Tnb Powering Sustainable Future

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Transcript of Tnb Powering Sustainable Future


Annual Report 2010200866-W



Tenaga Nasional Berhad No. 129, Jalan Bangsar, 59200 Kuala Lumpur Tel: 603-2296 5640 Fax: 603-2283 5494

POWERING A SUSTAINAB LE FUTURETenaga Nasional Berhad200866-W

Annual Report 2010

VISION TO be amONg The leadINg cOrpOraTIONS IN eNergy aNd relaTed buSINeSSeS glObally

mISSION We are cOmmITTed TO excelleNce IN Our prOducTS aNd SerVIceS

CoNTeNTS 2 7 8 12 13 Vision Mission Notice of Annual General Meeting Statement Accompanying Notice of 20th Annual General Meeting Investor Relations Financial Calendar 2010 About Us 21 22 30 36 48 58 Thank You, Prime Minister Awards & Recognition Key Past Awards Calendar of Events Milestones Over 60 Years Media Highlights 65 66 67 68 69 Group Quarterly Financial Performance Statement of Value Added FY2010 Core Revenue Operational Statistics Group Financial Review

CorporaTe Framework 16 Corporate Information 18 Group Corporate Structure 20 Organisational Structure

perFormaNCe review 60 Key Highlights 61 Key Financial Highlights 62 Five-Year Group Financial Summary 63 Five-Year Group Growth Summary 64 Simplified Group Balance Sheet

LeaderShip 72 Board of Directors 74 Profile of Directors 82 Group Executive Council Committee GECC 83 Energy Supply Committee ESC 84 Group Executive Management Committee GEMC

POWERING A SUSTAINABLE FUTUREFor over 60 years, TNB has been consistently and conscientiously powering the nations needs towards greater growth and progress. We continue to strive for excellence, to take Malaysias power generating capabilitiestogreaterheights.Asthenationsleadingpowerutility,weareproud to support initiatives to implement green technology into the nations energy sectorandwetakeprideinourcorporatesocialresponsibilitypoliciesthatensure our projects comply with stringent environmental standards. Through the years, we remain committed towards creating a sustainable future for all Malaysians, one where we are powering hope and the promise of a better and brighter tomorrow.

perSpeCTive/maNagemeNT overview 88 Chairmans Letter to Shareholders 100 President/CEOs Review 113 operations review 114 Generation 124 Transmission 130 Distribution 142 Sabah Electricity Sdn. Bhd. 145 Enterprise Management 146 Group Finance 152 Corporate Affairs 156 Planning 160 Procurement 166 Corporate Services

key iNiTiaTiveS 174 Human Capital Development 178 Corporate Social Responsibility 189 Commitment to the Environment 193 Other Services Productivity and Quality Management 195 Towards Greater Innovation 200 Occupational Safety and Health Report aCCouNTabiLiTy 204 Statement of Corporate Governance 222 Enterprise Wide Risk Management (EWRM)

224 228 231 233

Statement of Internal Control Board Audit Committee Report Statement on Internal Audit Function Terms of Reference of the Board Audit Committee

FiNaNCiaL STaTemeNTS 238 Financial Statements oTher iNFormaTioN 365 Analysis of Shareholdings 368 Property List 369 Group Directory Proxy Form




NoTiCe oF aNNuaL geNeraL meeTiNgNoTiCe iS hereby giveN ThaT the 20th annual general meeting of Tenaga Nasional berhad will be held on wednesday, 15 december 2010, at 10.00 a.m. at Dewan Serbaguna, Kompleks Sukan TNB, Jalan Pantai Baru, 59200 Kuala Lumpur to transact the following businesses:aS ordiNary buSiNeSS:1. To receive the Audited Financial Statements for the Financial Year ended 31 August 2010 together with the Reports of the Directors and Auditors thereon. ordinary resolution 1 Toapprovethedeclarationoffinalgrossdividendof20.0 sen per ordinary share less income tax of 25% for the Financial Year ended 31 August 2010. ordinary resolution 2 ToapprovethepaymentofDirectorsfeesofRM575,000.00 for the Financial Year ended 31 August 2010. ordinary resolution 3 To re-elect the following Directors who retire in accordance with Article 135 of the Companys Articles of Association:(i) Dato Sri Che Khalib Bin Mohamad Noh ordinary resolution 4 ordinary resolution 5 6. To re-appoint Tan Sri Dato Seri Siti Norma Binti Yaakob who retires in accordance with Section 129 of the Companies Act, 1965 (Act) to hold office until the conclusion of the next Annual General Meeting (AGM). ordinary resolution 9 To re-appoint Messrs PricewaterhouseCoopers, having consented to act, as Auditors of the Company, to hold office until the conclusion of the next AGM and to authorise the Directors to fix their remuneration. ordinary resolution 10



3. 4.

aS SpeCiaL buSiNeSS:To consider and if thought fit, to pass the following Resolutions:8. Specific authority for the directors to issue shares pursuant to the employees Share option Scheme ii THATpursuanttoTNBEmployeesShareOptionScheme II (ESOS II) as approved at the Extraordinary General Meeting (EGM) of the Company held on 29 May 2003, approval be and is hereby given to the Directors to issue shares in the Company at any time and in accordance with the terms and conditions of the said scheme. ordinary resolution 11 proposed renewal of authority for the purchase by the Company of its own shares THATsubjecttocompliancewiththeAct,theCompanys Memorandum and Articles of Association, the Main MarketListingRequirementsofBursaMalaysiaSecurities Berhad and all other applicable laws, guidelines, rules and regulations for the time being in force or as may be amended from time to time, and the approvals from all relevant authorities, the Company be and is hereby authorised to purchase such amount of ordinary shares

(ii) Dato Fuad Bin Jaafar 5.

To re-elect the following Directors who retire in accordance with Article 133 of the Companys Articles of Association:(i) Dato Abd Manaf Bin Hashim ordinary resolution 6


(ii) Dato Ir. Azman Bin Mohd (iii) Chung Hon Cheong

ordinary resolution 7 ordinary resolution 8




of RM1.00 each in the Companys issued and paid-up ordinary share capital through Bursa Malaysia Securities Berhad (BMSB) upon such terms and conditions as the Directors of the Company (Board) may deem fit and expedient in the interest of the Company provided that:(a) theaggregatenumberofsharespurchasedpursuant to this resolution shall not exceed 10% of the total issued and paid-up share capital of the Company (Proposed Share Buy-Back); (b) the maximum amount of funds to be utilised for the purpose of the Proposed Share Buy-Back shall notexceedtheCompanysaggregateretainedprofits and/or share premium account at the time of purchase be allocated by the Company for the Proposed Share Buy-Back; (c) the authority conferred by this resolution shall commenced immediately upon the passing of this resolution and shall continue to be in force until:(i) theconclusionofthenextAGMoftheCompany at which time the authority shall lapse unless by an ordinary resolution passed by the shareholders of the Company in a general meeting, the authority is renewed either unconditionally or subject to conditions;

AND THAT the Board be and is hereby authorised to take such steps to give full effect to the Proposed Share Buy-Back with full power to assent to any conditions, modifications, variations and/or amendments as may be imposedbytherelevantauthoritiesand/ortodoallsuch actsandthingsastheBoardmaydeemfitandexpedient in the best interest of the Company. ordinary resolution 12

(ii) the expiry of the period within which the next AGM of the Company is required by law to be held; (iii) theauthorityisrevokedorvariedbyanordinary resolution passed by the shareholders of the Company at a general meeting, whichever is the earlier. ANDTHATauthoritybeandisherebygiventotheBoard to decide in their discretion to retain the ordinary shares intheCompanysopurchasedbytheCompanyastreasury shares or to cancel them or a combination of both and/ or to resell them on BMSB and/or to distribute them as share dividends.

10. proposed bonus issue of up to 1,119,088,296 new ordinary shares of rm1.00 each (shares) in Tenaga Nasional berhad (TNb) (bonus Shares) to be credited as fully paid-up on the basis of one (1) bonus Share for every four (4) existing shares held at an entitlement date to be determined and announced later THAT, subject to the passing of Ordinary Resolution 14 and Special Resolution 1 and the approval of any other parties, if required, approval be and is hereby given to the Board to capitalise a sum of up to RM1,119,288,296 (which include the estimated expenses of RM200,000 for the Proposals as defined in the Circular to Shareholders dated 19 November 2010) from the Companys share premium account and that such sum be applied to the issuance at par of up to 1,119,088,296 Bonus Shares in the share capital of the Company to be credited as fully paiduponthebasisof(1)BonusShareforeveryfour(4) existingsharestoallshareholdersoftheCompanywhose names appear in the Record of Depositors (ROD) on an entitlement date to be determined and announced later by the Board; THATanyfractionalentitlementsthatmayariseunderthe Proposed Bonus Issue shall be dealt with in such manner as the Directors shall in their absolute discretion think expedient and in the best interest of the Company; THATsuchBonusSharesshall,uponallotmentandissue, rank pari passu in all respects with the then existing Shares of the Company except that they shall not be entitled to anydividends, rights,allotments and/orother distributions, the entitlement date of which is prior to the date of issuance and allotment of the Bonus Shares;




NoTiCe oF aNNuaL geNeraL meeTiNg


AND THAT the Boar