Excellence Award 2002 – Individual Award Category, an award at Asian level,

by the Regional Institute of Environmental Technology on 26 March 2002. YBhg Tan Sri

Rozali was a Top 10 Nominee for the Ernst & Young Entrepreneur Of The Year – Malaysia

2002 and Malaysia 2003 (Master Entrepreneur Category) Award in recognition of his

outstanding entrepreneurship and leadership skills. He was conferred an Honorary Doctorate

in Complementary Medicines (Humanity Services) by the Open International University for

Complementary Medicines, Colombo, Sri Lanka on 24 September 2004. YBhg Tan Sri Rozali

was conferred the Jaksa Pendamai (“JP”) award in conjunction with the 72nd birthday of the

Yang di-Pertua Negeri Melaka on 9 October 2010.

On 30 November 2007, YBhg Tan Sri Rozali was bestowed the SME Platinum Award 2007

by the SMI Association of Malaysia for his outstanding entrepreneurship, leadership and

achievements in the water industry. This award signals the SMI Association of Malaysia’s

recognition of YBhg Tan Sri Rozali as a role model for budding entrepreneurs, especially in

view of his rapid rise from a small and medium business entrepreneur to becoming a Chief

Executive Offi cer of a large listed company. On 16 January 2009, YBhg Tan Sri Rozali received

the title of Kolonel Kehormat “60 Rejimen Pakar Pengendalian Air (AW)”. In recognition

of his excellent services performed with utmost dedication towards the betterment of the

community, YBhg Tan Sri Rozali was the proud recipient of the Vocational Excellence Service

Award 2009, conferred by the Paul Harris Fellow Award and inducted as an Honorary Rotarian

by the Rotary Club of Kuala Lumpur West on 6 November 2009. On 16 June 2010, YBhg Tan

Sri Rozali received the Anugerah Perdana (Kepimpinan), a Premier Award for Leadership at

the ‘Anugerah Usahawan Bumiputera 2010’ organised by Gagasan Badan Ekonomi Melayu

(“GABEM”). On 20 June 2010, YBhg Tan Sri Rozali was honoured with the Top Achiever

Of The Year 2009 Award at the Fourth Business Of The Year Award organised by the SMI

and SME Worldwide Network. On 28 June 2011, YBhg Tan Sri Rozali was honoured with

Technology CEO of the Year-Global Award by World Finance Magazine under the World

Finance Technology Awards 2011 in recognition of his contributions towards the water sector

in Malaysia and the region over the past 15 years and commitment to continuously innovate

and improve lives in the process. YBhg Tan Sri Rozali received the title “Brigedier Jeneral

(Kehormat) Pakar Pengendalian Air-Ke-60 RAJD (AW)” on 4 July 2011. On 20 July 2011,

YBhg Tan Sri Rozali received the prestigious Entrepreneur of the Year 2011 Award at the Asia

Pacifi c Entrepreneurship Awards 2011. On 28 July 2011, YBhg Tan Sri Rozali was awarded

the Masterclass Leader Award at the International Standard Quality (“ISQ”) Award 2011. On

9 January 2012, he was recognized as International Distinguished Entrepreneur Of The Year

for the Asia Pacifi c International Brands Summit (Malaysia) 2011 by the Asia Entrepreneur

Alliance. On 23 February 2012, YBhg Tan Sri Rozali was awarded the Special Individual

Achievement Category at the 1st Malaysia Achievement Awards 2012.

Board ofDirectors’ Profi le

45



Profi le

46YBhg Tan Sri Rozali is a member of various infl uential governmental and non-governmental

associations such as Malaysian Industry-Government Group for High Technology

(“MIGHT”), Malaysian Institute of Directors (“MID”), Malaysian-British Business Council,

Malaysia-Indonesia Business Council, Corporate Malaysia Roundtable, Malaysia-Russia

Business Council, Malaysia India Business Council (MIBC), Commonwealth Partnership

for Technology Management, FELDA Community Social Development Committee, Yayasan

Budi Penyayang Malaysia, Malaysian Institute of Management (MIM) and a Trustee of

Perdana Leadership Foundation and Sekretariat Malaysia Prihatin. He is the Advisor to IMM,

President of the Malay Chamber of Commerce for the State of Selangor, Pro-Chancellor of

the Universiti Putra Malaysia (July 2007 – June 2015), Governor for Malaysia of Asia Pacifi c

Marketing Federation (“APMF”) Foundation, Advisor of “Gabungan Persatuan Usahawan

Melayu Selangor/Wilayah Persekutuan” (GAPUMS) and Advisor of “Persatuan Bola Sepak

Melayu Malaysia” (“PBSMM”). He is also the Chairman of Gabungan Wawasan Generasi

Felda Berhad and Chairman of Majlis Perundingan Ekonomi Melayu (“MAPEM”).

YBhg Tan Sri Rozali was the past Deputy President of the Malaysian Water Association

(MWA) (2003/2005 Session), former Board Member of the Universiti Utara Malaysia

(2004-2006), and past Advisor of the Business and Accounting Faculty Council, the University

of Malaya (21 May 2004 to 20 April 2007), former Trustee of Yayasan WAQAF Malaysia

(YWM) (January 2008 – December 2009) and former President of the Water Association of

Selangor, Kuala Lumpur and Putrajaya (SWAn) (2006 – 2013), a non-profi t organisation which

represents the common interest of all water supply and wastewater industries within the

States of Selangor, and the Federal Territories of Kuala Lumpur and Putrajaya with the aim

of promoting interaction with the general public, and enhancing their understanding of water

resources.

YBhg Tan Sri Rozali is the major shareholder of one (1) listed company, namely TRIplc Berhad,

a property company.

YBhg Tan Sri Rozali attended 4 out of the 5 Board Meetings of PNHB held in the fi nancial year

ended 31 December 2012.


YBhg Dato’ Ruslan Hassan joined Puncak Niaga (M) Sdn Bhd (“PNSB”) on 1 November 1995

as the Executive Director of Corporate and Legal Affairs Division. When Puncak Niaga Holdings

Berhad (“PNHB”) was set-up and listed on Bursa Malaysia Securities Berhad, YBhg Dato’

Ruslan was appointed to its Board on 24 April 1997 and on 6 April 1999, he was appointed

as the Executive Vice Chairman. Together with the Executive Chairman YBhg Tan Sri Rozali

Ismail, YBhg Dato’ Ruslan played a principle role in pursuing for the privatization rights for the

distribution of treated water in Selangor. Upon PNHB securing the water distribution concession

for the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya on

1 January 2005, YBhg Dato’ Ruslan was appointed as the fi rst Chief Executive Offi cer (“CEO”)

of Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) and sits on the Boards of SYABAS

and Perbadanan Urus Air Selangor Berhad. With his appointment as the CEO and Director of

SYABAS, YBhg Dato’ Ruslan was re-designated from Executive Vice Chairman of PNHB to

Non-Independent Non-Executive Director of PNHB with effect from 1 October 2005.

YBhg Dato’ Ruslan is a member of the Industrial Court Employer Panel from 1 January 2004

till present. He is also a member of the Malaysian Institute of Directors (“MID”), Malaysian

Water Association (“MWA”), Institute of Marketing Malaysia (“IMM”) and International Water

Association (“IWA”).

Upon obtaining a Bachelor of Laws Degree from the University of Malaya in 1981, YBhg Dato’

Ruslan began his career as the Legal Advisor with the multinational petroleum company,

Esso Malaysia Bhd, and later as the Senior Legal Counsel of ESSO Production Malaysia Inc.

In 1985, he joined Sime Darby Group and was appointed as the Group Legal Advisor and

Company Secretary of Pernas Sime Darby Holdings Sdn Bhd, with interests in automobile,

plantation and heavy machinery. YBhg Dato’ Ruslan has 4 years’ experience as an Advocate

and Solicitor in the capacity of a partner in a medium-sized legal fi rm. In 1993, he joined the

securities and banking group of Rashid Hussain Berhad as the Senior General Manager of

the Corporate Affairs Division and was later appointed as an Executive Committee Member

of the RHB Group. He was also appointed to the Boards of Rashid Hussain Berhad, Rashid

Hussain Securities Sdn Bhd as well as various subsidiaries of RHB and served as an Audit

Committee member of both companies.

YBhg Dato’ Ruslan attended 5 out of the 5 Board Meetings of PNHB held in the fi nancial year


YBHG DATO’

RUSLAN BIN HASSAN

Aged 57

Malaysian

Non-Independent

Non-Executive

Director of PNHB and

Chief Executive Offi cer

of SYABAS


47



Profi le

48

YBHG DATO’

IR LEE MIANG KOI

Aged 59

Malaysian

Non-Independent

Non-Executive


Chief Operating

Offi cer of SYABAS

YBhg Dato’ Ir Lee Miang Koi joined Puncak Niaga (M) Sdn Bhd (“PNSB”) in 1995 as General

Manager, Business Development. He was subsequently appointed as a Director of PNSB

and Puncak Niaga Holdings Berhad (“PNHB”) on 2 February 1999 and 1 September 1999,

respectively. On 1 January 2005, he was appointed as the Chief Operating Offi cer of Syarikat

Bekalan Air Selangor Sdn Bhd (“SYABAS”). YBhg Dato’ Ir Lee resigned as a Director of PNSB

on 30 September 2005 and was re-designated from Executive Director, Project and Business

Development Division of PNHB to Non-Independent Non-Executive Director of PNHB with

effect from 1 October 2005. He is a member of the Malaysian Water Association (“MWA”),

the Malaysian Institute of Directors (“MID”) and the Institute of Marketing Malaysia (“IMM”).

YBhg Dato’ Ir Lee graduated as a civil engineer from the Universiti Teknologi Malaysia in

1978 and in 1989, he obtained a Masters Degree in Environmental Engineering majoring in

water supply and wastewater engineering from the Asian Institute of Technology in Bangkok.

YBhg Dato’ Ir Lee has 35 years of experience in the water supply sector and has held various

positions during his tenure with the Public Works Department as well as the state Waterworks

Department in Malaysia, specialising in the various aspects of water supply services. He

was previously a Director of the Negeri Sembilan Waterworks Department. He left the Public

Works Department in 1991 to join Ranhill Bersekutu Sdn Bhd, holding various positions from

Senior Engineer to Vice President in the Water Supply Division.

YBhg Dato’ Ir Lee attended 5 out of the 5 Board Meetings of PNHB held in the fi nancial year



YBhg Dato’ Syed Danial Syed Ariffi n graduated in 1981 with a BSc (Hons) Degree in Civil

Engineering from the University of Aston in Birmingham, United Kingdom. He is a civil

engineer by profession and has been with Puncak Niaga Holdings Berhad (“PNHB”) Group

since December 1995. He began his career with Puncak Niaga (M) Sdn Bhd (“PNSB”) as a

Manager of Operation and was subsequently promoted to Senior Manager, Assistant General

Manager and General Manager of Operation. Prior to his appointments to the Boards of PNSB

and PNHB on 1 March 2004, he was the Acting Executive Director of the Operation Division

from July 2003 to February 2004 and subsequently re-designated as Executive Director,

Operation I Division on 1 April 2005. On 16 November 2007, YBhg Dato’ Syed Danial was

appointed as the Chief Operating Offi cer of PNHB and PNSB. On 15 February 2012, YBhg

Dato’ Syed Danial was appointed the Managing Director of PNSB and ceased to be the Chief

Operating Offi cer of PNSB. He is also a Director of Syarikat Bekalan Air Selangor Sdn Bhd

(“SYABAS”) since 3 September 2007. He was appointed as the Chairman of Sino Water Pte

Ltd, PNHB’s 98.65% owned subsidiary in Singapore on 1 January 2010.

YBhg Dato’ Syed Danial previously worked with the Pahang Public Works Department for

10 years, holding positions from Project Engineer (1981-1983) to District Engineer for JKR

Cameron Highlands (1983-1991) and the Selangor Water Works Department between 1991

to 1995, where he was the Senior Project Engineer overseeing the construction of the Sg

Selangor Phase 1 Water Supply Project. YBhg Dato’ Syed Danial is a member of the Institute

of Marketing Malaysia, Malaysian Water Association, a Registered Engineer with the Board

of Engineers Malaysia, a member of the Universiti Teknologi Mara’s Board of Academics,

Faculty of Civil Engineering (October 2009 - March 2014 term), Advisor to the Institute For

Infrastructure Engineering & Sustainable Management and he also sits on the Boards of

several private companies. He is also a member of the Water Association of Selangor, Kuala

Lumpur and Putrajaya (“SWAn”), a non-profi t organisation which represents the common

interest of all water supply and wastewater industries within the State of Selangor, and the

Federal Territories of Kuala Lumpur and Putrajaya with the aim of promoting interaction

with the general public and enhancing their understanding of water resources. On

2 May 2012, YBhg Dato’ Syed Danial was appointed as a member of Universiti Putra

Malaysia’s Committee of Program of Study, Faculty of Science.

YBhg Dato’ Syed Danial attended 5 out of the 5 Board Meetings of PNHB held in the fi nancial

year ended 31 December 2012.

YBHG DATO’

SYED DANIAL BIN

SYED ARIFFIN

Aged 55

Malaysian

Chief Operating

Offi cer of PNHB and

Managing Director

of PNSB


49



Profi le

50

YBHG TAN SRI DATO’

HARI NARAYANAN

A/L GOVINDASAMY

Aged 63

Malaysian

Independent

Non-Executive

Director of PNHB

YBhg Tan Sri Dato’ Hari Narayanan Govindasamy, a businessman was appointed to the

Board of Puncak Niaga Holdings Berhad (“PNHB”) on 1 July 1999 as an Independent

Non-Executive Director. He is a member of PNHB’s Audit Committee, Remuneration

Committee and Nomination Committee. He holds a Bachelor’s Degree in Electrical and

Electronics Engineering from the University of Northumbria, England.

YBhg Tan Sri Dato’ Hari Narayanan is a member of the Malaysian Institute of Directors and

a Registered Professional Engineer with the Board of Engineers Malaysia. He has extensive

experience in the fi eld of electrical and electronic engineering and has held various key

positions with some established companies as an engineer and entrepreneur.

YBhg Tan Sri Dato’ Hari Narayanan also sits on the Boards of Tenaga Nasional Berhad and

SP Setia Berhad, both public listed companies and he is the Chairman of IEV Holdings

Limited, Singapore. He also holds directorships in several other private limited companies.

YBhg Tan Sri Dato’ Hari Narayanan attended 3 out of the 5 Board Meetings of PNHB held in

the fi nancial year ended 31 December 2012.


YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh joined Puncak Niaga Holdings Berhad (“PNHB”) on

15 July 2000 as an Independent Non-Executive Director and a member of the Remuneration

Committee and the Nomination Committee. Currently, he is the Chairman for both PNHB’s

Audit Committee and Compliance, Internal Control and Risk Policy Committee. He graduated

with a Bachelor of Arts Degree from the University of Malaya in 1970 and obtained a Master

of Science Degree from the University of London in 1972. He also holds a Doctorate in

Philosophy, which he obtained from the University of Warwick in 1976. YBhg Tan Sri Dato’

Seri Dr Ting is a member of the Malaysian Institute of Directors.

YBhg Tan Sri Dato’ Seri Dr Ting started his career as a lecturer in the Faculty of Humanities

and Social Sciences at the Universiti Kebangsaan Malaysia from 1974 to 1980 and was

subsequently an Associate Professor at the Faculty until 1987. Between 1979 to 1986,

YBhg Tan Sri Dato’ Seri Dr Ting published two books entitled “Konsep Asas Sosiologi” and

“Hubungan Ras dan Etnik”.

In 1987, YBhg Tan Sri Dato’ Seri Dr Ting ventured into politics with his election as a Member

of Parliament for the Gopeng constituency, which he held until the 2008 general elections.

He previously served as Parliamentary Secretary of the Ministry of Health (1988-1989),

Deputy Minister in the Prime Minister’s Department (1989-1990), Minister of Housing and

Local Government (1990-1999) and Secretary-General of the Malaysian Chinese Association

(“MCA”) (1990-2005). He also sits on the Boards of Pan Malaysia Capital Berhad Group, Hua

Yang Berhad, Johan Holdings Berhad, Huaren Education Foundation and also serves as a

director of several private companies.

YBhg Tan Sri Dato’ Seri Dr Ting attended 5 out of the 5 Board Meetings of PNHB held in the

fi nancial year ended 31 December 2012.

YBHG TAN SRI DATO’ SERI

DR TING CHEW PEH

Aged 70

Malaysian

Independent

Non-Executive

Director of PNHB


51



Profi le

52

YAM TENGKU DATO’

RAHIMAH BINTI

ALMARHUM

SULTAN MAHMUD

Aged 47

Malaysian

Non-Independent

Non-Executive

Director Of PNHB

YAM Tengku Dato’ Rahimah Almarhum Sultan Mahmud was appointed to the Board

of Puncak Niaga Holdings Berhad (“PNHB”) on 1 August 2006 as an Independent

Non-Executive Director. On 1 January 2007, she was re-designated as Non-Independent

Non-Executive Director of PNHB following her appointment as the Executive Director of

Puncak Research Centre Sdn Bhd. She was a past Member of PNHB’s Audit Committee,

Remuneration Committee and Nomination Committee for the period from 1 August 2006 to

31 December 2006. On 26 February 2008, YAM Tengku Dato’ Rahimah was re-invited to sit

on PNHB’s Audit Committee.

YAM Tengku Dato’ Rahimah holds a BSc in Economics and Accountancy from the City of

London University, England. She is a member of the Malaysian Institute of Accountants

(“MIA”).

Upon completing her degree, YAM Tengku Dato’ Rahimah started her career with the

Hongkong Bank in London, England and upon her return to Malaysia, she joined Esso

Malaysia Berhad for 5 years.

YAM Tengku Dato’ Rahimah is currently the Chairman of Loh & Loh Corporation Bhd and a

Director of Cosway (M) Sdn Bhd, a direct selling company dealing in consumer goods and

services and a wholly owned subsidiary of Cosway Corporation Berhad. She also sits on the

Board of a few private limited companies.

YAM Tengku Dato’ Rahimah attended 5 out of the 5 Board Meetings of PNHB held in the

fi nancial year ended 31 December 2012.


YBhg Tan Sri Dato’ Ahmad Fuzi Haji Abdul Razak was appointed to the Board of Puncak Niaga Holdings Berhad (“PNHB”) on 6 October 2008 as an Independent Non-Executive Director. He is a member of PNHB’s Audit Committee and Chairman of PNHB’s Remuneration Committee and Nomination Committee. He holds a Bachelor of Arts Degree (Honours) from the University of Malaya (1972) and a Certifi cate in Diplomacy (Foreign Service Course) from the University of Oxford (1974). In recognition of his service to the nation, he was awarded the AMN (1979), the JSM (1999), the DSPN (1999), the DMPN (2002) and the PSM (2003).

YBhg Tan Sri Dato’ Ahmad Fuzi Haji Abdul Razak was previously the Secretary General of the Ministry of Foreign Affairs Malaysia. He joined the Malaysian Diplomatic and Administrative Service in 1972, and served in various capacities at the Ministry of Foreign Affairs, mainly in the Political Division, and at the Malaysian Missions abroad in Moscow, the Hague, Canberra, Washington and Dhaka. He also served as the Director General, Institute of Diplomacy and Foreign Relations.

YBhg Tan Sri Dato’ Ahmad Fuzi is currently the Secretary General of the World Islamic Economic Forum Foundation (WIEF); Member, Board of Trustees of MERCY, Malaysia and Perdana Global Peace Foundation (PGPF).

YBhg Tan Sri Dato’ Ahmad Fuzi is also Chairman of Amanahraya-REIT Managers Sdn Bhd, Seremban Engineering Berhad, Theatre Management Associates Sdn Bhd, Optima Capital Sdn Bhd and Ferro Mining Sdn Bhd; Non-Executive Chairman of Sofgen (Malaysia) Sdn Bhd and Xadacorp Sdn Bhd; Group Chairman of Ace Holdings Sdn Bhd; Independent Non-Executive Director of Maybank Islamic Berhad, Maybank Ventures Sdn Bhd (formerly known as Mayban Ventures Sdn Bhd) and Ranhill Energy And Resources Berhad; Non-Executive Director, MDIS (Malaysia) Sdn Bhd; Member, Board of Trustees of F3 Strategies Berhad; Advisor of Leisure Guide Publishing Sdn Bhd and Director of HDZ Petroleum Sdn Bhd, HDZ Oil Refi nery Sdn Bhd, ISAREIT Retail Properties Sdn Bhd, Weros Technology Sdn Bhd, NS Cattle Farm and Breeder Sdn Bhd.

YBhg Tan Sri Dato’ Ahmad Fuzi is also a Distinguished Fellow, Institute of Strategic and International Studies (ISIS); Distinguished Fellow, Institute of Diplomacy and Foreign Relations; Deputy Chairman, Malaysian Member Committee of the Council for Security Cooperation in the Asia Pacifi c (CSCAP Malaysia); Member, Institute of Advanced Islamic Studies (IAIS); Member, Advisory Board, Asia Pacifi c Entrepreneurship Award (APEA); Advisor, High School Bukit Mertajam Alumni Malaysia; and Honorary Advisor, Malaysia-Myanmar Chamber of Commerce.

YBhg Tan Sri Dato’ Ahmad Fuzi attended 5 out of the 5 Board Meetings of PNHB held in the fi nancial year ended 31 December 2012.


AHMAD FUZI BIN HAJI

ABDUL RAZAK

Aged 64

Malaysian

Independent

Non-Executive

Director of PNHB


53



Profi le

54

MR NG WAH TAR

Aged 49

Malaysian

Executive Director

Corporate Finance

Division of PNHB

and PNSB

Mr Ng Wah Tar was appointed to the Board of Puncak Niaga Holdings Berhad (“PNHB”)

and Puncak Niaga (M) Sdn Bhd (“PNSB”) on 1 January 2010 as the Executive Director,

Finance Division and was re-designated to Executive Director, Corporate Finance Division on

1 January 2011. He was also appointed a Member of PNHB’s Remuneration Committee and

the Compliance, Internal Control and Risk Policy Committee (“CICR”) and Syarikat Bekalan

Air Selangor Sdn Bhd’s (“SYABAS”) Audit Committee on 1 January 2010, respectively.

Mr Ng was appointed as the Audit Committee Chairman of SYABAS on 1 January 2013.

He is a member of the Water Association of Selangor, Kuala Lumpur and Putrajaya

(“SWAn”), a non-profi t organization which represents the common interest of all water

supply and wastewater industries within the State of Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya with the aim to promoting interaction with the general public,

and enhancing their understanding of the water resources. He is also a member of the

Malaysian Water Association (“MWA”).

Mr Ng has more than 26 years of working experience in various areas covering auditing,

accounting, fi nance and corporate fi nance. He commenced his articleship with an accounting

fi rm in 1984 and is a member of MIA, MICPA and CPA Australia. He had previously worked

with United Engineers (M) Berhad (“UEM”) from 1994 to 2000 overseeing the fi nance and

accounting functions of UEM.

In February 2000, Mr Ng joined PNSB as General Manager, Finance & Accounts and was

promoted to Senior General Manager, Finance & Accounts on 1 April 2006 and thereafter

to Executive Director, Corporate Finance under the Executive Chairman’s Offi ce on

1 April 2007, respectively. He left PNSB on 1 September 2007 to assume the position of

Executive Vice Chairman of WWE Holdings Bhd till 30 June 2009. Mr Ng resigned as the

Executive Vice Chairman of WWE Holdings Bhd and rejoined PNHB Group on 1 July 2009.

Mr Ng attended 5 out of the 5 Board Meetings of PNHB held in the fi nancial year ended

31 December 2012.


Board ofDirectors

YBHG TAN SRI

ROZALI ISMAIL

Executive Chairman

of PNHB Group

YBHG DATO’ IR LEE

MIANG KOI

Non-Independent

Non-Executive



of SYABAS

YBHG DATO’ SYED

DANIAL SYED ARIFFIN


of PNHB and Managing

Director of PNSB


HARI NARAYANAN

GOVINDASAMY

Independent

Non-Executive

Director of PNHB

YBHG DATO’

RUSLAN HASSAN

Non-Independent

Non-Executive


Chief Executive Offi cer

of SYABAS

MR NG WAH TAR

Executive Director


of PNHB and PNSB

YAM TENGKU DATO’

RAHIMAH ALMARHUM

SULTAN MAHMUD

Non-Independent


of PNHB


AHMAD FUZI HAJI

ABDUL RAZAK

Independent

Non-Executive

Director of PNHB

YBHG TAN SRI DATO’ SERI

DR TING CHEW PEH

Independent

Non-Executive

Director of PNHB

55


Ir Tan Hui Kuan joined PNSB in August 2003 as the General Manager of the Project and

Business Development Department. He was appointed as the Executive Director, Operation

& Maintenance Division on 1 January 2010. On 1 August 2011, he was redesignated as

the Executive Director of Engineering/Project Development Division. On 15 February 2012,

he was promoted to be the Chief Operating Offi cer of the Company. He graduated with a

Bachelor’s Degree (Hons) in Civil Engineering from the University Malaya in 1979. He has

26 years of working experience in the Public Works Department Malaysia and Lembaga

Air Perak in the fi eld of production, distribution, maintenance and consumer services

management of a District Waterworks Department, geotechnical investigation, maintenance

of military camps, project management of military buildings and infrastructures. Prior to joining

PNSB, Ir Tan was the Assistant Director for Military Works in the Public Works Department

Malaysia. While in PNSB, he has managed for a period the operation and maintenance of

the water treatment plants and dams under the various concession held by the Company,

besides executed and completed projects in India, Sabah, Sarawak and Peninsular Malaysia.

YBhg Dato’ Nasir Khan Illadad Khan joined PNSB on 21 February 2006 as Executive Director,

Corporate Affairs Division before being appointed as the Executive Director for Business

Development Division effective from 1 January 2010. He holds a Bachelor Degree in Social

Science, Political Science (Hons) from the Universiti Sains Malaysia and a Masters Degree in

Public Administration from the Pennsylvania State University, United States of America. He also

possesses a Diploma in Public Management from the National Institute of Public Administration

(INTAN), and attended an Executive Management Programme at the School of Government,

Harvard University, United States of America. YBhg Dato’ Nasir Khan has more than 33 years

of management experience with the Government, holding various positions and covering

areas of human resources, security, land development and fi nance. Prior to joining PNSB,

he was serving the Ministry of Finance, Malaysia.

YBhg Datuk Mohd Yunus Mohd Amin joined PNSB on 15 November 2007, as Executive

Director, Human Resources & Administration Division before assuming the position of

Executive Director, Special Functions Division. He holds a Degree in Mass Communications

from the University Padjajaran Bandung, Indonesia and a Diploma in Public Management

from the National Institute of Public Administration (INTAN).

Prior to joining PNSB, he was the Director for Bahagian Geraksaraf Dan Perancangan Dasar,

Jabatan Hal Ehwal Khas of the Ministry of Information, Malaysia. YBhg Datuk Mohd Yunus has

more than 32 years of administrative and management experiences holding various positions

in the Ministries and Agencies such as Ministry of Transport, Ministry of Education, Ministry

of Home Affairs, Student Attache, Prime Minister Department, Selangor State Government

and Ministry of Information, including 27 years of experience in the Diplomatic Service.

Key Personnel

Profi le - PNSB

56

IR TAN HUI KUAN

Aged 59

Malaysian


YBHG DATO’ NASIR KHAN ILLADAD KHAN

Aged 60

Malaysian

Executive Director,Business Development

Division

YBHG DATUK MOHD YUNUS MOHD AMIN

Aged 65

Malaysian

Executive Director,Special Functions Division


57YBhg Datuk Dr Muzahet Masruri joined PNSB on 1 January 2010 as the Senior General

Manager, Strategic Resource Centre. He was promoted to his current position of the Executive

Director, Strategic Resource & Public Relations Division on 15 February 2012.

He holds a Doctorate in Economics and Masters in Development Economics, both from the

University of East Anglia, United Kingdom. He obtained his Bachelor of Arts Degree from the

University of Malaya and Diploma in Teaching from Sultan Idris Teachers Training College

(now known as Sultan Idris University of Education), Tanjung Malim, Perak.

He carries over 34 years of working experience in economics research, planning and

management during his tenure with the Government. Prior to joining PNSB, he held various

senior positions including Secretary General in the Ministry of Unity, Culture, Arts & Heritage,

Deputy Director General 1 in the Economic Planning Unit, Prime Minister’s Department,

Deputy Secretary General in the Ministry of Domestic Trade & Consumer Affairs, Deputy Head

of Secretariat in the National Economic Action Council (NEAC), Prime Minister’s Department,

Senior Assistant Director in the Socioeconomic Research Unit, Prime Minister’s Department,

and Editor in Dewan Bahasa dan Pustaka.

Among the key strategic areas he was involved in during his working experience with the

Government include the preparation of the “Five-Year Malaysia Development Plans”, the

preparation of strategic policies and stimulus packages to avert the negative impacts of the

“Asian Financial Crisis in 1997”, the tension between Iraq & the US in 2001 and Severe Acute

Respiratory Syndrome (“SARS”) in 2003. He was also instrumental in drafting substantive

policy guidelines to promote retail and distributive trade as well as addressing the price

control mechanism covering retail business in oil & gas sector in Malaysia. He was involved

in bilateral trade negotiations with the USA and Chile.

Madam Tan Bee Lian joined PNSB as Company Secretary on 7 November 1994 and was

promoted thrice before assuming her current position as Executive Director, Corporate

Services Division on 1 January 2010. In her current position, she oversees the Legal

Department, Secretarial Department and Internal Audit Department. As Group Company

Secretary, Madam Tan is responsible for PNHB Group’s company secretarial and regulatory

compliance. She was appointed as a Director of Sino Water Pte Ltd on 27 June 2008 and

a Director of Puncak Niaga Overseas Capital Pte Ltd on 2 January 2013, both of which

are Puncak Niaga Holdings Berhad’s Singapore subsidiaries. Madam Tan is a Fellow of the

Malaysian Association of the Institute of Chartered Secretaries and Administrators (“MAICSA”)

and has more than 25 years of working experience in company secretarial practice and

corporate work. She had previously worked with Projek Lebuhraya Utara-Selatan Berhad

(“PLUS”) and Metramac Corporation Sdn Bhd/Metacorp Berhad. She is also the winner of

the ROC-MAICSA Company Secretary Award 2001 for the Listed Company Category.

YBHG DATUK DR MUZAHET MASRURI

Aged 61

Malaysian

Executive Director,Strategic Resource & Public Relations Division

MADAM TAN BEE LIAN

Aged 47

Malaysian

Executive Director,Corporate Services Division

Key Personnel Profi le -PNSB


Madam Wong Ley Chan graduated with a Bachelor of Accountancy Degree from the

prestigious National University of Singapore.

Madam Wong is a member of Malaysian Institute of Certifi ed Public Accountant (MICPA) and

Malaysian Institute of Accountant (MIA). She has more than 28 years of working experience

and extensive knowledge in various areas covering auditing, corporate banking and

corporate debts restructuring, corporate fi nance, accounting, taxation and strategic fi nancial

management.

Madam Wong started her career in 1984 as a young auditor in an established accounting

fi rm. Since then, she had served diligently in several companies at senior management level,

including a 6-year stint in UEM Land Group of Companies, 5 years in TRIplc Bhd and 3 years

in Syarikat Bekalan Air Selangor Sdn Bhd. Prior to joining Puncak Niaga Holdings Berhad,

she was the Vice President, Finance of Scomi Engineering Bhd.

On 25 November 2010, she was appointed as Executive Director, Finance Division in Puncak

Niaga (M) Sdn Bhd. She is responsible for the overall fi nance and accounting functions of

Puncak Niaga Group of Companies.

Tuan Haji Abd Rashid Abd Satar joined PNSB on 15 February 2012 as Executive Director,

Operation & Maintenance Division.

Tuan Haji Abd Rashid Abd Satar holds a Diploma in Civil Engineering from the Universiti

Teknologi Malaysia and a Bachelor of Civil Engineering Degree from the University of Glasgow,

Scotland. He has 30 years of working experience in the water supply sector. He began his

career in 1981 as a Technical Assistant and as a District Engineer of Kuala Selangor/Sabak

Bernam Districts with JBAS and continued his service with PUAS from 2002 to 2005 as

Senior Manager of the Kuala Langat/Sepang Districts respectively. He was the General

Manager of the Klang/Shah Alam District offi ce of SYABAS before assuming the position

as General Manager of the Petaling District Offi ce from March 2007 until March 2009. He

was later promoted as Senior General Manager of the Petaling District Offi ce effective from

1 April 2009. On 1 February 2011, he was appointed as Executive Director, Operation Division

of SYABAS.

He was awarded the Pingat Pekerti Terpilih (PPT) and Darjah Ahli Mahkota (A.M.S) in 1998

and 2002 respectively by the DYMM Sultan of Selangor for his dedication and services to the

State of Selangor.

Ir Ausamah Darwish joined PNSB on 9 January 2013 as Executive Director,

Engineering/Project Development Division. He attained his Bachelor of Science (Engineering)

from the Southern Illinois University, United States of America in 1984.

He is a Registered Professional Engineer with the Board of Engineers Malaysia (Mechanical).

Ir Ausamah Darwish has over 28 years of working experience. He started his career as a

Trainee Mechanical Engineer and held various posts from Mechanical Engineer, Associate

Mechanical Engineer, System Designer, Resident Engineer to a Plant Manager and Executive

Director. Prior to joining PNSB, Ir. Ausamah Darwish was the Executive Director, Operation

in WWE Holdings Bhd.

With his vast working experiences in fi elds related to mechanical, water and wastewater

engineering, Ir Ausamah Darwish was appointed as an Executive Director to head the

Engineering/Project Development Division of PNSB.

Key Personnel

Profi le -PNSB

58

MADAM WONG LEY CHAN

Aged 53

Malaysian

Executive Director,Finance Division

TUAN HAJI ABD RASHID ABD SATAR

Aged 53

Malaysian

Executive Director,Operation &

Maintenance Division

IR AUSAMAH DARWISHMOHD DAUD

Aged 53

Malaysian

Executive Director,Engineering/Project

Development Division


59Puan Faridatulzakiah holds a degree in Law (LLB, Hons) from the Hertfordshire University,

United Kingdom.

She started her legal career at Messrs Malek & Associate in 2003, handling civil and criminal

cases. In 2006, she served as Legal Offi cer in Great Eastern Life Assurance (Malaysia) Berhad

where she was exposed to Human Resource and Industrial Relations matters.

She then joined SYABAS in 2008 as Assistant Manager, Legal Department and subsequently

promoted to Manager of Industrial Relations a year later before being promoted as Senior

Manager in 2010. She continued leading the department until she joined PNSB in 2012 as

Assistant General Manager of the Human Resources & Administration Division, overseeing

the full spectrum of Human Resource Management. Under her leadership and guidance,

the Department focused on delivering high quality services and consequently improved the

Company’s performance.

On 1 February 2013, Puan Faridatulzakiah assumed the position of Executive Director of

Human Resources & Administration Division of PNSB.

Tuan Haji Sonari Solor joined PNSB on 10 September 1998 and was appointed as Senior

General Manager, Internal Audit Department of SYABAS for the period 1 September 2006 to

15 February 2012. He re-joined PNSB on 16 February 2012 as the Senior General Manager,

Internal Audit Department.

Tuan Haji Sonari Solor is a Chartered Accountant with the Malaysian Institute of Accountants

and Fellow of the Association of Chartered Certifi ed Accountants (U.K). He holds a

professional qualifi cation from the Chartered Institute of Management Accountants (U.K).

Tuan Haji Sonari Solor has more than 24 years of working experience at the managerial level

in the area of accounting and auditing with several public listed companies. Prior to joining

PNSB, Tuan Haji Sonari Solor held the position of Group Division Head, Internal Audit with

Land & General Berhad.

Puan Hafi zah joined a QS Consultant Company in July 1992 as a Quantity Surveyor for three

years. She graduated with an Advanced Diploma in Quantity Surveying from the Universiti

Teknologi MARA in 1992 and was bestowed with the Best Student Award. Prior to joining

PNSB in January 2010 as General Manager of Contract & Procurement Department (“CPD”),

she was with a construction company since October 1996. Overall, Puan Hafi zah has more

than 21 years of experience in quantity surveying works on construction industry. She was

promoted to Senior General Manager of CPD of PNSB on 1 January 2013.


PUAN FARIDATULZAKIAH MOHD BAKHRY

Aged 37

Malaysian

Executive Director,Human Resources & Administration Division

TUAN HAJI SONARI SOLOR

Aged 57

Malaysian

Senior General Manager,Internal Audit Department

PUAN HAFIZAH AHMAT

Aged 44

Malaysian

Senior General Manager,Contract & Procurement Department


Madam Lim Yew Heang (Jenny) joined PNSB on 1 April 2008 as General Manager, Secretarial

Department, Corporate Services Division. She was appointed as the Joint Company Secretary

for both PNSB and PNHB on 2 May 2008. She is a Chartered Secretary, a holder of the Institute

of Chartered Secretaries & Administrator (ICSA) qualifi cation and an Associate Member of

The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). She has

24 years of working experience in company secretarial practice. Prior to joining PNSB on

1 April 2008, she was a Senior Manager in a leading secretarial consultancy company for

14 years.

Encik Johari Pawanchik joined PNSB on 9 August 2010 as General Manager for Operation

& Maintenance Department. He graduated with a Bachelor’s Degree in Science from the

Universiti Kebangsaan Malaysia (UKM) in 1989 and pursued study in Engineering. He

obtained a Master’s Degree in Engineering from the University of South Australia in 2008.

He has wide exposure in Production Operation Management with Multinational Companies

and Government Linked Company before joining PNSB. Prior to joining PNSB, he was

attached to BHIC Boustead Holdings as Operations General Manager since 2008.

Encik Azlan Shah Tan Sri Rozali graduated with a Bachelor of Arts Degree in Business and

Marketing from the Middlesex University, Hendon Business Campus, London, United Kingdom.

He joined PNSB on 1 November 2011 and is the General Manager, Information Technology

Department of PNSB overseeing the overall of Information Technology Department of PNSB.

Encik Azlan Shah started his career in 2009 via an internship at an apparel merchandise

company. With his tremendous performance and high commitments, he was subsequently

promoted to a Manager responsible for the company’s sales and marketing, business

development, inventory management and administration functions. In 2010, he joined

SYABAS as an Executive and had exposures and experiences in the area of human resources

& administration, fi nance & accounts and managing SYABAS district offi ces.

Encik Azlan Shah is an EXCO Member of the Youth Chamber in the Malay Chamber

of Commerce for the State of Selangor, Founder and Vice President of 1Malaysia Youth

Entrepreneurs Club. In 2011, he received the title of ‘Leftenan Rejimen Pakar Pengendalian

Air ke-60 RAJD (Askar Wataniah)’.

Key Personnel

Profi le -PNSB

60

MADAM JENNY LIM YEW HEANG

Aged 46

Malaysian

General Manager,Secretarial Department

ENCIK JOHARI PAWANCHIK

Aged 49

Malaysian

General Manager,Operation & Maintenance

Department

ENCIK AZLAN SHAH TAN SRI ROZALI

Aged 27

Malaysian

General Manager,Information Technology

Department


61Madam Christina Lee Chin Kee joined PNSB on 27 April 2012 as General Manager, Legal

Department, Corporate Services Division. She obtained her Bachelor of Law (LLB) from the

University of Buckingham, United Kingdom in 1982 and her Certifi cate of Legal Practice

(CLP) from the University of Malaya in 1985. She had been called to the High Court of Malaya

and a Member of High Court of Borneo and enrolled as a member Sarawak Bar Association.

She started her working experience with the Judicial and Legal Services, Malaysia for a

period of ten years working as a Magistrate and later with the Attorney-General’s Chambers

before moving on to join the private sector, fi rstly, with the legal fi rm of Messrs. Abu Talib

Shahrom and later with Messrs. Zul Rafi que & Partners.

Prior to joining PNSB, she was with UEM Builders Berhad for fi ve (5) years as the General

Manager, Legal Department. Her expertise lies in terms of drafting and negotiating contractual

documents matters and concession agreements as well as overseeing legal issues in

international project and other joint ventures.

Tuan Syed Badli Shah joined PNSB on 9 January 2013 as the General Manager of Non Water

Department, Engineering/Project Development Division. He is a degree holder in Mechanical

Engineering from the Universiti Teknologi Malaysia in 1990.

Tuan Syed Badli Shah has over 20 years of experience in the construction industry, water &

wastewater operation & maintenance projects and solid waste management. He started his

career as a Mechanical Engineer for JCM Sdn Bhd before joining Perbadanan Kilang Felda

as Plant Engineer. He also served as Chief Engineer for Johor Aluminium Processing Sdn

Bhd and involved in the construction of Secondary Aluminium plant as well as testing and

commissioning. He gained experience as General Production Manager for Linde Industrial

Gases Sdn Bhd and constructed three (3) acetylene plants and four (4) fi lling stations for

industrial gases. He was a Plant/Facilities Planning Manager with Alam Flora Sdn Bhd and

managed Taman Beringin Transfer Station and Landfi ll operation and maintenance. He is also

a Project Director for Jeddah Sewer Networks, Saudi Arabia and managed the Operation and

Maintenance Contract of Jelutong Sewage Treatment Plant, Penang.

Prior to joining PNSB, he was the Business Development Manager/Jeddah Branch Manager

of WWE Holdings Bhd.

Ir Yong Oon Fatt (Dacius), is the General Manager, International Project Department of

Engineering & Project Development Division of PNSB. Ir Yong Oon Fatt joined PNSB on

1 July 2010 and was seconded to the PRC China for the Group’s water and wastewater

business in the PRC China undertaken by Sino Water Pte Ltd, PNHB’s 98.65% subsidiary in

Singapore. Ir Yong Oon Fatt holds a Bachelor of Engineering degree majoring in Mechanical

Engineering from the University Science of Malaysia. He is a qualifi ed Professional Engineer

registered with Board of Engineers, Malaysia. He is also a member of Institutional of Engineers

Malaysia. Ir Yong Oon Fatt has more than 17 years of experience in the municipal water and

waste water treatment system design and construction works. Besides having experiences

in engineering construction, Ir Yong Oon Fatt also has experiences in marketing and business

development.

MADAM CHRISTINA LEE CHIN KEE

Aged 52

Malaysian

General Manager,Legal Department

TUAN SYED BADLI SHAH SYED MANSOOR

Aged 46

Malaysian

General Manager,Local Project Department

IR YONG OON FATT

Aged 41

Malaysian

General Manager,International Project Department



Ir V Subramaniam is presently the Executive Director, Technical Development Division of

Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”). He has worked with the Selangor Water

Works Department (“JBAS”) since 1991 and continued his service with the Perbadanan Urus

Air Selangor Berhad (“PUAS”) when the Water Works Department was corporatised in March

2002 and subsequently with SYABAS as the Executive Director, Operations when the water

supply in Selangor and the Federal Territories of Kuala Lumpur & Putrajaya was privatised on

1 January 2005. He holds a Bachelor of Engineering (Hons) (Civil) Degree from the University

of Malaya.

Ir V Subramaniam has served in the Public Works Department/Water Supply Department/

PUAS/SYABAS in various capacities for the past 39 years since graduation in 1974.

He has vast experience in managing water supply and privatisation of water supply.

Ir V Subramaniam successfully handled the unprecedented 1998 Water Crisis in Selangor

and Kuala Lumpur, then as the Deputy Director of the Selangor Water Works Department and

published a complete documentation on the management of the water crisis. He has written

and presented more than 25 papers on Privatisation/Corporatisation of water supply and

on other technical aspects of water supply at both international and national level seminars,

conferences and publications including International Water Association (“IWA”); Asia Pacifi c

Economic Corporation (“APEC”); Economic and Social Commission for Asia & Pacifi c

(“ESCAP”) - United Nations and the Asian Development Bank (“ADB”). He has also assisted

ADB in several studies on water supply in Asian cities as a domestic consultant appointed

by the ADB.

For his dedication and service to the State and Nation, Ir V Subramaniam was awarded

the Darjah Kebesaran Setia Mahkota Selangor (“SMS”), Darjah Kebesaran Setia - Sultan

Salahuddin Abdul Aziz Shah (“SSA”), Ahli Mangku Negara (“AMN”) and Pingat Jasa Kebaktian

(“PJK”) (Terengganu). He is also the Deputy President of SWAn, the Water Association of

Selangor, Kuala Lumpur and Putrajaya. Ir V Subramaniam truly has a great passion for the

water industry with vast experience in drinking water supply from source to tap. He is also a

strong advocate of our piped water quality being clean and safe and believes only in drinking

water direct from the tap.

Tuan Haji Sanusi Sulieman graduated with a Second Class Upper Degree in Civil Engineering

from the University of Malaya in 1984, after which he started his career in Penang Water

Authority in 1984 holding various positions of Project Engineer, Treatment Engineer and

Distribution Engineer until 1993.

In 1993, he joined a consulting engineering fi rm, Ranhill Bersekutu Sdn Bhd as a Senior

Engineer involved in the Johor Baharu Water Supplies Privatisation Scheme. In 1994, he

joined Puncak Niaga (M) Sdn Bhd (“PNSB”) as the Project Manager for the RM1.3 billion

Sungai Selangor Phase 2 Water Supply Scheme which involves the construction of the

Sungai Selangor Phase 2 Water Treatment Plant and its distribution system.

In 2000, he joined Ranhill Engineers and Contractors Sdn Bhd as the Project Director in

charge of all water supply construction activities. He was then promoted to Chief Operating

Offi cer of Ranhill Civil Sdn Bhd until 2004. In 2004, he joined WWE Holdings Bhd as the

Executive Director, before joining PNSB in the same year, where he was involved in the task

force for the privatisation of PUAS to SYABAS.

Tuan Haji Sanusi was exposed to international construction works when he was assigned

for the SR408 million North Jeddah Branch Sewer Network Project in the Kingdom of Saudi

Arabia in 2006 before he was assigned to the position of Executive Director of Projects in

SYABAS in 2007. He was later re-designated as the Executive Director, Network & Planning

Division of SYABAS and re-designated again in 2011, to his current position as the Executive

Director, Planning Division.

Key Personnel

Profi le - SYABAS

62

IR V SUBRAMANIAM

Aged 63

Malaysian

Executive Director, Technical Development

Division

TUAN HAJI SANUSI SULIEMAN

Aged 52

Malaysian

Executive Director, Planning Division


63Tuan Haji Zainuddin Othman joined SYABAS on 1 April 2005 as General Manager, Human

Resource & Administration Division. He holds a Master of Science in Human Resource

Management from the University of Lincolnshire and Humberside, United Kingdom.

Prior to joining SYABAS, Tuan Haji Zainuddin was the Head of Human Resource and

Administration Department at Proton Edar Sdn Bhd (a subsidiary of Proton Berhad) for six

years (1998-2003) and the Head of Human Resources and Administration for fi ve years at

PATI Sdn Bhd (a subsidiary of United Engineering (Malaysia) Berhad) (1993-1997). He has

more than 24 years of working experience in the areas of human resource management and

general offi ce administration.

He was promoted to Senior General Manager, Human Resource Division with effect from 1st

January 2007 and he is currently holding the position of Executive Director, Human Resource

& Administration Division of SYABAS which he has held since January 2008.

Encik Abdul Halem Haji Mat Som joined PNSB in 2004 as Personal Assistant to the Executive

Chairman before he was assigned to SYABAS as Senior Manager, Corporate Communications

and Public Affairs Division (“CCPA”). Encik Abdul Halem was subsequently promoted

to General Manager, CCPA on 1 January 2007. He was promoted to Executive Director,

Corporate Affairs Division on 1 January 2010. He holds a Diploma in Public Administration

(1987) and a Bachelor’s Degree in Corporate Administration (1998), both from the Universiti

Teknologi MARA (“UiTM”) and a Certifi cate in Manufacturing Management from the Sanno

Institute of Business Administration (“SIBA”), Tokyo (1990).

Encik Abdul Halem started his career as a Deputy Assistant Director of Immigration before

joining a Japanese Manufacturing company for three years and subsequently attached to an

Arab based multinational company for another two years specialising in Human Resource

Management. His exposure in Corporate and PR exercise started when he was the General

Manager of Lagenda Abadi Sdn Bhd, an Event Management and PR Agency. He was

thereafter appointed as the Managing Director of Comiteg Berhad, a company dealing with

Property Development and Investment for four years.

Prior to joining PNSB, Encik Abdul Halem was the Group Managing Director of Eeman Group

of Companies, which dealt in manufacturing, trading, event consultancy, advertising and

production. Encik Abdul Halem has more than 21 years’ experience in the areas of event

management, fi lm production, advertising manufacturing, human resource consultancy and

training, administration and capital investment. He is also the President of UiTM Pahang

Alumni and a committee member of Yayasan Siswazah Malaysia.

Puan Roowina Merican A Rahim Merican joined PNSB on 22 March 1997 as a Manager in the

Operations Division responsible for the Environmental Unit. She was subsequently promoted

to Senior Manager, Assistant General Manager and General Manager of the Water Resources

and Environmental Surveillance Department in PNSB before assuming her position as the

Senior General Manager of the Water Quality Department under the Strategic Resources

Division in SYABAS. On 1 January 2011, she was appointed as the Executive Director, Water

Quality, Asset & Strategic Resources Division of SYABAS.

She graduated with a BSc (Hons) in Civil Engineering from the University of Surrey in 1984

and subsequently obtained her MEng (Hons) in Water Resources Development in 1991. She

began her career in 1985 as a Civil Engineer with the Public Works Department, Malaysia

(“PWD”) and held various positions during her tenure with PWD until 1997.

TUAN HAJI ZAINUDDIN OTHMAN

Aged 53

Malaysian

Executive Director,Human Resource and Administration Division

ENCIK ABDUL HALEM HAJI MAT SOM

Aged 47

Malaysian

Executive Director,Corporate Affairs Division

PUAN ROOWINA MERICAN A RAHIM MERICAN

Aged 51

Malaysian

Executive Director,Water Quality, Asset & Strategic Resources Division

Key Personnel Profi le -SYABAS


Encik Mohamad Isa Mohd Yassin joined SYABAS on 8 February 2007 as a Special

Assistant to the Executive Chairman/General Manager of the Bumiputera Entrepreneur

Participation & Development Department (“BEPD”). He was then promoted to Special

Assistant to the Executive Chairman/Senior General Manager of BEPD in May 2008,

followed by Special Assistant to the Executive Chairman/Executive Director of BEPD

in January 2011.

Prior to joining SYABAS, he was attached to Matsushita Electric Co (M) Bhd as Executive

of Research & Development Department and Production Planning Department. He joined

Puncak Niaga (M) Sdn Bhd (“PNSB”) in 1994 as a Special Assistant to the Executive

Chairman, and later promoted as General Manager of Puncak Alam Housing Sdn Bhd

from 2000 till 2004 and as Managing Director of Haluan Prisma Sdn Bhd from 2004

until 2007.

He was trained in Industrial & Management Training Skills in Matsushita Electric Co in Osaka,

under the Look East Policy Scheme in Japan from 1986 to 1988. He has vast experience

in town and building development, project monitoring, public relations and manufacturing

industries. The latest project under his belt is the Entrepreneur Development Programme for

SYABAS’ contractors. He also plays an active role as Special Assistant to the Rejimen Pakar

Pengendalian Air Ke-60 RAJD (Askar Wataniah) since 2007.

He was awarded the Darjah Ahli Mahkota Selangor (“AMS”) from DYMM Sultan of Selangor

in 2000, followed with Darjah Ahli Mahkota Kedah (“AMK”) from DYMM Sultan of Kedah

in 2011.

Tuan Haji Yusof Saroji holds a Diploma and Advanced Diploma in Civil Engineering from

the Universiti Teknologi MARA (“UiTM”). He has 23 years of working experience in the

water supply and distribution sector ranging from district water operations to revenue and

collection management.

Tuan Haji Yusof Saroji is also a Graduate Member of the Institution of Engineers Malaysia

(“IEM”). He began his career in 1988 as a Technical Assistant with JBAS and continued his

service with PUAS as Senior Manager/Head of District for Kuala Selangor and Sabak Bernam

District Offi ces. He was then promoted to General Manager/Head of Gombak District Offi ce

and later assigned as General Manager of the Operations and Maintenance Department of

SYABAS in January 2010. In August 2010, he joined the District Department as General

Manager and he was subsequently promoted to Senior General Manager where he is

responsible and accountable for overseeing the operations and management of SYABAS’ 10

District Offi ces. He is currently the Executive Director, Operation Division.

Tuan Haji Yusof Saroji is also active in several non-profi t organisations in the water fraternity

and was the Secretary and later the Chairman of the Jawatankuasa Tindakan Jurutera Air

Daerah Se Malaysia (“JTJAD”) for the 2011/2013 term. He is also the Commandant for the

Rejimen Pakar Pengendalian Air Ke-60 RAJD (Askar Wataniah) for the State of Selangor

holding the rank of Major since 2011.

Key Personnel

Profi le -SYABAS

64

ENCIK MOHAMAD ISA MOHD YASSIN, AMS, AMK

Aged 54

Malaysian

Special Assistant To Executive Chairman/Executive Director,

Special Task Department & Bumiputera Entrepreneur

Participation & Development Department

TUAN HAJI YUSOF SAROJI

Aged 47

Malaysian

Executive Director, Operation Division


65Encik Yusof Badawi joined SYABAS on 1 May 2011 as Executive Director, Project and

Development Division comprising the Project Management Department, Non-Revenue Water

(“NRW”) Department, Development Department and Contract Administration Department.

This Division was later renamed as Project and Non-Revenue Water Division, with the

exclusion of the Development Department.

Encik Yusof Badawi graduated with a Bachelor of Science in Engineering majoring in Civil

Engineering and minoring in Construction and Mathematics from the Southern Illinois

University, United States of America. He has 26 years of experience in the construction

industry at various levels including senior and board level. He has been actively involved

in management and implementation of various construction, infrastructure, housing

development, waterworks and maintenance projects.

Encik Yusof Badawi was involved in the construction, testing and commissioning of Sungai

Selangor Water Supply Scheme Phase I and Phase II from 1990 to 1998. He has also

successfully managed the implementation of the RM500 million contract for the maintenance

and upgrading of schools in Peninsular Malaysia under the umbrella concept for the Ministry

of Education.

In May 2003, he was appointed as Chief Executive Offi cer of a public listed company (PLC).

Together with the management and his staff team he managed to successfully construct

and complete numerous projects and turned the PLC from a loss making company into a

profi table group.

Encik Yusof Badawi is a member of the Board of Engineers Malaysia, the Malaysia Institute

of Management (“MIM”), the Malaysian Water Association and Dewan Perniagaan Melayu

Malaysia, Selangor (professional).

Madam Karen Chan holds a Bachelor of Accounting (Hons) degree from the University of

Malaya. She is a member of the Malaysian Institute of Accountants.

Madam Karen Chan has vast working experience of more than 25 years in various areas

covering Auditing, Accounting, Finance and Corporate Finance.

Prior to joining SYABAS, Madam Karen Chan was the Senior General Manager with the

Scomi Group of Companies for a total of 6.5 years, with 2 years of overseas assignment

based in Dubai overseeing the Middle East Operation.

She was with Price Waterhouse Coopers from 1987 to 1991. Thereafter, she was with various

companies within the Hong Leong Group of Companies and various Public Listed Companies

in Malaysia.

Tuan Haji Mohd Suhaimi holds a Diploma, Advanced Diploma in Civil Engineering and a

Post Graduate Diploma in System Analyst from the Universiti Teknologi Mara. He has

33 years of working experience in public works and the water supply sector. He began his

career in 1979 as a Civil Engineer with Jabatan Kerja Raya, holding various positions until

2001. Thereafter, he joined JBAS as a Senior Assistant Director and continued his service

under PUAS (2002 - 2004). He was the General Manager, Information & Communication

Technology Division before he was promoted to Senior General Manager, Information

& Communication Technology Department on 1 January 2007.

ENCIK YUSOF BADAWI

Aged 51

Malaysian

Executive Director,Project & Non-Revenue Water Division

MADAM KAREN CHAN YIT HWA

Aged 49

Malaysian

Executive Director,Finance Division

TUAN HAJI MOHD SUHAIMI RAFIE

Aged 57

Malaysian

Senior General Manager, Information & Communication Technology Department



Cik Hayati Ab Wahab is the Senior General Manager of Internal Audit Department. Previously,

Cik Hayati was the Senior General Manager of Billing and Recovery Department from January

2011 to September 2011 and General Manager of the Kuala Lumpur Regional Offi ce from

2007 to 2010. She joined PNSB in July 2001 as an Internal Auditor before she was assigned

to SYABAS in 2005 as Secretary of Works for the Kuala Lumpur District.

She holds a Bachelor of Accountancy (Hons) Degree from the London Guildhall University,

England and is a Certifi ed Public Accountant with MICPA, Chartered Accountant with the

Malaysia Institute of Accountants (“MIA”) and Chartered member of the Institute of Internal

Auditors, Malaysia.

She has 24 years of working experience including 10 years in external audit covering various

types of industries (e.g. construction, plantation, timber, manufacturing and government

bodies), due diligence reviews & profi t/cash fl ow forecasts and 8 years in internal audit in the

areas of fi nancial, operational, IT, risk management and investigation. She has experience

working in England, Bangkok and Singapore.

Tuan Haji Ariff Ibrahim joined PNSB in January 2005 and was assigned to SYABAS as General

Manager, Operation & Maintenance in January 2006 and he was appointed as the General

Manager of NRW Department in 2012. He graduated with a Bachelor of Civil Engineering

(Hons) Degree from the Universiti Technologi Malaysia in 1984 and subsequently obtained a

Masters Degree of Business Administration from the Universiti Kebangsaan Malaysia in 2001.

Tuan Haji Ariff has more than 29 years of working experience in the water industry covering

operation and maintenance of water treatment plants, operation and maintenance of water

supply, construction supervision of water supply schemes, safety and health and also human

resource and administrative matters. Prior to joining PNSB, he worked with Jabatan Bekalan

Air Selangor for 10 years and another 10 years with CGE Utilities (M) Sdn Bhd.

Tuan Haji Ariff has been a member of the Institute of Management Malaysia (“MIM”) and

International Water Association (“IWA”). He is also actively involved in the Rejimen Pakar

Pengendalian Air Ke-60 (Askar Wataniah), Rejimen Askar Jurutera Diraja and is currently

holding the rank of Major in the regiment.

Ir Ahmad Marzuki Hashim graduated with a Bachelor of Science Degree in Civil Engineering

(Hons) from the Ohio University in Athens in 1984 and Master of Science Degree in

Environmental, Civil Engineering from the University of Liverpool, England in 1994. He is a

Civil Engineer by profession and has been with PNSB since March 1997. He began his career

with PNSB as a Manager of the Dam Operation Department and was subsequently promoted

to the positions of Senior Manager, Assistant General Manager of the Dam Operation

Department and General Manager of the Business Development Department.

He then joined SYABAS as General Manager in the Chief Operating Offi cer’s Offi ce in August

2009. Ir Ahmad Marzuki is currently the General Manager, Project Management Department.

Ir Ahmad Marzuki has more than 28 years’ experience in the water industry and has held

various positions during his tenure with the Public Works Department’s Waterworks Branch.

Key Personnel

Profi le -SYABAS

66

CIK HAYATI AB WAHAB

Aged 49

Malaysian

Senior General Manager,Internal Audit Department

TUAN HAJI ARIFF IBRAHIM

Aged 52

Malaysian

General Manager,Non-Revenue Water

Department

IR AHMAD MARZUKI HASHIM

Aged 51

Malaysian

General Manager,Project Management

Department


67Encik Shahruddin Ab Rahman joined SYABAS on 1 July 2009 as the General Manager of the

Billing and Recovery Department. He was subsequently transferred as the General Manager

of the Kuala Lumpur District effective from 1 January 2011 to 15 February 2012 to familiarise

himself with District Operations and thereafter re-assigned again as the General Manager of

the Billing and Recovery Department.

He holds a Bachelor in Accounting (Advanced Diploma in Accounting) from the MARA

University of Technology.

Prior to joining SYABAS, he served Telekom Malaysia Berhad (“TM”) for 22 years with

various Divisions and subsidiary Companies of TM. He was the Chief Financial Offi cer for

two TM subsidiary Companies namely, Government Integrated Telecommunication Networks

(“GITN”) Sdn Bhd and TM Payphone Sdn Bhd. He was also involved in the takeover of GITN

Sdn Bhd, a subsidiary Company of Permodalan Nasional Berhad, to be a full subsidiary of

TM. His last project with TM was as the Business Controller for the Malaysian Emergency

Response System 999 project where TM was appointed by the Kementerian Tenaga, Air

and Komunikasi to develop and maintain the system which will provide emergency facilities

for the public.

Encik Ahmad Suhaidin Ismail is the Head of Petaling District at Syarikat Bekalan Air Selangor

Sdn. Bhd. (“SYABAS”). He holds a Bachelors Degree in Civil Engineering (Honours) from

the Universiti Technologi Malaysia (“UTM”). He has 28 years of working experience in the

water supply sector. Encik Ahmad Suhaidin joined Jabatan Bekalan Air Selangor (“JBAS”) on

15 January 1984 as a Technical Assistant (“TA”) at the Gombak District Offi ce. His extensive

participation and work commitment over the years led him to become the Manager of the

Klang/Shah Alam District Offi ce in the year 2002. He was subsequently promoted to Assistant

General Manager of the Kuala Langat District Offi ce in 2007.

In April 2009, Encik Ahmad Suhaidin was promoted as the General Manager of the Klang

District Offi ce and on 15 February 2012, he was transferred from the Klang District Offi ce to

the Petaling District Offi ce.

Encik Ahmad Suhaidin is a member of the Malaysian Water Association (“MWA”) and the

Secretary of the ‘Jawatankuasa Tindakan Jurutera Air Daerah Se Malaysia (“JTJAD”) for the

state of Selangor.

Encik Mohd Yaman Mohd Zin holds an Ordinary National Diploma in Technology (Engineering)

from the Oldham College of Technology, England and graduated from the University of

Sussex, England in 1982 with a Bachelor of Science Degree in Structural Engineering. Encik

Mohd Yaman has 30 years of working experience involving engineering and environmental

consultancy, business development, project/construction management, property

development and infrastructure/utility construction and management.

Encik Mohd Yaman joined SYABAS as General Manager, Water Quality Division in 2007

and was later appointed as General Manager, Operation & Maintenance Division in

2009 and as Head of Gombak District from 2010 until March 2011. He is currently the

General Manager, Customer Service Department. Prior to joining SYABAS, he had held

various senior positions in private organisations and public listed companies, the latest

being as the Construction Manager for the Jeddah Sewer Network Project with WWE

Holdings Bhd.

ENCIK SHAHRUDDIN AB RAHMAN

Aged 49

Malaysian

General Manager, Billing and Recovery Department

ENCIK AHMAD SUHAIDIN ISMAIL

Aged 52

Malaysian

General Manager,Petaling District Central RegionDistrict Department

ENCIK MOHD YAMAN MOHD ZIN

Aged 57

Malaysian

General Manager, Customer Service Department



Encik Abd Latif Ismail joined SYABAS on 20 August 2010, as General Manager of the

Human Resource Department. He holds a Master of Science Degree in Human Resources

Management from the University of Lincolnshire & Humberside, United Kingdom.

Prior to joining SYABAS, he was with the Exchange for over 14 years. His experience in

the fi eld of human resource includes being the key person involved in job re-design,

job evaluation, right-sizing, culture profi ling and internalisation.

Puan Rosmizah Ahmad joined PUAS on 2 September 2002 as an Engineer at the Development

Department. Puan Rosmizah is currently the General Manager of Development Department.

Upon graduating with a Bachelors Degree in Civil Engineering (Honours) from the Universiti

Teknologi Malaysia in 1994, Puan Rosmizah began her career as an Engineer in civil and

structural engineering design. Todate, she has over 19 years of working experience in the

fi eld of engineering.

Prior to joining PUAS, Puan Rosmizah joined a consultancy fi rm for 8 years majoring in

Structural Engineering Design. Puan Rosmizah is a Member of the Board of Engineers,

Malaysian Water Association (“MWA”) and International Water Association.

Puan Hayati Abd Rahman graduated with a Degree in Social Science majoring in Computer

Science from the University of Waikato, Hamilton, New Zealand in 1991 and holds a

Master of Science in Information Management from the University Institut Technologi Mara

(“UITM”) in 2002. She has 21 years of working experience in the computer environment from

various types of industries (eg. plantation, properties and government agencies), system

development, core system migration and implementation. She began her career in 1991 as

a Programmer at Sime Darby Plantation and later, joined Rubber Research Institutes (“RRI”)

as an Analyst Programmer.

In 1992, she joined TTDI Development Sdn Bhd and grew her career path from Analyst

Programmer to Manager heading the Management Information System Section until 2003.

Prior to joining SYABAS as General Manager of the Information & Communication Technology

Department on 15 January 2012, she was holding the post of Senior Manager, heading the

Application Development Section of the Information & Communication Technology Division

at Suruhanjaya Syarikat Malaysia (“SSM”), a post she held since 1 April 2003.

Key Personnel

Profi le -SYABAS

68

ENCIK ABD LATIF ISMAIL

Aged 51

Malaysian

General Manager, Human Resource

Department

PUAN ROSMIZAH AHMAD

Aged 44

Malaysian

General Manager, Development Department

PUAN HAYATI ABD RAHMAN

Aged 46

Malaysian

General Manager,

Information & Communication

Technology Department


69Ir Khor Tse Tong joined SYABAS on 24 January 2011 as Assistant General Manager, Planning

& Design Department (“PDD”) and was subsequently promoted in 2012 as General Manager

of PDD. He is a Professional Engineer registered with the Board of Engineers Malaysia

(“BEM”) and has more than 12 years of working experience as a Design Engineer for property

developments in the civil and structural aspects, as a contractor in a high rise building

construction, as an Engineer and Project Manager for NRW and Water Supply Distribution

Network Modeling projects.

Ir Khor Tse Tong graduated from the Universiti Kebangsaan Malaysia (“UKM”) in 1999 with

a Degree in Civil & Structural Engineering. He began his career as a Design Engineer for a

Civil and Structural consultancy fi rm. He then joined PABW Sdn Bhd in 2001 to work in the

Selangor NRW Project. He joined Salcon Engineering Berhad in 2003 for an NRW project in

Sandakan, Sabah. Prior to joining SYABAS, Ir Khor Tse Tong worked for Halcrow Consultant

in Malaysia since 2005.

Encik Armiy Rais Ahmad Sharifuddin joined SYABAS in 2012 as the General Manager of the

Legal & Enforcement Department. He holds a Bachelor of Laws (Honours) degree from the

Universiti Technologi MARA.

After being called to the Malaysian Bar, he started his legal career as an Advocate and

Solicitor with various major fi rms before joining Golden Hope Plantations Berhad as Manager,

Corporate Legal & Secretarial Department. Upon the rationalisation of the Permodalan

Nasional Berhad’s Group of Companies, Encik Armiy had been entrusted to head the legal

team in charge of a few major property companies within the Island & Peninsular Group

and then headed the pioneer team in the setting-up of Pelaburan Hartanah Berhad which

had successfully launched a special Bumiputera property investment trust fund, Amanah

Hartanah Bumiputera. Prior to SYABAS, he was the General Manager, Legal and Company

Secretarial in Petra Energy Berhad.

Ms Lee Chin Shin joined SYABAS on 18 April 2013 as General Manager of the Finance &

Accounts Department. She graduated with a Bachelor of Accounting (Hons) Degree from

the Universiti of Malaya in 1992 and is a member of the Malaysian Institute of Accountants

(“MIA”) and Malaysian Institute of Certifi ed Public Accountants (“MICPA”). Prior to joining

SYABAS, she was a Manager with HL Management Co Sdn Bhd.


IR KHOR TSE TONG

Aged 38

Malaysian

General Manager,Planning & Design Department

ENCIK ARMIY RAIS AHMAD SHARIFUDDIN

Aged 42

Malaysian

General Manager, Legal & Enforcement Department

MS LEE CHIN SHIN

Aged 45

Malaysian

General Manager, Finance & Accounts Department


Encik Taufi k Afendy Othman joined PNSB in 1997 as an Engineer before he was assigned

to SYABAS in 2005 as Secretary of Works for the Hulu Langat District. He was promoted

thrice before assuming his current position as General Manager, Administration Department

in 2013. He graduated with a Bachelor of Chemical Engineering (Hons) Degree from the

Universiti Teknologi Malaysia in 1992 and a Master of Industrial Safety Management from

the Universiti Kebangsaan Malaysia in 2009. Prior to joining PNSB, he was the Maintenance

Improvement Engineer with H & R Johnson Bhd.

Encik Wan Abd Aziz Wan Muda joined SYABAS in 2005 as Manager, Contract & Procurement

Department. He was later promoted thrice before assuming his current position as General

Manager, Contract & Procurement Department in 2013. He holds a Bachelor of Quantity

Surveying (Hons) Degree from the Universiti Teknologi Malaysia in 1998. Prior to joining

SYABAS, he was the Contracts Manager with U-Wood Holdings Bhd.

Mr Siew Weng Hoe (Kelvin) joined SYABAS in 2005 as a Technical Manager, Petaling

District. He was promoted thrice before assuming his current position as General Manager,

Kuala Lumpur District in 2013. He graduated with a Bachelor in Civil Engineering from the

Universiti Putra Malaysia in 1999. Prior to joining SYABAS, he was the NRW Engineer with

Premier Ayer Sdn Bhd.

Key Personnel

Profi le -SYABAS

70

ENCIK TAUFIK AFENDY OTHMAN

Aged 44

Malaysian

General Manager, Administration Department

ENCIK WAN ABD AZIZ WAN MUDA

Aged 46

Malaysian

General Manager, Contract & Procurement

Department

MR KELVIN SIEW WENG HOE

Aged 37

Malaysian

General Manager, Kuala Lumpur District

Central RegionDistrict Department


YBhg Dato’ Syed Danial Syed Ariffi n was appointed to the Board of Sino Water Pte Ltd (“Sino

Water”) and as the Chairman of Sino Water on 1 January 2010, respectively. He is the Chief

Operating Offi cer of Puncak Niaga Holdings Berhad (“PNHB”) and Managing Director of

Puncak Niaga (M) Sdn Bhd (“PNSB”). YBhg Dato’ Syed Danial is a civil engineer by profession

and has been with the PNHB Group since December 1995. He holds a BSc (Hons) Degree in

Civil Engineering from the University of Aston in Birmingham, United Kingdom.

As Chairman of Sino Water, YBhg Dato’ Syed Danial Syed Ariffi n is responsible for the

stewardship of the Board of Sino Water and its subsidiaries in the People’s Republic of China.

The full details of YBhg Dato’ Syed Danial’s profi le are as detailed on page 49 of this Annual

Report.

Ir Tan Hui Kuan was appointed as Managing Director of Sino Water on 8 June 2011. He is the

Chief Operating Offi cer of PNSB. Ir Tan Hui Kuan graduated with a Bachelor of Engineering

(Civil) (Hons) Degree from the University of Malaya in 1979.

As the Managing Director of Sino Water, Ir Tan Hui Kuan is responsible for the day-to-day

management, operations and project implementation of all projects undertaken in the

People’s Republic of China including identifying potential projects, liaisons with the regulatory

authorities and provincial heads of the respective government bureaus.

The full details of Ir Tan Hui Kuan’s profi le are as detailed on page 56 of this Annual Report.

YBHG DATO’ SYED DANIAL SYED ARIFFIN

Aged 55

Malaysian

Chairman,Sino Water Pte Ltd

IR TAN HUI KUAN

Aged 59

Malaysian

Managing Director, Sino Water Pte Ltd

71

Key Personnel Profi le -Sino Water


YBhg Tan Sri Dato’ Sri Dr Wan Abdul Aziz Wan Abdullah was appointed to the Board of GOM

Resources Sdn Bhd (“GOM Resources”) on 1 March 2013.

YBhg Tan Sri Dato’ Sri Dr Wan Abdul Aziz graduated with a Bachelor of Economics (Honours)

from the University of Malaya, Masters in Philosophy (Development Studies) from the

Institute of Development Studies, University of Sussex, Brighton, UK and obtained a Ph.D.

(Economics) from the School of Business and Economic Studies, University of Leeds, UK.

He also attended the Advanced Management Program at Harvard Business School, Harvard

University, Boston USA.

YBhg Tan Sri Dato’ Sri Dr Wan Abdul Aziz has spent more than 37 years in the Public Service

with vast experiences in fi nance and economic sectors. He began his career in 1975 as the

Assistant Director in the Economic Planning Unit (EPU), Prime Minister’s Department and

was promoted to Senior Assistant Director in 1984, before assuming the role of Director of

Energy Section in the same department. In late 1998, YBhg Tan Sri Dato’ Sri Dr Wan Abdul

Aziz was seconded by the Government of Malaysia to the World Bank Group, Washington

D.C, USA as the Alternate Executive Director representing the South East Asia Group.

YBhg Tan Sri Dato’ Sri Dr Wan Abdul Aziz returned to Malaysia in 2001 and assumed the

role of Deputy Under Secretary (Macro), Economics and International Division, Ministry

of Finance (“MOF”). In 2004, he served the EPU, Prime Minister’s Department as Deputy

Director General in the Macro Planning Division.

He was appointed as the Deputy Secretary General of Treasury (Policy), MOF in 2005 and

was promoted on 28 February 2007 as the Secretary General of Treasury, MOF. He retired

from the Public Service on 23 May 2008 and subsequently continued to serve as Secretary

General of Treasury until 23 August 2012.

Currently, he is the Chairman of Malaysia Airport Holdings Berhad, Bank Pembangunan

Malaysia Berhad, Bintulu Port Holdings Berhad, Samalaju Industrial Port Sdn Bhd, Syarikat

Jaminan Kredit Perumahan Berhad and Pembinaan BLT Sdn Bhd. He is also a Board Member

of Permodalan Nasional Berhad, Sime Darby Berhad, Sime Darby Motors Sdn Bhd, Felda

Global Ventures Holdings Berhad, Felda Global Ventures Plantations Sdn Bhd and Johor

Petroleum Development Corporation Berhad.

Encik Mohamed Sabri Zain was appointed President and Director of GOM Resources

on 1 January 2013 and 8 January 2013, respectively. He was appointed as Director of

KGL Ltd. (“KGL”) on 7 March 2013. He holds a Bachelor of Science Degree in Petroleum

Engineering from the University of Wyoming, United States of America in 1978.

Prior to joining GOM Resources, Encik Mohamed Sabri Zain held senior management

positions with established Oil & Gas (“OAG”) companies both locally and internationally such

as the Vice President, Offshore Business of MISC Berhad in year 2010, the President of White

Nile Petroleum Operating Company Ltd (“WNPOC”), a joint-venture operating company

between Petroliam Nasional Berhad (“PETRONAS”) and Sudapet of Sudan (responsible for

exploration, development and production of three blocks in Sudan from 2008 to 2010).

Encik Mohamed Sabri Zain has more than thirty four years of vast experience and versatility

in the OAG business covering domestic and international venture, with proven leadership

capabilities. He began his career in 1978 with PETRONAS Carigali as a Petroleum Engineer

and had held various senior roles including, General Manager for PCSB’s various Divisions/

Operations namely, PCSB Vietnam Operations, PCSB Development Division, PCSB Middle

East & Asia Region and PCSB International Operations covering Vietnam, Indonesia,

Myanmar, Pakistan, Turkmenistan, Uzbekistan, Malaysia-Thailand JDA and Sudan; and

President, WNPOC in Sudan.

Key Personnel

Profi le -POG & GOM

Resources

72

YBHG TAN SRI DATO’ SRI DR WAN ABDUL AZIZ

WAN ABDULLAH

Aged 61

Malaysian

Chairman,GOM Resources

ENCIK MOHAMED SABRI MOHAMED ZAIN

Aged 56

Malaysian

President,GOM Resources


YBHG DATO’ HASHIM MAHFAR

Aged 53

Malaysian

Director of POG/ Director and Senior Vice President,Corporate & Business Development Division of GOM Resources

ENCIK ANGAT ANUM LINGOH

Aged 57

Malaysian

Director andSenior Vice President,Operations Division ofGOM Resources

YBHG DATO’ MAT HAIRI ISMAIL

Aged 51

Malaysian

Director and Vice President,Human Resources & Administration Division/Information TechnologyDivision of GOM Resources

73YBhg Dato’ Hashim Mahfar was appointed to the Board of Directors of Puncak Oil & Gas Sdn

Bhd (“POG”) on 3 May 2010. He did his tertiary education in 1981 at the Universiti Teknologi

MARA (“UiTM”) and attended the professional qualifi cation of the Institute of Chartered

Secretaries and Administrators (UK). Throughout his career, YBhg Dato’ Hashim has been

very much involved in the corporate services which includes legal and secretarial, contract

administration, marketing and corporate fi nance.

YBhg Dato’ Hashim Mahfar is responsible for the Corporate & Business Development of

GOM Resources and Puncak Group’s Oil & Gas Division.

Encik Angat Anum Lingoh is the Senior Vice President, Operations Division and was appointed

as Director of GOM Resources on 21 February 2012.

Encik Angat Anum Lingoh graduated from the University of Newcastle in England with a B.Sc.

in Mechanical Engineering. He started off as a Contracts Engineer in Sarawak Shell Berhad in

August 1982 after which he held various technical and senior management positions in Shell

and other Installation Contractors. He has more than 31 years of working experience in the

Offshore Oil & Gas industry covering corporate offi ce, operations, project, fi nance and human

resource management. He also majors in offshore pipeline and platform engineering, project

management, installation, repairs replacements and commissioning.

Encik Angat Anum Lingoh had working experiences in major and established Oil & Gas

companies locally and internationally such as Sarawak Shell Berhad, Swiber Marine

(Malaysia) Sdn Bhd, Brunei Shell Petroleum Co, Technip Engineering in Brunei, Shell

Petroleum Development Company of Nigeria, Tengizchevroil Chevron in Kazakhstan and

Woodside Energy Limited in Australia.

YBhg Dato’ Mat Hairi Ismail obtained his Bachelor Degree in Accountancy from the Universiti

Kebangsaan Malaysia in 1985. He began his career as an Accountant with the Jabatan

Akauntan Negara Malaysia (JANM) in 1985 as Head of JANM in Labuan in 1989. YBhg Dato’

Mat Hairi was later appointed as the Representative Accountant of Malaysia in UK and EIRI

Offi ce in London from 1990-1992 and upon his return to Malaysia, YBhg Dato’ Mat Hairi was

appointed as Senior Accountant with the Langkawi Development Authority till 1994.

YBhg Dato’ Mat Hairi began his involvement in business in 1994 together with his elder

brothers, YBhg Tan Sri Rozali Ismail and YBhg Dato’ Shaari Ismail to set up Puncak Niaga (M)

Sdn Bhd (“PNSB”) which has now successfully become the leading regional integrated water,

wastewater and environmental solutions provider. YBhg Dato’ Mat Hairi had held various

positions within the PNHB Group including Executive Director of Finance & Corporate

Services, Executive Director in the Executive Chairman’s Offi ce and now as the Vice President

of Human Resources & Administration Division and Information Technology Division for POG

and Group. He was appointed as Director of GOM Resources on 2 January 2013 and Director

of KGL on 7 March 2013.

YBhg Dato’ Mat Hairi brings with him an extensive 27 years of experience in strategic

planning, corporate fi nance and business management to help build POG and Group to

become a signifi cant player in the Oil & Gas sector, both locally and internationally.

Key Personnel Profi le - POG & GOM Resources


Ir Nasir Ismail joined POG on 15 February 2012 as the Vice President, Tender &

Contract Division. Ir Nasir was appointed Director of POG and GOM Resources on

21 February 2012 and Director of KGL on 27 April 2012.

Ir Nasir Ismail is a member of the Board of Engineers (BEM), MWA, SWAn, IWA, IACCM and

Registered Gas Engineer with the Energy Commission, Ministry of Energy, Green Technology

and Water. He holds a Bachelor of Science Degree in Civil Engineering from the Memphis

State University, Tennessee, USA in 1985 and MSC in Environmental Engineering from the

Shimane University, Japan in 1992.

Prior to joining POG, Ir Nasir was one of the task force members for the privatisation of

Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) and has served PNSB since 1998 and

his designation in SYABAS prior to joining POG was Senior General Manager, Contract &

Procurement Department. Ir Nasir had also served Majlis Perbandaran Seremban, Consulting

Engineer fi rms, contractors and Gas Malaysia Sdn Bhd.

Encik Jamel Salleh’s career started with Elf Aquitaine in 1986. Encik Jamel has more than

25 years of working experience in the Oil & Gas Industry covering logistics, warehousing,

project operations and business development.

Encik Jamel has worked for major and established OAG companies locally and internationally

such as Idemitsu Exploration of Japan, Agip Ltd of Italy, PCSB (Baram Delta Operation),

Carigali-Triton Operating Co Sdn Bhd (“CTOC”), Carigali-HESS Operating Co Sdn Bhd and

PJ Energy Services Co. Ltd of Thailand.

Puan Halizah joined POG Group in 2011. Puan Halizah obtained her Bachelor Degree in

Civil Engineering from the University of Miami, USA in 1985 before pursuing her Masters in

1989. Puan Halizah is a member of the Board of Engineers Malaysia and American Society

of Civil Engineers.

Puan Halizah began her career as a Design Engineer with Bemax of Florida, USA before

embarking into the dynamic Oil and Gas Industry in 1991 with ESSO Production Malaysia

(EPMI) as a Structural Engineer. In her 21 over years’ experience, Puan Halizah has held

various positions from Structural Engineer, Project Engineer, Senior Project Engineer and

now Vice President, Marine Services Department.

Puan Halizah brings with her a wide technical and management qualifi cations with an

impressive track record of hands on experience in Project Management.

Tuan Haji Abu Samad Nordin joined GOM Resources as Vice President of Exploration &

Production Division. He obtained his BSc. Degree in Geology from the University of Malaya

in 1976 and a Master Degree in Earth Resources Management from the University of South

Carolina, USA in 1993.

Tuan Haji Abu Samad began his career with Petronas in 1976 and held various positions from

Geologist to General Manager. His experience covers both local and international Exploration

Operations. Tuan Haji Abu Samad brings with him 34 years of technical experience in the

upstream operations.

Key Personnel

Profi le - POG & GOM Resources

74

PUAN HALIZAH KAMARUDIN

Aged 49

Malaysian

Vice President,Marine Services Department

of GOM Resources

ENCIK JAMEL SALLEH

Aged 54

Malaysian

Vice President,Business Development

Department ofGOM Resources

TUAN HAJI ABUSAMAD NORDIN

Aged 60

Malaysian

Vice President, Exploration & Production

Department ofGOM Resources

IR NASIR ISMAIL

Aged 50

Malaysian

Director and Vice President, Tender & Contract Division of POG & GOM Resources


Madam Yan Siew Ching joined GOM Resources in 2012. Madam Yan received her Bachelor

of Business in Accountancy in 1990 from the Royal Melbourne Institute of Technology (RMIT),

Australia and is a Chartered Accountant (MIA).

Madam Yan started her career in 1991 with Kassim Chan & Co (Delloitte Touche) before

serving Pricewaterhouse Coopers (PWC) as Audit Senior in 1993. Madam Yan has served

many established companies in Malaysia such as Kvaerner (Malaysia) Sdn Bhd, EON Berhad,

KUB Malaysia Berhad, SYABAS and SCOMI Engineering Bhd in her 21 years of working

experience.

Encik Azman joined GOM Resources in 2012. Encik Azman obtained his BSc. in Mechanical

Engineering from the University of Glasgow in 1987 before obtaining his MBA from the

Universiti Kebangsaan Malaysia in 2004. He received his Dredgemaster Certifi cate of

Competency in 1982 and is a Member of the American Society of Safety Engineers (ASSE)

in 1991.

Encik Azman has over 25 years of Oil & Gas (“OAG”) Industry experience mainly in the

installation of subsea pipelines, installation of platforms and jackets, SBMs, FSO, underwater

diving and ROV inspection, repair and maintenance of OAG facilities.

Encik Azman worked for many established OAG companies such as Sarawak Shell Berhad,

Esso Production Malaysia Inc, TL Offshore Sdn Bhd, Sapura Energy Sdn Bhd and Alam

Maritim Group and has held various positions such as Construction Superintendent, Senior

Operations Manager and Managing Director.

Encik Zameri Embong commenced his career in 1989 as a Sub-Surface/Reservoir Engineer

and has more than 23 years of working experiences, Encik Zameri has worked for Petronas,

Petronas Carigali Sdn Bhd (“PCSB”), Petrofac and Sarawak Shell Berhad in various

capacities including Project Manager (Petronas Group Tender & Contracts), Senior Manager

(PCSB-SCM), General Manager (PCSB-SCM), Head (PCSB Well Operations) and Head

of Business Development (Petrofac E&C) and Senior Procurement Manager (Projects) for

Sarawak Shell Berhad.

Encik Zameri received his BSc in Petroleum Engineering from the University Technology of

Malaysia in 1987 and brings with him wide management experience in the OAG strategy,

contracts and procurement operations.

75

Key Personnel Profi le - POG & GOM Resources

MADAM YAN SIEW CHING

Aged 45

Malaysian

Vice President, Finance & Accounts Division of GOM Resources

ENCIK ZAMERI EMBONG

Aged 47

Malaysian

Vice President, Commercial & RiskDepartment ofGOM Resources

ENCIK AZMAN SHABUDIN

Aged 53

Malaysian

Vice President,Special Project of GOM Resources

With teamwork, there are no limits to growth


Five-YearFinancial

Highlights

31 Dec 12 31 Dec 11 31 Dec 10 31 Dec 09 31 Dec 08

(Restated) (Restated) (Restated) (Restated)

RM’000 RM’000 RM’000 RM’000 RM’000

KEY RESULTS

Revenue 3,743,935 2,591,509 # 2,055,523 # 2,089,855 # 2,062,653 #

Profi t before tax 298,304 (74,572) # (108,658) # (78,979) # (313,185) #

Net Profi t attributable to

owners of the parent 238,082 9,911 # ^ (19,524) # ^ 6,240 # ^ (123,816)# ^

STATEMENTS OF FINANCIAL POSITION

Property, plant and equipment 462,231 452,829 # 245,324 # 234,313 # 254,451 #

Service concession assets 7,686,187 7,694,674 # 7,685,002 # 7,647,906 # 7,600,899 #

Other non-current assets 3,221,178 2,421,135 # ^ 1,182,934 # ^ 1,161,173 # ^ 966,110 # ^

Current assets 2,064,866 1,738,017 2,395,880 1,994,738 1,388,883

Total assets 13,434,462 12,306,655 11,509,140 11,038,130 10,210,342

ISSUE AND PAID-UP CAPITAL

Share capital 411,143 411,143 411,143 411,143 411,143

Reserves 95,848 (138,931) # ^ (199,562) # ^ (135,749) # ^ (54,092) # ^

Equity attributable to

owners of the parent 506,991 272,212 # ^ 211,581 # ^ 275,394 # ^ 357,051 # ^

Net assets per share attributable to

owners of the parent (RM) 1.24 0.67 # ^ 0.52 # ^ 0.67 # ^ 0.87 # ^

RATIOS AND STATISTIC

Net profi t margin attributable to

owners of the parent (%) 6.36 0.38 # ^ (0.95) # ^ 0.30 # ^ (6.00)# ^

Basic earnings per share attributable to

owners of the parent (sen) 58.20 2.42 # ^ (4.77) # ^ 1.53 # ^ (30.27)# ^

Loans and borrowings (RM’000) 5,655,789 5,512,129 5,486,963 5,376,769 4,462,226

Service concession obligations 4,046,085 4,169,538 # 4,285,000 # 4,369,135 # 4,444,042 #

Gearing ratio (%) 96 98 # ^ 98 # ^ 98 # ^ 100 # ^

Current ratio (times) 0.70 0.78 # 0.85 # 1.22 # 0.98 #

# These comparatives have been restated to take into account the effects of the adoption of IC Interpretation 12 : Service

Concession Arrangement ^ These comparatives have been restated to take into account the effects of the adoption of MFRS

78


-150,0

00

-100,0

00 0

-50,0

00

50,0

00

150,0

00

100,0

00

200,0

00

250,0

00

0

500,0

00

1,0

00,0

00

1,5

00,0

00

2,0

00,0

00

2,5

00,0

00

4,0

00,0

00

3,0

00,0

00

3,5

00,0

00

2012

2011

2010

2009

2008

3,743,935

2,591,509

2,055,523

2,089,855

2,062,653

2012

2011

2010

2009

2008

238,082

9,911

(19,524)

6,240

(123,816)

0

3,0

00

,00

0

9,0

00

,00

0

6,0

00

,00

0

15

,00

0,0

00

12

,00

0,0

00

2012

2011

2010

2009

2008

13,434,462

12,306,655

11,509,140

11,038,130

10,210,342

100,0

000

200,0

00

400,0

00

300,0

00

600,0

00

500,0

00

2012

2011

2010

2009

2008

506,991

272,212

211,581

275,394

357,051

2012

2011

2010

2009

2008

1.24

0.67

0.52

0.67

0.87

-40

-30

-20

-10 0

10

20

30

50

40

60

2012

2011

2010

2009

2008

58.20

2.42

(4.77)

1.53

(30.27)

1.5

1.2

0.9

0.6

0.30

Five-YearGroup Performance

REVENUERM’000

BASIC EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENTSen

NET ASSETS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENTRM

TOTAL ASSETSRM’000

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENTRM’000

NET PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENTRM’000

79


Share Price & Volume Traded

80

SHARE PRICE MOVEMENT

2012 2013

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr

Volume of Shares 83,090 167,000 94,550 27,560 50,977 22,632 48,810 15,541 10,501 15,212 7,045 8,354 12,891 33,955 65,056 111,330

Traded (‘000)

PNHB Monthly 1.17 1.55 1.43 1.38 1.33 1.31 1.31 1.31 1.32 1.34 1.31 1.25 1.21 1.29 1.47 1.76

Average Closing

Prices (RM)

FTSE Bursa 1,521 1,570 1,596 1,571 1,581 1,599 1,632 1,646 1,637 1,673 1,611 1,689 1,628 1,638 1,672 1,668

Malaysia Kuala

Lumpur Composite

Index (“KLCI”)

Monthly Average

Closing Prices

Volume of Shares Traded PNHB Monthly Average Closing Prices Kuala Lumpur Composite Index (KLCI)

Monthly Average Closing Prices

KL

CI

1.0

2.0

1.5

Sh

are

Pri

ce

(R

M)

1,500

2,000

1,750

50,000

0

100,000

150,000

200,000

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr

2012 2013

Vo

lum

e o

f Sh

are

s T

rad

ed

(‘000)

Puncak Niaga Holdings Berhad Annual Report 2012Puncak Niaga Holdings Berhad

Financial Calendar

81

2012 2013

29 MAY 2012TUESDAY

First Quarter Results

ended 31 March 2012

29 AUGUST 2012WEDNESDAY

Second Quarter Results

ended 30 June 2012

27 NOVEMBER 2012TUESDAY

Third Quarter Results

ended 30 September 2012

28 FEBRUARY 2013 THURSDAY

Fourth Quarter Results

ended 31 December 2012

29 APRIL 2013MONDAY

Audited Financial Statements

for the financial year


4 JUNE 2013TUESDAY

Published

Annual Report 2012

26 JUNE 2013WEDNESDAY

Sixteenth

Annual General Meeting

Nothing builds teamwork as effectively as challenges


Operations Review

Puncak Niaga (M) Sdn Bhd

2012 MARKED ANOTHER SUCCESSFUL YEAR FOR PUNCAK NIAGA (M) SDN BHD

(“PNSB”) IN THE OPERATION OF ITS WATER TREATMENT PLANTS (“WTPS”) AND

DAMS. DESPITE THE MANY CHALLENGES FACING THE COMPANY WHICH HAD A

CONSIDERABLE IMPACT ON PNSB, PNSB’S FACILITIES PERFORMED ABOVE THEIR

DESIGN SPECIFICATIONS TO PRODUCE HIGH VOLUMES OF TREATED WATER OF

EXCELLENT QUALITY, AND PNSB SUCCESSFULLY CARRIED OUT A NUMBER OF

PLANT IMPROVEMENT WORKS, AS WELL AS INITIATING SOME IMPROVEMENTS

WORKS IN 2012. THE IMPROVEMENTS MADE TO OUR PLANTS DURING THE LAST

YEAR FURTHER ENHANCED OPERATIONAL RELIABILITY AND EFFICIENCY AND

ENABLED PNSB TO MEET AND INDEED EXCEEDED ITS KEY PERFORMANCE

INDICATORS (“KPIS”) FOR WATER QUALITY AND PRODUCTION, BUT PNSB’S

BOTTOM LINE INEVITABLY WAS AFFECTED BY THE BUDGETARY IMPASSE.

On a more positive note, environmental sustainability is a fundamental objective of PNSB, and

in the year under review PNSB made further progress towards environmental sustainability.

For more information on environment sustainability, please refer to the “Preserving Our

Environment” section on pages 150 to 163 of this Annual Report.

WATER TREATMENT PLANT OPERATIONS

PNSB operates, manages and maintains 29 WTPs with a combined capacity of 1,930 million

litres per day. PNSB delivered 711.00 million cubic metres of treated water in 2012, 1.07%

more than the 703.48 million cubic metres produced in 2011. Higher demand for treated

water from Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”) accounted for the increased

production level.

In 2012, our WTPs submitted water samples to both our Central Laboratory and the

Independent Laboratory to carry out 21,945 tests, and the results showed an impressive

99.8% compliance with the stipulated treated water quality standards.

A reliable supply of treated water is no less critical than its quality, and PNSB strives to

limit the number of unscheduled WTP shutdowns to ensure that consumers can depend

on a constant supply of treated water. During the year, however, rainfall caused landslips

which resulted in increased water turbidity. Although the design capacity of the WTPs is

adequate to cope with this eventuality, several crucial processes needed adjustment, for

which SYABAS Capital Expenditure (“CAPEX”) Programme funding was not available. As a

consequence, on various occasions a number of WTPs were compelled to shut down due

to raw water violations. In total, in 2012, our WTPs experienced 337.57 hours of shutdown

for reasons beyond our control (as shown in Table A). Despite this, throughout the year,

all our WTPs consistently met production demands and PNSB was successful in providing

dependable supplies of treated water.

Cause of WTP shutdown Hours of shutdown

Raw water violation 125.67

TNB power supply interruption 110.90

Pipe leak/burst 101.00

Total Hours 337.57

Table A: Causes and number of hours of WTPs shutdown

PNHB’s/ PNSB’s

Headquarters in Wisma

Rozali, Shah Alam

84


Operations ReviewPuncak Niaga (M) Sdn Bhd

The performances of our WTPs in 2012 were as follows:

• The Sungai (“Sg”) Selangor Phase 2 (“SSP2”) WTP produced 347.40 million cubic metres

of treated water, a slight decrease of 0.72% from the 349.92 million cubic metres recorded

in 2011. The average daily production dipped to 951.79 million litres from 958.68 million

litres in 2011, but the plant’s performance still exceeded its daily design capacity of

950.00 million litres.

• The Wangsa Maju WTP produced 15.71 million cubic metres of treated water in 2012,

6.21% less than the 16.75 million cubic metres it generated in the previous year. The

average daily production was 43.04 million litres as against 45.89 million litres in 2011.

The plant’s daily design capacity is 45 million litres, and its daily designated quantity in

accordance with the Concession Agreement is 31.50 million litres.

• The Sg Sireh WTP produced a total of 7.56 million cubic metres of treated water last

year, recording an 8.46% increase on the 6.97 million cubic metres produced in 2011.

The average daily production rose to 20.70 million litres from 19.10 million litres in 2011.

The plant’s daily design capacity is 27.28 million litres.

• The Sg Lolo (new) WTP recorded 999,974 cubic metres of treated water production last

year, representing a slight drop of 1.77% from the 1,017,998 cubic metres produced in

2011. The average daily production was 2.74 million litres compared to 2.79 million litres

in the previous year. The plant’s design capacity is 2.50 million litres daily.

• 26 WTPs fall under the Privatisation Cum Concession Agreement dated 22 September 1994

(“PCCA”) and collectively, they produced 339.34 million cubic metres of treated water

last year, a 3.20% increase from the 328.82 million cubic metres recorded in 2011.

The average monthly treated water production for 2012 was 28.28 million litres against

27.40 million litres in 2011. The WTPs exceeded their monthly designated quantity of

26.28 million litres as stipulated in the PCCA.

In 2012, the 29 WTPs performed admirably, both in terms of quantity and quality, meeting

SYABAS’ requirements for treated water and the Drinking Water Quality Standards as

determined by the Ministry of Health (“MOH”).

PLANT IMPROVEMENT WORKS

Refl ecting its steadfast commitment to providing a stable and effi ciently produced water

supply, PNSB successfully carried out a number of plant improvement works in 2012.

Sg Langat WTP: Electrifi cation of Two Raw Water Pumps and Replacement of

Bandscreen No. 2

The prime mowers of the 8 MDG raw water pumps were converted from diesel engines to

electric motors. The electric motors are a more economical means of driving the pumps and

have the added benefi t of generating less noise pollution and creating a cleaner environment.

A new chain link system, complete with nylon rollers, carbon steel pins and bushes was

installed to replace the worn-out Bandscreen No. 2. The refurbished Bandscreen has

enhanced screening at the intake, preventing unwanted fl oating debris from entering the

WTP and damaging plant equipment.

In 2012, the

29 WTPs performed

admirably, both in

terms of quantity

and quality,

meeting SYABAS’

requirements for

treated water and

the Drinking Water

Quality Standards

as determined

by the Ministry

of Health

85

PNSB operates and

manages Sg Langat Dam


Cheras Mile 11 WTP: Replacement of Electrical Motor for Raw Water Pump

One of the two 4.5 MGD raw water pumps received a new electric motor. The old motor was

then refurbished to its original condition and is now kept as a spare unit at the WTP.

Batang Kali WTP: Installation of New Air Blower

The plant’s fi lter back-washing system had been using air compressors until the 2012

upgrade to a new, enhanced air blower. The upgrade has improved the fi lter’s performance

and reduced the mud balls at the fi lter bed.

SSP2 WTP: Installation of New Post-Chlorine System

The new post-chlorine system replaced the older, ineffi cient chlorine system which had been

running since the WTP’s inception in 1998 to achieve the operational requirement for treated

water quality. Most of the original system’s internal and external components had corroded,

and its performance was diminished.

In 2012, PNSB initiated the following plant improvement works:-

• Replacement of fi lter media and associated works for the Gombak WTP, Sg Batu WTP,

North Hummock WTP and Rantau Panjang WTP

• Installation of auto-chlorine emergency shut-off system at seven WTPs namely,

Sg Pangsoon WTP, Salak Tinggi WTP, Sg Rumput WTP, Kepong WTP, Batang Kali WTP,

Sg Buaya WTP and North Hummock WTP

• Installation of new overhead cable at the Cheras Mile 11 WTP

• Rehabilitation and upgrading of 110VDC supply system at the SSP2 WTP

• Rehabilitation and upgrading of condition monitoring system at the SSP2 WTP

• Rehabilitation and upgrading of pre-chlorination system at the SSP2 WTP

• Upgrading of Siemens S5 PLC to Siemens S7 PLC system at the SSP2 WTP

• Rehabilitation and upgrading of automation system for fi ltration plant at the Wangsa Maju

WTP

• Rehabilitation of automation system for fi ltration plant at the SSP2 WTP

• Installation of automatic carbon dioxide fi re suppression system at the Sg Langat WTP

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 the “Preserving Our Environment”

section on pages 150 to 163 of this Annual Report.

Operations Review


86

Water Quality Testing

at WTP


Sedimentation tank at

Sg Batu WTP

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 2012.

No. Source Volume withdrawn (m3)

1 Sg Selangor 393,963,473

2 Sg Bernam 11,526,977

3 Sg Dusun 488,755

4 Sg Tengi 635,379

5 Sg Batang Kali 5,044,594

6 Sg Darah 206,627

7 Sg Gerachi 2,420,317

8 Sg Inki 2,308,354

9 Sg Ampang 6,807,759

10 Sg Gombak 12,417,835

11 Sg Rumput 416,262

12 Sg Rangkap 3,256,339

13 Sg Kepong 858,433

14 Sg Langat 193,552,339

15 Sg Labu 1,808,958

16 Sg Pangsoon 1,358,180

17 Sg Lolo 1,754,583

18 Sg Serai 435,435

19 Sg Sireh 9,375,357

20 Klang Gates Dam 63,216,187

21 Tasik Subang Dam 5,072,407

22 Batu Dam 45,317,890

Total 762,242,440

DAM OPERATIONS

PNSB operates and maintains the Sg Langat, Klang Gates and Tasik Subang Dams in

accordance with the Guidelines for Operation, Maintenance and Surveillance of Dams issued

by the Malaysian Inter-Departmental Committee on Dam Safety, October 1989. Performance

in 2012 was good, and there was no critical storage drawdown at any of the Dams.

During the year, total annual rainfall at two of the three Dam catchment areas was lower

than the mean average rainfall based on data from 1998 to 2011, but higher at the third Dam

catchment area, as shown in Table B:-

Mean Variance

Annual rainfall average rainfall against

Dam 2012 (mm) 1998–2011 (mm) average (%)

Sg Langat Dam 2,291.70 2,399.41 -4.49

Klang Gates Dam 2,805.90 2,824.35 -0.65

Tasik Subang Dam 2,804.00 2,457.41 14.10

Total 7,901.60 7,681.17

Table B: Annual Rainfall 2012

Actifl o plant inspection

at SSP2 WTP


87


To ensure the safety and stability of the Dams, PNSB completed an annual Dam Visual Safety

Inspection in 2012, including a fi eld inspection and an instrumentation analysis for all major

Dam structures and M&E equipment. No major defi ciencies were identifi ed except for the

gate and control valves at the Sg Langat Dam drawn off tower, which need to be replaced

on an urgent basis. The replacement work is presently undertaken by the Selangor State

Government through their appointed consultant and contractor.

The Dam operations staff utilise the Reservoir Operations Rules Curves (“RORC”) methodology

to decide a release rate from the dams based on current dams storage and expected rainfall

throughout the year. This helps the operators to meet the demand from the WTPs while

conserving as much reservoir water as possible.

At Sg Langat Dam, the reservoir levels were maintained above RORC No. 1 throughout 2012,

while at the Klang Gates Dam, the reservoir level was drawn down below RORC Nos. 2

and 3 from early September 2012 until the end of October 2012. The Tasik Subang Dam’s

reservoir level was drawn down below RORC No. 1 from mid August 2012 until the end of

October 2012. All three Dams, however, met the water demand of the respective WTPs.

With prudent, proper and effective planning for the management of the dams, PNSB ensures

the sustainability of the water supply in Selangor and the Federal Territories of Kuala Lumpur

and Putrajaya.

One component of PNSB’s commitment to corporate social responsibility (“CSR”) is a standing

invitation to the various stakeholders to visit the dams with the objective of educating guests

on the dams’ functions and operations. In 2012, PNSB welcomed visitors from schools,

universities, government agencies, NGOs and the general public. Prominent organisations

that visited the dams included Jabatan Pengairan Dan Saliran, Pejabat Pegawai Keselamatan

Kerajaan Malaysia and Lembaga Urus Air Selangor.

CERTIFICATIONS

ISO 9001:2008 (Quality Management System)

In 2012, additional nine WTPs had been certifi ed with ISO 9001:2008 Quality Management

System (“QMS”). As at August 2012, all Regional Offi ces and 26 WTPs have obtained the

internationally recognised standard ISO 9001:2008 QMS certifi cation. The ISO 9001:2008

certifi cation refl ects PNSB’s commitment towards Quality Management in managing the

WTPs.

ISO 14001 (Environmental Management System)

SSP2 WTP had successfully maintained the certifi cation until todate.

OHSAS 18001:2007 (Safety Management System)

27 of our WTPs and three Regional Offi ces have successfully maintained the certifi cation

todate.

INFORMATION AND COMMUNICATIONS TECHNOLOGY (“ICT”)

In 2012, PNSB’s Information Technology Department (“ITD”) continued to introduce

technologies that provide strategic tools for business success, implementing systems that

reduce manual processes, improve work-fl ow and standardise procedures.

Operations Review


With prudent,

proper and

effective planning

for the management

of the dams,

PNSB ensures the

sustainability of

the water supply in

Selangor and the

Federal Territories

of Kuala Lumpur

and Putrajaya

88


Business Applications

ITD continued to enable process improvements and Standard Operating Procedures (“SOP”),

and to centralise information via a work-fl ow application, working closely with each division

to migrate all manual processes to the online system. ITD also implemented improved Human

Resources Administration and Accounting systems that monitor manpower, manage capital

resources and analyse costing strategies.

IT Infrastructure Platform

ITD developed and deployed a computer data centre infrastructure, equipped with virtualised

systems and high-availability system management. The data is designed to operate without

downtime.

PREVENTIVE MAINTENANCE

Predictive & Preventive Plant Maintenance

Throughout the year we undertook systematic monitoring and maintenance of plant and

equipment to ensure the smooth and continuous operation of all our 29 WTPs. Predictive and

preventive plant maintenance follows an annual maintenance plan, and performance was

closely monitored by two maintenance software systems, Maximo and Maintpro.

In 2012, our WTP staff conducted 25,128 preventive maintenance works.

Preventive IT Maintenance

Preventive IT Maintenance is important to ensure that all systems are running smoothly. As

in previous years, PNSB’s ITD continuously supported and maintained all the 29 WTPs via

its programme of scheduled preventive IT Maintenance. For servers and critical equipment,

preventive IT Maintenance is conducted every six months. For 2012, ITD conducted a PC

replacement programme to further improve its productivity as well as to reduce maintenance

cost. This programme shall be a continuous effort by ITD on a yearly basis for IT assets that

are more than fi ve years old.

INNOVATIVE AND COST-CUTTING MEASURES

PNSB on a yearly basis conducts Innovative & Creative Circle (“ICC”) Programme to

encourage staff to generate innovative inventions or measures.

Details of the activities and achievements of the Company’s ICC Programme are set out

under the “Quality Policy & Report” section on pages 214 to 215 of this Annual Report.

ACHIEVEMENTS

On 11 October 2012, PNSB achieved the Bronze Award for the 12th Malaysia HR Awards

2012 Employer of Choice.

In 2012, the Sg Selisek, Kalumpang, Sg Batu, Bukit Tampoi, Wangsa Maju and SSP2

WTPs won Gold (Class I) Awards from the Malaysian Society for Occupational Safety &

Health (“MSOSH”), while the Sg Dusun and Ampang Intake WTPs received Gold (Class II)

Awards from MSOSH. The National Council of Occupational Safety & Health (“NCOSH”)

honoured the Sg Langat WTP with a Gold Trophy Award under the water utility sector on

30 October 2012.

PNSB’s Central Laboratory’s/SSP2 WTP Laboratory’s high standards for training, health and

safety earned them the Institut Kimia Malaysia (“IKM”) Laboratory Excellence Award 2012

on 30 November 2012.


Water quality inspection

at Central Laboratory

89

WATER FACTS

A person

can live for weeks

without food.

Without water, a person

can only live a few days


Operations Review

SyarikatBekalan Air

SelangorSdn Bhd

THOUGH 2012 WAS ANOTHER CHALLENGING YEAR FOR SYARIKAT BEKALAN AIR

SELANGOR SDN BHD (“SYABAS”), THE SOLE WATER DISTRIBUTOR FOR SELANGOR

AND THE FEDERAL TERRITORIES OF KUALA LUMPUR AND PUTRAJAYA, THE

COMPANY SUCCEEDED IN ACHIEVING ALL OF ITS KEY TARGETS FOR 2012. THE

MANAGEMENT AND STAFF OF SYABAS REMAINED COMMITTED, DEDICATED AND

HARDWORKING TO CONTINUE TO DELIVER TO THE BEST OF THEIR ABILITIES

IN 2012.

CHALLENGES

Water demand in 2012 in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya

grew with an average production for 2012 of 4.30% as compared to 2011, while the metered

consumption grew with an average production for 2012 of 3.70% as compared to 2011.

Against this backdrop, in 2012, there was very tight treated water supply-demand situation in

Selangor and the Federal Territories of Kuala Lumpur and Putrajaya which resulted in water

supply interruptions from time to time in various areas namely, Sg Way in Petaling District,

Hicom in Klang District, Bukit Gasing in Petaling District, Meru in Klang District, Wisma Putra,

KL Sentral and Cheras in Kuala Lumpur District.

The reserve margin for the supply of treated water is standing at less than 3% of the average

demand for Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. The reserve

margin will still remain below 3% of the average demand even with the completion in due

course of the ongoing KeTTHA Mitigation 1 and Mitigation 2 Programme as approved by

the Federal Government for increased treated water distributable capacity, as the supply

capacity from these programmes can hardly meet the increasing water demand. Unless more

programmes to increase the supply of treated water are implemented by the Government, the

critical water supply situation will persist and continue into 2013 with the continued increase

in demand for treated water but with limited additional distributable capacity.

The thin reserve margin of treated water supply with no certainty of any new additional water

supply has compelled SYABAS not able to provide support of any new development projects

due to consideration of the potential legal implication. In 2012, SYABAS deferred its support

for 450 projects relating to additional water demand. This matter has been communicated

to the regulator, the National Water Services Commission [Suruhanjaya Perkhidmatan Air

Negara] (“SPAN”) for their direction.

The impending issue of the Selangor State Government’s Proposed Restructuring since 2008

and the refusal of the Selangor State Government from 1 January 2009 to either gazette

the water tariff adjustment or to pay compensation in lieu thereof under the Concession

Agreement dated 15 December 2004 signed between SYABAS, the Federal Government and

the Selangor State Government (“SYABAS Concession Agreement”) continued, further add

on to SYABAS’ constraints on its fi nancial capacity.

This also continued to prevent SYABAS from drawing down its arranged loan facilities or

taking on any new commercial loans which resulted in insuffi cient cash fl ow to fully pay

the water treatment operators. The accumulated outstanding debt to water treatment

operators has sparked legal suits of claims by all the three water treatment operators, namely

Konsortium ABASS Sdn Bhd (“Konsortium ABASS”), Syarikat Pengeluar Air Sungai Selangor

Sdn Bhd (“SPLASH”) and Puncak Niaga (M) Sdn Bhd (“PNSB”). The cash fl ow problem

has also further hampered the SYABAS Capital Expenditure (“CAPEX”) programme, which

has remained frozen since 2008 except for very critical projects, particularly to reduce the

Non-Revenue Water (“NRW”) and rehabilitating the old distribution assets.

90

Media briefi ng on water crisis


Operations ReviewSyarikatBekalan AirSelangorSdn Bhd

The frozen SYABAS CAPEX programme resulted in numerous and frequent pipe bursts and

water supply interruptions, to the inevitable detriment of service levels. In 2012, it was once

again impossible to rehabilitate or upgrade many old assets, while some were required to

operate in overload mode, thereby causing further failures. These occurrences whilst not only

increased operation and maintenance costs, also thwarted any reduction in NRW, resulting in

a higher purchase cost of treated water.

Despite the above challenges, 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 2012 including solving the water crisis in Hulu Langat in 2012 and Wangsa Maju

in the beginning of 2013. This was made possible mainly as a result of the dedication and

commitment of the Management and staff of SYABAS to the consumers.

ACHIEVEMENTS

In 2012, despite the many challenges, SYABAS to the best of its ability, continued to maintain

the high service levels as required by the SYABAS Concession Agreement and the Ministry of

Health’s (“MOH”) National Standard for Drinking Water Quality (2004) (“NSDWQ”). As a result,

SYABAS successfully exceeded the 2012 performance targets it had set for itself, which were

higher than the requirements of the SYABAS Concession Agreement.

In a bid to continue to supply consumers with good quality treated water in 2012 with limited

funding for CAPEX investment, SYABAS continued to focus on enhancing its operating

standards and effi ciency by upgrading and improving the existing Standard Operating

Procedures (“SOP”), introducing new SOPs, researching into more effi cient methodologies

and making internal innovations with cost optimisation.

SYABAS also implemented a very critical CAPEX programme with the limited approval of

work programmes by SPAN in Selangor and the Federal Territories of Kuala Lumpur and

Putrajaya and the programmes carried out were mainly for the rehabilitation and upgrading

of pumphouses and leaking water tanks, improvement of distribution network to resolve low

pressures zones, and preventing the NRW from creeping up.

In 2012, SYABAS responded to 93.90% of all water quality complaints within half an hour

and also boosted its Billing and Collection Effi ciency, the details of which are as set out in

the headings “Immediate Response to Consumer Complaints” and “Billing & Collection”,

respectively in this Operations Review.

Despite the SYABAS CAPEX freeze, the average 2012 NRW level for Selangor and the

Federal Territories of Kuala Lumpur and Putrajaya was computed as 33.06%, and lower

than the targeted 2012 NRW target of 33.49%. However, the NRW level increased by 0.75%

compared with 2011 average of 32.31%. Details of NRW are set out under the heading “Non

Revenue Water” of this Operations Review.

As part of SYABAS’ continuous effort to further enhance customer service, with effect from

1 January 2013, PUSPEL was upgraded to double its capacity to handle customer calls.

Various upgrading of facilities were carried out too to provide better service to consumers

including more conducive working environment for SYABAS staff.

In 2012, SYABAS received the Anugerah Industri Sukan Negara 2012 – Promosi Gaya Hidup

Sihat Melalui Sukan. SYABAS also earned the Malaysian Society for Occupational Safety &

Health (“MSOSH”) Awards for all of its ten districts in 2012. Seven Districts, namely Kuala

Lumpur, Hulu Langat, Petaling, Gombak, Sabak Bernam, Hulu Selangor and Kuala Selangor

obtained Gold (Class I) Awards. Three districts, namely Kuala Langat, Sepang and Klang,

earned the Gold (Class II) Awards.

Three SYABAS districts were accredited with OHSAS 18001:2007 (Health and Safety). In

addition, SYABAS’ Human Resources & Administration Department was awarded with ISO

9001:2008 certifi cation in 2012.

In 2012,

despite the many

challenges, SYABAS

to the best of its

ability, continued

to maintain the

high service

levels as required

by the SYABAS

Concession

Agreement and the

Ministry of Health’s

National Standard

for Drinking Water

Quality (2004)

91


WATER DISTRIBUTION SERVICES

In 2012, SYABAS distributed a daily average of 4,322 MLD of treated water to about

7.50 million residential and commercial consumers in Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya. This amounted to 179 MLD (4.30%) of treated water more than

in 2011.

SYABAS maintains 26,425 km of water pipes, 1,527 service reservoirs, elevated water tanks

and suction tanks; and 589 booster pumping stations. The number of these assets increased

by 1.1%, 3.9% and 5.7% 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 eight years since the signing of SYABAS Concession Agreement, SYABAS has achieved

a reduction in NRW from 42.78% as at 1 January 2005 to 33.06% as at 31 December 2012,

as shown in Table A:

Metered

Water Input Consumption NRW

Period MLD MLD MLD %

2005 3,766 2,155 1,611 42.782012 4,322 2,893 1,429 33.06Difference in fi gures for 2005 and 2012 +556 +738 -182 -9.72

Note:

(1) Unbilled Authorised Consumption averaging 0.5% has been included and counted as NRW

Table A: NRW Reduction Achievement

The average 2012 NRW recorded at 33.06% was compared favourably with the Company’s

targeted 2012 NRW of 33.49%.

Since 2008, the CAPEX freeze has prevented SYABAS from carrying out any but very critical

works to reduce NRW, and the saving from critical works is only suffi cient to offset the

increase in leakage due to the Natural Rate of Rise. Nevertheless, despite limited CAPEX and

the effect of the ageing distribution network in 2012, SYABAS was able to sustain the NRW at

the level achieved by the end of 2008 recorded at 33.17%. Without the various diligent efforts

by SYABAS, the NRW level would have crept up to a much higher level.

NRW Reduction Works in 2012

The replacement of 210 km of pipes under the KeTTHA Mitigation 1 Programme for 30 critical

areas at an approved budget of RM170.0 million progressed on schedule. The four-year

programme began in 2011 with a target completion date of 2014. Eight pipe replacement

packages comprising 59 km of pipes were completed in 2012 and another 22 packages are

scheduled to be implemented in 2013-2014.

SYABAS was also granted approval by SPAN to carry out a number of critical NRW

programmes using its own internal funding, as follows:-

(a) Between February and November 2012, large area pressure management using the

Advanced Pressure Management (“APM”) system known as i20 technology was

implemented for four new Pressure Management Zones (“PMZ”), namely Kuala Langat,

Kuala Selangor and Hulu Selangor (two numbers). The pressure controls achieved a

cumulative saving of 8 MLD as against a target of 4 MLD.

Operations Review

SyarikatBekalan Air

SelangorSdn Bhd

92

SYABAS’ operation on

illegal water piping


(b) Between April and December 2012, i20 APM systems were installed at 20 zones in

existing District Metering Zones (“DMZ”) in the Petaling, Klang, Hulu Langat and Gombak

Districts, saving 4 MLD, as per the target set previously.

(c) The NRW Phase 3 programme also continued. This is a long term performance contract

awarded in 2007 for completion by the end of 2013 with a target to achieve a cumulative

saving of 300 MLD by June 2012. As at June 2012, a total saving of 303 MLD had been

achieved.

In addition, under the approved programmes for 2012, SYABAS embarked on two meter

replacement programmes to further reduce commercial losses. Between May and December

2012, 180,000 aged meters (nine years and above) were replaced, realising commercial

gains of about 18 MLD. Meanwhile, the replacement of AMR EM Flow Meters at 100 large

consumer accounts commenced in January 2013 and is expected to be completed by May

2013 with total predicted gains of 5 MLD.

Other NRW activities by SYABAS in-house teams included reservoir overfl ow monitoring and

the maintenance and monitoring of 80 KTAK DMZ and 112 PMZ.

Factors such as the CAPEX freeze are outside SYABAS’ control and materially affect its ability

to reduce NRW. Accordingly, to allow for the impact of these uncontrollable factors, SYABAS

has applied to SPAN and the Selangor State Government to revise the NRW KPI target in

SYABAS Concession Agreement to allow for the impact of the uncontrollable factors. To date

no decision has been reached for the application.

CAPEX WORKS

Under the privatisation of water supply services in Selangor and the Federal Territories of

Kuala Lumpur and Putrajaya, SYABAS, as the concessionaire, has put in place a CAPEX

programme for the rehabilitation and upgrading of the water distribution assets it operates.

The CAPEX programme for 2011 and 2012 was funded mainly from RPS 2009 (RM65.24

million), RPS 2010 (RM131.60 million) and SYABAS’ internal funding (RM448.18 million). The

cumulative CAPEX expenditure from 1 January 2005 to 31 December 2012 amounted to

RM2,537.1 million.

In year 2012, a total expenditure of RM77.12 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.

As mentioned under the heading “Achievements” of this Operation Review, SYABAS also

implemented very critical CAPEX programme with the approval by SPAN in Selangor and the

Federal Territories of Kuala Lumpur and Putrajaya. The programmes carried out were mainly

for the rehabilitation and upgrading of pumphouses and leaking water tanks, improvement of

distribution network to resolve low pressure zones, and preventing the NRW from creeping

up. In 2012, SYABAS managed to complete 30 projects and commenced 44 projects.

As mentioned under the heading, “Non Revenue Water” of this Operation Review, the

replacement of 210 km of pipes under the KeTTHA Mitigation 1 Programme for 30 critical

areas at an approved budget of RM170.0 million progressed on schedule with a target

completion date of 2014.


93

SYABAS Consumer

Awareness Programme


Operation Command Centre (“OCC”) and the Geographical Information System (“GIS”)

In 2012, OCC has further expanded by the implementation and integration of a few systems

thus further improved its operational capabilities. A new 2 Mbps leaseline, fully operational

in November 2012 cater for additional 2000 remote monitoring sites (originally 250 remote

sites).

The status of implementation of the GIS/SCADA/Hydraulic Modelling-related works as at

31 December 2012 were as follows:-

Phase 1A – Development of GIS (Infrastructure and Application)

The GIS captures information on pipeline and reservoir for all ten Districts and as of

31 December 2012, registered 26,433 km length of pipeline, 1,527 service reservoirs and

589 booster pumping stations.

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

2,566 major consumers (0.1 MLD) have been geo-coded in their respective Districts.

Phase 2 – Development of SCADA with GIS and Network Modelling

The data for the 250 remote sites can now be accessed and viewed over GIS system

seamlessly without the need to access SCADA monitoring system directly which has only 20

connection licences to key Departments and users. This has made the SCADA data available

to more staff for faster and better daily operation.

Phase 3 – Hydraulic Model

Hydraulic models for all ten Districts were completed and are being deployed for use of

planning and operations.

WATER QUALITY ENHANCEMENT

In 2012, SYABAS complied fully with MOH’s NSDWQ and Quality Assurance Programme

(“QAP”), as well as maintaining the Mandatory Level of Service (“MLS”) as stipulated in

SYABAS’ Concession Agreement.

The quality of the water supplied from Water Treatment Plants into SYABAS’ distribution

system is both systematically monitored by MOH by way of sampling and testing and is

tracked by its QAP. In 2012, MOH had carried out tests or analyses based on monthly average

of 2,696 (as at 31 December 2012) water samples from 1,107 (as at 31 December 2012)

sampling stations located at various treatment plant outlets, balancing reservoir outlets,

service reservoir outlets and at the distribution pipelines in the concession area.

Since 2008, SYABAS has been aggressively implementing a Water Quality Improvement

Master Plan (“WQIM Plan”), and the results have been excellent. The details of the programmes

under the WQIM Plan namely, the Air Scouring Programme and the Reservoir Cleaning and

Inspection Programme are set out in the “Delivering Quality” section on pages 111 to 123 of

this Annual Report.

Operations Review

SyarikatBekalan Air

SelangorSdn Bhd

94

Briefi ng on water status

by YBhg Dato’ Ir Lee at

Sg Langat WTP


Immediate Response to Consumer Complaints

In 2012, SYABAS achieved a 93.90% compliance rate in responding to consumer complaints

within half an hour. The immediate response to consumer complaints did not achieve a 100%

compliance rate due to the receipt of some complaints at night. The total number of consumer

complaints received during 2012 was 2,278.

Consumer Awareness & Education Programme (“CAE Programme”)

The CAE Programme’s goal is to instil public confi dence in the water quality provided

by SYABAS and also to educate consumers about their responsibility for inspecting and

maintaining their internal plumbing systems and storage tanks regularly. It also addresses

misconceptions about household water fi lters. In 2012, SYABAS devised Standard Operating

Procedures (“SOPs”) for the CAE Programme, as well as an enhanced consumer feedback

survey to evaluate the programme’s effectiveness.

For further details of the CAE Programme, please turn to the “Preserving Our Environment”


BILLING & COLLECTION

SYABAS revenue and cash fl ow rely heavily upon the effectiveness of its Billing & Recovery

Department, and efforts are constantly made to enhance the systems and processes for

peak effi ciency.

As at 31 December 2012, the total number of active water supply accounts stood at

1,857,349, representing a growth of 3.6% from the 1,793,580 accounts recorded in 2011.

Total billings during the year under review stood at RM1.598 billion, 4.3% up from the billing

recorded in 2011 of RM1.532 billion. Table B shows billing records over the last eight years,

demonstrating a cumulative growth of 49.3%.

Year 2005 2006 2007 2008 2009 2010 2011 2012

Billing

(RM million) 1,070.3 1,136.9 1,333.1 1,394.8 1,435.1 1,487.2 1,531.6 1,597.8

Growth (%) 8% 6% 17% 5% 3% 4% 3% 4%

Table B: Billing For The Last Eight Years


95

YBhg Dato’ Ruslan giving

a speech during SYABAS’

monthly assembly


Total current trade bill payments collected for the year stood at RM1.590 billion, of which is

4.0% higher than the RM1.529 billion collected in 2011. The overall 2012 collection effi ciency

was 99.5%.

Total current trade receivables as at 31 December 2012 amounted to RM158.9 million,

representing a 9.1% increase on the RM145.7 million reported in 2011. The higher amount

derived from the rise in total billings during the year and the increase in the amount of free

water rebate owed by the Selangor State Government.

The debtors’ turnover in 2012 (excluding the debt owed by the Selangor State Government)

stood at an average of 36 days as compared to 34 days in 2011. Aggressive monitoring and

controls were put in place by the Management for more effi cient recovery of debts.

Disconnection actions as enforcement for bills collection increased by 18.2%, from 155,409

disconnections in 2011 to 183,740 disconnections in 2012, while the reconnection ratio

improved from 85.2% in 2011 to 85.7% in 2012, attributed to the improved communication

procedures put in place for the benefi t of consumers.

MIGRATION OF BULK METER WATER SUPPLY ACCOUNTS TO INDIVIDUAL METER

WATER SUPPLY ACCOUNTS (“MIGRATION”)

Migration of bulk meter water supply accounts to individual meter water supply accounts is

still slow since it was available in May 2007.

As at 31 December 2012, a total of 1,295 applications involving 267,307 individual accounts

were received by SYABAS for processing. Out of the total applications received, 568

applications involving 114,233 individual accounts were approved for Migration while 289

applications involving 61,047 individual accounts completed the Migration.

2007 – 2012

Bulk Meter Individual

Particulars Account Account

No. of applications received 1,295 267,307

No. of applications approved 568 114,233

No. of applications approved and migrated 289 61,047

Table C: Progress of Migration from Bulk Meter Water Supply Accounts

to Individual Meter Water Supply Accounts up to 31 December 2012.

The Migration to individual meter account would enable the individual dwelling unit in

an apartment or condominium to enjoy the domestic tariff rate for landed premises. The

individual meter would be read and billed by SYABAS, and will facilitate SYABAS to enforce

actions for non-payment accounts by disconnecting individual accounts instead of the bulk

meter accounts which will affect all units of apartment or condominium.

As shown in the above statistics, despite various efforts by SYABAS to promote Migration,

it has been slow due to various factors. One of the alternatives as proposed by SYABAS to

the authority is to make Migration mandatory, which is still pending the gazettement of the

New Water Supply Rules under WSIA 2006.

Operations Review

SyarikatBekalan Air

SelangorSdn Bhd

96

Briefi ng on water crisis

that occured at

four Districts, namely

Petaling, Sepang,

Hulu Langat and

Kuala Langat Districts

Majlis Penyampaian

Hadiah Pelanggan Prihatin



97INFORMATION AND COMMUNICATION TECHNOLOGY (“ICT”)

In 2012, ICT reinforced its capability to meet the increasing needs of SYABAS users. The

increasing number of end users has resulted in higher transaction counts and more data.

ICT staff employed effective maintenance practices to ensure high availability with no major

disruptions. The average monthly service availability for all systems was 99.98%.

SYABAS increasingly turns to ICT solutions to be more effective in its business activities, and

in 2012, the staff continued implementation of 32 system enhancements and initiated 12 new

projects. Some of the major projects included:

• A long-term asset replacement programme which kicked off in 2012 to maximise the

utilisation of assets whilst maintaining stable cash fl ow planning.

• A new telephony system for the PUSPEL service centre which increased the number of

lines to 120 to improve customers’ ability to access to PUSPEL.

• BASIS server hardware upgrades and a back-up system for district offi ces to ensure

continuous availability and accessibility without disruption.

• New Spot Billing Machines and portable printers including Spot Meter Reading Software

for the Billing & Recovery Department to replace the meter readers’ obsolete hand-held

equipment.

• The launch of the Development Plan Approval Submission Management System

(“eDPLAS”) online, a value-added, internally developed initiative which allows users to

apply to SYABAS online for water supply system plan approval.

• The implementation of a Point of Sale (“iPOS”) system, a new collection system for all

SYABAS’ counters to simplify the collection process and to reduce maintenance cost.

• Enhancement of the eMesra intranet portal, a one-stop centre for all electronic

communication between SYABAS’ employees, Departments and Districts, to ensure all

information stays relevant and easy to access for SYABAS’ daily operation applications.

In conclusion, the ICT Department accomplished all of its goals for 2012.

OIL & GAS

SAVING TIPS

Keep your car

well maintained


Operations ReviewPuncak

Oil & Gas Sdn Bhd,

GOM Resources

Sdn Bhd and KGL Ltd.

98IN 2012, PNHB’S WHOLLY-OWNED SUBSIDIARY, PUNCAK OIL & GAS SDN BHD

(“POG”) COMPLETED ITS FIRST FULL YEAR OF OPERATION IN THE OIL & GAS

INDUSTRY VIA ITS WHOLLY-OWNED SUBSIDIARY, GOM RESOURCES SDN BHD

(“GOM RESOURCES“) WHICH WAS ACQUIRED BY POG IN 2011. IT WAS A YEAR OF

OUTSTANDING ACHIEVEMENT FOR PNHB GROUP IN THE OIL & GAS INDUSTRY.

REVENUE FOR THE OIL & GAS DIVISION ALMOST TRIPLED TO RM778.0 MILLION

FROM RM289.5 MILLION IN 2011, CONTRIBUTING 20.8% OF THE GROUP’S REVENUE

FOR THE YEAR 2012.

BACKGROUND

World primary energy consumption is projected to grow by 1.6% p.a. over the period 2010

to 2030, adding 39% to global consumption by 2030, with the annual growth rate standing

at approximately 2.0% over the next decade. Some 96% of the growth is expected to come

from countries outside the Organisation for Economic Co-operation & Development (“OECD”)

area, with China as the most important consumer market.

In Malaysia, where oil output has been falling over the past years, fresh attempts are being

made to enhance production from existing and marginal fi elds and to boost the development

of new fi elds in deeper offshore areas. Under the Economic Transformation Program (“ETP”),

the Government is working towards building Malaysia into regional oil storage and trading

hub. In addition, Malaysia is set to emerge as a top petroleum investment spot in 2013,

as Petroliam Nasional Berhad (“PETRONAS”) places renewed emphasis on maximising

domestic oil resources after years of international expansion. Indeed, PETRONAS has

announced a plan to raise capital expenditures to US$59 billion over the next fi ve years with

the aim of increasing domestic production.

Malaysia’s petroleum industry therefore looks set to start the year on an optimistic note.

(Source: Statistical Review of World Energy, June 2012)

PUNCAK OIL & GAS SDN BHD (“POG”)

In addition to the six months (primary) contract awarded on 23 December 2011, POG

managed to secure extension contracts from Perunding Ranhill Worley-Muhibbah Consortium

to provide work barge, work boat and support vessels for a regasifi cation facilities project

at Sungai Udang Melaka for Petronas Gas Bhd. The work barge can accommodate up

to 300 workers while the work boat is used for anchor handling and towing. The contract

also includes catering for contractor’s live-in personnel. The Project was completed on

31 October 2012.

In 2012, POG had a rationalization exercise. First, POG’s offi ce was relocated to Tower 1

Etiqa Twins, Jalan Pinang in June 2012. In October 2012, POG’s employees were seconded

to GOM Resources to build a committed team to enrich the Oil & Gas Division with diversity

skills and experiences to deliver exceptional results for the client.

GOM RESOURCES 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 had a proven track record in

undertaking oil and gas works, both at home and abroad with range of expertise from simple

jobs to highly complex jobs.

KGL LTD. (“KGL”)

KGL is involved in the business of offshore leasing of vessels on bareboat basis. KGL owns

the Derrick Lay Barge 264 (“DLB264”).

Construction crew working

in the pipe tunnel

Tower operations

running anchors &

monitoring tension


In 2012, GOM Resources completed the works of the Integrated Transportation and

Installation of Offshore Facilities contract (2010-2012) for “Pipelay Barge Package A” for

Petronas Carigali Sdn Bhd as awarded by Petronas (“KPOC Project 2010 - 2012”) and was

subsequently further awarded the Offshore Installation Contractor (“OIC”) status, which

entails a 3+1+1 contract (2010 to 2014). For the offshore installation and pipe laying works,

GOM Resources operates the DLB264 which is owned by KGL.

In 2012, apart from the KPOC Project 2010-2012, GOM Resources successfully brought the

following projects to completion:

1. Kebabangan Petroleum Operating Company (KPOC)

- Installation of KBB 24” x 123 km pipeline from Sabah Oil Gas Terminal (“SOGT”) to

Kebabangan (“KBB”)

- Installation of KBB 14” x 123 km pipeline from SOGT to KBB

- Installation of KPOC - Malikai 1 km pipeline from KBB toward Malikai

2. Petronas Carigali Sdn Bhd (PCSB)

- Installation of Bekok 6” x 7.6 km pipeline from Tiong A to Bekok A

- Pre-commissioning of 24” x 140 km pipeline from SOGT to KNPGB

CHALLENGES

The Group’s Oil & Gas Division currently has only the Integrated Transportation and Installation

of Offshore Facilities which has been renewed for one year (2013) with an extension option

of one year. The Oil & Gas Division will have to make greater business development efforts to

gain other Oil & Gas projects locally and overseas.

One of the key challenges facing PNHB’s Oil & Gas Division during the year was the need

to integrate the Oil & Gas personnel into the Group’s culture, vision and mission, apart from

having to manage the human resources elements that arose from the impact of a company

takeover.

Monthly management visit to the DLB 264 was arranged to meet the client and the offshore

crew to show that the new management is serious in the new business and in the project

operation works and take great interest and time to meet the client and crew. Many other

activities were organised for the Oil & Gas Division’s staff such as luncheon, teambuilding,

inter company bowling, majlis berbuka puasa and Safety Campaign.

It is pleasing to report that the integration was well managed and achieved not only

harmoniously but successfully and a new and entrepreneurial team spirit was built within the

Oil & Gas Division. The Oil & Gas Division personnel has also participated in the Transformation

and Motivational Programme arranged by the Group to ensure that the Oil & Gas Division is

united with the Group in its vision and mission.

ADVANCES IN INFORMATION TECHNOLOGY

In parallel with the integration, the Information Technology Department of GOM Resources

had diligently addressed the Oil & Gas Division’s ever-changing technology needs to be

in line with PNSB’s SAP system whereby the Oil & Gas Division had implemented a full

SAP System which went live on 7 January 2013 to provide better support for the client and

the staff.

In 2012, apart from the successful implementation of a full SAP System, GOM Resources

implemented a Computer Refresh Project whereby computers inventory was improved to

better serve end-users; a GOM Resources Website (www.gomresources.com) was offi cially

launched on 19 October 2012 to provide a greater emphasis on the range of products,

services and vision and enable GOM Resources to communicate with the customers and

to launch future online features and functionality; the existing GOM Resources network

infrastructure was upgraded and confi gured into multiple segments or Virtual LANs.

Operations ReviewPuncak Oil & Gas Sdn Bhd,GOM Resources Sdn Bhd and KGL Ltd.

99

Stalk-on riser installation

at KNPGB Platform

WATER FACTS

Water helps to maintain

a healthy body weight


In 2012, KGL’s pipelay barge “DLB 264” was equipped with a satellite system (VSAT system)

to provide data and voice communication service while at sea for the benefi ts of the crew/

staff and clients including contractors onboard the DLB 264.

ACHIEVEMENTS

For KPOC Project 2010-2012, GOM Resources successfully achieved a total Loss Time Injury

free man-hours of 3,186,655 hours as at 31 December 2012, an outstanding achievement

in preventing work-place injuries. This was achieved via the enforcement of the HSE related

policies namely, HSE Protection Policy, Drug & Alcohol Abuse Policy, Smoking Policy and

Stop Work For Safety Policy.

GOM Resources’ HSE motto is “Productivity is Priority, Safety is Mandatory”.

Another milestone for GOM Resources in 2012 is the certifi cation from DNV Business

Assurance Malaysia conforming GOM Resources’ Integrated Management System (“IMS”)

accreditation, which consist of ISO 9001-2008 (Quality Management System), ISO14001-

2004 (Environment Management System), ISO/TS 29001-2010 (Petroleum, Petrochemical

and Natural Gas Industries – Section Specifi c Quality Management System) and OHSAS

18001-2007 (Occupational Health and Safety Management System).

BUSINESS DEVELOPMENT

Apart from local ground, the Oil & Gas Division is also focusing on an ambitious programme

of expanding abroad to ASEAN countries and Turkmenistan.

In September 2012, GOM Resources set up an Exploration & Production (“E&P”) department

for purposes of evaluating and to conduct business development locally and in overseas.

In 2013, POG incorporated a wholly owned limited company in The Republic of the Union of

Myanmar, namely GOM Resources Limited, to undertake the business of transportation and

installation of pipelines and other services for the onshore and offshore operations of the Oil

& Gas industry. POG is currently in the process of registering a branch in Turkmenistan.

Looking ahead, POG Group will aim to clinch potential Oil & Gas Projects and contracts

locally and overseas and is building a committed team with a wealth of skills and experiences

to deliver exceptional results for the Group and the client. POG Group will continue to grow

its Oil & Gas operations organically and/or by merger and acquisition, and aims to be the

worthwhile contributor to the Group’s profi tability within the next one to two years.

Operations ReviewPuncak

Oil & Gas Sdn Bhd,

GOM Resources

Sdn Bhd and KGL Ltd.

100

One of the key

challenges facing

PNHB’s Oil & Gas

Division during the

year was the need

to integrate the Oil &

Gas personnel into

the Group’s culture,

vision and mission

Mattress installation

on board DLB264


Business Expansion

101Between 2000 and 2050, the global demand for water is projected to increase by 55%. Many

countries are increasingly recognising that water scarcity is a serious and growing concern.

The inadequacy of the water supply will be further compounded by issues of water quality,

and resolving the global water crisis will require a level of funding commensurate with the

scale of the problem.

(Source: Economic Intelligence Unit, December 2012 and World Bank, 2010)

This situation augurs well for the Group to take on projects in the water, wastewater and

environment related sector as well as the oil and gas sector, not just in Malaysia but in China,

India and the ASEAN countries.

Nevertheless, given the volatile economic environment and political risks involved in overseas

projects, our main focus remains the local market whilst cautiously looking at overseas for

business expansion.

MALAYSIA

Sarawak

Rural Water Supply Project

The Rural Water Supply Project in Sarawak (“Sarawak BALB Project”) is a Federal

Government initiative designed to upgrade the living standards of the rural population of

Sarawak by providing clean piped water to over 91,000 households, thereby increasing the

water coverage from 59% to 90% by the end of 2012. RM1.378 billion has been allocated

for this purpose.

The RM667.32 million contract for the Sarawak BALB Project clinched by the 40:60

unincorporated joint venture between Puncak Niaga Holdings Berhad (“PNHB”) and Quality

Concrete Holdings Bhd, namely Konsortium Puncak Niaga Holdings Bhd – Quality Concrete

(“KPNHB-QC”), from the Rural and Regional Development Ministry (“KKLW”) involves 15 Work

Orders. The scope of works includes pipe laying, reticulation works, and the construction

and commissioning of three water treatment plants (“WTP”), booster pumping stations and

reservoir covering six divisions from Kuching to Sibu.

As at 31 December 2012, KPNHB-QC completed ten of the Work Orders. The remaining

Work Orders are expected to be completed by mid 2013. The successful implementation of

the Sarawak BALB Project has given the Group a presence in Sarawak’s waterworks industry

sector and the Group is on the lookout to secure potential projects in East Malaysia in the

near future.

Selangor

Kelana Jaya (“KLJ”) Line Extension Project

The KLJ Line Extension Project, PNSB’s RM15.3 million contract from Syarikat Prasarana

Negara Bhd (“SPNB”) involving the relocation works of SYABAS water mains and Indah

Water Konsortium Sdn Bhd (“IWK”) sewer pipes, is expected to complete in June 2013.

Project Mass Rapid Transit (MRT) Lembah Klang

The Relocation of The Existing Sewerage & Water Main For Cochrane Launching Shaft –

Package D2 Project was awarded to PNSB by SPNB. It involved relocating SYABAS main

pipes and carrying out cement/sand grouting for existing sewer main pipes under the existing

road, and was completed on 15 March 2012.

The successful

implementation

of the Sarawak

BALB Project

has given the

Group a presence

in Sarawak’s

waterworks

industry sector


CHINA

In the coming years, GDP growth in China is expected to moderate from the nearly 10%

recorded over the fi rst three decades of its reform period, though the growth rate should

remain above 8% from 2013 to 2017. The projected slowdown is attributable to falling growth

in demand for China’s exports combined with reduced labour force growth and the slackening

of productivity gains as a result of the shifting of labour from agriculture to industry and the

adoption of various technologies.

(Source: Organisation for Economic Co-operation and Development Southeast Asian

Economic Outlook 2013)

In line with China’s rapid development, however, the need to tackle the issue of water supply

and quality is especially acute. Indeed, water pollution is so widespread that 21% of available

surface water resources are unfi t even for agriculture.

(Source: 2030 Water Resources Group, 2009)

Via its 98.65% owned Singapore subsidiary, Sino Water Pte Ltd (“Sino Water”), the PNHB

Group has been in the China market since 2008 and, currently, its projects in China include

both water supply and wastewater projects.

Lushan Water Supply Project

Located in Lushan County, Pingdingshan City, Henan Province

Luwei (Pingdingshan) Water Co Ltd, a Sino Water 91.94% owned China subsidiary, supplies

water from a 2.0 million-litre-per day (“MLD”) underground water well pumping station to

around 6,400 consumer accounts in Lushan County township. Water is abstracted from

underground and supplied directly to consumers by six pumping stations, with the daily

supply ranging from 1.4 MLD to 1.8 MLD.

Phase 1 of the Lushan Water Supply Project, with an investment cost of RMB70.0 million,

66% funded by the World Bank Loan, involves rehabilitating the existing water distribution

pipeline in Lushan County Township; building a new 30 MLD WTP and laying a 14.7 km

raw water pipeline constructed of a combination of concrete and mild steel. This work is

now complete and the WTP, which was successfully commissioned in November 2012, will

become fully operational once the laying of the distribution pipeline crossing railway track is

completed.

With the new 30 MLD WTP, the existing private wells will gradually be closed. Over the next

two years, it is expected that the number of consumer accounts will increase from 6,400 to

24,000, with the daily supply volume increasing to more than 11 MLD. More effi cient systems

for registering water usage, billings, collections and customer service will be established for

implementation within the next two years in Lushan County Township to serve the estimated

130,000 population.

Binzhou Wastewater Project

Located in Yangxin County, Binzhou City, Shandong Province

Sino Water’s wholly owned China subsidiary, Xinnuo Water (Binzhou) Co. Ltd (“Xinnuo Co

Ltd”) is responsible for the construction of a 30 MLD wastewater treatment plant (“WWTP”)

in two phases of 15 MLD each.

Business Expansion

102

Luwei (Pingdingshan)

Water Co Ltd’s

Administrative Building


Business Expansion

103The WWTP is designed to treat high strength wastewater mainly from four tanneries located in

Chen Lou Industry Park. The 15 MLD WWTP under Phase 1, with a total estimated investment

cost of RMB43.0 million, became fully operational in August 2012 and the current treatment

volume averages 5 MLD. Xinnuo Co Ltd has started billing the tanneries and collection is

done via Laodian Town Government based on incoming wastewater fl ow, which is recorded

at range of 2,500 – 3,000 m3/day.

Due to the changes on the incoming waste parameters, after research was carried out

by design institute and discussion with Yangxin County Government and Laodian Town

Government, it was concluded that an upgrading to the existing treatment facility will be

implemented. The upgrading work is expected to commence in May 2013 and completed by

August 2013.

The operation of Binzhou WWTP has helped to clean up the wastewater discharge by

factories, thus improving the environment in Chenlou Industry Park. By the end of 2013,

Chenlou Industry Park will house seven tanneries and it is expected that the daily wastewater

discharge volume will increase to more than 10 MLD once the factories achieve full production.

With the development of tannery factories at the Chenlou Industry Park, it is expected that

the 2nd phase work shall commence in 2015.

Luancheng Dayu Water Supply Project

Located in Luancheng County, Shijiazhuang City, Hebei Province

Sino Water’s 83.99% owned China subsidiary, Luancheng Dayu Water Supply Co Ltd, supplies

water to around 3,500 consumers in Luancheng County Township. Water is abstracted from

underground and supplied directly to consumers by ten pumping stations, with the daily

supply ranging from 1.8 MLD to 2.5 MLD.

Yuanshi Industrial Water Supply Project

Located in Yuanshi County, Shijiazhuang City, Hebei Province

Sino Water’s 80% owned China subsidiary, Hebei Sino Panlong Industrial Water Supply Co

Ltd, uses gravity fl ow to supply water abstracted from the Ba-Yi Reservoir via a 15.5 km

pipeline directly to the thermal plant in Yuanshi County. PNHB is currently conducting a

feasibility study on Phase 2 of this project, consisting of a 60 MLD domestic WTP and 55

MLD industrial WTP. There were no major construction works in 2012.

INDIA

Inadequate water supply and sanitation remain major issues in India, and the Group is

exploring ways to capitalise on the governmental budgets allocated to these works so as to

expand its programme of overseas business development.

(Source: National Water Policy, New Delhi, 2002)

For the period 2012-2014, growth in India is anticipated to remain relatively subdued at around

7%, held back by monetary policy tightening, stalled reforms, fi scal defi cits, entrenched

infl ation, and electricity shortages, all of which in turn hamper investment activity.

(Source: World Bank Global Economic Prospects Volume 5)

Luwei WTP’s Filter Gallery

OIL & GAS

SAVING TIPS

Purchase a more

fuel effi cient vehicle


Business Expansion

104Nevertheless, with India’s population of nearly 1.2 billion, the demand for both clean and

continuous drinking water and effective wastewater management is vast, and the government

has allocated substantial budgets for infrastructure improvement works that are likely

to continue for the next decade. This presents the Group with immense opportunities for

expanding its overseas operations.

(Source: UNICEF India – Water Environmental and Sanitation)

PNHB’s wholly owned subsidiary in India, Puncak Niaga Infrastructures & Projects Private

Limited (“PNIP Pte Ltd”) aims to establish itself as an effective Integrated Water, Wastewater

and Environmental Solutions provider in India and to contribute signifi cantly towards the

expansion of PNHB abroad. Accordingly, PNIP Pte Ltd is currently exploring new business

opportunities in the area of integrated water-related projects in India.

ASEAN

Vietnam

In Vietnam, the GDP growth rate over the last ten years has averaged a relatively modest 7.3%,

dampened by low internal and external demand. Externally, growth has been weakened in

particular by the Eurozone crisis, the sluggish US recovery and slowing growth in China. The

prospects for the year ahead are therefore not really positive.

(Source: HSBC Vietnam Economic Outlook 2012-2013)

PNHB’s Representative Offi ce in Ho Chi Minh City continues to be on the lookout for potential

water-related projects as well as the possibility of collaborating with local Vietnamese partners

for potential oil and gas projects in Vietnam.

Myanmar

The Company’s wholly-owned subsidiary, Puncak Oil & Gas Sdn Bhd (“POG”) has incorporated

a wholly owned limited company in The Republic of the Union of Myanmar, namely, GOM

Resources Limited, with an authorised capital of USD50,000.00 divided into 50,000 shares

of USD1.00 each with 49,999 shares (99.99%) to be held by POG and 1 share (0.01%) to be

held in trust by the Executive Chairman of PNHB, YBhg Tan Sri Rozali Ismail for the benefi cial

owner, POG. The Form of Permit (Temporary) and a Certifi cate of Incorporation (Temporary)

were dated 9 January 2013.

GOM Resources Limited will facilitate the PNHB Group to undertake the business of

transportation and installation of pipelines and other services of the onshore and offshore

operations of the oil and gas industry in Myanmar.

The PNHB Group is also exploring potential water and wastewater related projects in

Myanmar.

Binzhou WWTP’s

Oxidation ditch


Delivering Service Excellence

SYARIKAT BEKALAN AIR SELANGOR SDN BHD (“SYABAS”)

SYABAS ALWAYS GIVE ITS BEST TO PROVIDE ITS CUSTOMERS WITH SPEEDY,

QUALITY, COURTEOUS AND EXCELLENT SERVICES. SYABAS HAS A HIGHLY

ACCLAIMED AND AWARD WINNING ONE-STOP CONTACT CENTRE NAMELY, PUSAT

PERKHIDMATAN PELANGGAN (“PUSPEL”)/CONTACT CENTRE, COUNTER SERVICES,

UNIT KERJASAMA INFORMASI PELANGGAN (“YAKIN”) AND THE INDUSTRIAL

CONSUMER UNIT (“ICU”) TO SERVE ITS CUSTOMERS AND TO ENSURE BEST QUALITY

SERVICES AT ALL TIMES EVEN EXCEEDING OUR CLIENT CHARTER.

The fi ve major integrated core functions of the Customer Service Department established

by SYABAS as one of several consumer-oriented efforts and initiatives for the benefi t of

the consumers are namely, PUSPEL/Contact Centre, Counter Services, Unit Kerjasama

Informasi Pelanggan (“YAKIN”), Industrial Consumer Unit (“ICU”), and Customer Database

Management (“CDM”).

PUSPEL/Contact Centre

PUSPEL, a highly acclaimed and integrated consumer contact centre is 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.

At PUSPEL, customers receive prompt feedback on all water and water supply related

queries, reports and complaints in Selangor and the Federal Territories of Kuala Lumpur

and Putrajaya. PUSPEL’s logo with the service motto, “Friendly, Committed, and Trusted”,

launched on 10 January 2009 is 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

and follow PUSPEL via social network tools namely, Twitter and Facebook. 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’s staff practise “SMART”

principles in their daily work, namely, S – Smile, M – Manageable, A – Accessible, R – Reliable

and T – Timely.

PUSPEL maintains a CDM section. As at 31 December 2012, PUSPEL’s CDM maintains a

total of 1,033,081 customer contacts via a web-based application called Customer Database

Repository System (“CDRS”) which has been set up both at SYABAS’ headquarters and at

all ten district offi ces. PUSPEL targets a total of 1.6 million customer contacts for the CDM

by year end.

To ensure an immediate response to customer complaints, our PUSPEL agents are always

ready to serve the consumers. All cases are recorded in our complaint management system

known as the Pivotal System. The Contact Centre agents are able to update consumers on

the current status of their enquiries or complaints promptly.

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. In

order to deliver service excellence, except during crisis situation, it is our general policy that

all calls received must be picked up in less than 6 seconds and the handling time within three

minutes. Consumers are assured that their complaints will be attended to and addressed

immediately.

105

PUSPEL’s Call Agents

attending to telephone calls


Delivering Service

Excellence

PUSPEL continues to introduce initiatives and innovations that are geared towards increasing

effi ciency and productivity at the workplace, while striving to minimise costs.

2008 2009 2010 2011 2012

Calls received 600,865 567,970 538,525 640,242 726,837

Cases for investigation and

remedial action 196,813 204,430 202,270 223, 551 382,964

Remaining Calls * 404,052 363,540 336,255 416,691 343,873

* The remaining calls were either general inquiries and dropped calls (abandoned).

Table A: PUSPEL statistics of calls received

The number of calls received in 2012 increased by 13.5% to 726,837 calls compared to

640,242 calls in 2011. The Petaling District had the highest number of cases with 92,270

cases, followed by the Klang District and the Kuala Lumpur District with 68,524 and 60,807

cases, respectively.

Table B is a summary of pipe leaks and pipe bursts cases reported in 2011 and 2012. The

cases were attended to within the targeted time, as shown in Table C which also show the

average number of hours the repair took to complete:-

2011 2012

Pipe leaks 72,824 88,870

Pipe burst 5,093 4,864

Table B: Summary of cases for pipe leaks and pipe bursts

Repair period as SYABAS Internal Average time

provided in Concession target (hours) to complete

Pipe Size Agreement (Target) for repair time repair (hours)

<200 mm <1 day 4 1.58

201-600 mm <2 days 10 6.58

601-1,200 mm <3 days 16 10.35

>1,200 mm <4 days 20 7.60

Table C: Summary of pipe repair cases

Type of cases 2011 2012

Water supply problems 174,572 311,853

Billing problems 23,890 30,402

Faulty water meters 13,024 24,188

Disconnections and related complaints 11,744 16,201

Others 321 320

Total 223, 551 382,964

Table D: Breakdown of Cases for Investigation and Remedial Action in 2011 and 2012

Based on Table D, cases of water supply problems increased from 174,572 in 2011 to 311,853

in 2012, a rise of 78.6%. During this time, cases of billing problems also rose by 27.3% to

30,402 cases in 2012, up from 23,890 cases in 2011. The cases of faulty water meter issues

also rose from 13,024 cases in 2011 to 24,188 cases in 2012. The increase in cases are due

to various reasons, inter alia, including the treated water shortage problem become more

critical in year 2012, and the increased awareness of consumers in communicating with

PUSPEL.

106

PUSPEL

continues to

introduce initiatives

and innovations that

are geared towards

increasing effi ciency

and productivity

at the workplace,

while striving to

minimise costs


In spite of the increase in cases for investigation and remedial action in 2012, PUSPEL

received 107 calls from consumers that commended its effi ciency and initiative.

In 2012, PUSPEL acknowledged all calls and correspondence within 30 minutes of receipt

(“30 Minutes Target”). 100% of calls received and 99.25% of correspondence received

surpassed the 30 Minutes Target. Nevertheless, there are calls that could not be received

during peak period of water crisis situations.

PUSPEL’s Key Performance Indicators (“KPIs”) were established to ensure that staff handle

each call in the most effi cient and effective way. Below are our achievements in 2012:-

Criteria KPI Set KPI Achieved in 2012

% of abandoned calls Not >2% 13%(hourly average)

Average answering time 6 seconds 2 seconds

Average call handling time 3 minutes 3.01 minutes

% of call feedback 100% 100%

Table E: PUSPEL’s KPIs

As illustrated in Table E, PUSPEL exceeded all its KPI targets for 2012 except for percentage

of abandoned calls, which is principally attributed to situations during the water crisis.

Visitors are always welcome to visit our PUSPEL/Contact Centre 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 and to become a

good role model for other companies.

In 2012, SYABAS hosted the following technical visits and briefi ngs for various agencies at

SYABAS’ Headquarters and at the Contact Centre:-

DATE VISITORS

14 July 2012 Visit by KAIST-KYOTO-NTU-NUS Symposium to SYABAS

25 September 2012 Briefi ng and Delegation Visit by Majlis Keselamatan Negara

Negeri Kelantan to SYABAS and Puncak Niaga (M) Sdn Bhd

(“PNSB”)

Counter Service

Counter Service serves as a “one stop solution centre” at all ten SYABAS’ District Offi ces.

Among the services provided at the counter are: new applications, opening of new accounts,

closing of 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, 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.

PUSPEL constantly seeks to enhance its relationship with its customers 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).


107

Visit by KAIST-KYOTO-NTU-

NUS Symposium to SYABAS


Walk-in customers can expect to be served within 15 minutes in accordance with SYABAS’

Client Charter and for this, PUSPEL achieved a Quality Management System (“QMS”) rating

of 98.8%.

In 2012, the ten District Offi ces served 868,570 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. Our

Head of Unit regularly conducts district site visits to check the smooth running of the counter

services and the best of services in line with our service motto, “Friendly, Committed and

Trusted” are provided.

Additionally, all counter services sections submit consumer survey forms twice a year to

PUSPEL Headquarters, providing consumer feedback on ways to improve our services in

the future.

PUSPEL’s “follow@puspel” online interaction channels on the social networks, Twitter and

Facebook allow our customers to connect with SYABAS and to lodge their complaints or

queries easily and effortlessly since their launch on 14 January 2010. As at 31 December 2012,

PUSPEL had a total of 7,127 followers on Twitter and 12,883 friends and fans on Facebook.

SYABAS is continuously seeking to make these online interaction channels more effective

and interesting for our consumers.

Unit Kerjasama Informasi Pelanggan (“YAKIN”)

SYABAS’ Customer Service Department has a separate unit namely, YAKIN, which engages

in community activities and programmes such as conducting site visits, briefi ngs on pipe

replacement programmes, dialogue sessions, briefi ng and presentations, product and

services demonstrations, public relations to promote consumer relationships with Residents’

Associations, “Ketua Kampong/Ketua Taman” and various agencies to give personalised

service, creating awareness on issues relating to water supply and providing educational

programmes for the community in Selangor and the Federal Territories of Kuala Lumpur and

Putrajaya.

Skuad Ronda YAKIN and Sahabat Yakin are two of the main programmes spearheaded

by YAKIN as its vehicles for enhancing consumer relationships and delivering educational

and consumer awareness activities. The Sahabat Yakin 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. The Skuad Ronda YAKIN

programme is a customer relationship programme comprising personnel from YAKIN, and

the Operation & Maintenance and Water Quality Departments of SYABAS together with the

community leader, business community and consumers of a particular location to randomly

check the standard and quality of water supplied by SYABAS at that particular area. The aim

is to reassure consumers that SYABAS only supplies high quality water.

In 2012, YAKIN successfully conducted a total of 2,265 consumers education and awareness

programmes/activities involving domestic consumers in Selangor and the Federal Territories

of Kuala Lumpur and Putrajaya. The positive response received from the consumers involved

indicates that consumer satisfaction is our priority.

Delivering Service

Excellence

108

Programme Sahabat YAKIN


Below is the breakdown of the total number of programmes held at each month throughout

2012 by YAKIN:-

Number of Programmes Held by YAKIN in 2012

YAKIN’s 2012

YAKIN’s 2012 achievements

KPIs for consumer for consumer

educational activities educational activities

Area (Average per month) (Average per month)

Gombak 3 activities 3 activities

Hulu Langat 3 activities 3 activities

Hulu Selangor 3 activities 3 activities

Klang 3 activities 3 activities

Kuala Langat 2 activities 3 activities

Kuala Lumpur 3 activities 3 activities

Kuala Selangor 2 activities 2 activities

Petaling Jaya 3 activities 4 activities

Sabak Bernam 2 activities 3 activities

Sepang 2 activities 3 activities

Total 26 activities 30 activities

Table F: 2012 KPIs for YAKIN’s consumer educational activities

Table F shows the 2012 KPIs for YAKIN’s consumer educational activities (“Activities”) by

area. All areas met or exceeded the KPI requirement for the monthly average number of

Activities that were required to be conducted by YAKIN with Petaling Jaya achieving the

highest average number of Activities.

Aside from interactive programmes with the local communities, YAKIN operates a system

to notify community leaders and Residents’ Associations of scheduled Water Supply

Disruptions (“WSD”). YAKIN is sensitive to resident feedback on WSDs, and sends out

notices to Community Heads and Residents’ Associations seven working days prior to the

scheduled WSD so that residents in the affected areas can prepare for the temporary water

cut. In 2012, YAKIN sent out notices in the form of 9,644 SMSes and 544 emails.

In 2012, there were 44 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.


109

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

220234

262247

193171

193

154

265

156

113

57

Programme Sahabat YAKIN

Wilayah Hulu Langat

WATER FACTS

Water protects the

human eye


During a major unscheduled water disruption such as a pipeburst or the failure of a water

treatment plants which would affect a large number of consumers, SYABAS activates an

Emergency Response Plan (“ERP”) to ensure the most effective response with minimal

disruption to consumers. In 2012, 23 cases of ERP activation were recorded (comprising

20 Code Green ERP, 2 Code Yellow ERP and 1 Code Red ERP).

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 ICU team 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 through visits to

individual consumers and trade associations by sending advance notice on scheduled water

disruption, handle cases reported by trade consumers and participating in trade programmes.

A total of 6,315 SMSes and 5,133 emails were sent by ICU in 2012 for the advance notices.

Among the ICU’s other duties are disseminating information on water disruptions, 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 providing information on other SYABAS’ services and products.

The ICU constantly updates PUSPEL on all its activities via monthly activity reports.

In 2012, the ICU implemented Consumer Relationship Enhancement Programmes and visited

a total of 2,105 trade consumers and ran 273 Rakan ICU programmes. These programmes

included dialogues/briefi ngs (Sua Mesra), public relations programmes, educational

programmes and consumer awareness programmes.

Below is the total number of programmes conducted by the ICU each month throughout

2012:-

Number of Programmes Held by ICU in 2012

Delivering Service

Excellence

110


254230

275

207 216186

210

151

228210

140

71

Our courteous and cheerful

PUSPEL staff on the job


Delivering Quality

111PUNCAK NIAGA (M) SDN BHD (“PNSB”)

Water Safety Plan Management System ISO 22000:2005

The Water Safety Plan (“WSP”) is the approach of The World Health Organization (“WHO”),

which 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 supply through the control of hazardous constituents in water from source to

consumers’ taps.

PNSB being part of the chain in delivering drinking water, has commenced implementation

of the WSP in 2010 in its mission to consistently provide high quality water from its Water

Treatment Plants (“WTPs”). The WSP has been developed and implemented at fi ve of

PNSB’s WTPs namely the Sg Langat, Sg Batu, North Hummock, Wangsa Maju and SSP2

WTPs. In order to formalize the implementation of the WSP and to demonstrate PNSB’s

ability to control water safety hazards to ensure that water supplied from the WTPs is safe,

PNSB is taking the initiative to apply for ISO22000:2005 Food Safety Management System

certifi cation by the third quarter of 2013 for three WTPs, namely, the SSP2, Wangsa Maju and

Sg Langat WTPs.

Water Quality Surveillance Programme (“WQS Programme”) for WTPs

PNSB has in place a WQS Programme to ensure that it consistently delivers a high quality

water supply from its WTPs. Raw and treated water at the WTPs is monitored at every

critical process stage through the WQS Programme to ensure that the water quality meets

or surpasses the standards stipulated by the Ministry of Health’s (“MOH”) National Standard

for Drinking Water Quality (2004) (“NSDWQ”) and MOH’s Quality Assurance Programme

(“MOH’s QAP”). The testing and monitoring of raw and treated water is carried out at PNSB’s

Central Laboratory (“CL”) and is verifi ed by an Independent Accredited Laboratory.

We also conduct bacteriological tests every day at all our WTPs which are more stringent

than the weekly tests that are normally required.

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 in accordance with

MOH’s NSDWQ. On 8 March 2012, CL successfully renewed its certifi cate of accreditation

with the 24 numbers of accredited parameters that consist of the chemical and microbiology

analysis.

In addition, on 30 November 2012, CL/SSP2 WTP Laboratory was awarded with the IKM

Laboratory Excellence Award by Institute Kimia Malaysia. The award was designed to

recognise laboratories which achieve the International Standard MS ISO/IEC 17025 quality

standard as well as laboratory safety and health standards.

CL has been equipped with an Inductively Coupled Plasma-Mass Spectrometer (“ICP-MS”)

and a Gas Chromatography-Mass Spectrometer (“GC-MS”), which increase the laboratory’s

capability for testing heavy metals, pesticides and herbicides in line with MOH’s NSDWQ.

CL also provides laboratory testing services for various activities such as for Puncak

Research & Development Centre, environmental investigations conducted by WTPs, and

process improvement studies by the Operation & Maintenance Department.

Water Quality testing at

Sg Langat WTP


Other than water quality testing, CL also offer support to ensure smooth operation of WTPs

as listed below:

• Conducting laboratory assessment for all WTPs to ensure that the laboratories at the

WTPs are 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.

• Assisting in trouble shooting of treatment process shortcomings or non-compliance.

• Providing training for WTP staff in relation to water quality testing and the maintenance

of laboratory and testing equipment.

• Conducting analyses of WTP process in relation to chemicals supplied to ensure

compliance with specifi cations so as not to affect plant production and quality.

• Conducting sieve analyses of fi lter media for compliance with specifi cation prior to usage

at the WTPs.

Raw and Treated Water Quality Performances

For 2012, CL achieved 100% sampling requirements for both raw and treated water for all

the WTPs operated by PNSB.

The 2012 water quality analysis breakdown as conducted by CL and the appointed

Independent Laboratory is as shown in Table A:

Analysis conducted

for PNSB’s WTPs

By appointed

By Central Independent

Item Laboratory Laboratory

Raw water 6,384 8,034

Treated water 12,551 9,394

Total 18,935 17,428

Table A: Analyses conducted for PNSB’s WTPs in 2012

Based on the water quality monitoring carried out by CL and the appointed Independent

Laboratory, treated water compliance achieved was 99.8%. For raw water, although not

part of concessionaire obligation is being monitored as part of operation and noted the

compliance achieved was 92.1%.

Out of the 21,945 analyses conducted for treated water, a total of 35 cases of non-compliance

(0.16%) were detected, which were mainly due to the presence of aluminium, for example as

detected at the Ampang Intake and the Sg Sireh WTPs.

For the Ampang Intake WTP, the violation was due to the deteriorating raw water quality

due to turbidity, which was above the recommended raw water quality criterion set by MOH

(>1,000 NTU) and which was beyond the plant’s treatment capability. The violation was

due to occurrence of a landslide within the water catchment area since March 2012. As an

alternative to control the raw water pollution, PNSB has submitted proposals to upgrade

the plant back in 2008 and 2010 but the proposals were put on hold pending the proposed

restructuring of the water services industry in Selangor by the Selangor State Government.

Details of the non-compliance for treated water at the Sg Sireh WTP are set out under the

heading “Research and Process Unit of Water Quality and Research Section” of this Report.

Delivering Quality

112

Pre-treatment of

Wangsa Maju WTP


Research and Process Unit of Water Quality and Research Section

The Research and Process Unit (“RPU”) of the Water Quality and Research Section (“WQRS”)

carried out a range of projects and studies in 2012 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 monitoring, fi lter

performance monitoring and value-added projects. Descriptions of the projects undertaken

by RPU in 2012 are as follows:-

Process Improvement

Process improvement comprise the process of fi ne-tuning at WTPs with the objective to

improve its treatment process for water quality enhancement and or production cost

optimization. RPU also played the role to provide solutions for continuous water treatment

process optimization.

1. Process Improvement at Sg Sireh WTP

The violation at Sg Sireh WTP was due to a raw water quality problem that normally

occurs during the wet season. During the wet season, raw water at the Sg Sireh WTP is of

high colour, low alkalinity, high turbidity and organic matter is present, especially aquatic

humic substances. This requires treatment with a high alum dosage which subsequently

results in a high aluminium residual in the treated water. Numerous studies have been

carried out by PNSB to improve its treated water quality and some studies are still in

progress.

Various chemicals were tested on laboratory scale at the plant such as ferric chloride,

activated carbon and sodium aluminate. In the laboratory scale study using ferric chloride,

high colour was observed in the settled water due to residual iron. Chemicals such as

powdered activated carbon and sodium aluminate were found to be ineffective as the use

of both chemicals results in higher settled water colour and turbidity compared to when

using alum alone for coagulation. Hence, alum is considered to be the better coagulant

at the Sg Sireh WTP.

In collaboration with Puncak’s Research & Development Centre, the use of two types

of equipment has been studied to optimise the treatment process at the Sg Sireh WTP.

A Photometric Dispersion Analyser (“PDA”) determines the optimum coagulant dosage

and measures the fl oc strength while UV 254 measures the level of organic matter in the

raw water.

Both types of equipment were installed in May 2012. Based on the preliminary study

of the data gathered, and given that the application of both types of equipment is still

new to PNSB, further optimization studies and fi ne tuning for optimal performance are

currently being conducted prior to full utilisation for treatment process control at the

plant.

2. Process Improvement at North Hummock WTP

In 2012, the North Hummock WTP encountered short fi lter running hours with fi lter media

cracking and the presence of mudballs. Assessment and analysis indicated that the

surface of the fi lter media grain showed the presence of a high level of iron in comparison

with aluminium and manganese.

Delivering Quality

113



In view of the encouraging results from the laboratory-scale study conducted in 2011 to

evaluate the effectiveness of different chemicals namely, chloride of lime, caustic soda

and oxalic acid in fi lter media cleaning, a plant trial using oxalic acid was carried out

at one of the fi lters in February 2012. The cleaning of fi lter media with oxalic acid as

observed in plant trials conducted has observed improvement as follows:-

i. Reduction in fi lter media cracking.

ii. Mudball size becomes smaller and accumulated on the sand surface, thus facilitates

the removal of mudballs manually.

iii. In terms of removal of the metal contents coating the sand grains, signifi cant reduction

of aluminium and iron was observed and this was also shown by the cleanliness of

the fi lter wall and media after being soaked with oxalic acid overnight.

With the improvement observed on the fi lter media condition and conformity of treated

water quality after the cleaning with oxalic acid, the WTP continues to use oxalic acid to

clean its fi lter media every two months.

3. Ammonia Removal Studies

WTPs located downstream of Sg Langat such as the 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 an alternative chemical, namely aluminosilicate have

been conducted in case there is ever a shortage of supply of treated water due to plant

shutdown as a result of ammonia pollution.

Based on the pilot plant trial conducted at Bukit Tampoi WTP from 22 October 2009

till 1 July 2010, it was observed that the use of aluminosilicate in combination as feed

chemical and fi lter media could increase the plant’s capability in removing ammonia.

At low raw water ammonia level of 0.1 – 0.5 mg/L, ammonia removed through the

application of aluminosilicate as feed chemical at the intake and as fi lter media was

in the range of 0.01 – 0.46 mg/L compared to the range of 0 – 0.36 mg/L with normal

sand media. At higher raw water ammonia level of 0.51 – 0.96 mg/L, ammonia removed

by aluminosilicate was in the range of 0.23 – 0.78 mg/L as compared to the range of

0 – 0.47 mg/L with normal sand media.

Due to the encouraging fi ndings, application of aluminosilicate dosing has been extended

to the Salak Tinggi WTP in April 2012. Aluminosilicate will be applied intermittently

whenever the raw water ammonia level exceeds 1.0 mg/L.

4. Process Improvement at Sg Rumput WTP

The Sg Rumput WTP adopted UF membrane technology to produce treated water in

1997. Since upgrading to full treatment using membrane technology, shutdown due to

high raw water turbidity has been reduced. However, as the plant has been operating for

four years, in 2012 thorough assessments were carried out to ascertain the membrane

performance.

Based on assessments conducted, the membrane condition was observed to have

deteriorated and coated with mud, which originated from the raw water it was treating.

To prevent breach of water quality, replacement of membrane modules was carried out

and concurrently, PNSB is considering to improve the quality of the raw water that fl ows

into the membrane module via the installation of auto screen fi lter with the purpose to

prolong the lifespan of the membrane modules.

Delivering Quality

114

Water Quality Surveillance

by Central Laboratory


Water Quality Monitoring of Raw Water

Activities such as the river water quality index programme, treated reservoir water quality

monitoring and the monitoring of ammonia level are carried out at four critical WTPs along

Sg Langat namely, Sg Langat WTP, Salak Tinggi WTP, Bukit Tampoi WTP and Cheras Mile 11

WTP to ensure the quality of the treated water supplied to consumers.

1. 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.

Details of the WQI Programme and its fi ndings in 2012 are detailed in the “Preserving Our

Environment” section on pages 150 to 163 of this Annual Report.

2. 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 150 to 163 of this

Annual Report.

3. Ammonia Level Monitoring

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 hourly basis.

Details of the Ammonia Level Monitoring are set out in the “Preserving Our Environment”


Filter Performance Monitoring

The fi ltration process 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 of the 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”


Delivering Quality

115

Water sampling


Value –Added Projects

Other value-added projects carried out by the RPU in 2012 were as follows:-

(a) Coagulant Performance Evaluation Study at Rantau Panjang and Bukit Tampoi WTPs

A feasibility study was conducted on the usage of lower cost coagulant such as Liquid

Alum (“LA”) and Rock Alum to replace costly Polyaluminium Chloride (“PAC”) with a view

to minimising the production cost at Rantau Panjang and Bukit Tampoi WTPs.

The study however concluded that PAC was still recommended to be used at both WTPs

in view that the settled water quality produced was found to be better with lowest pH

depression and aluminum residual as compared to settled water quality with LA and

Rock Alum.

(b) Training on Process and Water Quality

For purpose of enhancing knowledge on process and water quality, WQRS has coordinated

three (3) sessions of 3-days training programme with the Training Department in May,

July and October 2012 involving a total of 56 Process Technician from various WTPs.

Raw Water Quality Violation

In 2012, 15 incidences of pollution occurred where WTPs were shutdown. There are also

incidences where the production capacity and quality of treated water from the plants are

affected by these pollution.


Water Quality Improvement Master Plan (“WQIMP”)

Drinking water quality of the customers’ taps has always been SYABAS’ top priority. Water

quality results reported as at 31 December 2012 indicated that SYABAS has continued to

meet the high standards set out in MOH’s NSDWQ and MOH’s QAP. It also complies with

the requirement of the Mandatory Level of Service (“MLS”) specifi ed under the Concession

Agreement dated 15 December 2004 signed between SYABAS, the Federal Government and

the Selangor State Government (“SYABAS Concession Agreement”).

Since 2007, SYABAS has been aggressively implementing the Water Quality Improvement

Master Plan (“WQIMP”), and the results have been excellent. The continuous water quality

improvement programmes and monitoring at 1,107 sampling stations had shown greatly

reduced water quality violations.

Based on the water quality analyses carried out by SYABAS and MOH in 2012, 99.52%

complied with MOH’s NSDWQ with zero violations in the microbiological parameters. The

minor instances of non-compliance cases were within the acceptable limit of the MOH’s QAP

and had no adverse impact on health. It should be noted that 6.05% of the non-compliance

cases relates to the fl uoride parameter, which originates from the dosing of the chemical at

the water treatment stage. Any non-compliance is taken seriously, and SYABAS investigates

each issue thoroughly and, where necessary, does everything possible to correct the faults.

Delivering Quality

116

Since 2007,

SYABAS has

been aggressively

implementing

the Water Quality

Improvement

Master Plan and

the results have

been excellent


Cleaning of Water Reticulation Pipeline

(1) Air Scouring Programme (“ASP”)

The ASP is designed to systematically clean all the reticulation pipes using compressed

air on a twelve-month cycle, employing 29 Air Scouring (“AS”) machines designated

for this purpose. In 2012, a total of 8,099 km of 100 mm – 200 mm diameter pipes

were cleaned in the district’s workable ASP zone. However, 34% of the reticulation main

pipe could not be cleaned via ASP due to the unavailability of fi xtures which include air

insertion, isolation and scour valves in the system. Such fi xtures have been installed

in stages but commencing 2008, such effort was affected by the freeze on approval of

Capital Expenditure (“CAPEX”) programmes. As at 31 December 2012, the amount spent

on installation of the valves and fi ttings was RM8.40 million. A total budget of RM3.0

million was approved in 2012 for the installations of valves and fi ttings of which were still

in tender process.

Overall, the ASP cleaning of the reticulation system has measurably improved the water

quality and consequently reduced the number of complaints received from consumers

on water quality.

Month *Extent Of Air Scouring Works

2009 (Km) 2010 (Km) 2011 (Km) 2012 (Km)

January 0 904.79 879.67 721.02

February 0 750.01 725.2 737.57

March 1,094.18 978.39 1,022.96 745.84

April 1,095.28 926.08 978.32 684.39

May 1,053.78 922.87 887.8 776.57

June 1,055.96 903.81 876.52 767.12

July 1,235.05 857.83 827.63 496.44

August 1,096.37 676.6 658.92 359.33

September 719.63 587.98 591.37 687.92

October 1,001.33 790.18 707.52 738.75

November 689.05 699.49 640.31 665.46

December 202.02 516.68 353.78 621.73

Grand Total 9,242.65 9,514.71 9,150.00 8,002.14

* Notes:

i. Except for 2009, which Air Scouring work frequency was a nine month cycle, 2010 to 2012 had Air

Scouring work frequency of 12 month cycle.

ii. Total Air Scouring data (workable/non-workable) for 2010 onwards was based on actual/latest update

from time to time from the mapping department.

Table B: Air Scouring Works From Year 2009 Until 2012

Delivering Quality

117

Preventive Maintenance

activity


(2) Scheduled Manual Flushing Programme (“SMFP”)

In order to ensure that all reticulation pipeline sizes of 100 mm – 200 mm diameter are

cleaned, non-workable ASP zones are also cleaned using the conventional method via

SMFP which was implemented since 2005 and continued in 2012.

Reservoir Cleaning & Inspection Programme (“RCP”)

Under the RCP, all service reservoirs are cleaned manually or using robotic methods and

thereafter inspected every six months to test the water quality using ‘depth-samplers’.

Subsequent cleaning of the reservoirs is conducted if threshold water quality violations are

detected.

SYABAS’ distribution system has more than 1,100 service reservoirs, and as at 31 December 2012,

1,044 of them were active. All these reservoirs have been cleaned since 2005 except those

newly brought into service.

Under the RCP, the water quality in these active reservoirs was inspected twice in 2012.

Those found to have turbidity violations were slated for cleaning. Two reservoirs were cleaned

manually and nine using robotic methods, whilst 120 were cleaned via an open scour fl ushing

method to remove the sediment at the bottom of the reservoirs. Wherever possible, SYABAS

minimises water supply interruptions during the cleaning programme by utilising the by-pass

valves and piping systems at the reservoirs.

Water Quality Surveillance Programme (“WQS PROGRAMME”)

(1) Quality Assurance Programme (“QAP”) by MOH

SYABAS 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 of violation for

each parameter was well within the QAP limits.

In 2012, a monthly average of 2,696 water samples was taken and 100,522 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. Based on the tests or analyses,

99.22% complied with MOH’s NSDWQ with zero violations recorded for microbiological

parameters. The chemical violations were mostly for parameters fl uoride and aluminium

which originated from the WTPs.

MOH Results For 2011-2012

Nos. Nos. 2012 2011

Of Tests Of Violations Compliance (%) Compliance (%)

100,522 780 99.22 99.47

Table C: Summary of 2011 and 2012 MOH’s Water Quality Assessment for all parameters

Delivering Quality

118

Bottled water to affected

consumers at Balakong


(2) In-house Water Quality Assessment

SYABAS started an in-house Water Quality Sampling and Testing Programme in 2006

based on the same frequency of sampling and the nature of parameters as listed in MOH’s

NSDWQ. In 2012, grab samples were collected from the designated 1,107 sampling

stations by personnel from the districts’ Water Quality Units 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 1,841 samples were taken and 77,754 analyses carried out. The results also

showed that the water quality was within the limit set by MOH and the Mandatory Level

of Service (“MLS”) as in the concession, whereby 99.81% of the total of 77,754 analyses

had complied with MOH’s NSDWQ. This result is an improvement from 2011 when

99.46% complied with MOH’s NSDWQ.

MOH Compliance Based On QAP Limit For 2011-2012

Nos. Nos. 2012 2011

Of Tests Of Violations Compliance (%) Compliance (%)

77,754 147 99.81 99.46

Table D: Summary of the 2011 and 2012 In-House Water Quality Assessment for all parameters

Immediate Response to Consumer Complaints

The objective is to achieve a quick initial response time for 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 2012,

compliance with this half-hour response time was 93.90%.

The scope of work covers initial investigation involving in-situ testing of the physical

parameters and the taking of necessary remedial actions or providing advice to the

consumers. A Water Quality Consumer Complaint’s Report has to be submitted too. 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 reason for not achieving a 100% compliance rate for the immediate response

to consumers was that some complaints were received at night. All complaints received

are recorded and investigated to enable improvements to take place. The most signifi cant

area of consumer complaint is on the occasions when long-term suspended solids or iron

deposits arising from corrosion in water mains caused the water to be discoloured.

The total number of consumer complaints received in 2012 was 2,278 of which 20.98% were

due to internal plumbing problems. Table E shows the number of water quality complaints in

2012 and the half-hour response time achievement.

Delivering Quality

119

World Water Day 2012


Item Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

No. of 232 147 112 260 183 143 106 123 124 127 133 110

complaints

(excluding

complaints

due to

Internal

Plumbing)

1/2 Hour 94.89 99.49 98.08 80.55 91.77 92.35 92.31 98.03 94.27 96.45 97.48 98.62

Response

Time (%)

Total 274 195 156 293 231 196 151 152 157 169 159 145

Nos. of

Complaints

Table E: Water Quality Complaints 2012

Graph On Nos. of Complaints From 2007-2012

Jan Feb Mar Apr May Jun 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

• 2012 274 195 156 293 231 196 151 152 157 169 159 145

Graph A: Trend of Consumer Complaints from January 2007 – December 2012

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 the “Preserving Our Environment”


Delivering Quality

120


100

200

300

400

500

600

700


Research and Development (“R&D”) Centre

PUNCAK RESEARCH CENTRE (PRC)

In 2012, the PNHB Group continued to improve the quality and reliability of water supply by

the Group and look to collaborate with local and foreign R&D institutions and universities with

the objectives of advancing and developing the competencies and expertise in the fi eld of

water, wastewater and environment.

Through research and development, 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 continues to actively

brainstorm and develop on ideas to further improve water operational effi ciency and cost

control at the WTPs.

DHI-PRC Collaboration

PRC has entered into a Collaboration Agreement with DHI Denmark (“DHI”), a global leader

in the fi eld of water treatment on 15 March 2007. Under the collaboration with DHI, our

R&D team has completed the study entitled “Optimization of Coagulation Process”. The

studies revealed that Aluminium Chlorohydrate (ACH) contribute the best performance with

highest color removal and lower aluminium residual. ACH was proven to be able to yield very

minimum aluminium residuals at a rate of 65 times better than current Aluminium Sulphate

(Alum). The fi ndings have eventually led to the ACH plant trials at Sg Sireh WTP, which was

piloted in February 2013.

On 15 March 2013, Puncak Research and DHI have mutually agreed to extend the

Collaboration Agreement for a further period of one (1) year, commencing 15 March 2013

until 14 March 2014.

Other Research Activities/Initiatives

R&D Centre has also embarked on the following research activities:-

(1) Composting the WTP residue into fertilizer. The residue has been transformed loose and

friable dry soil with reduced content of Aluminium Oxide (Al2O3), to a level similiar to normal

soil. R&D is looking to collaborate with the right partner to progress this development

in future.

(2) R&D Centre is working with a cement manufacturer to explore if the residue from our

WTPs can be utilised as fi ller in the cement industry. Based on the results obtained via

accredited laboratory testing as well as from the cement manufacturer’s internal testing,

the residue’s main composition, consist of aluminium oxide, iron oxide and silica oxide

when added together have fulfi lled the acceptance criteria for safe disposal through

resource recovery by co-processing in a cement klin. This could be an alternative method

of residue disposal if the schedule waste classifi cation and cost are resolved.

(3) SYABAS have carried out internal research and improved on the various standard

drawings including meter stand and various valve installation which would improve the

ease of operation and maintenance of operation.

Delivering Quality

121

Observation on

precipitation test


(4) Collaboration between Puncak Niaga Holdings Berhad (“PNHB”) and the Malaysian

Armed Forces (“MAF”) on the new and highly innovative fi eld water purifi cation system

for drinking known as JERNIH.

JERNIH is one of the most practical and effi cient fi eld water purifi cation systems that is

able to treat very high turbidity water. The current design is able to provide safe drinking

water up to maximum of 3,000 litres/day for consumption of 500 people.

PNHB and MAF signed a Memorandum of Agreement on this collaboration at the recent

Langkawi International Maritime & Aerospace Exhibition (LIMA) 2013 on 28 March 2013.

The collaboration is in the process of discussion on perfecting the JERNIH design,

commercialising JERNIH to potential clients domestically and internationally and running

some high impact corporate social responsibility projects in less developed countries.

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 to deal and offer our assistance with issues or problems that are related to raw

water and treated water and/or our services, both within or beyond our control. With our

years of experience in the industry, we have expeditiously solved many crises over the years.

PNSB initiated a Crisis Management Plan (“CMP”) and a 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 two 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.

The CMP was activated two times in 2012 due to the following incidents:-

Date Incident

7 March 2012 – 13 March 2012 Ampang Intake WTP shutdown due to fl ooding.

13 April 2012 – 4 May 2012 SSP2 WTP operation disruption due to fl ashover at

Transformer No. 2 at Intake Plant.

SYABAS Emergency Response Plan (“ERP”)

The ERP is an action plan developed by SYABAS in 2005 as a management action plan

to deal with a crisis of emergency that could affect the water supply to the consumer.

Development of an ERP is also in line with the provisions of SYABAS Concession Agreement.

The ERP is constantly updated to ensure that it can be applied in accordance with the

conditions/circumstances.

SYABAS has ten districts, which has an ERP Secretariat and Crisis Operations Room (COC-D)

that manage ERP activation in the respective district. In 2012, a total of 23 ERP activations

were made, that consists of 20 Code Green ERP, 2 Code Yellow ERP and 1 Code Red ERP.

Delivering Quality

122

Pipe repair works by

SYABAS’ contractors


Total ERP Vs Month

Note: Code Red ERP signifi es high or critical level of emergency

Code Yellow ERP signifi es medium level of emergency

Code Green ERP signifi es mild or operational level of emergency

Two Code Yellow ERP and one Code Red ERP were activated in 2012 due to the following

incidents:-

Date ERP Code Incident

8 March 2012 – 13 March 2012 Yellow Code Ampang Intake WTP Shutdown

due to fl ash fl ood.

8 March 2012 – 12 March 2012 Yellow Code Sg Langat WTP Shutdown

due to high NTU in raw water source.

13 April 2012 – 30 April 2012 Red Code SSP2 WTP Operation Shutdown

due to fl ashover at Transformer

No. 2 at Intake Plant.

To ensure smooth management assistance, SYABAS have intensifi ed efforts to conduct

training to ERP staff, upgrading PUSPEL telephony system, upgrade consumers’ contact

information and procurement of additional facilities. To ensure a smooth activation of ERP,

the formation of certain committees were also established as a mechanism to facilitate

ERP implementation namely Crisis Executive Committee, Crisis Management Group, Crisis

Operation Centre and Crisis Recovery Group.

Delivering Quality

123

Total ERP (Cases)


5

4

3

2

1

0

Red Code Yellow Code Green Code

OIL & GAS

SAVING TIPS

Anticipate stops and

brake less

By securing the good of others, we also secure our own


Valuing Our People

The Group continues to provide a workplace where its people have the opportunity to

grow, to mature and to nurture their skills. The Group focuses on creating the right culture

and working environment, and providing development and career opportunities with fair

processes to all employees. As part of our continuous commitment in delivering value to

our stakeholders, various internal best practices have been set to build on the strength of

our workforce. We promote team leadership fostering synergies and sharing commitment to

achieve organisation goal and 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 operations is always a priority.

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 a conducive environment.

In 2012, the Group arranged for the employees to undergo Motivational Transformation

Programme with the theme “Teaming for Quantum Growth”. The Programme focused on

all employees to unite in strength as one team to achieve the Company’s vision, mission

and goal and, on fostering teamwork that will enable us to continue to grow and prosper by

means of mutual effort and team leadership to sustain a successful business. This is aptly

embodied by the theme for our Annual Report 2012, “Strength In Unity”.

EMPLOYEE PROFILE

Puncak Niaga Holdings Berhad (“PNHB”) Group

PNHB Group employed a total of 4,680 personnel as at 31 December 2012, locally and

overseas. This represented an increase of approximately 3.1% compared to the 4,540

personnel employed in 2011. We continue to promote diversity in the workplace. Any forms

of discrimination, including discrimination based on age, gender, ethnicity or background,

are not tolerated.

The breakdown of the Group’s employees by ethnic group, excluding employees in the

People’s Republic of China (“PRC”) is 92.0% Malays, 2.1% Chinese, 4.9% Indians and 1.0%

others.

As shown in Table A, the majority of the Group’s workforce (excluding employees in the PRC)

consists of non-executive personnel (70.1%) with executives at 23.4% 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 (3,394 Men: 1,120 Women).

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

PNSB 99 282 724 862 243 1,005 49 30 21 1,105

SYABAS 155 674 2,422 2,428 823 3,011 37 187 16 3,251

GOM

Resources 35 99 20 101 53 133 9 3 9 154

POG 4 0 0 3 1 4 0 0 0 4

PRC 16 9 141 100 66 0 166 0 0 166

Note:• PNSB denotes Puncak Niaga (M) Sdn Bhd• SYABAS denotes Syarikat Bekalan Air Selangor Sdn Bhd• GOM Resources denotes GOM Resources 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

PEKA’s event: Visit to

Johor Premium Outlet

126

In 2012, the Group arranged for

the employees to undergo

Motivational Transformation

Programme with the theme “Teaming for Quantum Growth”.

The Programmes focused on all

employees to unite in strength as one

team to achieve the Company’s vision,

mission and goal


Valuing Our People

Puncak Niaga (M) Sdn Bhd (“PNSB”)

PNSB is a private limited company in PNHB Group of Companies. PNSB handles the

operations, maintenance, management, construction, rehabilitation and refurbishment of

water treatment facilities. PNSB had 1,105 employees as at the end of 2012. Out of the total

number, 862 employees (78%) were male and 243 (22%) were female.

The employment by gender ratio (men to women) is 3.5:1 due to the nature of PNSB’s

operations, which involve a lot of manual labour.

PNSB Workforce Breakdown by Ethnic Group (refer to Chart 1)

PNSB Workforce Breakdown by Category (refer to Chart 2)

More than half (65.52%) of PNSB’s employees were non-executives while 25.52% were

executives and the remaining 8.96% were at the Management level.

PNSB Workforce Breakdown by Age Group

Employee Turnover

The turnover rate in 2012 for PNSB was 9.5% as compared with 7.14% in 2011. 72.4% of

PNSB’s resigned employees are permanent employees, with the remaining 27.6% resigned

employees being contract employees. The tables below present PNSB’s employees turnover

for 2012.

PNSB Employee Turnover by Category

Category Turnover (%)

Management 1.5

Executive 3.8

Non-Executive 4.2

Total 9.5%

PNSB Employee Turnover by Gender

Gender Turnover (%)

Male 3.5

Female 6.0

Total 9.5%

Total

Employees

(“E”)

1,105

Total

Employees

(“E”)

1,105

Chart 1

PNSB Workforce Breakdown by Ethnic Group

Chart 2

PNSB Workforce Breakdown by Category

Malay (1,005 E)

Chinese (49 E)

Indian (30 E)

Others (21 E)

Management (99 E)

Executive (282 E)

Non-Executive (724 E)

90.95%

65.52%

4.44%

2.71%

25.52%

1.90%

8.96%

127

<30 30-39 40-49 >49

363400

350

300

250

200

150

100

50

0

268

121

353

Age Group

No

. o

f E

mp

loye

es


Valuing Our People

128PNSB Employee Turnover by Ethnic Group

Ethnic Group Turnover (%)

Malay 7.69

Chinese 1.45

Indian 0.09

Others 0.27

Total 9.5%

PNSB Employee Turnover by Age Group

Age Group Turnover (%)

<30 4.34

30-39 3.08

40-49 1.36

>49 0.72

Total 9.5%

Note: Turnover rates are derived from staff terminations, retirements and expiry of contracts.


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 3,251 employees as at 31 December 2012. Out of the

total number, 2,428 employees (74.7%) were male and 823 (25.3%) were female.

The employment by gender ratio (men to women) is 3:1 due to the nature of SYABAS’

operations, which involve a lot of manual labour.

SYABAS Workforce Breakdown by Ethnic Group (refer to Chart 3)

SYABAS Workforce Breakdown by Category (refer to Chart 4)

More than half (74.50%) of SYABAS’ employees were non-executives while 20.73% were

executives and the remaining 4.77% were at the Management level.

SYABAS Workforce Breakdown by Age Group

<30 30-39 40-49 >49

1,2341,400

1,200

1,000

800

600

400

200

0

378 365

1,274

Age Group

No

. o

f E

mp

loye

es

Total

Employees

(“E”)

3,251

Total

Employees

(“E”)

3,251

Chart 3

SYABAS Workforce Breakdown by Ethnic Group

Chart 4

SYABAS Workforce Breakdown by Category

Malay (3,011 E)

Chinese (37 E)

Indian (187 E)

Others (16 E)

Management (155 E)

Executive (674 E)

Non-Executive (2,422 E)

92.62%

74.50%

1.14%

5.75%

20.73%

0.49%

4.77%


Employee Turnover

The turnover rate in 2012 for SYABAS was 9.63% as compared with 6.03% in 2011.

97.51% of SYABAS’ resigned employees are permanent employees, with the remaining

2.49% resigned employees being contract employees. The tables below present SYABAS’

employees turnover for 2012.

SYABAS Employee Turnover by Category


Management 0.68

Executive 3.11

Non-Executive 5.84

Total 9.63%

SYABAS Employee Turnover by Gender

Gender Turnover (%)

Male 6.92

Female 2.71

Total 9.63%

SYABAS Employee Turnover by Ethnic Group


Malay 8.67

Chinese 0.22

Indian 0.71

Others 0.03

Total 9.63%

SYABAS Employee Turnover by Age Group


<30 4

30-39 2.86

40-49 0.74

>49 2.03

Total 9.63%



POG is a private limited company in the PNHB Group of Companies, which is currently

involved in the offshore logistics service provider and marine management. POG had a total

of four employees as at 31 December 2012. Out of the total number, three employees (75%)

were male and one (25%) was female.

The employment by gender ratio (men to women) is 3:1.

As at 31 December 2012, POG’s employees (100%) were of Malay ethnic group and were at

the Management level.

Valuing Our People

129

GOM Resources & KPOC

launching the HSE Campaign

on board DLB264


POG Workforce Breakdown by Age Group

Employee Turnover

The turnover rate in 2012 for POG was 91.67%. The reason for the high turnover was because

44 employees were transferred to GOM Resources in 2012 in view of the high volume of

works being undertaken by GOM Resources, the new Oil & Gas unit of the Group. 87.5% of

POG’s resigned employees are permanent employees, with the remaining 12.5% resigned

employees being contract employees. The tables below present POG’s employee turnover

for 2012.

POG Employee Turnover by Category


Management 29.17

Executive 50.00

Non-Executive 12.50

Total 91.67%

POG Employee Turnover by Gender

Gender Turnover (%)

Male 60.42

Female 31.25

Total 91.67%

POG Employee Turnover by Ethnic Group


Malay 79.17

Chinese 8.33

Indian 4.17

Others 0

Total 91.67%

POG Employee Turnover by Age Group


>30 22.92

30-39 35.42

40-49 20.83

>49 12.50

Total 91.67%


Valuing Our People

130

30-39 40-49 >49

1

2

1

0

1

2

Age GroupN

o. o

f E

mp

loye

es

GOM Resources Sdn Bhd

hosted a Gawai Luncheon

for its clients


GOM RESOURCES SDN BHD (“GOM RESOURCES”)

GOM Resources is a private limited company in the POG Group of Companies, which is

involved as the offshore installation contractor for intergrated transportation & installation of

offshore facilities. GOM Resources had a total of 154 employees as at 31 December 2012.

Out of the total number, 101 employees (65.6%) were male and 53 (34.4%) were female.

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

GOM Resources Workforce Breakdown by Ethnic Group (refer to Chart 5)

GOM Resources Workforce Breakdown by Category (refer to Chart 6)

More than half (64.29%) of GOM Resources’ employees were executives while 12.99% were

non-executives and the remaining 22.72% were at the Management level.

GOM Resources Workforce Breakdown by Age Group

Employee Turnover

The turnover rate in 2012 for GOM Resources was 15.59% as compared with 16.88% in

2011. 78.5% of GOM Resources’ resigned employees are permanent employees, with the

remaining 21.43% resigned employees being contract employees. The tables below present

GOM Resources’ employee turnover for 2012.

GOM Resources Employee Turnover by Category


Management 3.90

Executive 9.74

Non-Executive 1.95

Total 15.59

GOM Resources Employee Turnover by Gender

Gender Turnover (%)

Male 9.09Female 6.50

Total 15.59

Valuing Our People

131

<30 30-39 40-49 >49

40

70

60

50

40

30

20

10

0

30

21

63

Age Group

No

. o

f E

mp

loye

es

Total

Employees

(“E”)

154

Total

Employees

(“E”)

154

Chart 5

GOM Resources Workforce Breakdown by Ethnic Group

Chart 6

GOM Resources Workforce Breakdown by Category

Malay (133 E)

Chinese (9 E)

Indian (3 E)

Others (9 E)

Management (35 E)

Executive (99 E)


86.36%

64.29%

5.84%

1.96%

12.99%

5.84%

22.72%


GOM Resources Employee Turnover by Ethnic Group


Malay 12.99Chinese 2.60Indian 0Others 0

Total 15.59

GOM Resources Employee Turnover by Age Group


<30 4.5530-39 7.1440-49 2.60>49 1.30

Total 15.59


THE PEOPLE’S REPUBLIC OF CHINA (“PRC”) OPERATIONS

The Group’s operations in the PRC employed 166 employees as at 31 December 2012, all of whom were hired on a contract basis. Out of the total number, 100 employees (60.2%) were male and 66 were female (39.8%).

The employment by gender ratio (men to women) is 1.5:1.

As at 31 December 2012, 100% of the PRC workforce are Chinese.

PRC Operations Workforce Breakdown by Category (refer to Chart 7)

More than half (84.94%) of PRC Operations’ employees were non-executives while 5.42% were executives and the remaining 9.64% were at the Management level.

PRC Operations Workforce Breakdown by Age Group

Valuing Our People

132

<30 30-39 40-49 >49

39

70

60

50

40

30

20

10

0

62

16

49

Age Group

No

. o

f E

mp

loye

es

Total

Employees

(“E”)

166

Chart 7

PRC Operations Workforce Breakdown by Category

Management (16 E)

Executive (9 E)


84.94%

5.42%9.64%


Employee Turnover

The turnover rate in 2012 for PRC Operations was 8.2% as compared with 1.4% in 2011.

The tables below present PRC Operations’ employees turnover for 2012.

PRC Operations Employee Turnover by Category


Management 0Executive 0.59Non-Executive 7.63

Total 8.2

PRC Operations Employee Turnover by Gender

Gender Turnover (%)

Male 5.2Female 3.0

Total 8.2

PRC Operations Employee Turnover by Ethnic Group


Malay 0Chinese 8.2Indian 0Others 0

Total 8.2

PRC Operations Employee Turnover by Age Group


<30 1.730-39 040-49 0>49 6.5

Total 8.2


BEST PRACTICES AT THE WORKPLACE

PNHB Group Employee Benefi ts (excluding PRC Operations)

The Group offers a comprehensive employee benefi ts package which includes competitive

salary packages with insurance coverage for the staff and the immediate families, housing

and car loan interest subsidies, interest free education assistance loan scheme as well

as Tabung Kebajikan, computers, personal loans, medical benefi ts that cover outpatient

treatment, hospitalisation and surgical, dental and maternity benefi t for up to fi ve 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

133

PEKA’s Bubur Lambuk event

with media and celebrities

SYABAS’ Bubur Lambuk event


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 packages from time to time

to ensure that the Group is at least at par with the prevailing market in terms of proposed

remuneration for our 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 taken care of at all times and that they are continuously appreciated

and rewarded for their hard work.

Effective 1 January 2013, the whole Group are on a Five Day Work Week for non-operation

staff as part of its ongoing efforts to enhance employees’ engagement through a healthy

work-life balance, to improve employee-employer relationships, and to enhance staff benefi ts

to enable the Group to be recognised as an organisation of priority choice.

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, they also receive benefi ts such as overtime pay, leave in lieu, a

welfare allowance, pension fund contributions, unemployment 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 a hospitalisation, medical and personal insurance plan. 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

PNHB Group recognises that our employees are core assets of the Group and strongly

believes in rewarding our employees for their commitment, dedication and hard work.

To recognise good work and to motivate productivity, employees with good and excellent

performances are awarded bonuses, salary increments, position upgrades and promotions.

In appreciation of the employees’ contributions, in 2012 SYABAS held a “Majlis Penyerahan

Pampasan Kepada Kakitangan Serta Waris Keluarga Kakitangan SYABAS” for existing

employees.

At PNSB, “Majlis Penyerahan Insuran Pampasan Kepada Ahli Keluarga Bekas Kakitangan

Yang Telah Meninggal Dunia” were held to show PNSB’s appreciation to the demised staff.

In addition, PNSB provides fi nancial assistance to the family of the demised staff for a year

for those in dire need of fi nancial assistance in view of non-working spouses.

Valuing Our People

134

PNHB Group

recognises that

our employees

are core assets

of the Group and

strongly believes

in rewarding our

employees for

their commitment,

dedication and

hard work


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 groom and retain the best employees as well as providing them with career opportunities/

career path in the Group.

Performance Appraisal Exercises

With the exception of PRC Operations, the Group conduct performance appraisal exercises

for all confi rmed employees twice a year.

At PNSB, 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 recommendations of the review are

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,

or the appropriate actions to be taken against those employees whose performances are

not up to the Company’s performance requirements. Non-performing employees undergo

Performance Improvement Programme (“PIP”) with counselling by the Head of Division and

the Counselling Committee to improve their performances. Review of their performance is

conducted for six months on a monthly basis.

At SYABAS, this involves a discussion session on performance which is called the ‘Challenge

Session’. 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.

Our PRC Operations conduct performance appraisal exercises once a year.

Training

PNHB Group is committed to equip 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, the Group sends its employees

for external training, locally and overseas.

Details of the number of training sessions (in-house and external) conducted for PNSB,

SYABAS, POG and GOM Resources in 2011 and 2012 are set out in Table B.

POG & GOM

PNSB SYABAS Resources Total

Category 2011 2012 2011 2012 2011 2012 2011 2012

Management (including Directors) 102 100 157 164 N/A 30 259 294

Executive 265 283 617 622 N/A 102 882 1,007

Non-Executive 650 533 2,318 2,305 N/A 0 2,968 2,838

Total Personnel 1,017 916 3,092 3,091 N/A 132 4,109 4,139Trained (92.2%) (82.9%) (97.6%) (95.0%) (83.0%) (96.4%) (91.7%)

Note: The majority of training was provided to non-executive employees.

Table B: Conduct of 2012 Training Sessions (in-house and external)

Valuing Our People

135

SYABAS Jom Senamrobik

November 2012

Senamrobik at

SYABAS Petaling Jaya

District offi ce


PNSB’s and SYABAS’ number of training sessions decreased in 2012 as compared to 2011.

PNSB trained 82.9% of its employees in 2012 while SYABAS trained 95% of its employees

in 2012. 4,139 employees of the Group attended training in 2012 as shown in Table B on

page 135 of this Annual Report.

Our training was conducted in fi ve broad categories namely, personal and leadership

development, functional/knowledge, positive mindset, supplementary knowledge, and

external courses/public programme (local/overseas) (“Five Broad Categories”). Trainings

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 and at GOM Resources, the IP was for a duration of one day only.

The breakdown of PNSB’s, SYABAS’, POG’s and GOM Resources’ training in the Five Broad

Categories for 2012 is as set out in Table C.

PNSB SYABAS POG & GOM Resources

No. of No. of No. of No. of No. of No. of

Category Programmes Participants Programmes Participants Programmes Participants

Personal &

Leadership

Development 48 765 3 148 0 0

Functional

Knowledge 220 1,693 100 4,685 1 9

Positive Mindset – – 13 684 0 0

Supplementary

Knowledge 25 418 468 12,185 2 29

External Courses /

Public Programme

(Local/ Overseas) 109 204 75 153 3 94

Total 402 3,080 659 17,855 6 132

Note: Employees may attend more than one training session.

Table C: Breakdown of PNSB’s, SYABAS’, POG’s and GOM Resources’ trainings held in

Five Broad Categories for 2012

PNSB spent RM686,457.31 in 2012 on training, 14.1% reduction from the 2011 training cost. SYABAS spent RM886,326.60 in 2012 on training, 38.3% up from the 2011 training cost. POG and GOM Resources spent RM1,123,092.54 in 2012 on training. These are shown in Table D.

Our PRC Operations spent RM6,169.00 on training in 2012.

POG & GOM

PNSB (RM) SYABAS (RM) Resources (RM)

Category 2011 2012 2011 2012 2011 2012

Internal 250,604.32 474,835.30 271,278.31 561,739.25 N/A 0

External 436,086.66 211,622.01 369,580.33 324,587.35 N/A 1,123,092.54

Total 798,952.98 686,457.31 640,858.64 886,326.60 N/A 1,123,092.54

Note: N/A - Not Applicable

Table D: Cost of Training for PNSB, SYABAS, POG and GOM Resources for 2011 and 2012

PEKA Walk Hunt 2012

Valuing Our People

136

“Teaming for Quantum Growth”

Teambuilding Programme


Listening to Our Employees

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.

We believe that listening to and working in tandem with our employees is vital for the growth

of our business and our organisation in building a shared vision of the organisation within

the competitive environment. We encourage two-way communication for all levels at the

workplace vis-à-vis sharing information and knowledge.

In 2012, the Group sent all levels of employees of the Group for Motivational Transformation

Programme with the theme “Teaming for Quantum Growth” to promote team leadership and

to groom the employees to inculcate a shared vision, mission and goal.

Collective Bargaining Agreement

In 2012, there were two negotiation sessions held between SYABAS and the Kesatuan

Pekerja-pekerja PUAS Berhad on the third collective agreement. The agreement was fi nalised

in April 2012 and signed in September 2012.

Employees at our PRC operations are allowed to form a union, in accordance with PRC

Labour Laws. However, as at 31 December 2012, 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 and Policies 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

• Water Quality Policy

• Gender Diversity Policy

• Whistle Blowing Policy

• Corporate Social Responsibility Policy

• Code of Conduct – Board of Directors

• Code of Conduct - Employees

• No Smoking Policy

• Board Charter“Operasi Cegah” in Gombak

Valuing Our People

137


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 2012.

Caring for Staff

The Group recognises 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 2012, PEKA organised various events that included recreational activities, sporting events

and cultural and religious programmes. They were:

1. Recreational Activities

• Photo Jamboree on 3 March 2012

• Fishing Competition on 27 May 2012

• Walk Hunt and Mini Carnival on 10 November 2012

• Visit to Johor Premium Outlets on 1 December 2012

2. Sporting Events

• Kuantan Century Ride on 25 March 2012

• Bowling Competition President Cup 2012 on 14 April 2012

• Seminar/talk on Indian Traditional Exercise (Yoga) & Ayurvedic Treatment on

26 May 2012

• Ping Pong Competition on 16 June 2012

• Futsal Competition on 30 June 2012

Valuing Our People

138

PEKA’s Fishing

Competition 2012

The Group

recognises the

importance of

providing staff with

an adequate

work-life balance


• Bowling Competition 3 Penjuru on 14 July 2012

• Ipoh Century Ride on 15 July 2012

• Pertandingan Bola Sepak 9 Sebelah on 20 October 2012

• Sepak Takraw Championship on 17 November 2012

• Netball Championship on 8 December 2012

• Volleyball Championship on 29 December 2012

3. Cultural & Religious Programmes

• Solat Sunat Hajat & Tazkirah every Thursday of the 2nd and 4th week of the month

• Maulidur Rasul celebration on 5 February 2012

• Program Bubur Lambuk with Media and Celebrities on 3 August 2012

• Fiesta Aidilfi tri Puncak Niaga at Sg Batu WTP on 8 September 2012, SSP2 WTP on

13 September 2012 and Sg Langat WTP on 15 September 2012

• Majlis Ibadah Qurban on 27 October 2012

• Majlis Berkhatan on 24 November 2012

• Seminars on Religion/Tazkirah at PNSB’s/SYABAS’ offi ce and WTPs

4. Other Events

• Seminar on “Alerting parents on child behaviour towards crime” and Self-grooming

Class “Be Beauty” on 10 March 2012

• PEKA’s 6th Annual General Meeting on 31 March 2012

• Visit to Rumah Jagaan & Rawatan Orang Tua Al-Ikhlas, Puchong, Selangor on

14 April 2012

• Program Kursus Pengurusan Jenazah with Jabatan Agama Islam Selangor (“JAIS”)

on 28 April 2012

• PEKA members’ children visit to NSTP & Karangkraf at Shah Alam on 5 June 2012

• Majlis Berbuka Puasa bersama Anak Yatim on 3 August 2012

• Program Gotong Royong at an orphanage home at Bandar Tasek Puteri, Rawang,

Selangor on 13 August 2012

• Visit to demised employee’s family and employees who suffered from sickness etc.

• “Program Gotong-Royong” to clean up WTP and staff quarters

Our Executive Directors and Senior Management actively participated in these programmes

to give support and encouragement to the employees.

ENSURING HEALTH AND SAFETY

Everyone has the right to work in a healthy and safe environment. As a responsible and

caring employer, we always ensure that our employees are treated well and fairly in a healthy,

safe environment. We also ensure a safe environment in our premise to our visitors and

contractors. The Group takes responsibility for preventing any work-related injuries or

illnesses. The Group had in 2012 demonstrated to the best of its ability, its commitment to

improving health and safety at our workplace.

PNSB

Health, Safety and Environment

In September 2011, PNSB was awarded the Occupational Health And Safety Assessment

Series (“OHSAS”) 18001:2007 certifi cations by the Bureau “Det Norske Veritaas” (DNV) for

27 Water Treatment Plants (“WTP”) and three Regional Offi ces. This OHSAS 18001:2007

Award attests to PNSB’s compliance with International Occupational Health & Safety (“OHS”)

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

the workplace.

Valuing Our People

139

Volleyball Championship on

29 December 2012

Netball Championship 2012


PNSB established an OHS management system prior to the prestigious accreditation, with

the aim of eliminating or minimising risk to employees, visitors, contractors and other parties

who are exposed to OHS risks within its operations. Amidst its rapid expansion over the years,

PNSB has been investing in establishing, maintaining and improving OHS at its operations.

This coveted industry certifi cation is evidence of our commitment to OHS and is clear proof of

the Company’s high standards of safety awareness, which can be traced back to the fi rst day

of its operations. The certifi cation has also motivated us to further strengthen our initiatives

towards effi ciently meeting our health and safety obligations and is a rewarding recognition

of our dedicated efforts to achieve results that are favourable to all our stakeholders,

shareholders, employees and customers.

PNSB’s Occupational Health and Safety Management Performance

PNSB provides the necessary health and safety protections for 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 OHS at the

workplace. Since 2004, PNSB has a Corporate Health & Safety Committee, to ensure full

compliances with OHS requirements in the workplace.

For proper implementation of OHS procedures, PNSB’s employees and permanent

contractors must be adequately trained in three categories namely, Statutory Requirements,

Competency Training and Awareness Training. All 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 2012, Health, Safety and Environment (“HSE”) induction training, and 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.

In the process, matters such as adequate signage as well as proper storage of chemicals

and usage of personal protective equipment at the workplace are also reviewed annually.

In 2012, PNSB implemented the following OHS programmes:-

1. Fire Safety Training for ERP Team

Four sessions of Fire Safety Training were held from March to December 2012 at the

Akademi Bomba & Penyelamat Kuala Kubu Baru. The training was attended by 120

employees 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. The knowledge of fi re safety is useful not only at the workplace but at home

and other premises too.

Hand & Finger Campaign

Valuing Our People

140


2. Hazard Identifi cation and Risk Assessment

The objectives are:-

• To identify hazards associated with the workplace facilities and the activities of

all personnel (including subcontractors and visitors), as well as to evaluate and

categorise any identifi ed risks.

• To defi ne, via a Risk Management System, the objectives and targets of the

management programme, with the aim of preventing and controlling risks.

• To check, monitor and review the system at the managerial level to ensure the

effectiveness of the management system.

3. Emergency Preparedness and Response Plan

PNSB’s Emergency Preparedness and Response Plan has been continuously enforced

and improved and in 2012, 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 and three minor mock drills at each of the WTPs and dams.

• Regular drills conducted both internally and with the collaboration of external parties

such as chemical suppliers.

4. 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 at or for

PNSB.

5. Surveillance Audit / Inspections

A corporate audit of the health and safety management system was performed in 2012

by the OHSAS 18001 Internal Auditors for various Regions and Headquarters to ensure

compliance with OHS requirements and to enhance the health management system.

6. Management Review

Top management is responsible for reviewing OHSAS annually at plant to ensure the

continuing, suitability, adequacy and effectiveness of the system. The review includes

assessing Opportunity for Improvements (OFI), and the needs of the OHS management

system, the status of the OHS policy and objectives, OHS resources and other elements

of the OHS management system. Records regarding management review decisions

and actions prior to possible changes are retained and made available for future

communication and consultation.

We are pleased to announce that PNSB is in full compliance with the statutory requirements

regulated by the Department of Occupational Safety and Health (“DOSH”).

In 2012, PNSB held 18 health and safety trainings, briefi ngs and talks such as Chlorine

Handling Training, Training and Briefi ng for LEV/GEV & Chemical Exposure Monitoring, ERP

Training, Malaysian Society of Occupational Safety & Health (“MSOSH”) Audit – HSE Briefi ng,

Safety Talk, Fire Prevention Training, HSE – SOP Briefi ng Workshop and Forklift Defensive

Driving Training.

Valuing Our People

141

Health and Safety training


Lost Time Injury (LTI)

No LTIs occurred in 2012, except for two cases of Medical Treatment Injury (MTI) which

occurred at the Central and Northern Region.

We are proud to announce that since its commission in July 1998, the SSP2 WTP has no

industrial accidents and the 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, LTIs have included the man hours of contractors and suppliers after they have

undergone extensive health and safety training and familiarisation at SSP2 WTP.

The LTIs recorded in 2012 were as follows:-

Accidents/Incidents Occurred in 2012

Wangsa

SSP2 Maju Sg Sireh Central Southern Northern PNSB

Type of Incident WTP WTP WTP Region Region Region HQ

LTI 0 0 0 0 0 0 0

Medical Treatment 0 0 0 1 0 1 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 1 0 1 0

Table E: Breakdown of LTIs in 2012

The total man hours with Zero LTIs were as follows :

WTP Million Man Hours with Zero LTI

SSP2 WTP 4,475,172.27

(SSP2 WTP has had zero LTI since its

commissioning on 17 July 1998)

Wangsa Maju WTP 1,142,165.22

(Wangsa Maju WTP has had zero LTI since

its commissioning on 18 July 1998)

Sg Sireh WTP 374,932.67

Central Region 3,453,194.62

Southern Region 2,686,258.99

Northern Region 3,694,666.52

PNSB HQ 4,423,615.00

Valuing Our People

142

Majlis Berbuka Puasa

with Anak Yatim 2012

Majlis Berkhatan PEKA 2012


ACHIEVEMENTS

1. Awards

(a) Malaysian Society of Occupational Safety & Health (MSOSH) Award:

At the MSOSH Excellence Award 2012 held on 6 July 2012, eight of PNSB’s WTPs

won the following awards:-

WTP Award

SSP2 WTP Gold Class I

Wangsa Maju WTP Gold Class I

Bukit Tampoi WTP Gold Class I

Sg Batu WTP Gold Class I

Kalumpang WTP Gold Class I

Sg Selisek WTP Gold Class I

Sg Dusun WTP Gold Class II

Ampang Intake WTP Gold Class II

(b) National Council of Occupational Safety & Health (NCOSH) Award:

NCOSH honoured the Sg Langat WTP with a Gold Trophy Award under the water

utility sector on 30 October 2012.

(c) Laboratory Excellence Award By Institute Kimia Malaysia (“IKM”)

PNSB’s Central Laboratory’s/SSP2 WTP Laboratory’s high standards for training,

health and safety earned them the Institut Kimia Malaysia (“IKM”) Laboratory

Excellence Award 2012 on 30 November 2012.

CERTIFICATIONS

ISO 9001:2008 CERTIFICATION FOR ALL WTPS

In 2012, additional nine WTPs had been certifi ed with ISO 9001:2008 Quality Management

System (“QMS”). As at August 2012, all Regional Offi ces and 26 WTPs have obtained the

internationally recognised standard ISO 9001:2008 QMS certifi cation. The ISO 9001:2008

certifi cation refl ects PNSB’s commitment towards Quality Management in managing the

WTPs.

SYABAS

Health, Safety And Environment

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.

Puncak’s Cyclist Team at

Kuantan Century Ride

Valuing Our People

143

All Regional Offi ces

and 26 WTPs

have obtained

the internationally

recognised standard

ISO 9001:2008

Quality Management

System certifi cation


SYABAS endeavours to:

• Recognise HSE objectives as an integral part of its business performance.

• Continually improved its HSE management system.

• Establish and periodically review its safety and environmental objectives and targets.

• Comply with all the applicable HSE legal and other requirements to which SYABAS

subscribes.

• Provide suffi cient information, instruction, training and supervision to enhance employees’

HSE consciousness so that work is performed safely.

• Minimise waste and continually prevent pollution in all activities.

• Investigate any incidents whose fi ndings can be used to develop and improve HSE

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.

ACHIEVEMENTS

1. MSOSH OSH Award

The objective of participation is to evaluate and assess the effectiveness of the safety

management system implemented by SYABAS and to ensure that its workplaces are

safe and healthy. At the MSOSH OSH Award held on 6 July 2012, seven districts namely

Kuala Lumpur, Hulu Langat, Petaling, Gombak, Sabak Bernam, Hulu Selangor and

Kuala Selangor obtained Gold (Class I) Awards and three districts, namely Kuala Langat,

Sepang and Klang obtained Gold (Class II) Awards.

CERTIFICATION

1. OHSAS 18001:2007 (Health and Safety) Certifi cation Programme

The objective of this programme is to gain recognition of the safety management system

implemented by SYABAS. Three districts namely, Petaling, Hulu Langat and Kuala

Lumpur achieved OHSAS 18001:2007 (Health and Safety) certifi cation on 28 March

2012. The scope of the certifi cation programme is “Distribution and storage of treated

water at Petaling, Hulu Langat and Kuala Lumpur districts including their operations and

the administrative operations of the HSE Section at Headquarters”.

In 2012, SYABAS implemented the following OSH Programme:-

1. ISO 9001:2008 Certifi cation Programme

Through its Human Resource & Administration Department (“HRAD”), SYABAS achieved

ISO 9001:2008 certifi cation on 4 May 2012. The objective of this programme is to ensure

that a working system is effectively implemented and monitored by the HRAD.

2. 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 the 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 their clients’ premises.

As at 31 December 2012, 120 training sessions involving 1,916 participants had been

conducted for SYABAS’ contractors.

Valuing Our People

144

Bowling Competition

President Cup 2012

Through its

Human Resource

& Administration

Department,

SYABAS achieved

ISO 9001:2008

certifi cation on

4 May 2012


3. HSE Internal Audit

The objectives of the HSE Internal Audit:-

• To evaluate the level of implementation of HSE requirements at District offi ces.

• To propose corrective action and improvement in all cases of non-conformance.

Two HSE Internal Audits were conducted at every District Offi ce. SYABAS appointed 62

Internal Auditors to assist in the HSE Internal Audit exercise for 2012.

All Non-Conformance Requests were rectifi ed and closed within the agreed timeframe

given by the Internal Auditors.

4. National Council of Occupational Safety and Health (NCOSH) Award 2012

SYABAS participated the NCOSH Award 2012 to gauge the level of implementation on

safety and health at workplace.

5. Confi ned Space Emergency Drill Programme

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

exposure on how to operate rescue equipment.

In 2012, SYABAS conducted the Confi ned Space Emergency Drill programme involving

nine more districts and for future planning, SYABAS planned to increase the number

of competent staff in confi ned space by organising competencies programme such as

Authorised Entrants and Standby Person And Authorised Gas Testers by collaboration

with NCOSH.

6. Defensive Riding

HSE, SYABAS has initiated a programme in collaboration with MSOSH and the Social

Security Organisation (“SOCSO”) to raise awareness to the motorcyclist on 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.

In 2012, the programme was conducted in ten series at three different locations namely,

Sg Besi, Kuala Selangor and Gombak. At the end of each session, all participants were

given a test to evaluate their understanding of the course.

7. HSE Training

In 2012, SYABAS conducted 73 HSE training sessions involving 1,515 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’ seven Authorised Gas Testers

(“AGT”).

Fire Drill Programme

Valuing Our People

145

GOM Resources’

HSE Rescue Boat Training


8. Fire Drill Programme

The Fire Drill Programme was successfully conducted at all District Offi ces with

co-operation from the Fire Rescue Department to comply with Section 13 of the

Factories & Machinery Act 1970 (Safety, Health Welfare) and with the requirement listed

in OHSAS 18001:2007 Standards.

9. 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 2012, SYABAS had recorded 6,809,216 manhours without LTIs. This

statistic includes the ten District Offi ces covered by SYABAS.

The LTIs recorded in 2012 were as follows:

2012

Type of Injuries Employees Contractors

FATALITIES 0 0

LTI 0 0

Restricted Work Cases 0 0

Medical Treatment Cases 0 0

First Aid 0 0

Equipment Damage 0 4

Near Miss 0 2

Fire 0 0

Spill 0 0

Hydrocarbon Release 0 0

Vehicle Accident 0 0

Others 0 0

Hazards Report 0 109

Manhours 80,524 171,228

In 2012, SYABAS arranged for HSE Trainings for the employees namely, First Aider Training,

health talk and safe handling of forklift truck, HSE Knowledge Enhancement Programme

for Technician. SYABAS also conducted briefi ngs such as Law Requirements, Working at

Heights, Permit to Work, Ergonomics HIRADC and Personal Protective Equipments.



A Corporate HSE Committee was formed with two meetings held on 18 April 2012 and

9 August 2012 and had participated in monthly Petronas HSE Focal Person meeting.

In 2012, POG implemented the following OHS programmes:

• Endorsement of four HSE related policies including the HSE Protection Policy; Drug and

Alcohol Abuse Policy; the Smoking Policy; and the Stop Work for Safety Policy

• Conduct of communication sessions to address offi ce safety, basic life support and

offi ce move safety

• An Emergency Evacuation Drill was held in July 2012 at POG’s Offi ce

Blood donation campaign

2012 in Hulu Langat

Valuing Our People

146


GOM RESOURCES


GOM Resources’ Corporate HSE Committee was set up in May 2010.

In 2012, GOM Resources implemented the following OHS programmes:

• A ‘Driving Safely, Buckle Up’ campaign was held with Kebabangan Petroleum Operating

Company Sdn Bhd (“KPOC”) in Etiqa building

• Monthly management visits were made to project site

• HSE induction was conducted for all new staff

• A monthly safety campaign on hand and fi nger injury protection; housekeeping; slip trip

and fall protection; and lifting safety was held at project sites

• Monthly drills were conducted including muster drill, fi re drill, helicopter crash drill, CPR,

fi rst aid and stowaway drills

• Project pre-mobilization Induction was conducted at Batam, Labuan, Kota Kinabalu and

Kemaman

• Health Campaign at the worksite includes high blood pressure check, blood cholesterol

& glucose

• Construction Risk Assessment were conducted for all installation and project campaigns

• Monthly Safety Award presentation were made to the Safest Man of the Month, the Best

Safety Observation Report (“SOR”), the Highest SOR and the best Stop Work for Safety

Initiative

• A Petronas Carigali Sdn Bhd (“PCSB”) Project was conducted including Time off For

Safety and Touch the Heart sessions

• Staff participated in a marine forum and a quarterly contractor conference

• Urine testing for drugs and alcohol was conducted for all project crew and spread

• Monthly site safety committee meetings were held

• A Hazard Hunt and weekly safety walkabouts were held at the work site

• Monthly Spread Vessel Visit and Inspection

The LTIs recorded in 2012 were as follows:- 2012

Type of Injuries Employees Contractors

FATALITIES 0 0

LTI 0 0

Restricted Work Cases 0 0

Medical Treatment Cases 1 2

First Aid 0 0

Equipment Damage 4 –

Near Miss 5 –

Fire 0 –

Spill 0 –

Hydrocarbon Release 0 –

Vehicle Accident 0 –

Others 0 –

SOR 2,436 –

Manhours 1,661,136 –

ACHIEVEMENTS

Injury Free Recognitions

On 25 May 2012, the management and crew of the Derrick Lay Barge 264 (“DLB 264”)

were recognised by GOM Resources for their outstanding achievement in preventing

work-place injuries and for achieving 250,000 man-hours LTI-free. The management and crew

of DLB 264 were also recognised for achieving 500,000 man-hours LTI-free on 18 July 2012.

Valuing Our People

147

GOM Resources’ launching

of HSE campaign


The KPOC project received an award for achieving 1,000,000 man hours LTI-free on

15 October 2012.

GOM Resources (DLB264) was awarded for its 2,000,000 man hours LTI-free on

30 October 2012.

CERTIFICATION

1. GOM was awarded the following Integrated Management System certifi cates by

Det Norske Veritas (“DNV”):-

• ISO 9001-2008, Quality Management System

• ISO 14001-2004, Environment Management System

• OHSAS 18001-2007, Occupational Health and Safety Management System

• ISO/TS 29001-2010, Petroleum, Petrochemical and Natural Gas Industries – Sector

Specifi c Quality Management System

The objectives and benefi ts of implementing an Integrated Management System and of

ISO certifi cations are:-

• Meeting clients’ requirement for all companies servicing the Oil & Gas sector to have

ISO 9001 certifi cation.

• Increasing operational effi ciency by maintaining standard processes.

• Uplifting the Company’s image with a high standard of Quality Management System

which support GOM Resources operations.

• Increasing the Company’s marketing value by winning recognition from an international

certifi cation body.

• Reducing auditing time by integrating the four systems into one.

Security Services

On 9 June 2006, PNHB formed its Auxiliary Police with the objectives of enhancing PNHB

security services, creating and maintaining a safe working environment for staff, and

customers, and protect the Company’s asset. The PNHB Auxiliary Police project a good

image by overseeing security and performing the task of developing the trust of PNHB,

the Government and the public.

Armed with knowledge gained during Auxiliary Basic Training and the authority granted

by the Royal Malaysian Police (“PDRM”) to enforce rules and regulations, in 2012, PNHB

Auxiliary Police Agency continued its strong commitment and outstanding services to PNHB

and the Government. Besides playing a major role in PNHB, it also continuously provided

close rapport with the PDRM and local authorities in order to deal with any security issues.

With a staff strength of 305, the Auxiliary Police have been placed at PNHB’s Management

Offi ce, Store, Residency, Billing Counters, WTPs, Pump Houses, Balancing Reservoirs and all

sites belonging to PNHB. Besides carrying out standard security duties, the PNHB Auxiliary

Police performs the following tasks:-

• Acting as Cash-In-Transit (“CIT”) for cash handling activities

• Escorting vehicles of VIPs or any others as required by the Company

• Ensuring proper protocol for offi cial ceremonies organised by PNHB

• Assisting the PDRM in carrying out joint patrols and being omnipresent in specifi ed

locations

• Performing surveillance tasks as directed by the Management

• Participating in PDRM’s offi cial activities by invitation

• Carrying out police vetting of newly recruited staff to ensure that they do not have criminal

record.

Valuing Our People

148

Staff Monthly Assembly

Training Drill by

PNHB’s Auxiliary Police


In order to enhance the knowledge and effi ciency of all the PNHB Auxiliary Police staff,

external training is conducted on an ongoing basis. Shooting training is conducted every

year to ensure that the PNHB Auxiliary Police staff have good shooting skills and are able to

handle fi rearms effi ciently. In ensuring that all PNHB Auxiliary Police staff have a high level of

fi tness, they are sent for continuous fi tness training and are tested twice a year.

MANAGING OUR SUPPLIERS AND CONTRACTORS

PNSB

As at 31 December 2012, PNSB had enlisted 203 contractors as panel contractors, suppliers

or consultants. Apart from the normal criteria assessment for contractors, suppliers or

consultants, such as fi nancial and operating strength, past and current performance record,

licence or certifi cation from government and regulatory bodies, history of satisfactory

performance with other companies and registration with relevant government agencies or

bodies, we ensure the quality of the contractors’ or consultants’ services, by incorporating

clauses in our contracts specifying that work done must be of the highest quality and conform

to our standard desired practice, failing which, PNSB has the right to reject the goods or

services provided by them.

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.

SYABAS

As at 31 December 2012, there were 543 contractors, suppliers and service providers

registered with SYABAS. In addition to that, SYABAS has registered 214 panel contractors for

pipes and meters to carry out emergency works for ten SYABAS’ District Offi ces. Like PNSB,

SYABAS has a procurement policy with which contractors, suppliers and service providers

are appointed. Their appointment and selection also includes non-commercial terms, such

as sound and proven track records of their technical capability.

To ensure the quality of works and services, contractors, suppliers and service providers

have to abide by SYABAS’ following guidelines:-

• Garis Panduan Kontraktor, Pembekal dan Penyedia Perkhidmatan.

• Garis Panduan Bagi Kerja-Kerja Penyenggaraan Paip SYABAS.

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.

Auxiliary Police

Shooting Training

Valuing Our People

149

WATER FACTS

Water increases

energy levels


PreservingOur

Environment

150

The Group

continues to

operate in an

ethical and

environmentally

responsible manner

that contributes

to sustainable

development

At Puncak Niaga Holdings Berhad (“PNHB”), we recognise the need to preserve and to

protect the environment and we also recognise the impact that results from our operations.

As we operate, the environmental aspects are involved in every area of our business and

we continue, to the best of our ability, to minimise the negative effect. Our commitment to

preserve the environment is inculcated into all relevant aspects including raw and treated

water quality, water safety and public health and we continually review our operations and

processes to identify the relevant elements.

The Group continues to operate in an ethical and environmentally responsible manner

that contributes to sustainable development. Operating in this industry, we recognise our

corporate social responsibility for the environment and we endeavour to optimise the use of

natural resources. Our environmental initiatives include energy performance, and waste and

effl uents management.

Our environmental commitment is also nurtured within our workplace. This is refl ected in

the various environmental initiatives practised at our offi ces and Water Treatment Plants

(“WTPs”) including reducing paper consumption, and applying 3R (Reduce, Reuse, Recycle)

activities and energy conservation practices. We carefully monitor our carbon footprint so as

to better manage the emissions derived from the activities of the Company, its employees,

suppliers and contractors.

Syarikat Bekalan Air Selangor Sdn Bhd (“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. Through the ESS, SYABAS has developed Water Resources Surveillance

Programmes via its Sanitary Surveys, its Water Quality Index (“WQI”) Programme,

Environmental Impact Studies and investigations of raw water quality violations. These

programmes focus on preservation of and/or improvement in raw water quality, identifying

and monitoring potential pollution sources and activities, and liaising with and making

appropriate recommendations to stakeholder groups including water operators, government

departments/authorities, government agencies and civil society to mitigate incidences of

pollution, and to ensure environmental care.

PUNCAK NIAGA (M) SDN BHD (“PNSB”)

Raw Water Quality and Violation

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 27 water intakes located within six water catchment areas operated by Puncak Niaga (M)

Sdn Bhd (“PNSB”). The water quality data is compiled based on the monthly Water Quality

Reports.


PreservingOur Environment

151The 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’s”) National

Standard for Drinking Water Quality (2004) (“NSDWQ”) as categorised in Table A:-

Total Raw Water Quality

Violations Recorded

Parameter group 2011 2012

Microbiological 496 465

Group I - Physical 409 464

Group II – Inorganic matter 176 184

Group III – Heavy metals 1 1

Group IV – Pesticides 0 0

Group V - Radioactivity 3 0

Total 1,085 1,114

Table A: Breakdown of PNSB’s Violated Parameters in 2011 and 2012

Chart A illustrates the annual raw water quality violations and plant shutdown cases from

1995 until 2012.

Chart A: Annual Raw Water Quality Violations and Plant Shutdowns (1995-2012)

PNSB’s raw water quality data shows that the number of violations increased by 2.7%,

from 1,085 in 2011 to 1,114 in 2012 (Table A).

Based on PNSB’s raw water quality monitoring, it showed that most violations occurred in

Sg Langat, Sg Selangor, Sg Bernam and the Sg Tengi basins, as recorded in Table B.

Total Raw Water Quality

Total Violations Recorded

Catchment Area WTP(s) 2011 2012

Sg Langat 8 416 437

Sg Selangor 7 286 272

Sg Bernam 4 188 198

Sg Klang 6 27 42

Sg Buluh 2 20 24

Sg Tengi 2 148 141

Total 29 1,085 1,114

Table B: Breakdown of PNSB’s Violations by Catchment Area in 2011 and 2012

Total Raw Water Quality Violations Plant Shutdown Due to Raw Water Violation

No

. o

f R

aw

Wa

ter

Qu

ality

Vio

lati

on

&

Fre

qu

en

cy o

f P

lan

t S

hu

tdo

wn

Pro

du

cti

on

Lo

ss (

Ho

urs

)

1,000

1,200

1,400

1,600 7000

6000

5000

4000

3000

2000

1000

800

600

400

200

0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Production Loss (No. of Hours)

Year

273

0 8587 76 75 99 102

171 166 164123

225277 247

21 7

511 522

658

804

1,044957

909

802 810796

830

1,008

1,268

1,485

1,319

9 18

1,085 1,114

Inspection visit at

Sg Langat WTP


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”), Jabatan Alam Sekitar (“JAS”) Selangor

and Selangor Water Management Authority (Lembaga Urus Air Selangor) (“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 do not occur again.

In 2012, 15 incidences of raw water pollution occurred that resulted in WTPs shutdown.

The details of these incidences are as follows:-

No Date WTP

Shutdown

hours

Type of

pollution

Probable source

of pollution

1 24.2.2012 Sg Selisek 6.5 hrs High raw

water

ammonia

level

Suspected due to

discharges from

chicken farm

2 25.2.2012 Sg Selisek 5 hrs High raw

water

ammonia and

manganese

level

Suspected due to

discharges from

chicken farm

3 29.2.2012 Sg Selisek 5 hrs High raw

water

ammonia

level

Suspected due to

discharges from

chicken farm

4 7.3.2012 Cheras

Mile 11

9.75 hrs Diesel

spillage

Suspected from

a quarry site

5 7.3.2012 Ampang

Intake

3.75 days Landslide and

fl ood

Heavy rainfall resulting

mud and runoffs from

nearby forest reserve area

enter into treatment plant

facilities, fl occulation

tank, sedimentation

tank and fi lter tanks

6 26.4.2012 SSP2 15 hrs Abnormal

odor

(leachate

smell)

Suspected due to

leachate contamination

at Sg Air Hitam

PreservingOur

Environment

152

Water quality sampling

and testing


No Date WTP

Shutdown

hours

Type of

pollution

Probable source

of pollution

7 20.5.2012 Sg Selisek 4.75 hrs High raw water ammonia level

Suspected due to discharges from chicken farm









12 6.11.2012 Ampang Intake

4 hrs High raw water turbidity

High loading of silt from disturbed catchmentdue to heavy rainfall


2.67 hrs High raw water turbidity

High loading of silt from disturbed catchment due to heavy rainfall



High loading of silt due to heavy rainfall

15 22.11.2012 Kuala KubuBahru


High loading of silt due to heavy rainfall

Note: SYABAS also carried out ESS on the above WTP shutdown incidences investigated in 2012.

Table C: Record of Plant Shutdown Cases Due to Raw Water Pollution

in 2012 as recorded by PNSB


153

BPS Eco-Challenge

Programme on 27 June 2012


In 2012, the production capacity and quality of treated water of some of the WTPs are also

affected by raw water pollution as follows:-

No Date WTPType of Pollution

Probable Source of Pollution

Interruption of WTP Operation

1 Monthly event

Sg Langat High raw water turbidity

Discharge from sand mining area near Sg Sub, tributary of Sg Langat

Reduced production from 10 – 50% during pollution

2 During low river water level

Salak Tinggi

High raw water ammonia level

Suspected Industrial and domestic effl uent

Could cause treated water quality violations

3 25 – 27 January 2012

Cheras Mile 11

Abnormal high fl uoride level

Suspected industrial effl uent


4 November –December 2012

Sg Sireh Low pH Surface runoff from peat swamp during heavy rain


Table D: Incidences of Raw Water Pollution in 2012 affecting operation of the plants

Treated Water Quality

The Water Quality Surveillance (“WQS”) Programme for all the 29 WTPs managed by PNSB is conducted by the Central Laboratory (“CL”) and verifi ed by an independent accredited laboratory appointed by PNSB. The WQS Programme is carried out as per the requirements of MOH’s NSDWQ and MOH’s Quality Assurance Programme (“QAP”).

Based on the WQS Programme carried out by CL and the independent accredited laboratory in 2012, treated water compliance achieved was 99.8% as shown in Table E:

Nos of Nos of %

Year analyses compliance Compliance

2012 21,945 21,910 99.8

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

Table E: Treated Water Compliance Achieved in 2012

Table F shows that the treated water produced by PNSB complied with MOH’s QAP.

Parameter MOH’s QAP (% violation) 2012 (% violation)

E. Coli < 0.4 0

Free residual chlorine (FRC) < 2.3 0.005

E. Coli & FRC < 0.2 0

Turbidity < 2.0 0.015

Aluminium < 10.2 0.351

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

Table F: Treated Water Quality compliance to QAP

PreservingOur

Environment

154

Visit by students to

SSP2 WTP


Water Quality Monitoring

1. Water Quality Monitoring 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 the drinking water supply.

The WQI assessment that is carried out for the 27 water intakes in Selangor and the

Klang Valley serves as a basis for environmental assessment. The WQI is calculated

based on six parameters, namely Dissolved Oxygen, BOD5, COD, Ammoniacal Nitrogen,

Total Suspended Solids (“TSS”) and pH.

Based on the WQI value, the rivers can be classifi ed under Class I, II, III, IV or V quality,

whereby Class I value indicates best river water quality.

WQI Class Range Water Usage Description

I > 92.7 Water supply I – Practically no treatment necessary

(except disinfection or boiling) only

II 76.5 – 92.7 Water supply II – Conventional treatment required

III 51.9 – 76.5 Water supply III – Extensive treatment required

IV 31.0 – 51.9 Irrigation only

V < 31.0 Water unsuitable for any of the above uses

(Source: Department of Environment Malaysia)

Note: Class I value indicates best river water quality.

Table G: Water Quality Index Classifi cation According to

Department of Environment Malaysia

WQI Class Nos of WTPs WTP

I 8 Kuala Kubu Bharu, Kalumpang, Sungai Pangsoon,

Sungai Lolo, Sungai Serai, Sungai Gombak, Sungai

Kepong, Sungai Rumput WTPs.

II 12 Rantau Panjang, Bernam River Headworks, North

Hummock, Batang Kali, Sungai Selisek, Sungai

Dusun, Sungai Tengi, Sungai Buaya, Sungai Langat,

Sungai Batu, Ampang Intake, Sungai Rangkap

WTPs.

III 7 Sungai Selangor Phase 2 (“SSP2”), Sungai Sireh,

Bukit Tampoi, Cheras Mile 11, Salak Tinggi, Bukit

Nanas, Wangsa Maju WTPs.

IV 0 None.

V 0 None.

Total 27

Note : Sg Keroh WTP and Sg Pusu WTP have been shutdown.

Table H: Water Quality Index (“WQI”) Record at the WTPs for 2012

The average monthly WQI readings in 2012 for the 27 WTPs showed eight stations fall in

Class I, 12 stations in Class II and the remaining seven stations in Class III.


155



2. Balancing Reservoir Water Quality Monitoring

The treated water from WTPs is stored in reservoirs prior to distribution by SYABAS to

consumers.

Balancing Reservoir Water Quality Monitoring at different depth 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.

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 2012, four reservoirs were cleaned either manually

or by robotic method at Kuala Kubu Bahru, Ampang Intake, Sg Langat and Matang Pagar.

3. Ammonia Level Monitoring

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 hourly basis.

Based on the Ammonia Level Monitoring conducted in 2012, the Summary of Daily

Ammonia Level in the raw and treated water at the four WTPs along the Sg Langat basin

in 2012 were as summarised below:-

Ammonia level (mg/L)

Raw Water Treated water

WTP Min – Max (Average) Min – Max (Average)

Sungai Langat 0.00 – 0.49 (0.09) 0.00 – 0.10 (0.01)

Cheras Mile 11 0.03 – 3.50 (0.53) 0.00 – 1.22 (0.01)

Salak Tinggi 0.01 – 3.00 (0.78) 0.00 – 0.39 (0.05)

Bukit Tampoi 0.14 – 4.50 (0.86) Old : 0.00 – 1.18 (0.09)

New : 0.00 – 1.16 (0.09)

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

Table I: 2012 Summary of Daily Ammonia Level at four WTPs Along the Sg Langat Basin

PNSB has highlighted the high raw water ammonia level issue to LUAS who will take

the necessary action to reduce the pollution and to prevent further raw water quality

deterioration.

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 and headloss 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 whichever is earlier, backwashing is initiated.

PreservingOur

Environment

156

Visit by BPS Club & PEKA

to Sg Langat WTP and

Sg Langat Dam


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 174 fi lters operating at the 29 WTPs,

the breakdown of the fi lter running hours is as tabulated below:-

As at As at

December 2011 December 2012

Filter Run Time Nos Nos

Per Month (hours) of fi lter % of fi lter %

60 - 72 79 46.7 54 32.4

40 - 59 72 42.6 54 32.3

30 - 39 18 10.7 12 7.2

< 30 0 0 43 28.1

Total 169 100 163 100

Note: Some of fi lters were not in operation as they were either under repair or on standby

Table J: Breakdown of fi lter running hours in 2012

In 2012, the overall fi lter performance deteriorated with an increased number of fi lters

having less than 30 running hours compared to 2011. This could be due to deteriorating raw

water quality and also problems with the aging of the fi lter system which may require either

refurbishment or replacement of the fi lter media.

In order to improve fi lter operation, refurbishment and upgrading of the fi lter system are

being actively carried out at most WTPs. Among the fi lter refurbishment works carried out in

2012 were those at the SSP2, North Hummock, Sg Rangkap, Sg Batu, Gombak, Sg Langat,

Batang Kali and Rantau Panjang WTPs.

R&P will continue to monitor and perform studies to further improve the running hours with

the objective of achieving a backwashing cycle of 72 hours, or whenever fi lter headloss

reaches 1.8 metres, whichever occurs fi rst.


Water Quality Monitoring

1. Water Quality Monitoring Index (“WQI”) Assessment Programme

The details are set out under the section of PNSB’s Water Quality Monitoring on

page 155 of this Annual Report. The monitoring carried out by SYABAS included

additional four water intakes i.e. Sg Semenyih, SSP1- Badong, SSP3-Badong and

SSP3-Rasa intakes.

Year 2011 Year 2012

WQI

Class

No.

of WTP WTP

No.

of WTP WTP

I 5 Sungai Pangsoon, Sungai

Lolo, Ampang Intake,

Sungai Rangkap, Sungai

Rumput

8 Kuala Kubu Bharu,

Kalumpang, Sungai

Pangsoon, Sungai Lolo,

Sungai Serai, Gombak,

Sungai Rumput, Kepong


157

BPS Nature Hunt 2012 in

Hulu Langat


Year 2011 Year 2012

WQI

Class

No.

of WTP WTP

No.

of WTP WTP

II 21 Bernam River Headworks,

North Hummock, Batang

Kali, Kuala Kubu Bharu,

Kalumpang, Sungai Selisek,

Sungai Dusun, Sungai

Tengi, Sungai Buaya, SSP2,

Sungai Langat, Sungai

Serai, Bukit Nanas, Sungai

Batu, Gombak, Kepong,

Wangsa Maju, SSP1,

SSP3- Badong,

SSP3- Rasa, Semenyih

16 Bernam River

Headworks, North

Hummock, Batang Kali,

Sungai Selisek, Sungai

Dusun, Sungai Tengi,

Sungai Buaya, Sungai

Langat, Sungai Batu,

Ampang Intake, SSP1,

SSP3- Badong,

SSP3- Rasa, Semenyih,

Sungai Rangkap,

Rantau Panjang

III 5 Rantau Panjang, Sungai

Sireh, Bukit Tampoi, Cheras

Mile 11, Salak Tinggi

7 SSP2, Sungai Sireh,

Bukit Tampoi, Cheras

Mile 11, Salak Tinggi,

Bukit Nanas,

Wangsa Maju

IV 0 None 0 None

V 0 None 0 None

Total 31 31

Notes: • The WQI was derived from the water quality data obtained from the Monthly Report submitted by

PNSB (27 intakes) and the monthly raw water sampling carried out by SYABAS (SSP1 – Badong, SSP3- Badong, SSP3-Rasa and Semenyih intakes) in 2011 and 2012.

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

Table K: Water Quality Index (“WQI”) Record at 31 Intakes for 2011 and 2012

Raw water quality at fi ve water intakes was found to have improved from Class II to Class I namely Kuala Kubu Bharu WTP, Kalumpang WTP, Sungai Serai WTP, Gombak WTP and Kepong WTP, whilst Rantau Panjang WTP has climbed from Class III to Class II in Year 2012. Ampang Intake WTP and Sg Rangkap WTP intakes deteriorated from Class I to Class II while three water intakes fell from Class II to Class III, namely SSP2 WTP, Wangsa Maju WTP and Bukit Nanas WTP.

2. Sanitary Surveys

The sanitary survey is a programme conducted to assess the general impact that human activities have on raw water resources and their consequent quality. It also assesses the effi ciency of the WTPs’ treatment process in respect of the raw water components as well as the treated water quality in the distribution lines.

In 2012, eight sanitary surveys were jointly conducted by SYABAS’ team with MOH and WTP operators at the following study areas and the surveys covered the water catchment area, the WTP processes and the distribution area:-

i. Kepong WTP ii. Sungai Sireh WTP iii. Sungai Selisik WTP iv. Bernam River Headworks WTP v. Sungai Semenyih WTP vi. Sungai Semenyih WTP’s Distribution System (Petaling) vii. Sungai Semenyih WTP’s Distribution System (Hulu Langat) viii. Sungai Semenyih WTP’s Distribution System (Klang)

PreservingOur

Environment

158


BPS Nature Hunt 2012


Based on these surveys, several activities that might have raw water pollution impacts

were identifi ed such as industry, land clearing, illegal sand mining, stone quarries, open

landfi lls and illegal waste dumping sites. These surveys facilitate early detection and

provide a general idea about the potential sources of contamination for reference and

plant shutdown during the occurrence of pollution events.

The survey fi ndings and recommendations are highlighted to the relevant agencies and

authorities to mitigate pollution incidents and manage environmental risk before the

water supply or the operation of any WTP is jeopardised.

3. Environmental Impact Study (“EIS”)

In 2012, land use assessment for an EIS was carried out for the Sg Selangor, Sg Langat,

Sg Bernam, Sg Klang, Sg Tengi and Sg Buloh catchment areas. Land use within the

water catchment areas refers to various natural or human activities that may result in

contamination of raw water and cause deterioration in its quality. Pollution may affect

the raw water quality to the point where water treatment processes are unable to cope,

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 2012 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 any pollution issues and risks faced within the water catchment areas. The

fi ndings and recommendations are highlighted to the relevant agencies and authorities

to mitigate the environmental risk before the water supply or the operation of any WTP is

jeopardized.

Public Awareness Programme on Environmental Protection and Conservation

The Group successfully organised and/or participated in various environmental awareness

campaigns and activities in 2012 in a bid to highlight the impact of environmental pollution,

and the need to preserve and conserve our water resources (“Activities”). The details of the

Activities are set out in the “Engagement with Our Community” section on pages 164 to 169

of this Annual Report.

Consumer Awareness and Education Programme (“CAE Programme”)

The Consumer Awareness and Education (“CAE”) Programme is an education campaign

that was initiated by SYABAS in 2007 to create immediate consumer awareness of water

quality issues. It disseminates knowledge and instils consumer confi dence that the water

provided by SYABAS is clean and safe for consumption because of the stringent water

quality monitoring activities carried out by SYABAS and MOH.

To educate consumers, the CAE Programme which involves media coverage includes

educational events, as well as 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 by engaging licensed plumbers to ensure that inspections and cleaning are carried

out professionally. It also counters misconceptions about household water fi lters, which

can sometimes contribute to the deterioration of water quality at the consumers’ premises.

In addition, the CAE Programme educates 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.


159

The Consumer

Awareness

and Education

Programme is an

education campaign

that was initiated

by SYABAS in

2007 to create

immediate consumer

awareness of water

quality issues


Since 2010, the CAE Programme has been carried out on a larger 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

CAE Programme touches on other water supply issues such as low water pressure, pipe

bursts/leaks, billing problems, etc. Demonstrations of the quality of water supplied are also

carried out at consumers’ premises.

To ensure continuous improvement to the CAE Programme, Standard Operating Procedures

(“SOP”) for the programme were developed in 2012, together with a consumer feedback

survey to evaluate the impact and effectiveness of the programme. The SOP was updated

in 2012. Comments and suggestions received from consumers have enabled SYABAS to

further enhance its efforts in ensuring that the supply of treated water is always clean and

safe for consumption.

Year 2007 2008 2009 2010 2011 2012

CAE Programme events 5 16 3 15 20 28organised by Headquarters

CAE Programme events NA 532 957 185 179 285organised by Districts

Note: NA – Not available. CAE Programme at districts level was only introduced in 2008.

Table L: Summary of CAE Programme events organised by Headquarters and Districts from 2007 to 2012

PNSB AND SYABAS

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 2012,

1. SSP2 WTP produced 167,010 metric tonnes (“MT”) of treatment residue.

2. Wangsa Maju WTP produced 220.12 MT of treatment residue.

WTP Residue Treatment

SSP2 and Wangsa Maju WTPs are equipped with sludge treatment facilities (“STF”) to treat

the residue.

The Department of Environment Malaysia had 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 new depository

area was completed in 2012 and the residue from the SSP2 and Wangsa Maju WTPs is now

sent to this depository area.

Reducing Paper Usage

In 2012, PNSB’s paper usage decreased by 20.4% as compared to 2011. This decrease was

mainly attributed to the Company’s effort in adopting a paperless offi ce.

2010 2011 2012

Paper Consumption (ton) 12.64 14.16 11.27

Carbon Emission (ton of CO2)* 3.41 3.82 3.04

* Note: Offi ce 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)

Table M: PNSB Paper Consumption (A4) from 2010 to 2012

PreservingOur

Environment

160

Launching of BPS Club

Programme at SMK Ungku Aziz


At SYABAS, we utilise paper for our daily operations. Based on internal records, our paper

consumption dropped in 2012 compared to the previous year. In 2011, the A4 paper

consumption stood at 59.97 ton which is equivalent to 16.19 ton of carbon dioxide (“CO2”).

In 2012, the paper consumption comprising A4 and A3 papers reduced by 1.85 ton (3.1%) as

compared to the consumption in 2011. 2010 2011 2012

(A4 Size) (A4 Size) (A4 & A3 Size)

Paper Consumption (ton) 54.96 59.97 58.12

Carbon Emission (ton of CO2)* 14.84 16.19 15.69

* Note : Offi ce paper produces 0.27 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)

Table N: SYABAS Paper Consumption (A4 and A3) from 2010 to 2012

PNSB and SYABAS will continue to intensify its 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 the “Valuing

Our People” section on pages on 126 to 149 of this Annual Report.

Use of Resources

Raw Water Drawn for Treatment

The table summarises the amount of raw water drawn from the various rivers and dams for

treatment at PNSB’s WTPs in 2012 as provided in PNSB’s Operations Review on pages 84

to 89 of this Annual Report.

The current climate changes make weather patterns harder to predict, making it more

important than ever to continue to 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 Utilisation

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.

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 2012, water usage at PNSB decreased by 9.49% (15,033 m3) compared to the usage

amount of 16,609 m3 in 2011.


161

Program SYABAS Prihatin at

Laman Budaya, Shah Alam

Briefi ng on BPS


Reducing water losses makes for more effective utilisation of precious water resources.

Between 2005, when it started operations, and 31 December 2012, SYABAS has managed

to reduce water losses from 42.78% in 2005 to 33.06% in 2012, a reduction of about 9.72%.

PNSB and SYABAS 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 589

pumping stations.

PNSB’s and SYABAS’ electricity consumption in 2012 was as set out below:-

• At Wisma Rozali (headquarters), electricity consumption decreased by 0.55% from

1,852,385kWh in 2011 to 1,842,228kWh in 2012. The electricity cost however increased

by 2.74% due to tariff rise in June 2011 from RM0.397/kWh to RM0.43/kWh.

• At the WTPs, electricity consumption decreased by 2.5% from 2011 to 2012. The

decrease was due to the success implementation of energy saving initiatives at several

WTPs.

• At SYABAS, total electricity consumption increased by 6.33% from 2011 to 2012. The

increase resulted from the increase in the quantity of water pumped during the year.

SYABAS’ measures to replace old and ineffi cient pumping equipment to reduce electricity

usage at booster pumping stations and offi ce buildings were hampered by CAPEX freeze.

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

In order to make savings wherever possible, in 2012, PNSB conducted the following energy

effi ciency initiatives:-

1. Refurbishment of three treated water pump for the Matang Pagar reservoir.

2. Optimization of recirculation pumps at the Actifl o Plant at SSP2 WTP.

3. Replacement of existing lights to energy saving type for street lighting at SPP2 WTP.

4. Programme to reduce carbon footprint through bicycle utilisation at SPP2 WTP.

Use of Raw Materials

We are also pleased to report that PNSB utilised 41,935.35 MT of chemicals in the water

treatment process in 2012.

As at 31 December 2012, total production of treated water at all 29 WTPs was 711,003,863 m3

and about 0.059 kg of chemicals were required to treat 1 m3 of water. The amount of chemical

usage per m3 of water for 2012 is the same as that of last year.

Carbon Emissions

The fi rst time we reported our carbon emissions based on the Green House Gas (“GHG”)

Protocol was in 2009.

Being concerned with global environmental issues, especially climate change, Malaysia has

adopted a voluntary target of a reduction of up to 40% 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.

PreservingOur

Environment

162

BPS event at Hulu Langat


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”).

To play its role in reducing environmental stress, SYABAS is also planning to position the

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

SYABAS’ carbon footprint excludes carbon emission from WTP which are not operated by

SYABAS. Table O illustrates SYABAS CO2 emission profi le by source since 2010. Based on

the information gathered, electricity consumption (Scope 2) contributed 97.77% to SYABAS’

carbon footprint, fuel consumption by company’s vehicles (Scope 1) contributed 2.21% and

the remainder 0.02% was contributed from paper consumption (Scope 1).

2010 2011 2012

CO2 Source (Tonnes CO2) (Tonnes CO2) (Tonnes CO2)

Electricity (Scope 2) 103,539 103,653 109,811

Transport (Scope 1) 3,475 3,557 2,486

Paper Consumption (Scope 1) 14.84 16.19 15.69

Total 107,028.84 107,226.19 112,312.69

Notes:

1) SYABAS carbon footprint has been updated with the new CO2 emission factor published by GreenTech

Malaysia for electricity in Malaysia (0.683 ton CO2/MWh). The previous emission factor used was 0.672

ton CO2/MWh.

2) Scope 1 - Paper consumption data for 2010 and 2011 was for A4 size only, whilst data for year 2012 is

inclusive of A3 size paper.

3) Scope 2 - Direct emissions resulting from company vehicles.

4) Scope 3 - Indirect emissions from electricity purchased and used.

Table O: SYABAS CO2 Emission Profi le by Source from 2010 to 2012

The main task of SYABAS’ integrated working group for CFIP 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.

SYABAS’ CFIP includes short term programmes that promote green habits/culture among

staff, suppliers and contractors, 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 contribute positively to the

mitigation of climate change.

2011 2012

Locations (MT CO2 -eq) (MT CO2 -eq)

Wisma Rozali 1,227.61 1,220.88

WTPs 159,708.37 155,779.50

SYABAS 107,210.00 112,312.69

Total 268,145.98 269,313.07


163


OIL & GAS

SAVING TIPS

Use overdrive gears

to save gas


Engagement With Our

Community

164Puncak Niaga Holdings Berhad (“PNHB”) recognises the principles of Corporate Social

Responsibility (“CSR”) as sustainable and ethical ways of doing business to 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,

PNHB recognises the need to continue to foster and nurture meaningful relationships with

its stakeholders.

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.

Conserving, 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 continually strive to maintain our reputation as a caring organization towards our

community.

COMMUNITY INVESTMENT

As a caring organisation, PNHB Group contributes to community initiatives each year. In

2012, Puncak Niaga (M) Sdn Bhd (“PNSB”), SYABAS and GOM Resources Sdn Bhd

(“GOM Resources”) contributed a total amount of RM5,471,016.00 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.


Tabung Budi event in Gombak


Engagement With Our Community

165RIVER RESCUE BRIGADE (“BRIGED PENYELAMAT SUNGAI”) (“BPS”)

In 2012, 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.

As at 31 December 2012, there were 5,595 BPS club members, comprising students from

281 primary, secondary and tertiary schools in Selangor and the Federal Territories of Kuala

Lumpur and Putrajaya, an increase of 965 students on the 2011 fi gure.

Events held in 2012 include:

1. World Water Day 2012 Celebrations on 22 March 2012, offi ciated by YBhg. Tan Sri

Rozali Ismail, our Executive Chairman at SYABAS’ Headquarters.

14 schools in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya

participated in the event.

2. Offi ciating Ceremony of Kelab BPS with Sekolah Menengah Kebangsaan Ungku

Aziz Sabak Bernam on 24 March 2012.

3. ECO Challenge BPS in conjunction with World Environmental Day on 27 June 2012

at Nur Laman Bistari, Ulu Yam.

Four schools around Gombak and the Hulu Selangor area participated in the event.

4. Majlis Berbuka Puasa Jalinan Mesra BPS 2012 on 8 August 2012.

The above event which was held during the month of Ramadhan was participated by

representatives from the Ministry of Education (”MOE”), District Education Offi ces,

NGOs and teachers from Selangor area, aims to strengthen the relationship between the

Company and MOE and the Education Departments, and to show our appreciation for

their support of our BPS programmes.

5. BPS Nature Hunt 2012 on 18 October 2012 which was offi ciated by YB Dato’ Hajjah

Noriah Kasnon, Deputy Minister of Tenaga, Teknologi Hijau dan Air (KeTTHA) at

Nur Lembah Pangsun, Hulu Langat.

One school and two universities in the Cheras and Sabak Bernam areas participated

in the event.

6. 2012 BPS Membership Recruitment Drive.

Briefi ng introduction of BPS Club to 80 primary and secondary schools in Selangor

and the Federal Territories of Kuala Lumpur and Putrajaya on 7 November 2012 for

the purposes of increasing students’ knowledge of conservation and protection of the

environment in particular the river water, the source of drinking water.

7. Educational Outreach Programme (“Program Pelestarian Pendidikan”) (“3P”).

We organised monthly 3P programmes, conducted in collaboration with the BPS Club,

to help educate 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.

Six schools participated in the 3P programmes in 2012.

“Misi Bantuan Kemanusiaan

Bekalan Air” in Terengganu

In 2012,

our River Rescue

Brigade held various

events involving

educational and

entertainment

activities


Engagement With Our

Community

8. Public Awareness Programme

In 2012, BPS conducted public awareness programme during Migration programmes

and Pelanggan Prihatin programmes, some of which also facilitated activities such as

drawing and colouring competitions, exhibitions and membership drive at public venues.

TABUNG BUDI

Tabung Budi was founded on 24 August 2010 by staff of SYABAS and PNSB. The “Program

Bantuan Bekalan Air Tabung Budi” was launched by PEKA at SYABAS’ Headquarters on

22 October 2010. This programme, inspired by YBhg Tan Sri Rozali Ismail, our Executive

Chairman, focuses on helping the poor, the homeless, single parents, the disabled and those

in need. To date, 2,770 individuals including PEKA members, employees of SYABAS and

PNSB as well as the public are supporting the Program Bantuan Bekalan Air Tabung Budi.

The Tabung Budi team has introduced “Aktiviti Turun Padang Tabung Budi” whereby a

presentation ceremony is held at the recipients’ residences.

In 2012, Tabung Budi held 40 events covering ten districts namely, Klang, Petaling, Kuala

Lumpur, Hulu Selangor, Kuala Selangor, Sepang, Gombak, Kuala Langat, Hulu Langat and

Sabak Bernam.

A total of 377 families have benefited from the Tabung Budi programme since its

implementation in 2010. In 2012, 190 families irrespective of their social and ethnic background

were selected to benefi t from the Tabung Budi programme. The total donation received to

date amount to RM309,984.25. Since the introduction of Tabung Budi, RM304,588.13 of

the money raised was utilised for payment of water bill arrears, water connection charges,

repair of water pipes and meter stands; installation of water supply for new water account,

installation and reconnection charges on water supply to recipients’ residences and payment

of monthly bills.

Other Corporate Responsibility Events

1. Sponsorship and Donations 2012

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

• 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

166

Staff’s visit to

Old Folks Home Al-Ikhlas



Some of the communities that benefi ted from our 2012 sponsorship and donation drive

included:-

• Perdana Leadership Foundation

• University Malaya

• Sekolah Jenis Kebangsaan Tamil Bestari Jaya

• Sekolah Menengah Kebangsaan TTDI Jaya

• Persatuan Pentadbir Universiti Teknologi Mara

• Federation of Public Listed Companies Bhd

• Suruhanjaya Koperasi Malaysia

• Mangsa Banjir Hulu Langat

• Sekolah Kebangsaan Bangsar

• Mangsa Banjir Hulu Selangor

• Sekolah Pendidikan Khas

• Malaysia Water Resources Management

• Persatuan Down Sindrom Malaysia

• UiTM

• Tabung Rejimen 514 Askar Wataniah

• The Malaysia Oil & Gas Services Council

2. Key Social Responsibilities in 2012

1. On 6 January 2012, we participated in the ”Sumbangan Air Mineral” in conjunction

with the Prime Minister, YAB Datuk Seri Mohd Najib Tun Haji Abdul Razak’s visit to

the PROTON Shah Alam plant.

2. The launch of World Water Day 2012 on 22 March 2012 at SYABAS’ Headquarters by

YBhg Tan Sri Rozali Ismail, our Executive Chairman.

3. In 2012, we hosted and participated in various Gotong-Royong events with the

residents:-

• On 18 March 2012, at Kg. Hulu Rening Batang Kali.

• On 13 April 2012, at Masjid As Sabirin Kg. Bukit Changgang.

• On 20 April 2012, at Masjid Jamek Jamaiyah Morib.

• On 29 April 2012, at Kg. Wawasan Fasa 5, Bandar Utama Batang Kali.

• On 14 May 2012, at Kg. Baru Batu 9, Cheras.

• On 25 May 2012, at Kg Tg Sepat, Kuala Langat.

• On 16 June 2012, at Jalan Tanjung, Bukit Beruntung.

• On 14 July 2012, at Kg. Sg Manggis, Kuala Langat.

4. On 11 February 2012, we participated in Gotong-Royong with Pejabat Belia Dan

Sukan Daerah (“PBSD”), Kuala Selangor at PBSD’s offi ce.

5. In 2012, we participated in various “Misi Bantuan Kemanusiaan Bekalan Air Bersih”

events with the following parties:-

• On 10 March 2012, in helping the fl ood victims at Kg. Melayu Ampang.

• On 9 May 2012, in helping the fl ood victims at Kg. Sentosa, Batang Kali.

• On 7 April 2012, with Rejimen Pakar Air Jurutera Di Raja (RAJD) in helping the

fl ood victims at Gerik, Perak.

• On 27 December 2012, with Rejimen Pakar Air Jurutera Di Raja (RAJD) in helping

the fl ood victims in Terengganu.

6. On 28 January 2012, we organised a Program Khidmat Masyarakat Bersama

Penduduk Masjid Lama Kg. Ampang at Kuala Kubu Bharu.

167

Program Migrasi & BPS in

Pangsapuri Subang Impian

Majlis Berbuka Puasa with

the orphanage


7. In 2012, 190 families benefi ted from the Program Bantuan Bekalan Air Tabung Budi

2012.

8. In 2012, we hosted the Program Penyerahan Sumbangan Air Bersih at various

locations as follows:

• On 5 to 7 February 2012, for the National Blood Centre in conjunction with

Kempen Derma Darah Daerah Gombak.

• On 6 to 7 February 2012, for the Hindu Sevai Sangam temple at Batu Caves in

conjunction with Thaipusam celebration.

9. We brought smiles to the unfortunate children and community through various

philantrhopic activities. These include:

• On 26 May 2012, we held the “Program Motivasi Anak-Anak Yatim PAYSA

Bersama SYABAS” at Rumah Anak Yatim PAYSA, Wilayah Kuala Selangor.

• On 15 October 2012, we invited some Down syndrome children for a trip to the

Kuala Lumpur Bird Park, Kuala Lumpur.

• On 28 November 2012, we treated the orphans from Rumah Amal Al Rahmaniah,

to a trip to the Aquaria KLCC, Kuala Lumpur.

• On 24 December 2012, we held a “Christmas Cherish” with the paediatric

patients at Selayang Hospital.

• On 27 December 2012, we treated the Anak - Anak Yatim Shifa’ and Rumah

Perlindungan Agathians to a theatre musical show, “Beauty & The Beast”.

10. On 9 June 2012, we hosted the Explorasi Bukit Gasing bersama Pihak Berkuasa

Tempatan Wilayah Petaling.

11. On 3 to 4 November 2012, we supported the Program Kem Solehah Surau Al Salam

Gugusan Dedap Kota Damansara.

12. PNSB and SYABAS hosted visits by various agencies, both local and overseas,

details as shown below:-

Visitors Venue Date

Compassive SSP2 WTP 8 March 2012

Secondary School,

Singapore

Lembaga Urus Air Klang Gates Dam 4 April 2012

Selangor

JKKK Sabak Bernam SSP2 WTP 28 April 2012

JKKK Sabak Bernam Bernam River Headworks WTP 30 June 2012

Universiti Malaya Klang Gates Dam 5 July 2012

Malaysia University Bukit Nanas WTP 14 July 2012

Science Technology

SEGI College SSP2 WTP 14 July 2012

KAIST-KYOTO- SYABAS’ Headquarters and 14 July 2012

NTU-NUS Symposium PUSPEL Contact Centre

Engagement With Our

Community

168

Tabung Budi event in

Hulu Langat District


Visitors Venue Date

The Offi ce of Waterworks, SSP2 WTP 5 September 2012

Seoul Metropolitan

Government

Majlis Keselamatan Sg Langat WTP and SYABAS 25 September 2012

Negara, Negeri Kelantan

Korean ICC Delegation SSP2 WTP 16 October 2012

Japanese School Wangsa Maju WTP 27 November 2012

Politeknik Sultan SSP2 WTP 6 December 2012

Idris Shah

Universiti Putra Malaysia Sg Langat WTP and Langat Dam 8 December 2012

Universiti Putra Malaysia Wangsa Maju WTP 15 December 2012

PEKA Members’ Children Wangsa Maju WTP & 20 December 2012

Klang Gates Dam

13. In conjunction with the month of Ramadhan:-

(a) On 31 July 2012, we organised “Program Bubur Lambuk Amal bersama Media”.

(b) On 3 August 2012, PEKA organised “Program Bubur Lambuk PEKA bersama

Media & Selebriti”.


169

Program Migrasi at

Pangsapuri Desa Perangsang

WATER FACTS

Water is the primary mode

of transportation for all

nutrients in our body and

is essential for proper

circulation


CorporateEvents

170

6 JAN

2012

SYABAS’ Klang District Public Relations Programme – Contribution of mineral water in conjunction with the Prime Minister’s visit to PROTON Shah Alam plant

9 JAN

2012

PNHB’s Group’s Executive Chairman, YBhg Tan Sri Rozali Ismail was awarded the “International Distinguished Entrepreneur Of The Year for the Asia Pacifi c International Brands Summit (Malaysia) 2011” by the Asia Entrepreneur Alliance

17 JAN

2012

Briefi ng on Water Status to the Federation of Malaysian Manufacturers Selangor

3 FEB

2012

SYABAS’ Klang District Public Relations Programme – Dialogue session with Nippon Electrical Glass (M) Sdn Bhd

23 FEB

2012

PNHB’s Group’s Executive Chairman, YBhg Tan Sri Rozali Ismail was awarded the Special Individual Achievement Categoryat the 1st Malaysia Achievement Awards 2012

8 MAR

2012

Study visit by students from the Compassive Secondary School, Singapore to SSP2 Water Treatment Plant (“WTP”)

10 MAR

2012

Gotong-royong and contribution of 5 litre mineral water to the fl ood victims at Ampang Intake

22 MAR

2012

Launching Ceremony of PNSB’s and SYABAS’ celebration of World Water Day 2012

24 MAR

2012

Contribution of 5,000 bottles of mineral water in conjunction with the Prime Minister, YAB Datuk Seri Mohd Najib Tun Haji Abdul Razak’s visit to the Institut Kemahiran Belia Dusun Tua, Negeri Selangor

4 APR

2012

Visit by Lembaga Urus Air Selangor to Klang Gates Dam

7 APR

2012

Launching of the mission of supplying bottled water to residents in Perak together with Rejimen Pakar Pengendalian Air Ke-60 RAJD (AW)

14 APR

2012

Visit by PEKA to “Rumah Jagaan & Rawatan Orang Tua Al-Ikhlas”

6 MAY

2012

SYABAS was awarded the “Anugerah Industri Sukan Negara 2012 – Promosi Gaya Hidup Sihat Melalui Sukan”

11 MAY

2012

Signing Ceremony of the Memorandum of Understanding (“MOU”) between Puncak Niaga Holdings Berhad and the Government of Malaysia, represented by Politeknik Sultan Idris Shah (“PSIS”)

6 JAN

22 MAR

10 MAR

23 FEB

9 JAN

7 APR

11 MAY 26 JUN


171

CorporateEvents

14 JUL

2012

Visit by participants from KAIST-KYOTO-NTU-NUS Symposium to SYABAS

5 SEPT

2012

Visit by the Offi ce of Waterworks, Seoul Metropolitan Government to SSP2 WTP

25 SEPT

2012

Visit by the delegates from Majlis Keselamatan Negara, Kelantan to Sg Langat WTP

11 OCT

2012

PNSB was awarded the Bronze Award at the 12th Malaysia HR Awards 2012 Employer of Choice

16 OCT

2012

Korean Innovative & Creative Circle (“ICC”) delegation visit to SSP2 WTP

18 OCT

2012

BPS Nature Hunt Programme 2012

19 OCT

2012

Offi cial launching of GOM Resources Sdn Bhd’s website at www.gomresources.com

26-27

NOV

2012

SYABAS’ exhibition in conjunction with “The Malaysia Water Resources Management Forum 2012” (MyWRM)

27 NOV

2012

PNHB was awarded the Socrates International Award in London, United Kingdom

6 DEC

2012

Study visit by lecturers from Politeknik Sultan Idris Shah to SSP2 WTP

7 & 8 DEC

2012

GOM Resources Sdn Bhd attended the Ministry of Energy Partners and Operators Appreciation Dinner held in Nay Phi Taw, Myanmar

27 DEC

2012

Launching of a mission of supplying clean water to residents in Terengganu together with Rejimen Pakar Pengendalian Air Ke-60 RAJD (AW)

22 MAY

2012

GOM Resources Sdn Bhd attended the launching of the PAN Malaysia Integrated Offshore Installation 2012 Campaign held at the Rennaisance Hotel, Kuala Lumpur

6 JUN

2012

GOM Resources Sdn Bhd hosted Gawai Luncheon for clients

19 JUN

2012

PNHB received two awards namely, Federation of Public Listed Companies Berhad (“FPLC”) – Top 10 Companies Highest Sponsorship Recognition Award 2010/2011 – CSR in Sport Activities andFPLC Recognition Award – Top 10 Companies Most Active in Professional Development Participation in Seminars and Conferences by FPLC

26 JUN

2012

PNHB’s 15th Annual General Meeting held at Concorde Hotel Shah Alam

27 JUN

2012

BPS ECO-Challenge Programme in conjunction with World Environment Day 2012

6 JUL

2012

PNSB received eight gold awards and SYABAS received ten gold awards at MSOSH Award Ceremony

27 NOV

19 JUN 27 JUN

5 SEPT 27 DEC

18 OCT

11 OCT

174 Statement On Corporate Governance

196 Statement On Internal Control

198 Audit Committee Report

204 Risk Management Policy & Report

208 Corporate Disclosure Policy

209 Corporate Social Responsibility Policy

210 Health, Safety And Environmental Policy

211 Investor Relations Policy & Report

214 Quality Policy & Report

216 Statement Of Directors’ Responsibility For Preparation Of Financial Statements

AC

CO

UN

TA

BIL

ITY

Contents


174COMPLIANCE STATEMENT

The Board is committed to sustain high standards of corporate governance in Puncak Niaga.

This statement demonstrates the Board’s fi rm commitment in promoting and cultivating a

strong culture of good governance for the success and sustainable economic growth of the

Group and for its accountability to the shareholders and stakeholders.

Puncak Niaga has in 2012 complied with the principles of the Malaysian Code On

Corporate Governance 2012 (“MCCG 2012”), save for the recommendations on the tenure

of Independent Director which should not exceed a cumulative term of nine (9) years and

the Board composition which must comprise a majority of Independent Directors where the

Chairman of the Board is not an Independent Director.

The Group believes that the principles of good corporate governance are integral to Puncak

Niaga’s growth and ability to promote the confi dence 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 where possible, the principles and recommendations

of MCCG 2012 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, refi ne and revamp its fi nancial 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, clarifi es the role and responsibilities of the Board and

Management and ensure a balance of authority.

This report explains how the Group has applied the principles as set out in MCCG 2012

having regard to the recommendations stated under each principle and the Main Market

Listing Requirements of Bursa Securities and the extent to which it has complied with the

principles and recommendations during the year 2012.

BOARD OF DIRECTORS

(a) THE BOARD OF DIRECTORS

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 fi duciary 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.

Statement On Corporate

Governance


175 One of the recommendations of the MCCG 2012 is that the positions of Chairman and

Managing Director should be held by different individuals, and the Chairman must be a

non-executive member of the Board.

The Board Charter of the Company sets out the Board’s strategic intent and the

specifi c roles and responsibilities to be discharged by the Board members collectively

in discharging its fi duciary and leadership functions, the individual roles expected from

the Executive Chairman, Managing Director, Executive Directors and Non-Executive

Directors, and the role of the Board Committees. The role of the Executive Chairman is

distinct and separate from that of the Managing Director. This allocation of responsibilities

refl ect the dynamic nature of the relationship necessary for the Company to adapt to

changing environment.

The Board reviews its Board Charter, to keep it up to date with changes in regulations.

The Board Charter is posted at the Corporate Governance link at the Company’s website,

www.puncakniaga.com.my.

Puncak Niaga presently does not have a Managing Director. However, at each operating

subsidiary level, there is a Managing Director/Chief Executive Offi cer/President to manage

and focus on the day-to-day business and management of the respective operating

subsidiaries namely, Puncak Niaga (M) Sdn Bhd (“PNSB”), Syarikat Bekalan Air Selangor

Sdn Bhd (“SYABAS”) and Puncak Oil & Gas Sdn Bhd (“POG”)/GOM Resources Sdn Bhd

(“GOM Resources”).

The MCCG 2012 recommends that the Board must comprise a majority of Independent

Directors where the Chairman of the Board is not an Independent Director. The Board

believes that its current structure is able to discharge the Board’s priorities objectively

with balance of power and authority on the Board.

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 profi le

is set out on page 51 of this Annual Report.

(b) BOARD COMPOSITION

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 profi le of the Board Members are set out on pages 44 to 54 of this Annual Report.

None of the Directors has any convictions for any offences within the past ten (10) years

(other than traffi c offences, if any) or has any confl ict of interests with the Company or

has any family relationship with any Director and/or major shareholder of the Company.

For compliances with Paragraph 15.02 of the Main Market Listing Requirements of Bursa

Securities and the MCCG 2012, the Company, through the Nomination Committee and

the Board of the Company, annually reviewed the required mix of skills, experiences,

competencies and other qualities of the Board and the individual members, the

Independent Non-Executive Directors of the Company in their capacities as Independent

Directors, and the Audit Committee and the individual members. In 2012, the Nomination

Committee and the Board developed criteria specifi cally to assess the independence of

the Independent Directors as recommended by the MCCG 2012.

Statement On Corporate Governance


176 The Board of Puncak Niaga comprises nine (9) Members, of whom three (3) 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 as explained in paragraph 7 of item (a) above.

The three (3) Independent Non-Executive Directors of the Company fulfi l the criteria of

independence as set out in the defi nition of “Independent Director” under Paragraph

1.01 (Defi nitions) 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 confl ict 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 Nomination Committee and the Board have upon their annual assessment, concluded

that the Independent Non-Executive Directors of the Company continue to demonstrate

proper conduct and behavior that are essential indicators of independence, and that

each of them continues to fulfi ll the defi nition of independence as set out in the Main

Market Listing Requirements of Bursa Securities.

One of the recommendations of the MCCG 2012 states that the tenure of an Independent

Director should not exceed a cumulative term of nine (9) years.

The Nomination Committee and the Board had deliberated on the said recommendation

and had concluded that YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh and YBhg Tan Sri

Dato’ Hari Narayanan Govindasamy, who had served on the Board of Puncak Niaga

for a cumulative term of more than nine (9) years remain objective and independent in

expressing their views and in participating in deliberations and decision making during

the Board’s and Board Committees’ Meetings. The length of their service on the Board

do not in any way interfere with their exercise of independent judgement and ability to act

in the best interests of the Company.

Both YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh and YBhg Tan Sri Dato’ Hari Narayanan

Govindasamy had proven to be reliable Independent Directors with their professionalism

aptitude and outlook of business perspective, devoted suffi cient time and attention to

their professional obligations for informed and balanced decision making, and they had

expressed their willingness to continue in offi ce as Independent Non-Executive Directors

of the Company.

Based on the annual assessment made, the Nomination Committee and the Board

of the Company had determined to recommend to the shareholders of the Company

for approval to grant the authority to YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh and

YBhg Tan Sri Dato’ Hari Narayanan Govindasamy to continue to act as Independent

Non-Executive Directors of the Company and to hold offi ce until the conclusion of the

next Annual General Meeting of the Company. Kindly refer to Agenda 7 of the Notice of

the Sixteenth Annual General Meeting of the Company in this Annual Report.


Governance


177(c) BOARD MEETINGS

The Board met fi ve (5) times in 2012, 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

Tuesday 28 February 2012 12.25 p.m.

Thursday 26 April 2012 12.30 p.m.

Tuesday 29 May 2012 12.03 p.m.

Wednesday 29 August 2012 12.20 p.m.

Tuesday 27 November 2012 12.50 p.m.

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

follows:-

No. of

Name of Meetings

Director Designation attended %

Tan Sri Rozali Ismail Executive Chairman 4 out of 5 80

Dato’ Hashim Mahfar Managing Director 5 out of 5 100

(resigned on 31 December 2012)

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


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


Tan Sri Dato’ Hari Independent 3 out of 5 60

Narayanan Govindasamy Non-Executive Director

Tan Sri Dato’ Seri Independent 5 out of 5 100

Dr Ting Chew Peh Non-Executive Director

Dato’ Syed Danial Syed Ariffi n Chief Operating Offi cer 5 out of 5 100

Tengku Dato’ Rahimah Non-Independent 5 out of 5 100

Almarhum Sultan Mahmud Non-Executive Director

Tan Sri Dato’ Ahmad Independent 5 out of 5 100

Fuzi Haji Abdul Razak Non-Executive Director

Ng Wah Tar Executive Director, 5 out of 5 100


Board meetings are scheduled to be held regularly, at least fi ve times in a fi nancial year

with suffi cient notice for all Board Meetings of issues to be discussed. The dates for

Board Meetings for the ensuing fi nancial year are scheduled well in advance and the

Board has formal schedule of matters specifi cally 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.



178 Additional Board Meetings may be called as and when signifi cant issues arise and which

require the Board’s review or 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 confi rmation at the next Board Meeting.

(d) DIRECTORS’ CODE OF ETHICS

The Directors continue to observe and commit a Code of Ethics & Conduct 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 and

ensure implementation of appropriate internal systems to support, promote and ensure

the compliance of the Directors’ Code of Ethics & Conduct. The Group has a Code of

Ethics & Conduct that set out sound principles and standards of good practice, which

are observed by the Directors and employees.

These Code of Ethics & Conduct for the Directors and employees together with the

Group’s Whistle Blowing Policy are posted at the Corporate Governance link at the

Company’s website, www.puncakniaga.com.my.

(e) SUPPLY OF INFORMATION AND ACCESS TO ADVICE

Each Board member is supplied with accurate, complete, 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 benefi t of their particular knowledge, skills and abilities to the Board. Where a

potential confl ict 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 confl ict

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 offi ce of the Company.

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 Company Secretaries.


Governance


179 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 policies and 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 and recommendation of candidates for Board

appointments as well as for assessing the effectiveness of the Board as a whole, the Audit

Committee of the Company, the other Committees of the Board and the contributions

of each individual Director, including the Independent Non-Executive Directors (in their

capacities as Independent Directors) and the Managing Director.

The review process by the Nomination Committee and the Board on annual basis

was based on the competencies, commitment, contribution and performance of the

candidates/Board members as well as the required mix of skills, experiences, gender

and other qualities of the Directors to ensure that the Board continues to function

effectively and effi ciently. During the fi nancial year under review, the Board’s composition

was reduced to nine (9) Directors with the resignation of the Managing Director on

31 December 2012.

Nomination Committee

The Nomination Committee comprises three (3) Directors, all of whom should be

Independent Non-Executive Directors of the Company.

The primary objectives of the Nomination Committee are:-

(i) To annually review the overall composition of the Board in terms of required mix

of the skills and experiences and other qualities, including core competencies and

adequacy of balance between Executive Directors, Non-Executive Directors and

Independent Directors.

(ii) To assess and recommend to the Board, candidates for all directorships to be fi lled.

(iii) To assess and recommend to the Board, Directors to fi ll the seats on Board

Committees.



180 (iv) To annually assess the effectiveness of the Board as a whole, the committees of the

Board and for assessing the contribution of each individual Director.

(v) To examine the size of the Board with a view to determining the impact of the

number upon its effectiveness.

(vi) In the case of persons for the position of Independent Non-Executive Directors,

to evaluate the persons’ ability to discharge such responsibilities/functions as

expected from Independent Non-Executive Directors.

(vii) To determine annually whether a Director is independent as may be defi ned in

Bursa Securities’ Main Market Listing Requirements.

(viii) To ensure that all Directors receive appropriate continuous training programmes in

order to broaden their perspectives and to keep abreast with developments in the

market place and changes in new statutory requirements.

(ix) To recommend to the Board the removal of a Director if he is ineffective, errant or

negligent in discharging his responsibilities.

(x) To assess and recommend to the Board, the terms of reference of Board Committees

and to review the adequacy of committee structure of Board Committees.

With respect to nomination and election process of new Directors, the responsibilities of

the Nomination Committee shall include as follows:-

• Gathering the nomination and selection of Directors for members of the Board.

• Reviewing the competencies, commitment, contribution and performance of the

candidates/Board members and the required mix of skills, experiences and gender

and other qualities of the Directors.

• Making recommendations to the Board on candidates for appointment.

• Facilitate the relevant orientation and education programme for the new Board

member.

(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.


Governance


181


The 2012 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,

experiences and qualities to lead the Company and each of the Director including the

Independent Directors in their capacities as Independent Directors had fulfi lled their

responsibilities and obligations and have carried out their duties as required and in

accordance with the Board Charter of the Company.

In 2012, the Nomination Committee and the Board of the Company had also assessed

the independence of its Independent Directors based on the relevant criteria on the

assessment of independence as developed by the Nomination Committee.

(i) BOARD COMMITTEES

The Board has delegated specifi c responsibilities to the Board Committees whose

functions and authorities are spelt out in their respective terms of reference and consistent

with the recommendations of the MCCG 2012. 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:- 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

Managing Director (resigned on 31/12/2012)

Dato’ Ruslan Hassan

Non-Independent


Dato’ Ir

Lee Miang Koi

Non-Independent


Dato’ Syed

Danial Syed Ariffi n


Tan Sri Dato’ Member Member Member

Hari Narayanan

Govindasamy

Independent



182


Governance

Compliance,

Internal

Control and

Risk Policy

Audit Remuneration Nomination Committee

Name of Director Committee Committee Committee (CICR)

Tan Sri Dato’ Seri Chairman Member Member Chairman

Dr Ting Chew Peh

Independent


Tengku Dato’ Member

Rahimah Almarhum

Sultan Mahmud

Non-Independent


Tan Sri Dato’ Member Chairman Chairman

Ahmad Fuzi Haji

Abdul Razak

Independent


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 exclusively or a majority of non-executive directors

(as recommended in the MCCG 2012).

(3) The Nomination Committee comprises exclusively of non-executive directors, a majority of whom

must be independent (as recommended in the MCCG 2012).

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 PNSB, SYABAS, POG and

GOM Resources. PNSB’s, POG’s and GOM Resources’ EXCO comprise of Executive

Directors and Senior Management whereas SYABAS’ EXCO comprise only the Executive

Directors. The Board of Directors of Sino Water Pte Ltd (“Sino Water”), the Company’s

98.65% owned Singapore subsidiary company meets at frequent intervals in Malaysia to

deliberate on operational matters.

Each of the operating companies has established Limits of Authority (“LOA”) which

governs the Group’s operational management matters with the relevant level of authority

accorded to the Management. The LOA at each operating company are continuously

reviewed to ensure adequacy, effi ciency 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.


183 Audit Committee

The Audit Committee is authorised by the Board to investigate any activities within

its Terms of Reference and has unrestricted access to both the internal and external

auditors and members of the senior management of the Group. The activities carried out

by the Audit Committee are summarised in the Audit Committee Report together with its

Summarised Terms of Reference as stated on pages 198 to 203 of this Annual Report.

The Audit Committee ensure that the fi nancial statements comply with applicable

fi nancial reporting standards as this is integral to the reliability of the fi nancial statements.

The Audit Committee also ensure the independence of the External Auditors during the

conduct of the audit engagement.

Nomination Committee

The primary objectives of the Nomination Committee are set out under the heading of

Appointment of Directors on pages 179 to 180 of this Annual Report.

Remuneration Committee

The Remuneration Committee comprises four (4) Directors, consisting of three (3)

Independent Non-Executive Directors of the Company and one (1) Executive Director of

the Company.

The primary objectives of the Remuneration Committee are:-

(i) To establish and annually review the remuneration packages for each individual

Executive Directors such that the levels of remuneration are suffi cient to attract and

retain the Directors needed to run the Company successfully and aligned to the

business strategy and long term objectives of the Company.

(ii) The Remuneration Committee shall make its recommendation to the Board and the

respective Directors shall abstain from the discussion of their own remuneration.

The levels of remuneration of the Executive Directors should refl ect their experiences,

level of responsibilities, expertise and complexity of the Company’s activities and

contribution to the Company.

(j) RE-ELECTION OF DIRECTORS

Retirement by rotation

Articles 98 and 99 of the Company’s Articles of Association (“Articles”) provide that one

third of the Directors shall retire from offi ce by rotation at each Annual General Meeting

and all Directors shall retire from offi ce 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 and the Board of the Company,

the following Directors shall retire at the forthcoming Sixteenth Annual General Meeting

(“16th AGM”) of the Company and being eligible, had offered themselves for re-election:-

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

ii. YBhg Dato’ Syed Danial Bin Syed Ariffi n, retiring pursuant to Article 98 of the Articles;

and

iii. YAM Tengku Dato’ Rahimah Binti Almarhum Sultan Mahmud, retiring pursuant to

Article 98 of the Articles.



184 The information on the Directors standing for re-election at the forthcoming 16th AGM of

the Company is contained in the Statement Accompanying the Notice of Annual General

Meeting.

Continuing as Independent Directors after serving a tenure of more than nine (9) years

As highlighted in item (b) above, the Nomination Committee and the Board of the

Company had recommended that both YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh and

YBhg Tan Sri Dato’ Hari Narayanan Govindasamy, who had served on the Board of the

Company for a cumulative term of more than nine (9) years be granted the authority to

continue to serve as Independent Non-Executive Directors of the Company and to hold

offi ce until the conclusion of the next Annual General Meeting of the Company.

Section 129 of the Companies Act, 1965

Pursuant to Section 129(2) of the Companies Act, 1965 (the “Act”), Directors who attain

or who are over the age of 70 years shall retire at every annual general meeting and may

offer themselves for re-appointment to hold offi ce until the next annual general meeting.

YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh, the Senior Independent Non-Executive

Director of the Company, who will attain the age of 70 years in June 2013, shall retire at

the forthcoming 16th AGM pursuant to Section 129(2) of the Act.

The Nomination Committee and the Board of the Company had recommended the

re-appointment of YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh pursuant to Section 129

of the Act at the forthcoming 16th AGM of the Company. Kindly refer to Agenda 4 of the

Notice of the 16th AGM on pages 431 to 438 of this Annual Report.

The recommendation by the Nomination Committee and the Board of the Company was

based on YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh’s continued invaluable contributions

to the Company and he had proven to be a reliable Independent Director/Chairman of

Audit Committee/Chairman of CICR with his professionalism, aptitude and outlook of

business perspective.

Gender Diversity Policy

The Board has approved the establishment of a Gender Diversity Policy for the Group

with the objective to achieve an equitable and fair gender rate in its manpower resources

including female representation at Board and Senior Management levels.

This policy is posted at the Corporate Governance link at the Company’s website,

www.puncakniaga.com.my.


Governance


185DIRECTORS’ 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 salary,

allowances, bonuses and other benefi ts as normally accorded to similar positions in

other comparable companies and suffi ciently attractive to retain persons of high caliber.

Performance is measured against profi ts 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 refl ect their

experiences, level of responsibilities and contributions and the time spent attending

to the Group’s affairs and they are paid a fi xed 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.

(b) DISCLOSURE OF DIRECTORS’ REMUNERATION

The details of the remuneration received and receivable by the Company’s Directors from

the Company for the fi nancial year ended 31 December 2012 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 – – – – – – – (Resigned on 31/12/2012) Dato’ Ruslan Hassan – – – 80,000 107,000 – 187,000

Dato’ Ir Lee Miang Koi – – – 70,000 2,000 – 72,000

Dato’ Syed Danial – – – – – – – Syed Ariffi n

Tan Sri Dato’ – – – 50,000 72,000 – 122,000 Hari Narayanan Govindasamy

Tan Sri Dato’ Seri – – – 50,000 104,000 – 154,000 Dr Ting Chew Peh

Tengku Dato’ – – – – 10,000 – 10,000 Rahimah Almarhum Sultan Mahmud

Tan Sri Dato’ Ahmad – – – 50,000 78,000 – 128,000 Fuzi Haji Abdul Razak Ng Wah Tar – – – – – – –



186 The remuneration packages of the Directors of the Company received and receivable

from the Group for the fi nancial year ended 31 December 2012 are categorised into the appropriate components as follows:-

Executive Directors Non-Executive Directors

(RM) (RM)

Salaries 10,416,459 – Bonuses 1,609,945 – Benefi ts-in-kind 225,685 – Allowances 3,962,204 254,000 Employees Provident Fund 3,217,007 – Leave Passage 780,000 150,000 Retirement Benefi t 20,000,000 –

Total 40,211,300 404,000

Details of the Directors’ Remuneration at Company and Group levels for the fi nancial

year ended 31 December 2012, in bands of RM50,000 are tabulated as follows:-

Company Level Group Level

No. of No. of

Executive Non-Executive No. of

Range of Remuneration per annum Directors Directors Directors

RM100,001 to RM150,000 – 2 2

RM150,001 to RM200,000 – 1 1

RM300,001 to RM350,000 – 1 1

RM700,001 to RM750,000 – – 1

RM1,000,001 to RM1,050,000 – – 1

RM1,050,001 to RM1,100,000 – – 1

RM1,700,000 to RM1,750,000 – – 1

RM2,000,001 to RM2,050,000 – – 1

RM33,300,001 to RM33,350,000 – – 1

(c) DIRECTORS’ SHARE OPTIONS

There is no Directors’ Share Options Scheme in the Company during the fi nancial year


(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 fi nancial year ended 31 December 2012, the Directors have attended training

programmes, seminars and conferences organised by the Company and the various

training providers covering areas such as:-

• Talk on Identity & Prospective Launch

• Talk on Campaign Launching Ceremony

• EOR Services Forum – Preparing Mindset & Capabilities For Successful Malaysia

EOR Projects

• Executing Effective Transformation Process – Getting It Right

• Financial Essentials for Non-Financial Professionals

• Building High Performance Directors

• Corporate Disclosure Guide 2011

• Managing Board, Committees And Shareholders


Governance


187 • National Procurement & Integrity Forum For Malaysian Government Contractors And

GLC Vendors 2012

• Related Party Transactions – Doing It Right For Results

• FIDE Elective Program – Banking Fundamentals

• Roundtable Conference on Malaysia-Indonesia/Thailand/Vietnam Relations Towards

Strengthening ASEAN Regionalism & ASEAN : The Way Forward

• Roundtable “Regional Cooperation to Combat Climate Change : The Way Forward”

& Islamic Micro Finance : An Instrument for Poverty Alleviation

• International Conference – Plight of the Rohingya: Solutions? International Efforts in

Addressing the Suffering of the Rohingya – The Role of NGOs and Civil Society”

• MICPA 53rd Anniversary Commemorative Lecture Cum Luncheon

• Asia Water

• Singapore International Water Week 2012, Singapore

• Indonesia Investment Summit

• Advocacy Sessions On Disclosure For CEOs And CFOs

In addition, the Executive Chairman and some Directors have also presented papers at

seminars and forums on water-related subjects.

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 fi nancial results on quarterly basis provides

the shareholders and investors with an overview of the Group’s fi nancial 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 Notice for the Company’s Annual General Meetings contains

relevant information including the shareholders’ rights to demand a poll vote to enable

them to exercise their rights.

The Notice for the Company’s Annual General Meeting is posted at the Annual Report

link at the Company’s website, www.puncakniaga.com.my.

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 effective communication tool to reach shareholders and investors using information

technology is via our corporate website, www.puncakniaga.com.my with a direct link to

SYABAS’ website, www.syabas.com.my, POG’s website, www.puncakoil.com, GOM

Resources’ website, www.gomresources.com and Sino Water Pte Ltd’s website,

www.sino-water.com. 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 211 to 213 of this

Annual Report and the Investor Relations Policy is posted at the Corporate Governance

link at the Company’s website, www.puncakniaga.com.my.



188ACCOUNTABILITY AND AUDIT

(a) FINANCIAL REPORTING

The Board is responsible for the quality and completeness of publicly disclosed fi nancial

reports. In presenting the annual fi nancial 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 fi nancial 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 fi nancial 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 216 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 fi ve Audit Committee meetings of the

Company held during the fi nancial 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 fi ndings.

The Audit Committee has considered the provision of non-audit services by the External

Auditors during the year and concluded that the provision of these services did not

compromise the External Auditors’ independence and objectivity as the amount of the

fees paid for these services were not signifi cant when compared to the total fees paid to

the External Auditors.

A report by the Audit Committee together with its Summarised Terms of Reference is set

out on pages 198 to 203 of this Annual Report.


Governance


189(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

effi ciency 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 fi nancial administration procedures and guidelines.

The effectiveness of the system of internal controls of the Group is reviewed by the Audit

Committee. The Internal Audit Department, led by the Head of Internal Audit will conduct

internal audit covering the fi nancial, operational and compliance controls, processes to

identify and evaluate the signifi cant risks faced by the Group including the governance,

risk management and internal control processes within the Company. The reports of

the Internal Audit Department will be tabled to the Audit Committee for review and

deliberation.

The Group’s Statement on Internal Control is set out on pages 196 to 197 of this

Annual Report.

(d) RISK MANAGEMENT FRAMEWORK

The Board 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 effi ciency and better

decision-making. The Group’s Enterprise-Wide Risk Profi le is reviewed annually to

take into consideration changes in the business environment, strategies and functional

activities of the Group for determining the Group’s level of risk tolerance and identify,

assess and monitor key business risks to safeguard shareholders’ investments and

the Company’s assets.

The Group’s Risk Management Policy and Report is set out on pages 204 to 207 of this

Annual Report.

(e) 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 126 to 149 of this Annual

Report, in “Engagement With Our Community” section on pages 164 to 169 of this

Annual Report and in “Preserving Our Environment” section on pages 150 to 163 of this

Annual Report.

The Corporate Disclosure Policy and the Quality Policy & Report are set out on pages

208 and 214 to 215 of this Annual Report, respectively and these policies are also posted

at the Corporate Governance link at the Company’s website, www.puncakniaga.com.my.



190OTHER 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 fi nancial year ended 31 December 2012. As at

31 December 2012, 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 fi nancial

year ended 31 December 2012 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 fi nancial

year ended 31 December 2012.

(e) NON-AUDIT FEES

During the fi nancial year ended 31 December 2012, the Group paid the following

non-audit fees to the External Auditors:-

(i) Tax advisory and compliance work – RM184,886

(ii) Other non-audit related service – RM398,310

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

adoption of new accounting standards, tax compliance, tax planning and advisory

services.

(f) VARIATIONS IN RESULTS

There was no material variation in the Audited Financial Statements for the fi nancial

year ended 31 December 2012 contained in this Annual Report as compared with the

unaudited consolidated results of the Group for the fi nancial year ended 31 December 2012

which was announced to Bursa Securities on 28 February 2013.

(g) PROFIT GUARANTEE

The Company does not provide any profi t guarantee to any parties.


Governance


191(h) RECURRENT RELATED PARTY TRANSACTION

The Company did not enter into any recurrent related party transaction, which requires

the shareholders’ mandate during the fi nancial year ended 31 December 2012.

(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 fi nancial year ended

31 December 2012, are as follows:-

Date

Nature of

Contract Parties

Consideration/

Mode of

Satisfaction

Relationship

with Director/

Major

Shareholder

15

December

2004

Concession

Agreement

Syarikat Bekalan

Air Selangor

Sdn Bhd

(“SYABAS”),

the State

Government of

Selangor Darul

Ehsan and the

Government

of Malaysia

(“Federal

Government”)

Not

Applicable

YBhg Tan Sri

Rozali Ismail

(”TSRI”) is a

major shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

Central Plus (M)

Sdn Bhd (“CPlus”)

and Corporate

Line (M) Sdn Bhd

(“CLine”). PNHB

in turn, holds 70%

equity interest

in SYABAS.

31

December

2004

Shareholders’

Agreement

PNHB,

Kumpulan

Darul Ehsan

Berhad

(“KDEB”)

and SYABAS

Not

Applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 70%

equity interest

in SYABAS.



192

Date

Nature of

Contract Parties

Consideration/

Mode of

Satisfaction

Relationship

with Director/

Major

Shareholder

23

February

2006

Subscription

Agreement In

Relation To The

Subscription

For Up To

RM1.045 Billion

Nominal Value

Of Redeemable

Cumulative

Unsecured

Loan Stocks

Of SYABAS

(RCULS)

PNHB, KDEB

and SYABAS

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 70%

equity interest

in SYABAS.

8

December

2006

Subscription

Agreement In

Relation To

The Issue Of

RM435.0 Million

Nominal Value

Of Redeemable

Unsecured

Bonds To

PNHB

Puncak Niaga

(M) Sdn Bhd

(“PNSB”) (as the

Issuer), United

Overseas Bank

(Malaysia) Bhd

(as the Facility

Agent and the

Issue Agent)

and PNHB

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest

in CPlus and

CLine. PNHB in

turn, holds 100%

equity interest

in PNSB.

16

August

2007

Sungai Lolo

Water Treatment

Plant (Extension)

Operation And

Maintenance

Agreement

The State

Government of

Selangor Darul

Ehsan and

PNSB

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest

in CPlus and

CLine. PNHB in

turn, holds 100%

equity interest

in PNSB.


Governance


193

Date

Nature of

Contract Parties

Consideration/

Mode of

Satisfaction

Relationship

with Director/

Major

Shareholder

16

August

2007

Novation

Agreement In

Relation To The

Sungai Lolo

Water Treatment

Plant (Extension)

Operation and

Maintenance

Agreement

The State

Government of

Selangor Darul

Ehsan, PNSB

and SYABAS

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest

in CPlus and

CLine. PNHB in

turn, holds 100%

and 70% equity

interests in PNSB

and SYABAS,

respectively.

7

March

2008

Sg Sireh Water

Treatment Plant

(Extension)

Operation and

Maintenance

Agreement

The State

Government of

Selangor Darul

Ehsan and

PNSB

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest

in CPlus and

CLine. PNHB in

turn, holds 100%

equity interest

in PNSB.

7

March

2008

Novation

Agreement To

The Sg Sireh

Water Treatment

Plant (Extension)

Operation and

Maintenance

Agreement

The State

Government of

Selangor Darul

Ehsan, PNSB

and SYABAS

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest

in CPlus and

CLine. PNHB in

turn, holds 100%

and 70% equity

interests in PNSB

and SYABAS,

respectively.



194


Governance

Date

Nature of

Contract Parties

Consideration/

Mode of

Satisfaction

Relationship

with Director/

Major

Shareholder

16

December

2009

Loan Facility

Agreement

(in respect of a

loan facility of

RM320,800,000.00

only). The details

are set out in the

Audited Financial

Statements of

the Group and

the Company

for the fi nancial

year ended

31 December

2012 on pages

335 to 336 of this

Annual Report

SYABAS

(Borrower) and

the Federal

Government

(Lender)

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 70%

equity interest

in SYABAS.

17

October

2011

Loan Facility

Agreement

(in respect of a

loan facility of

RM110,000,000.00

only). The details

are as set out

in the Audited

Financial

Statements of

the Group and

the Company

for the fi nancial

year ended 31

December 2012

on pages 336 to

337 of this

Annual Report.

Deed of

Assignment

SYABAS

(Borrower) and

the Federal

Government

of Malaysia

(Lender)

SYABAS

(as the Assignor)

and the Federal

Government

(as Assignee)

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 70%

equity interest

in SYABAS.


195

Date

Nature of

Contract Parties

Consideration/

Mode of

Satisfaction

Relationship

with Director/

Major

Shareholder

29

February

2012

Facility

Agreement

(in respect of

Syndicated

Term Loan

Facility of

USD36.0 million).

The details

are as set out

in the Audited

Financial

Statements of

the Group and

the Company

for the fi nancial

year ended

31 December

2012 on pages

340 to 341 of this

Annual Report.

KGL Ltd.

(Borrower),

OCBC Bank

(Malaysia)

Berhad and

Hong Leong

Bank Berhad

(Lenders)

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 100%

equity interest

in Puncak Oil &

Gas Sdn Bhd, the

holding company

of KGL Ltd.

31

July

2012

Deed of

Revocation

to revoke and

rescind the

Supplemental

Shareholders

Agreement dated

20 February

2009.

PNHB, KDEB,

SYABAS and

Kumpulan

Perangsang

Selangor Berhad

Not

applicable

TSRI is a major

shareholder

of PNHB held

directly under

his name and

indirectly held

through his 100%

equity interest in

CPlus and CLine.

PNHB in turn,

holds 70%

equity interest

in SYABAS.

STATEMENT OF GOING CONCERN

Barring any unforeseen circumstances and upon making due and reasonable enquiry into

the affairs of the Group, the Board fi rmly 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

29 April 2013.



196INTRODUCTION

The Malaysian Code on Corporate Governance 2012 requires the Board of Directors (“Board”) to maintain a sound system of risk management and internal control to safeguard shareholders’ investments and the Group’s assets. The Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires the Board to disclose in the annual report the main features of the company’s risk management and internal control system.The Board is guided by Statement on Risk Management & Internal Control: Guidelines for Directors of Public Listed Companies (“Guidelines”).

RESPONSIBILITY

The Board of the Puncak Niaga Holdings Berhad (“PNHB”) Group is responsible for maintaining a sound risk management and internal control system and for reviewing their adequacy and integrity so as to safeguard the shareholders’ investments and the Group’s assets. The Board has mandated the Management to implement 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 Board affi rms that there is an ongoing processes for identifying, evaluating, monitoring and managing signifi cant risks faced by the Group. This process is carried out by the Board of PNHB via a specifi c 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 fi rmly 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 204 to 207 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 fi nal approval of the respective Boards/Executive Committees within the Group (PNHB/Puncak Niaga (M) Sdn Bhd (“PNSB”)/Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”)/ Sino Water Pte Ltd (“Sino Water”)/Puncak Oil & Gas Sdn Bhd (“POG”) Group) and 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 Policies 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 fi ndings 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 fi ndings to the Board. The Internal Audit Department of PNSB

StatementOn Internal

Control


197extends 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 Department 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.

• 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 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 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 and POG Group have their own Limits of Authorities that have been approved by their respective Boards.

• Self-Assessment Audit Forms (which list key internal controls), have been developed for all Departments of PNSB. All departments are required to submit a quarterly declaration to the Internal Audit Department as to whether all the key internal controls have been complied with. Effective quarter ended 30 September 2012, the Self-Assessment Audit Forms are submitted and monitored online through the Audit Monitoring System.

Board Assessment

The Board is of the view that the Group’s risk management and internal control system for the year under review and as at the date of this statement is sound and suffi cient to safeguard the shareholders’ investment and the Group’s asset.

The Board has received assurance from the respective companies’ CEO and CFO that the Group’s risk management and internal control system are operating adequately and effectively at the operating companies.

This Statement on Internal Control has been prepared in accordance with the Guidelines 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

29 APRIL 2013

StatementOn InternalControl


198The Board of Directors of Puncak Niaga Holdings Berhad (“PNHB”) is pleased to present the report of the Audit Committee for the fi nancial year 2012.

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 fi nancial year 2012 were as follows:

NUMBER OF NUMBER OF

MEETINGS MEETINGS PERCENTAGE

COMPOSITION OF COMMITTEE HELD ATTENDED (%)

YBhg Tan Sri Dato’


Chairman/Independent Non-Executive Director 5 5 100



Member/Independent Non-Executive Director 5 4 80

YAM Tengku Dato’

Rahimah Almarhum Sultan Mahmud

Member/Non-Independent Non-Executive Director 5 5 100



Member/Independent Non-Executive Director 5 5 100

The Executive Director (Finance Division), Senior General Manager (Internal Audit Department), Executive Director (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, quarterly fi nancial results 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 fi nancial year 2012, the Audit Committee carried out its duties as set out in the Terms of Reference of the Audit Committee. The main activities carried out by the Audit Committee during the fi nancial year included the following:-

Financial Results

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

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

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.

Audit Committee

Report


199 • Discussed on signifi cant 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 2012 of the Internal Audit Department (which was developed based on a risk based approach), was approved by the Audit Committee at the 71st Audit Committee Meeting of the Company held on 23 November 2011. 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 2012, the Internal Audit Department completed a total of 68 major audit assignments covering all the Water Treatment Plants, high-risk areas identifi ed by the Risk Management Scorecard Working Group and ad hoc assignments requested by the Senior Management. Examples of key areas audited by the Internal Audit Department during the Financial Year 2012 were Sludge Lagoon at SSP2, Property Maintenance at Wisma Rozali, Contract Management of Sarawak Project, Incidents Handling & Downtime, Store Operations, Receivables & Payables of Puncak Oil & Gas Sdn Bhd (“POG”) Group 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 204 to 207 of this Annual Report.

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 2012 was about RM1.3 million.

Audit Committee Report


200 As at 31 December 2012, the Internal Audit Department had thirteen staff

(four Accountants, four Engineers, one IT specialist and four support staff). Training attended by the Internal Audit Department’s staff in 2012 included the Singapore International Water Week 2012, National IT Governance - Data Protection and Cyber Security Conference for the Public and Private Sector and A Practical Approach to Forensic Accounting & Digital Forensic.

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 ratifi ed the establishment of the Internal Audit Department 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 2012 was to determine the compliance to Client Charter, Company’s procedures and guidelines, as well as the Authorities’ rules and regulations.

Amongst the audits carried out by the Internal Audit Department were on Savings From DMZ Installation, Application Assessment on e-Complaint, Management of Shell Card, Overtime, Whether Meter in Meter Management System Tally to BASIS System and Sites, Physical Checking on Sampling Station in Accordance With MOH and Safety, Overfl ow Incidence and Monitoring Action by Districts, Compensation imposed on Cases of Illegal Tapping, Compliance to Client Charter 7.3 (c) ix (Pipe Repair) and ii (Pressure) and MLS 2A and 2E and Follow Up Audit On Meter Reader Incentives. Including follow-up audit, the Internal Audit Department conducted in total 83 assignments in 2012.

The cost incurred by the Internal Audit Department in relation to the conduct of internal audit function of SYABAS during the year was about RM1.4 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 fulfi ls 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 specifi ed 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 specifi ed in Part II of the 1st Schedule of the Accountants Act 1967; or

3. fulfi ls such other requirements as prescribed or approved by the Exchange.

Audit Committee

Report


201 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, has knowledge and experience in fi nancial reporting, good leadership skills and is keen to get fi nancial 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 fi nancially 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 fulfi lling 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 signifi cant accounting and auditing problems that the auditors can foresee and the impact on the fi nancial 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 specifi c areas of concern to the Committee. Clear policies and procedures must be established and followed to ensure the independence of the external auditors is not impaired by the provision of non-audit services to the Company.

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

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

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

• Assess the capacity of the Internal Audit Department to fulfi l 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, qualifi cations 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.



202 • Review any appraisal or assessment of the performance of the staff

of the Internal Audit Department and approve any appointment or termination of the Head of the Internal Audit Department.

iii. Review the assistance and cooperation given by the Company’s offi cers 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 specifi c 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 fi nancial 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 signifi cant 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 confl ict 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 signifi cant adjustments and unusual events, reclassifi cations or additional disclosures proposed by the external auditors that are currently signifi cant or may become signifi cant in the future.

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

Audit Committee

Report


203 vii. Review the reasons for the major fl uctuations in fi nancial statement balances

for the current year compared to prior years.

viii. Review for any unusual circumstances or situations refl ected in the fi nancial statements, including identifying any marginal operations.

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

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

xi. Review for any signifi cant 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 Offi cer, other Board Members and/or other appropriate offi cers 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 Secretaries to the Audit Committee shall be the Company Secretaries.



204RISK MANAGEMENT POLICY

The Board of Puncak Niaga Holdings Berhad (“PNHB”) 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, fi nancial

and others, need to be identifi ed 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 with its

own Terms of Reference.

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

Control and Risk Policy Committee.

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.

An internal briefi ng was conducted in March 2013 for Directors and Senior Management

on the “An Overview of M’sian Code On Corporate Governance 2012 & Bursa Malaysia

Securities Berhad Main Market Listing Requirements”.

Risk Management

Policy & Report


205COMPLIANCE, INTERNAL CONTROL AND RISK POLICY COMMITTEE (CICR)

The establishment of the CICR was formalised by the Board in October 2001. The current

members of the CICR comprise the following:-

Chairman : YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh

(Independent Non-Executive Director)

Members : Mr Danny Ng Wah Tar

Executive Director, Corporate Finance Division, PNSB

Madam Tan Bee Lian

Executive Director, Corporate Services Division, PNSB

Madam Wong Ley Chan,

Executive Director, Finance Division, PNSB

Tuan Haji Sonari Solor

Senior General Manager, Internal Audit Department, PNSB

Cik Hayati Ab Wahab

Senior General Manager, Internal Audit Department - SYABAS

Secretary : Madam Johty Priyatharashani

Senior Manager, Internal Audit Department, PNSB

A) TERMS OF REFERENCE OF THE CICR

The CICR shall provide assistance to the Board of Directors of Puncak Niaga in

discharging its fi duciary 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.

• Justifi able 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 signifi cant 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.

Risk Management Policy & Report


206B) CICR ACTIVITIES

MEETINGS HELD AND ISSUES COVERED

During the year 2012, 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 identifi ed within Puncak Niaga (M)

Sdn Bhd (“PNSB”), Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”), Sino Water

Pte Ltd (“Sino Water”) and Puncak Oil & Gas Sdn Bhd (“POG”) Group.

4. The status of Self-Assessment Audit Forms submitted by the relevant Departments

in PNSB as to whether the key internal controls have been complied with.

5. The structure and key changes of Malaysian Code of Corporate Governance

2012 issued by Securities Commission Malaysia effective fi nancial year ending

31 December 2012.

6. 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 effi ciency and better decision-making. The

Group’s Enterprise-Wide Risk Profi le is reviewed annually to take into consideration changes

in the business environment, strategies and functional activities of the Group.

RMSWG was held at Group level, comprising all Executive Directors of PNSB, Senior

Management of PNSB, SYABAS and POG Group on 11 January 2013 to deliberate on the

risks highlighted by the different business sectors and determine the Puncak Niaga Group’s

Enterprise-Wide Risk Profi le for year 2013.

The deliberations of the RMSWG were reviewed by the CICR on 18 February 2013.

Subsequently, a detailed Board Paper on the Group’s “Top Enterprise Wide Risks Facing the

Puncak Niaga Group for year 2013” was tabled during PNHB’s Board of Directors’ Meeting

that was held on 26 February 2013.

The Group’s Enterprise-Wide Risk Profi le will be reassessed by the RMSWG on a yearly

basis.

Risk Management

Policy & Report


207QUARTERLY RISK SCORECARD REPORTING

(PNSB, SINO WATER, POG GROUP AND SYABAS)

The respective Heads of Divisions and Departments of PNSB, the Managing Director of Sino

Water and the Senior Management of POG Group and SYABAS are responsible for assessing

and managing their respective risks. Using the Q-RADAR Corporate Risk Scorecard (“CRS”)

software, the respective Heads of Divisions and Departments of PNSB, the Managing Director

of Sino Water and the Senior Management of POG Group and SYABAS 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, POG Group and SYABAS utilise a risk management tool

namely, the Q-RADAR CRS software to identify, measure and manage all corporate

risks affecting the Group. 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.

The CRS also facilitates a Corporate Digital Assurance module which requires Risk

Scorecard Owners 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 2012, the Q-RADAR CRS software had 110 authorised users covering

25 Departments / Divisions, including SYABAS, POG Group and Sino Water.

The Q-RADAR CRS software is administered by the Risk Management Section.

Risk Management Policy & Report


208As 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 confi dence.

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 effi cient 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 offi cer 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 briefi ng 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.

Corporate Disclosure

Policy


209Puncak Niaga Holdings Berhad (“PNHB”) recognises the signifi cance of being an

organisation that practises the highest standard of work ethics. As a responsible company

to its shareholders, business associates, suppliers, employees and various stakeholders,

we therefore take our corporate social responsibility seriously as we are a Leading Regional

Integrated Water, Wastewater And Environmental Solutions Provider And To Emerge As A

Signifi cant Player In The Oil And Gas Sector. Our aim is to achieve our business objectives

and expansion in a considerate and responsible manner, whilst balancing the interests in the

economic, social and environmental impacts of our activities.

• ENVIRONMENTAL

We advocate sustainable environment through managing our daily operation and

activities in a responsible manner to minimise activities that could harm the environment

and nature. Among the programmes/activities are:-

a) River Rescue Brigade (“BPS”)

b) Consumer Awareness & Education Programme (“CAE”)

c) Green Initiatives

d) Environmental Impact Study (“EIS”)

• COMMUNITY

We support philanthropic and charitable giving, support for and active engagement with

local communities through volunteering and other programmes. We also support and

encourage our employees to help local community organisations and activities in the

areas where we operate in. Among the programmes/activities organised by PNHB are:-

a) Education Study Visit – DAMs, Water Treatment Plants, Operation Command Centre

& PUSPEL

b) Program Pelestarian Pendidikan (“3P”)

c) Tabung Budi

d) Public Awareness Programme and Exhibition

e) Corporate Social Responsibilities – Visits to Old Folks Home, Orphanage &

Gotong-Royong

• STAKEHOLDERS

We protect the interests and priorities of stakeholders as well as managing risks in order

to maximise profi ts for the success and growth of the Company.

• EMPLOYEES

We shall respect the rights and diversity of our employees, irrespective of race and gender

and whilst providing a dynamic workplace and equal opportunities, improving employee

satisfaction, whilst enhancing the intellectual capital through continuous investment in

training and development of employees’ skills for the company’s quantum growth.

• STRATEGIC COLLABORATION AND KNOWLEDGE ENHANCEMENT AT ALL LEVELS

We promote continuous education and knowledge enhancement at all levels through

collaborations with local and international higher education institutions and corporations.

We are equally dedicated not only to maintaining the highest ethical standards but also to

achieving sustainability both in our operations and in our impact on the environment for the

benefi ts of our customers, shareholders, stakeholders, and business associates

Corporate Social Responsibility Policy


210It 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.

Health, Safety And

Environmental Policy


211As 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 benefi cial 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 benefi ts 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 confi dence 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 effi cient 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 confi dence 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 Policy & Report


212INVESTOR 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 2012 had been challenging amidst Puncak Niaga’s relentless pursuit to gain

leadership in the water and water related industry and to emerge as a signifi cant player in the

Oil & Gas industry whilst, remaining focus in achieving our Vision and Mission.

The Board is therefore pleased to report on Puncak Niaga’s investor relations activities during

2012 as follows:-

DIALOGUES WITH INVESTORS

The Top Management of the Group actively engages in meetings, dialogues and briefi ng

sessions with local and foreign institutional groups. In 2012, 13 dialogues and group briefi ng

sessions were conducted with existing and potential investors, local and foreign fund

managers and fi nancial analysts from research and asset management houses.

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, www.puncakoil.com and www.gomresources.com) 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 208 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.

Investor Relations Policy &

Report


213ANNUAL GENERAL MEETING (“AGM”)

The Board of Puncak Niaga fi rmly 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

fi nancial 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 benefi t of our shareholders.

The 2013 AGM will be held on Wednesday, 26 June 2013 at the Concorde Hotel Shah Alam.

The Notice of AGM is enclosed with this Annual Report. The results of all resolutions proposed

at the 2013 AGM will be posted on Bursa Securities’ website and the Company’s website on

the evening of 26 June 2013.

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.

Investor Relations Policy & Report


214QUALITY 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

Puncak Niaga (M) Sdn Bhd (“PNSB”) support national aspiration on innovation and creativity

via ICC Programme. It 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-benefi t.

PNSB’s ICC Secretariat (“the Secretariat”) had successfully conducted its seventh 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 refl ection of the Company’s continuous efforts in enhancing

productivity and competitiveness.

For the year 2012-2013 ICC Programme, a total of 24 teams participated in the ICC

Programme. They comprised four teams from the Head Offi ce and 20 teams from the Water

Treatment Plants (“WTP”). All teams participated in the In-house ICC Convention held on

2 May 2012.

Quality Policy &

Report


215Based on project evaluation using judging criteria set by the Malaysian Productivity

Corporation (“MPC”), the Secretariat shortlisted six teams to participate in the ICC Mini

Convention 2012 and 12 teams to participate in the Regional ICC Convention 2012. Six

teams were selected by MPC to participate in the National ICC Convention 2012 and one

team was selected by MPC to participate in the International Convention on Quality Creative

Circle (“ICQCC”) 2012. The successful projects were as follows with project number 1 below

being selected for the ICQCC 2012:-

Projects:

1. Lime Dosing Problem

2. Handling Support Equipment for Maintenance Work at Actifl o Plant

3. High Polymer Consumption

4. To resolve the frequent malfunction of Chlorination Equipment at Ampang Intake WTP

5. To resolve the faulty treated water sampling pump at Sungai Rangkap WTP

6. Cost Saving for Polymer Chemical

7. High Testing Cost for Microbiology

PNSB received a total of 25 ICC Awards in 2012, surpassing the previous year’s performance.

The ICC Awards were as follows:-

Competition Date Awards achieved

Mini ICC Convention 8 May 2012 • Four Gold Awards

2012 • Two Silver Awards

Regional ICC June 2012 and • Nine Gold Awards

Convention 2012 July 2012 • Three Silver Awards

National ICC 15 – 17 October • Three 3-Star Gold Awards

Convention 2012 2012 • Three 2-Star Gold Awards

The team with project number 3 above (High Polymer Consumption) was one of the best

top 10 teams from Service Sector and they will participate in the ICQCC 2013 to be held

in Taiwan.

ICQCC 2012 16 October 2012 • One 3-Star Gold Award

The Company’s achievement in ICC activities for 2012-2013 was outstanding and excellent.

PNSB will continue to foster the culture of ICC in the workplace.

Quality Policy & Report


216The fi nancial 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 fi nancial statements give a true and

fair view of the fi nancial position of the Group and of the Company as at

31 December 2012 and of the results and the cash fl ows of the Group and

of the Company for the fi nancial year then ended.

In preparing the fi nancial 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 fi nancial 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 fi nancial 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.

Statement Of Directors’

Responsibility For

Preparation Of Financial

Statements

Contents

218 Defi nitions

222 Directors’ Report

227 Statement by Directors

227 Statutory Declaration

228 Independent Auditors’ Report

230 Income Statements

231 Statements of Comprehensive Income

232 Statements of Financial Position

236 Statements of Changes in Equity

239 Statements of Cash Flows

242 Notes to the Financial Statements

417 Supplementary Information

FIN

AN

CIA

LS

TA

TE

ME

NT

S


218

Defi nitions

Except where the context otherwise requires, the following defi nitions shall apply throughout this Directors’ Report and

Audited Financial Statements for the fi nancial year ended 31 December 2012:

“ABASS” : Konsortium ABASS Sdn Bhd

“Acqua” : Acqua SPV Berhad

“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

“BPMB” : Bank Pembangunan Malaysia Berhad

“Bursa Securities” : Bursa Malaysia Securities Berhad

“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

“EPF” : Employees Provident Fund

“Federal Government” : Government of Malaysia

“FRS” : Financial Reporting Standards


219

Defi nitions

“GOM Resources” : GOM Resources Sdn Bhd

“Group” : Puncak Niaga Holdings Berhad Group of Companies

“GWGF” : Gabungan Wawasan Generasi Felda Malaysia

“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

“KeTTHA” : Kementerian Tenaga, Teknologi Hijau dan Air

“Luancheng” : Luancheng Dayu Water Supply Co Ltd

“LUWEI” : Luwei (Pingdingshan) Water Co Ltd

“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


220

“O&M” : Operations & Maintenance

“Oasis Water” : Oasis Water Resources Sdn Bhd

“PAAB” : Pengurusan Aset Air 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

Defi nitions


221

“State Government” : The State Government of Selangor

“SYABAS” : Syarikat Bekalan Air Selangor Sdn Bhd

“SYABAS Concession : Concession Agreement dated 15 December 2004 between SYABAS, the Federal

Agreement” Government and the State Government

“WWE” : WWE Holdings Berhad

“USD” : United States Dollar

“XINNUO” : Xinnuo Water (Binzhou) Co. Ltd

Defi nitions


222

The directors have pleasure in presenting their report together with the audited fi nancial statements of the Group and of the

Company for the fi nancial year ended 31 December 2012.

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. The Group’s principal activities diversifi ed to the provision

of marine spread, onshore and offshore services and engineering works for the oil and gas sector in year 2011. The principal

activity of the Company is investment holding.

The principal activities of the subsidiaries, associates and joint ventures are disclosed in Notes 18, 19 and 20 respectively

to the fi nancial statements.

There have been no other signifi cant changes in the nature of the principal activities during the fi nancial year other than as

disclosed in Note 18 to the fi nancial statements.

RESULTS

Group Company

RM RM

Profi t net of tax 232,680,075 6,235,047

Profi t attributable to:

Owners of the parent 238,081,852 6,235,047

Non-controlling interest (5,401,777) -

232,680,075 6,235,047

There were no material transfers to or from reserves or provisions during the fi nancial year other than as disclosed in the

fi nancial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the fi nancial year were

not substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in the


DIVIDENDS

No dividend was paid since the end of the previous fi nancial year.

At the forthcoming Sixteenth Annual General Meeting of the Company, a fi nal single tier dividend of 5 sen per ordinary share

amounting to RM20,455,305 in respect of the fi nancial year ended 31 December 2012 will be proposed for the shareholders’

approval. The fi nancial statements for the current fi nancial year do not refl ect this proposed dividend. Such dividend, if

approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the fi nancial year

ending 31 December 2013.

Directors’ Report


223

DIRECTORS

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

Tan Sri Rozali bin Ismail

Dato’ Ruslan bin Hassan

Dato’ Ir Lee Miang Koi

Dato’ Syed Danial bin Syed Ariffi n

Ng Wah Tar

Tan Sri Dato’ Hari Narayanan a/l Govindasamy

Tan Sri Dato’ Seri Dr Ting Chew Peh

Tengku Dato’ Rahimah binti Almarhum Sultan Mahmud

Tan Sri Dato’ Ahmad Fuzi bin Haji Abdul Razak

Dato’ Hashim bin Mahfar (Resigned effective 31 December 2012)

In accordance with Article 98 of the Company’s Articles of Association, Dato’ Ruslan bin Hassan, Dato’ Syed Danial bin

Syed Ariffi n and Tengku Dato’ Rahimah binti Almarhum Sultan Mahmud shall retire from offi ce by rotation at the forthcoming

Sixteenth Annual General Meeting of the Company and, being eligible, had offered themselves for re-election.

DIRECTORS’ BENEFITS

Neither at the end of the fi nancial 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 benefi ts by means of the acquisition of shares in or debenture

of the Company or any other body corporate.

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t (other than

benefi ts included in the aggregate amount of emoluments received or due and receivable by the directors or the fi xed salary

of a full-time employee of the Company as shown in Note 10 to the fi nancial statements) by reason of a contract made by

the Company or a related corporation with any director or with a fi rm of which the director is a member, or with a company

in which the director has a substantial fi nancial interest, except for Tan Sri Rozali bin Ismail who has interests in related

parties, GWGF and RZ Management, of which RZ Management provides corporate secretarial services to the Group, details

of which are provided in Note 40 to the fi nancial statements.

Directors’ Report


224

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in offi ce at the end of the fi nancial year in

shares in the Company and its related corporations during the fi nancial year were as follows:

Number of ordinary shares of RM1.00 Each

1.1.2012 Acquired Sold 31.12.2012

Name of director

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 Company

Tan Sri Rozali bin Ismail 167,037,114 * 19,800,000 (19,800,000) 167,037,114

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

* 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 his spouse, Tay Boon Ling pursuant to Section 134 of the Companies Act,

1965.

None of the other directors in offi ce at the end of the fi nancial year had any interest in shares in the Company or its related

corporations during the fi nancial year.

OTHER STATUTORY INFORMATION

(a) Before the income statements, statements of comprehensive income and statements of fi nancial 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 satisfi ed 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.

Directors’ Report

**

*


225

OTHER STATUTORY INFORMATION (CONTINUED)

(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 fi nancial statements

of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the fi nancial 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 fi nancial statements of the Group and of the Company which would render any amount stated in the fi nancial

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 fi nancial 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 fi nancial year.

(f) In the opinion of the directors:

(i) except as disclosed in Note 50, 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 fi nancial 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

fi nancial 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 fi nancial year in which this report is made.

SIGNIFICANT EVENTS

In addition to signifi cant events disclosed elsewhere in this report, other signifi cant events are disclosed in Note 48 to the


Directors’ Report


226

SUBSEQUENT EVENTS

Details of subsequent events are disclosed in Note 49 to the fi nancial statements.

AUDITORS

The auditors, Ernst & Young, retire and are not seeking reappointment at the forthcoming Annual General Meeting.

Signed on behalf of the Board in accordance with a resolution of the directors dated 29 April 2013.

Tan Sri Rozali bin Ismail Dato’ Syed Danial bin Syed Ariffi n

Directors’ Report


227

We, Tan Sri Rozali bin Ismail and Dato’ Syed Danial bin Syed Ariffi n, being two of the directors of Puncak Niaga Holdings

Berhad, do hereby state that, in the opinion of the directors, the accompanying fi nancial statements set out on pages 230 to

416 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards,

and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and the

Company as at 31 December 2012 and of its fi nancial performance and cash fl ows for the year then ended.

The information set out in Note 52 to the fi nancial statements have been prepared in accordance with the Guidance on

Special Matter No.1, Determination of Realised and Unrealised Profi ts 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 29 April 2013.

Tan Sri Rozali bin Ismail Dato’ Syed Danial bin Syed Ariffi n

Statutory DeclarationPursuant to Section 169

(16) of the Companies

Act, 1965

I, Wong Ley Chan, being the offi cer primarily responsible for the fi nancial management of Puncak Niaga Holdings Berhad,

do solemnly and sincerely declare that the accompanying fi nancial statements set out on pages 230 to 417 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 declared

by the abovenamed Wong Ley Chan

at Shah Alam in the State of Selangor

on 29 April 2013. Wong Ley Chan

Before me,

Statement by DirectorsPursuant to Section 169

(15) of the Companies

Act, 1965


228

Independent Auditors’ Report

to the member of Puncak

Niaga Holdings Berhad

(Incorporated in Malaysia)

Report on the fi nancial statements

We have audited the fi nancial statements of Puncak Niaga Holdings Berhad, which comprise the statements of fi nancial position as at 31 December 2012 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 fl ows of the Group and of the Company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 230 to 416.

Directors’ responsibility for the fi nancial statements

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

Auditors’ responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of fi nancial statements that give a true and fair view 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 fi nancial statements.

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

Opinion

In our opinion, the fi nancial statements give a true and fair view of the fi nancial position of the Group and of the Company as at 31 December 2012 and of their fi nancial performance and cash fl ows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirement of the Companies Act, 1965 in Malaysia.

Emphasis of Matter

1) We draw attention to Note 4.2, Note 50(e) and Note 50(g) to the fi nancial statements which describe the uncertainty relating to the outcome of the lawsuit fi led by a subsidiary of the Company, SYABAS against the Selangor State Government for the recovery of the water tariff compensation.

2) In view of the signifi cance of the matter, we draw your attention to Note 7(b) to the fi nancial statements in connection with the indemnity payment of RM15 million made to a director, which describes the judgement exercised by the Board of Directors in arriving at their conclusion.

Our opinion is not qualifi ed in respect of the above matters.


229

Independent Auditors’ Reportto the member 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 fi nancial statements and the auditors’ reports of the subsidiaries which we have not acted as auditors, which are indicated in Note 18 to the fi nancial statements, being fi nancial statements that have been included in the consolidated fi nancial statements.

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

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

Other matters

(i) As stated in Note 2 to the fi nancial statements, Puncak Niaga Holdings Berhad, adopted Malaysian Financial Reporting Standards on 1 January 2012 with a transition date of 1 January 2011. These standards were applied retrospectively by directors to the comparative information in these fi nancial statement, including statements of fi nancial position as at 31 December 2011 and 1 January 2011, and income statements, the statements of comprehensive income, statements of changes in equity and statements of cash fl ows for the year ended 31 December 2011 and related disclosures. We are not engaged to report on the comparative information and it is unaudited. Our responsibilities as part of our audit of the fi nancial statements of the Group and Company for the year ended 31 December 2012 have, in these circumstances, including obtaining suffi cient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially affect the fi nancial position as of 31 December 2012 and fi nancial performance and cash fl ows for the year then ended.

(ii) The supplementary information set out in Note 52 on page 417 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 Profi ts 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 PHANG OY LINAF: 0039 No.2985/03/14 (J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia29 April 2013


230

Group Company

Note 2012 2011 2012 2011

RM RM RM RM

Revenue 6 3,743,935,224 2,591,509,091 – –

Other income 7(a) 169,523,693 320,099,478 20,688,979 79,980,819

Items of expense

Raw materials, consumables and maintenance (1,139,622,609) (1,083,109,917) – –

Construction contract expense (307,812,037) (277,484,524) – –

Cost of providing oil and gas services (609,125,904) (219,414,230) – –

Employee benefi ts expense 9 (349,247,380) (286,636,889) – –

Other expenses 7(b) (327,367,858) (318,569,222) (6,412,399) (21,204,991)

Depreciation and amortisation expense 7(c) (234,141,105) (176,305,767) (568,323) (774,562)

Finance costs 11 (647,688,537) (624,459,577) (17,638) (49,806,510)

Share of results

- Associates 19 (1,406) 3,172 – –

- Joint venture 20 (147,815) (203,235) – –

Profi t/(loss) before tax 7 298,304,266 (74,571,620) 13,690,619 8,194,756

Income tax expense 12 (65,624,191) (8,559,374) (7,455,572) (4,669,189)

Profi t/(loss) net of tax 232,680,075 (83,130,994) 6,235,047 3,525,567

Profi t/(loss) attributable to:

Owners of the parent 238,081,852 9,910,838 6,235,047 3,525,567

Non-controlling interest (5,401,777) (93,041,832) – –

232,680,075 (83,130,994) 6,235,047 3,525,567

Earnings per share attributable to owners

of the parent (sen per share)

Basic 13 58.20 2.42

Diluted 13 N/A N/A

IncomeStatements

For the fi nancial year



231

Group Company

Note 2012 2011 2012 2011

RM RM RM RM

Profi t/(loss) net of tax 232,680,075 (83,130,994) 6,235,047 3,525,567

Other comprehensive (loss)/income:

Foreign currency translation (2,421,522) 2,165,771 – –

Fair value gain/(loss) on available-for-sale investment 28 442,298 (591,207) 661,055 –

Actuarial loss on retirement benefi t, net of tax 34 (1,039,663) – – –

Revaluation surplus on land and buildings 14 – 92,117,262 – 12,108,879

Transfer to deferred tax 37 – (23,029,316) – (3,027,220)

Revaluation surplus – 69,087,946 – 9,081,659

Total comprehensive income/(loss) for the year 229,661,188 (12,468,484) 6,896,102 12,607,226

Total comprehensive income/(loss) attributable to:

Owners of the parent 235,306,081 80,393,762 6,896,102 12,607,226

Non-controlling interest (5,644,893) (92,862,246) – –

229,661,188 (12,468,484) 6,896,102 12,607,226

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

Statements of Comprehensive IncomeFor the fi nancial year



232

Group Company

Note 2012 2011 1.1.2011 2012 2011 1.1.2011

RM RM RM RM RM RM

Assets

Non-current assets

Property, plant

and equipment 14 462,230,875 452,829,031 245,323,870 19,391,859 19,600,000 7,620,310

Investment property 15 – – – 8,553,688 8,913,870 9,559,243

Operating fi nancial

assets 16 7,475,727 6,584,625 2,475,910 – – –

Service concession

assets 17 7,686,186,879 7,694,673,807 7,685,002,446 – – –

Investment in

subsidiaries 18 – – – 463,305,380 463,118,040 463,110,960

Investment in

associates 19 45,236 43,986 39,738 48,071 45,415 44,339

Investment in

joint venture 20 1,104,156 1,641,971 5,634,957 – – 2,476,927

Held-to-maturity

fi nancial assets 21 – – – 278,764,629 265,958,665 254,152,376

DSRA 23 255,822,967 306,891,601 297,271,081 – – –

Goodwill 24 210,820,140 210,878,972 193,258,671 – – –

Trade and other

receivables 25 2,319,981,438 1,469,883,064 284,706,684 – – –

Deferred tax assets 37 425,928,475 425,211,092 399,546,108 – – –

11,369,595,893 10,568,638,149 9,113,259,465 770,063,627 757,635,990 736,964,155

Statements of Financial

PositionAs at 31 December 2012


233

Group Company

Note 2012 2011 1.1.2011 2012 2011 1.1.2011

RM RM RM RM RM RM

Current assets

Inventories 27 5,789,984 9,483,743 9,887,761 – – –

Held-to-maturity

fi nancial assets – – – – – 285,568,993

Trade and other

receivables 25 365,764,907 361,639,078 1,148,918,467 205,837,615 194,628,490 63,763,440

Other current assets 26 249,717,468 88,759,639 21,118,036 217,098 86,217 8,912,100

Available-for-sale

investments 28 59,851,091 9,408,793 – 50,661,055 – –

Tax recoverable 1,514 639,110 653,790 – – –

Short term funds 29 – 36,281 35,231 – – –

Cash and bank

balances 31 1,383,740,725 1,268,050,147 1,215,266,678 174,812,115 270,325,861 180,088,126

2,064,865,689 1,738,016,791 2,395,879,963 431,527,883 465,040,568 538,332,659

Total assets 13,434,461,582 12,306,654,940 11,509,139,428 1,201,591,510 1,222,676,558 1,275,296,814

Statements of Financial PositionAs at 31 December 2012


234

Group Company

Note 2012 2011 1.1.2011 2012 2011 1.1.2011

RM RM RM RM RM RM

Equity and liabilities

Current liabilities

Provision for

retirement benefi ts 34 324,408 2,283,854 1,539,853 – – –

Loans and borrowings 32 937,054,866 471,168,322 806,392,097 – – 285,568,993

Trade and

other payables 33 1,560,003,213 1,387,291,014 1,662,607,522 217,075,509 249,872,615 35,872,702

Other current liabilities 35 141,405 – 6,546,029 – – –

Service concession

obligations 17 369,424,130 337,189,482 313,628,571 – – –

Tax payable 90,280,541 27,434,086 14,155,744 286,161 590,847 228,041

2,957,228,563 2,225,366,758 2,804,869,816 217,361,670 250,463,462 321,669,736

Net current (liabilities)/assets (892,362,874) (487,349,967) (408,989,853) 214,166,213 214,577,106 216,662,923

Non-current liabilities

Provision for

retirement benefi ts 34 25,171,202 20,475,716 19,224,022 – – –

Loans and borrowings 32 4,718,733,590 5,040,961,074 4,680,571,099 – – –

Trade and other

payables 33 1,823,215,652 1,205,760,654 9,794,600 – – –

Government grant 36 308,509,896 285,933,999 282,626,078 – – –

Deferred tax liabilities 37 – – – 21,637,528 16,516,886 10,538,094

Service concession

obligations 17 3,676,661,105 3,832,349,191 3,971,371,961 – – –

10,552,291,445 10,385,480,634 8,963,587,760 21,637,528 16,516,886 10,538,094

Total liabilities 13,509,520,008 12,610,847,392 11,768,457,576 238,999,198 266,980,348 332,207,830

Net assets (75,058,426) (304,192,452) (259,318,148) 962,592,312 955,696,210 943,088,984

Statements of Financial Position

As at 31 December 2012


235

Group Company

Note 2012 2011 1.1.2011 2012 2011 1.1.2011

RM RM RM RM RM RM

Equity attributable

to owners

of the parent

Share capital 38 411,142,895 411,142,895 411,142,895 411,142,895 411,142,895 411,142,895

Share premium 38 102,878,221 102,878,221 102,878,221 102,878,221 102,878,221 102,878,221

Treasury shares 38 (5,940,688) (5,940,688) (5,940,688) (5,940,688) (5,940,688) (5,940,688)

Foreign currency

translation reserve 38 (569,747) 1,986,185 – – – –

Revaluation reserve 38 69,087,946 69,087,946 – 9,081,659 9,081,659 –

Other reserve 38 (340,943,537) (340,416,375) (320,653,591) – – –

Available-for-sale

reserve 38 94,080 (413,845) – 661,055 – –

Retained earnings 39 271,241,376 33,887,288 24,153,812 444,769,170 438,534,123 435,008,556

506,990,546 272,211,627 211,580,649 962,592,312 955,696,210 943,088,984

Non-controlling interest (582,048,972) (576,404,079) (470,898,797) – – –

Total equity (75,058,426) (304,192,452) (259,318,148) 962,592,312 955,696,210 943,088,984

Total equity and liabilities 13,434,461,582 12,306,654,940 11,509,139,428 1,201,591,510 1,222,676,558 1,275,296,814


Statements of Financial PositionAs at 31 December 2012


236

Equity

attributable

to owners of

Equity, the parent, Share

Note total total capital

RM RM RM

2012

Group

Opening balance at 1 January 2012 17,421,889 107,104,726 411,142,895

- Effects of adoption of MFRS 1 (321,614,341) 165,106,901 –

Opening balance at 1 January 2012 (304,192,452) 272,211,627 411,142,895

Total comprehensive income/(loss) 229,661,188 235,306,081 –

Transactions with owners

Net premium paid on acquisition of non-controlling interests (527,162) (527,162) –

Total transactions with owners (527,162) (527,162) –

Closing balance at 31 December 2012 (75,058,426) 506,990,546 411,142,895

2011

Group

Opening balance at 1 January 2011 62,296,193 46,473,748 411,142,895

- Effects of adoption of MFRS 1 (321,614,341) 165,106,901 –

Opening balance at 1 January 2011 (259,318,148) 211,580,649 411,142,895

Total comprehensive (loss)/income (12,468,484) 80,393,762 –

Transactions with owners

Net premium paid on acquisition of non-controlling interests 18 (19,762,784) (19,762,784) –

Acquisition of non-controlling interests 18 (34,224,947) – –

Acquisition of subsidiaries 18 21,581,911 – –

Total transactions with owners (32,405,820) (19,762,784) –

Closing balance at 31 December 2011 (304,192,452) 272,211,627 411,142,895

Statements of Changes in

EquityFor the fi nancial year



237

Attributable to owners of the parent

Non-distributable Distributable

Foreign

currency Available- Non-

Share Treasury translation Revaluation Other for-sale Retained controlling

premium shares reserve reserve reserve Reserves earnings interests

RM RM RM RM RM RM RM RM

102,878,221 (5,940,688) (1,108,129) 69,087,946 (19,762,784) (413,845) (448,778,890) (89,682,837)

– – 3,094,314 – (320,653,591) – 482,666,178 (486,721,242)

102,878,221 (5,940,688) 1,986,185 69,087,946 (340,416,375) (413,845) 33,887,288 (576,404,079)

– – (2,555,932) – – 507,925 237,354,088 (5,644,893)

– – – – (527,162) – – –

– – – – (527,162) – – –

102,878,221 (5,940,688) (569,747) 69,087,946 (340,943,537) 94,080 271,241,376 (582,048,972)

102,878,221 (5,940,688) (3,094,314) – – – (458,512,366) 15,822,445

– – 3,094,314 – (320,653,591) – 482,666,178 (486,721,242)

102,878,221 (5,940,688) – – (320,653,591) – 24,153,812 (470,898,797)

– – 1,986,185 69,087,946 – (413,845) 9,733,476 (92,862,246)

– – – – (19,762,784) – – –

– – – – – – – (34,224,947)

– – – – – – – 21,581,911

– – – – (19,762,784) – – (12,643,036)

102,878,221 (5,940,688) 1,986,185 69,087,946 (340,416,375) (413,845) 33,887,288 (576,404,079)

Statements of Changes in EquityFor the fi nancial year ended 31 December 2012


238

Non-Distributable

Available- Distributable

Equity, Share Share Treasury Revaluation for-sale retained

total capital premium shares reserve Reserves earnings

RM RM RM RM RM RM RM

Company

2012

Opening

balance at

1 January

2012 955,696,210 411,142,895 102,878,221 (5,940,688) 9,081,659 – 438,534,123

Total

comprehensive

income 6,896,102 – – – – 661,055 6,235,047

Closing

balance at

31 December

2012 962,592,312 411,142,895 102,878,221 (5,940,688) 9,081,659 661,055 444,769,170

2011

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


Statements of Changes in Equity

For the fi nancial year ended 31 December 2012


239

Group Company

Note 2012 2011 2012 2011

RM RM RM RM

Operating activities

Receipts from customers 2,498,912,185 1,918,420,162 – –

Other income 76,400,125 75,586,861 55,000 –

Payments to water treatment operators (468,803,052) (395,739,973) – –

Payments to service concession obligations (215,420,000) (190,430,000) – –

Payments for operating expenses (730,138,753) (619,928,751) (3,782,791) (4,122,385)

Payments to contractors (727,285,506) (301,842,316) – –

Net cash generated from/(used in) operations 433,664,999 486,065,983 (3,727,791) (4,122,385)

Net deposits received 24,991,273 25,852,252 – –

Interest paid (288,247,929) (216,208,730) – (7,408,244)

Tax paid (2,510,968) (44,089,652) (2,639,615) (1,354,811)

Interest received 48,114,073 44,519,034 5,695,178 26,152,673

(217,653,551) (189,927,096) 3,055,563 17,389,618

Net cash infl ow/(outfl ow) from operating activities 216,011,448 296,138,887 (672,228) 13,267,233

Investing activities

Acquisition of subsidiaries 18(b)

& (c) – (49,066,343) – (7,080)

Acquisition of non-controlling interest 18(a)

& (d) (527,162) (114,207,000) – –

Purchase of property, plant and equipment (38,005,312) (14,196,927) – –

Additions of service concession assets (197,513,389) (140,079,491) – –

Net advances (to)/from subsidiaries – – (45,970,700) 82,990,614

Net advance to associate (2,656) (1,076) (2,656) (1,076)

Net advance from/(to) joint venture 1,647,362 (239,267) 1,257,362 (239,267)

Cash fl ows (used in)/from investing activities

carried forward (234,401,157) (317,790,104) (44,715,994) 82,743,191

Statements of Cash FlowsFor the fi nancial year



240

Statements of Cash Flows


Group Company

Note 2012 2011 2012 2011

RM RM RM RM

Investing activities

Cash fl ows (used in)/from investing activities

brought forward (234,401,157) (317,790,104) (44,715,994) 82,743,191

Purchase of unquoted investments 28 (50,000,000) (10,000,000) (50,000,000) –

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

Proceeds from disposal of property, plant and

equipment 1,638,084 230,690 – –

Net cash (outfl ow)/infl ow from

investing activities (282,763,073) (333,332,103) (94,715,994) 404,937,761

Financing activities

Proceeds from loan and borrowings 243,629,513 444,848,500 – –

Repayment of loan and borrowings (105,450,668) (335,141,667) – (327,967,259)

Repayment of obligation under fi nance leases (5,604,347) (8,388,357) – –

Net cash infl ow/(outfl ow) from

fi nancing activities 132,574,498 101,318,476 – (327,967,259)

Net increase/(decrease) in cash and

cash equivalents 65,822,873 64,125,260 (95,388,222) 90,237,735


241

Group Company

Note 2012 2011 2012 2011

RM RM RM RM

Effects of exchange rate changes on cash

and cash equivalents (1,237,210) (1,720,221) (125,524) –

Cash and cash equivalents at 1 January 1,268,086,428 1,215,301,909 270,325,861 180,088,126

Transfer from/(to) DSRA 23 51,068,634 (9,620,520) – –

Deposits held in trust 31 (214,404,967) (186,955,104) – –

Cash and cash equivalents at 31 December 1,169,335,758 1,081,131,324 174,812,115 270,325,861

Cash and cash equivalents comprise:

Deposits with licensed banks 1,199,377,428 1,108,293,684 159,163,393 231,152,547

Less: Deposits held in trust 31 (214,404,967) (186,955,104) – –

984,972,461 921,338,580 159,163,393 231,152,547

Cash and bank balances 31 184,363,297 159,756,463 15,648,722 39,173,314

Short term funds 29 – 36,281 – –

1,169,335,758 1,081,131,324 174,812,115 270,325,861

Group

2012 2011

RM RM

(a) Purchase of plant and equipment was fi nanced by:

Cash 38,005,312 14,196,927

Hire Purchase 4,736,625 11,059,773

42,741,937 25,256,700


Statements of Cash FlowsFor the fi nancial year ended 31 December 2012


242

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 offi ce of the Company is located at 10th Floor, Wisma Rozali, No. 4, Persiaran

Sukan, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan. The principal place of business of the Company is located

at 8th 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. The Group’s principal activities diversifi ed to the

provision of marine spread, onshore and offshore services and engineering works for the oil and gas sector in year 2011.

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are disclosed in Note 18.

There have been no other signifi cant changes in the nature of the principal activities during the fi nancial year other than

those disclosed in Note 18.

2. BASIS OF PREPARATION

The fi nancial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial

Reporting Standards (“MFRSs”) as issued by Malaysian Accounting Standards Board (“MASB”), International Financial

Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. These fi nancial statements also

comply with the International Financial Reporting Standards as issued by the International Accounting Standards Board.

The fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting policies

below. The fi nancial statements are presented in Ringgit Malaysia (“RM”).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 First-time adoption of Malaysian Financial Reporting Standards (“MFRS”)

These fi nancial statements are the Group’s and the Company’s fi rst MFRS fi nancial statements for the year ended

31 December 2012. MFRS 1 First-Time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”) has been

applied.

In the previous years, the fi nancial statements of the Group and the Company were prepared in accordance with

Financial Reporting Standards (“FRSs”) in Malaysia.

Notes to the Financial

StatementsFor the fi nancial year



243

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.1 First-time adoption of Malaysian Financial Reporting Standards (“MFRS”) (continued)

In preparing its opening MFRS Statement of Financial Position as at 1 January 2011 (which is also the date of

transition), the Group has adjusted the amounts previously reported in fi nancial statements prepared in accordance

with FRS. An explanation and the fi nancial impact of how the transition from FRS to MFRS has affected the Group’s

fi nancial position is set out in Note 3.2 below. These include reconciliations of equity for comparative periods and of

equity at the date of transition reported under FRS to those reported for those periods and at the date of transition

under MFRS. The transition from FRS to MFRS has not had a material impact on statement of cash fl ow.

3.2 Application of MFRS 1

The audited fi nancial statements of the Group and of the Company for the year ended 31 December 2011 were

prepared in accordance with FRS. Except for certain differences, the requirements under FRS and MFRS are similar.

The signifi cant accounting policies adopted in preparing these fi nancial statements are consistent with those of the

audited fi nancial statements for the year ended 31 December 2011 except as discussed below. Accordingly, notes

related to the statement of fi nancial position as at date of transition to MFRSs are only presented for those items.

(a) Business combination

MFRS 1 provides the option to apply MFRS 3 Business Combinations, prospectively from the date of transition

or from a specifi c date prior to the date of transition. This provides relief from full retrospective application of

MFRS 3 which would require restatement of all business combinations prior to the date of transaction.

The Group has elected to apply MFRS 3 prospectively from the date of business combination of 1 January 2005.

In respect of acquisitions on or after 1 January 2005:

i) The classifi cation of former business combinations and the carrying amount of goodwill recognised under

FRS is maintained except for the goodwill recognised on the acquisition of the remaining 17.5% of the

ordinary shares of Puncak Niaga (M) Sdn Bhd (“PNSB”) in 2008 amounting to RM321,614,341 (31 December

2011: RM321,614,341) were adjusted to other reserve (RM320,653,541) and retained earnings (RM950,750);

and

ii) There is no-remeasurement of original fair values determined at the time of business combination (date of

acquisition).

Notes to the Financial StatementsFor the fi nancial year ended 31 December 2012


244


3.2 Application of MFRS 1 (continued)

(a) Business combination (continued)

In respect of the Group’s acquisitions prior to 1 January 2005:

i) The classifi cation of former business combinations under FRS is maintained;

ii) There is no-remeasurement of original fair values determined at the time of business combination (date of

acquisition); and

iii) The carrying amount of goodwill recognised under FRS is not adjusted.

(b) Foreign currency translation reserve

Under FRS, the Group recognised translation differences on foreign operations as a separate component of

equity. Cumulative foreign currency translation differences for all foreign operations are deemed to be zero as at

the date of transition to MFRS.

Accordingly, at the date of transition to MFRS, the cumulative foreign currency translation losses of RM3,094,314

(2011: RM3,094,314) were adjusted to retained earnings.

(c) Non-Controlling Interest (“NCI”)

According to MFRS 127 - Consolidated and Separate Financial Statements, total comprehensive income is

attributable to the owners of the parent and to the NCI even if this results in the NCI having a defi cit balance and

this shall be applied prospectively from 1 January 2011. However, if the entity elects to apply MFRS 3 - Business

Combination for an earlier period, MFRS 127 shall also be applied for that earlier period.

The Group elects to adopt MFRS 3 and MFRS 127 on the business combination date of 1 January 2005 as

permitted under the MFRS. Accordingly, the impact of these earlier adoptions had been adjusted to the retained

earnings and non-controlling interest as disclosed in the reconciliation below.

At the date of transition to MFRS, the cumulative NCI’s share of losses of RM486,721,242 (2011: RM486,721,242)

were adjusted to retained earnings.

(d) Estimates

The estimates at 1 January 2011 and 31 December 2011 were consistent with those made for the same dates

in accordance with FRS. The estimates used by the Group to present these amounts in accordance with MFRS

refl ects conditions at 1 January 2011, the date of transition to MFRS and as of 31 December 2011.

Notes to the Financial Statements



245



The reconciliations of equity for comparative periods and of equity at the date of transition reported under FRS to

those reported for those periods and at the date of transition under MFRS of the Group, are provided below:

(i) Reconciliation of equity as at 1 January 2011

Note 3.2(b)

Foreign Note 3.2(c)

FRS as at Currency Non- MFRS as at

1 January Note 3.2(a) Exchange controlling 1 January

2011 Goodwill Reserves interest 2011

RM RM RM RM RM

Statement of fi nancial position

Group

Non-current assets

Goodwill 514,873,012 (321,614,341) – – 193,258,671

Equity

Foreign currency

translation reserve (3,094,314) – 3,094,314 – –

Non-controlling interests 15,822,445 – – (486,721,242) (470,898,797)

(Accumulated losses)/

Retained earnings (458,512,366) (960,750) (3,094,314) 486,721,242 24,153,812

Other reserve – (320,653,591) – – (320,653,591)



246



The reconciliations of equity for comparative periods and of equity at the date of transition reported under FRS

to those reported for those periods and at the date of transition under MFRS of the Group, are provided below:

(continued)

(ii) Reconciliation of equity as at 31 December 2011

Note 3.2(b)

Foreign Note 3.2(c)

FRS as at Currency Non- MFRS as at

31 December Note 3.2(a) Exchange controlling 31 December

2011 Goodwill Reserves interest 2011

RM RM RM RM RM

Statement of fi nancial position

Group

Non-current assets

Goodwill 532,493,313 (321,614,341) – – 210,878,972

Equity

Foreign currency

translation reserve (1,108,129) – 3,094,314 – 1,986,185

Non-controlling interests (89,682,837) – – (486,721,242) (576,404,079)

(Accumulated losses)/

Retained earnings (448,778,890) (960,750) (3,094,314) 486,721,242 33,887,288

Other reserve (19,762,784) (320,653,591) – – (340,416,375)




247


3.3 Standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s

and the Company’s fi nancial statements are disclosed below. The Group and the Company intend to adopt these

standards, if applicable, when they become effective.

Effective for

annual periods

beginning on

Description or after

MFRS 101 Presentation of Items of Other Comprehensive Income (Amendments to

MFRS 101) 1 July 2012

Amendments to MFRS 101: Presentation of Financial Statements

(Annual Improvements 2009-2011 Cycle) 1 January 2013

MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in

March 2004) 1 January 2013

MFRS 10 Consolidated Financial Statements 1 January 2013

MFRS 11 Joint Arrangements 1 January 2013

MFRS 12 Disclosure of interests in Other Entities 1 January 2013

MFRS 13 Fair Value Measurement 1 January 2013

MFRS 119 Employee Benefi ts 1 January 2013

MFRS 127 Separate Financial Statements 1 January 2013

MFRS 128 Investment in Associate and Joint Ventures 1 January 2013

MFRS 127 Consolidated and Separate Financial Statements (IAS 27 as revised

by IASB in December 2003) 1 January 2013

Amendments to MFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013

Amendments to MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards

– Government Loans 1 January 2013

Amendments to MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards

– Annual Improvements 2009-2011 Cycle) 1 January 2013

Amendments to MFRS 116: Property, Plant and Equipment (Annual Improvements

2009-2011 Cycle) 1 January 2013

Amendments to MFRS 132: Financial Instruments: Presentation (Annual Improvements

2009-2011 Cycle) 1 January 2013

Amendments to MFRS134: Interim Financial Reporting (Annual Improvements

2009-2011 Cycle) 1 January 2013

Amendments to MFRS 10: Consolidated Financial Statements: Transition Guidance 1 January 2013

Amendments to MFRS 11: Joint Arrangements: Transition Guidance 1 January 2013

Amendments to MFRS 12: Disclosure of Interests in Other Entities: Transition Guidance 1 January 2013

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities 1 January 2014

MFRS 9 Financial Instruments 1 January 2015



248


3.3 Standards issued but not yet effective (continued)

The directors expect that the adoption of the above standards and interpretations will have no material impact on

the fi nancial statements in the period of initial application except as discussed below:

MFRS 10 Consolidated Financial Statements

MFRS 10 replaces part of MFRS 127 Consolidated and Separate Financial Statements that deals with consolidated

fi nancial statements and IC Interpretations 112 Consolidation - Special Purpose Entities.

Under MFRS 10, an investor controls and investee when (a) the investor has power over an investee, (b) the investor

has exposure, or rights, to variable returns from its involvement with the investee, and (c) the investor has ability to

use its power over the investee to affect the amount of the investor’s returns. Under MFRS 127 Consolidated and

Separate Financial Statements control was defi ned as the power to govern the fi nancial and operating policies of an

entity so as to obtain benefi ts from its activities.

MFRS 10 includes detailed guidance to explain when an investor has control over the investee. MFRS 10 requires

the investor to take into account all relevant facts and circumstances.

The change in accounting of Group’s investments (if any) will be applied in accordance with the relevant transitional

provisions as set out in MFRS 10 as if the acquisitions of the effected entities had been accounted for in accordance

with MFRS 3 at the date of acquisition.

MFRS 11 Joint Arrangements

MFRS 11 establishes the principles for classifi cation and accounting for joint arrangements and supersedes MFRS

131, Interest in Joint Ventures. Under MFRS 11, a joint arrangement may be classifi ed as joint venture or joint

operation. Interest in joint venture will be accounted for using equity method whilst interest in joint operation will be

accounted for using the applicable MFRSs relating to the underlying assets, liabilities, income and expense items

arising from the joint operations. The Group is currently assessing the impact of adoption of MFRS 11.

MFRS 12 Disclosure of interests in Other Entities

MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and

structured entities. A number of new disclosures are required. This standard affects disclosures only and has no

impact on the Group’s fi nancial position or performance.

MFRS 127 Separate Financial Statements

As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, jointly

controlled entities and associates in separate fi nancial statements.




249



MFRS 128 Investments in Associates and Joint Ventures

As a consequence of new MFRS 11 and MFRS 12, MFRS 128 is renamed as MFRS 128 Investments in Associates

and Joint Ventures. This new standard describes the application of the equity method to investments in joint ventures

in addition to associates.

MFRS 13 Fair Value Measurement

MFRS 13 establishes a single source of guidance under MFRS for all fair value measurements. MFRS 13 does not

change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under

MFRS when fair value is required or permitted.

Upon adoption of MFRS 13, the Group will take into consideration the highest and best use of certain properties

in measuring the fair value of such properties. The adoption of MFRS 13 is expected to result in higher fair value of

certain properties of the Group.

MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004) and MFRS 127

Consolidated and Separate Financial Statements (IAS 27 as revised by IASB in December 2003)

An entity shall apply these earlier versions of MFRS 3 and MFRS 127 only if the entity has elected to do so as allowed

in MFRS 10 Consolidated Financial Statements. The adoptions of these standards are not expected to have any

signifi cant impact to the Group and the Company.

MFRS 119 Employee Benefi ts

The most signifi cant change relates to the accounting for changes in defi ned benefi t obligations and plan assets.

The amendments require the recognition of changes in defi ned benefi t obligations and in fair value of plan assets

when they occur, and hence eliminate the “corridor approach” as permitted under the previous version of MFRS

119 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses

to be recognised immediately through other comprehensive income in order for the net pension asset or liability

recognised in the consolidated statement of fi nancial position to refl ect the full value of the plan defi cit or surplus.

The amendments to MFRS 119 require retrospective application with certain exceptions. The directors anticipate

that the application of the amendments to MFRS 119 may have impact on amounts reported in respect of the

Group’s defi ned benefi t plans. However, the Group is currently assessing the impact that this standard will have on

the fi nancial position and performance of the Group.



250



Amendments to MFRS 101: Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)

The amendments to MFRS 101 change the grouping of items presented in other comprehensive income. Items

that could be reclassifi ed (or recycled) to profi t or loss at a future point in time (for example, exchange differences

on translation of foreign operations and net loss or gain on available-for-sale fi nancial assets) would be presented

separately from items which will never be reclassifi ed (for example, actuarial gains and losses on defi ned benefi t

plans and revaluation of land and buildings). The amendment affects presentation only and has no impact on the

Group’s fi nancial position and performance.

MFRS 9 Financial Instruments: Classifi cation and Measurement

MFRS 9 refl ects the fi rst phase of the work on the replacement of MFRS 139 Financial Instruments: Recognition and

Measurement and applies to classifi cation and measurement of fi nancial assets and fi nancial liabilities as defi ned in

MFRS 139 Financial Instruments: Recognition and Measurement. The adoption of the fi rst phase of MFRS 9 will have

an effect on the classifi cation and measurement of the Group’s fi nancial assets. The Group will quantify the effect in

conjunction with the other phases, when the fi nal standard including all phases is issued.

3.4 Basis of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries as at

the reporting date. The fi nancial statements of the subsidiaries used in the preparation of the fi nancial 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 except for unrealised losses, which are not eliminated when there are indications

of impairment.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it:

- Derecognises the assets (including goodwill) and liabilities of the subsidiary

- Derecognises the carrying amount of any non-controlling interest

- Derecognises the cumulative translation differences recorded in equity

- Recognises the fair value of the consideration received

- Recognises the fair value of any investment retained

- Recognises any surplus or defi cit in profi t or loss

- Reclassifi es the parent’s share of components previously recognised in other comprehensive income to profi t or

loss or retained earnings, as appropriate




251


3.4 Basis of consolidation (continued)

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured

as aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-

controlling interest in the acquiree at fair value or at the proportionate share of the acquiree’s identifi able net assets.

Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the fi nancial assets and liabilities assumed for appropriate

classifi cation and designation in accordance with the contractual terms, economic circumstances and the pertinent

conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the

acquiree.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition

date fair value and any resulting gain or loss is recognised in statement of comprehensive income.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition

date. Contingent consideration classifi ed as an asset or liability that is a fi nancial instrument and within the scope of

MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value

recognised either in profi t or loss or as a change to other comprehensive income. If the contingent consideration is

not within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration

that is classifi ed as equity is not remeasured and subsequent settlement is accounted for within equity.

3.5 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 fi nancial 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 refl ect 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.

Total comprehensive income within a subsidiary is attributable to the non-controlling interest even if it results in a

defi cit balance.



252


3.6 Currency conversion

The Group’s fi nancial statements are presented in Ringgit Malaysia (“RM”), which is also the functional currency

of the Company. All transactions are recorded in Ringgit Malaysia. Each entity in the Group determines its own

functional currency and items included in the fi nancial statements of each entity are measured using that functional

currency.

(a) 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 prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are

translated at the rate of exchange prevailing at the end of the reporting period.

Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using

the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign

currency 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 end

of the reporting period are recognised in profi t 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 reclassifi ed from equity to profi t 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 profi t

or loss except for the differences arising on the translation of non-monetary items in respect of which gains and

losses are recognised directly in other comprehensive income. Exchange differences arising from such non-

monetary items are also recognised directly in other comprehensive income.

(b) 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

profi t 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.




253


3.7 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 benefi ts associated with the

item will fl ow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment and furniture and fi xtures are measured at cost less accumulated

depreciation and accumulated impairment losses. When signifi cant parts of property, plant and equipment are

required to be replaced in intervals, the Group recognises such parts as individual assets with specifi c 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 satisfi ed. All other repair and

maintenance costs are recognised in profi t or loss as incurred.

In the previous fi nancial 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

suffi cient 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 profi t or loss, in which case the increase is recognised in profi t or loss. A revaluation defi cit is

recognised in profi t 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.

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

- Offi ce equipment: 4 to 10 years

- Furniture and fi ttings: 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



254


3.7 Property, plant and equipment (continued)

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 fi nancial year-end, and adjusted

prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are

expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profi t or loss in

the year the asset is derecognised.

3.8 Investment properties

Investment property is property which are held to earn rental income or for capital appreciation or both. Properties

that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment

properties.

Such property are measured initial at cost including transaction costs. Subsequent to recognition, Investment

property is stated at cost less accumulated depreciation. The annual depreciation rate for buildings is 2%. The

policy for the recognition and measurement of impairment losses is in accordance with Note 3.12.

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 benefi t is expected from its disposal. Any gain or loss on the

retirement or disposal of an investment property is recognised in profi t 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 3.7 up to the date of change

in use.




255


3.9 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 identifi ed 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 fi nancial statements for

the fi nancial year ended 31 December 2012 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

benefi ts 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.

The Group subsequently measures the service concession obligations at amortised costs using the effective

interests method as disclosed in Note 3.23.

In addition, the Group recognises and measures revenue in accordance with MFRS 111, Construction Contracts

and MFRS 118, Revenue Recognition for the services it performs.

3.10 Operating fi nancial 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 specifi ed period of time. These

arrangements may include infrastructure used in a public-to-private service concession arrangement for its entire

useful life.

The fi nancial asset model is used when the Group has an unconditional contractual right to receive cash or

another fi nancial asset from or at the direction of the grantor for the construction services.



256


3.10 Operating fi nancial assets (continued)

When the unconditional right to receive cash covers only part of the service, the intangible asset and fi nancial

asset model are combined to account seperately for each component. If the Company performs more than one

service (i.e. construction or upgrade services and operation services) under a single contract or arrangement,

consideration received or receivable is allocated by reference to the relative fair values of the services delivered,

when the amounts are seperately identifi able.

In the fi nancial asset model, the amount due from the grantor meets the defi nition 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

benefi ts are expected from its future use or disposal or when the contractual rights to the fi nancial asset expire.

3.11 Goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the

amount recognised for non-controlling interest over the net identifi able assets acquired and liabilities assumed.

If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is

recognised in statement of comprehensive income.

After initial recognition, goodwill is tested annually for impairment and carried at cost less accumulated impairment

losses.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to

those cash-generating units or groups of cash-generating units that are expected to benefi t from the synergies

of the business combination in which the goodwill arose. The accounting policy on impairment of non-fi nancial

assets is disclosed in Note 3.12.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed

of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when

determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the

relative values of the disposed operation and the portion of the cash-generating unit retained.




257


3.12 Impairment of non-fi nancial 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

identifi able cash fl ows (“CGU”).

In assessing value in use, the estimated future cash fl ows expected to be generated by the asset are discounted

to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of

money and the risks specifi c 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 fi rst 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 profi t 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 profi t 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.

3.13 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies so as

to obtain benefi ts from its activities.

In the Company’s separate fi nancial statements, investments in subsidiaries are accounted for at cost less

impairment losses.

3.14 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant infl uence. An

associate is equity accounted for from the date the Group obtains signifi cant infl uence until the date the Group

ceases to have signifi cant infl uence over the associate.



258


3.14 Associates (continued)

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 fi nancial 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 identifi able

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 profi t

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 profi t or loss.

The fi nancial statements of the associates are prepared as of the same reporting date as the Company. Where the

date of the audited fi nancial statements used are not coterminous with those of the Group, the share of results is

derived at from the last audited fi nancial statements available and management fi nancial 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 fi nancial 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 profi t or loss.

3.15 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 fi nancial 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 3.14.

Adjustments are made in the Group’s consolidated fi nancial 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

controlled entity.

The fi nancial 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.




259


3.15 Joint venture (continued)

In the Company’s separate fi nancial 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 profi t or loss.

3.16 Financial assets

Financial assets are recognised in the statements of fi nancial position when, and only when, the Group and the

Company become a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets

not at fair value through profi t or loss, directly attributable transaction costs.

The Group and the Company determine the classifi cation of their fi nancial assets at initial recognition, and the

categories include fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity

investments and available-for-sale fi nancial assets.

(a) Financial assets at fair value through profi t or loss

Financial assets are classifi ed as fi nancial assets at fair value through profi t 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 fi nancial assets acquired principally for the purpose of selling in the

near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair

value. Any gains or losses arising from changes in fair value are recognised in profi t or loss. Net gains or net

losses on fi nancial assets at fair value through profi t or loss do not include exchange differences, interest

and dividend income. Exchange differences, interest and dividend income on fi nancial assets at fair value

through profi t or loss are recognised separately in profi t or loss as part of other losses or other income.

Financial assets at fair value through profi t or loss could be presented as current or non-current. Financial

assets that are held primarily for trading purposes are presented as current whereas fi nancial 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 fi xed or determinable payments that are not quoted in an active market are classifi ed

as loans and receivables.



260


3.16 Financial assets (continued)

(b) Loans and receivables (continued)

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method. Gains and losses are recognised in profi t or loss when the loans and receivables are

derecognised or impaired, and through the amortisation process.

Loans and receivables are classifi ed as current assets, except for those having maturity dates later than 12

months after the reporting date which are classifi ed as non-current.

(c) Held-to-maturity investments

Financial assets with fi xed or determinable payments and fi xed maturity are classifi ed 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 profi t or loss when the held-to-maturity

investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classifi ed as non-current assets, except for those having maturity within

12 months after the reporting date which are classifi ed as current.

(d) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are fi nancial assets that are designated as available for sale or are not

classifi ed in any of the three preceding categories.

After initial recognition, available-for-sale fi nancial assets are measured at fair value. Any gains or losses

from changes in fair value of the fi nancial 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 profi t or loss. The cumulative gain or loss previously

recognised in other comprehensive income is reclassifi ed from equity to profi t or loss as a reclassifi cation

adjustment when the fi nancial asset is derecognised. Interest income calculated using the effective interest

method is recognised in profi t or loss. Dividends on an available-for-sale equity instrument are recognised

in profi t 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 fi nancial assets are classifi ed as non-current assets unless they are expected to be

realised within 12 months after the reporting date.




261


3.16 Financial assets (continued)

(d) Available-for-sale fi nancial assets (continued)

A fi nancial asset is derecognised when the contractual right to receive cash fl ows from the asset has expired.

On derecognition of a fi nancial 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 profi t or loss.

Regular way purchases or sales are purchases or sales of fi nancial 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 fi nancial 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.

3.17 Impairment of fi nancial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a fi nancial

asset is impaired.

(a) Trade and other receivables and other fi nancial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been incurred,

the Group and the Company consider factors such as the probability of insolvency or signifi cant fi nancial

diffi culties of the debtor and default or signifi cant delay in payments. For certain categories of fi nancial 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 fl ows discounted at the fi nancial asset’s

original effective interest rate. The impairment loss is recognised in profi t or loss.

The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial 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 profi t or loss.



262


3.17 Impairment of fi nancial assets (continued)

(b) Unquoted equity securities carried at cost

If there is objective evidence (such as signifi cant adverse changes in the business environment where the

issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer) that an impairment

loss on fi nancial assets carried at cost has been incurred, the amount of the loss is measured as the

difference between the asset’s carrying amount and the present value of estimated future cash fl ows

discounted at the current market rate of return for a similar fi nancial asset. Such impairment losses are not

reversed in subsequent periods.

(c) Available-for-sale fi nancial assets

Signifi cant or prolonged decline in fair value below cost, signifi cant fi nancial diffi culties 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 classifi ed as available-for-sale fi nancial assets are impaired.

If an available-for-sale fi nancial 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 profi t or loss, is transferred from equity to profi t or loss.

Impairment losses on available-for-sale equity investments are not reversed in profi t 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 profi t 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 profi t or loss.

3.18 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 insignifi cant risk of

changes in value.

3.19 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.




263


3.19 Construction contracts (continued)

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 profi ts (less recognised losses) exceeds

progress billings, the balance is classifi ed as amount due from customers on contracts. When progress billings

exceed costs incurred plus, recognised profi ts (less recognised losses), the balance is classifi ed as amount due

to customers on contracts.

3.20 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.

Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of

completion and the estimated costs necessary to make the sale.

3.21 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 outfl ow 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 refl ect the current best estimate. If it is no longer

probable that an outfl ow 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

refl ects, where appropriate, the risks specifi c to the liability. When discounting is used, the increase in the provision

due to the passage of time is recognised as a fi nance cost.



264


3.22 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 fi nancial position and is amortised to profi t 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 3.9. The cost of assets to which

the grants relate to are capitalised as service concession assets.

When loans or similar assistance are provided by governments or related institutions with an interest rate below

the current applicable market rate, the effect of this favourable interest is regarded as a government grant.

3.23 Financial liabilities

Financial liabilities are classifi ed according to the substance of the contractual arrangements entered into and the

defi nitions of a fi nancial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of fi nancial position when, and

only when, the Group and the Company become a party to the contractual provisions of the fi nancial 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 classifi ed 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 fi nancial liabilities, gains and losses are recognised in profi t or loss when the liabilities are derecognised,

and through the amortisation process.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. When an existing fi nancial

liability is replaced by another from the same lender on substantially different terms, or the terms of an existing

liability are substantially modifi ed, such an exchange or modifi cation 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 profi t or loss.




265


3.24 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 profi t 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.

3.25 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.

3.26 Employee benefi ts

(a) Defi ned contribution plans

The Group participates in the national pension schemes as defi ned 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 defi ned

contribution pension scheme. Contributions to defi ned 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.

(b) Defi ned benefi t plans

The Group operates an unfunded, defi ned benefi t Retirement Benefi t 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

benefi t that employees have earned in return for their service in the current and prior years is estimated.

That benefi t 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 benefi ts

are already vested, and otherwise are amortised on a straight-line basis over the average period until the

amended benefi ts become vested.



266


3.26 Employee benefi ts (continued)

(b) Defi ned benefi t plans (continued)

The amount recognised in statement of fi nancial position represents the present value of the defi ned benefi t

obligation adjusted for unrecognised actuarial gains and losses and unrecognised past service costs.

(c) Short term benefi ts

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which

the associated services are rendered by employees of the Group. Short term accumulating compensated

absences such as paid annual leave are recognised when services are rendered by employees that increase

their entitlement to future compensated absences. Short term non-accumulating compensated absences

such as sick leave are recognised when the absences occur.

3.27 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 fi nance 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 profi t 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 profi t or loss on a straight-line basis over the

lease term. The aggregate benefi t 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 classifi ed

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 3.28(f).




267


3.28 Revenue

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow 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 revenue

Revenue from construction contracts is accounted for by the stage of completion method as describe in

Note 3.19.

(d) Rehabilitation works

Revenue from rehabilitation works is recognised and measured by the Group in accordance with MFRS 111

and MFRS 118 for the services it performs. Revenue 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

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 revenue

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.



268


3.28 Revenue (continued)

(g) Oil and gas revenue (continued)

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 fi nancial position.

3.29 Raw materials, consumables and maintenance expenses

Raw materials, consumables and maintenance expenses represent costs incurred in the production of treated

water, maintenance works, and provision of oil and gas services. These costs are recognised as an expense in the

income statement in the year in which the expenses are incurred.

3.30 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 profi t or loss except to the extent that the tax relates to items recognised

outside profi t 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 fi nancial 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 profi t nor taxable profi t 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.




269


3.30 Income taxes (continued)

(b) Deferred tax (continued)

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 profi t 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 profi t nor taxable profi t 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 profi t will be available against

which the temporary differences can be utilised.

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 suffi cient taxable profi t 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 profi t 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 profi t or loss is recognised outside profi t 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.

3.31 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 47, including the factors used

to identify the reportable segments and the measurement basis of segment information.



270


3.32 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 classifi ed as equity. Dividends on ordinary shares are recognised in equity in the period in

which they are declared.

3.33 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 classifi ed as treasury shares and

presented as a deduction from total equity. No gain or loss is recognised in profi t 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.

3.34 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will

be confi rmed 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 fi nancial position of the Group.

3.35 Financial guarantee contracts

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse the

holder for a loss it incurs because a specifi ed debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent

to initial recognition, fi nancial guarantee contracts are recognised as income in profi t or loss over the period of

the guarantee. If the debtor fails to make payment relating to fi nancial 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 required to settle the present obligation at the reporting date and

the amount initially recognised less cumulative amortisation.




271

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group’s fi nancial 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.

4.1 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 signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

the next fi nancial year are discussed below.

(a) Service Concession Arrangement (“SCA”)

In applying IC Interpretation 12, the Group has made a judgement that the Agreements as discussed in Note

5(b), qualifi es under the Intangible Asset model as disclosed in Note 3.9.

Under the Intangible Asset model, the rehabilitation works performed by the Group (previously recognised as

project development expenditure) and the present value of the total estimated concession fee payments were

recognised as intangible assets. The intangible assets is amortised using the revenue method over the life of

the concession agreement.

During the fi nancial 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 intangibles

asset contained in a concession arrangement, and the deliberation over this matter is currently ongoing.

Pending the fi nalisation 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.

As the related service concession obligation is now recognised, this resulted in additional fi nance costs to the

Group due to the accretion of the obligation.

In connection with the rehabilitation of works performed, the Group measures the revenue at the fair value of

the consideration received or receivable. The fair value is calculated by including certain mark-up, estimated to

refl ect a margin consistent with other similar construction work where possible, on the actual costs incurred.

As at 31 December 2012, the carrying amount of service concession assets was RM7,686,186,879 (2011:

RM7,694,673,807). The carrying amount of service concession obligations was RM4,046,085,235 (2011:

RM4,169,538,673).



272

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONTINUED)

4.1 Key sources of estimation uncertainty (continued)

(b) Water tariff compensation

Pursuant to the Concession Agreement (“CA”) dated 15 December 2004, and as disclosed in Note 5(b),

SYABAS is entitled to impose a second water tariff review effective from 1 January 2009 and a third water

tariff review effective from 1 January 2012 based on a formula contained in the Concession Agreement.

The revised water tariff rates are to be submitted by SYABAS to the State Government for gazettement. The

second and third revised water tariffs were submitted on 31 March 2008 and 23 May 2011 respectively but as

at the reporting date, the State Government has not gazetted the revised rates. The Directors, in consultation

with their solicitors, are of the opinion that SYABAS is entitled to the water tariff compensation recognised in

the fi nancial statement of RM2,334,992,912 (2011: RM1,311,051,925) as disclosed in Note 25.

(c) Estimated useful life of the vessel

The cost of plant and equipment is depreciated on a straight-line basis over the vessel’s estimated economic

useful life. Management estimates the useful life of the vessel to be within 15 years and residual value of

USD20 million. These are common life expectancies and residual value applied in the industry for a similar

vessel. Management has relied upon professional valuer’s opinion to determine these estimates.

Changes in the expected level of usage and technological developments could impact the economic useful

life and the residual value of the vessel, therefore, future depreciation charge could be revised. The carrying

amount of the Group’s plant and equipment at the reporting date is disclosed in Note 14.

(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 fl ows from the CGU and also to choose a

suitable discount rate in order to calculate the present value of those cash fl ows. The carrying amount of

goodwill as at 31 December 2012 was RM210,820,140 (2011: RM210,878,972 ). Further details are disclosed in

Note 24.

(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 profi t will be available against which the losses and capital allowances can be utilised.

Signifi cant 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 profi ts together with future tax planning

strategies.




273



(e) Deferred tax (continued)

The total carrying value of deferred tax assets recognised by the Group as at 31 December 2012 is

RM425,928,475 (2011: RM425,211,092).

(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 2012, the Group’s gross trade receivables were RM2,837,010,331

(2011: RM1,863,241,602) and the provision for doubtful receivables was RM10,436,262 (2011: RM6,617,704).

The tariff compensation amounting to RM2,334,992,912 (2011: RM1,311,051,925) were reclassifi ed 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 RM108,519,566

(2011: 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 3.22. 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 signifi cant risk of changes in the

projected water revenue which may cause a material adjustment to the amortisation of government grant in

the future fi nancial 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 fi nancial statements. Further details of the

material litigations involving the Group are disclosed in Note 50.



274



(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.

(j) Unbilled revenue

Within the total revenue earned by the Group, signifi cant estimation is involved in determining the unbilled

revenue of the Group which has a carrying value of RM237,253,922 (2011: RM74,780,225) as at the reporting

date. It is attributable to work performed based on the contracts with the respective customers, with the

external party certifying the daily progress report which forms a signifi cant part of the contracting document

for the transfer of risk and rewards.

Management estimates are based on their previous experience with the respective customers and the following

assumptions:

(i) The work scope are carried out in accordance with provisions in the oil and gas contracts;

(ii) The stage of the completion of the contract activity as of the reporting date; and

(iii) The associated costs incurred to carry out these work scope are incurred in the period and charged to the

income statements.

These work are subject to fi nal approval by respective customers. As such there is time lag between the fi nal

approval and the completion of work done by GOM. It is therefore appropriate to recognise revenue on these

transactions for the current fi nancial year.

(k) Income taxes

Signifi cant judgement is involved in determining the Group’s provision for income taxes. There are certain

transactions and computations for which the ultimate tax determination is uncertain during the ordinary

course of business. The Group recognised liabilities for expected tax issues based on estimates of whether

additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that

were initially recognised, such differences will impact the income tax and deferred tax provisions in the period

in which such determination is made. The carrying amount of the Group’s tax payable as at 31 December 2012

and 31 December 2011 was RM90,280,541 and RM27,434,086 respectively.




275


4.2 Signifi cant judgement

Recoverability of amount due from State Government

Included in trade receivables is RM2,334,992,912 (2011: RM1,311,051,925) being the water tariff compensation

owing from the State Government for the years 2009, 2010, 2011 and 2012 cumulatively. During the fi nancial 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’s application to withdraw with liberty to fi le afresh by way of

a writ of summons with no order as to costs as further disclosed per Note 50(e). As disclosed in Note 50(g), on 8

September 2011, SYABAS fi led 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. Total water tariff compensation claims submitted to

the Selangor State Government up to the period ended 31 December 2012 is RM2,486,972,720. 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.

5. 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 fi nalised 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:



276

5. AWARD OF CONCESSIONS (CONTINUED)

(a) PNSB was awarded the following concessions by the State Government: (continued)

(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.

(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




277


(a) PNSB was awarded the following concessions by the State Government: (continued)

(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, benefi ts,

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

(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, benefi t, 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.



278




(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, fi nance, 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, fi nance, 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, fi nance, 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.

6. REVENUE

Group Company

2012 2011 2012 2011

RM RM RM RM

Supply and distribution of treated water to consumers 1,599,014,093 1,532,897,384 – –

Water tariff compensation 1,023,940,987 458,150,923 – –

Oil and gas revenue 778,041,868 289,529,044 – –

Construction revenue 342,672,444 310,931,740 – –

Others 265,832 – – –

3,743,935,224 2,591,509,091 – –

(a) Supply and distribution of treated water to consumers

The amount relates to 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 is determined by the directors of SYABAS based on the terms of the SYABAS Concession Agreement

signed between the Company, the Federal Government and the State Government as disclosed in Note 4.1(b).

The claim for water tariff compensation had been included as amount owing by the State Government under trade

receivables as at 31 December 2012.


279

6. REVENUE (CONTINUED)

(c) Oil and gas revenue

Oil and gas revenue relates to revenue arising in rendering of offshore personnel services and renting of machineries

and vessels and recognised in accordance with Note 3.28(g).

(d) Construction revenue

Construction revenue relates to revenue recognised in accordance with MFRS 111 in respect of service under the

concession arrangements. Construction revenue is recognised based on the percentage of completion method

during the construction phase.

7. PROFIT/(LOSS) BEFORE TAX

The following items have been included in arriving at profi t/(loss) before tax:

(a) Other income

Group Company

2012 2011 2012 2011

RM RM RM RM

Amortisation of:

- deferred government grant (Note 36(a)) (5,378,552) (4,199,561) – –

- government grant (Note 36(b) & (c)) (5,423,021) (3,667,198) – –

Accretion of interest on long term receivable

(Note 25(e)) (9,976,953) (12,134,199) – –

Interest income:

- Junior Notes A – – – (49,792,877)

- RCULS (Note 22) – – (12,805,964) (11,806,289)

- BAIDS – – – (8,895,000)

Finance income from operating fi nancial asset (499,761) (188,978) – –

Profi t earned from deposits (47,799,802) (44,289,735) (5,657,309) (5,451,384)

Income from liquidated ascertained damages

from contractors (1,884) (109,200) – –

Rental income from land and building (404,077) (325,700) (60,000) (60,000)



280

7. PROFIT/(LOSS) BEFORE TAX (CONTINUED)

(a) Other income (continued)

Group Company

2012 2011 2012 2011

RM RM RM RM

Rental income from investment property – – (873,461) (840,056)

Unrealised foreign exchange gain – – – (3,135,213)

Income from property developers (Note 7(a)(i)) (54,713,859) (43,780,035) – –

Gain on extinguishment of debts in regards to

JNA (Note 32(c)) – (155,554,087) – –

Adjustment on trade and other payables (Note 33(f)) (23,801,845) (19,680,001) – –

Negative goodwill (Note 18(e)) – (5,333,824) – –

Gain on disposal of BAIDS – (6,740,180) – –

Write back on impairment loss on investment in

joint venture (Note 20) (1,257,362) – (1,257,362) –

Reconnection charges (8,277,317) (7,092,172) – –

(i) Income from property developers represents contributions by developers to improve and upgrade the distribution

system.

(b) Other expenses

Group Company

2012 2011 2012 2011

RM RM RM RM

Auditors’ remuneration (Note 8)

Auditors of the Company

- Statutory audit 785,229 602,659 70,000 56,000

- Others 560,370 724,071 234,496 53,284

Other auditors

- Statutory audit 414,715 380,624 – –

- Others 22,826 77,077 – –

1,783,140 1,784,431 304,496 109,284




281


(b) Other expenses (continued)

Group Company

2012 2011 2012 2011

RM RM RM RM

Others

Concession fees 1,000,000 1,000,000 – –

Non-Executive Directors’ remuneration (Note 10) 404,000 406,000 404,000 406,000

Impairment loss on other receivables (Note 25) 283 9,142,903 – 9,130,501

Bad debt written off 3,088,310 14,919,957 – –

Bad debts recovered (3,397,596) (4,008,696) – –

Reversal of allowance for impairment of

trade receivables (Note 25(a)) (125,658) (518,244) – –

Property, plant and equipment written off 311,599 114,541 – –

Impairment loss on:

- property, plant and equipment (Note 14) 1,455,092 7,472,794 – –

- service concession assets (Note 17) 3,168 20,255 – –

- joint venture (Note 20) – 4,029,018 – 2,716,194

- goodwill (Note 24) – 4,137,344 – –

Loss on disposal of BAIDS – – – 5,772,689

Operating lease:

- minimum lease payments on buildings 7,329,756 5,097,927 128,736 101,357

- minimum lease payments on motor vehicle

and equipment 15,999,217 6,859,786 – –

Unrealised foreign exchange loss 2,913,017 9,001,163 3,609,875 –

Impairment of long term trade receivables

(Note 25(b)) 108,519,566 75,259,744 – –

Impairment of trade receivables

- current (Note 25(a)) 3,876,272 – – –

Realised foreign exchange loss 1,890,515 2,783,180 – –

Inventory written off 2,344,500 2,422,802 – –

Indemnity cost (A) 15,000,000 – – –

Loss on disposal of property, plant

and equipment 665,881 991,439 – –



282


(b) Other expenses (continued)

(A) During the current fi nancial year, PNSB paid a sum amounting to RM15,000,000 to its Executive Chairman, Tan

Sri Rozali Ismail, being indemnity for losses suffered by him as the agent of PNSB, in defending a legal case

brought against him together with two other defendants by a third party arising from a termination of agreement

between PNSB and the third party for procurement of water related projects. The indemnity is in respect of the

amount which Tan Sri Rozali Ismail was ordered to pay by the High Court. However, upon appeal to the Court of

Appeal, the decision of the High Court was reversed in Tan Sri Rozali Ismail’s favour and leave for the third party

to appeal to the Federal Court was refused. The total indemnity claimed by Tan Sri Rozali Ismail in connection

with this legal suit was RM36,523,693, out of which PNSB had paid a sum of RM15,000,000, with the balance

sum of RM21,523,693 subsequently waived by Tan Sri Rozali Ismail. Proceedings are presently ongoing to

recover the sum paid by Tan Sri Rozali Ismail pursuant to the High Court decision and upon recovery, it shall

accrue to the benefi t of PNSB.

At the point when PNSB Board considered the indemnity claim made by Tan Sri Rozali Ismail, PNSB had relied

on 2 legal opinions rendered by reputable legal fi rms and the PNSB Board was satisfi ed with the facts and legal

principles set out in the legal opinions that :

(i) the indemnity claim is a legitimate claim which arose from Tan Sri Rozali Ismail’s act as agent of PNSB and

having to deal with the plaintiff who pursued Tan Sri Rozali Ismail and requested to be compensated for

the termination of the PNSB agreement which exposed Tan Sri Rozali Ismail, as the Executive Chairman of

PNSB to the legal suit.

(ii) Tan Sri Rozali Ismail did not exceed his authority as PNSB’s Executive Chairman in dealing with the plaintiff

on the terminated PNSB agreement.

(iii) There is nothing to show that Tan Sri Rozali Ismail had any independent or commercial dealings or

arrangements with the plaintiff which were unrelated to PNSB as his meetings and negotiations with the

plaintiff were all in respect of the terminated PNSB Agreement and the legal opinion stated that the court

papers and record of proceedings of the legal suit appears to be consistent with the factual position.

(iv) There was no negligent act or default by Tan Sri Rozali Ismail whilst acting as the agent of PNSB and he had

acted in the interest of PNSB by not according any compensation to the plaintiff.

Consequently, PNSB Board was satisfi ed that PNSB is obligated to indemnify its agent, Tan Sri Rozali Ismail for

the actual losses suffered by him in the legal suit.

During the course of the year end audit, at the request of the PNHB Board, the Management had sought another

legal opinion from a senior legal counsel who opined that Tan Sri Rozali Ismail is entitled to be indemnifi ed by

PNSB for the judgement sum paid by him arising from the said legal suit.




283


(c) Depreciation and amortisation expense

Group Company

2012 2011 2012 2011

RM RM RM RM

Depreciation of property, plant and equipment

(Note 14) 29,195,877 26,791,482 208,141 129,189

Depreciation of investment property (Note 15) – – 360,182 645,373

29,195,877 26,791,482 568,323 774,562

Amortisation of Service concession assets

(Note 17) 204,945,228 149,514,285 – –

234,141,105 176,305,767 568,323 774,562

8. AUDITORS’ REMUNERATION

Group

2012 2011

RM RM

Auditors of the Company (Note 7(b))

Statutory audit - current year 780,542 526,009

Statutory audit - under provision in prior year 4,687 76,650

Fees for tax compliance work 162,060 309,841

Other non-audit related services 398,310 414,230

1,345,599 1,326,730

Other auditors (Note 7(b))

Statutory audit 414,715 380,624


437,541 457,701

1,783,140 1,784,431



284

8. AUDITORS’ REMUNERATION (CONTINUED)

Company

2012 2011

RM RM

Auditors of the Company (Note 7(b))

Statutory audit - current year 56,000 42,000

Statutory audit - under/(over) provision in prior year 14,000 14,000


Other non-audit related services 209,800 15,000

304,496 109,284

9. EMPLOYEE BENEFITS EXPENSE

Group

2012 2011

RM RM

Wages, salaries and bonuses 236,212,790 201,911,903

Defi ned contribution retirement plan 32,780,868 26,827,452

Defi ned benefi t plan (Note 34) 4,356,101 4,030,312

Gratuity 20,000,000 2,500,000

Unutilised leave 5,070,050 2,712,524

Other staff related expenses 50,827,571 48,654,698

349,247,380 286,636,889

Included in employee benefi ts expenses of the Group and Company are the Executive Directors’ remuneration (excluding

benefi ts-in-kind) amounting to RM39,985,615 (2011: RM19,500,455) and RM269,000 (2011: RM NIL) respectively as

further disclosed in Note 10.

The number of persons, including the Company’s Executive Directors, employed by the Group at the end of the fi nancial

year was 4,795 (2011: 4,427).




285

10. DIRECTORS’ REMUNERATION

The details of remuneration receivable by directors of the Company during the year are as follows:

Group Company

2012 2011 2012 2011

RM RM RM RM

Executive:

Wages, salaries and bonus 14,455,229 13,305,312 – –

Defi ned contribution retirement plan 3,217,007 1,777,361 – –

Leave passage 780,000 663,582 150,000 –

Gratuity 20,000,000 2,500,000 – –

Other staff related expenses 1,533,379 1,254,200 119,000 –

Total executive directors’ remuneration (excluding

benefi ts-in-kind) (Note 9) 39,985,615 19,500,455 269,000 –

Estimated money value of benefi ts-in-kind 225,685 405,646 – –

Total executive directors’ remuneration (including

benefi ts-in-kind) 40,211,300 19,906,101 269,000 –

Non-Executive:

Allowances 254,000 256,000 254,000 256,000

Leave passage 150,000 150,000 150,000 150,000

Total non-executive directors’ remuneration

(Note 7(b)) 404,000 406,000 404,000 406,000

Total directors’ remuneration (Note 40(a)) 40,615,300 20,312,101 673,000 406,000



286

10. DIRECTORS’ REMUNERATION (CONTINUED)

The number of directors of the Company whose total remuneration during the fi nancial year fell within the following

bands is analysed below:

Number of directors

2012 2011

RM100,001 to RM200,000 3 3

RM300,001 to RM400,000 1 1

RM700,001 to RM800,000 1 1

RM1,000,001 to RM1,100,000 2 1

RM1,100,001 to RM1,200,000 – 1

RM1,700,001 to RM1,800,000 1 –

RM1,800,001 to RM1,900,000 – 1

RM2,000,001 to RM2,100,000 1 –

RM3,700,001 to RM3,800,000 – 1

RM11,000,001 to RM11,100,000 – 1

RM33,300,001 to RM33,400,000 1 –

During the current fi nancial year, a retirement gratuity benefi t amounting to RM20,000,000 had been paid to the Executive

Chairman upon his statutory retirement date on 9 December 2012.

Included in other staff related expenses of the Group is the payment for unutilised leave to Executive Chairman amounting

to RM2,428,825 (2011: RM2,653,677). The payment made in 2011 for unutilised leave to Executive Chairman amounting

to RM2,653,677 had been reclassifi ed from other expenses to directors’ remuneration.

11. FINANCE COSTS

Group Company

2012 2011 2012 2011

RM RM RM RM

Finance cost on Islamic banking borrowings

- BAIDS 58,794,247 50,046,183 – –

- BAMTN 127,089,605 126,806,474 – –

Finance cost on conventional borrowings

- Government Support Loan 1,242,937 1,454,353 – –

- RUN – 49,987,557 – 49,792,877

- JNA 43,579,025 4,156,562 – –

- RM410 million and RM250 million Term Loans 37,288,571 37,308,502 – –

- RUBs 39,762,957 38,603,249 – –

- RCULS 1,831,622 1,720,324 – –

- RPS 8,556,552 19,326,865 – –

- Government loan RM110 million 1,936,452 52,497 – –




287

11. FINANCE COSTS (CONTINUED)

Group Company

2012 2011 2012 2011

RM RM RM RM

- USD46.7 million revolving credit 370,354 – – –

- USD31 million term loan 1,038,767 894,764 – –

- USD36 million term loan 2,699,785 – – –

Accretion of fi nance costs in RPS (Note 32(m)) 6,879,073 6,381,330 – –

Accretion of interest on service concession obligations 209,493,968 211,930,000 – –

Finance cost on long term payables 101,937,474 72,652,309 – –

Interest expense on obligation under fi nance leases 948,060 874,807 – –

Bank charges 4,106,731 2,253,009 17,638 13,633

Other interest expenses 132,357 10,792 – –

Total fi nance costs 647,688,537 624,459,577 17,638 49,806,510

12. INCOME TAX EXPENSE

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2012 and 2011 are:

Group Company

2012 2011 2012 2011

RM RM RM RM

Income statements:

Current income tax

- Current fi nancial year 101,297,785 58,463,114 1,261,132 1,762,427

- Foreign income tax 103,277 78,966 76,278 76,758

- (Over)/under provision in respect of previous years (35,406,044) (1,159,406) 997,520 (121,568)

65,995,018 57,382,674 2,334,930 1,717,617

Included in the over provision in respect of previous year amounting to RM35,406,044 is PNSB’s tax refund received

from Inland Revenue Board (“IRB”) amounting to RM23,214,090 for YA 2006, YA2007 and YA2009 due to IRB using a

differential capital allowance rate in the respective Year of Assessment (“YA”).



288

12. INCOME TAX EXPENSE (CONTINUED)

Group Company

2012 2011 2012 2011

RM RM RM RM

Income statements: (continued)

Deferred income tax (Note 37)

- Origination and reversal of temporary differences (15,109,047) (46,707,820) 3,180,209 2,951,572

- Under/(over) provision in respect of previous years 14,738,220 (2,115,480) 1,940,433 –

(370,827) (48,823,300) 5,120,642 2,951,572

Income tax recognised in profi t or loss 65,624,191 8,559,374 7,455,572 4,669,189

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2011: 25%) of the estimated assessable

profi t for the year.

Reconciliation between tax expense and accounting profi t/(loss)

The reconciliation between tax expense and the product of accounting profi t multiplied by the applicable corporate tax

rate for the years ended 31 December 2012 and 2011 are as follows:

Group Company

2012 2011 2012 2011

RM RM RM RM

Profi t/(loss) before tax 298,304,266 (74,571,620) 13,690,619 8,194,756

Taxation at Malaysian statutory tax rate of 25%

(2011: 25%) 74,576,067 (18,642,905) 3,422,655 2,048,689

Different tax rates in other jurisdictions (8,918,050) (5,709,941) (35,896) 36,121

Income not subject to tax (1,998,248) (1,392,917) (323,061) –

Expenses not deductible for tax purposes 21,967,255 34,671,198 1,453,921 2,705,947

(Over)/under provision of current tax in prior years (35,406,044) (1,159,406) 997,520 (121,568)

Under/(over) provision of deferred tax in prior years 14,738,220 (2,115,480) 1,940,433 –

Utilisation of previously unutilised tax allowances (525,760) – – –

Deferred tax assets not recognised 1,190,751 2,908,825 – –

Income tax expense recognised in profi t or loss 65,624,191 8,559,374 7,455,572 4,669,189




289

12. INCOME TAX EXPENSE (CONTINUED)

The corporate tax rate applicable to the Singapore subsidiary of the Group is 17% on its respective taxable income.

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.

13. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profi t for the year, net of tax, attributable to owners of the

parent by the weighted average number of ordinary shares outstanding during the fi nancial year.

Diluted earnings per share amounts are calculated by dividing profi t for the year, net of tax, attributable to owners of

the parent by the weighted average number of ordinary shares outstanding during the fi nancial 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 refl ect the profi t and share data used in the computation of basic earnings per share for the years

ended 31 December:

Group

2012 2011

Profi t net of tax attributable to owners of the parent (RM) 238,081,852 9,910,838

Weighted average number of ordinary shares (RM) 409,106,095 409,106,095

Basic earnings per share (sen) 58.20 2.42



290

14. PROPERTY, PLANT AND EQUIPMENT

Long term

Freehold leasehold

land land Buildings Buildings Vessel

RM RM RM RM RM

Cost or valuation: At valuation

Group

At 1 January 2012 2,800,000 180,660,000 30,740,001 11,261,230 148,563,476

Additions – – 278,547 10,174,199 –

Reclassifi cation – – – – –

Disposals – – – – –

Write off – – – – –

Exchange difference – – – 14,877 (91,359)

At 31 December 2012 2,800,000 180,660,000 31,018,548 21,450,306 148,472,117

At 1 January 2011 2,557,700 94,054,114 32,982,213 11,266,420 –

Additions – – – – –

Acquisition of subsidiaries – – – – 146,970,752




Revaluation surplus 242,300 91,869,250 5,712 – –

Elimination of accumulated depreciation

on revaluation – (5,263,364) (2,247,924) – –

Exchange difference – – – (5,190) 1,592,724

At 31 December 2011 2,800,000 180,660,000 30,740,001 11,261,230 148,563,476




291

Plant Computers, Furniture Construction

and software and and Motor in

equipment equipment fittings vehicles Renovations Signage progress Total


At cost

24,043,146 66,896,076 16,010,835 78,003,065 94,977,846 12,858,384 8,460,575 675,274,634

3,405,168 9,947,943 396,011 7,864,130 8,962,677 1,142,540 570,722 42,741,937

40,073 (36,198) 20,995 (24,870) – –

– (73,095) – (2,937,244) – – – (3,010,339)

(33,224) (8,380,683) (782,698) (302,173) (1,400) – – (9,500,178)

19,126 4,421 (4,315) (8,665) (4,001) – – (69,916)

27,474,289 68,358,464 15,640,828 82,619,113 103,910,252 14,000,924 9,031,297 705,436,138

17,353,199 63,126,761 14,903,581 69,419,495 94,223,635 12,855,904 7,447,285 420,190,307

6,728,783 4,592,685 983,364 11,656,300 279,798 2,480 1,013,290 25,256,700

– 747,267 128,000 127,795 476,688 – – 148,450,502

– 13,670 – – (13,670) – – –

– (64,151) – (3,225,761) – – – (3,289,912)

(38,790) (1,514,989) (8,118) – – – – (1,561,897)

– – – – – – – 92,117,262

– – – – – – – (7,511,288)

(46) (5,167) 4,008 25,236 11,395 – – 1,622,960

24,043,146 66,896,076 16,010,835 78,003,065 94,977,846 12,858,384 8,460,575 675,274,634



292

14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Long term

Freehold leasehold

land land Buildings Buildings Vessel

RM RM RM RM RM

Cost or valuation: At valuation

Group

Accumulated Depreciation

& Accumulated Impairment:

At 1 January 2012 – – – 2,180,312 23,458,200

Depreciation charge for the year

(Note 7(c)) – 1,835,008 620,371 507,954 3,669,371




Impairment (Note 7(b)) – – 1,455,092 – –

Exchange difference – – – 18,847 (110,596)

At 31 December 2012 – 1,835,008 2,075,463 2,707,113 27,016,975

At 1 January 2011 – 4,263,735 1,850,548 1,545,563 –

Depreciation charge for the year (Note 7(c)) – 999,629 397,376 651,587 91,931

Acquisition of subsidiaries – – – – 23,114,778




Impairment (Note 7(b)) – – – – –

Elimination of accumulated depreciation

on revaluation – (5,263,364) (2,247,924) – –

Exchange difference – – – (16,838) 251,491

At 31 December 2011 – – – 2,180,312 23,458,200

Net carrying amount:

At 31 December 2012 2,800,000 178,824,992 28,943,085 18,743,193 121,455,142

At 31 December 2011 2,800,000 180,660,000 30,740,001 9,080,918 125,105,276




293

Plant Computers, Furniture Construction

and software and and Motor in

equipment equipment fittings vehicles Renovations Signage progress Total


At cost

10,253,027 59,498,499 11,832,285 36,440,830 64,979,133 6,330,523 7,472,794 222,445,603

1,519,085 4,242,278 1,347,517 5,781,955 8,335,785 1,336,553 – 29,195,877

42,017 (39,409) 5,946 – (8,554) – – –

– (66,940) – (639,434) – – – (706,374)

(16,281) (8,258,085) (747,505) (166,047) (661) – – (9,188,579)

– – – – – – – 1,455,092

81,184 13,076 2,450 (1,014) (303) – – 3,644

11,879,032 55,389,419 12,440,693 41,416,290 73,305,400 7,667,076 7,472,794 243,205,263

9,187,807 54,114,386 9,724,769 33,498,661 55,683,087 4,997,881 – 174,866,437

1,168,203 6,400,546 2,106,155 4,828,674 8,814,739 1,332,642 – 26,791,482

– 455,680 9,840 115,016 476,688 – – 24,172,002

– (2,506) – – 2,506 – – –

– (58,022) – (2,009,761) – – – (2,067,783)

(38,622) (1,401,888) (6,846) – – – – (1,447,356)

– – – – – – 7,472,794 7,472,794

– – – – – – – (7,511,288)

(64,361) (9,697) (1,633) 8,240 2,113 – – 169,315

10,253,027 59,498,499 11,832,285 36,440,830 64,979,133 6,330,523 7,472,794 222,445,603

15,595,257 12,969,045 3,200,135 41,202,823 30,604,852 6,333,848 1,558,503 462,230,875

13,790,119 7,397,577 4,178,550 41,562,235 29,998,713 6,527,861 987,781 452,829,031



294


Long term

leasehold

land Renovations Total

RM RM RM

At valuation At cost

Company

At 1 January 2012 and 31 December 2012 19,600,000 892,010 20,492,010

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 2012 – 892,010 892,010

Depreciation charge for the year (Note 7(c)) 208,141 – 208,141

31 December 2012 208,141 892,010 1,100,151

At 1 January 2011 1,137,246 850,865 1,988,111

Depreciation charge for the year (Note 7(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


At 31 December 2012 19,391,859 – 19,391,859

At 31 December 2011 19,600,000 – 19,600,000




295


Assets pledged as security

Property, plant and equipment of the subsidiaries with total carrying amount of RM399,440,802 (2011: RM311,132,223)

have been charged as security for borrowings of the Group as disclosed in Note 32(b), Note 32(d) and Note 32(e).

Leasehold land of the Group with a carrying value of RM159,433,133 (2011: RM161,060,000) has been charged as

security for borrowings as disclosed in Note 32(b).

Assets held under fi nance leases

During the fi nancial year, the Group acquired property, plant and equipment at aggregate costs of RM42,741,937 (2011:

RM25,256,700) of which RM4,736,625 (2011: RM11,059,773) were acquired by means of fi nance leases.

The carrying amount of property, plant and equipment of the Group held under fi nance leases at the reporting date

were:

Group

2012 2011

RM RM

Motor vehicles

Cost 33,920,868 35,221,816

Accumulated depreciation (8,791,151) (7,223,189)

Net carrying amount 25,129,717 27,998,627

Impairment of property, plant and equipment

In the previous fi nancial 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 have any concrete

plans in the near future for the said construction yet. Hence the Group had decided to recognise an impairment loss of

RM7,472,794 as disclosed in Note 7(b).

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.



296


Revaluation of freehold land, leasehold land and buildings (continued)

If the freehold, leasehold and buildings were measured using the cost model, the carrying amounts would have been as

follows:

Group

2012 2011

RM RM

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 (6,262,993) (5,263,364)

- Net carrying amount 87,791,121 88,790,750

Buildings at 31 December:

- Cost 32,982,213 32,982,213



120,685,734 122,082,739

Company

2012 2011

RM RM

Leasehold land at 31 December:

- Cost 8,716,411 8,716,411






297

15. INVESTMENT PROPERTY

Company

2012 2011

Building RM RM

At net carrying value:

At 1 January 8,913,870 9,559,243

Depreciation charge for the year (Note 7(c)) (360,182) (645,373)

At 31 December 8,553,688 8,913,870

Fair value 10,520,259 10,000,000

Fair value of investment property

In the previous fi nancial year, 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

qualifi cation and recent experience in the location and category of the properties being valued.

During the fi nancial year, the Directors have reassessed the fair value of the investment property and believe that the fair

value remains higher than the net carrying value as at the reporting date.

16. 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 fi nancial 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 profi t or loss.



298

17. SERVICE CONCESSION ASSETS AND OBLIGATIONS

Service Concession Assets

The movements in this account follow:

Group

2012 2011

RM RM

Cost

At 1 January 8,430,342,535 8,271,004,036

Additions 197,513,389 157,161,112

Exchange differences (1,106,345) 2,177,387

At 31 December 8,626,749,579 8,430,342,535

Accumulated amortisation and impairment

At 1 January 735,668,728 586,001,590

Amortisation charge for the year (Note 7(c)) 204,945,228 149,514,285

Impairment loss (Note 7(b)) 3,168 20,255

Exchange differences (54,424) 132,598

At 31 December 940,562,700 735,668,728

Net carrying amount 7,686,186,879 7,694,673,807

Service concession assets consist of the fair value of the service concession obligations 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 external

consultants and in-house projects respectively.

The capital work in progress are costs incurred to date in respect of projects to reduce the NRW rate and are not

amortised until completed.

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 32. During the fi nancial year, the net borrowing costs capitalised in

capital work-in progress amounted to RM416,343 (2011: RM414,219).




299

17. SERVICE CONCESSION ASSETS AND OBLIGATIONS (CONTINUED)

Service Concession Obligations

Service concession obligations is 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.

Service concession obligations are analysed as follows:

Group

2012 2011

RM RM

Analysed as:

Current 369,424,130 337,189,482

Non-current:

Later than 1 year but not later than 2 years 379,234,386 343,808,577

Later than 2 years but not later than 5 years 739,409,667 879,842,557

Later than 5 years 2,558,017,052 2,608,698,057

3,676,661,105 3,832,349,191

4,046,085,235 4,169,538,673

18. INVESTMENT IN SUBSIDIARIES

Company

2012 2011

RM RM

Unquoted shares, at costs

At 1 January 463,118,040 463,110,960

Incorporation of PNIPPL (Note 18(a)) – 7,080

Subscription of additional shares in PNIPPL (Note 18(a)) 187,340 –

At 31 December (Note 47) 463,305,380 463,118,040



300

18. INVESTMENT IN SUBSIDIARIES (CONTINUED)

Proportion (%) of

ownership interest

Name Principal Activities 2012 2011

Incorporated in Malaysia

PNSB *** Operation, maintenance, management, construction,

rehabilitation and refurbishment of water treatment facilities 100 100

SYABAS *** Supply and distribution of treated water within Selangor and

the Federal Territories of Kuala Lumpur and Putrajaya 70 70

Puncak Niaga (India) Dormant 100 100

Sdn Bhd *

Puncak Research Research and development and technology development,

Centre Sdn Bhd * for water wastewater and environment sectors 100 100

Puncak Seri (M) Food and beverage related activities 100 100

Sdn Bhd *

NS Water System Dormant 100 100

Sdn Bhd *

Puncak Oil & Gas Investment holding and provision of offshore and onshore

Sdn Bhd *** engineering works 100 100

Incorporated in Singapore

SINO ** Investment in water and wastewater projects in PRC 98.65 98.65

PNOC ** Investment in water, wastewater, solid waste,

environmental and oil and gas in the Asian countries 100 100

Incorporated in India

Puncak Niaga Carry out activities of infrastructures, constructions and

Infrastructures and other projects in India 100 100

Projects Private

Limited (PNIPPL) *




301


Proportion (%) of

ownership interest



Subsidiaries of PNSB

Ideal Water Resources Ceased operations 100 100

Sdn Bhd *

Unggul Raya (M) Ceased operations 100 100

Sdn Bhd *


Subsidiary of SYABAS

PUAS *** Ceased operations 70 70

Incorporated in PRC

Subsidiaries of SINO

LUWEI ** Treatment and distribution of water and related services 90.70 90.11

XINNUO ** Treatment of wastewater and related services 98.65 98.65

Sino Water Consultancy services for water and wastewater projects 98.65 98.65

(Shanghai) **

Luancheng** Treatment and distribution of water and related services 82.86 78.92

Hebei Sino** Distribution of water to industrial areas 78.92 78.92


Subsidiaries of POG

GOM Resources Provide offshore personnel services and renting of

Sdn Bhd *** machinery and vessels 100 100

KGL Ltd *** Offshore leasing of vessels on bareboat basis. 100 100

* Audited by fi rms other than Ernst & Young

** Audited by member fi rms of Ernst & Young Global in the respective countries

*** Audited by Ernst & Young, Malaysia




302


(a) Subscription of additional shares in subsidiary, PNIPPL

PNIPPL 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). PNIPPL had 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.

On 10 February 2012, PNIPPL had increased its paid up capital to Rs.30,00,000 with an allotment of 290,000 (two

Lakhs ninety thousand) only equity shares of India Rupees Ten (Rs.10) each to the Company.

(b) Subscription of additional equity interest in subsidiary, LUWEI by SINO

On 8 November 2012, SINO increased the paid-up registered capital of LUWEI through capital injection of

USD400,000 in cash. As a result, SINO’s shareholding in LUWEI increased from 91.34% to 91.94%.

(c) Subscription of additional equity interest in subsidiary, Luancheng by SINO

On 26 June 2012, SINO increased the paid-up registered capital of Luwei through capital injection of USD196,670 in

cash. As a result, SINO’s shareholding in Luwei increased from 80.00% to 83.99%.

Completed in previous fi nancial year

(d) 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, an option have been granted to POG to purchase the remaining interest in GOM Resources.

The option granted to the POG to purchase the remaining interest, which is 60% in GOM Resources equates to the

POG having a control and option gives a potential voting rights to POG. Hence, upon completion of the acquisition

on 30 June 2011, GOM Resources became a subsidiary of the POG.




303


Completed in previous fi nancial year (continued)

(d) Acquisition of GOM Resources, by POG (continued)

The fair value of identifi able 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 outfl ow on acquisition 4,499,684



304



(d) Acquisition of GOM Resources, by POG (continued)

Goodwill arising on acquisition

RM

Net identifi able assets 6,664,193

Less: Non-controlling interests (3,998,516)

Group’s interest in fair value of net identifi able assets 2,665,677

Goodwill on acquisition (Note 24) 21,370,083

Cost of business combination 24,035,760

Goodwill on acquisition is attributable to the signifi cant revenue stream that arose subsequent to the acquisition as

well as the oil and gas contracts awarded to GOM Resources.

Accounting on acquisition

As at 31 December 2011, the fair value of GOM Resources’ identifi able assets and liabilities were determined on a

provisional basis as the results of PPA exercise is not fi nalised. Goodwill arising from this acquisition will be adjusted

accordingly on a retrospective basis when the purchase price allocation exercise is fi nalised.

As at 31 December 2012, the purchase price allocation has been fi nalised. Accordingly, the provisional goodwill of

GOM Resources Sdn. Bhd. of RM21,370,083 is deemed to be fi nalised and no further adjustment is required.

Acquisition of non-controlling interest in GOM Resources

On 23 September 2011, POG exercised its option to purchase the remaining 60% equity interest in GOM Resources

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.

The difference between the consideration and the book value of the interest acquired is refl ected 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)




305



(e) Acquisition of KGL Ltd (“KGL”), by POG

On 23 May 2011, the POG have 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%

rights of the shareholder’s loan (RM39,422,841) to POG. On the same date, an option have been granted to POG to

purchase the remaining interest in KGL.

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 identifi able 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

The effect of the acquisition on cash fl ows 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 outfl ow on acquisition 44,566,659



306



(e) Acquisition of KGL Ltd (“KGL”), by POG (continued)

Negative goodwill arising on acquisition

RM

Net identifi able assets 29,305,658

Less: Non-controlling interests (17,583,395)

Group’s interest in fair value of net identifi able assets 11,722,263

Negative goodwill on acquisition (Note 7(a)) (5,333,824)

Cost of business combination 6,388,439

Assumption of shareholder’s loan 39,422,841

Consideration paid 45,811,280

POG’s acquisition of KGL has given rise of a gain on bargain purchase as the net assets acquired and the liabilities

assumed from the said acquisition are in excess of the consideration paid.

Accounting on acquisition

As at 31 December 2011, the fair value of KGL’s identifi able assets, except for property, plant and equipment, and

identifi able liabilities were determined on a provisional basis as the results of PPA exercise is not fi nalised. Negative

goodwill arising from this acquisition will be adjusted accordingly on a retrospective basis when the purchase price

allocation exercise is fi nalised.

As at 31 December 2012, the purchase price allocation has been fi nalised. Accordingly, the provisional goodwill of

KGL, negative goodwill amounting to RM5,333,824 is deemed to be fi nalised and no further adjustment is required.

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.




307



(e) Acquisition of KGL Ltd (“KGL”), by POG (continued)

Acquisition of non-controlling interest in KGL (continued)

The difference between the consideration, the book value of the interest acquired and the loan assumed is refl ected

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

19. INVESTMENT IN ASSOCIATES

Group Company

2012 2011 2012 2011

RM RM RM RM

Unquoted shares, at cost 42,501 42,501 42,501 42,501

Advance 5,570 2,914 5,570 2,914

Share of post-acquisition reserves (2,835) (1,429) – –

45,236 43,986 48,071 45,415

Proportion (%) of

ownership interest



Oasis Water * Dormant 40 40

Purnama Persada Sdn Bhd * Dormant 50 50

* Audited by a fi rm other than Ernst & Young



308

19. INVESTMENT IN ASSOCIATES (CONTINUED)

The summarised fi nancial information of the associates are as follows:

Group

2012 2011

RM RM

Assets and liabilities

Current assets 92,298 92,298

Current liabilities (20,299) (17,290)

Results

Revenue – 11,513

Expenses (3,159) (3,226)

(Loss)/profi t for the year (3,159) 8,287

20. INVESTMENT IN JOINT VENTURE

Group Company

2012 2011 2012 2011

RM RM RM RM

Advances to joint venture 9,295,613 9,295,613 6,449,964 6,449,964

Less: Repayment during the year (1,647,362) – (1,257,362) –

7,648,251 9,295,613 5,192,602 6,449,964

Accumulated impairment At 1 January 5,721,843 1,692,825 6,449,964 3,733,770

Impairment (Note 7(b)) – 4,029,018 – 2,716,194

Write back of impairment (Note 7(a)) (1,257,362) – (1,257,362) –

At 31 December 4,464,481 5,721,843 5,192,602 6,449,964

Share of net liabilities of the joint venture (2,079,614) (1,931,799) – –

1,104,156 1,641,971 – –




309

20. INVESTMENT IN JOINT VENTURE (CONTINUED)

Name Principal activities Participation interest

held (%)

2012 2011

PNHB-Lanco-KHEC Operation and maintenance of

Joint Venture (Unincorporated) * water supply augmentation 70 70

POG-ATSB JV (Unincorporated) * Provision of offshore and onshore 50 50

engineering works

PED-PNSB JV (Unincorporated) * Construction of water treatment facilities 40 40

* Audited by a fi rm other than Ernst & Young

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:

Group

2012 2011

RM RM

Assets and liabilities:

Non-current assets 77,808 37,665

Current assets 1,766,318 2,135,436

Total assets 1,844,126 2,173,101

Current liabilities (3,923,740) (4,104,900)

Income and expenses:

Income – 886,554

Expenses excluding taxation (147,815) (1,110,875)



310

21. HELD-TO-MATURITY FINANCIAL ASSETS

Company

2012 2011

RM RM

Non-current

RCULS (Note 22) 278,764,629 265,958,665

On 1 November 2011, the Company entered into a conditional Sale and Purchase Agreement with 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 the fi fth

mandatory partial redemption of RM54,687,500. The sale was completed on 18 November 2011.

22. RCULS

Company

2012 2011

RM RM

Nominal value 212,000,000 212,000,000

Accretion of fi nance costs 66,764,629 53,958,665

At amortised cost (Note 21) 278,764,629 265,958,665

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 were issued progressively to the

Company and KDEB over the next four (4) years from 2006 to 2009 to fi nance 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 Ratifi cation 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 fi rst issue date at their nominal value.




311

22. RCULS (CONTINUED)

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 fi xed rate of 7% per annum.

Company

2012 2011

RM RM

Interest on RCULS receivable from SYABAS (Note 7(a)) 12,805,964 11,806,289

23. DSRA

Group

2012 2011

RM RM

DSRA maintained in relation to:

- RM1,020,000,000 10-Year BAIDS 191,091,213 244,116,849

- BAMTN Programme and RM410 million and RM250 million Term Loans 64,731,754 62,774,752

255,822,967 306,891,601

(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

fi nancial 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 32(b)).

As at 31 December 2012, 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 32(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

3.17% (2011: 3.16%) per annum.



312

23. DSRA (CONTINUED)

(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 profi t 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 fi nancial 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 3.15% (2011: 3.18%) per annum.

At the reporting date, the carrying amount of the deposits held in the DSRA approximated its fair value.

24. GOODWILL

Group

2012 2011 1.1.2011

RM RM RM


At 1 January 210,878,972 193,258,671 193,698,114

Acquisition of subsidiary - GOM Resources (Note 18(d)) – 21,370,083 –

Subscription of additional equity interest in subsidiary – – 68,112

Impairment (Note 7(b)), (Note 24(b)) – (4,137,344) –

Exchange differences (58,832) 387,562 (507,555)

At 31 December 210,820,140 210,878,972 193,258,671

(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.




313

24. GOODWILL (CONTINUED)

(a) SYABAS (continued)

SYABAS and PUAS are identifi ed as one combined CGU. The recoverable amount of this CGU is determined based

on value-in-use calculations using cash fl ow projections based on fi nancial budgets approved by Management

covering the entire concession period of thirty (30) years commencing 1 January 2005 to 31 December 2034. A cash

fl ow projection of more than fi ve (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 fl ow 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 signifi cantly from the projected water demand.

For the purpose of the cash fl ow projections, SYABAS has incorporated escalation rates ranging from 1.5% to

20% per annum of the bulk supply rate and fi xed capacity payment respectively for projection of the cost of

purchasing water from the respective water treatment operators.

(iii) NRW

The NRW rate is projected to reduce progressively to meet the fi nal target within the SYABAS Concession

Agreement.

(iv) Capital expenditure

The balance of the total value of the capital expenditure as projected under the SYABAS Concession Agreement

for development and upgrading of distribution system, asset management and replacement programme

and NRW reduction programme is projected to be incurred progressively over the remaining period of the

concession.



314


(a) SYABAS (continued)

(v) Discount rate

The discount rate used in the cash fl ow 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) 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. However the goodwill for Luancheng has been fully

impaired in fi nancial year 2011.

The recoverable amount of this CGU is determined based on fair value less costs to sell calculations using cash

fl ow projections based on fi nancial budgets approved by management covering the entire Concession Period as

disclosed in Note 5. Cash fl ow projections of more than fi ve (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

2012 2011

RM RM


At 1 January 3,470,154 7,219,936

Less: Impairment – (4,137,344)

Add: Net exchange difference (78,759) 387,562

At 31 December 3,391,395 3,470,154




315


(b) LUWEI and Luancheng (continued)



(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.

(ii) Growth rate

The average daily throughput capacity is expected to increase gradually to full capacity for the period between

fi nancial year 2013 and fi nancial year 2021. The water treatment plant is expected to maintain 100% throughput

capacity starting from fi nancial year 2019 to the end of the concession period.

(iii) Discount rate

The discount rate used in the cash fl ow projection is 10% to 12.5% (2011: 10% to 11%) per annum.

(iv) Sensitivity to changes in assumptions



In the previous fi nancial year, impairment loss was recognised to write down the carrying amount of goodwill

attributed to Luancheng due to the protracted time to fi nalise the Concession Agreement.

(c) 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 fl ow projections

based on fi nancial budgets approved by management. Cash fl ow projections of fi ve (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.



316


(c) GOM Resources (continued)



(i) Budgeted gross margins and growth

Management determined budgeted gross margin and results based on its secured contracts and its expected

order book in line with its expectations of relevant market development.

(ii) Discount rate

The discount rate used in the cash fl ow projection is 8% (2011: 11%) per annum.

(iii) Sensitivity to changes in assumptions



25. TRADE AND OTHER RECEIVABLES

Group Company

2012 2011 2012 2011

RM RM RM RM

Current

Trade receivables

Third parties 284,494,673 231,839,291 – –

Amount due from State Government - free water

(Note 25(f)) 24,621,810 11,670,038 – –

Amount due from State Government - tariff

compensation (Note 25(b)) – – – –

Progress billings receivable 24,133,100 74,589,465 – –

333,249,583 318,098,794 – –

Less: Allowance for impairment (Note 25(a)) (10,436,262) (6,617,704) – –

Trade receivables, net 322,813,321 311,481,090 – –




317

25. TRADE AND OTHER RECEIVABLES (CONTINUED)

Group Company

2012 2011 2012 2011

RM RM RM RM

Other receivables

Advances and loans to staff 1,451,435 1,519,800 – –

Amounts due from subsidiaries (Note 25(c)) – – 203,819,333 194,168,340

Advance to project contractors (Note 25(d)) 6,390,738 13,303,640 – –

Interest receivable 3,486,372 3,787,230 146,526 184,395

Amount due from collection agencies 8,633,069 9,393,308 – –

Sundry receivables 22,955,771 22,170,701 10,809,520 9,213,520

Deposits 9,176,821 9,126,212 192,737 192,736

52,094,206 59,300,891 214,968,116 203,758,991

Less: Allowance for impairment (Note 7(b)) (9,142,620) (9,142,903) (9,130,501) (9,130,501)

42,951,586 50,157,988 205,837,615 194,628,490

365,764,907 361,639,078 205,837,615 194,628,490

Non-current

Trade receivables

Long-term receivables (Note 25(e)) 168,767,836 234,090,883 – –

Amount due from State Government

- tariff compensation (Note 25(b)) 2,334,992,912 1,311,051,925 – –

Less: Allowance for impairment (Note 7(b)) (183,779,310) (75,259,744) – –

2,319,981,438 1,469,883,064 – –

Total trade and other receivables

(current and non-current) 2,685,746,345 1,831,522,142 205,837,615 194,628,490

Add: Cash and bank balances (Note 31) 1,383,740,725 1,268,050,147 174,812,115 270,325,861

Short term funds (Note 29) – 36,281 – –

Tax recoverable 1,514 639,110 – –

Total loans and receivables 4,069,488,584 3,100,247,680 380,649,730 464,954,351



318


(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 days (2011: 30 days) terms. Other credit terms are

assessed and approved on a case-by-case basis. The credit term for the amount due from State Government - tariff

compensation is 90 days (2011: 90 days). They are recognised at their original invoiced amounts which represent

their fair values on initial recognition.

The current trade receivables balance included an amount due from Serba Tiara amounting to RM75,300,000

(2011: RM62,750,000) in respect of the supply of bulk quantity of treated water to the State Government as disclosed

in Note 25(e).

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables excluding the amount due from State Government - tariff

compensation is as follows:

Group

2012 2011

RM RM

Neither past due nor impaired 478,539,826 396,748,222

1 to 30 days past due not impaired 35,249,769 78,771,104

31 to 154 days past due not impaired 18,495,702 88,213,259

155 to 365 days past due not impaired (40,704,140) (32,191,842)

More than 365 days past due not impaired – 14,031,230

13,041,331 148,823,751

Impaired 10,436,262 6,617,704

502,017,419 552,189,677

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.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the

fi nancial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM13,041,331 (2011: RM148,823,751) that are past due at the reporting

date but not impaired.




319


(a) Trade receivables (continued)

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:

Group

2012 2011

RM RM

Individually impaired:

Trade receivables–nominal amounts 10,436,262 6,617,704

Less: Allowance for impairment (10,436,262) (6,617,704)

– –

Movement in allowance accounts:

At 1 January 6,617,704 6,058,089

Reversal of impairment losses (Note 7(b)) (125,658) (518,244)

(Utilisation)/Reversal of deposit from customers (Note 33(d)) 67,944 1,077,859

Impairment (Note 7(b)) 3,876,272 –

At 31 December 10,436,262 6,617,704

It is the subsidiary’s practice to offset the deposit received from customers with the outstanding due from customers.

The negative balance on the trade receivables more than 154 days past due not impaired arises from deposits

placed with the subsidiary against the arrears owed. It is the subsidiary’s policy to offset the deposit received from

water account holders with the outstanding due from water account holders if no payments received 3 months after

disconnection notices sent to the water accounts holder.

(b) Amount due from the State Government - tariff compensation

This represents cumulative water tariff compensation receivable arising from the new water tariff as disclosed in

Note 4.1(b) and Note 4.2. The water tariff compensation is reclassifi ed to long term receivable and impaired due to

change in the estimated timeframe of collection.

Impairment allowance of RM108,519,566 (2011: RM75,259,744) was made in the current fi nancial year. The details are

disclosed in Note 4.1(f). The movement of the allowance accounts used to record the impairment are as follows:



320


(b) Amount due from the State Government - tariff compensation (continued)

Movement in allowance accounts:

Group

2012 2011

RM RM

At 1 January 75,259,744 – Impairment (Note 7(b)) 108,519,566 75,259,744

At 31 December 183,779,310 75,259,744

(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.

Group

2012 2011

RM RM

At 1 January 296,840,883 334,906,684 Long-term receivable repaid (62,750,000) (50,200,000) Accretion of interest on long-term receivable (Note 7(a)) 9,976,953 12,134,199 At 31 December (Note 25(a)) 244,067,836 296,840,883

Maturity of loans and receivables: Due within 1 year included in trade receivables 75,300,000 62,750,000 Due more than 1 year 168,767,836 234,090,883

244,067,836 296,840,883




321


(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.

26. OTHER CURRENT ASSETS

Group Company

2012 2011 2012 2011

RM RM RM RM

Amount due from customer on construction contract

(Note 30) 2,028,361 905,996 – –

Unbilled revenue (Note 4.1(j)) 237,253,922 74,780,225 – –

Prepayments 10,435,185 13,073,418 217,098 86,217

249,717,468 88,759,639 217,098 86,217

27. INVENTORIES

Group

2012 2011

RM RM

Cost

Water treatment chemicals 2,617,196 2,602,586

Spare parts and equipment 2,668,881 3,354,384

Fuel 503,907 1,182,273

Mild steel pipe – 2,344,500

5,789,984 9,483,743

During the year, the amount of inventories recognised in the income statement of the Group was RM45,063,286 (2011:

RM37,127,803) and is included in the following line items:

Group

2012 2011

RM RM

Raw materials, consumables and maintenance 36,919,941 30,171,494

Cost of providing oil and gas services 8,143,345 6,956,309

45,063,286 37,127,803



322

28. AVAILABLE-FOR-SALE INVESTMENTS

Group

2012 2011

Carrying Market Carrying Market

amount value amount value

RM RM RM RM

Unquoted

At 1 January 9,408,793 –

Addition 50,000,000 10,000,000

Fair value gain/(loss) 442,298 (591,207)

At 31 December 59,851,091 59,851,091 9,408,793 9,408,793

Company

2012

Carrying Market

amount value

RM RM

Unquoted

At 1 January –

Addition 50,000,000

Fair value gain 661,055

At 31 December 50,661,055 50,661,055

Available-for-sale investments represent fund placements in the RHB Asia Pacifi c MAQASID fund and Hong Leong

Asset Management Bhd fund.

29. SHORT TERM FUNDS

Group

2012 2011

RM RM

At 1 January 36,281 35,231

Placement – 1,050

Withdrawal (36,281) –

At 31 December – 36,281

Short term funds represent fund placement in the Aiman Cash Fund.




323

30. GROSS AMOUNT DUE FROM/(TO) CUSTOMERS FOR CONSTRUCTION CONTRACTS

Group

2012 2011

RM RM

Construction contracts costs incurred to date 677,812,765 486,486,676

Attributable profi ts 38,996,819 15,870,246

716,809,584 502,356,922

Less: Progress billings (714,922,628) (501,450,926)

1,886,956 905,996

Presented as:

Due from customers on construction contract (Note 26) 2,028,361 905,996

Due to customers on construction contract (Note 35) (141,405) –

1,886,956 905,996

31. CASH AND BANK BALANCES

Group Company

2012 2011 2012 2011

RM RM RM RM

Deposits with licensed banks 1,199,377,428 1,108,293,684 159,163,393 231,152,547

Cash and bank balances 184,363,297 159,756,463 15,648,722 39,173,314

1,383,740,725 1,268,050,147 174,812,115 270,325,861

Included in cash and bank balances of the Group is an amount of RM2,404,967 (2011: RM1,955,104), being deposits held

in trust for water account consumer deposits.

Included in the deposits with licensed banks of the Group are monies of RM212,000,000 (2011: RM185,000,000),

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 RM11,072 (2011: RM1,832) 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.

Included in the deposits with licensed banks of the Group, are monies of RM1,948,328 (2011: RM1,896,052) arising from

government grants.



324

31. CASH AND BANK BALANCES (CONTINUED)

Included in cash and bank balances of the Group, are monies of RM195,861 (2011: RM40,509) arising from government

loan of RM110 million for water supply mitigation programmes i.e. Selangor, Kuala Lumpur and Putrajaya.

Included in the deposits with licensed banks of the Group, are monies of RM22,045,940 (2011: RM18,500,000) arising

from government loan of RM110 million.

Included in cash and bank balances of the Group are designated collection accounts amounting to RM65,242,177

(2011: RMNil) charged as security for borrowings as disclosed in Note 32(n) and Note 32(o).

The weighted average effective return applicable to deposits with licensed banks at the reporting date was 3.15%

(2011: 3.17%) per annum.

Deposits of the Group and the Company with licensed banks have an average maturity of 28 days (2011: 58 days) and

29 days (2011: 30 days) respectively.

32. LOANS AND BORROWINGS

Group Company

2012 2011 2012 2011

RM RM RM RM

Current

Secured:

Government Support Loan 7,443,982 7,227,167 – –

BAIDS 509,661,068 360,000,000 – –

BAMTN 308,923,621 –

USD36 million term loan 24,464,000 – – –

USD31 million term loan – 98,223,500 – –

Revolving credit 80,119,599 – – –

Obligation under fi nance leases (Note 41(c)) 5,181,507 5,168,006 – –

935,793,777 470,618,673 – –

Unsecured:

Lushan MOF Novated World Bank Loan 1,261,089 549,649 – –

1,261,089 549,649 – –

937,054,866 471,168,322 – –




325

32. LOANS AND BORROWINGS (CONTINUED)

Group Company

2012 2011 2012 2011

RM RM RM RM

Non-current

Secured:

Government Support Loan 32,077,131 39,521,114 – –

BAIDS 507,330,176 656,379,299 – –

BAMTN 1,751,470,108 2,049,007,301 – –

RM410 million and RM250 million Term Loans 659,974,712 659,974,712 – –

USD36 million term loan 79,508,000 – – –

Government Loan RM320.8 million 320,800,000 320,800,000 – –

Government Loan RM110.0 million 34,049,167 7,377,817 – –

Obligation under fi nance leases (Note 41(c)) 11,085,333 11,966,556 – –

RPS 618,472,322 611,593,249 – –

4,014,766,949 4,356,620,048 – –

Unsecured:

RUBs 471,406,408 479,216,984 – –

RCULS 24,308,682 22,477,060 – –

JNA 198,872,139 173,981,676 – –

Lushan MOF Novated World Bank Loan 9,379,412 8,665,306 – –

703,966,641 684,341,026 – –

4,718,733,590 5,040,961,074 – –

Total loans and borrowings 5,655,788,456 5,512,129,396 – –



326


The remaining maturities of the loans and borrowings as at 31 December 2012 are as follows:

Group Company

2012 2011 2012 2011

RM RM RM RM

On demand or within one year 937,054,866 471,168,322 – –

More than 1 year and less than 2 years 388,252,661 469,647,492 – –

More than 2 years and less than 5 years 1,746,858,971 1,903,767,350 – –

5 years or more 2,583,621,958 2,667,546,232 – –

5,655,788,456 5,512,129,396 – –

The BAIDS, RUN, BAMTN, JNA and RUBs are further analysed as follows:

Group

BAIDS

2012 2011

RM RM

Nominal value 1,020,000,000 1,020,000,000

Less: Yield to maturity * (15,085,005) (15,085,005)

Net proceeds 1,004,914,995 1,004,914,995

Redemption (180,000,000) (180,000,000)

Issuance 180,000,000 180,000,000

Accreted fi nance cost 12,076,249 11,464,304

1,016,991,244 1,016,379,299

Group Company

BAMTN RUBs

2012 2011 2012 2011

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 fi nance cost 60,570,018 49,183,590 56,111,091 63,921,667

2,060,393,729 2,049,007,301 471,406,408 479,216,984




327


Group

JNA

2012 2011

RM RM

Nominal value 328,125,000 328,125,000

Accumulated gain on extinguishment of debt (Note 7(a)) (155,554,087) (155,554,087)

172,570,913 172,570,913

Accreted fi nance cost 26,301,226 1,410,763

198,872,139 173,981,676

(a) Government Support Loan

The Government Support Loan from the Federal Government in 1998 was to fi nance 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 fi xed 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.



328


(b) BAIDS/MCPs/MMTNs (continued)

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






1,020,000,000

(ii) revision of the profi t 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.

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 fi xed 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.




329


(b) BAIDS/MCPs/MMTNs (continued)

PNSB will also be required to maintain the following fi nancial 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.

In 2011, Acqua acquired 100% of BAIDS from all bondholders.

In 2011 and 2012, PNSB had obtained indulgence from Acqua to extend the maturity dates for BAIDS Series 3 & 4

as follows:-

Nominal value

Series RM Maturity dates

Series 3 180,000,000 From 27 October 2011 to 26 April 2013

Series 4 180,000,000 From 27 October 2012 to 26 April 2013

On 19 April 2013, PNSB had executed the Agreements for restructuring of the outstanding bonds comprising of

BAIDs, RUBs and JNA with Acqua.

The revised extension of the tenors for BAIDs is sets out in Note 49(m).

(c) JNA

As per Note 21(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 adviser); and the Company

(as noteholders) (“PNSB Subscription Agreement”)



330


(c) JNA (continued)

(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 28,125,000

Gain on extinguishment of debts (Note 7(a)) (155,554,087)

Accretion of interest 26,301,226

Fair value of the “New” JNA 198,872,139

Fair value is measured in accordance with MFRS 139. The fair value is computed based on the future cash outfl ows

discounted using the current interest rate of similar fi nancial 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 the income statement in the previous fi nancial year.

(d) 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 fi rst 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.

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. The fi rst series amounting to RM310 million has

been reclassifi ed to current liabilities as it will mature on 30 September 2013.




331


(d) BACP Programme/BAMTN Programme (continued)

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 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 fi fteen-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 fi fteen-year RM125 million nominal value tranche.

SYABAS is required to maintain the following fi nancial 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.



332


(d) BACP Programme/BAMTN Programme (continued)

BACP/BAMTN are sharing the same securities as listed in Note 32(e). 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.

The effective interest rates per annum of this borrowing at the reporting date range between 5.00% to 8.24% per

annum (2011: 5.00% to 8.24% per annum).

(e) RM410 million and RM250 million Term Loans

SYABAS obtained Term Loan facilities of up to RM410 million and RM250 million from BPMB to part fi nance 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 fi rst 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




333


(e) RM410 million and RM250 million Term Loans (continued)

The above Term Loans are secured via the following:

- A debenture incorporating fi xed and fl oating charges over all present and future assets of SYABAS, both movable

and immovable;

- Assignment of all rights, titles and benefi ts under the SYABAS Concession Agreement;

- Assignment of all contractual rights, titles and benefi ts 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% (2011: 5.65%) per annum.

(f) RUBs

During the fi nancial 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), satisfi ed via a cash consideration of RM132,719,134 and the balance being satisfi ed 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.



334


(g) 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 fi nance the operations and capital expenditure

requirements of SYABAS under SYABAS Concession Agreement. The commitment by the Company and KDEB to

subscribe for the RCULS were 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 Ratifi cation 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.

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 fi rst 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 fi xed 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 split 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 fi nancial position of the Group as follows:




335


(g) RCULS (continued)

Group

2012 2011

RM RM

Liability component

Nominal value of RCULS 33,000,000 33,000,000

Equity component, net of deferred taxation

(held by non-controlling interest) (Note 38) (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 fi nance costs 8,815,865 6,984,243

Liability component as at 31 December (held by non-controlling interest) 24,308,682 22,477,060

(h) 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 fi nance 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.

(i) 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 fi fth (5th) year from fi rst (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.



336


(i) Government Loan RM320.8 million (continued)

The salient terms of the Government Loan Agreement are as follows: (continued)

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.

vi) Other Terms : As privately agreed with the Federal Government.

The Government Loan was fully utilised by SYABAS to pay water treatment operators, namely, PNSB, ABASS and

SPLASH for water purchased.

(j) Government Loan RM110 million

On 17 October 2011, SYABAS 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 SYABAS 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 fi nance capital expenditure works on old pipe replacement project and

upgrading of water supply system project.

iii) Tenure : Twenty (20) years.

iv) Drawdown period : Year RM

2011 18,500,000

2012 63,000,000

2013 28,500,000

110,000,000

During the year, SYABAS has drawndown RM58,046,000 from this Facility. The balance will be obtained during the

third drawdown in 2013.




337


(j) Government Loan RM110 million (continued)

The salient terms of the Government Loan Agreement are as follows: (continued)

2012 2011

RM RM

At 1 January 7,377,817 –

Drawdown during the year 58,046,000 18,500,000

Effect of adoption MFRS 120 (Note 36(c)) (33,377,470) (11,174,680)

Accretion of fi nance costs 1,936,452 52,497

Borrowing costs capitalised 66,368 –

At 31 December 34,049,167 7,377,817

v) Repayment : The Facility amount to be repayable over eighteen (18) years, commencing

on the third (3rd) year from the fi rst 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 Account : Deed of Assignment over a Special Loan Account and the credit balances

and Security therein.

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.



338


(k) Obligation under fi nance leases

These obligations are secured by a charge over the leased assets (Note 14). The average discount rate implicit in the

leases is 2.97% per annum (2011: 3.01% per annum).

(l) 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 fi ve (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

15 January 2007 to 14 January 2008 125,400,000 125,400,000




655,000,000 655,000,000

2012 2011

RM RM

At 1 January 611,593,249 605,211,919

Accretion of fi nance costs (Note 11) 6,879,073 6,381,330

At 31 December 618,472,322 611,593,249

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.






339


(l) RPS (continued)



Each RPS shall confer on its holder(s) the following rights:

(i) A fi xed cumulative net dividend of 3% per annum on each RPS, payable in cash on a date falling in the fi nancial

year ending not earlier than 31 December 2015 (which date is to be determined at the sole discretion of SYABAS),

out of profi ts of SYABAS available for distribution in respect of each fi nancial 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 fi nancial year from the date of issue up to the fi nancial 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

fi nancial year 31 December 2015 and any fi nancial 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.



340


(l) RPS (continued)

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.

(m) USD31 million term loan

POG obtained a short term loan of USD31 million to part fi nance the acquisition of the remaining 60% interest in GOM Resources and KGL respectively as disclosed in Note 18(d) and Note 18(e).

The above term loan is secured via the following:

- Charge over all KGL Ltd and GOM Resources shares owned by POG;

- Debenture incorporating a fi xed and fl oating charge over all present and future assets of POG; and

- Corporate guarantee from the Company for USD31 million together will interest thereon.

The loan was repayable on 27 October 2011 but has 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. The term loan was fully settled on the repayment due date.

(n) USD36 million term loan

KGL had during the year secured a syndicated term loan facility of USD36 million from two local licensed banks. The loan had been drawndown in April 2012. The facility was originally for a period of six (6) months from the date of fi rst drawing on the facility.

On 14 March 2012, the two local licensed banks have approved to extend the tenure of the facility to fi ve (5) years. The principal is repayable on a quarterly basis and the interest is payable on a quarterly at rate of 2.0% above cost of funds.

The above term loan is secured via the following:

(i) First ship mortgage over KGL’s barge vessel;

(ii) Assignment of all the present and future rights, title and interests in and under the charter contracts of the barge vessel;

(iii) Assignment of all the Designated Collection Accounts of KGL (Note 31);




341


(n) USD36 million term loan (continued)

(iv) All insurances in relation to the barge vessel;

(v) Any requisition compensation paid or payable by KGL;

(vi) Debenture over all fi xed and fl oating assets of KGL; and

(vii) Corporate guarantee from the Company.

(o) Revolving credit

During the current fi nancial year, a subsidiary of POG, GOM Resources had secured syndicated credit facilities from two local licensed banks. The facilities are secured via the following:

(i) Assignment of all the present and future rights, title, benefi t and interest in and under the project contracts of GOM Resources;

(ii) Debentures over the fi xed and fl oating assets of GOM Resources;

(iii) Assignment of the designated collection accounts of GOM Resources (Note 31); and

(iv) Corporate guarantee by the Company.

(p) 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

2012 2011

% %

Group Government Support Loan 3.00 3.00 BAIDS 5.00 - 5.60 5.00 - 5.60 JNA 5.68 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 USD36 million term loan 3.35 - 4.05 – Revolving credit 3.25 – Obligation under fi nance leases 2.97 3.01



342

33. TRADE AND OTHER PAYABLES

Group Company

2012 2011 2012 2011

RM RM RM RM

Current

Trade payables

Third parties 662,283,488 489,472,586 – –

Amounts due to contractors 59,657,082 39,490,131 – –

721,940,570 528,962,717 – –

Other payables

Amount due to a subsidiary – – 216,425,009 249,260,364

Finance cost payable 127,175,241 117,349,151 – –

Deposit from water consumers (Note 33(d)) 425,812,350 403,239,351 – –

Accruals (Note 33(c)) 285,075,052 337,739,795 650,500 612,251

838,062,643 858,328,297 217,075,509 249,872,615

1,560,003,213 1,387,291,014 217,075,509 249,872,615

Non-current

Trade payables

Third parties 1,571,571,675 1,102,557,144 – –

Other payables

Long-term payable (Note 33(e)) 6,529,733 8,162,167 – –

Accruals (Note 33(f)) 268,916,089 114,721,344 – –

275,445,822 122,883,511 – –

Less: Adjustment (Note 7(a), Note 33(f)) (23,801,845) (19,680,001) – –

251,643,977 103,203,510 – –

1,823,215,652 1,205,760,654 – –

Total trade and other payables 3,383,218,865 2,593,051,668 217,075,509 249,872,615

Add: Loan and borrowings (Note 32) 5,655,788,456 5,512,129,396 – –

Total fi nancial liabilities carried at amortised cost 9,039,007,321 8,105,181,064 217,075,509 249,872,615




343

33. TRADE AND OTHER PAYABLES (CONTINUED)

(a) Trade payables

These amounts are non-interest bearing. Trade payables are normally settled on 30-90 days (2011: 30-90 days)

terms.

Included within the trade payables is an amount of RM2,018,592,734 (2011: RM1,525,365,656) payable by SYABAS to

its external water suppliers. These amounts are under litigation as disclosed in Note 50(d) and Note 50(f) respectively.

(b) Amount due to a subsidiary

This amount is unsecured, non-interest bearing and is repayable on demand.

(c) Accruals

Included in accruals of the Group is an amount of RM21,200 (2011: RM42,400), which is amount due to a subsidiary

of CPMSB, a substantial corporate shareholder of the Company.

(d) Deposit from water consumers

Group

2012 2011

RM RM

As at 1 January 403,239,351 380,325,879

Addition during the year 48,924,720 47,589,047

Transfer (from) trade receivables (Note 25(a)) (67,944) (1,077,859)

Refund (26,291,362) (23,586,082)

Bad debt reversal/(written off) 7,585 (11,634)

As at 31 December 425,812,350 403,239,351

(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 forty four (144)

months commencing April 2005.



344


(e) Long-term payable (continued)

Long-term payable is analysed as follows:

Group

2012 2011

RM RM

Analysed as:

Current 1,632,433 1,632,433

Non-current:



6,529,733 8,162,167

8,162,166 9,794,600

(f) Adjustment for changes in estimate

In the previous fi nancial year ended 31 December 2011, SYABAS revised its estimates of cash outfl ows 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 50(d)). SYABAS anticipates that the total amount outstanding to

its third parties trade payables of RM2,018,592,734 (2011: RM1,525,365,656) is likely to be paid in the following

timeframe:

Within next 13 - 36

12 months months

RM RM


Trade payables carried at amortised cost 447,021,059 1,571,571,675

Accruals – 268,916,089

Within next 13 - 24

12 months months

RM RM


Trade payables carried at amortised cost 422,808,512 1,102,557,144

Accruals – 114,721,344




345


(f) Adjustment for changes in estimate (continued)

Arising from the revision in the estimates of cash fl ows, 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 1,571,571,675 268,916,089 1,840,487,764

Adjustment for changes in estimate recognised in profi t or loss

(Note 7(a)) (210,310,130) 186,508,285 (23,801,845)

Amortised carrying amount after revision 1,361,261,545 455,424,374 1,816,685,919


Amortised carrying amount before revision 1,102,557,144 114,721,344 1,217,278,488

Adjustment for changes in estimate recognised in profi t or loss

(Note 7(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

34. PROVISION FOR RETIREMENT BENEFITS

The Group operates unfunded, defi ned benefi t Retirement Benefi t Schemes (the “Scheme”) for its eligible employees.

SYABAS’s and PNSB’s eligible employees are entitled to retirement benefi ts of either 0.5 or 1.25 month of their fi nal

salary for every year of service with the respective companies on the attainment of their retirement age of 56 (age of 60

effective 1 January 2013) or voluntary retirement age of 50.

Movement of provision of retirement benefi ts is as follows:

Group

2012 2011

RM RM

At 1 January 22,759,570 20,763,875

Add: Provision for the year (Note 9) 4,356,101 4,030,312

Add: Recognition of actuarial differences 1,386,219 –

Less: Payment made during the year (3,006,280) (2,034,617)

At 31 December 25,495,610 22,759,570



346

34. PROVISION FOR RETIREMENT BENEFITS (CONTINUED)

Group

2012 2011

RM RM

Maturity of provision:

Not later than 1 year 324,408 2,283,854

Later than 1 year but not later than 2 years 331,464 3,269,880

Later than 2 years 24,839,738 17,205,836

25,495,610 22,759,570

Current service cost 3,006,666 2,751,615

Interest cost 1,349,436 1,278,697

Total 4,356,102 4,030,312

The principal actuarial assumptions used are as follows:

Group

2012 2011

% %

Discount rate 6.00 6.50

Rate of compensation increase 6.00 6.00

35. OTHER CURRENT LIABILITIES

Group

2012 2011

RM RM

Amount due to customer on construction contract (Note 30) 141,405 –




347

36. 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 fi nancing 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.

Group

2012 2011

RM RM

Net carrying amount

At 1 January 226,832,424 231,031,985

Less: Amortisation (Note 7(a)) (5,378,552) (4,199,561)

At 31 December 221,453,872 226,832,424

(b) On 26 March 2010, SYABAS has completed the RPS issuance of RM131.6 million by issuing 131.6 million units of

RPS with a nominal value 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. MFRS 120 requires the benefi t of the government loan at a below-

market rate of interest to be treated as government grants. RM54,309,571 being the difference between the amount

received and the present value of estimated cash fl ows discounted at market interest rate is accounted for as

government grants.

Group

2012 2011

RM RM

Net carrying amount

At 1 January 47,973,455 51,594,093

Less: Amortisation (Note 7(a)) (3,620,638) (3,620,638)

At 31 December 44,352,817 47,973,455

(c) On 17 October 2011, SYABAS 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.

During the year, SYABAS had a second drawdown of RM58,046,000 from this Facility. MFRS 120 requires the benefi t

of the government loan at a below-market rate of interest to be treated as government grants. RM33,377,740 (2011:

RM11,174,680) being the difference between the amount received and the present value of estimated cash fl ows

discounted at market interest rate is accounted for as government grants.



348

36. GOVERNMENT GRANT (CONTINUED)

(c) (continued)

Group

2012 2011

RM RM

Net carrying amount At 1 January 11,128,120 – Add: Effect of adoption of MFRS 120 (Note 32(j)) 33,377,470 11,174,680 Less: Amortisation (Note 7(a)) (1,802,383) (46,560)

At 31 December 42,703,207 11,128,120

Total net carrying amount (a) + (b) + (c) 308,509,896 285,933,999

37. DEFERRED TAX

Deferred income tax as at 31 December relates to the following:

As at Recognised As at 31 Recognised As at

1 January Acquisition in profit Recognised December in profit Recognised 31 December

2011 of subsidiary or loss in Equity 2011 or loss in Equity 2012


Group

Deferred tax liabilities: Loans and borrowings – – (38,535,831) – (38,535,831) 6,222,616 (32,313,215) Trade payable – – (10,145,744) – (10,145,744) (18,769,144) – (28,914,888) Interest receivable (10,538,094) – (2,951,572) – (13,489,666) (3,201,491) – (16,691,157) Service concession assets (1,502,210,090) – (19,011,935) – (1,521,222,025) (93,692,957) – (1,614,914,982) Revaluation reserve – – – (23,029,316) (23,029,316) 668,471 – (22,360,845) Fair value adjustments on acquisitions

of subsidiaries (1,852,232) – 171,194 – (1,681,038) 157,451 – (1,523,587)

Others 68,652 – 2,774,155 – 2,842,807 (2,958,057) – (115,250)

(1,514,531,764) – (67,699,733) (23,029,316) (1,605,260,813) (111,573,111) – (1,716,833,924)




349

37. DEFERRED TAX (CONTINUED)

Deferred income tax as at 31 December relates to the following:

As at Recognised As at 31 Recognised As at

1 January Acquisition in profit Recognised December in profit Recognised 31 December

2011 of subsidiary or loss in Equity 2011 or loss in Equity 2012


Deferred tax assets: Tax losses 571,271,270 – 105,468,577 – 676,739,847 (42,523,035) – 634,216,812 Property, plant and equipment 187,606,323 (129,000) 41,905,810 – 229,383,133 17,520,207 – 246,903,340 Service concession obligations 1,108,018,313 – (31,491,552) – 1,076,526,761 87,633,157 – 1,164,159,918 RCULS 4,516,082 – 3,381,652 – 7,897,734 3,659,397 – 11,557,131 Trade receivables 1,514,521 – 24,180,586 – 25,695,107 38,620,834 – 64,315,941 Reinvestment allowance 35,359,632 – (35,359,632) – – – – – Other payables 5,791,731 – 8,437,592 – 14,229,323 6,359,194 – 20,588,517 Provision for retirement benefi ts – – – – – – 346,556 346,556 Exchange difference – – – – – 674,184 – 674,184

1,914,077,872 (129,000) 116,523,033 – 2,030,471,905 111,943,938 346,556 2,142,762,399

399,546,108 (129,000) 48,823,300 (23,029,316) 425,211,092 370,827 346,556 425,928,475

Company

Deferred tax liabilities: Interest receivable (10,538,094) – (2,951,572) – (13,489,666) (3,201,491) – (16,691,157) Property, plant and equipment – – – (3,027,220) (3,027,220) (1,820,745) – (4,847,965) Others – – – – – (98,406) – (98,406)

(10,538,094) – (2,951,572) (3,027,220) (16,516,886) (5,120,642) – (21,637,528)



350

37. DEFERRED TAX (CONTINUED)

Group Company

2012 2011 2012 2011

RM RM RM RM

Presented after appropriate offsetting as follows:

Deferred tax assets 2,142,762,399 2,030,471,905 – –

Deferred tax liabilities (1,716,833,924) (1,605,260,813) (21,637,528) (16,516,886)

425,928,475 425,211,092 (21,637,528) (16,516,886)

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 benefi t through the future taxable profi ts

is available. The directors are of the opinion that the Group will be able to reduce tax payable in view of future profi ts

and benefi ts accruing to the Group from the existing water concessions which have been awarded to the Group (Note

5) to which the deferred tax asset relates. The unabsorbed capital allowances, unutilised tax losses and unutilised

reinvestment allowances are available indefi nitely for offsetting against future taxable profi ts 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

2012 2011

RM RM

Tax losses and capital allowances 4,895,738 13,906,455




351

38. SHARE CAPITAL, SHARE PREMIUM, TREASURY SHARES, FOREIGN CURRENCY TRANSLATION RESERVE,

AVAILABLE-FOR-SALE RESERVE AND RCULS

Group and Company

Number of ordinary

shares of RM1.00 each Amount

Share capital Share capital

(Issued and (Issued and Total share

fully paid) Treasury fully paid) Share capital and Treasury

Shares premium share premium Shares

RM RM RM RM

At 1 January 2011/

31 December 2011/

31 December 2012 411,142,895 (2,036,800) 411,142,895 102,878,221 514,021,116 (5,940,688)

Number of Ordinary Shares

of RM1.00 each Amount

2012 2011 2012 2011

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 fi nanced by internally generated funds. The shares repurchased are being held as

treasury shares.



352


AVAILABLE-FOR-SALE RESERVE AND RCULS (CONTINUED)

Foreign

currency

Revaluation translation Available-for- Other

Reserve reserve sale reserve reserve RCULS Total

RM RM RM RM RM RM

Group

At 1 January 2011 – (3,094,314) – – 13,130,387 10,036,073

- Effects of adoption of

MFRS 1 – 3,094,314 – (320,653,591) – (317,559,277)

At 1 January 2011 – – – (320,653,591) 13,130,387 (307,523,204)

Revaluation surplus 69,087,946 – – – – 69,087,946

Exchange differences – 1,986,185 – – – 1,986,185

Available-for-sale reserve – – (413,845) – – (413,845)

Other reserve – – – (19,762,784) – (19,762,784)

At 31 December 2011 69,087,946 1,986,185 (413,845) (340,416,375) 13,130,387 (256,625,702)

At 1 January 2012 69,087,946 1,986,185 (413,845) (340,416,375) 13,130,387 (256,625,702)

Exchange differences – (2,555,932) – – – (2,555,932)

Available-for-sale reserve – – 507,925 – – 507,925

Other reserve – – – (527,162) – (527,162)

At 31 December 2012 69,087,946 (569,747) 94,080 (340,943,537) 13,130,387 (259,200,871)

Revaluation Available-for-

Reserve sale reserve Total

RM RM RM

Company

At 1 January 2011 – – –

Revaluation surplus 9,081,659 – 9,081,659

At 31 December 2011 9,081,659 – 9,081,659

At 1 January 2012 9,081,659 – 9,081,659

Available-for-sale reserve – 661,055 661,055

At 31 December 2012 9,081,659 661,055 9,742,714




353


AVAILABLE-FOR-SALE RESERVE AND RCULS (CONTINUED)

(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 fi nancial

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 on acquisition of non-controlling interests in PNSB, KGL, GOM, LUWEI and

Luancheng.

(g) Available-for-sale reserves

The available-for-sale reserves represent the fair value gain or losses from the available-for-sale investments.

39. 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.

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 2012, the Company has tax exempt profi ts available for distribution of approximately RM1,077,959

(2011: RM1,077,959), subject to the agreement of the Inland Revenue Board.



354

40. RELATED PARTY TRANSACTIONS

(a) Transactions with related parties

In addition to the related party information disclosed elsewhere in the fi nancial statements, the following signifi cant

transactions between the Group and related parties took place at terms agreed between the parties during the

fi nancial year:

Group Company

2012 2011 2012 2011

RM RM RM RM

Advances from PNSB – – 229,610,273 644,177,620

Advance to PNSB – – 327,628 501

Repayment to PNSB – – 262,118,000 429,759,100

Advances to POG – – 9,398,793 105,326,830

Repayment from POG – – 20,240,000 –

Advance to SINO – – 13,509,529 22,175,017

Rental from SINO – – 873,461 840,056

Advances to PNOC – – 5,074,252 1,072,528

Advances to PSSB – – 4,706,297 392,000

RCULS interest receivable from SYABAS – – 12,805,964 11,806,288

Coupon and discounts on JNA from PNSB – – – 49,792,877

Secretarial fees charged by RZ Management * 240,000 240,000 – –

Consultancy work charged by WWE Holdings Bhd* – 946,000 – –

Donation to GWGF* 1,282,193 4,557,442 – –

* RZ Management Services Sdn Bhd, WWE Holdings Bhd and GWGF are a Director related corporation.

(b) Key management personnel remuneration

Group Company

2012 2011 2012 2011

RM RM RM RM

Short-term employee benefi ts 19,123,231 14,948,574 – –

Defi ned contribution plan 4,234,375 2,451,731 – –

Gratuity 20,000,000 2,500,000 – –

Other staff related expenses 8,953,456 7,728,095 673,000 406,000

52,311,062 27,628,400 673,000 406,000




355

40. RELATED PARTY TRANSACTIONS (CONTINUED)

(b) Key management personnel remuneration (continued)

Included in the total key management personnel are:

Group Company

2012 2011 2012 2011

RM RM RM RM

Directors’ remuneration (Note 10) 40,615,300 20,312,101 673,000 406,000

41. COMMITMENTS

(a) Capital commitments

Capital expenditure as at the reporting date is as follows:

Group

2012 2011

RM RM

Capital expenditure:

Contracts approved and contracted for 21,022,735 21,354,709

Commitment under the terms of the SYABAS Concession Agreements:

- Concession fees over remaining concession period 22,000,000 23,000,000

- Contracts approved and contracted for service concession assets 226,871,753 216,276,962

248,871,753 239,276,962

(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

2012 2011

RM RM

Payable within one year 2,793,257 1,429,795

Payable between one and fi ve years 1,587,461 1,822,195

Payable after fi ve years – 761,807

4,380,718 4,013,797



356

41. COMMITMENTS (CONTINUED)

(c) Finance lease commitments

Group

2012 2011

RM RM

Minimum lease payments:

Not later than 1 year 5,923,315 5,840,720



17,764,808 18,992,822

Less: Amounts representing fi nance charges (1,497,968) (1,858,260)

Present value of minimum lease payables 16,266,840 17,134,562

Present value of payments:

Not later than 1 year 5,181,507 5,168,006



Present value of minimum lease payables 16,266,840 17,134,562

Less: Amount due within 12 months (Note 32) (5,181,507) (5,168,006)

Amount due after 12 months (Note 32) 11,085,333 11,966,556

42. FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES

Group Company

2012 2011 2012 2011

RM RM RM RM

Secured:

Corporate guarantee (a) – – 184,091,600 98,223,500

Unsecured:

Trade and performance guarantees extended to

third parties 92,784,602 74,293,608 10,000,000 11,221,899

92,784,602 74,293,608 194,091,600 109,445,399




357

42. FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES (CONTINUED)

(a) Corporate guarantee

The Group and Company has assessed the fi nancial guarantee contract of RM184,091,600 (2011: RM98,223,500)

and concluded that the guarantee is more likely not be called upon by the banks and accordingly not recognised as

fi nancial liability as at 31 December 2012 and 31 December 2011.

(b) Tax penalty - PNSB

In the previous fi nancial year, PNSB has recognised all the invoices issued to SYABAS in its income statement for

the supply of treated water as revenue. The full amount has been recognized in its tax submission as gross income

and therefore subject to tax. PNSB did not make any provision for doubtful debts on the uncollectible amount due

from SYABAS. Hence, PNSB did not claim any deductions in respect of the portion of invoices not collectible from

SYABAS as at end of the respective basis periods. However, PNSB had fully provided for the YA2012 tax payable in

the current fi nancial statement.

Subsequently, PNSB had appealed to Inland Revenue Board of Malaysia (“IRB”) to revise the tax computations for

YA2009 and YA2010 to take into account the following tax adjustments:

i) To claim a deduction under Section 34(2) of the Income Tax Act 1967 (“the Act”) in respect of the amount owing

from SYABAS for treated water supplied which was not collectible as at end of the basis period for both YA2009

and YA2010; and

ii) To include as gross income and subject to tax on the bad/doubtful debts claimed as tax deduction under item

above which was recovered from SYABAS in the subsequent years of assessment pursuant to Section 30(1) of

the Act,i.e. when the payment is received from SYABAS, it become taxable.

PNSB had fi led in the tax submission based on the full revenue approach for YA2011 and at the same time, fi led

in an appeal via Form Q to IRB to revise the tax computation for YA2011 based on the same tax adjustments as

mentioned above. PNSB had fully paid all the tax installments for YA2009, YA2010 and YA2011 and is appealing for

tax refund from IRB.

However, as at the date of this report, PNSB had yet to receive written approval from IRB as to whether PNSB can

claim a deduction under Section 34(2) of the Act in respect of the amount owing from SYABAS for treated water

supplied which was not collectible as at end of the respective basis period and to include as gross income and

subject to tax on the bad/doubtful debts claimed as tax deduction under item above which was recovered from

SYABAS in the subsequent years of assessment pursuant to Section 30(1) of the Act.

During the current fi nancial year, in the revised submission of CP204 form to the IRB, PNSB has submitted a RM

NIL tax payable for the year. The revised estimate of tax payable has claimed a tax deduction on the uncollectible

portion of the revenue from SYABAS during the current fi nancial year.



358

42. FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES (CONTINUED)

(b) Tax penalty - PNSB (continued)

In the event that IRB refuses to grant approval to PNSB to claim a deduction under Section 34(2) of the Act in respect

of amount owing from SYABAS for treated water supplied, PNSB will be exposed to the tax penalty provision as

provided in Section 107C(10) of the Act for YA2012. PNSB had expressed its awareness on the matter and the fi nal

outcome will be based on IRB’s decision on the matter.

As at reporting date, the tax penalty is possible, pending the outcome of PNSB’s appeal to IRB.

(c) Tax liability - GOM

POG completed the acquisition of the 100% equity interest in GOM Resources on 28 September 2011 from the

previous shareholders, Global International Vessels, Ltd (“GIVL”) and Global Asia Pacifi c Industries Sdn Bhd (“GAPI”).

The parent company of GIVL and GAPI, namely Global Industries Ltd (“GIL”) has since been taken over by a French

based company, Technip International Group (“Technip”).

Since October 2010, the Inland Revenue Board (“IRB”) had initiated a tax investigation on GOM Resources’ past

years’ tax submissions. The years of assessment under investigation are 2003 to 2009, which are clearly prior to the

acquisition of GOM by the POG. The IRB’s tax investigation is on the following matters:

i) Withholding tax on payment of vessel charter fee for years 2003 – 2009 paid directly to GIL instead of Global

Industries Offshore Labuan Ltd (“GIOLL”).

ii) Tax deductibility on management fees paid to Global Industries Offshore Thailand (“GIOT”) and GIL from years

2003 – 2009.

The Management of GOM Resources is currently compiling the relevant information and documents to be furnished

to the IRB with the assistance of Technip.

On 4 April 2013, IRB has requested GOM Resources to furnish further documents to facilitate the ongoing tax

investigation by 15 April 2013 and to schedule a meeting to discuss on these matters on 18 April 2013. The

Management of GOM Resources has sought approval from the IRB for an extension of time to furnish the requested

documents to the IRB. Subsequently, IRB had agreed to extend the document submission deadline to 3 May 2013

and re-schedule the meeting to 14 May 2013. Pending the completion of the tax investigation process, the probable

outcome is unknown at the point in time.




359

43. FAIR VALUE OF FINANCIAL INSTRUMENTS

A. Fair value of fi nancial 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 2012

Group

Financial liabilities:

Loans and borrowings

- Obligations under fi nance lease 32 (16,266,840) (16,708,521)

- Government Support Loan 32 (39,521,113) (34,637,945)

- BAIDS 32 (1,016,991,244) (807,997,809)

- JNA 32 (198,872,139) (165,968,265)

- BAMTN 32 (2,060,393,729) (2,239,763,248)

- USD36 million Term Loan 32 (103,972,000) (98,610,981)

- RM410 million and RM250 million Term Loans 32 (659,974,712) (674,394,978)

- Government Loan RM320.8 million 32 (320,800,000) (96,960,889)


- RUBs 32 (471,406,408) (356,615,587)

- RCULS 32 (24,308,682) (26,062,699)

- Lushan MOF Novated World Bank Loan 32 (10,640,501) (8,394,311)

- RPS 32 (618,472,322) (434,928,744)

Service concession obligations 17 (4,046,085,235) (3,117,985,763)

Company

Financial assets:

RCULS 21 278,764,629 171,944,021



360

43. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

A. Fair value of fi nancial instruments by classes that are not carried at fair value and whose carrying amounts are

not reasonable approximation of fair value (continued)

Carrying Fair

Note amount value

RM RM

At 31 December 2011

Group


Loans and borrowings

- Obligations under fi nance lease 32 (17,134,562) (17,186,292)

- Government Support Loan 32 (46,748,281) (40,136,884)

- BAIDS 32 (1,016,379,299) (806,854,526)

- JNA 32 (173,981,676) (159,173,702)

- BAMTN 32 (2,049,007,301) (2,048,352,107)

- RM410 million and RM250 million Term Loans 32 (659,974,712) (520,679,585)



- RUBs 32 (479,216,984) (258,193,388)

- RCULS 32 (22,477,060) (21,376,093)

- Lushan MOF Novated World Bank Loan 32 (9,214,955) (8,697,637)

- RPS 32 (611,593,249) (671,097,732)

Service concession obligations 17 (4,169,538,672) (3,181,654,775)

Company

Financial assets:

RCULS 21 265,958,665 139,875,761




361


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 fi nancial instruments that are not carried at fair value and whose carrying amounts are

reasonable approximation of fair value:

Note

Available-for-sale investments 28

Trade and other receivables (current) 25

Trade and other payables (current) 33

Borrowings 32

USD31 million term loan

Revolving credit

The carrying amounts of these fi nancial assets and liabilities are reasonable approximation of fair values, either due

to their short-term nature or that they are fl oating rate instruments that are re-priced to market interest rates on or

near the reporting date.

C. Fair value hierarchy

Fair value of unquoted available-for-sale fi nancial assets is estimated using appropriate valuation techniques.

The Group and the Company uses the following hierarchy for determining and disclosing the fair value of fi nancial

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 signifi cant effect on the recorded fair value are observable,

either directly or indirectly

Level 3: techniques that use inputs that have a signifi cant effect on the recorded fair value that are not based on

observable market data



362


C. Fair value hierarchy (continued)

As at 31 December 2012, the Group and Company held the following fi nancial instrument at fair value in the statement

of fi nancial position:

31 December Level 1 Level 2 Level 3

RM RM RM RM

Assets measured at fair value

Group

2012

Available-for-sale investment 59,851,091 – 59,851,091 –

2011


Company

2012


2011

Available-for-sale investment – – – –

44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to fi nancial risks arising from their operations and the use of fi nancial

instruments. The key fi nancial 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 fi nancial 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 fi nancial 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.




363

44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Credit risk (continued)

For other fi nancial 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 profi le

At the reporting date, approximately:

- 81% (2011: 80%) of the Group’s trade were due from 1 major customer.

As disclosed in Note 4.1(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 for the second water tariff review and

from 1 January 2012 for the third water tariff review. Any late or non-repayment by the State Government may have

an adverse impact on the cash fl ows and/or profi t of the Group. SYABAS has taken legal action against the State

Government as disclosed in Note 50(e) & Note 50(g).

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.

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 25.

Deposits with banks and other fi nancial institutions, other investment securities and short term funds that are neither

past due nor impaired are placed with or entered into with reputable fi nancial institutions or companies with high

credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that are either past due or impaired is disclosed in Note 25.

(b) Liquidity risk

Liquidity risk is the risk that the Group or Company will encounter diffi culty in meeting fi nancial 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 fi nancial assets and liabilities.

The Group manages its liquidity risk by establishing budget with the view to ensure suffi cient bank balances to

meet the obligations. In addition, the Group negotiate with fi nancial institutions to reschedule and/or restructure the

existing credit facilities to coincide with the present operating environment.



364


(b) Liquidity risk (continued)

As disclosed in Note 33(f), SYABAS has revised its estimates of cash outfl ows 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 50(d)).

Analysis of fi nancial instruments by remaining contractual maturities

The table below summarises the maturity profi le of the Group’s and the Company’s liabilities at the reporting date

based on contractual undiscounted repayment obligations.

2012

On demand

or within One to Over five

one year five years years Total

RM RM RM RM

Group


Trade and other payables 1,562,719,626 2,207,636,311 – 3,770,355,937

Loans and borrowings 1,207,058,004 2,993,069,530 3,601,411,572 7,801,539,106

Service concession obligations 388,288,682 1,308,454,696 4,627,622,500 6,324,365,878

Total undiscounted fi nancial liabilities 3,158,066,312 6,509,160,537 8,229,034,072 17,896,260,921

Company


Trade and other payables 217,075,509 – – 217,075,509

Total undiscounted fi nancial liabilities 217,075,509 – – 217,075,509




365


(b) Liquidity risk (continued)

2011

On demand

or within One to Over five

one year five years years Total

RM RM RM RM

Group


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 fi nancial liabilities 2,212,766,836 5,191,467,354 7,803,736,131 15,207,970,321

Company


Trade and other payables 249,872,615 – – 249,872,615

Total undiscounted fi nancial liabilities 249,872,615 – – 249,872,615

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash fl ows of the Group’s and the Company’s fi nancial

instruments will fl uctuate because of changes in market interest rates.

As at 31 December 2012, 96.7% (2011: 99.9%) of the Group’s borrowings carry fi xed interest rates. The Group’s

income and operating cash fl ows 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 profi t net of tax would have been RM103,972 (2011: RM25,632) higher/lower, arising mainly as a result of

lower/higher interest expense on fl oating rate loans and borrowings, higher/lower interest income from fl oating 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 fl ows of a fi nancial instrument will fl uctuate because

of changes in foreign exchange rates.



366


(d) Foreign currency risk (continued)

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 fl ows 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 fi nancial assets and fi nancial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

Net financial assets/(liabilities) held in

non-functional currencies

United States Singapore

Renminbi Dollar Dollar Total

RM RM RM RM

Group

At 31 December 2012 Cash and bank balances 1,480,602 283,690,958 194,788 285,366,348 Trade and other receivables 746,355 47,435,678 1,096 48,183,129 Trade and other payables 5,786,082 54,011,204 576,810 60,374,096 Loans and borrowings 10,640,502 184,091,600 – 194,732,102

18,653,541 569,229,440 772,694 588,655,675

Company

At 31 December 2012 Cash and bank balances – 30,932 – 30,932 Trade and other receivables – 1,529,000 – 1,529,000

– 1,559,932 – 1,559,932

Sensitivity analysis for foreign currency risk

Profit/(loss) net of tax

Group Company

2012 2012

RM RM

USD/RM - strengthened 5% 4,651,192 77,997 - weakened 5% (4,651,192) (77,997) SGD/RM - strengthened 5% (19,046) – - weakened 5% 19,046 – RMB/RM - strengthened 5% (716,154) – - weakened 5% 716,154 –




367


(e) Market price risk

Market price risk is the risk that the fair value or future cash fl ows of the Group’s fi nancial instruments will fl uctuate 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 classifi ed as short term funds.

45. 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.

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 fi nancial 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 as required by the respective borrowing documents.

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 RM11,701,351,831 (2011: RM11,006,669,590) and a total capital of RM12,208,342,377 (2011: RM11,278,881,217) giving rise to a gearing ratio of approximately 96% (2011: 98%).

46. DIVIDENDS

Group and Company

2012 2011

RM RM

Proposed but not recognised as liability as at 31 December:

Dividends on ordinary shares, subject to shareholders’ approval at the Annual General Meeting (“AGM”): - Final tax exempt (single tier) dividend for 2012: 5 sen (2011: Nil) per share 20,455,305 –

At the forthcoming Sixteenth Annual General Meeting of the Company, a fi nal single tier dividend in respect of the fi nancial year ended 31 December 2012, of 5 sen per ordinary share, amounting to a dividend payable of RM20,455,305 will be proposed for the shareholders’ approval. The fi nancial statements of the current fi nancial year do not refl ect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the fi nancial year ending 31 December 2013.



368

47. 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 insignifi cant to the Group.

Water

Distribution

2012

RM

Operating Revenue

Sales to external customers 2,622,955,076 Inter-segment sales –

2,622,955,076

Other income 163,893,016

2,786,848,092 Operating expenses (1,961,999,841)

Share of results - Associates – - Joint venture –

Depreciation and amortisation (214,246,581)

Segment results 610,601,670

Finance cost

Profi t before tax

Assets and Liabilities

Investment in associates – Segment assets 11,151,916,640 11,151,916,640 Unallocated assets

Total assets

Segment liabilities 13,676,975,073 Unallocated liabilities

Total liabilities




369

Per

consolidated

Water Holding financial

Treatment Company Oil and Gas Construction Others Elimination Notes statement

2012 2012 2012 2012 2012 2012 2012


– – 778,041,868 342,672,445 265,835 – 3,743,935,224 559,912,208 – – 25,590 – (559,937,798) A –

559,912,208 – 778,041,868 342,698,035 265,835 (559,937,798) 3,743,935,224

146,122,782 20,688,979 3,007,956 – 1,051,100 (165,240,140) A 169,523,693

706,034,990 20,688,979 781,049,824 342,698,035 1,316,935 (725,177,938) 3,913,458,917 (338,062,648) (6,412,399) (693,045,067) (307,812,037) (17,615,564) 591,771,768 A (2,733,175,788)

– – – – (1,406) – (1,406) – – – – (147,815) – (147,815)

(14,265,374) (568,323) (4,561,947) – (498,880) – (234,141,105)

353,706,968 13,708,257 83,442,810 34,885,998 (16,946,730) (133,406,170) 945,992,803

(647,688,537)

298,304,266

– 45,236 – – – – 45,236 3,550,218,880 1,201,546,274 548,250,201 – 24,276,610 (3,467,720,734) B 13,008,487,871

3,550,218,880 1,201,591,510 548,250,201 – 24,276,610 (3,467,720,734) 13,008,533,107 425,928,475

13,434,461,582

1,835,996,667 217,075,508 500,351,181 – 216,008,270 (3,027,167,232) C 13,419,239,467 90,280,541

13,509,520,008



370

47. SEGMENT INFORMATION (CONTINUED)

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

insignifi cant to the Group.

Water

Distribution

2011

RM

Operating Revenue

Sales to external customers 1,991,048,307 Inter-segment sales – 1,991,048,307 Other income 135,049,092

2,126,097,399 Operating expenses (1,838,337,783)

Share of results - Associates - Joint venture

Depreciation and amortisation (160,764,339)

Segment results 126,995,277

Finance cost

Profi t before tax

Assets and Liabilities

Investment in associates Segment assets 10,148,772,446

10,148,772,446 Unallocated assets

Total assets

Segment liabilities 12,672,701,129 Unallocated liabilities

Total liabilities




371

Per

consolidated

Water Holding financial

Treatment Company Oil and Gas Construction Others Elimination Notes statement

2011 2011 2011 2011 2011 2011 2012


– – 289,529,044 310,931,740 – – 2,591,509,091 522,891,400 – – 198,249 – (523,089,649) A –

522,891,400 – 289,529,044 311,129,989 – (523,089,649) 2,591,509,091 303,969,840 79,980,818 5,597,181 – 252,369 (204,749,822) A 320,099,478

826,861,240 79,980,818 295,126,225 311,129,989 252,369 (727,839,471) 2,911,608,569 (309,693,940) (21,204,990) (275,332,873) (277,683,709) (12,838,171) 549,876,684 A (2,185,214,782)

3,172 3,172 (203,235) (203,235)

(14,143,616) (774,563) (212,407) – (410,842) (176,305,767)

503,023,684 58,001,265 19,580,945 33,446,280 (13,196,707) (177,962,787) 549,887,957

(624,459,577)

(74,571,620)

45,415 (1,429) 43,986 3,301,778,708 1,222,631,143 309,073,227 – 29,121,072 (3,129,976,734) B 11,881,399,862

3,301,778,708 1,222,676,558 309,073,227 – 29,121,072 (3,129,978,163) 11,881,443,848 425,211,092

12,306,654,940

1,824,494,408 249,872,615 321,206,467 – 195,363,154 (2,680,224,467) C 12,583,413,306 27,434,086

12,610,847,392



372

47. SEGMENT INFORMATION (CONTINUED)

Notes Nature of adjustments and elimination to arrive at amounts reported in the consolidated fi nancial statements

A Inter-segment revenues and expenses are eliminated on consolidation.

B The following items are (deducted from)/added to segment assets to arrive at total assets reported in the

consolidated statement of fi nancial position:

2012 2011

RM RM

Investment in RCULS (278,764,629) (265,958,665)

Inter group intercompany balances elimination (2,911,372,316) (2,588,190,736)

Investment in subsidiaries (463,305,380) (463,118,040)

Goodwill on consolidation 185,970,623 186,038,736

Loss on disposal of Property, plant and equipment (1,353,188) –

Reversal of impairment loss in joint venture 1,104,156 1,251,971

(3,467,720,734) (3,129,976,734)

C The following items are (deducted from)/added to segment liabilities to arrive at total liabilities reported in the

consolidated statement of fi nancial position: 2012 2011

RM RM

Investment in RCULS (168,899,214) (156,093,250)

Inter group intercompany balances (2,911,372,312) (2,588,190,736)

Investment in RUBs 53,104,294 64,059,519

(3,027,167,232) (2,680,224,467)

48. SIGNIFICANT EVENTS

(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 fi rst ship mortgage over KGL’s barge vessel, a corporate guarantee from the Company.

On 25 October 2012, OCBC Bank (Malaysia) Berhad and Hong Leong Bank Berhad (“the Lenders”) had approved

an extension of the tenor for KGL Ltd’s USD36.0 million Syndicated Term Loan Facility for four and a half (4.5) years

up to 29 April 2017.




373

48. SIGNIFICANT EVENTS (CONTINUED)

(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 basis as well as to execute all relevant documents.

On 18 September 2012, Acqua has issued a revised offer letter for the restructuring on all outstanding bonds

(including BAIDS, RUBs, and Junior Notes A). The Company has accepted the offer letter on 5 October 2012 pending

the fi nalisation of detail terms and conditions and legal documentation for the restructuring of all outstanding bonds.

On 23 October 2012, Acqua has again granted the extension for BAIDS Series 3 from 27 October 2012 to 27

November 2012. Acqua has also agreed to extend the BAIDS Series 4 from 27 October 2012 to 27 November 2012

via the same resolution.

On 26 November 2012, Acqua granted the extension on BAIDS Series 3 & 4 from 27 November 2012 to 27 February

2013. Another extension for BAIDS Series 3 & 4 from 27 February 2013 to 27 April 2013 has been granted on 25

February 2013 from Acqua.

(d) The Company had on 11 May 2012 entered into a MoU with the Government of Malaysia, represented by Politeknik

Sultan Idris Shah (“PSIS”) (collectively referred to as “the Parties”) to co-operate and collaborate in the areas

of technical education and training. The MoU promotes cooperation and collaboration in the areas of technical

education and training between Puncak and a leading local polytechnic, PSIS on the basis of reciprocity and mutual

benefi t for both Parties and will help in developing the country’s water and wastewater industry which is synergistic

to Puncak Group’s business.

The salient terms of the MoU are as follows:

(i) Purpose Of MoU

- Developing a new Diploma Programme of Environmental Engineering (Water and Wastewater)

(“New Diploma Programme”) and conduct of lectures in respect of the New Diploma Programme by any

of the industrial experts from the Company and its subsidiary, Syarikat Bekalan Air Selangor Sdn Bhd

(“SYABAS”) for one (1) to two (2) hours per semester;



374


(d) (continued)

(i) Purpose Of MoU (continued)

- Provision of expertise knowledge and information related to water and wastewater industry by the Company

through advisory services, career talks, career exhibitions, seminars, conferences and other related

activities;

- Training of staff and students of PSIS at PNSB and SYABAS that will be of mutual benefi t;

- Conduct potential collaborative research studies by the Company, SYABAS and PSIS for the purpose of

exploring mutual project(s) (if any);

- Any other areas of co-operation as may be mutually agreed upon by the Parties.

(ii) Validity

The MoU is valid for a period of three (3) years from the date of execution.

The collaboration between the Company and PSIS under the MOU is currently ongoing.

(e) On 27 September 2012, the Company announced the following:

(i) Proposed issue of up to 40,910,609 free warrants (“Warrants”) on the basis of 1 Warrant for every 10 existing

ordinary shares of RM1.00 each in PNHB held (“Proposed Free Warrants Issue”); and

(ii) Proposed issue of a 5-year Redeemable Convertible Secured Sukuk Ijarah of up to RM165.0 million in nominal

value (“Proposed Convertible Sukuk Ijarah”).

The Proposed Free Warrants Issue and Proposed Convertible Sukuk Ijarah are inter-conditional upon the relevant

approvals being obtained for each other.




375


(e) The Proposed Free Warrants Issue will not raise any immediate funds upon its issuance as the Warrants will be

issued at no cost to the Entitled Shareholders. Nevertheless, the exact quantum of proceeds that may be raised

by the Company from the exercise of the Warrants would depend upon the actual number of Warrants exercised

during the tenure of the Warrants. The proceeds to be raised from the exercise of the Warrants shall be utilised for

the working capital purposes of the Company and its subsidiaries.

The proceeds of up to RM165.0 million from the Proposed Convertible Sukuk Issue will be utilised in priority to fund

future acquisitions in companies to be identifi ed later and/or such other acquisitions and/or investments mutually

agreed upon between the Company and the Convertible Sukuk holders which are Shariah compliant within 12

months from the receipt of the proceeds.

On 8 October 2012, the Company has submitted the following applications to:

(i) The Securities Commission Malaysia for the Proposed Convertible Sukuk Issue;

(ii) Bank Negara Malaysia for the issuance of Warrants to non-resident shareholders of the Company; and

(iii) Bursa Malaysia Securities Berhad (“Bursa Securities”) for the following:

- Admission of the Warrants to the Offi cial List of Bursa Securities; and

- The listing of and quotation for the Warrants to be issued pursuant to the Proposed Free Warrants Issue

and the new PNHB Shares to be issued arising from the exercise of the Warrants and conversion of the

Convertible Sukuk.

On 18 October 2012, Bank Negara Malaysia had, via its letter dated 16 October 2012 which was received on

18 October 2012, approved PNHB’s application for the issuance of Warrants to non-resident shareholders of the

Company.

(f) Sino had invested an additional amount of USD400,000 in LUWEI, its 91.34% owned limited liability subsidiary

incorporated in Lushan County, Henan Province, in PRC under the China Company Law.

The Company was notifi ed on 8 November 2012 by LUWEI that the regulatory authorities of the PRC had issued the

“Enterprise Legal Representative Business Licence” dated 6 November 2012 approving the increase of the paid up

registered capital of LUWEI from USD5,400,000 to USD5,800,000.

Accordingly, LUWEI became a 91.94% owned subsidiary of Sino with a total investment of USD5,332,500.



376


(g) Sino had invested an additional amount of RMB1,246,000 in Luancheng, its 80.00% owned limited liability subsidiary

incorporated in Luancheng County, Hebei Province, in the People’s Republic of China under the China Company

Law.

The Company was notifi ed on 26 June 2012 by Luancheng that the regulatory authorities of the PRC had issued

the “Enterprise Legal Representative Business Licence” dated 25 June 2012 approving the increase of the paid up

registered capital of Luancheng Co., Ltd from RMB5,000,000.00 to RMB6,246,000.

Accordingly, Luancheng Co., Ltd is now a 83.99% owned subsidiary of Sino Water with a total investment of

RMB5,246,000.

(h) Sino had invested an additional amount of USD280,000 in XINNUO, its 80.00%, a wholly owned subsidiary

incorporated in Yangxin County, Shandong Province in the People’s Republic of China. As at 18 July 2012, the paid

up registered capital of XINNUO stood at USD3,780,000.

49. EVENTS OCCURRING AFTER THE REPORTING DATE

(a) On 21 January 2013, POG has incorporated a wholly owned limited company in The Republic of the Union of

Myanmar, namely GOM Resources Limited.

GOL was incorporated to facilitate the Group to undertake the business of transportation and installation of

pipelines and other services of the onshore and offshore operations of the oil and gas industry including submarine

pipelines installations, underwater diving and remotely operated vehicle services, marine support vessel services,

petrochemicals and engineering services and logistic services in Myanmar.

(b) On 21 January 2013, the Securities Commission Malaysia had, via its letter dated 18 January 2013 which was

received on 21 January 2013, approved PNHB’s proposed convertible Sukuk Ijarah under Section 212(5) of the

Capital Markets & Services Act 2007.

(c) The 98.65% owned subsidiary in Singapore, Sino Water Pte Ltd had recently invested an additional USD920,000 in

Xinnuo, a wholly owned subsidiary incorporated in Yangxin County, Shandong Province in the People’s Republic of

China.

As at 4 February 2013, the paid up registered capital of Xinnuo stood at USD4,700,000.




377

49. EVENTS OCCURRING AFTER THE REPORTING DATE (CONTINUED)

(d) On 20 February 2013, the Company had received two (2) faxed letters from Kumpulan Darul Ehsan Berhad (“”KDEB””)

for the following:

(i) Indicative terms and conditions for proposed purchase of 100% equity in PNSB;

(ii) Indicative terms and conditions for proposed purchase of 70% equity in SYABAS other than equity already

owned by KDEB.

Set out below are the indicative terms and conditions for the Proposed Purchase of PNSB and Proposed Purchase

of SYABAS as stipulated in KDEB’s letters dated 20 February 2013:

(1) Valuation Principles

The values of the equity in PNSB and SYABAS have been derived based on the following principles:

(i) The value of equity in PNSB and SYABAS including a return on equity of 12% per annum.

(ii) The water assets of PNSB and the pro rata share of water assets of SYABAS to be acquired by PAAB.

(iii) Equity includes all forms of investments and contributions by the shareholders (e.g. ordinary or preference

shares, advances and, where applicable, debt-equity instruments are also taken into account).

(iv) Return on equity is calculated at 12% per annum up to 31 December 2012 (with no compounding) with

deductions for any historical dividend payouts.

(v) Liabilities to be assumed are all outstanding water-related debts owed by PNSB and SYABAS, which include:

- Bonds acquired by ACQUA or remaining in the capital markets;

- Commercial loans, if applicable; and

- Government loans; if applicable.

(vi) PAAB to decide on payment of surplus book value of assets over liabilities, and if agreeable, to be paid by

PAAB direct to applicable concessionaires.



378


(d) (continued)

(2) Payment Consideration

Premised on the above principles, the consideration for the Proposed Purchase are as follows:

(i) For PNSB RM million

Equity contribution plus return on equity at 12% per annum 1,117.5

Water Assets to be assumed 1,359.5

Total Value of PNSB Equity 2,477.0

Note 1 : Preliminary value of PNSB equity to be revised pursuant to the due diligence inquiry to be

undertaken.

Payment shall be in cash in respect of the portion ascribed to the equity contribution, as detailed in section

1. (iii) and (iv) above, with the remaining value to be via assumption of liabilities of PNSB.

Payment for surplus book value of assets over liabilities to be assumed, if any, shall be subject to the

agreement of PAAB.

(ii) For SYABAS RM million

Equity contribution plus return on equity at 12% per annum 437.8

A pro rata share of water assets to be assumed 2,679.2

Total Value of SYABAS Equity 3,117.0

Note 1 : Preliminary value of SYABAS equity to be revised pursuant to the due diligence inquiry to be

undertaken.

Payment shall be in cash in respect of the portion ascribed to the equity contribution, as detailed in section

1. (ii) and (iii) above, with the remaining value to be via assumption of a pro rata share of liabilities of SYABAS.

Payment for surplus book value of assets over liabilities to be assumed, if any, shall be subject to the

agreement of PAAB.




379


(d) (continued)

(3) Conditions of the Proposed Purchase of PNSB and Proposed Purchase of SYABAS

The Proposed Purchase of PNSB and Proposed Purchase of SYABAS are conditional upon the following:

(i) Acceptance in principle of the indicative terms and conditions proposed by KDEB by Puncak by 5.00 p.m.

(Malaysian time) on or before 6 March 2013 or such other extended or revised closing date(s) as may be

decided by KDEB;

(ii) Acceptance in principle of the indicative terms and conditions proposed by KDEB for the acquisition of the

equity interest of the other Selangor Water Companies by those respective shareholders to whom such

proposals are made by 5.00 p.m. (Malaysian time) on or before 6 March 2013 or such other extended or

revised closing date(s) as may be decided by KDEB;

(iii) The execution of the Defi nitive Agreements and all other defi nitive agreements for the purchase of the equity

interest of the other Selangor Water Companies and any other legal documentation deemed necessary by

solicitors to be appointed by KDEB;

(iv) Satisfactory completion of the due diligence inquiries to be undertaken on PNSB and SYABAS prior to the

completion of the Proposed Purchase of PNSB and the Proposed Purchase of SYABAS;

(v) The estimated value for PNSB and SYABAS of RM2,477.0 million and RM3,117.0 million respectively to be

revised, if necessary, pursuant to the completion of the due diligence inquiries;

(vi) All corporate approvals required by Puncak including, if applicable, the approval of the Puncak’s minority

shareholders and/or shareholders of Puncak’s holding companies at a general meeting of shareholders to

be convened;

(vii) Approval and consent of the Federal Government and all related agencies e.g. the Ministry of Energy,

Green Energy and Water (“KeTTha”), the Economic Planning Unit and/or the Public Private Partnership Unit

(“UKAS”) etc;

(viii) Approval and consent of the Selangor State Government and all related agencies e.g. Selangor Economic

Planning Unit (“UPEN”) etc;

(ix) Approval of the National Water Services Commission (“SPAN”), the Securities Commission (“SC”), Bursa

Malaysia, if applicable;

(x) Approval of ACQUA SPV and other lenders of PNSB and SYABAS, where applicable;

(xi) The approval of any other authorities or parties, if required;

(xii) Any other terms to be mutually agreed upon by all parties.



380


(d) (continued)

(3) Conditions of the Proposed Purchase of PNSB and Proposed Purchase of SYABAS (continued)

Acceptance in principle of the indicative terms and conditions set out in KDEB’s letters dated 20 February 2013

do not give rise to a contract and are not intended that the indicative terms and conditions stipulated therein

represent the fi nal agreements as to the Proposed Purchase of PNSB and the Proposed Purchase of SYABAS.

These indicative terms and conditions are subject to the negotiation and execution of the Defi nitive Agreements.

On 6 March 2013, the Board of Directors of the Company announced that after full deliberation of the offer from

KDEB and after considering also the advise of Hong Leong Investment Bank Bhd, the Adviser appointed by the

Board to assist and advise the Board in evaluating the Offers from KDEB, and in view of the incomplete and

inconclusive nature of the Offers as well as the position taken by PAAB was unable to reach a fi nal decision to even

consider giving approval in principle or to give acceptance in principle to KDEB in respect of the indicative terms and

conditions as set out in KDEB’s letters dated 20 February 2013. Given these circumstances, the Board is also not

ready to convene a general meeting for the purpose of tabling the KDEB Offers to the shareholders of the Company

for consideration.

The Board further decided that the Company is still willing to hold discussions with KDEB on the Offers, subject to

KDEB’s readiness to provide defi nitive answers to all issues raised by the Company.

(e) On 21 February 2013, SYABAS and the National Institute Of Occupational Safety and Health (‘NIOSH”) mutually

agreed to extend the duration of the MoU for a further period of two (2) years from 22 February 2013 to 21 February

2015 with an amendment to the MoU whereby SYABAS and NIOSH will review the existing training curriculum

and modules, learning guides and assessment modules for OSH-SNSC training and assessment programmes for

improvement from time to time. All other terms and conditions of the MoU remain unchanged.

(f) On 3 January 2013, PNSB announced that the completion period for the contract for rural water supply project in the

state of Sarawak (“the contract”) for year 2010 to 2012 has been extended from 31 December 2012 to 28 February

2013 under the terms and conditions of the Contract with the Employer. On 27 February 2013, PNSB has further

extended the completion period for the contract from 28 February 2013 to 28 March 2013 under the terms and

conditions of the Contract with the Government of Malaysia.

(g) On 27 February 2013, the collaboration between the Company’s 70% owned subsidiary, SYABAS and Construction

Industry Development Board (“CIDB”) under the Memorandum of Understanding (“MoU”) dated 26 February 2009 in

respect of the provision of training and development programmes by CIDB to the Bumiputra contractors, suppliers

and consultants registered with SYABAS subsists until the Parties elect to review or terminate the same.

(h) On 15 March 2013, Puncak Research and DHI Water Environment Health (“DHI”) have mutually agreed to extend the

Collaboration Agreement for a further period of one (1) year, commencing 15 March 2013 until 14 March 2014.




381


(d) (continued)

(i) On 22 March 2013, on behalf of the Board of Directors of PNHB, Hong Leong Investment Bank Berhad (formerly

known as MIMB Investment Bank Berhad) (“HLIB”) wishes to announce that Bursa Malaysia Securities Berhad

(“Bursa Securities”) had, via its letter dated 22 March 2013 has resolved to approve PNHB’s application for the

following:

(i) admission to the Offi cial List and the listing and quotation of up to 40,910,609 Warrants to be issued pursuant

to the Proposed Free Warrants Issue;

(ii) listing of up to 40,910,609 new PNHB Shares to be issued pursuant to the exercise of the Warrants; and

(iii) listing of up to 165,000,000 new PNHB Shares to be issued pursuant to the conversion of the Convertible

Sukuk.

The approval of Bursa Securities is subject to the following conditions:

(i) PNHB and HLIB must fully comply with the relevant provisions under the Main Market Listing Requirements

pertaining to the implementation of the Proposals;

(ii) PNHB and HLIB to inform Bursa Securities upon the completion of the Proposals;

(iii) PNHB to furnish Bursa Securities with a written confi rmation of its compliance with the terms and conditions

of Bursa Securities’ approval once the Proposals are completed;

(iv) PNHB is required to furnish Bursa Securities on a quarterly basis a summary of the total number of shares

listed pursuant to the exercise of Warrants and Convertible Sukuk as at the end of each quarter together

with a detailed computation of listing fees payable; and

(v) A certifi ed true copy of the resolution passed by shareholders at the extraordinary general meeting for the

Proposals.

(j) On 28 March 2013, GOM Resources and MedcoEnergi have signed a MOA to cooperate in Oil & Gas Field

Development Projects and the Risk Service Contract (RSC) Projects in Malaysia and exploration and production

opportunities regionally.

(k) On 28 March 2013, PNHB through its R&D units in collaboration with the Malaysian Armed Forces (“MAF”) has

developed a new and highly innovative fi eld water purifi cation system for drinking known as JERNIH.

(l) On 7 March 2013, GOM Resources Sdn Bhd had signed a Contract with HESS Exploration And Production

Malaysia B.V. (Company Registration number 993963-V) for the Provision Of The Integrated Transportation

And Installation Of Offshore Facilities For Early Production Scheme (EPS), Integrated Gas Development (IGD)

Project, North Malay Basin (NMB) Field (“Project”).



382


(d) (continued)

(m) On 19 April 2013, PNSB had executed the Agreements for restructuring of the outstanding bonds comprising of

BAIDs, RUBs and JNA with Acqua.

Pursuant to the restructuring, the revised terms are as follows:

(i) Extension of the tenors of the BAIDS

Series Nominal Amount Existing Revised

RM’million Redemption Date Redemption

Series 1 180.0 27 October 2015 27 October 2016






(ii) Revision of terms of the BAIDS

Terms Existing term Revised term

Collateral Charge over the DSRA Legal assignment over PNSB’s operating

account and mandatory redemption

account (to be shared via a security

sharing arrangement with JNA and RUB)

Financial covenants (i) Annual debt service cover ratio Not required

(ii) Forward debt service cover ratio

(iii) Interest cover ratio

(iv) Debt to equity ratio

50. MATERIAL LITIGATIONS

(a) 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.




383

50. MATERIAL LITIGATIONS (CONTINUED)

(a) KHEC (continued)

(i) The First Arbitration Proceedings (continued)

Arising from the arbitration proceedings initiated by KHEC, both KHEC and the Consortium have each appointed

a qualifi ed 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 offi cially constituted on 24 September 2005. On 28 September 2005, the

Company was informed that the arbitral tribunal has fi xed the following dates for the fi ling of the arbitration

cause papers as part of the preliminary procedural formalities:

(i) claim by the claimant, KHEC to be fi led before 4 October 2005;

(ii) rejoinder by the respondent, the Consortium to be fi led before 18 November 2005; and

(iii) reply rejoinder by the claimant, KHEC to be fi led before 5 December 2005.

The Consortium had on 2 January 2006, fi led 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).

The Company was notifi ed 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 notifi ed on 25 June 2009 that the fi rst 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.

The Arbitration proceedings is currently ongoing in India whereby the Arbitration Panel has yet to schedule a

new continued hearing subsequent to the hearing on 19 April 2013.

Based on legal advice, the Consortium is of the view that the claim by KHEC is not sustainable.



384


(a) KHEC (continued)

(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 profi t (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.

Subsequently, KHEC had fi led in an amended claim for damages and lost of profi t from Rs5,44,32,916 to

Rs55,44,32,916 (equivalent to approximately RM4.35 million to RM44.3 million). PNHB-Lanco’s counsel had

fi led an interim application to dismiss the claim of Rs50,00,00,000 (equivalent to approximately RM39.9 million)

for compensation for loss of opportunity on the basis that it is frivolous and unreasonable.

The Second Arbitration proceedings which were heard by a single arbitrator have been completed wherein the

parties have submitted their respective written submissions on 1 December 2012.

On 1 April 2013, PNHB-Lanco members of the Consortium received the Arbitrator’s Final Award dated 29 March

2013 wherein the PNHB-Lanco members of the Consortium are to pay interest for the delayed payment of

enabling cost of Rs.58 Lakhs amounting to Rs14,62,503 (approximately RM83,627.38) only to the claimant,

KHEC Heavy Engineering and Construction Sdn Bhd on or before 30 April 2013 and all other claims by the

claimant were rejected.

PNHB-Lanco member of consortium has on 27 April 2013 complied with the Final Award of the Arbitration dated

29 March 2013 by paying the interest for the delayed payment of enabling cost of Rs.58 Lakhs amounting to

Rs.14,62,503 to KHEC Heavy Engineering & Construction Sdn. Bhd.

(b) 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 Affi davit affi rmed

on 6 October 2006;

(iii) Amended Statement of Claim fi led on 18 October 2006; and

(iv) An Ex-Parte Injunction Order dated 18 October 2006 (“Ex-Parte Order”);




385


(b) JAKS-KDEB (continued)

Kuala Lumpur High Court Suit No. D4-22-1452-2006 (continued)

(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 fi ttings 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 fi ttings (which includes

tees, bends, tapes, tapers, collars, fl ange adaptors, blank fl anges, 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;

(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 fi ttings 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 fi ttings 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 fi xed 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 fi t.

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 fi xed on 7 November 2006.



386




PUAS and SYABAS deny and refute all allegations raised by the Plaintiff in the Suit and have instructed their Solicitors

to fi le 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 fi xed 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 affi davit to the

affi davit fi led 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 fi xed 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 fi x 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.

On 22 March 2007, the High Court fi xed 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 fi xed 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 fi ling an appeal, SYABAS has instructed its solicitors to

proceed to fi le an appeal with the Court of Appeal. The appeal was subsequently fi led 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.




387




In view of the dissolution of Jabatan Kawalselia Air Selangor (“JKAS”) previously being the recipient of the written

notifi cation and written report as stated in High Court Order dated 22 November 2006, SYABAS had instructed its

solicitors to fi le 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 fi xed 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 fi xed 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 fi le a further

Affi davit 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 fi le its Affi davit in Reply to the Plaintiff’s Affi davit 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 fi xed 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 fi xed the matter for

further Case Management on 12 January 2010. In response, SYABAS has then fi led the Amended Statement of

Defence on 22 January 2010 and the matter was fi xed for further Case Management on 25 March 2010.

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 fi x 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 fi xed on 29 September 2010.

The High Court had subsequently adjourned the matter for Hearing on 12 October 2010 with trial date been tentatively

fi xed on 16 October 2010 and 17 October 2010 subject to reconfi rmation at the next Case Management date.

At the Case Management held on 12 October 2010, the High Court had fi xed 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.



388




At the hearing on 17 December 2010, the High Court had vacated the trial date on 20 January 2011 and fi xed new trial

dates on 28 March 2011 to 31 March 2011. The trial date fi xed on 21 January 2011 and the oral submissions dates

fi xed 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 fi xed for the oral submissions

on 24 January 2011 and 25 January 2011 and fi xed additional dates for continued trials on 24 January 2011,

25 January 2011 and 26 January 2011. The trial dates previously fi xed 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 fi xed 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 fi xed for 10 June 2011 was vacated and the matter was fi xed 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 fi led a Notice of

Appeal to the Court of Appeal against the decision by the High Court on 5 October 2011.

SYABAS has been informed by its solicitors on 3 December 2012 that the Court of Appeal had fi xed the matter for

case management on 10 January 2013.

At the case management held on 10 January 2013, the Court of Appeal had fi xed the matter for further case

management on 26 February 2013 to fi x the hearing date on the Appeal fi led by JAKS-KDEB Consortium Sdn Bhd.

At the case management held on 26 February 2013, the Court Of Appeal fi xed the matter for Hearing on 22 May 2013

on the Appeal fi led by JAKS-KDEB Consortium Sdn Bhd.

(c) ADP-PJI Joint Venture (“ADP-PJI JV”)

On 27 February 2009, PNSB was notifi ed 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 fi xed price lump sum of RM65,161,515.01.




389


(c) ADP-PJI Joint Venture (“ADP-PJI JV”) (continued)

(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 Offi cer (‘S.O.’) under the contract for a decision.

Following the reference to the S.O. for a decision and being dissatisfi ed 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 certifi ed and for works completed which have not

been certifi ed 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 notifi ed 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

fi led 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 fi le 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 fi led with the Arbitrator on 3 May 2011.



390


(c) ADP-PJI Joint Venture (“ADP-PJI JV”) (continued)

On 18 February 2013, PNSB’s solicitors received the Arbitrator’s published Final Award dated 31 January 2013 in

respect of the arbitration whereby the Arbitrator has, inter alia, decided as follows:

(i) That the determination of the Claimants’ employment under the Contract is unlawful and invalid.

(ii) That the Respondent shall pay to the Claimants the sum of Ringgit Malaysia Seven Million Nine Hundred And

Seventy Thousand Nine Hundred And Five And Sen Eighty Seven (RM7,970,905.87) only (“Award Sum”) of

which Ringgit Malaysia Three Million Five Hundred And Fifty Two Thousand One Hundred And Seven And Sen

Fifty Six (RM3,552,107.56) only and Ringgit Malaysia Three Million Two Hundred And Fifty Eight Thousand And

Seventy Five And Sen Seventy Five (RM3,258,075.75) only are payment for certifi ed works and retention monies,

respectively.

(iii) That the Respondent shall also pay interests to the Claimants at the rate of 8% per annum on the Award Sum

from 26 December 2007. Such interests will continue to run until the actual realisation of the said payments by

the Respondent.

(iv) That the Respondent shall bear and pay the Claimants’ costs in the Arbitration Proceedings upon a party and

party basis.

(v) That the Respondent shall pay and bear the costs of the Award.

(vi) That all other requests and claims of the Claimants and Respondent are rejected.

On 19 March 2013, the parties have reached an amicable settlement in respect of the Final Award dated

31 January 2013. The full and fi nal settlement sum of Ringgit Malaysia Ten Million One Hundred And One Thousand

And Ninety Five And Sen Forty Three (RM10,101,095.43) only made by PNSB mutually releases and discharges

the parties from all obligations and liabilities (including any claims as to interest and costs) arising under and/or in

connection with the said Final Award.

(d) 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.




391


(d) SPLASH (continued)

Kuala Lumpur High Court Civil Suit No. D-22ND-398-2009 (continued)

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


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


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


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


1 August 2009 until the date of full realisation;

(ix) Interest on the sum of RM24,353,298.51 which is the Capacity Charge for the month of May 2009 at the rate


1 September 2009 until the date of full realisation; and

(x) Costs.



392




SYABAS had instructed its solicitors to defend the above claims. The solicitors of SYABAS had on 6 January 2010,

fi led and served SYABAS’ Defence to the claim fi led by SPLASH dated 30 October 2009. The High Court had on

26 January 2010 fi xed 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

fi led 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 affi davits 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 fi xed 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 fi xed 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 fi xed on 10 January 2011 was vacated and the matter was fi xed for hearing on 7 January 2011. The

solicitors of SYABAS had fi led 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 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 fi xed for hearing on 7 January 2011.

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 fi xed the matter for decision on 16 February 2011 which was subsequently fi xed for decision

on 21 February 2011. The Court of Appeal had fi xed the appeal for case management on 17 February 2011. The

case management originally fi xed on 17 February 2011 by the Court of Appeal for the appeal had been postponed

to be fi xed on 25 February 2011 upon application by SYABAS’ solicitors pending decision by the High Court on the

plaintiff’s claim which had been fi xed on 21 February 2011.

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 fi xed 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.




393




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

(ii) 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 fi xed. 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 fi led 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 fi xed for

further Case Management on 22 March 2011, pending the fi ling 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 fi xed for Case Management on 29 March 2011 was subsequently adjourned to

5 April 2011. The Court of Appeal had fi xed 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

fi led by 16 May 2011. The written submissions date was changed from 16 May 2011 to 14 June 2011.

The earlier hearing date fi xed on 30 May 2011 was vacated.



394




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 fi xed 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 fi xed 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 fi xed the said application and any other application that may be fi led

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 fi led its

Affi davit pursuant to the SIC. At the hearing held on 22 July 2011, the High Court fi xed the mention on 19 August 2011

for the parties to seek clarifi cation from the Court of Appeal on the Court of Appeal’s decision dated 30 June 2011.

The matter was fi xed for further mention on 20 September 2011 pending the disposal of the motion of SPLASH to

the Court of Appeal (fi led on 2 August 2011) for clarifi cation of the Order of the Court of Appeal dated 30 June 2011.

On 28 July 2011, SYABAS’ solicitors were notifi ed by SPLASH’s solicitors that the latter intend to fi le 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 fi led the affi davit to oppose SPLASH’s application.

At the case management on SPLASH’ Notice of Motion held on 11 August 2011, the Federal Court fi xed 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 fi xed for 17 October 2011 was vacated.

The court has fi xed 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 fi xed 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

clarifi cation and to amend the Order dated 30 June 2011).

The Federal Court had at the case management held on 6 December 2011 fi xed 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 clarifi cation and to amend the Order dated 30 June 2011).




395




At the case management held on 30 January 2012, the Federal Court had fi xed 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 clarifi cation and to amend the Order dated 30 June 2011).

On 13 February 2011, the Plaintiff’s solicitors informed the Court of Appeal that the Plaintiff’s applications for

motion for clarifi cation and to amend the Order of the Court of Appeal dated 30 June 2011 was fi xed for hearing on

20 February 2012.

At the hearing held on 20 February on the Plaintiff’s applications for motion for clarifi cation 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 affi rmed 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 clarifi cation.

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 fi xed the hearing for the Consequential Order on 29 March 2012.

On 29 August 2011, SYABAS’ solicitors served a sealed copy of SPLASH’S Notice of Motion and Affi davit in

Support which was affi rmed on 3 August 2011. The motion for clarifi cation of the decision of the Court of Appeal

on 30 June 2011 fi xed for hearing on 22 September 2011 has been adjourned to 27 October 2011, pending the

clarifi cation at the Court of Appeal and hearing of the notice of motion for leave to appeal to the Federal Court.

The matter was fi xed 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 clarifi cation 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 fi xed for hearing on 27 October 2011. On 27 October 2011, the Court has fi xed

both SPLASH’s application for Consequential Orders and Interim Payment for Mention on 31 October 2011 to fi x

a new hearing date. SPLASH’s applications for Consequential Orders and Interim Payment came up for Mention

on 31 October 2011 and is now fi xed for Hearing on 21 February 2012.



396




On 21 November 2011, SYABAS’ solicitors informed that the Court of Appeal had fi xed the Case Management for

the motion for clarifi cation 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 clarifi cation 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 fi xed.

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 fi xed the matter for hearing on 10 May 2012.

At the hearing held on 29 March 2012 on the Plaintiff’s application for a Consequential 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.

On 10 May 2012, the Federal Court has postponed the hearing of SPLASH’s motion for leave to appeal to the Federal

Court to 9 August 2012.

The hearing scheduled to be held on 9 August 2012 for SPLASH’s motion for leave to appeal to the Federal Court

had been adjourned as the Court of Appeal has not provided the written grounds of Judgement. The Federal Court

will write to the parties to fi x the matter for Case Management and, subject to the availability of the written grounds

of Judgement, another date would be fi xed to hear the motion.

At the case management held on 22 October 2012, the Federal Court had fi xed the Motion for Leave to appeal for

Hearing on 28 February 2013.

On 28 February 2013, the Federal Court unanimously dismissed the application fi led by SPLASH for leave to appeal

against the decision of the Court of Appeal, with cost of RM20,000 awarded to SYABAS. The Motion for Leave

was fi led by SPLASH against the decision of the Court of Appeal given on 30 June 2011 which had earlier allowed

SYABAS’ appeal against the decision of the High Court. By the Federal Court decision, the decision of the Court of

Appeal recognising SYABAS’ right to pay SPLASH on a proportionate basis was upheld by the Federal Court.




397


(e) 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

affi davit 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 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 Affi davit 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 fi le the State Government’s affi davit in reply and

thereafter adjourned the matter for further case management on 16 December 2010. On the case management date

16 December 2010, the State Government’s affi davit in reply dated 15 December 2010 was served on SYABAS’

solicitors. The High Court then directed SYABAS to fi le its affi davit in reply by 31 December 2010 and further fi xed

the matter for Hearing on 11 February 2011. The High Court also directed parties to fi le their respective submissions

by 8 February 2011. The High Court also informed that parties may agree between themselves any extension of time

for fi ling of affi davits provided that the hearing date is not affected. In this regard, the State Government’s solicitors

agreed to SYABAS fi ling the affi davit in reply by 10 January 2011.

On 10 January 2011, SYABAS’ solicitors fi led SYABAS’ Affi davit 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

affi davit in reply dated 24 January 2011 was served on SYABAS’ solicitors. On 2 February 2011, SYABAS’

solicitors fi led SYABAS’ affi davit (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’ affi davits, which was fi xed for hearing on 11 February 2011.

On 8 February 2011, SYABAS’ solicitors fi led the written submission for the Originating Summons.

On 10 February 2011, SYABAS’ solicitors fi led SYABAS’ affi davit 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 fi led their Affi davit in Reply dated 23 February 2011 and served a copy of the same on SYABAS’

solicitors, in reply to Syabas’ Affi davit dated 10 February 2011 in relation to the State Government’s application.



398


(e) Kerajaan Negeri Selangor (“ State Government”) (continued)

Kuala Lumpur High Court Originating Summons No. D-24NCC-388-2010 (continued)

On 11 February 2011, the High Court decided to hear the State Government’s application fi rst and fi xed it for

clarifi cation/decision on 28 February 2011. As for the Originating Summons, the High Court fi xed the matter for

case management on 28 February 2011 immediately after the clarifi cation 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 fi xed for case management on 16 March 2011. The matter was fi xed for further

Case Management on 30 March 2011 pending the State Government’s offi cial 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 fi xed 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 fi rst 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 fi xed a further case management date on 6 May 2011.

The Court has fi xed 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 fi xed the case management on 27 May 2011 pending the defendant’s fi ling

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 fi xed

for further case management on 28 June 2011 for Syabas to take instruction on the mode of action and pleadings.

At the case management held on 28 June 2011, the High Court allowed SYABAS’ application to withdraw with liberty

to fi le afresh by way of a writ of summons with no order as to costs. The withdrawal of the suit by SYABAS with liberty

to fi le 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 affi davit form;

and

(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.




399


(f) 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’s 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;

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 fi xed the matter for

Case Management on 12 April 2011.

SYABAS’ solicitors fi led 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.



400


(f) ABASS (continued)

Kuala Lumpur High Court Writ Summons No: 22NCC-543-2011 (continued)

The High Court fi xed the matter for Case Management on 12 April 2011. At the Case Management on 12 April 2011,

the High Court fi xed a further Case Management on 30 May 2011 in order for SYABAS to fi le its Defence latest by

6 May 2011 and for ABASS to fi le its reply (if any).

SYABAS’ Defence and Counterclaim had been fi led 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 fi xed 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 fi xed the next Case Management on 29 July 2011 for the

defendant to fi le a reply affi davit 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 fi xed a further Case Management date on 26 August 2011

to fi x 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 fi led a reply affi davit 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.

The High Court has further fi xed 19 August 2011 for the plaintiff to fi le a reply affi davit and for SYABAS to reply,

if any, on 26 August 2011. The High Court has also fi xed a further Case Management date on 26 August 2011 for

the High Court to fi x a hearing date and on 11 August 2011, the High Court also fi xed 26 August 2011 for the plaintiff

to fi le its reply affi davit 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 fi le any further affi davits in respect of the three applications.

At the case management held on 26 August 2011, the High Court has fi xed the next case management on

26 September 2011 for the defendant to fi le its reply affi davits and for the parties to exhaust all their affi davits 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.




401




At the case management held on 26 September 2011, the High Court has fi xed the next case management on

5 October 2011 to fi x 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 fi xed 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 fi xed 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 fi xed 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 applications 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 fi xed 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 fi xed both appeals for hearing on 23 November 2011.

Pursuant to the Third Party (Selangor State Government) fi ling the memorandum of appearance on

17 November 2011, the matter is now fi xed for further case management on 23 November 2011 for SYABAS to fi le

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 clarifi cation by SPLASH at the Court of Appeal and the leave to appeal at the Federal Court.

The case was fi xed for mention on 13 February 2012.

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 fi led on 23 November 2011 and

the matter was fi xed for hearing on 30 November 2011.



402




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 fi xed 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 fi led 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 fi xed the next case management on

20 January 2012 for the defendant to fi le a reply to the Third Party’s defence.

At the case management held on 20 January 2012, the High Court had fi xed the trial dates tentatively on

19 March 2012 to 21 March 2012. The High Court also fi xed 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 fi xed 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 fi xed for

case management on 13 February 2012.

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 fi xed the matter for further case

management on 5 March 2012.




403




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 fi xed 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 fi xed 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 fi xed for case management on 16 March 2012. At the case management held on 16 March 2012, the High Court

had fi xed 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 fi xed 20 February 2012 for clarifi cation 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 fi xed 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 clarifi cation 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 fi xed 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 fi xed for Case Management on 16 March 2012 which was subsequently further fi xed 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 fi xed for Hearing

on 28 June 2012 with submissions in reply (if any) to be fi led on or before 15 June 2012; and

(b) The Plaintiff’s application for Trial of Preliminary Issues pursuant to Order 33 Rule 2 is fi xed for Hearing on

10 August 2012.

The Plaintiff’s application for Interim Payment is fi xed for Mention on 10 August 2012.



404




On 28 June 2012, the High Court had fi xed the application by the Third Party to set aside the Third Party Notice and

the Statement of Claim against the Third Party for further hearing on 3 July 2012.

At the hearing held on 3 July 2012 in relation to the application by the Third Party to set aside the Third Party

Notice and the Statement of Claim against the Third Party, the High Court had adjourned the matter to 31 July 2012

for decision.

On 31 July 2012, the High Court had allowed the Third Party’s application to set aside the Third Party Notice and

the Statement of Claim issued against the Third Party by the Defendant with costs of RM10,000.00 and SYABAS is

currently taking legal advice on whether to appeal the decision to the Court of Appeal.

SYABAS’ solicitors had on 2 August 2012 fi led the Notice of Appeal at the Court of Appeal against the decision

by the High Court on 31 July 2012 to allow the Third Party’s application to set aside the Third Party Notice and

Statement of Claim fi led by SYABAS against the Third Party.

At the hearing held on 10 August 2012 on the plaintiff’s application for Trial of Preliminary Issues pursuant to Order

33 Rule 2 (“Application”), the High Court had adjourned the Application for continued hearing on 23 August 2012 and

had also fi xed the Application for decision on 3 September 2012.

The High Court had also at the mention held on 10 August 2012 on the plaintiff’s application for Interim Payment,

fi xed the next mention on 3 September 2012.

On 3 September 2012, the High Court had allowed the plaintiff’s application for Trial of Preliminary Issues pursuant

to Order 33 Rule 2 (“Application”) with costs in the cause with directions. The Kuala Lumpur High Court had further

fi xed the matter for case management on 5 September 2012 to fi x trial dates.

The High Court had at the mention held on 3 September 2012 on the plaintiff’s application for Interim Payment,

fi xed the matter for case management on 5 September 2012.

At the case management held on 5 September 2012 on the plaintiff’s application for Trial of Preliminary Issues

pursuant to Order 33 Rule 2, SYABAS’ solicitors informed the Kuala Lumpur High Court that by a Notice of Assignment

dated 15 August 2012, SYABAS was informed by the plaintiff that by a Deed of Assignment dated 10 August 2012,

the plaintiff had assigned to Maybank Investment Bank Berhad its rights title and interest under the Novation

Agreement dated 15 February 2005 and in view of this latest development, SYABAS will be making an application to

re-amend its defence and counterclaim.

The High Court had adjourned the case management of the action and the plaintiff’s application for Interim Payment

to 2 October 2012, pending fi ling of SYABAS’ application to re-amend its defence and counterclaim.




405




At the case management held on 13 September 2012, the Court of Appeal had fi xed the matter in relation to

the appeal made by SYABAS against the decision by the Kuala Lumpur High Court on 31 July 2012 allowing the

Third Party’s application to set aside the Third Party Notice and Statement of Claim fi led by SYABAS against the

Third Party, for hearing on 27 November 2012. The Court of Appeal also directed that the appeal record be fi led on

or before 27 September 2012.

On 2 October 2012, the High Court had fi xed 8 November 2012 for hearing of SYABAS’ application to re-amend its

defence and counterclaim to enable parties to exhaust the fi ling of affi davits and fi xed the next case management

of the action and the plaintiff’s application for Interim Payment on 8 November 2012.

On 8 November 2012, the High Court had allowed SYABAS’ application to re-amend its defence and counterclaim

with costs in the cause. The High Court had directed SYABAS to re-amend its defence and counterclaim within

seven (7) days from today. The High Court had given the plaintiff the liberty to make consequential amendments

to its amended reply to defence and defence to counterclaim within fourteen (14) days from the date of service of

SYABAS’ re-amended defence and counterclaim.

The High Court also fi xed the trial dates on 22 April 2013, 23 April 2013 and 24 April 2013 and case management of

the action and the plaintiff’s application for Interim Payment on 30 November 2012.

On 26 November 2012, following the application made by the counsel of Selangor State Government to the Court

of Appeal on 20 November 2012, SYABAS’ solicitors were informed by the counsel of Selangor State Government

vide a letter dated 23 November 2012 that the Court of Appeal had granted adjournment and vacated the hearing

fi xed on 27 November 2012 in relation to the appeal made by SYABAS against the decision by the High Court on

31 July 2012 allowing the Third Party’s application to set aside the Third Party Notice and Statement of Claim fi led

by SYABAS against the Third Party, to a date to be fi xed by the Court of Appeal in due course.

At the case management held on 30 November 2012, the High Court had fi xed further case management on

4 January 2013 for the Plaintiff’s application for Interim Payment and the Plaintiff to fi le the Re-amended Reply and

Defence to counter claim.

On 7 December 2012, SYABAS has been informed by its solicitors on even date that the Court of Appeal had fi xed

the hearing for the appeal made by SYABAS against the decision by the High Court on 31 July 2012 allowing the

Third Party’s application to set aside the Third Party Notice and Statement of Claim fi led by SYABAS against the

Third Party on 7 January 2013.



406




At the case management held on 4 January 2013, the High Court had fi xed 12 March 2013 for the following:

i) Case management for the Plaintiff’s application for Interim Payment;

ii) Hearing for SYABAS’ application to strike out the Plaintiff’s claim; and

iii) Case management of the main action.

The Court of Appeal had adjourned the hearing fi xed on 7 January 2013 for the appeal made by SYABAS against the

decision by the High Court on 31 July 2012 allowing the Third Party’s application to set aside the Third Party Notice

and Statement of Claim fi led by SYABAS against the Third Party to 21 January 2013.

At the hearing held on 21 January 2013, the Court of Appeal had dismissed the appeal made by SYABAS against the

decision by the High Court on 31 July 2012 allowing the Third Party’s application to set aside the Third Party Notice

and Statement of Claim fi led by SYABAS against the Third Party with cost. SYABAS is currently seeking advice from

its solicitors on the next course of action arising from the said decision.

On 20 February 2013, SYABAS fi led the notice of motion for leave to appeal against the decision made by the Court

of Appeal on 21 January 2013 to the Federal Court.

The High Court had on 12 March 2013 adjourned the hearing for SYABAS’ application to strike out the Plaintiff’s

claim to 20 March 2013 to enable the parties to prepare their submissions in reply and had also fi xed 20 March 2013

for the following:-

i) case management for the Plaintiff’s application for Interim Payment; and

ii) case management of the main action.

The matters at the High Court on 20 March 2013 was fi xed for the following:-

i) hearing of SYABAS’ application to strike out the Plaintiff’s claim;

ii) the Plaintiff’s application to stay proceedings and to strike out SYABAS’ application to strike out the Plaintiff’s

claim and SYABAS Defence and counterclaim;

iii) case management of the main action; and

iv) case management on the Plaintiff’s application for Interim Payment.




407




The High Court had adjourned the proceedings to 29 March 2013 for case management to enable the parties

to exhaust their affi davits and to revert to the Kuala Lumpur High Court if the parties are proceeding with the

applications. This is pursuant to the Plaintiff serving their application to stay proceedings and to strike out SYABAS’

application to strike out the Plaintiff’s claim and SYABAS Defence and counterclaim on 19 March 2013 following

which SYABAS had on 20 March 2013 fi led their affi davit in reply.

At the case management held on 27 March 2013, the Federal Court had fi xed 28 August 2013 for hearing of SYABAS’

motion for leave to appeal against the decision of the Court of Appeal dated 21 January 2013.

At the case management held on 29 March 2013, the parties informed the Kuala Lumpur High Court that they

are proceeding with SYABAS’ application to strike out the Plaintiff’s claim and the Plaintiff’s application to stay

proceedings and to strike out SYABAS’ application to strike out the Plaintiff’s claim and SYABAS’ Defence and

Counterclaim.

The High Court has now fi xed the case management for both the applications on 17 April 2013. As the Trial has

been fi xed on 22 April 2013, 23 April 2013 and 24 April 2013, the High Court fi xed case management for the Trial on

8 April 2013 and 17 April 2013.

At the case management held on 8 April 2013, the High Court had fi xed SYABAS’ application to strike out the

Plaintiff’s claim and the Plaintiff’s application to stay proceedings and to strike out SYABAS’ application to strike out

the Plaintiff’s claim and SYABAS’ Defence and Counterclaim for hearing on 24 April 2013. The High Court maintained

the case management for both the applications on 17 April 2013, as previously announced.

The High Court vacated the case management for Trial on 17 April 2013 and the Trial dates fi xed on 22 April 2013,

23 April 2013 and 24 April 2013 pending the disposal of SYABAS’ application for leave to appeal at the Federal Court which

has been fi xed for hearing on 28 August 2013 and further fi xed the case management for Trial on 4 September 2013.

At the case management held on 17 April 2013, the Kuala Lumpur High Court had vacated the hearing fi xed on

24 April 2013 in respect of the following:

i) SYABAS’ application to strike out the Plaintiff’s Writ of Summons & Statement of Claim dated 28 March 2011

fi led based on the assignment given by the Plaintiff to the Security Agent vide Deed of Assignment dated

23 August 2012 whereby the Plaintiff has absolutely and irrevocably assigned its right to receive payments from

the Defendant to the Security Agent; and

ii) the Plaintiff’s application to stay proceedings and to strike out SYABAS’ application to strike out Plaintiff’s claim

and SYABAS’ Defence and Counterclaim pursuant to the Plaintiff’s contention that SYABAS has similarly executed

an assignment of its legal rights, title, benefi ts and interest of its assigned properties to SYABAS’ Security Agent.



408




The Kuala Lumpur High Court had further fi xed the case management on the abovementioned applications on

4 September 2013 pending the disposal of SYABAS’ application for leave to appeal at the Federal Court against the

decision made by the Court of Appeal dated 21 January 2013, whereby the Court of Appeal had dismissed SYABAS’

appeal against the decision of the Kuala Lumpur High Court on 31 July 2012 in allowing the Third Party’s application

to set aside the Third Party Notice and Statement of Claim fi led by SYABAS against the Third Party.

(g) 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 fi ling 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

iv) 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 fi led on 30 September 2011 and an application for leave to fi le

Defence was fi led in the Kuala Lumpur High Court on 10 October 2011. The Court then fi xed a further case management

on 4 November 2011 for further directions. On 14 October 2011, the Court allowed the defendant to fi le the Defence

latest by 4 November 2011 and the plaintiff to fi le 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 fi led on 4 November 2011.

The Court directed SYABAS to fi le the notice to attend pre-trial case management after fi ling the Reply by

18 November 2011. The Court fi xed the next case management on 29 November 2011.




409


(g) Kerajaan Negeri Selangor (“State Government”) (continued)

Kuala Lumpur High Court Suit No: 22NCC-1478-09/2011 - SYABAS vs State Government (continued)

On 21 November 2011, SYABAS’ Reply had been fi led 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 fi xed a further case management on

14 December 2011 for SYABAS to fi le 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 fi xed for mention on 23 December 2011

in order to fi x a hearing date for the defendant’s application for leave to issue a Third Party Notice against the Federal

Government, which was fi led 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 fi xed 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 fi xed 8 February 2012 for the plaintiff to fi le in an affi davit in reply to the

defendant’s affi davit dated 25 January 2012 and further fi xed 13 February 2012 for parties to fi le their respective

submissions simultaneously. The hearing date previously fi xed 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 fi xed 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 fi xed the matter for case management on 28 March 2012 to

allow the State Government and the Federal Government to fi le and serve their respective pleadings in the third

party proceedings.

On 28 March 2012, the Kuala Lumpur High Court had fi xed the matter for further case management on 17 April 2012

to allow the parties to fi nalise the issues to be tried, bundle of documents and list of witnesses. The High Court had

also fi xed 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 fi xed earlier. The High Court had rescheduled the call management for application of the Defendant

to 27 April 2012 which was subsequently adjourned to 30 April 2012.

The Kuala Lumpur High Court had fi xed the matter for further case management on 8 May 2012 and 15 May 2012.



410




At the case management held on 15 May 2012 which was heard together with the hearing fi xed for the application

to amend the Statement of Claim fi led by SYABAS on 14 May 2012, the Kuala Lumpur High Court had fi xed a further

hearing date on 22 May 2012 to allow the parties to fi le and serve their respective affi davits. The case management

is also fi xed on the same date.

At the case management held on 22 May 2012 on the application to amend the Statement of Claim fi led by SYABAS,

the High Court had adjourned the matter to 25 May 2012 for decision.

On 25 May 2012, the High Court had adjourned the decision on the application to amend the Statement of Claim

fi led by SYABAS to 29 May 2012 to allow the parties to further deliberate and submit on the matter. The trial dates

fi xed on 29 May 2012 and 30 May 2012 as announced earlier are now vacated for the aforementioned purpose.

The trial dates fi xed on 14 June 2012 and 15 June 2012 remain unchanged.

On 29 May 2012, the High Court had allowed the application to amend the Statement of Claim fi led by SYABAS and

further fi xed the matter for case management on 14 June 2012. The trial dates of 14 June 2012 and 15 June 2012 as

announced previously have been vacated.

The High Court has further fi xed 4 September 2012, 6 September 2012 and 7 September 2012 as the new trial dates.

At the case management held on 14 June 2012, the High Court had fi xed three (3) additional trial dates on

30 October 2012, 31 October 2012 and 1 November 2012 respectively. The High Court had further directed the

parties to fi le additional bundle of documents (if any) and the issues to be tried on or before 31 July 2012, and their

respective witness statements one (1) week before the trial.

On 22 June 2012, the Defendant has fi led an appeal to the Court of Appeal against the Order dated 29 May 2012 of

the High Court allowing the Plaintiff’s application to amend the Statement of Claim.

On 28 June 2012, the Court of Appeal had fi xed the Defendant’s appeal against the Order dated 29 May 2012

of the High Court allowing SYABAS’ application to amend the Statement of Claim, for Case Management on

12 July 2012.

At the case management held on 12 July 2012 for the Defendant’s appeal against the Order dated 29 May 2012 of

the High Court allowing SYABAS’ application to amend the Statement of Claim, the Court of Appeal had fi xed the

matter for further case management on 14 August 2012 for further direction.

The Court of Appeal had also directed the Defendant to fi le in the Record of Appeal by 9 August 2012.




411




On 14 August 2012, the Court of Appeal had fi xed the hearing for the Defendant’s appeal against the Order dated

29 May 2012 of the Kuala Lumpur High Court allowing SYABAS’ application to amend the Statement of Claim on

8 October 2012. The Court of Appeal also directed the parties to fi le their respective written submission on or before

24 September 2012.

The Kuala Lumpur High Court had via letter dated 13 August 2012 fi xed the matter for case management on

16 August 2012.

At the case management held on 16 August 2012, the solicitors for the Defendant had requested for the trial dates

on 4 September 2012, 6 September 2012 and 7 September 2012 to be vacated pending disposal of the Defendant’s

appeal against the Order dated 29 May 2012 of the Kuala Lumpur High Court allowing SYABAS’ application to

amend the Statement of Claim (“Appeal”). The Appeal is fi xed for hearing at the Court of Appeal on 8 October 2012,

as previously announced by the Company on 14 August 2012.

The High Court agreed to vacate the trial dates on 4 September 2012 and 7 September 2012. The witness

for SYABAS will give evidence in chief on 6 September 2012. The trial will continue on 30 October 2012,

31 October 2012, and 1 November 2012 respectively. The parties are to fi le their respective witness statements one

(1) week before the commencement of the trial.

The trial held on 6 September 2012 had been adjourned to 30 October 2012, 31 October 2012 and 1 November 2012,

the trial dates previously fi xed and announced on 17 August 2012, pending the Plaintiff and the Third Party to fi le in

their respective supplementary/fresh witness statements.

At the hearing held on 8 October 2012 for the State Government’s appeal against the Order dated 29 May 2012 of

the High Court allowing SYABAS’ application to amend the Statement of Claim (“Appeal”), the Court of Appeal had

allowed the Appeal with costs.

On 15 October 2012, SYABAS’ solicitors had fi led a motion for leave at the Federal Court to appeal against the

decision made by the Court of Appeal dated 8 October 2012. The Federal Court had also fi xed the motion for hearing

on 23 October 2012.

At the hearing held on 23 October 2012, the Federal Court had granted leave to SYABAS to appeal to the Federal

Court against the decision made by the Court of Appeal dated 8 October 2012 (“Appeal”). The Federal Court had

also directed for an early date to be fi xed for the hearing of the Appeal. Pursuant to the leave granted by the Federal

Court, SYABAS will instruct its solicitors to proceed with the fi ling of the relevant notice of appeal and appeal record.



412




In view of the fact that the Federal Court had on 23 October 2012 granted leave to SYABAS to appeal to the

Federal Court against the decision dated 8 October 2012 of the Court of Appeal (which allowed the defendant’s

appeal against the decision of the High Court on 29 May 2012 granting leave to SYABAS to amend its claim),

the High Court had on 30 October 2012 adjourned the trial fi xed for 30 October 2012, 31 October 2012 and

1 November 2012 pending the outcome of SYABAS’ appeal to the Federal Court. The High Court had fi xed new

trial dates on 11 January 2013, 13 February 2013, 14 February 2013 and 15 February 2013 and also fi xed case

management on 17 December 2012 for the parties to inform the Kuala Lumpur High Court on the outcome of

SYABAS’ appeal to the Federal Court.

On 20 November 2012, the Federal Court had fi xed SYABAS’ appeal to the Federal Court against the decision made

by the Court of Appeal dated 8 October 2012, for case management on 22 November 2012.

At the case management held on 22 November 2012, the Federal Court had fi xed 10 December 2012 for further case

management pending the extraction of the notes of evidence and the grounds of judgment delivered by the Court of

Appeal on 8 October 2012.

At the case management held on 10 December 2012, the Federal Court had fi xed 31 January 2013 for hearing of the

appeal against the decision delivered by the Court of Appeal on 8 October 2012.

At the case management held on 17 December 2012, the High Court had vacated the trial date fi xed on

11 January 2013 and maintained the trial dates on 13 February 2013, 14 February 2013 and 15 February 2013.

The High Court had also fi xed the case management on 4 February 2013 for the parties to inform KLHC on the

outcome of SYABAS’ appeal to the Federal Court which has been fi xed for hearing on 31 January 2013.

On 31 January 2013, the hearing for the appeal against the decision delivered by the Court of Appeal on

8 October 2012 had been vacated by the Federal Court to a date to be fi xed in due course following re-arrangement

of cases by the Federal Court.

On 4 February 2013, the Federal Court had fi xed 6 February 2013 as the hearing date for the appeal against the

decision delivered by the Court of Appeal on 8 October 2012.

At the case management held on 4 February 2013, the High Court (“KLHC”) had vacated the Trial dates fi xed on

13 February 2013, 14 February 2013 and 15 February 2013, as announced previously, on the request made by the

Defendant’s Solicitors. KLHC had fi xed the new Trial dates on 1 July 2013, 2 July 2013, 3 July 2013, 4 July 2013,

8 July 2013, 9 July 2013 and 10 July 2013.




413




KLHC had also fi xed the case management on 15 February 2013 for the parties to inform KLHC on the outcome of

SYABAS’ appeal to the Federal Court which has been fi xed for hearing on 6 February 2013.

At the hearing held on 6 February 2013, the Federal Court had allowed the appeal made by SYABAS against the

decision delivered by the Court of Appeal on 8 October 2012, which earlier dismissed SYABAS’ application to

amend the Statement of Claim and awarded cost to SYABAS.

The High Court postponed the case management fi xed on 15 February 2013 to 28 February 2013.

At the case management held on 28 February 2013, the Kuala Lumpur High Court has maintained the Trial dates

on 1 July 2013, 2 July 2013, 3 July 2013, 4 July 2013, 8 July 2013, 9 July 2013 and 10 July 2013, as previously

announced.

The High Court had via a letter dated 8 April 2013 vacated the Trial dates on 1 July 2013, 2 July 2013,

3 July 2013, 4 July 2013, 8 July 2013, 9 July 2013 and 10 July 2013, as announced previously and has

now rescheduled the Trial to 2 September 2013, 3 September 2013, 4 September 2013, 5 September 2013,

9 September 2013, 10 September 2013 and 11 September 2013 accordingly.

(h) SPLASH vs State Government

Shah Alam High Court Civil Suit No : 21NCVC-34-2011 - SPLASH vs State Government

On 28 October 2011, SYABAS 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 fi led 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 fi le afresh. As such, the Third

Party Notice dated 3 October 2011 fi led by the Defendant against SYABAS to join SYABAS as third party in the main

suit is now rendered academic.



414


(h) SPLASH vs State Government (continued)

Shah Alam High Court Civil Suit No : 21NCVC-34-2011 - SPLASH vs State Government (continued)

On 14 April 2013, the High Court had via a letter dated 8 April 2013 vacated the Trial dates on 1 July 2013,

2 July 2013, 3 July 2013, 4 July 2013, 8 July 2013, 9 July 2013 and 10 July 2013, as announced previously and

has now rescheduled the Trial to 2 September 2013, 3 September 2013, 4 September 2013, 5 September 2013,

9 September 2013, 10 September 2013 and 11 September 2013 accordingly.

(i) PNSB vs SYABAS

Kuala Lumpur High Court Civil Suit No : 22NCC-1336-08/2012

On 30 August 2012, PNSB had instituted legal proceedings against SYABAS via the fi ling of a Writ of Summons and

Statement of Claim dated 30 August 2012 at the High Court for amount due for payment as of 30 April 2012 for the

supply and purchase of treated water. (“Amount Due as of 30 April 2012”).

In the Statement of Claim, PNSB is claiming the following:-

i) The Amount Due For Payment of RM1,211,156,583.09 being the unpaid due amount accrued as of 30 April 2012;

in the alternative, the Amount Due For Payment of RM1,072,725,761.32 being the unpaid due amount accrued as

of 30 April 2012;

ii) Alternatively, such other sum or sums as may be assessed by the Honourable Court to be due to the Plaintiff

from the Defendant as at 30 April 2012;

iii) Further, all sums arising and due to the Plaintiff from the Defendant under the provisions of the Water Supply

Agreements accruing after 30 April 2012 until the date of Judgment;

iv) Costs;

v) Interest;

vi) Such further and alternative reliefs as the Honourable Court deems fi t and proper.

The solicitors of PNSB had on 4 September 2012 served on SYABAS the Writ of Summons and Statement of Claim

dated 30 August 2012 for Amount Due as of 30 April 2012.

The High Court has fi xed the matter for case management on 21 September 2012.




415


(i) PNSB vs SYABAS (continued)

Kuala Lumpur High Court Civil Suit No : 22NCC-1336-08/2012 (continued)

SYABAS’ solicitors had fi led a Memorandum of Appearance on behalf of SYABAS on 14 September 2012 and the

said Memorandum of Appearance was served on PNSB’s solicitors on 18 September 2012. At the Case Management

of this matter held on 21 September 2012, a further Case Management date of 8 November 2012 was fi xed pending

SYABAS’ fi ling of its Statement of Defence. SYABAS fi led its Statement of Defence on 17 October 2012 and had

subsequently fi led the Amended Statement of Defence dated 25 October 2012.

On 30 October 2012, in addition to the Defence which was fi led by the Defendant on 17 October 2012 as previously

announced, the Defendant’s Amended Defence dated 25 October 2012 had been served on the Plaintiff’s solicitors

on 25 October 2012.

On 8 November 2012, the High Court had directed the Plaintiff to fi le its Reply to the Defendant’s Amended Defence

dated 25 October 2012 by 22 November 2012. The High Court had also fi xed the next case management date on

3 December 2012.

At the case management held on 3 December 2012, the High Court had fi xed the matter for further case management

on 16 January 2013 and 8 July 2013 and also fi xed the trial dates on 15, 16, 17 and 18 July 2013.

(j) PNSB vs State Government

Kuala Lumpur High Court Originating Summons No. 24NCVC-369-02/2013

PNSB had on 18 February 2013 instituted legal proceedings against the Selangor State Government via the fi ling of

the relevant cause papers all dated 18 February 2013 at the High Court in relation to the Operation and Maintenance

Agreement dated 7 March 2008 in respect of the Sungai Sireh Water Treatment Plant between PNSB and the

Selangor State Government and the Novation Agreement dated 7 March 2008 in respect of the Sungai Sireh Water

Treatment Plant between PNSB, SYABAS and the Selangor State Government (“the Agreements”).

In the Originating Summons and the Notice of Application dated 18 February 2013, PNSB is seeking for the following:-

i) A declaration that the Agreements between PNSB and the Selangor State Government dated 7 March 2008 in

respect of the Sungai Sireh Water Treatment Plant between PNSB, SYABAS and the Selangor State Government

are valid and enforceable pursuant to the Water Services Industry Act 2006;

ii) An order against the Selangor State Government for specifi c performance of the Agreements;

iii) that the Selangor State Government whether by its servants, agents or howsoever be restrained from terminating

the Operation and Maintenance Agreement dated 7 March 2008 in respect of the Sungai Sireh Water Treatment

Plant between PNSB and the Selangor State Government and the Novation Agreement dated 7 March 2008 in

respect of the Sungai Sireh Water Treatment Plant between PNSB, SYABAS and the Selangor State Government;



416


(j) PNSB vs State Government (continued)

Kuala Lumpur High Court Originating Summons No. 24NCVC-369-02/2013 (continued)

iv) that the Selangor State Government whether by its servants, agents or howsoever be restrained from handing

over howsoever the operations and managements of the Sungai Sireh Water Treatment Plant as defi ned in the

Agreements to Konsortium Air Selangor Bhd or whomsoever;

v) Costs; and

vi) Such further or other relief as the Honourable Court deems just and fi t.

The solicitors of PNSB had on 20 February 2013 served the Sealed Copy of Originating Summons, Sealed Copy of

Notice of Application and a copy of the Plaintiff’s Affi davit in respect of the Suit on the Selangor State Government.

The High Court has fi xed the matter for hearing on 11 March 2013.

At the hearing held on 11 March 2013, the High Court has directed as follows:-

i) That Parties are to exhaust the exchange of affi davits by 4 June 2013; and

ii) The Originating Summons has been fi xed for hearing on 4 June 2013.

51. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE

The fi nancial statements for the year ended 31 December 2012 were authorised for issue in accordance with a resolution

of the directors on 29 April 2013.




417

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 2012 into realised and

unrealised profi ts is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated

25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and

Unrealised Profi ts 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 (accumulated losses)/retained earnings of the Company and its subsidiaries

- Realised (834,630,218) 473,905,759

- Unrealised 393,924,257 (29,136,589)

(440,705,961) 444,769,170

Total share of (accumulated losses) from associated companies:

- Realised (2,835) –

Total share of retained earnings from jointly controlled entities:

- Realised 1,104,156 –

(439,604,640) 444,769,170

Less: Consolidation adjustments 710,846,016 –

Total group retained earnings as per consolidated accounts 271,241,376 444,769,170



418

Distribution Schedule of

Equity Securities as at 25 April 2013

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital : RM1,300,000,000.00

Issued 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 each

Voting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

Shareholders No. of Shares Held

Malaysian Foreigner Total Malaysian Foreigner Total

Size of Shareholdings No % No % No % No % No % No %

Less than 100 463 5.40 5 0.06 468 5.46 12,419 * 154 * 12,573 *

100-1,000 1,271 14.83 9 0.10 1,280 14.93 927,471 0.23 5,645 * 933,116 0.23

1,001-10,000 5,109 59.60 78 0.91 5,187 60.51 19,150,937 4.68 330,311 0.08 19,481,248 4.76

10,001-100,000 1,293 15.08 69 0.81 1,362 15.89 40,723,402 9.95 3,033,686 0.74 43,757,088 10.69

100,001-20,455,303 231# 2.69# 39 0.45 270# 3.14# 155,479,383# 38.01# 20,363,750 4.98 175,843,133# 42.99#

(less than 5% of the

issued share capital)

20,455,304 6 0.07 0 0 6 0.07 169,078,937 41.33 0 0 169,078,937 41.33

(5% of the issued

share capital) and above

TOTAL 8,373# 97.67# 200 2.33 8,573# 100.00# 385,372,549 # 94.20 # 23,733,546 5.80 409,106,095 # 100.00 #

Notes :

* Negligible

# Excluding a total of 2,036,800 PNHB Shares bought back by PNHB and retained as treasury shares as at 25 April 2013.

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)

No Name of Shareholder No. of Shares Held

% of Issued and

Paid-Up Share Capital #

1. CIMB Group Nominees (Tempatan) Sdn BhdPledged Securities Account For Corporate Line (M) Sdn Bhd (WWE Holdings)

39,000,000 9.53

2. RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Central Plus (M) Sdn Bhd (681055)

33,000,700 8.07

3. Central Plus (M) Sdn Bhd 27,359,537 6.69

4. Lembaga Tabung Haji 26,198,700 6.40

5. AmSec Nominees (Tempatan) Sdn BhdPledged Securities Account – Ambank (M) Berhad For Central Plus (M) Sdn Bhd

21,920,000 5.36

Note :



419

Distribution Schedule of Equity Securities as at 25 April 2013


% of Issued and


6. HLIB Nominees (Tempatan) Sdn BhdPledged Securities Account For Corporate Line (M) Sdn Bhd

21,600,000 5.28

7. UOBM Nominees (Tempatan) Sdn BhdPledged Securities Account For Central Plus (M) Sdn Bhd (PCB)

19,900,000 4.86

8. Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board

14,864,583 3.63

9. Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board (CIMB PRIN)

7,912,400 1.93

10. AmanahRaya Trustees BerhadAmanah Saham Wawasan 2020

7,209,640 1.76

11. TA Nominees (Tempatan) Sdn BhdPledged Securities Account For Ong Siok Wan

5,250,000 1.28

12. Cartaban Nominees (Tempatan) Sdn BhdExempt An For Eastspring Investments Berhad

4,812,800 1.18

13. Citigroup Nominees (Tempatan) Sdn BhdKumpulan Wang Persaraan (Diperbadankan) (CIMB Equities)

3,945,200 0.96

14. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (RHB INV)

3,341,700 0.82

15. Maybank Nominees (Tempatan) Sdn BhdEtiqa Takaful Berhad (Family PRF EQ)

3,006,100 0.73

16. Ng Yim Hoo 2,979,600 0.73

17. Maybank Nominees (Tempatan) Sdn BhdPledged Securities Account For Corporate Line (M) Sdn Bhd

(41210162038A)

2,500,000 0.61

18. HSBC Nominees (Asing) Sdn BhdExempt An For The Bank Of New York Mellon (Mellon Acct)

2,256,200 0.55

19. Kok Chew Leng 2,050,000 0.50

20. ECML Nominees (Tempatan) Sdn BhdPledged Securities Account For Leong Kam Chee (002)

2,000,000 0.49

21. Maybank Nominees (Tempatan) Sdn BhdEtiqa Insurance Berhad (Life Par Fund)

2,000,000 0.49

22. Central Plus (M) Sdn Bhd 1,738,250 0.42

Note :



420


% of Issued and


23. Rozali Bin Ismail 1,729,000 0.42

24. KAF Trustee BerhadKAF Fund Management Sdn Bhd For KAF Seagroatt & Campbell Berhad

1,660,040 0.41

25. HSBC Nominees (Asing) Sdn BhdBNY Brussels For Powershares Global Water Portfolio

1,645,200 0.40

26. HSBC Nominees (Asing) Sdn BhdExempt An For JPMorgan Chase Bank, National Association (U.S.A)

1,509,200 0.37

27. HLB Nominees (Tempatan) Sdn BhdQuek Sue Yian

1,500,000 0.37

28. Employees Provident Fund Board 1,494,000 0.37

29. M & A Nominee (Tempatan) Sdn BhdPledged Securities Account For Sarah Pauline A/P Melkees (M&A)

1,450,000 0.35

30. DB (Malaysia) Nominee (Asing) Sdn Bhd Exempt An For Deutsche Bank AG London (Prime Brokerage)

1,383,900 0.34

Total 267,216,750 65.30

Note :

# Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 25 April 2013.

DIRECTORS’ INTEREST IN ORDINARY SHARES AS PER REGISTER OF DIRECTORS’ SHAREHOLDINGS

No of Shares Held in the Company

No Name Of Director Direct Interest % # Indirect Interest % #

1. YBhg Tan Sri Rozali Bin Ismail 1,729,000 0.42 167,037,114 + 40.83 +

2. YBhg Dato’ Ruslan Bin Hassan – – – –

3. YBhg Dato’ Ir Lee Miang Koi 10,000 ** – –

4. YBhg Dato’ Syed Danial Bin Syed Ariffi n – – – –

5. YBhg Tan Sri Dato’ Hari Narayanan Govindasamy – – – –

6. YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh – – 42,000 ^ 0.01 ^

7. Mr Ng Wah Tar – – – –

8. YAM Tengku Dato’ Rahimah Binti

Almarhum Sultan Mahmud – – – –

9. YBhg Tan Sri Dato’ Ahmad Fuzi Bin Haji Abdul Razak – – – –

Note :

+ 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.


** Negligible

Distribution Schedule of

Equity Securities as at 25 April 2013


421

SUBSTANTIAL SHAREHOLDERS BASED ON THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

(Excluding Bare Trustees)

No of Shares Held in the Company

No Name Of Substantial Shareholder Direct Interest % # Indirect Interest % #

1. YBhg Tan Sri Rozali Bin Ismail 1,729,000 0.42 167,037,114 + 40.83 +

2. Central Plus (M) Sdn Bhd 29,097,787 7.11 74,820,700 * 18.29 *

3. Corporate Line (M) Sdn Bhd 18,627 ** 63,100,000 * 15.42 *

4. Employees Provident Fund Board 1,494,000 0.37 26,086,483 ^ 6.38 ^

5. Lembaga Tabung Haji 26,198,700 6.40 – –

Note :

+ 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.


** Negligible

Distribution Schedule of Equity Securities as at 25 April 2013


422

List Of Properties


Date of Net Book

Acquisition Value Remaining

Description & Date of Valuation (RM) Leasehold Existing

Location (if applicable) (V) Land Area as at 31.12.2012 Tenure (Expiry Date) Use

Building & Adjacent LandWisma Rozali 01/08/2005 12,952 sq.m 53,178,562 99 years 90 years Offi ce No. 4 & 6, Persiaran Sukan 31/12/2011 (V) Leasehold expiring on PremisesSeksyen 13 22/01/2102 and40100 Shah Alam Vacant LandSelangor Darul Ehsan

Offi ce LotsNo. 8 Eu Tong Sen Street 03/10/2008 86 sq.m 99 years 87 years Offi ce# 22-85, The Central N/A (V) Leasehold expiring on PremisesSingapore 059818 8,553,690 01/01/2100

No. 8 Eu Tong Sen Street 26/09/2008 60 sq.m 99 years 87 years Offi ce# 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 19,391,860 99 years 87 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 89 years None 31/12/2011 (V) Leasehold expiring on 24/10/2101H.S.(D) 6164, PT 10654 213,092 sq.m 115,079,391 NoneH.S.(D) 6165, PT 10655 # 229,299 sq.m Rented outH.S.(D) 6166, PT 10656 229,733 sq.m NoneMukim Of IjokDistrict Of Kuala SelangorSelangor Darul Ehsan

# Included a single storey building complete with parking facilities


423

List Of Propertiesas at 31 December 2012

Date of Net Book

Acquisition Value Remaining

Description & Date of Valuation (RM) Leasehold Existing

Location (if applicable) (V) Land Area as at 31.12.2012 Tenure (Expiry Date) Use

4 Storey Shophouse

No. 12, Jalan Todak 5 21/03/2007 238 sq.m 1,664,651 99 years 80 years Offi ce

Pusat Bandar Seberang Jaya 31/12/2011 (V) Leasehold expiring on Premises

13700 Perai 21/10/2092Pulau Pinang

Offi ce LotNo. 20-1 & 20-2 01/02/2008 164 sq.m 1,892,000 Freehold N/A Offi ceJalan 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 18,076,309 99 years 83 years NoneMukim Jeram 31/12/2011 (V) Leasehold expiring onDistrict Of Kuala Selangor 1/12/2095Selangor Darul Ehsan

5 Storey ShophouseLot 37, Persiaran Sukan 07/06/2011 38,755 sq.m 8,010,047 99 years 96 years Offi ceLaman Seri Business Park N/A (V) Leasehold expiring on PremisesSeksyen 13, Shah Alam 21/3/2109Selangor Darul Ehsan

BuildingNo. 12B, Jalan PJS 8/11 19/10/2011 331 sq.m 5,027,216 90 years 89 years Rented outDataran Mentari N/A (V) Leasehold expring on46150 Petaling Jaya 06/11/2102Selangor Darul Ehsan


424

GRI Index

GRI G3.1 CONTENT INDEX

In ensuring our compliance to the highest level of transparency in our Corporate Social Responsibility (“CSR”) section of this

Report, we have adopted the internationally-recognised reporting framework, the Global Reporting Initiatives (GRI). G3.1 is a

finalised update of GRI’s most recent generation of CSR Reporting Guidelines, and is the most comprehensive CSR reporting

guidance currently available. Application Levels indicate the extent to which the G3.1 Guidelines have been applied in our

sustainability reporting. The GRI Content Index table is presented to guide where information on each GRI indicator can be

found.

PROFILE DISCLOSURES

Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organisation P8-16

1.2 Description of key impacts, risks, and opportunities P8-16, P84

Organisational Profi le

2.1 Name of the organisation Front Cover

2.2 Primary brands, products, and/or services P18-19

2.3 Operational structure of the organisation P35

2.4 Location of organisation's headquarters P20

2.5 Number of countries where the organisation operates P20

2.6 Nature of ownership and legal form P35

2.7 Markets served P35

2.8 Scale of the reporting organisation P17

2.9 Signifi cant changes during the reporting period P84

2.10 Awards received in the reporting period P32

Report Parameters

3.1 Reporting period P17

3.2 Date of most recent previous report P17

3.3 Reporting cycle P17

3.4 Contact point for questions regarding the report or its contents P20

3.5 Process for defi ning report content P17

3.6 Boundary of the report P17

3.7 Specifi c limitations on the scope or boundary of the report P17

3.8 Basis for reporting on joint ventures, subsidiaries, etc P17

3.9 Data measurement techniques and the bases of calculations P163

3.10 Explanation of the effect of any re-statements of information P8-16

3.11 Signifi cant changes from previous reporting period P8-16, P84

3.12 Table identifying the location of the Standard Disclosures GRI G3.1 Index Table

3.13 Policy and current practice with regard to seeking external assurance for the report P218 - Audited

Financial Statement


425

GRI Index

Governance, Commitments, and Engagement

4.1 Governance structure of the organisation P177

4.2 Indicate whether the Chair of the highest governance body is also

an executive offi cer

P174

4.3 Independent and/or non-executive members of the Board P176

4.4 Mechanisms for shareholders and employees to provide recommendations or

direction to the highest governance body

P187

4.5 Linkage between compensation and the organisation's performance P183

4.6 Processes in place to ensure confl icts of interest are avoided P178

4.7 Qualifi cations and expertise of the Board P44

4.8 Internally developed statements of mission or values, codes of conduct, and

principles

P5

4.9 Identifi cation and management of economic, environmental, and social

performance, conduct, and principles

P13

4.10 Processes for evaluating the highest governance body's own performance P180

4.11 Explanation of whether and how the precautionary approach or principle is

addressed by the organisation

P189

4.12 Externally developed economic, environmental, and social charters, principles P164

4.13 Memberships in associations P24

4.14 List of stakeholder groups engaged by the organisation P140

4.15 Basis for identifi cation and selection of stakeholders with whom to engage P13, P165

4.16 Approaches to stakeholder engagement P13, P165

4.17 Key topics and concerns that have been raised through stakeholder engagement,

and how the organisation has responded to those key topics

P13, P165

PERFORMANCE INDICATORS : ECONOMIC

Economic Performance

EC1 Direct economic value generated and distributed P78

EC2 Financial implications and other risks and opportunities for the organisation's

activities due to climate change

P162

EC3 Coverage of the organisation's defi ned benefi t plan obligations P134

EC4 Signifi cant fi nancial assistance received from government P10, P90

Market Presence

EC5 Standard entry level wage vs. local minimum wage P134

EC6 Policy, practices, and proportion of spending on locally-based suppliers P149

EC7 Procedures for local hiring P101, P126

Indirect economic impacts

EC8 Development and impact of infrastructure investments and services provided

primarily for public benefi t

P164

EC9 Understanding and describing signifi cant indirect economic impacts P164


426

GRI Index

PERFORMANCE INDICATORS : ENVIRONMENTAL

Materials

EN1 Materials used by weight or volume P162

EN2 Percentage of materials used that are recycled input materials P162

EN3 Direct energy consumption by primary energy source P162-163

EN4 Indirect energy consumption by primary source P162-163

EN5 Energy saved due to conservation and effi ciency improvements P162

EN6 Initiatives to provide energy-effi cient or renewable energy P163

EN7 Initiatives to reduce indirect energy consumption and reductions achieved P162

EN8 Total water withdrawal by source P161

EN9 Signifi cant impact of withdrawal of water P161

EN10 Percentage and total volume of water recycled and reused. P161

Biodiversity

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected

areas

X

EN12 Description of signifi cant impacts of activities, products, and services on

biodiversity in protected areas

X

EN13 Habitats protected or restored X

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity X

EN15 Number of IUCN Red List species and national conservation list species with

habitats in areas affected by operations

X

Emissions, Effl uents and Waste

EN16 Total direct and indirect greenhouse gas emissions by weight P163

EN17 Other relevant indirect greenhouse gas emissions by weight P163

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved P163

EN19 Emissions of ozone-depleting substances by weight N/A

EN20 NOx, SOx, and other signifi cant air emissions by type and weight X

EN21 Total water discharge by quality and destination. P161

EN22 Total weight of waste by type and disposal method P161

EN23 Total number and volume of signifi cant spills P142

EN24 Weight of transported, imported, exported, or treated waste deemed hazardous P161

EN25 Identity, size, protected status, and biodiversity value of water bodies and related

habitats signifi cantly affected by the reporting organisation's discharges of water

and runoff

P161

Products and Services

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of

impact mitigation.

P150

EN27 Percentage of products sold and their packaging materials that are reclaimed by

category

N/A


427

GRI Index

Compliance

EN28 Monetary value of signifi cant fi nes and total number of non-monetary sanctions for

non-compliance with environmental laws and regulations.

P150-151

Transport

EN29 Signifi cant environmental impacts of transporting products and other goods and

materials used for the organisation's operations, and transporting members of the

workforce.

P163

Overall

EN30 Total environmental protection expenditures and investments by type. P163

PERFORMANCE INDICATORS : SOCIAL - LABOUR PRACTICES AND DECENT WORK

Employment

LA1 Total workforce by employment type, employment contract, and region P25, P126

LA2 Total number and rate of employee turnover by age group, gender, and region P127-133

LA3 Benefi ts provided to full-time employees that are not provided to temporary or

part-time employees, by major operations

P133-134

LA15 Return to work and retention rates after parental leave, by gender X

Labour/Management Relations

LA4 Percentage of employees covered by collective bargaining agreements P137

LA5 Minimum notice period(s) regarding signifi cant operational changes, including

whether it is specifi ed in collective agreements

P137

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

P139

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number

of work-related fatalities by region

P142

LA8 Education, training, counselling, prevention, and risk-control programs in place

to assist workforce members, their families, or community members regarding

serious diseases

P140-141

LA9 Health and safety topics covered in formal agreements with trade unions. P137

Training and Education

LA10 Average hours of training per year per employee by employee category P135

LA11 Programs for skills management and lifelong learning that support the continued

employability of employees and assist them in managing career endings

P135-136

LA12 Percentage of employees receiving regular performance and career development

reviews

P135


428

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.

P25, P126

LA14 Ratio of basic salary of men to women by employee category. P134

PERFORMANCE INDICATORS : SOCIAL - HUMAN RIGHTS

Diversity and Equal Opportunity

HR1 Percentage and total number of signifi cant investment agreements that include

human rights clauses or that have undergone human rights screening

P135

HR2 Percentage of signifi cant suppliers and contractors that have undergone screening

on human rights and actions taken.

P149

HR3 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.

P135

HR4 Total number of incidents of discrimination and actions taken. X

HR5 Operations identifi ed in which the right to exercise freedom of association and

collective bargaining may be at signifi cant risk, and actions taken to support

these rights.

P137

Child Labour

HR6 Operations identifi ed as having signifi cant risk for incidents of child labour, and

measures taken to contribute to the elimination of child labour.

X

Forced and Compulsory Labour

HR7 Operations identifi ed as having signifi cant risk for incidents of forced or compulsory

labour, and measures to contribute to the elimination of forced or compulsory

labour.

X

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.

P148

Indigenous Rights

HR9 Total number of incidents of violations involving rights of indigenous people and

actions taken.

X

Assessment

HR10 Percentage and total number of operations that have been subject to human rights

reviews and/or impact assessments

X

Remediation

HR11 Number of grievances related to human rights fi led, addressed, and resolved

through formal grievance mechanism

X

GRI Index


429

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

P164

SO9 Operations with signifi cant potential or actual negative impacts on local

communities

P164-165

SO10 Prevention and mitigation measured implemented in operations with signifi cant

potential or actual negative impacts on local community

P164-165

Corruption

SO2 Percentage and total number of business units analysed for risks related to

corruption.

P138

SO3 Percentage of employees trained in organisation's anti-corruption policies and

procedures

P135

SO4 Actions taken in response to incidents of corruption P138

Public Policy

SO5 Public policy positions and participation in public policy development and

lobbying

X

SO6 Total value of fi nancial 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 signifi cant fi nes and total number of non-monetary sanctions for

non-compliance with laws and regulations.

P164-165

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 signifi cant products and services

categories subject to such procedures.

P150

PR2 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.

P150

GRI Index


430

Product and Service Labelling

PR3 Type of product and service information required by procedures, and percentage of

signifi cant products and services subject to such information requirements.

P109


concerning product and service information and labelling, by type of outcomes.

P109

PR5 Practices related to customer satisfaction, including results of surveys measuring

customer satisfaction.

P117, P119

Marketing Communications

PR6 Programs for adherence to laws, standards, and voluntary codes related to

marketing communications, including advertising, promotion, and sponsorship.

X


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.

P119

Compliance

PR9 Monetary value of signifi cant fi nes for non-compliance with laws and regulations

concerning the provision and use of products and services.

P119

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.

GRI Index


431

NOTICE IS HEREBY GIVEN THAT the Sixteenth Annual General Meeting of Puncak Niaga Holdings Berhad (416087-U) will

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 Wednesday, 26 June 2013 at 10.00 a.m. for the following purposes: -

AS ORDINARY BUSINESSES

1. To receive the Audited Financial Statements of the Group and of the Company for the fi nancial year

ended 31 December 2012 together with the Reports of the Directors and Auditors thereon. Resolution 1

2. To declare a fi nal single tier dividend of 5 sen per ordinary share in respect of the fi nancial year ended

31 December 2012 as recommended by the Directors of the Company. Resolution 2

3. To re-elect the following Directors of the Company who retire by rotation pursuant to Article 98 of the

Company’s Articles of Association: -

(a) YBhg Dato’ Ruslan Bin Hassan Resolution 3

(b) YBhg Dato’ Syed Danial Bin Syed Ariffi n Resolution 4

(c) YAM Tengku Dato’ Rahimah Binti Almarhum Sultan Mahmud Resolution 5

4. To consider and, if thought fi t, to pass the following Ordinary Resolution in accordance with Section

129 of the Companies Act, 1965:-

Ordinary Resolution 1

Re-appointment Pursuant To Section 129 Of The Companies Act, 1965

“THAT YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh, retiring pursuant to Section 129 of the Companies

Act, 1965, be and is hereby re-appointed as a Director of the Company and to hold offi ce until the

next Annual General Meeting of the Company.” Resolution 6

5. To consider and, if thought fi t, to pass the following resolution of which the Notice of Nomination of

Auditors pursuant to Section 172(11) of the Companies Act, 1965 is set out in Appendix A of this

Notice of Meeting:-

“THAT Messrs KPMG having given their consent in writing to act, be and are hereby appointed as

Auditors of the Company for the fi nancial year ending 31 December 2013 in place of Messrs Ernst

& Young who had indicated their intention not to seek for re-election at the forthcoming Sixteenth

Annual General Meeting of the Company and to hold offi ce until the conclusion of the next Annual

General Meeting of the Company AND THAT authority be and is hereby given for the Directors of the

Company to fi x their remuneration.” Resolution 7

Notice Of Annual General Meeting

431


432

AS SPECIAL BUSINESSES

To consider and, if thought fi t, to pass the following Ordinary Resolutions: -

6. Ordinary Resolution 2

Allotment Of Shares Pursuant To Section 132D Of The Companies Act, 1965

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and

the approvals of the relevant governmental/regulatory authorities, the Directors of the Company be

and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue and

allot shares in the Company, from time to time, and upon such terms and conditions and for such

purposes as the Directors of the Company may deem fi t provided that the aggregate number of

shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the issued

share capital of the Company for the time being AND THAT the Directors of the Company be and

are hereby also empowered to obtain the approval for the listing of and quotation for the additional

shares so issued on Bursa Malaysia Securities Berhad AND FURTHER THAT such authority shall

continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Resolution 8


Continuing In Offi ce As Independent Non-Executive Director

“THAT authority be and is hereby given to YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh who has

served as an Independent Non-Executive Director of the Company for a cumulative term of more

than nine years, to continue to act as an Independent Non-Executive Director of the Company

and to hold offi ce until the conclusion of the next Annual General Meeting of the Company.” Resolution 9


Continuing In Offi ce As Independent Non-Executive Director

“THAT authority be and is hereby given to YBhg Tan Sri Dato’ Hari Narayanan A/L Govindasamy

who has served as an Independent Non-Executive Director of the Company for a cumulative

term of more than nine years, to continue to act as an Independent Non-Executive Director of

the Company and to hold offi ce until the conclusion of the next Annual General Meeting of the

Company.” Resolution 10

9. To transact any other ordinary business of which due notice shall have been given.

Notice Of Annual

General Meeting


433

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders of the Company at the Sixteenth

Annual General Meeting of the Company of a fi nal single tier dividend of 5 sen per ordinary share for the fi nancial year ended

31 December 2012 under Resolution 2, the dividends will be paid on 6 August 2013 to the Depositors whose names appear

in the Record of Depositors of the Company on 15 July 2013.

A Depositor shall qualify for entitlement to the dividends only in respect of:-

a. Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 15 July 2013 in respect of transfers;

b. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia

Securities Berhad.

BY ORDER OF THE BOARD

TAN BEE LIAN (MAICSA 7006285)

LIM YEW HEANG (MAICSA 7007653)

Secretaries

Shah Alam

4 June 2013

Notes: -

1. In respect of deposited securities, only Members whose names appear in the Record of Depositors on 18 June 2013 (General Meeting Record

of Depositors) shall be entitled to attend, speak and vote at this Sixteenth 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 Companies Act, 1965 shall not apply to the

Company. There shall be no restriction as to the qualifi cation 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 defi ned 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 benefi cial 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 specifi es the proportions of

his holdings to be represented by each proxy.



434

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 offi cer or attorney duly appointed under a power of

attorney. If this Proxy Form is signed under the hand of an offi cer duly authorised, it should be accompanied by a statement reading “signed as

authorised offi cer 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

fi t 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 Offi ce 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 not less than 48 hours before the time set for

holding the Meeting or any adjournment thereof.

8. At any general meeting, a resolution put to the vote of the Meeting shall be decided on a show of hands unless a poll be (before or on the

declaration of the result of the show of hands) demanded by either:-

(a) the Chairman (being a person entitled to vote); or

(b) not less than two Members present in person or by proxy and entitled to vote; or

(c) a Member or Members present in person or by proxy and representing not less than one-twentieth of the total voting rights of all the

Members having the right to vote at the Meeting; or

(d) a Member or Members present in person or by proxy and holding shares in the Company conferring a right to vote at the Meeting being

shares on which an aggregate sum has been paid up equal to not less than one-twentieth of the total sum paid up on all the shares

conferring that right.

9. A demand for a poll may be withdrawn. Unless a poll be so demanded (and the demand be not withdrawn), a declaration by the Chairman that

a resolution has been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minute book, shall be

conclusive evidence of the fact without proof of the number or proportion of the votes recorded for or against such resolution.

10. No poll shall be demanded on the election of a Chairman or on a question of adjournment. A poll demanded on any other question shall be taken

either immediately or at such subsequent time (not being more than thirty days from the date of the meeting) and place as the Chairman may

direct. No notice need to be given of a poll not taken immediately.

11. On a poll, votes may be given either personally or by proxy and a person entitled to more than one vote need not use all his votes or cast all the

votes he uses in the same way.

12. Explanatory Notes And Statement Of Effect For Ordinary Businesses and Special Businesses: -

Ordinary Businesses

Resolution 6: Ordinary Resolution 1 - Re-appointment Pursuant To Section 129 of the Companies Act, 1965

The Nomination Committee and the Board of Directors of the Company had assessed the independence of YBhg Tan Sri Dato’ Seri Dr Ting Chew

Peh as an Independent Director of the Company. With YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh’s consent, the Nomination Committee and the

Board of Directors of the Company had recommended for YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh who will attain the age of 70 years to be

re-appointed as Director of the Company pursuant to Section 129 of the Companies Act, 1965 based on the following reasons:-

(i) YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh has served the Company as an Independent Director for almost thirteen (13) years. YBhg Tan Sri

Dato’ Seri Dr Ting Chew Peh had, during his tenure as Independent Director of the Company, Senior Independent Director of the Company,

Chairman of Audit Committee of the Company and Chairman of Compliance, Internal Control and Risk Policy (“CICR”) Committee of the

Company, acted in the best interests of the Company, exercising his independent judgement during deliberations and decision-making

during the Audit Committee Meetings, Board of Directors’ Meetings and CICR Meetings.

Notice Of Annual

General Meeting


435

(ii) YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh has proven to be a reliable Independent Director/Chairman of Audit Committee/Chairman of

CICR with his professionalism, aptitude and outlook of business perspective.

Resolution 7: Appointment Of Messrs KPMG as the Auditors of the Company in place of the retiring Auditors, Messrs Ernst & Young

Our auditors, Messrs Ernst & Young had indicated that they do not wish to seek for re-election at the Sixteenth Annual General Meeting of

the Company. The Company received a Notice of Nomination of Auditors pursuant to Section 172(11) of the Companies Act, 1965 for the

nomination of Messrs KPMG as the Auditors of the Company in place of the retiring Auditors, Messrs Ernst & Young. A copy of the Notice of

Nomination of Auditors dated 22 May 2013 is annexed as “Appendix A” to the Notice of this Sixteenth Annual General Meeting”.

Special Businesses

Resolution 8: Ordinary Resolution 2 - Allotment Of Shares Pursuant To Section 132D Of The Companies Act, 1965

The Ordinary Resolution proposed under Agenda 6 of the Notice of this Sixteenth Annual General Meeting dated 4 June 2013 is for the purpose

of seeking a renewal of the general mandate to empower the Directors of the Company pursuant to Section 132D of the Companies Act, 1965,

from the date of the above Meeting, to issue and allot ordinary shares from the unissued share capital of the Company for such purposes as the

Directors of the Company consider would be in the interest of the Company. This authority will, unless revoked or varied at a General Meeting,

expire at the next Annual General Meeting of the Company.

This authority will provide fl exibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to

placement of shares, funding future investment(s) and/or working capital.

As at the date of this Notice, the Company did not implement its proposal for new allotment of shares under the general mandate pursuant to

Section 132D of the Companies Act, 1965 as granted at the Fifteenth Annual General Meeting of the Company held on 26 June 2012.

Resolutions 9 & 10: Ordinary Resolutions 3 & 4 - Continuing In Offi ce As Independent Non-Executive Directors

The Nomination Committee of the Company and the Board of Directors of the Company had assessed the independence of YBhg Tan Sri Dato’

Seri Dr Ting Chew Peh and YBhg Tan Sri Dato’ Hari Narayanan A/L Govindasamy, who have served as Independent Non-Executive Directors of

the Company for a cumulative term of more than nine (9) years, and with their consents, had recommended for both of them to continue to act

as Independent Non-Executive Directors of the Company based on the following justifi cations:-

a. they fulfi lled the criteria of the defi nition of Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia

Securities Berhad and had expressed their willingness to continue in offi ce as Independent Non-Executive Directors of the Company;

b. their vast experiences would enable them to provide the Board with a diverse set of experience, expertise and independent judgement to

better manage and run the Group;

c. they have served the Company as Independent Directors for a cumulative term of more than nine (9) years during which they had acted in

the best interests of the Company, exercising their independent judgement during deliberations and decision making during the Company’s

meetings and were familiar with the Company’s business operations and the water industry market; and

d. both YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh and YBhg Tan Sri Dato’ Hari Narayanan A/L Govindasamy had proven to be reliable

Independent Directors with their professionalism aptitude and outlook of business perspective, devoted suffi cient time and attention to

their professional obligations for informed and balance decision making and had also exercised due care during their tenure in the best

interests of the Company and the shareholders.



436

APPENDIX A

Wong Shey Lan

No. 38, Laluan Pinji Wani

Taman Pinji Wani

31650 Ipoh, Perak

22 May 2013

To:

The Board of Directors

Puncak Niaga Holdings Berhad

10th Floor, Wisma Rozali,


Seksyen 13, 40100 Shah Alam


Dear Sirs,

RE: NOTICE OF NOMINATION OF AUDITORS PURSUANT TO SECTION 172(11) OF THE COMPANIES ACT, 1965

I, Wong Shey Lan, being the registered holder of 7,565 ordinary shares of RM1.00 each fully paid-up in the capital of Puncak Niaga Holdings Berhad

(“Puncak”), hereby give notice pursuant to Section 172(11) of the Companies Act, 1965 of my nomination of Messrs KPMG for appointment as new

Auditors of Puncak in place of Messrs Ernst & Young at the forthcoming Sixteenth Annual General Meeting of Puncak.

Therefore, I propose that the following resolution be considered at the forthcoming Sixteenth Annual General Meeting of Puncak:-

“THAT Messrs KPMG having given their consent in writing to act, be and are hereby appointed as Auditors of the Company for the fi nancial year

ending 31 December 2013 in place of Messrs Ernst & Young who had indicated their intention not to seek for re-election at the forthcoming Sixteenth

Annual General Meeting of the Company and to hold offi ce until the conclusion of the next Annual General Meeting of the Company AND THAT

authority be and is hereby given for the Directors of the Company to fi x their remuneration.”

Thank you.

Yours faithfully

Wong Shey Lan

(NRIC: 691124-08-5372)

Notice Of Annual

General Meeting


437

Statement Accompanying The Notice Of Annual General Meeting

DETAILS OF DIRECTORS STANDING FOR RE-ELECTION AT THE SIXTEENTH ANNUAL GENERAL MEETING:-

Name of

Retiring Director

YBhg Dato’

Ruslan Bin Hassan

YBhg Dato’

Syed Danial Bin

Syed Ariffin

YAM Tengku Dato’

Rahimah Almarhum

Sultan Mahmud

YBhg Tan Sri

Dato’ Seri Dr Ting

Chew Peh

YBhg Tan Sri

Dato’ Hari Narayanan

A/L Govindasamy

Re-election By rotation of Directors

pursuant to Article 98 of

the Company’s Articles of

Association

(Resolution 3)

By rotation of Directors



Association

(Resolution 4)

By rotation of Directors



Association

(Resolution 5)

• Pursuant to Section

129 of the Companies

Act, 1965

• Pursuant to MCCG

2012 (serving more

than 9 years as

Independent Director)

(Resolutions 6 & 9)

Pursuant to MCCG 2012

(serving more than 9 years

as Independent Director)

(Resolution 10)

Age 57 55 47 70 63

Nationality Malaysian Malaysian Malaysian Malaysian Malaysian

Qualifi cation Bachelor of Laws Degree BSc (Hons)

Degree in

Civil Engineering

BSc in Economics and

Accountancy

Bachelor of Arts Degree

Master of Science Degree

Doctorate in Philosophy

Bachelor’s

Degree in Electrical and

Electronics Engineering

Position In

PNHB

Non-Independent


Chief Operating Offi cer Non-Independent


Independent


Independent


Working Experience &

Occupation

For details of YBhg

Dato’ Ruslan Hassan’s

profi le, please refer to

his profi le on page 47

of this Annual Report

For details of YBhg

Dato’ Syed Danial Syed

Ariffi n’s profi le, please

refer to his profi le on

page 49 of this

Annual Report

For details of YAM

Tengku Dato’ Rahimah

Almarhum Sultan

Mahmud’s profi le,

please refer to her

profi le on page 52 of

this Annual Report

For details of YBhg Tan

Sri Dato’ Seri Dr Ting

Chew Peh’s profi le,

please refer to his profi le

on page 51 of this

Annual Report

For details of YBhg

Tan Sri Dato’ Hari

Narayanan A/L

Govindasamy’s profi le,

please refer to his profi le

on page 50 of this

Annual Report

Directorships in the

public companies

None None Loh & Loh Corporation

Berhad

1. Pan Malaysia Capital

Berhad Group

2. Hua Yang

Berhad

3. Johan Holdings Berhad

4. Huaren Education

Foundation

1. Tenaga Nasional

Berhad

2. SP Setia Berhad

Equity securities

interests in PNHB and

its subsidiaries

None None None For details of YBhg Tan

Sri Dato’ Seri Dr Ting

Chew Peh’s equity

securities interests in

PNHB, please refer to

page 420 of this Annual

Report

None

Family relationship

with any director

and/or major

shareholder of PNHB

None None None None None

Any confl ict

of interests

with PNHB


List of convictions

for offences (other than

traffi c offences, if any)

within the past 10 years


Nota :

MCCG 2012 denotes Malaysian Code on Corporate Governance 2012.

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 Sixteenth 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 Wednesday, 26 June 2013 at 10.00 a.m. and at any adjournment thereof, as indicated below:-

NO. RESOLUTION FOR AGAINST

ORDINARY BUSINESSES

1. To receive the Audited Financial Statements of the Group and of the Company for the fi nancial year ended 31 December 2012 together with

the Reports of the Directors and Auditors thereon.

2. To declare a fi nal single tier dividend of 5 sen per ordinary share in respect of the fi nancial year ended 31 December 2012 as recommended

by the Directors of the Company.

3. To re-elect YBhg Dato’ Ruslan Bin Hassan as Director of the Company.

4. To re-elect YBhg Dato’ Syed Danial Bin Syed Ariffi n as Director of the Company.

5. To re-elect YAM Tengku Dato’ Rahimah Binti Almarhum Sultan Mahmud as Director of the Company.

6. Ordinary Resolution 1: To re-appoint YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh retiring pursuant to Section 129 of the Companies Act, 1965,

as Director of the Company.

7. To appoint Messrs KPMG as Auditors of the Company for the fi nancial year ending 31 December 2013 in place of Messrs Ernst & Young and

to authorise the Directors of the Company to fi x their remuneration.

SPECIAL BUSINESSES

8. Ordinary Resolution 2: To empower the Directors of the Company to issue shares pursuant to Section 132D of the Companies Act, 1965.

9. Ordinary Resolution 3: To approve the continuing in offi ce by YBhg Tan Sri Dato’ Seri Dr Ting Chew Peh as an Independent Non-Executive

Director of the Company and to hold offi ce until the conclusion of the next Annual General Meeting of the Company.

10. Ordinary Resolution 4: To approve the continuing in offi ce by YBhg Tan Sri Dato’ Hari Narayanan A/L Govindasamy as an Independent

Non-Executive Director of the Company and to hold offi ce until the conclusion of the next Annual General Meeting 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 specifi c directions, your proxy will vote or abstain as

he thinks fi t.

Signed this day of 2013

Signature(s)/Common Seal of Shareholder

NRIC/Company No. : Tel. No. :

Notes:

1. In respect of deposited securities, only Members whose names appear in the Record of Depositors on 18 June 2013 (General Meeting Record of Depositors) shall be entitled to attend, speak and vote at this

Sixteenth 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 Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualifi cation 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 defi ned 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 benefi cial 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 specifi es 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 offi cer or attorney duly appointed under a power of attorney. If this Proxy Form is signed under the hand of an offi cer duly authorised, it should be accompanied by

a statement reading “signed as authorised offi cer 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 fi t 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 Offi ce 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 not less than 48 hours before the time set for holding the Meeting or any adjournment thereof.

8. At any general meeting, a resolution put to the vote of the Meeting shall be decided on a show of hands unless a poll be (before or on the declaration of the result of the show of hands) demanded by either:-

(a) the Chairman (being a person entitled to vote); or

(b) not less than two Members present in person or by proxy and entitled to vote; or

(c) a Member or Members present in person or by proxy and representing not less than one-twentieth of the total voting rights of all the Members having the right to vote at the Meeting; or

(d) a Member or Members present in person or by proxy and holding shares in the Company conferring a right to vote at the Meeting being shares on which an aggregate sum has been paid up equal to not less

than one-twentieth of the total sum paid up on all the shares conferring that right.

9. A demand for a poll may be withdrawn. Unless a poll be so demanded (and the demand be not withdrawn), a declaration by the Chairman that a resolution has been carried or carried unanimously, or by a particular

majority, or lost and an entry to that effect in the minute book, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded for or against such resolution.

10. No poll shall be demanded on the election of a Chairman or on a question of adjournment. A poll demanded on any other question shall be taken either immediately or at such subsequent time (not being more

than thirty days from the date of the meeting) and place as the Chairman may direct. No notice need to be given of a poll not taken immediately.

11. On a poll, votes may be given either personally or by proxy and a person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

Number of shares held Please fi ll in CDS Account No. Proxy Form

Share Registrar for

Puncak Niaga Holdings Berhad (416087-U)

Tricor Investor Services Sdn Bhd (118401-V)

Level 17, The Gardens North Tower

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Malaysia

PLEASE FOLD HERE

PLEASE FOLD HERE

STAMP

PUNCAK NIAGA HOLDINGS BERHADWisma RozaliNo. 4, Persiaran SukanSeksyen 13, 40100 Shah AlamSelangor Darul EhsanTel : +603-5522 8589Fax : +603-5522 8598e-mail (general):[email protected] (investors):[email protected]: www.puncakniaga.com.my

BRANCH OFFICESKuala Terengganu Offi ce201B, Jalan Sultan Zainal Abidin20000 Kuala TerengganuTerengganu Darul ImanTel : +609-623 8589Fax : +609-624 8589

Penang Offi ceNo. 12C, Jalan Todak 5Pusat Bandar Seberang Jaya13700 Perai, Pulau PinangTel : +604-397 8589

Sarawak Offi ceLot 10864 & 10865Section 64, KTLDJalan Mendu93200 Kuching, SarawakTel : +6082-332 589Fax : +6082-337 589

Sri Aman Site Offi ce 1st 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

Sabah Offi ceNo. 5, 1st Floor, Block ALorong Plaza Permai 1Alamesra, Sulaman Coastal Highway88400 Kota KinabaluSabahTel : +6088-486 070Fax : +6088-486 069

SUBSIDIARY OFFICES

In Malaysia

PUNCAK NIAGA (M) SDN BHDWisma RozaliNo. 4, Persiaran SukanSeksyen 13, 40100 Shah AlamSelangor Darul EhsanTel : +603-5522 8589Fax : +603-5522 8598

SYARIKAT BEKALAN AIR SELANGOR 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 Perkhidmatan Pelanggan (PUSPEL)Toll Free Helpline: 1-800-88-5252Fax : +603-2295 5168SMS to 39222 type PUSPEL<space><your complaints/feedback>e-mail: [email protected]: follow@puspel

(on Twitter and Facebook)

PUNCAK OIL & GAS SDN BHDLevel 17, Tower 1Etiqa TwinsNo. 11, Jalan Pinang50450 Kuala LumpurWilayah Persekutuan Tel : +603-2176 2000Fax : +603-2176 2100

GOM RESOURCES SDN BHDLevel 15, 16 & 17, Tower 1Etiqa TwinsNo. 11, Jalan Pinang50450 Kuala LumpurWilayah Persekutuan Tel : +603-2176 2000Fax : +603-2176 2100

PUNCAK RESEARCH CENTRE SDN BHDWisma RozaliNo. 4, Persiaran SukanSeksyen 13, 40100 Shah AlamSelangor Darul EhsanTel : +603-5522 8589Fax : +603-5522 8598

KGL LTD.c/o Lot 1, 2nd FloorWisma SiamlohJalan Kemajuan87007Federal Territory of LabuanTel : +608-741 7810Fax : +608-742 4220

In Singapore

SINO WATER PTE LTD and PUNCAK NIAGA OVERSEAS CAPITAL PTE LTD No. 8, Eu Tong Sen Street#22-85 & #22-86The CentralSingapore 059818Tel : +65 6224 9220 (Main Line) +65 6222 7926Fax : +65 6222 6812

In China

SINO WATER ENVIRONMENTAL CONSULTANCY (SHANGHAI) CO. LTDUnit 301, No. 398City GatewayCaoxi (North) RoadXuhui District200030 ShanghaiPeople’s Republic of ChinaTel : +86-21-6090 5282Fax : +86-21-6090 5281

Liaison Offi ceLevel 28, One Aerospace CenterNo. 7, Xin Guang Hua StreetJin Jiang District610016 ChengduPeople’s Republic of ChinaTel : +86 28 6283 3442/ 43/46/48Fax : +86 28 6283 3550

LUWEI (PINGDINGSHAN) WATER CO. LTDNo. 6, ShunCheng Road (East)Lushan CountyHenan Province467300 People’s Republic of ChinaTel / Fax: +86-375-5891036

XINNUO WATER (BINZHOU) CO. LTD Chenlou Industrial & Commerce ParkLaodian TownYangxin CountyShandong Province251802People’s Republic of ChinaTel / Fax: +86-543-898 3008

LUANCHENG DAYU WATER SUPPLY CO. LTD No. 17, Xinyuan RoadLuancheng CountyHebei Province051430 People’s Republic of ChinaTel / Fax: +86-311-8803 1652

HEBEI SINO PANLONG INDUSTRIAL WATER SUPPLY CO. LTD No. 117, Renmin RoadYuanshi CountyHebei Province051130 People’s Republic of ChinaTel / Fax: +86-311-8463 8813

In India

PUNCAK NIAGA INFRASTRUCTURES & PROJECTS PRIVATE LIMITED No. 12, 7th Main RoadFirst FloorKasturibai NagarAdyarChennai 600020Tamil Nadu, IndiaTel : +91-44-4210 2058Fax : +91-44-4210 2028

In Myanmar

GOM RESOURCES LIMITEDc/o No. 79, Taw Win RoadDagon Township11191 YangonMyanmarTel : +95-973 9999 11/ +95-973 9999 66Fax : +95-1221 789

REPRESENTATIVE OFFICE

In Vietnam

The Representative Offi ce of Puncak NiagaHoldings Berhad16F, Saigon Tower29, Le Duan StreetDistrict 1, Ho Chi Minh CitySaigon, VietnamTel : +84-8-3520 7601Fax : +84-8-3520 7604

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