COMMITTED TO THE COURSE

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2 About the Cover COMMITTED TO THE COURSE In 2008, we achieved several operational initiatives by remaining on track to achieve our Vision to be a Leading and Dynamic Integrated Water Services Company. As we move forward, our focus in 2009 is to execute well to stay the course concentrating on working at it until all is done and done right. Like a river that flows into the ocean, our foray into expanding our business worldwide remain challenging yet exciting. We are optimistic and eagerly embrace the bright future that lies ahead. Our Vision To be the Leading and Dynamic Integrated Water Services Company Our mission To provide a synergy of socio-economic products and services in the realm of water treatment, management and distribution, and other related businesses. To cater to the increasing challenges in the demand for high quality water production and distribution through the continuous implementation of high quality standards, efficient services, human resources development, innovative technology and operational systems. To actively participate in regional and global business opportunities with linkages to the Company s core activities and related interests. 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 To address national and international concerns pertaining to the protection, conservation and enhancement of the natural environment we live in. 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: Passionate about our business for sustainable performance. United as one in our corporate responsibility strategy to align with our Vision to be the Leading and Dynamic Integrated Water Services Company. Nurture our human capital towards an exemplary workforce. Corporate Governance guides 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.

3 ANNUAL REPORT 2008 key HIGHLIGHTS WTPs with total production ORGANISATION STRUCTURE of million cubic metres of treated water equivalent to 97.3% of total design capacity of the WTPs employees worldwide 17 WTPs 3 & Regional Offices with ISO Certifications & 4,188 PNSB s IMS Certifications 7 Awards 3 & Certificates of Recognition Single tier Dividend payout of 10 sen per share for financial year ended 31 December 2008 All Credit Ratings affirmed by rating agency Zero Lost Time Injury (LTI) maintained by SSP2 WTP (3,035, hours), Wangsa Maju WTP (818, hours) and Sungai Sireh WTP (117, hours) which recorded accumulated man-hours without LTI Billings to consumers of RM1.395 billion exceeded billings growth target of RM1.394 billion 100% Collection efficiency (on the amount collected from the account holders over the amount billed during the year) Trained 3,117 employees Profit before tax Expansion into China market RM54.86m PUNCAK NIAGA HOLDINGS BERHAD 1

4 12 th Annual General Meeting >>> >>> >>> 23 June 2009 (Tuesday) a.m. Concorde 1 Concorde Hotel Shah Alam Level 2, No. 3, Jalan Tengku Ampuan Zabedah C9/C Shah Alam Selangor Darul Ehsan

5 table of contents 4 Executive Chairman s Statement understanding us 12 Corporate Profile 14 Corporate Information 16 PNHB Fact Sheet 18 Corporate Achievements 19 Our Role in the Water Supply System 20 Corporate Structure 21 Organisation Structure - PNSB 22 Organisation Structure - SYABAS our people 26 Board of Directors Profile 37 Board of Directors 38 Key Personnel Profile - PNSB 41 Key Personnel Profile - SYABAS 45 Key Personnel Profile - Sino Water Pte Ltd 46 Human Capital Expertise 47 Puncak Niaga s Global Presence perfomance figures 50 Five-Year Financial Highlights 51 Five-Year Group Performance 52 Share Price & Volume Traded 53 Financial Calendar building socially responsible businesses 79 Building a Dynamic Workplace 84 Valuing Relationships in the Marketplace 89 Reaching Out to Our Community 91 Sustaining Our Environment 98 Our Focus on Occupational Health & Safety 104 Commitment to Quality 108 Corporate Events 112 Milestones 114 Water News accountability 117 Corporate Disclosure Policy 118 Statement on Corporate Governance 132 Statement on Internal Control 134 Audit Committee Report 140 Risk Management Policy & Report 143 Investor Relations Policy & Report 145 Quality Policy & Report 146 Distribution Schedule of Equity Securities 150 List of Properties financial statements 151 Statement of Directors Responsibility for Preparation of Financial Statements 152 Financial Statements operations review 56 Operations Review - PNSB Water Treatment Activities 62 Operations Review - SYABAS Water Distribution Activities 69 Operations Review - Operational Highlights: people s Republic of China 71 Operations Review - Operational Highlights: India & Pakistan 72 Innovative Research and Development Initiatives 270 Notice of Annual General Meeting 272 Statement Accompanying the Notice of Annual General Meeting Proxy Form Corporate Directory

6 YBHG TAN SRI ROZALI ISMAIL Executive Chairman of PNHB Group 4 PUNCAK NIAGA HOLDINGS BERHAD

7 2008 ANNUAL REPORT EXECUTIVE CHAIRMAN S STATEMENT To the Shareholders of Puncak Niaga Holdings Berhad, During the year under review, we maintained momentum in both our water treatment and water distribution operations in spite of numerous challenges. We met most of our Key Performance Indicators with continual improvement on many work processes towards operational efficiency. These achievements are mainly due to the hard work and commitment of our workforce of over 4,000 employees who embody the theme for this year s Annual Report, Committed to the Course. Each year, we keep raising the benchmark, particularly in improving our service levels and addressing concerns in raw water quality. As the year progressed, the global financial crisis deepened and global economic conditions worsened significantly. By year end, the country s economic growth rate had slowed to 0.1% in the fourth quarter of 2008 against a growth rate of 4.7% in the preceding quarter. For the full year of 2008, the Malaysian economy expanded by 4.6%, compared to 6.3% in Moving into 2009, the global economy is not expected to record any growth with a large number of economies experiencing a synchronised recession. The Malaysian real gross domestic product is projected to grow between minus 1% and 1% in Amidst this, the Group remains confident and inspired to overcome the obstacles, and to be on the constant look out for new businesses, both locally and abroad. We will remain focused to achieve our goals as we continue to advance our operations base and expertise, expand and nurture our workforce, preserve financial resources, and intensify R&D initiatives and efforts towards the protection and enhancement of the environment. We remain focused to achieve our Vision to be a Leading and Dynamic Integrated Water Services Company. Financial Performance For the financial year ended 31 December 2008, the Group reported a 1.9% increase in revenue to RM1,415.3 million from RM1,388.4 million in 2007 (restated). The increase in revenue was due to higher water revenue of RM1,394.9 million (2007: RM1,331.7 million - restated). Although revenue recorded an increase, profit before taxation (PBT) decreased by RM59.0 million (51.9%) to RM54.9 million compared with RM113.9 million in 2007 (restated). Net profit posted RM22.1 million against RM69.4 million in the previous year, denoting a decrease of RM47.3 million (68.2%). The decrease was due to lower other income, higher operating cost, finance costs and depreciation and amortisation of expenses. The higher finance costs were mainly attributed to the further drawdown of the Bai Bithaman Ajil Medium Term Notes (BAMTN) in SYABAS to fund its operating cash flow deficit. The increase in depreciation and amortisation was due to changes in the projected revenue of SYABAS following the yearly review at the end of 2007 and The Group s Shareholders Funds stood at RM1,372.6 million (2007:RM1,397.2 million - restated) and Earnings Per Share (EPS) was 5.27 sen compared to sen in 2007 (restated), down by sen (66.2%). On the strength of the Group s financial performance, the Board of Directors is pleased to propose a final single tier dividend of 10 sen per share for the financial year ended 31 December 2008 (2007: tax exempt dividend of 10 sen per share). PUNCAK NIAGA HOLDINGS BERHAD 5

8 exemplary leadership ANNUAL REPORT 2008 Executive Chairman s Statement (continued) Our 4,000+ hard working and committed employees are key to improving our service levels Our focus in 2009 to drive growth will be on preserving financial resources, advancing operations base and expertise, and intensifying R & D initiatives Corporate Developments On 20 February 2008, SYABAS issued BAMTN with an aggregate nominal value of RM230.0 million in four series, which will mature beginning 20 February On 31 October 2008, SYABAS issued a further BAMTN with an aggregate nominal value of RM500.0 million in four series with maturity dates on 31 October 2016 to 31 October 2023 respectively. On 11 March 2008, RM184.2 million of Redeemable Cumulative Preference Shares (RPS) of RM0.01 each of SYABAS were subscribed by the Minister of Finance, Incorporated (MOF) at an issue price of RM1.00 per RPS (representing a premium of RM0.99 per RPS) to fund the operations and capital expenditure requirements of SYABAS. As at 31 December 2008, the RPS stood at RM309.6 million. Pursuant to the Call Option Agreement dated 19 December 2006 between PNHB and Arena Tekad Sdn Bhd (ATSB), PNHB exercised its option to re-acquire 1.75 million ordinary shares of RM1.00 each in Puncak Niaga (M) Sdn Bhd (PNSB) representing 17.5% equity interest on 18 September 2008 at an exercise price of RM320,250, (Exercise of Call Option). On 22 October 2008, the Company completed the Exercise of Call Option and PNSB is now a wholly owned subsidiary of PNHB. On 20 November 2008, PNSB carried out the second mandatory partial redemption of RM54,687, of the outstanding RM492,187, nominal value 15-Year Redeemable Unconvertible Junior Notes (JNA) from PNHB. Concurrently, PNHB utilised the proceeds from the redemption of the JNA to undertake a second mandatory partial redemption of RM54,687, of the outstanding RM492,187, nominal value of 15-Year Redeemable Unconvertible Junior Notes (RUN) from PNHB s RUN holders. In March 2009, Malaysian Rating Corporation Berhad (MARC) affirmed the A+ long term ratings of PNHB s RUN, PNSB s JNA and RUBs and the AA 1D rating for PNSB s BAIDs whilst SYABAS s BA Commercial Papers/ BAMTN was affirmed at MARC-1 1D / AA-1D in February Effective Governance The Group upholds the core values of corporate governance, integrity, transparency and accountability in the conduct of its business operations. As Malaysia s leading water services company, we believe that the principles of good governance are integral to the Group s continued growth and ability to promote the confidence of our stakeholders. Building Better Relationships Being an essential services provider, we are constantly under the scrutiny of the public and authorities, which makes us more determined to outperform our obligations with each turn of the year. It is no doubt a heavy responsibility to cater to the demands of 7.3 million consumers in Selangor, Kuala Lumpur and Putrajaya. Through our customercentric efforts and initiatives, we have experienced an increase in public confidence in SYABAS over the past years since we took over the water distribution responsibility in January PUSPEL, SYABAS 24-hour customer contact centre recently launched its new logo to reflect reliability, courteousness and commitment in the discharge of its functions and responsibilities to the consumers. We have also established a Code of Ethics for our counter staff to improve counter services, courtesy and time taken in handling enquiries. 6 PUNCAK NIAGA HOLDINGS BERHAD

9 2008 ANNUAL REPORT Executive Chairman s Statement (continued) Staying on Course Each year, our challenges increase, especially in addressing the problems of raw water contamination. However, with stringent and rigid testing, we are able to mitigate the issues immediately. In 2008, we implemented the 24-hour On-Line River Level Monitoring System at the Langat River to monitor levels at seven locations of stage gauges. This project enables fast and optimal response to regulating dam release in ensuring adequate water supply particularly during the dry season. The hard work and effort put in by the teams at the Operation II Division and the relevant Departments have paid off as PNSB successfully obtained the Integrated Management System (IMS) Certification for the Provision of Construction Services for Building, Civil Engineering Works, Mechanical and Electrical Engineering Works, Specialising in Water Related Infrastructure by Lloyd s Register Quality Assurance (LRQA). The certification comprises the ISO 9001:2000 Quality Management System, the OHSAS 18001:2007 Safety and Health Management System and the ISO 14001:2004 Environmental Management System, which are also accredited under the United Kingdom Accredited Service (UKAS). This certainly further enhances our international acceptance and recognition to compete effectively as we have the capability and capacity to provide construction services with high work quality, safety and health features with emphasis on environmental preservation. Standard Bearer of Excellence In August 2008, we were shortlisted as a finalist for the inaugural StarBiz- ICR Malaysia Corporate Responsibility Awards 2008 in the Community category in recognition of our ongoing efforts to promote awareness on protecting the environment and natural resources. This has certainly encouraged us to intensify our community-driven programmes and various Corporate Responsibility (CR) initiatives such as the River Rescue Brigade (Briged Penyelamat Sungai), Educational Outreach Programme, Factory Visit Programme and SYABAS Kempen Mesra Pelanggan. A great deal of our CR programmes is focused on advocating and promoting environmental awareness among children. Our employees are also encouraged to reach out to the community and to be involved in these programmes to increase their appreciation of the natural resources and to take their work responsibilities seriously. In November 2008, the Company obtained the NACRA 2008 Industry Excellence Award for Main Board Construction & Infrastructure Project Companies sector for excellence in annual reporting whilst SYABAS was awarded with the Malaysian Business Ethics Excellence Award 2008 for large companies category by the Business Ethics Institute of Malaysia. In March 2009, SYABAS became a proud recipient of the HR Excellence Award (Bronze Recognition) in the Malaysia HR Awards awarded by the Malaysian Institute of Human Resource Management. Environmental Responsibility Looking at the bigger picture, as with other responsible corporations, we share increasing concerns on global warming and climate change. Water is in all aspects of climate change and is among the key areas to be impacted as reported by the *Intergovernmental Panel on Climate Change (IPCC). Freshwater is indispensable for all forms of life and Providing 7.3 million consumers with quality supply of treated water daily (Selangor, Kuala Lumpur & Putrajaya) is needed in large quantities, for almost all human activities. Climate, freshwater, biophysical and socio-economic systems are interconnected in complex ways, so a change in any one of these induces a change in another. Climate change due to human activities adds a major pressure to nations that are already confronting the issue of sustainable freshwater use. Water resources, both in terms of quantity and quality, are critically influenced by human activity, including agriculture and land-use change, construction and management of reservoirs, pollutant emissions, and water and wastewater treatment. * The IPCC was established by the World Meteorological Organization (WMO) and United Nations Environment Programme (UNEP) to assess on a comprehensive, objective, open and transparent basis the latest scientific, technical and socio-economic literature produced worldwide relevant to the understanding of the risk of humaninduced climate change, its observed and projected impacts and options for adaptation and mitigation. PUNCAK NIAGA HOLDINGS BERHAD 7

10 exemplary leadership ANNUAL REPORT 2008 Executive Chairman s Statement (continued) We take a serious view of our corporate environmental responsibility and remain conscious of our impact on the atmosphere through emissions of greenhouse gases and the need to adapt to a changing climate. We will seek to increase our knowledge on these issues as we continue to develop and implement innovative and sustainable adaptation measures. We will endeavour to conduct our operations in a responsible manner and promote greater awareness on the conservation and enhancement of our natural environment, particularly relating to the care and management of our water resources. Water Industry Outlook With heightened concerns over climate change and global warming, water sustainability becomes an urgent concern which requires integrated planning by the government and industry players. Proactive and prudent water management is key to helping our nation s holistic approach to optimise its water resources and to protect and preserve our watercourses and water catchments. In line with this, the legal and administrative framework has been put in place via two laws, i.e. the Suruhanjaya Perkhidmatan Air Negara Act 2006 (SPAN Act or Act 654) and the Water Services Industry Act 2006 (WSIA or Act 655) to ensure an orderly and well regulated water supply services and sewage services industry in Malaysia that delivers effective and efficient service to the consumers. On 13 February 2009, PNSB and SYABAS each received a Letter of Offer from the Selangor State Government to take over the water assets and operations of both entities. On 20 February 2009, both PNSB and SYABAS reverted to the Selangor State Government with the decision of the respective Boards not to accept the offers based on various reasons. The catchment area at Sungai Langat Dam Pursuant to Section 192 of the WSIA, PNSB and SYABAS are only given the option to either send a notice to SPAN on its intention to apply for a licence under WSIA in substitution of the registered existing licence or apply for authorisation. PNSB s Board has in principle agreed to migrate to the licensing regime since it is in line with the Federal Government s policy to restructure the nation s water industry. In the case of SYABAS, Clause 24.7 of its Concession Agreement provides that for any disposal of assets, SYABAS is required to obtain the Federal Government s prior written consent by virtue of the Golden Share held by MOF. We are also still awaiting for Pengurusan Aset Air Berhad (PAAB) to initiate the preliminary talks with PNSB and SYABAS on the terms for migration. We will carefully consider the impact and implications to our shareholders, lenders, customers and all other stakeholders before a decision is made in the interests of all stakeholders. Increasing the Momentum In 2009, we will continue with our business development efforts to secure new projects in other states within Malaysia whilst at the same time, expanding our operations into the international markets. The emerging markets of India and China warrant fast track development where our expertise has been called for. In May 2008, PNHB entered into a Shareholders Agreement with a strategic partner, Environmental Holding Pte Ltd to take up an 80% equity interest in a Singapore company, Sino Water Pte Ltd (SWPL) to enable the Group to tap into investments in water and wastewater projects in China. 8 PUNCAK NIAGA HOLDINGS BERHAD

11 2008 ANNUAL REPORT Executive Chairman s Statement (continued) 80% equity interest in Singapore-based Sino Water Pte Ltd to enable the Group to explore further opportunities in the water and wastewater industries in China PNHB Group has expanded into the China market In Pakistan, PNSB is currently undertaking feasibility studies under the auspices of the Asian Development Bank (ADB) to address the need for long term system planning for a sustainable and safe water supply system, and an effective sewage treatment network for the Karachi Water and Sewerage Board. This collaboration is implemented and financed by ADB as a South Asian Water Utilities Network activity as part of the Water Operators Partnerships Programme. On 18 November 2008, PNHB and the Government of Banten Province entered into a Memorandum of Understanding to establish mutual beneficial investment co-operation in water management and related infrastructures in Banten Province, Indonesia. This is in line with the Group s expansion plan to tap the Indonesian market. Acknowledging Efforts In today s dynamic business environment, our Management and employees are the ultimate source of competitive advantage. On behalf of the Board, I would like to offer each and every one of them our sincere appreciation. We will continue to rely on their professionalism, knowledge and experience to fulfil our aspirations. Our thanks also go to the Federal Government and the Selangor State Government as well as various government authorities, agencies and non-governmental organisations for the guidance they consistently provide. I am also grateful to my fellow Board Members who comprise a formidable Board, with the vision, expertise and experience to provide sound counsel and corporate strategies in propelling the Group forward. To our shareholders, PNHB s success is a direct result of your ongoing commitment, loyalty and support. We look forward to your continued support in As we move ahead into 2009, we will continue to address the growing demand for water, and do so in a way that endeavours to both preserve our environment and ensure a dependable water system for the consumers. Tan Sri Rozali Ismail Executive Chairman 27 April 2009 Clarifiers at the Central Ordinance Depot (COD) WTP in Karachi, Pakistan The Gujjo Headworks that supply water to the pumping station for subsequent pumping to water treatment plants for treatment in Karachi, Pakistan PUNCAK NIAGA HOLDINGS BERHAD 9

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13 Committed to the course Our strengths lie in our expertise in meeting the demand for high quality water production and distribution. We are proactive and continously seek methods to improve the services we provide. Each and every day we endeavour to respond promptly and efficiently to enable uninterrupted service to UNDERSTANDING US the consumers.

14 success ANNUAL REPORT 2008 corporate profile OUR COMPANY The Puncak Niaga Holdings Berhad (PNHB) Group is the leading and dynamic integrated water services company in Malaysia. 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 research and development and technology development for the water, wastewater and environment sectors as well as undertaking works related to the oil and gas industry and other materials and the provision of offshore and onshore engineering works. Established on 7 January 1997, PNHB was listed on the Main Board of Bursa Malaysia Securities Berhad on 8 July As at the end of December 2008, PNHB s market capitalisation stood at RM1.0 billion. It is the first 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 five 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 1,942 million litres per day. PNSB undertook the finance, 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 exemplifies the PNHB Group s excellent capabilities in managing and undertaking largescale 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 a population of 7.3 million including industrial and commercial users, with a total registration of million consumer accounts. SYABAS also undertakes the maintenance of 23,500 km of water pipes, 1,226 service reservoirs, elevated water tanks and suction tanks and 444 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 (SWPL), a company incorporated in Singapore which focuses primarily on potential markets in China. SWPL has established various subsidiaries in the People s Republic of China to undertake potable water and wastewater projects in several provinces in China. 12 PUNCAK NIAGA HOLDINGS BERHAD

15 2008 ANNUAL REPORT Two subsidiaries within the Group, namely Puncak Research Centre Sdn Bhd and Puncak Oil & Gas Sdn Bhd undertake the research and development activities and oil and gas works respectively. Our customer contact centre, PUSPEL, which is manned by 60 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. 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 business 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 water resources, which is relevant to our business operations. Our River Rescue Brigade (Briged Penyelamat Sungai) programme, that 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 3,080 school children and 115 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 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 school 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 its stakeholders, we will look into expanding our operations in areas related to our core business and competencies within Malaysia and undertaking projects in other countries such as India, China, the Middle East and Indonesia. PUNCAK NIAGA HOLDINGS BERHAD 13

16 success ANNUAL REPORT 2008 CORPORATE INFORMATION Board of Directors Name Yang Berbahagia Tan Sri Rozali Ismail Yang Berbahagia Dato Matlasa Hitam Yang Berbahagia Dato Ruslan Hassan Yang Berbahagia Dato Ir Lee Miang Koi Yang Berbahagia Dato Syed Danial Syed Ariffin Yang Berbahagia Tan Sri Dato Hari Narayanan Govindasamy Yang Berbahagia Tan Sri Dato Seri Dr Ting Chew Peh Mr Tan Seng Lee Yang Amat Mulia Tengku Dato Rahimah Almarhum Sultan Mahmud Yang Berbahagia Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Designation Executive Chairman Managing Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Chief Operating Officer Independent Non-Executive Director Independent Non-Executive Director Executive Director, Finance Division Non-Independent Non-Executive Director Independent Non-Executive Director COMPANY SECRETARIES Madam Tan Bee Lian, MAICSA Madam Lim Yew Heang, MAICSA registered office 10th Floor, Wisma Rozali No. 4, Persiaran Sukan Seksyen Shah Alam Selangor Darul Ehsan Tel : Fax : PRINCIPAL OFFICE Wisma Rozali No. 4, Persiaran Sukan Seksyen Shah Alam Selangor Darul Ehsan Tel : Fax : website : (general) : corpcom@puncakniaga.com.my (investors) : investors@puncakniaga.com.my BRANCH OFFICE Penang Office Block C, No.12, Jalan Todak 5 Pusat Bandar Seberang Jaya Perai Pulau Pinang Tel : Fax : Kuala Terengganu Office 201B, Jalan Sultan Zainal Abidin Kuala Terengganu Tel : Fax : DATE AND PLACE OF INCORPORATION 7 January 1997, Malaysia COMPANY NUMBER U 14 PUNCAK NIAGA HOLDINGS BERHAD

17 2008 ANNUAL REPORT Corporate Information (continued) AUDITORS Messrs Ernst & Young (AF 0039) TAX ADVISOR Ernst & Young Tax Consultants Sdn Bhd PRINCIPAL BANKERS CIMB Investment Bank Berhad (13491-P) RHB Bank Berhad (6171-M) AmIslamic Bank Berhad ( U) HwangDBS Investment Bank Berhad (14389-U) United Overseas Bank (Malaysia) Bhd ( K) SOLICITORS Messrs Adnan Sundra & Low Messrs Azian Haslina & Co Messrs Belden Messrs Kadir, Andri & Partners Messrs Sreenevasan Young Messrs Wong & Partners Messrs Zaid Ibrahim & Co Messrs Zul Rafique & Partners SHARE REGISTRAR (Place where all registers of securities are kept) Tenaga Koperat Sdn Bhd ( V) Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra Kuala Lumpur Tel : Fax : STOCK EXCHANGE LISTING Main Board of Bursa Malaysia Securities Berhad under the Infrastructure Project Companies Sector INDICES FTSE Bursa Malaysia Kuala Lumpur Composite Index (FTSE Bursa Malaysia KLCI) FTSE Bursa Malaysia Emas Syariah Index AUDIT COMMITTEE Chairman: Yang Berbahagia Tan Sri Dato Seri Dr Ting Chew Peh Members: Yang Berbahagia Tan Sri Dato Hari Narayanan Govindasamy Yang Amat Mulia Tengku Dato Rahimah Almarhum Sultan Mahmud Yang Berbahagia Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Secretaries: Madam Tan Bee Lian Madam Lim Yew Heang REMUNERATION COMMITTEE Chairman: Yang Berbahagia Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Members: Yang Berbahagia Tan Sri Dato Hari Narayanan Govindasamy Yang Berbahagia Tan Sri Dato Seri Dr Ting Chew Peh Mr Tan Seng Lee Secretaries: Madam Tan Bee Lian Madam Lim Yew Heang NOMINATION COMMITTEE Chairman: Yang Berbahagia Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Members: Yang Berbahagia Tan Sri Dato Hari Narayanan Govindasamy Yang Berbahagia Tan Sri Dato Seri Dr Ting Chew Peh Secretaries: Madam Tan Bee Lian Madam Lim Yew Heang COMPLIANCE, INTERNAL CONTROL AND RISK POLICY COMMITTEE (CICR) Chairman: Yang Berbahagia Tan Sri Dato Seri Dr Ting Chew Peh Members: Yang Berbahagia Dato Matlasa Hitam (Head of CICR) Tuan Haji Sonari Solor Madam Tan Bee Lian Secretary: Encik Mohammed Sofian Ismail (Head of Risk Management Section) PUNCAK NIAGA HOLDINGS BERHAD 15

18 success ANNUAL REPORT 2008 PNHB FACT SHEET Authorised Share Capital rm1,300,000, Paid-Up Share Capital rm411,142, (comprising 411,142,895 ordinary shares of RM1.00 each) Number of RUN Issued 546,875,000 RUN Coupon Rates RUN Maturity Date 18 November 2016 RUN Holders Put Option Date 20 November 2011 RUN Redemption Dates ( ) 2.5% per annum for the first 10 years and 3.5% per annum for the remaining 5 years First (1st) Mandatory Partial Redemption - 20 November 2007 (completed) Second (2nd) Mandatory Partial Redemption - 20 November 2008 (completed) Third (3rd) Mandatory Partial Redemption - 20 November 2009 Fourth (4th) Mandatory Partial Redemption - 20 November 2010 Fifth (5th) Mandatory Partial Redemption - 20 November 2011 PNSB Fact Sheet Number of PNSB s Water Treatment Plants 29 Number of Water Treatment Plants with ISO Certifications 20 syabas Fact Sheet Number of SYABAS Consumer Accounts Maintenance of water pipes million 23,500 km Number of service reservoirs, elevated water tanks 1,226 and suction tanks Number of pumping stations 444 group manpower as at 27 april 2009 No. of Gender Race Category Personnel Male Female Malay Chinese Indian Others Management Executive Non-Executive 3,137 2, , Total 4,115 3,095 1,020 3, PUNCAK NIAGA HOLDINGS BERHAD

19 2008 ANNUAL REPORT List of Corporate Memberships Fact Sheet (continued) 1. Malaysian Water Association (MWA) Member since Malaysia South-South Association (MASSA) Member since Federation of Public Listed Companies (FPLC) Member since Malaysian Employers Federation (MEF) Member since Malaysian Industry-Government Group for High Technology (MIGHT) Member since Malaysian-German Chamber of Commerce and Industry (MGCC) Member since National Institute of Occupational Safety and Health (NIOSH) Member since American Water Works Association (AWWA) Member since Malaysian-French Chamber of Commerce and Industry (MFCCI) Member since Malaysia-Russia Business Council Member since British Malaysian Chamber of Commerce (BMCC) Member since Malaysia-Japan Economic Association (MAJECA) Member since Commonwealth Partnership for Technology Management (CPTM) Member since Institute of Marketing Malaysia (IMM) Member since South East Asian Water Utilities Network (SEAWUN) Member since Malaysian Islamic Chamber of Commerce (MICC) Member since Singapore Water Association Member since Malaysian Investors Relations Association (MIRA) Member since Water Association of Selangor, Kuala Lumpur and Putrajaya (SWAn) Member since 2008 Group Manpower analysis Non-Executive 76.2% Breakdown by Category Breakdown by Gender Male 82.4% 12% 5.6% Non-Executive Executive 57.5% Female 37% 5.5% Management Breakdown by Race Malay Chinese Management 5.6% Executive 18.2% total training Organised in year 2008 Total: % 18.1% 2.6% 7.7% 76.8% Indian 89.7% 22.7% 42.9% 34.4% 3.8% 42.3% Others 53.9% Management Executive Non-Executive 1.8% 48.1% 16.8% 33.3% In-House Personal & Leadership Programme 9 In-House Supplementary Knowledge Programme 83 In-House Functional/ Knowledge Programme 238 External Courses (Local/Overseas) 165 No. of staff trained in year 2008 by Category Total Staff Trained: 3,117 Directors & Management % 20.1% 74.6% Executive 626 Non-Executive 2,325 PUNCAK NIAGA HOLDINGS BERHAD 17

20 SUCCESS ANNUAL REPORT 2008 CORPORATE ACHIEVEMENTS ACCA Malaysia Environmental and Social Reporting Awards (MESRA) 2007 * PNHB was shortlisted under the Social Reporting Category on 22 May national council for occupational safety and health malaysia (NCOSH) Awards 2007 Gold Award for the Water Sector awarded to Wangsa Maju WTP on 9 July StarBiz-ICR Malaysia Corporate Responsibility Awards 2008 for the Community Category (Finalist) awarded to pnhb on 22 August Malaysian society for occupational safety & health (MSosh) ANNUAL osh PERFORMANCE awards 2007 Gold (Class II) awarded to Sungai Langat WTP, Sungai Batu wtp and Bukit Nanas wtp on 25 August Quality Management system iso 9001:2000 Certification received on 17 November health and safety management system bs ohsas 18001:2007 Certification received on 15 December 2008 environmental Management system iso 14001:2004 Certification received on 15 December Malaysian Business Ethics Excellence Award 2008 under the Large Company Category awarded to syabas on 11 November NACRA 2008 Industry Excellence Award for Main Board Construction & Infrastucture Project Companies Category awarded to pnhb on 19 November integrated management system (ims) certification for the Provision of Construction Services for Building, Civil Engineering Works, Mechanical and Electrical Engineering Works, Specialising in Water Related Infrastructure awarded to PNSB Certified by urs Certification (m) Sdn Bhd (urs) and accredited under United Kingdom Accredited Service (ukas) 8 Malaysia HR Awards HR EXCELLENce CATEGORY (BRONZE AWARD) awarded to SYABAS on 25 March 2009 * now known as ACCA Malaysia Sustainability Reporting Awards (MaSRA) 18 PUNCAK NIAGA HOLDINGS BERHAD

21 2008 ANNUAL REPORT our role in the water supply system Regulatory Authorities Policy, Planning, Enforcement and Surveillance by Government Agencies Selangor Water Management Authority (luas) Department of Environment (doe) Department of Irrigation and Drainage Malaysia (did) Manages river basin upstream beginning 3 nautical miles from the sea Oversees environment issues concerning rivers Flood control and river management Rivers Dams Operators Dam Operators in Selangor Puncak Niaga (M) Sdn Bhd (PNSB) Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) Konsortium ABASS Sdn Bhd Schematic diagram of water treatment system raw water pump Band screen grit Chamber National Water Services Commission (span) modified liquid alum aerator mixing channel intake filtration tank filtration flocculation channel gallery sedimentation tank to river / sludge lagoons chlorine sodium silicoflouride hydrated lime clear water tank treated water pump balancing reservoir bulk meters WTP Operators in Selangor Puncak Niaga (M) Sdn Bhd (PNSB) Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) Konsortium ABASS Sdn Bhd reservoir water tower booster station service reservoir Water Supply Distributor for Selangor, Kuala Lumpur and Putrajaya Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS) Water Meter (Condominium/ Flat) Water Meter (Residential Home) Water Meter (Industrial/ Factory) Water Meter (Government/ Institutional) Water Meter (Office) Water Meter (Shopping Centre) Consumers PUNCAK NIAGA HOLDINGS BERHAD 19

22 success ANNUAL REPORT 2008 CORPORATE STRUCTURE INVESTMENT HOLDING 100% PUNCAK RESEARCH CENTRE SDN BHD research and 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 (M) SDN BHD operation, maintenance, management, construction, rehabilitation and refurbishment of water treatment facilities. 100% IDEAL WATER RESOURCES SDN BHD ceased operation. 100% UNGGUL RAYA (M) SDN BHD ceased operation. 70% SYARIKAT BEKALAN AIR SELANGOR SDN BHD supply and distribution of treated water within Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. 100% PUNCAK OIL & GAS SDN BHD exploration for the production of oil and gas and other materials and the provision of offshore and onshore engineering works. 40% Oasis Water Resources Sdn Bhd dormant. 50% Purnama persada Sdn Bhd dormant. Associate Company Associate Company 100% Xinnuo Water (Binzhou) Co. Ltd treatment of wastewater and related services. 100% PERBADANAN URUS AIR SELANGOR BERHAD ceased operation. 80% Sino Water Pte Ltd investment in water and wastewater projects in China. 83% luwei (pingdingshan) water Co. Ltd treatment and distribution of water and related services. 100% Sino Water Environmental consultancy (shanghai) Co. Ltd consultancy services for water and wastewater projects. 20 PUNCAK NIAGA HOLDINGS BERHAD

23 2008 ANNUAL REPORT ORGANISATION STRUCTURE - PNSB BOARD OF DIRECTORS audit committee EXECUTIVE CHAIRMAN YBhg Tan Sri Rozali Ismail EXECUTIVE CHAIRMAN S OFFICE Senior General Manager Mr Ramalingam K R Arumugam Senior General Manager Encik Zon Abd Hamid General Manager Tuan Syed Aminuddin Syed Zakaria MANAGING DIRECTOR YBhg Dato Matlasa Hitam SECRETARIAL department Senior General Manager Madam Tan Bee Lian General Manager Madam Lim Yew Heang BUSINESS DEVELOPMENT department General Manager Ir Ahmad Marzuki Hashim INTERNAL AUDIT department Acting Head (Senior Manager) Encik Mohammed Sofian Ismail CONTRACT & PROCUREMENT department Senior Manager Encik Mohd Azmi Jusoh CHIEF OPERATING OFFICER YBhg Dato Syed Danial Syed Ariffin chief operating officer s office General Manager Ir Dr Teoh Seng Giap CORPORATE AFFAIRS DIVISION Executive Director Tuan Haji Nasir Khan Illadad Khan FINANCE DIVISION Executive Director Mr Tan Seng Lee HUMAN RESOURCES & ADMINISTRATION DIVISION (HRAD) Executive Director YBhg Datuk Mohd Yunus Mohd Amin OPERATION I DIVISION Executive Director Vacant OPERATION II DIVISION Executive Director Vacant LEGAl department General Manager Vacant CORPORATE communications department General Manager Puan Shuhainie Shamsudin STRATEGIC RESOURCE CENTRE General Manager Dr Abdul Rahim Awang Kechik FINANCE & ACCOUNTS department General Manager Vacant COMPENSATION & BENEFITS section Assistant General Manager Encik Nik Azmi Nik Yaacob ACCOUNTS section Senior Manager Vacant HRAD 2 General Manager Encik Saadon Kardi PROTECTIVE SERVICES department Manager Encik Abdul Latif Othman Food & Beverage department Manager Encik Rosdi Abdul Rahman PEKA Assistant Manager Puan Zelly Asma Hassan HRAD 1 General Manager Encik Azhari Abd Rahman HUMAN RESOURCES MANAGEMENT department Manager Encik Muhamad Noor Md Darus ADMINISTRATION department Manager Puan Didy Narisa Ab Rahim INFORMATION TECHNOLOGY department Assistant Manager Encik Mat Suhairi Darin property management department Senior Manager Vacant OPERATION OF WTPS department Assistant General Manager Encik Azhani Sukimi PLANT IMPROVEMENT & MAINTENANCE SECTION Senior General Manager Vacant SSP2 WTP Plant Manager Encik Zaini Zainal WANGSA MAJU WTP Assistant Manager Encik Mohd Hafiz Md Yunos HEALTH, SAFETY & QUALITY MANAGEMENT department Senior Manager Tuan Haji Kaharudin Mohd Ali WATER RESOURCES & ENVIRONMENTAL SURVEILLANCE department General Manager Puan Roowina Merican A Rahim Merican MAJOR PROJECT & UPGRADING PROJECT department General Manager Ir Tan Hui Kuan SABAH PROJECT General Manager Mr Seng Pay (As at 27 April 2009) PUNCAK NIAGA HOLDINGS BERHAD 21

24 success ANNUAL REPORT 2008 ORGANISATION STRUCTURE - SYABAS EXECUTIVE CHAIRMAN (EC) YBhg Tan Sri Rozali Ismail chief executive officer YBhg Dato Ruslan Hassan executive DIRECTOR Encik Othman Ismail GENERAL MANAGER Encik Othman Omar AUDIT DIVISION General Manager Tuan Haji Sonari Solor CORPORATE COMMUNICATIONS & CUSTOMER SERVICE Executive Director Vacant FINANCE Executive Director Madam Thein Kwee Sim HUMAN RESOURCE & ADMINISTRATION Executive Director Tuan Haji Zainuddin Othman Ict, Legal & contract Executive Director Vacant Strategic resource Executive Director Ir V Subramaniam CORPORATE COMMUNICATIONS & PUBLIC AFFAIRS DIVISION General Manager Encik Abdul Halem Mat Som 22 CORPORATE COMMUNICATIONS DEPARTMENT Senior Manager Cik Shahrul Bariah Mohd Rejab Public Affairs & Community Service Department Public Affairs Manager Puan Balqesh Abdullah EVENT DEPARTMENT Event Management Manager Encik Abdul Raof Ahmad MEDIA RELATION DEPARTMENT Manager Cik Hashimah Che Mat Din CUSTOMER SERVICE DIVISION General Manager Puan Adelina Iskandar PUSPEL CALL CENTRE DEPARTMENT Senior Manager Tuan Haji Mohd Sufian Sahran ICU DEPARTMENT Manager Encik Abdul Manaf Ayoub YAKIN DEPARTMENT Manager Encik Hazamuddin Hashim COUNTER SERVICE DEPARTMENT Senior Executive Encik Syahruladha Nurlis FINANCE & ACCOUNTS DIVISION General Manager Madam Chong Poh Leng TREASURY & BANKING DEPARTMENT Senior Manager Encik Shamsul M Isa ACCOUNTS & FINANCIAL REPORTING DEPARTMENT Senior Manager Mr Cheah Koh Leong CONTRACT, ASSET MANAGEMENT & PAYable DEPARTMENT PUNCAK NIAGA HOLDINGS BERHAD BILLING & RECOVERY DIVISION General Manager Vacant RECOVERY DEPARTMENT Manager Mr Vasan a/l Ramachandram System & Finance development DEPARTMENT Manager Vacant billing DEPARTMENT Manager Encik Asararuddin Abd Mutalib Special Assistant to Executive director, human resource & administration Manager Encik Arash Mohd Zin HUMAN RESOURCE & ADMINISTRATION DIVISION General Manager Vacant RECRUITMENT DEPARTMENT Manager Puan Noor Fadilla M Samsi INDUSTRIAL RELATION DEPARTMENT Manager Puan Faridatulzakiah Mohd Bakhry TRAINING DEPARTMENT Manager Puan Yasmin Hood PERFORMANCE MANAGEMENT & CAREER DEVELOPMENT DEPARTMENT Manager Puan Khamsiah Mohd Saad COMPENSATIONS & BENEFITS/ EMPLOYEE RELATIONS DEPARTMENT Manager Puan Aida Yuhana Zainul Ariff HEALTH SAFETY & ENVIRONMENT DEPARTMENT Manager Encik Taufik Afendy Othman Senior Manager Encik Norazmani Ahmad GENERAL ADMINISTRATION DEPARTMENT Manager Encik Abd Rahman Bakar ASSET & OFFICE MANAGEMENT DEPARTMENT Manager Encik Damuri Dollah SPORTS & RECREATIONAL DEPARTMENT Assistant Manager Encik As ad Mohd Sidek TRANSPORT DEPARTMENT Assistant Manager Encik M Taran Daniel Abdullah STORE DEPARTMENT Assistant Manager Encik Norzaini M Yatim INFORMATION & COMMUNICATION TECHNOLOGY DIVISION Senior General Manager Tuan Haji Mohd Suhaimi Rafie NETWORK OPERATION CENTRE DEPARTMENT Manager Encik Mohd Shafie Mohd Taib BUSINESS APPlication SUPPORT & ADMINISTRATION DEPARTMENT Manager Puan Munaliza Maseran PROGRAMME PLANNING & APPlication DEVELOPment DEPARTMENT Manager Encik Hamidun Jaafar SECURITY division Assistant General Manager Encik Zainal Rashid Adnan SECURITY OPERATIONAL section Assistant Manager Encik Abd Aziz Taip ADMINISTRATION UNIT Executive Encik Ismail Samek LEGAL & ENFORCEMENT DIVISION General Manager Puan Nik Aliena Salwanee Nik Mohamed LITIGATION DEPARTMENT Senior Manager Mr Vignesweran a/l Thambirajah Corporate ADVISORY & Compliance department Manager Puan Siti Farah Husna enforcement DEPARTMENT Manager Mr Vishnu Kumar a/l Visvanathan regulatory coordination department Manager Vacant research & development department Manager Vacant Library/archives department Executive Vacant Data and resources collation storage Executive Vacant CONTRACT & PROCUREMENT DIVISION General Manager Ir Nasir Ismail PRE TENDER & PROCUREMENT DEPARTMENT Manager Vacant POST TENDER & GENERAL ADMINISTRATION DEPARTMENT Senior Manager Encik Wan Abdul Aziz Wan Muda POST TENDER & contract MONITORING DEPARTMENT Manager Vacant

25 2008 ANNUAL REPORT ORGANISATION STRUCTURE SECRETARIAL DEPARTMENT Manager Madam Lau Pueh Geok DISTRICT DIVISION Senior General Manager Encik Ismail Rusmin Chief operating Officer (COO) Executive Director YBhg Dato Ir Lee Miang Koi BUMIPUTERA PARTICIPATION & DEVELOPMENT DEPARTMENT Special Assistant to Executive Chairman/ Senior General Manager PPUB Encik Mohamad Isa Mohd Yassin DEVELOPMENT DIVISION General Manager Mr Koh Eng Seng Operation & MAINTENANCE Senior General Manager Encik Muhamad Darif Idris project Executive Director Encik Sanusi Sulieman MECHANICAL/ ELECTRICAL DEPARTMENT Senior Manager Encik Mohd Yusri Abu Samah DISTRICT MONITORING DEPARTMENT Assistant Manager Encik Amri Hamdan Plumber monitoring DEPARTMENT Supervisor Encik Sulaiman Samat PROJECT MANAGEMENT DEPARTMENT Manager Encik Hasnol Ezam Effendy Hamzah MIGRATION DEPARTMENT Manager Encik Mohd Azmi Md Nasir TECHNICAL DEPARTMENT Manager Encik Wan Amzari Abdul Halim enforcement DEPARTMENT Assistant General Manager Encik Yusof Awang Dollah Manager Encik Abd Hafidz Mohd Tahet NORTHERN ZONE DEPARTMENT Senior Manager Cik Maimunah Musa central ZONE DEPARTMENT Manager Ir Pua Eng Teik southern ZONE DEPARTMENT Manager Puan Rosmizah Ahmad OPERATION & MAINTENANCE Department General Manager Encik Mohd Yaman Mohd Zin PRODUCTION DEPARTMENT Manager Vacant BULK TRANSFER & TRANSMISSION SYSTEM DEPARTMENT Manager Vacant WATER QUALITY department Senior Manager Encik Mokhtar Atan TECHNICAL & ENGINEERING DEPARTMENT Manager Encik Roskhamdi Kamaluddin WATER QUALITY & CONSUMER COMPLAINT DEPARTMENT Manager Encik Abd Latif Kamarudin GIS, Asset,scada & Telemetry DIVISION General Manager Vacant senior manager Encik Hairuddin Munip MAPPING, GIS DEPARTMENT Manager Encik Mohd Sapran Hosnan Asset Management System Assistant Manager Encik Roslan Osman scada department Manager Encik Wan Burhanuddin Wan Ismail Telemetry department Manager Mr Ragbir Singh a/l Harbans Singh TECHNICAL SERVICES DIVISION Assistant General Manager Ir Hussain Salikin Planning & Design DEPARTMENT Planning unit Manager Ir Rohizan M Asmoni design unit Senior Manager Ir You Ho Hu Hydraulic Modeling department Senior Manager Ir Wan M Jaafar Wan Ahmad Nasiry NORTH ZONE 1. Kuala Selangor (Category C) Senior Manager Encik Abdul Halim Ishak 2. Sabak Bernam (Category C) Assistant General Manager Encik Mohd Yunus Othman 3. Hulu Selangor (Category C) Assistant General Manager Encik Abdul Latip Mustafa 4. Gombak (Category A) General Manager Encik Yusof Saroji SECRETARy OF WORK (Sow) (Acting) Cik Sharifah Fairus Syed Jaafar Manager I Encik Anwar Ahmadi Mahmud Manager II Encik Ahmad Pauzi Abdullah Sow (Acting) Encik Syamsul Kamal Tajudin Manager I Encik Mohd Rosli Tun Manager II Vacant Sow (Manager) Encik Mat Saman Mat Soom Manager I Encik Mohd Paizal Baharudin Manager II Encik Mohd Asri Hassan Sow (Acting) Encik Yusran Yusof Manager I (Senior Manager) Encik Hamdan Ahmad Manager II Encik Wan Ediwan Wan Mohamad Manager III Puan Suhaila Abd Rahman central ZONE 1. Kuala lumpur (Category A) General Manager Cik Hayati Ab Wahab 2. Petaling (Category A) Senior General Manager Encik Abdul Rashid Abd Satar Sow Encik Abd Shukor Ismail Manager I (Senior Manager) Encik Mohd Azmi Jamaluddin Manager II (Senior Manager) Encik Surani Naim Manager III (Senior Manager) Puan Roslina Ab Lazid south ZONE 1. HULU LANGAT (Category B) General Manager Encik Ariff Ibrahim Sow (Acting) Encik Ezrul Azzim Wahid Manager I Ir Ammar M Noor Manager II Vacant Manager III Encik Ahmad Rosdan Jamlus (E1) PROJECT MANAGEMENT DIVISION General Manager Vacant slope & other specific projects Senior Manager Encik Muhamad Zuki Mat Zin CONTRACT ADMINISTRATION DIVISION Senior Manager Puan Ramnah M Ramli NRW contract department Senior Executive Encik Azhar Ayob NON REVENUE WATER (NRW) DIVISION General Manager Ir Albert Loh Thiam Hock Sow (SM) Encik Kamarul Bahrain Ahmad 2. Kuala Langat Sow (Acting) (Category C) Encik Khairul Anuwar Ismail Distribution other works Senior Manager-Administration & System contract Customer Services Senior Manager Manager I Upgrading department Vacant Encik Ariff Saring Vacant Senior Manager Executive Administration & Finance Manager Manager II Encik Musa Omar Puan Norsazawati Vacant Encik Abu Zarin Abu Bakar (E1) Mohd Azha Customer Services Manager Sow Pipe Replacement Vacant 3. SEPANG Puan Andik (Category C) (Assistant Manager) Senior Manager Development & Projects Manager Nurliana Bachuk Encik Ahmad Fuad Zainudin Encik Shahrom Hashim Vacant Senior Manager North Zone (Senior Manager) (Acting) Manager I Encik Hussain Rusmin Encik Mohd Indra Encik Abdul Halim Othman Arshad Senior Manager I Manager II Encik Mohamad Zahir Vacant Physical commercial special Mohamad Hassan 4. Klang Sow (Manager) loss loss projects Manager II (Category A) reduction reduction Tg Mohd Safari Tg Ahmad General Manager Encik Mohd Asgha Putra General Manager Senior Manager Manager M Ghazali Ir Albert Loh Manager I Encik Ahmad Vacant Encik Mohamad Thiam Hock South Zone (Senior Manager ) Vacant Suhaidin Ismail Nasir Ramli Mr Kelvin Siew Weng Hoe Manager II Manager I Vacant Vacant Manager III Manager II Vacant Vacant PUNCAK NIAGA HOLDINGS BERHAD 23

26

27 Committed to the course Our people are the key to successfully meeting the challenges posed by growth and expansion. We stand united in our march towards attaining our Vision to be the Leading and Dynamic Integrated Water Services Company. Through nurturing and empowering our human capital, we are proactive and embrace the our people vibrant future ahead of us.

28 responsibility ANNUAL REPORT 2008 Board of Directors Profile YBhg Tan Sri Rozali Ismail Aged 52, Malaysian Executive Chairman of PNHB Group 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 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 Together with a few pioneer bank staff, he conceptualised the first 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. 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 fields, 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 on 8 July PUNCAK NIAGA HOLDINGS BERHAD

29 2008 ANNUAL REPORT Board of Directors Profile (continued) 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 Individual Award Category, an award at the Asian level, by the Regional Institute of Environmental Technology, on 26 March 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 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 Officer of a large listed company. YBhg Tan Sri Rozali is a member of various influential 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, Commonwealth Partnership for Technology Management, FELDA Community Social Development Committee, Yayasan Budi Penyayang Malaysia and a Trustee of Perdana Leadership Foundation, Yayasan WAQAF Malaysia (YWM) (January 2008-December 2009) 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 Universiti Putra Malaysia (July 2007-June 2010), Governor for Malaysia of the Asia Pacific Marketing Federation (APMF) Foundation, Advisor of Gabungan Persatuan Usahawan Melayu Selangor/Wilayah Persekutuan (GAPUMS), Advisor of Gabungan Pelajar Melayu Semenanjung (GPMS) ( Session), Committee Member of Gagasan Badan Ekonomi Melayu (GABEM) Negeri Selangor and Life Member of Gabungan Ikhtisas Dan Usahawan Bumiputra Anak Selangor, Selangor (GIBS). In November 2006, YBhg Tan Sri Rozali set up the Water Association of Selangor, Kuala Lumpur and Putrajaya (SWAn), a non-profit 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. He is the President of SWAn for the 2007/2009 Session. YBhg Tan Sri Rozali is the past Deputy President of the Malaysian Water Association (MWA) (2003/2005 Session), former Board Member of Universiti Utara Malaysia ( ) and past Advisor of the Business and Accounting Faculty Council, University of Malaya (21 May 2004 to 20 April 2007). Besides PNHB, YBhg Tan Sri Rozali is also the Executive Chairman and major shareholder of another listed company, WWE Holdings Bhd, a wastewater and environmental engineering services company and major shareholder of TRIplc Berhad, a listed property company. YBhg Tan Sri Rozali attended 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 27

30 responsibility ANNUAL REPORT 2008 Board of Directors Profile (continued) YBhg Dato Matlasa Hitam aged 69, Malaysian Managing Director of PNHB and PNSB YBhg Dato Matlasa Hitam joined PNSB on 1 July 2003 as the Executive Director, Human Resources & Administration Division and was appointed as the Managing Director of PNHB and PNSB on 1 October YBhg Dato Matlasa is the Head of PNHB s Compliance, Internal Control and Risk Policy Committee (CICR) and sits on the Board of several private companies. He is the Chairman of SYABAS Audit Committee and a member of the Water Association of Selangor, Kuala Lumpur and Putrajaya (SWAn), a non-profit 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 and to promote and advance interaction and understanding with members of the general public. He is also a member of the Malaysian Institute of Directors and the Malaysian Institute of Management. YBhg Dato Matlasa holds a Bachelor s Degree in Business Administration (Hons) from the Monmouth College, United States of America and a Master s Degree in Business Administration (Finance) from the Central Michigan University, United States of America. He has more than 32 years of senior management experience covering areas related to manufacturing, marketing, human resources, finance as well as contract and project management. YBhg Dato Matlasa served as the Managing Director/Chief Executive Officer and Board member of both Petronas Methanol (L) Sdn Bhd and Petronas Gas Supply (L) Sdn Bhd from January 1992 to May Prior to joining PNSB, he was the Executive Vice Chairman of WWE Holdings Bhd. YBhg Dato Matlasa attended 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD

31 2008 ANNUAL REPORT Board of Directors Profile (continued) YBhg Dato Ruslan Hassan aged 53, Malaysian Non-Independent Non-Executive Director of PNhb and Chief Executive Officer of SyaBAS YBhg Dato Ruslan Hassan joined PNSB on 1 November 1995 as the Executive Director of Corporate and Legal Affairs Division. When 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 privatisation 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 first Chief Executive Officer (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 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 the 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 firm. 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 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 29

32 responsibility ANNUAL REPORT 2008 Board of Directors Profile (continued) YBhg Dato Ir Lee Miang Koi aged 55, Malaysian Non-Independent Non-Executive Director of PNHB and Chief Operating Officer of SYABAS YBhg Dato Ir Lee Miang Koi joined PNSB in 1995 as the General Manager of Business Development. He was subsequently appointed as a Director to the Boards of PNSB and PNHB on 2 February 1999 and 1 September 1999 respectively. On 1 January 2005, he was appointed as the Chief Operating Officer of 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 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 31 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 Waterworks Department in Malaysia, specialising in the field 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. YBhg Dato Ir Lee attended 5 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD

33 2008 ANNUAL REPORT Board of Directors Profile (continued) YBhg Dato Syed Danial Syed Ariffin aged 51, Malaysian Chief Operating Officer of PNHB and PNSB and a Director of SYABAS YBhg Dato Syed Danial Syed Ariffin 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 the PNHB Group since December He began his career with 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 On 16 November 2007, YBhg Dato Syed Danial was appointed as the Chief Operating Officer. He is also a Director of SYABAS since 3 September YBhg Dato Syed Danial previously worked with the Pahang Public Works Department for 10 years, holding positions from Project Engineer ( ) to District Engineer for JKR Cameron Highlands ( ) and the Selangor Water Works Department between 1991 to 1995, where he was the Senior Project Engineer overseeing the construction of the Sungai 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 and 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-profit 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. YBhg Dato Syed Danial attended 5 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 31

34 responsibility ANNUAL REPORT 2008 Board of Directors Profile (continued) YBhg Tan Sri Dato Hari Narayanan Govindasamy aged 59, Malaysian Independent Non-Executive Director of PNHB YBhg Tan Sri Dato Hari Narayanan Govindasamy, a businessman, was appointed to the Board of 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 is a member of the Malaysian Institute of Directors and a Registered Professional Engineer with the Board of Engineers Malaysia. He has vast experience in the field of electrical and electronics engineering and has held key positions at Inchcape Berhad and Tamco Cutler-Hammer Sdn Bhd. He is currently the Chairman of Noblemax Resources Sdn Bhd, Chairman of IEV Group Sdn Bhd, Deputy Chairman of Emrail Sdn Bhd and Deputy Chairman of Leighton Contractors (M) Sdn Bhd. YBhg Tan Sri Dato Hari also sits on the Boards of Tenaga Nasional Berhad and SP Setia Berhad, both public listed companies. He also holds directorships in Lembaga Lebuhraya Malaysia (The Malaysian Highway Authority), the Asian Institute of Medicine, Science & Technology and several other private limited companies. YBhg Tan Sri Dato Hari attended 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD

35 2008 ANNUAL REPORT Board of Directors Profile (continued) YBhg Tan Sri Dato Seri Dr Ting Chew Peh aged 66, Malaysian Independent Non-Executive Director of PNHB YBhg Tan Sri Dato Seri Dr Ting Chew Peh joined 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 He also holds a Doctorate in Philosophy, which he obtained from the University of Warwick in 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 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 ( ), Deputy Minister in the Prime Minister s Department ( ), Minister of Housing and Local Government ( ) and Secretary-General of the Malaysian Chinese Association (MCA) ( ). He also sits on the Boards of Pan Malaysia Capital Berhad Group, Hua Yang Bhd, Pan Malaysia Corporation Berhad, Johan Holdings Berhad, Complete Logistic Services Berhad and also serves as a director of several private companies. YBhg Tan Sri Dato Seri Dr Ting attended 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 33

36 responsibility ANNUAL REPORT 2008 Board of Directors Profile (continued) Mr Tan Seng Lee aged 50, Malaysian Executive Director, Finance Division of PNHB and PNSB Mr Tan Seng Lee was appointed to the Boards of PNHB and PNSB on 1 September 2005 and Sino Water Pte Ltd on 5 June He is a Member of PNHB s Remuneration Committee and SYABAS Audit Committee and was a past Member of PNHB s Audit Committee for the period from 1 September 2005 to 26 February Mr Tan is a Chartered Accountant and Certified Public Accountant and a Member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants and the Institute of Bankers Malaysia. He holds a Master s Degree in Business Administration from the Charles Sturt University, Australia. Mr Tan has over 28 years of working experience in corporate finance, mergers and acquisition, corporate restructuring, accounting, auditing and banking via his involvement with companies operating in Europe, Australia, China and Indonesia. Mr Tan began his career as an auditor with a professional accountancy firm, Messrs HRM-Arthur Andersen ( ). In 1986, he joined Bumiputra-Commerce Finance Berhad as Manager of Finance and Treasury and was subsequently promoted to Senior Manager and then to Deputy General Manager of Financial Services and Credit Control. Prior to joining the PNHB Group, Mr Tan was the Chief Financial Officer of PROTON Holdings Berhad from 1999 to Mr Tan attended 6 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD

37 2008 ANNUAL REPORT Board of Directors Profile (continued) YAM Tengku Dato Rahimah Almarhum Sultan Mahmud aged 43, Malaysian Non-Independent Non-Executive Director of PNHB YAM Tengku Dato Rahimah Almarhum Sultan Mahmud was appointed to the Board of PNHB on 1 August 2006 as an Independent Non-Executive Director. On 1 January 2007, she was re-designated as a 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 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 at the Hongkong Bank in London, England. She then joined Esso Malaysia Berhad, holding positions from Control Advisor, Controllers Department to Senior Accountant, Menara Esso Project Team. As Control Advisor, YAM Tengku Dato Rahimah authored the booklet entitled Doing Business with Esso, which was distributed internally and externally to all Esso s contractors. She also wrote speeches, one of which was for the Finance Director of Esso Malaysia Berhad, entitled Doing Business In Malaysia Towards Vision 2020 that was published in the MIA magazine. YAM Tengku Dato Rahimah was the Business Development Manager/Director of the DJAJANTI Group, an Indonesian-based company dealing in agriculture and deep sea fishing. She was responsible for seeking business opportunities in Malaysia, Indonesia and Papua New Guinea as well as liaising with government bodies and appropriate business partners. YAM Tengku Dato Rahimah is currently the Executive Director of TRAG Holdings Sdn Bhd which is a holding company. She also sits on the Board 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 is also the Chairman of Loh & Loh Corporation Bhd. YAM Tengku Dato Rahimah attended 5 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 35

38 responsibility ANNUAL REPORT 2008 Board of Directors Profile (continued) Ybhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Aged 60, Malaysian Independent Non-Executive Director Of PNHB YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak was appointed to the Board of 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 Foreign Service Course with a Certificate in Diplomacy 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). Since joining the Malaysian Diplomatic and Administrative Service in 1972, YBhg Tan Sri Dato Ahmad Fuzi 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 before assuming the post of Director General of the Institute of Diplomacy and Foreign Relations, Deputy Secretary General I (Political) and subsequently, Secretary General of the Ministry of Foreign Affairs. As Secretary General, he played a prominent role in organising the Non Aligned Movement (NAM) Summit (2003), the Organisation of the Islamic Conference (OIC) Summit (2003) and the ASEAN Summit and Related Summits including the East Asia Summit in Kuala Lumpur (2005). He also led Malaysia s Delegation to the ASEAN Senior Officials Meeting (SOM) and the Senior Officials Meeting of the bilateral Joint Commissions between Malaysia and the relevant countries. YBhg Tan Sri Dato Ahmad Fuzi had previously served on the Boards of BERNAMA, PROTON, the Malaysian-Thailand Joint Authority (MTJA) and the Maritime Institute of Malaysia (MIMA). He was also on the panel of the Board of Advisors of the Institute of Diplomacy and Foreign Relations (IDFR) and acted as Malaysia s Representative to the ASEAN High Level Task Force (HLTF) on the Drafting of the ASEAN Charter. He was a member of the Malaysian Education Promotion Council, Board of Trustee of World Islamic Economic Forum (WIEF), International Advisory Panel (lap) of WIEF, Chairman of AmanahRaya Capital Group Sdn Bhd and Board of Trustees of MERCY, Malaysia. YBhg Tan Sri Dato Ahmad Fuzi is currently the Ambassador at-large at the Ministry of Foreign Affairs, Malaysia. He is Malaysia s Representative to the High Level Panel (HLP) on the Drafting of the Terms of Reference of the ASEAN Human Rights Body and the Secretary General of WIEF. He is also the Chairman of AI-Nibras Limited, a Member of the Board of Trustees of F3 Strategies Berhad, an Independent Non-Executive Director of LCL Corporation Berhad, Group Corporate Advisor, Weida (M) Bhd, the Advisory Board, Asia Pacific Entrepreneurship Award (APEA), the Panel of Distinguished Fellows, Institute of Diplomacy and Foreign Relations, the Advisory Council of the Alliance Foundation, a Distinguished Institute of Strategic and International Studies (ISIS) Fellow, an Advisor of High School Bukit Mertajam Alumni Malaysia, President of the Association of Former Malaysian Ambassadors (AFMA) and Malaysian Member Committee of the Council for Security Cooperation in the Asia Pacific (CSCAP Malaysia). Since YBhg Tan Sri Dato Ahmad Fuzi was appointed to the Board of PNHB on 6 October 2008, he attended 1 out of the 6 Board Meetings of PNHB held in the financial year ended 31 December NOTE: None of the Directors has any family relationship with any director and/or major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. Neither have they been convicted of any offences within the past 10 years. 36 PUNCAK NIAGA HOLDINGS BERHAD

39 2008 ANNUAL REPORT board of directors Left to right: YBhg Tan Sri Rozali Ismail Executive Chairman YBhg Dato Matlasa Hitam Managing Director YBhg Dato Ruslan Hassan Non-Independent Non-Executive Director YBhg Dato Ir Lee Miang Koi Non-Independent Non-Executive Director YBhg Dato Syed Danial Syed Ariffin Chief Operating Officer YBhg Tan Sri Dato Hari Narayanan Govindasamy Independent Non-Executive Director YBhg Tan Sri Dato Seri Dr Ting Chew Peh Independent Non-Executive Director Mr Tan Seng Lee Executive Director, Finance Division Left to right: YAM Tengku Dato Rahimah Almarhum Sultan Mahmud Non-Independent Non-Executive Director YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Independent Non-Executive Director PUNCAK NIAGA HOLDINGS BERHAD 37

40 responsibility ANNUAL REPORT 2008 Key personnel profile - pnsb tuan haji NASIR KHAN ILLADAD KHAN Aged 56, Malaysian EXECUTIVE DIRECTOR, CORPORATE AFFAIRS DIVISION Tuan Haji Nasir Khan Illadad Khan joined PNSB in February 2006 as Executive Director, Corporate Affairs Division. He holds a Bachelor s Degree in Social Science, Political Science (Hons) from Universiti Sains Malaysia and a Master s 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. Tuan Haji Nasir Khan has more than 30 years of management experience in the areas of the human resources, security, land development and finance during his attachment to the Government. Prior to joining PNSB, he was the Senior Assistant Director of the Budget Division at the Ministry of Finance, Malaysia. YBHG DATUK MOHD YUNUS MOHD AMIN Aged 61, Malaysian EXECUTIVE DIRECTOR, HUMAN RESOURCEs AND ADMINISTRATION DIVISION YBhg Datuk Mohd Yunus Mohd Amin joined PNSB on 15 November 2007, as Executive Director, Human Resources & Administration Division. He holds a Degree in Mass Communications from Universitas 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 30 years of management experience during his tenure with the Government, inclusive of 27 years of experience as a Diplomatic Service Officer. MADAM TAN BEE LIAN Aged 43, Malaysian SENIOR GENERAL MANAGER, SECRETARIAL/GROUP COMPANY SECRETARY Madam Tan Bee Lian joined PNSB as Company Secretary in November 1994 and was promoted twice before assuming her current position as Senior General Manager, Secretarial on 1 January As Group Company Secretary, Madam Tan is responsible for PNHB Group s company secretarial and regulatory compliance. She is a Fellow of the Malaysian Association of the Institute of Chartered Secretaries and Administrators (MAICSA) and has more than 21 years of working experience in company secretarial practice. She previously worked with Projek Lebuhraya Utara-Selatan Berhad (PLUS) and Metramac Corporation Sdn Bhd/Metacorp Berhad. In 2001, she won the ROC-MAICSA Company Secretary Award for the Listed Company Category. IR TAN HUI KUAN Aged 55, Malaysian GENERAL MANAGER, MAJOR PROJECT & UPGRADING PROJECT, OPERATION II DIVISION Ir Tan Hui Kuan joined PNSB in August He graduated with a Bachelor of Civil Engineering (Hons) Degree from the University of Malaya in He has 25 years of working experience in the Public Works Department Malaysia and Lembaga Air Perak in the management of production, distribution, maintenance and consumer services 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 successfully executed and completed the Chennai Water Supply Augmentation Project 1, Package III implemented by the Chennai Metropolitan Water Supply and Sewerage Board in Tamil Nadu, India. 38 PUNCAK NIAGA HOLDINGS BERHAD

41 2008 ANNUAL REPORT Key Personnel Profile - PNSB (continued) DR ABDUL RAHIM AWANG KECHIK Aged 57, Malaysian GENERAL MANAGER, STRATEGIC RESOURCE CENTRE, CORPORATE AFFAIRS DIVISION Dr Abdul Rahim Awang Kechik joined PNSB in July 2003 as General Manager and was appointed as Secretary of the Independent Employees Performance Review Committee (IEPRC) in 2004 and Chairman of the Tender and Contracts Committee in January Prior to joining PNSB, he was an Administrative and Diplomatic Officer with the Government since 1983 and has held various positions, namely in the Ministry of Finance, National Economic Action Council (NEAC), Prime Minister s Office, Ministry of International Trade and Industry (MITI), State Economic Planning Unit of the State of Negeri Sembilan, Ministry of Agriculture and the Ministry of Housing and Local Government. He holds a Doctorate of Philosophy Degree in Management, a Bachelor of Arts Degree in Education (Hons), both from Universiti Sains Malaysia. He obtained a Master of Business Administration Degree from the University of Wales College of Cardiff, United Kingdom, a Diploma in Business Administration from the University of Birmingham, United Kingdom and a Diploma in Public Management from the National Institute of Public Administration (INTAN). IR AHMAD MARZUKI HASHIM Aged 47, Malaysian GENERAL MANAGER, BUSINESS DEVELOPMENT DEPARTMENT, EXECUTIVE CHAIRMAN S OFFICE Ir Ahmad Marzuki Hashim graduated with a Bachelor of Science Degree in Civil Engineering (Hons) from Ohio University in Athens in 1984 and a Master of Science Degree in Environmental Civil Engineering from the University of Liverpool, England in He is a civil engineer by profession and has been with PNSB since March He began his career with PNSB as a Manager of the Dam Operation Department and was subsequently promoted to the positions of Senior Manager and Assistant General Manager before assuming his current position as General Manager of the Business Development Department. Ir Ahmad Marzuki has more than 25 years experience in the water industry and has held various positions during his tenure with the Public Works Department s Waterworks Branch. PUAN ROOWINA MERICAN A RAHIM MERICAN Aged 47, Malaysian GENERAL MANAGER, WATER RESOURCES & ENVIRONMENTAL SURVEILLANCE, OPERATION I DIVISION Puan Roowina Merican A Rahim Merican joined PNSB on 22 March 1997 as a Manager in the Operation Division in charge of the Environmental Unit. She is now the General Manager of the Water Resources & Environmental Surveillance Department under Operation I Division. Puan Roowina Merican graduated with a Bachelor of Science Degree in Civil Engineering (Hons) from the University of Surrey in 1984 and subsequently obtained her Master of Engineering Degree in Water Resources Development (Hons) in She began her career in 1985 as a Civil Engineer with the Public Works Department and held various positions during her tenure until ENCIK azhani sukimi Aged 42, Malaysian assistant GENERAL MANAGER, OPERATION OF WTPS, OPERATION I DIVISION Encik Azhani Sukimi joined PNSB in May 1998 as a Process Engineer at Sungai Selangor Phase 2 WTP. He was promoted to various managerial positions before assuming his current position as the Assistant General Manager, Operation of WTPs, Operation I Division since August Encik Azhani graduated with a Bachelor of Science Degree in Petroleum Engineering from the Colorado School of Mines, Colorado, United States of America in Encik Azhani has more than 10 years working experience in the various aspects of operations and maintenance of water treatment plants and he was also one of the pioneer engineers involved in the early operations of Sungai Selangor Phase 2 WTP in 1998 to Prior to joining PNSB, he was a Petroleum Engineer with Petronas Carigali (M) Sdn Bhd. PUNCAK NIAGA HOLDINGS BERHAD 39

42 responsibility ANNUAL REPORT 2008 Key Personnel Profile - PNSB (continued) ENCIK AZHARI ABD RAHMAN Aged 52, Malaysian GENERAL MANAGER, HUMAN RESOURCES AND ADMINISTRATION DIVISION I Encik Azhari Abd Rahman joined PNSB in November 2007 as General Manager, Human Resources & Administration Division and was re-designated to General Manager, Human Resources & Administration Division I on 18 August He was a Maybank scholar and graduated from UiTM with a Diploma in Banking Studies. He holds a Bachelor s Degree in Business Administration (Hons) majoring in Human Resource Management from Universiti Putra Malaysia. Encik Azhari has 26 years of working experience in the areas of Human Resource Management and Training in corporations involved in banking, information technology, manufacturing, media, construction and logistics. He has worked in various senior positions such as General Manager, Director and Vice President of Human Resource at several American and Japanese Multinational Corporations (MNCs) as well as local public listed companies. During his tenure as an HR practitioner, he served IBM Malaysia, EDS, Sony TV Industries and The New Straits Times Press. He also underwent intensive and extensive on the job training in the ASEAN region and the United States of America. He has conducted several overseas training stints as part of his job scope and is a certified trainer in Behavioral Interviewing Techniques from Behavioral Inc, United States of America. Prior to joining PNSB, he was the Vice President, Group Human Resource of Konsortium Logistik Berhad for 6 1 /2 years. MADAM LIM YEW HEANG Aged 42, Malaysian GENERAL MANAGER, SECRETARIAL DEPARTMENT Madam Lim Yew Heang (Jenny) joined PNSB on 1 April 2008 as General Manager, Secretarial Department. She was appointed as the Joint Company Secretary for both PNSB and PNHB on 2 May She is a Chartered Secretary, a holder of the Institute of Chartered Secretaries & Administrators (ICSA) qualification and an Associate Member of The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). She has 20 years of working experience in company secretarial practice. Prior to joining PNSB on 1 April 2008, she was a Senior Manager of Securities Services (Holdings) Sdn Bhd, a leading secretarial consultancy company for 14 years. PUAN ShUHAINIE SHAMSUDIN Aged 43, Malaysian GENERAL MANAGER, CORPORATE COMMUNICATIONS DEPARTMENT, CORPORATE AFFAIRS DIVISION Puan Shuhainie Shamsudin joined PNSB in October 2008 as the General Manager of the Corporate Communications Department in the Corporate Affairs Division. She started her career with the Holiday Inn City Centre as an Assistant Manager in Sales where she served for four years. Puan Shuhainie then assumed the position of Sales Manager at the Legend Hotel & Apartments from January 1993 to January From January 1995 to January 1999, she was appointed as the Director of Sales and Communications at the Holiday Inn. She was subsequently appointed as the Senior Manager in Marketing at the internationally renowned Sepang International Circuit Sdn Bhd for five years. She was a Senior Manager in Public Relations at Malaysia Airports Holdings Berhad before assuming her current post at PNSB. 40 PUNCAK NIAGA HOLDINGS BERHAD

43 2008 ANNUAL REPORT Key Personnel Profile - SYABAS Ir V Subramaniam aged 59, Malaysian Executive Director, strategic resources DIVISION Ir V Subramaniam is the Executive Director of Strategic Resources Division of SYABAS. He worked with Jabatan Bekalan Air Selangor (JBAS) from 1991 and continued his services with Perbadanan Urus Air Selangor Berhad (PUAS) from 2002 to He holds a Bachelor of Civil Engineering (Hons) Degree from the University of Malaya. Ir V Subramaniam has served in the Public Works Department and Water Supply Department, in various capacities for the past 35 years since graduating in He has vast experience in managing water supply and in the privatisation of water supply. Ir V Subramaniam successfully handled the 1998 Water Crisis in Selangor and Kuala Lumpur and published a complete documentation on the management of the water crisis. He has written and presented many papers on Privatisation/Corporatisation of water supply and on other related technical subjects at seminars and conferences, both locally and abroad. He has also assisted the Asian Development Bank (ADB), in his capacity as ADB s domestic consultant, in several studies on water supply in the Asian cities. 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), for his dedication and service to the state and the nation. Madam Thein Kwee Sim aged 45, Malaysian Executive Director, Finance DIVISION Madam Thein Kwee Sim holds a professional qualification from the Malaysian Institute of Certified Public Accountants (MICPA) and has been a member of MICPA and Malaysian Institute of Accountants (MIA) since Madam Thein has more than 21 years of working experience in various areas covering auditing, group accounting, corporate debt restructuring and corporate finance. Prior to joining SYABAS, Madam Thein was with the Renong Group of Companies for a total of 7 1 /2 years where she served in United Engineers (Malaysia) Berhad from 1992 to 1997, overseeing the group finance and accounting functions. From 1997 to 1999 under HBN Management Office, her role was to monitor the financial performance of the listed companies under the Renong Group in addition to the debt restructuring of several companies under the Group subsequent to the financial crisis of In early 2000, she joined Jendela Permai Sdn Bhd, a financial consultancy company prior to joining SYABAS in May Her appointment as Executive Director of Finance at SYABAS was effective from 1 April Encik othman ismail aged 51, Malaysian Executive Director, executive chairman s office Encik Othman Ismail joined PNSB in April 2004 as General Manager and was subsequently promoted to Senior General Manager, Executive Chairman s Office on 1 April He was promoted to Executive Director, Government Relations of SYABAS under the Executive Chairman s Office on 1 April He graduated from the University of Wales, United Kingdom in 1999 with a Master s Degree in Business Administration. Encik Othman has 16 years of working experience covering areas in marketing, sales and administration. Prior to joining PNSB, Encik Othman worked with Edaran Otomobil Nasional Berhad and was the Operations Director of Gold Bridge Construction and Engineering Berhad. PUNCAK NIAGA HOLDINGS BERHAD 41

44 responsibility ANNUAL REPORT 2008 Key Personnel Profile - SYABAS (continued) Encik Sanusi Sulieman aged 48, Malaysian Executive Director, Projects DIVISION Encik 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 with the Penang Water Authority. During his tenure with the Penang Water Authority, he held various positions including Project Engineer, Treatment Engineer and Distribution Engineer until In 1993, he joined a consulting engineering firm, Ranhill Bersekutu Sdn Bhd, as a Senior Engineer involved in the Johor Bahru Water Supplies Privatisation Scheme. In 1994, he joined PNSB and was appointed as the Project Manager for the RM1.3 billion Sungai Selangor Phase 2 Water Supply Scheme, which involved 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 at the company. He was then promoted to Chief Operating Officer of Ranhill Civil Sdn Bhd until In 2004, he joined as the Executive Director of WWE Holdings Sdn Bhd before joining PNSB in the same year where he was involved in the task force for the privatisation of PUAS to SYABAS. Encik Sanusi has international construction works experience as he was assigned to the SR408 million North Jeddah Branch Sewer Network Project in the Kingdom of Saudi Arabia in 2006, prior to his assignment as Executive Director (Projects) of SYABAS in August Tuan Haji Zainuddin Othman aged 49, Malaysian Executive Director, Human Resources & Administration Division Tuan Haji Zainuddin Othman joined SYABAS on 1 April 2005 as General Manager, Human Resources & Administration Division. He holds a Diploma in Public Administration from the Universiti Teknologi MARA (UiTM), a Post Graduate Diploma and a Master of Science in Human Resource Management Degree from the University of Lincolnshire and Humberside, United Kingdom. He has more than 22 years of working experience in the areas of human resources management and general office administration. He was promoted to Senior General Manager of the Human Resources & Administration Division with effect from 1 January 2007 and is currently the Executive Director, Human Resources & Administration Division of SYABAS since 1 January Tuan Haji Mohd Suhaimi Rafie aged 53, Malaysian Senior General Manager, Information & Communications Technology division Tuan Haji Mohd Suhaimi Rafie holds a Diploma and an Advanced Diploma in Civil Engineering and a Post Graduate Diploma in Systems Analysis from UiTM. He has 27 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 (JKR), holding various positions until Thereafter, he joined JBAS as a Civil Engineer and continued his service under PUAS from 2002 to He was the General Manager, Information & Communications Technology Division before he was promoted to Senior General Manager, Information & Communications Technology Division of SYABAS on 1 January TUAN Haji Muhamad Darif Haji Idris aged 54, Malaysian senior General Manager, operation & maintenance division Tuan Haji Muhamad Darif Haji Idris holds a Bachelor of Science (Engineering) (Hons) Degree from the University of Aberdeen, Scotland and an Ordinary National Diploma (Building) from the Southampton Technical College, England. He has 29 years working experience in public works and the water supply sector. He began his career as a Civil Engineer at the JKR Tampin District. He was then transferred to JBAS as a District Waterworks Engineer at the Hulu Langat District and continued his service with PUAS from 2002 to 2004 as Senior Manager, Operation Division. Prior to assuming his current position as the Senior General Manager of Operation & Maintenance Division on 1 April 2009, he was the General Manager of the Klang District and Petaling Regional Office from April 2007 to March PUNCAK NIAGA HOLDINGS BERHAD

45 2008 ANNUAL REPORT Key Personnel Profile - SYABAS (continued) encik Ismail Rusmin aged 39, Malaysian senior General Manager, District Division Encik Ismail Rusmin holds a Diploma in Business Studies from Institut Teknologi MARA and an Advanced Diploma in Business Administration from Swansea Institute of Higher Education, United Kingdom. He joined PNSB as an Operations Executive in In 2003, he was placed under SYABAS Special Project Team as a Manager during the privatisation process of water supply in the State of Selangor, and Federal Territories of Kuala Lumpur and Putrajaya. In 2006, he was promoted to Assistant General Manager to head the Operational Audit & Special Function Division. Subsequently, he was promoted to Senior General Manager, District Division to supervise the Enforcement Department, Mechanical & Electrical Department and the operational activities of 10 SYABAS District Offices around the concession areas as well as the Secretaries of Work (SOW). tuan Haji Sonari Solor aged 53, Malaysian General Manager, Internal Audit division Tuan Haji Sonari Solor joined PNSB on 10 September He is a Chartered Accountant with MIA and a Fellow Member of the Chartered Association of Certified Accountants (UK). He also holds a professional qualification from the Chartered Institute of Management Accountants (UK). Tuan Haji Sonari has more than 20 years of working experience at several public listed companies in the areas of accounting and auditing, with focus on asset development of manufacturing companies, logging and management consultancy. Prior to joining PNSB, Tuan Haji Sonari held the position of Group Division Head, Internal Audit with Land & General Berhad. Ir Nasir Ismail aged 46, Malaysian General Manager, Contract & Procurement division Ir Nasir Ismail is a member of the Board of Engineers (BEM), MWA, SWAn, IWA and is a Registered Gas Engineer with the Energy Commission at the Ministry of Energy, Green Technology and Water (formerly known as Ministry of Energy, Water and Telecommunications). He holds a Bachelor of Science in Civil Engineering Degree from the Memphis State University, Tennessee, United States of America and a Master of Science in Environmental Engineering Degree from the Shimane University, Japan in Prior to joining SYABAS, Ir Nasir was one of the task force members for the privatisation of SYABAS. He has served PNSB since 1998 as a Senior Manager, responsible for the upgrading and rehabilitation of water treatment plants under the Concession Agreement with the State Government of Selangor. He has previously worked with Majlis Perbandaran Seremban, consulting engineer firms, contractors and Gas Malaysia Sdn Bhd. Encik Abdul Halem Haji Mat Som aged 43, Malaysian General Manager, Corporate Communications and Public Affairs division Encik Abdul Halem Haji Mat Som joined PNSB in 2004 as the 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 then promoted to General Manager, CCPA effective 1 January He obtained a Diploma in Public Administration in 1987 and a Bachelor s Degree in Corporate Administration in 1998 both from UiTM and a Certificate in Manufacturing Management from the Sanno Institute of Business Administration (SIBA), Tokyo in His expertise lies in the areas of event management, production, human resource consultancy and training, administration and capital investment. PUNCAK NIAGA HOLDINGS BERHAD 43

46 responsibility ANNUAL REPORT 2008 Key Personnel Profile - SYABAS (continued) puan Adelina Iskandar aged 48, Malaysian General Manager, Customer Service division Puan Adelina Iskandar joined SYABAS on 1 August 2007 as General Manager, Customer Service Division, the Division that caters to the needs of the consumers. Puan Adelina has more than 21 years experience in public relations and training. She holds a Degree in Humanities and a Masters in Linguistics. Puan Adelina had served as Director, Corporate Communications of the Malaysian Communications and Multimedia Commission where she was responsible for all matters pertaining to the media, government and public relations. She was also involved in strategising the branding and image building of the commission. Prior to that, she was in charge of members relations and corporate communications at the Association of Chartered Certified Accountants. Puan Adelina was also in the education field for 10 years as the Director of a University Preparatory Programme with an American twinning programme here. At SYABAS, Puan Adelina is a member of the Corporate Social Responsibility (CSR) Committee, Business Ethics Committee and Sexual Harassment Committee. Madam Chong Poh Leng aged 39, Malaysian General Manager, Finance & Accounts division Madam Chong Poh Leng joined SYABAS in April 2008 as General Manager, Finance & Accounts of SYABAS. Madam Chong graduated with a Bachelor s Degree in Accountancy from the University of Malaya in She is a member of MIA, having more than 14 years of working experience in auditing, corporate finance, corporate restructuring, accounting and corporate taxation. Madam Chong previously served at the senior management level of several public listed companies dealing in property development, project management, construction and manufacturing including TRIplc Berhad. puan Nik Aliena Salwanee Nik Mohamed aged 46, Malaysian General Manager, Legal & Enforcement Division Puan Nik Aliena Salwanee Nik Mohamed is the General Manager of the Legal & Enforcement Division of SYABAS. She joined the Company on 1 August She is a barrister-at-law of the Honorable Society of Lincoln s Inn, London, England and holds a Bachelor of Laws (Hons) Degree from Middlesex University, London, England. She also holds a Master of Laws Degree from King s College, University of London. Since graduating in 1986 she has worked in both the legal practice and corporate advisory having practiced for eight years as an advocate and solicitor. She also spent nine years as the Head of the Legal and Secretarial Department and Company Secretary of Proton Holdings Berhad. mr Albert Loh Thiam Hock aged 55, Malaysian General Manager, Non-Revenue Water division Mr Albert Loh Thiam Hock joined SYABAS on 14 February 2005 as a Leak Detection Specialist and was promoted to his current position as the General Manager of the Non-Revenue Water Division. He graduated with a Bachelor of Science (Hons) Degree from the Universiti Sains Malaysia in 1978 majoring in Geophysics. Prior to working with SYABAS, he was employed by an engineering company in Melbourne to undertake water resource investigation, pipe condition assessment and leak detection services in Australia. He also worked with the Geological Survey of Malaysia from 1979 to 1981 and Malaysia Mining Corporation Bhd from 1981 to He has vast experience, both locally and overseas, in the fields of exploration & mining, oil & gas, and utility projects. 44 PUNCAK NIAGA HOLDINGS BERHAD

47 2008 ANNUAL REPORT key personnel PROFILE - sino water pte ltd Mr Tan Seng Lee Aged 50, Malaysian Chairman, Sino Water Pte Ltd Mr Tan Seng Lee was appointed to the Board of Sino Water Pte Ltd on 5 June 2008 and as the Chairman of Sino Water Pte Ltd on 26 June He is concurrently holding the position of Executive Director, Finance Division for both PNHB and PNSB. Mr Tan is a Chartered Accountant and Certified Public Accountant by profession and a Member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants and the Institute of Bankers Malaysia. He also holds a Master in Business Administration Degree from the Charles Sturt University, Australia. As Chairman, Mr Tan is responsible for the stewardship of the Board of Sino Water Pte Ltd and its subsidiaries in the People s Republic of China. The full details of Mr Tan s profile are as detailed on page 34 of this Annual Report. Ir Ooi Cheng Swee Aged 56, Malaysian Managing Director, Sino Water Pte Ltd Ir Ooi Cheng Swee was appointed to the Board of Sino Water Pte Ltd on 5 June He was subsequently appointed as the Managing Director of Sino Water Pte Ltd on 26 June 2008 and is based in Shanghai, in the People s Republic of China. He joined PNSB in January 2005 as General Manager and was promoted to Senior General Manager, Operation of WTPs, Operation I Division of PNSB on 1 January Prior to assuming his current position, Ir Ooi was a civil engineer by profession and has 31 years of experience in infrastructure works, drainage, road and bridge engineering design, construction supervision of water supply schemes, water supply distribution study and operations of water treatment plants. He is a Professional Engineer registered with the Board of Engineers Malaysia and a member of the Institution of Engineers Malaysia. Prior to joining PNSB, he was the General Manager (Maintenance & Project) of CGE Utilities (M) Sdn Bhd. As the Managing Director of Sino Water Pte Ltd, Ir Ooi 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. PUNCAK NIAGA HOLDINGS BERHAD 45

48 responsibility ANNUAL REPORT 2008 human capital expertise We demand excellence in our people so that they can deliver excellence. We are a team of over 4,000 committed employees in Malaysia and abroad comprising Management, professionals and support employees. Our workforce comprise individuals from various disciplines, each bringing a different perspective to enhance the value of our operations and projects. They include:- l Auxiliary Police l Accountants l Administration & Clerical Staff l Business Development Personnel l Chartered Secretaries l Chemists l Civil, Electrical & Mechanical Engineers l Corporate Communications & Public Affairs Personnel l Corporate Finance Personnel l Counter Service Personnel l Electrical Chargemen l Environmental Engineers l Fitters l Instrument & Automation Engineers l IT Personnel l Meter Replacement Executives l Non-Revenue Water Personnel l Pipe Replacement Executives l Plant Operators l Plant Superintendents l Process Engineers l Production Controllers l Production Executives l Quantity Surveyors l Research & Development Personnel l Safety & Health Officers l Senior Draught Persons l Site Engineers l Water Quality Personnel l Lab Assistants l Lawyers l Leak Detection Specialists l Leak Inspectors l Librarian 46 PUNCAK NIAGA HOLDINGS BERHAD

49 2008 ANNUAL REPORT puncak niaga s global presence We are here in... PAKISTAN INDIA CHINA SINGAPORE Malaysia INDONESIA PUNCAK NIAGA HOLDINGS BERHAD 47

50

51 Committed to the course While change is an inevitable partner to growth, we have the ability to adapt to any given situation no matter how challenging. It is this persistence that steers the Group s performance, both financially and operationally. performance figures

52 integrity ANNUAL REPORT 2008 five-year Financial Highlights In RM Dec Dec Dec Dec Dec 04 (Restated) (Restated) (Restated) KEY RESULTS Revenue 1,415,283 1,388, ,438, ,196, ,841 Profit before taxation 54, , , , ,119 Net profit attributable to equity holders of the Company 21,573 64,184 # + 297,087 # + 364,479 # + 46,439 BALANCE SHEET Property, plant and equipment 1,560,927 1,526, ,495, ,424,554 * + 1,361,459 * Prepaid land lease payments 76,738 77,581 20,128 20,356 * 8,107 * Project development expenditure 3,465,899 2,411, ,429, , ,840 Other non-current assets 1,284,236 1,248,470 1,272, , ,805 Current assets 1,388,883 1,473, ,233, ,667, ,678 Total assets 7,776,683 6,737,240 6,450,812 4,909,491 3,127,889 ISSUE AND PAID-UP CAPITAL Share capital 411, , , , ,935 Reserves 961, ,094 # + 1,280,249 # + 1,076,688 # 739,207 Equity attributable to equity holders of the Company 1,372,580 1,397,237 1,867,596 1,539,868 1,199,142 Net assets per share attributable to equity holders of the Company (RM) # # # RATIOS AND STATISTIC Net profit margin attributable to equity holders of the Company (%) 2 5 # + 21 # + 30 # + 8 Basic earnings per share attributable to equity holders of the Company (sen) # # # +** ** Interest bearing debt (RM 000) 4,784,802 3,760,457 2,923,089 2,423,279 1,504,082 Gearing ratio (times) # # # Current ratio (times) * These comparative have been restated following the early adoption of the revised FRS Leases in 2006, which resulted in the reclassification of leasehold land as prepaid lease payments retrospectively. ** These comparatives have been restated to take into account the effects of the bonus issue and consolidation of shares which were part of the Company s Capital Repayment exercise. # These comparatives have been restated to take into account the effects of the adoption of FRS 112: Income Taxes + These comparatives have been restated to take into account the effects of understatement of trade receivables and retained earnings of prior years due to underrecognition of revenues for prior years. 50 PUNCAK NIAGA HOLDINGS BERHAD

53 2008 ANNUAL REPORT five-year group performance 1,500,000 1,200,000 revenue RM 000 1,196,612 1,438,706 1,388,383 1,415, net profit Attributable to equity holders of the Company RM , , Earnings per share Sen , , , , ,439 64,184 21, ,000,000 1,500,000 1,000,000 equity Attributable to equity holders of the company RM 000 1,199,142 1,539,868 1,867,596 1,397,237 1,372,580 8,000,000 6,000,000 4,000,000 TOTAL ASSETS RM 000 3,127,889 4,909,491 6,450,812 6,737,240 7,776, NET ASSETS per share RM ,000 2,000, PUNCAK NIAGA HOLDINGS BERHAD 51

54 integrity ANNUAL REPORT 2008 Share price & volume traded SHARE PRICE MOVEMENT Volume of Shares Traded 6,260 8,393 29,260 7,508 11,952 5,666 6,479 4,242 3,598 10,126 5,705 4,750 5,164 16,650 4,767 7,974 ( 000) PNHB Monthly Average Closing Prices (RM) Kuala Lumpur Composite Index (KLCI) Monthly Average Closing Prices 1,435 1,397 1,235 1,259 1,281 1,225 1,139 1,103 1, Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Share Price (RM) KLCI , , , ,000 27,000 24,000 21,000 18,000 15,000 12,000 9,000 6,000 Volume of Shares Traded ( 000) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr ,000 0 Volume of Shares Traded PNHB Monthly Average Closing Prices Kuala Lumpur Composite Index (KLCI) Monthly Average Closing Prices 52 PUNCAK NIAGA HOLDINGS BERHAD

55 2008 ANNUAL REPORT ORGANISATION FINANCIAL CALENDAR STRUCTURE Thursday, 22 May 2008 First Quarter Results ended 31 March Thursday, 26 February 2009 Fourth Quarter Results ended 31 December Thursday, 28 August 2008 Second Quarter Results ended 30 June Monday, 27 April 2009 Audited Financial Statements for the financial year ended 31 December Monday, 1 June 2009 Published Annual Report Thursday, 20 November 2008 Third Quarter Results ended 30 September Tuesday, 23 June 2009 Twelfth Annual General Meeting. Wednesday, 15 July 2009 Entitlement Date for payment of Final Single Tier Dividend for the financial year ended 31 December Monday, 3 August 2009 Payment of Final Single Tier Dividend of 10 sen per share for the financial year ended 31 December PUNCAK NIAGA HOLDINGS BERHAD 53

56

57 Committed to the course We are aggressively pursuing our ventures overseas to tap into the vast opportunities that are available to us. We operate with utmost integrity as we set out to foster long-lasting relationships with whomever we come in contact with, be it our partners, associates or consumers. operations review

58 analytical ANNUAL REPORT 2008 Operations review - Pnsb water treatment activities YBhg Dato Syed Danial Syed Ariffin Chief Operating Officer PNSB YBhg Dato Matlasa Hitam Managing Director PNSB In 2008, PNSB focused its efforts on improving operational performance and efficiency at the WTPs and Dams under its responsibility whilst at the same time, managing the operating cost at an efficient level. The correspondingly higher operating cost was attributed to factors such as increase in chemical costs due to higher chemical consumption to address poor raw water quality at the WTP intakes and upward electricity tariff revision which took effect on 1 July The 29 WTPs recorded a total production of million cubic metres of treated water in 2008, up 4.72% from million cubic metres in The total hours of unscheduled plant shutdowns in 2008 was hours, a decrease of 91.8% against 1, hours in 2007, attributed mainly to incidences of TNB power failure and raw water violation. 56 PUNCAK NIAGA HOLDINGS BERHAD

59 2008 ANNUAL REPORT Operations Review - PNSB Water Treatment Activities (continued) Meeting Demands Water Treatment Plant (WTP) Operations Throughout 2008, all our 29 WTPs performed at the expected levels to consistently fulfil the production demands for the supply of treated water by SYABAS and met with the stipulated treated water quality requirements under the Ministry of Health s Drinking Water Quality Standards. With the proper implementation of scheduled preventive maintenance as prescribed in the Operation and Maintenance Manual, none of the WTPs encountered major interruptions, which could have disrupted the water supply to consumers in the designated areas. With the diligent execution of our comprehensive scheduled preventive maintenance programme, we were able to sustain the momentum of our past year s performance in achieving the targets set. By adopting several improvement initiatives in our daily operations throughout 2008, we continued to advance our technological know-how, bridge gaps in our operations methodologies and processes, and intensify research and development efforts. More details of these initiatives are elaborated in pages 72 to 75 of this Annual Report under the Innovative Research and Development Initiatives section. Sungai Selangor Phase 2 (SSP2) WTP The SSP2 WTP recorded a total production of million cubic metres of treated water in 2008, an increase of 11.09% from million cubic metres in the previous year. Average daily production in 2008 was million litres compared to million litres in the previous year. Wangsa Maju WTP The Wangsa Maju WTP produced million cubic metres of treated water, a 7.22% decrease from the million cubic metres recorded in Average daily production in 2008 was reduced to 46.2 million cubic metres compared to 50 million cubic metres in 2007, due to additional uptake from the SSP2 WTP. SSP2 WTP PUNCAK NIAGA HOLDINGS BERHAD 57

60 analytical ANNUAL REPORT 2008 Operations Review - PNSB Water Treatment Activities (continued) Sungai Sireh WTP PNSB undertook the operations and maintenance of the Sungai Sireh WTP since 30 March 2007 and in 2008, the total production of treated water amounted to 7.89 million cubic metres with an average daily production of 21.6 million litres. WTPs under the Privatisation Cum Concession Agreement (PCCA) The 26 WTPs under the PCCA produced a total of million cubic metres of treated water in 2008, an 11.47% decrease from the million cubic metres in the previous year. The drop was due to SYABAS water purchase strategy of maximising abstraction from WTPs with designated quantities. Safeguarding Supplies Dam Operations Besides the 29 WTPs, PNSB operates and maintains the Sungai Langat, Klang Gates and Tasik Subang Dams under a Supplemental Agreement to the PCCA, which was executed on 31 December PNSB ensures strict compliance with the Guidelines for Operation, Maintenance and Surveillance of Dams (Malaysia Inter-Departmental Committee on Dam Safety, 1989) for the purpose of sustainable water supply in Selangor. All three dams operate using the Operational Rule Curve which regularly monitors the rainfall level at the dams catchments areas and help our operators meet the demand for raw water release while conserving as much dam water as possible. According to the Malaysian Meteorological Department s forecasts until June 2009, the average rainfall record for the year 2009 will be similar to that of As the reservoir levels at the three dams were at their maximum at the end of 2008, for 2009, we do not anticipate any critical storage drawdown at any of these dams or any major change in raw water demand from the WTPs. Sungai Langat Dam The total rainfall in the Sungai Langat Dam catchment area in 2008 was 2,408.20mm/ year, about 5% lower than the 21 years average ( ) of 2,534.75mm/year. The reservoir level of the dam was maintained above the Operational Rule Curve No. 1, enabling the reservoir to supply the maximum amount of raw water to the Sungai Langat WTP. Klang Gates Dam At the Klang Gates Dam, total rainfall in the catchment area for 2008 was 3,302.80mm/year, an increase of 32.7% compared to the 22 years average ( ) of 2, mm/year. Aerial view of Sungai Langat Dam 58 PUNCAK NIAGA HOLDINGS BERHAD

61 2008 ANNUAL REPORT Operations Review - PNSB Water Treatment Activities (continued) Reservoir rim surveillance in progress Owing to the markedly higher than average rainfall, the reservoir level has been able to maintain its maximum level above the Operational Rule Curve No.1 throughout the year, which allows maximum abstraction not only from Bukit Nanas WTP but also from Wangsa Maju WTP. Land development activities near to Klang Gates Dam Tasik Subang Dam The Tasik Subang Dam catchment area experienced a total rainfall of 2,714.50mm for 2008, a 10.7% increase compared to the 13 years average ( ) of 2, mm/year. However, there was a constant demand from the North Hummock WTP, which resulted in fluctuating reservoir levels throughout The reading dropped below the levels of the Operational Rule Curve No. 1 in early January 2008 before returning to the normal zone in October 2008 due to the increase in rainfall at the catchment area. Aerial view of Tasik Subang Dam catchment area Ongoing Initiatives As part of PNSB s progressive initiative to ensure sustainable water supply to the Sungai Langat WTP, the On-Line River Level Monitoring System (On-Line RLM System) was implemented at the Langat River. The project commenced in April 2008 and was completed in December The On-Line RLM System provides 24 hour monitoring of the river levels at seven locations of stage gauges along Langat River. The monitoring data are automatically transmitted to the Sungai Langat Dam and PNSB s Head Office in Shah Alam, which will then be used to determine the volume of water to be released from the dam. Costing RM396,000.00, this project enables fast and optimal response to regulating dam release to support adequate water supply particularly during the dry season. PUNCAK NIAGA HOLDINGS BERHAD 59

62 analytical ANNUAL REPORT 2008 Operations Review - PNSB Water Treatment Activities (continued) Another major investment for the Sungai Langat Dam in 2008 was the refurbishment of the main switchboard at RM189, All in, the total capital expenditure for Dam Operations in 2008 for the Sungai Langat Dam amounted to RM585, In 2008, all three dams incurred a total operation and maintenance expenditure of RM2,103, inclusive manpower cost, unscheduled and preventive maintenance, routine surveys, grass cutting and landscape maintenance works. On-Line River Level Monitoring System for the Langat River Sungai Langat Dam Mile 18 Sungai Lui Level Sensors Lui River Head Office Mile 14 Mile 16 Mile 18 Mile 16 Centralised Computer at Sungai Langat Dam Sungai Langat WTP Mile 14 Expanding our Expertise WTP Intake Langat River Diagram 2: Schematic diagram of the On-line RLM System Telibong and Telipok Project, Sabah With the completion of the RM313.5 million Project which included the construction of the WTP, intake, off river storage, reservoir and pipe laying, Stage 1 of the Telibong Water Supply Scheme commenced operations in April 2008 and was handed over to Jabatan Air Sabah on 17 February The WTP currently treats and supplies 80 million litres of treated water per day to residential developments, industrial parks and tourist resorts in the Tuaran area. Aerial view of the 10 million cubic meter capacity Off River Storage (earth filled dam) site Aerial view of the 80 MLD WTP site 60 PUNCAK NIAGA HOLDINGS BERHAD

63 2008 ANNUAL REPORT Operations Review - PNSB Water Treatment Activities (continued) Enhancing Business Operations with IT Solutions While we continue to strive for organic growth, the need for technological advancements to enhance our operations is essential. In 2008, our Information Technology Department (ITD) continued to provide IT solutions for the business and operations by introducing new systems and projects. These included:- MySAP.com - a Financial Accounting package with new module on Cash Management, Cheque Printing Enhancement, Electronic Desktop Banking, Liquidity Forecast and Cash Position. A Centralised Network Printing system was also implemented at Wisma Rozali, with the aim of reducing maintenance cost, which in turn improves productivity. Apart from these, 82 units of obsolete desktop computers located at all WTPs were replaced with newer energysaving models. These efforts form part of the Group s ongoing plans to be more office automated, IT savvy and environmental conscious in our daily operations. PR Online - a Material Management module for centralising the creation of Purchase Requisitions for PNSB and the WTPs. Fixed Asset Tracking and Tagging (FATTS) - a new module for tracking and tagging of assets for the Administration Department. Electronic Document and Records Management System (EDRMS) - a central system for documenting and keeping track of all active files for the Administration Department. Utilising IT solutions at the workplace PNHB s revamped website features new user interface elements to better serve our target audiences Incorporation of IT solutions reduces downtime in operations PUNCAK NIAGA HOLDINGS BERHAD 61

64 analytical ANNUAL REPORT 2008 Operations review - syabas water distribution activities YBhg Dato Ir Lee Miang Koi Chief Operating Officer SYABAS YBhg Dato Ruslan Hassan Chief Executive Officer SYABAS 2008 marked numerous challenges for SYABAS as we continued to focus on improving our service levels to meet our consumers demands. This required us to perform beyond the Concession Agreement (CA) requirements even as SYABAS operates on a cashflow deficit. We generally met all the targets set as well as the CA requirements and the mandatory level of service. We fell short on achieving targets for non revenue water (NRW) due to a number of factors beyond the control of SYABAS and a provision has been made under the CA for SYABAS to claim allowances arising from these factors. Fuel price increases as well as the 26% rise in electricity tariff during the year added to the strain of managing distribution costs. However, with prudent management and effective implementation on several cost cutting measures, SYABAS was able to maintain distribution costs within budget and the CA requirements. As provided under the CA, SYABAS is entitled to a second water tariff review on 1 January 2009 upon achievement of certain Key Performance Indicators. The proposal for a 36% water tariff revision as provided for in the CA was submitted on 31 March 2008 and is pending the approval of the Federal Government and Selangor State Government. Under Clause 11.3 of the CA, the Federal Government and Selangor State Government shall within six months from 31 March 2008 notify SYABAS of their decision. As SYABAS has not received any decision from the Federal Government and Selangor State Government, SYABAS has served notice on the Selangor State Government under Clause 11.3(4) of the CA to claim for compensation for the delay in implementation of the water tariff revision. 62 PUNCAK NIAGA HOLDINGS BERHAD

65 2008 ANNUAL REPORT Operations Review - SYABAS Water Distribution Activities (continued) Delivering More Water Distribution Services SYABAS distributes treated water to approximately 7.3 million consumers that include domestic consumers, factories, commercial and industrial buildings in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya through million consumer connections or accounts, the largest in the country, of which 69% of the quantity is for domestic use. During the year, SYABAS distributed a daily average of 3,867 million litres of treated water (MLD) which is 56 MLD (1.5%) more from 3,811 MLD in SYABAS continued to maintain its water distribution assets comprising 23,500 km water distribution pipes of sizes ranging from 2,200 mm to 100 mm in diameter, 1,226 service reservoirs, elevated water tanks and suction tanks, and 444 booster pumping stations. Water supply coverage in urban areas is 100% whereas water supply in sub-urban or rural areas has reached 99%. Our water resources depend entirely on surface water with raw water abstracted from the rivers and some are regulated by the dams. SYABAS obtains treated water from three WTP operators namely Puncak Niaga (M) Sdn Bhd (PNSB), Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) and Konsortium ABASS Sdn Bhd (ABASS). In 2008, several projects were initiated to specifically increase connectivity between various water supply sources aimed at enhancing the water supply distribution capacity from the available sources to cater to the demand centres and also to enhance reliability in case of system breakdowns. In the Hulu Langat District, SYABAS is currently implementing the Bulk Transfer from Sungai Semenyih to the Sungai Langat Water Distribution System. The project is now 85% completed and is slated for full commissioning by September The Klang water transfer project is currently in design stage for Bulk Transfer from Sungai Selangor Phase 3 Water Treatment Plant (SSP3) to the Klang area and implementation is subject to approval from SPAN. Non Revenue Water (NRW) Reduction During the year under review, SYABAS continued to carry out various strategic programmes to reduce water losses as formulated under the SYABAS NRW Reduction Master Plan. We intensified efforts to further improve and expand these programmes, which have proven to be effective in yielding the desired results within a shorter payback period. These include meter replacements, District Metering Zones (DMZ) establishment, active leak detection and reservoir overflow controls. As a result, the overall NRW level for Selangor, Kuala Lumpur and Putrajaya has been progressively reduced from 42.78% recorded as at the commencement of the CA on 1 January 2005 to 31.94% as at 31 December 2008, representing a total reduction of 10.84% over the four-year period. Air scouring is a cost effective solution to cleaning reticulation pipes 48 reservoirs were cleaned in 2008 PUNCAK NIAGA HOLDINGS BERHAD 63

66 analytical ANNUAL REPORT 2008 Operations Review - SYABAS Water Distribution Activities (continued) The NRW level of 31.94% achieved by SYABAS as at 31 December 2008 is 3.96% above the CA s NRW target of 27.98% for the second Operating Period (1 January 2006 to 31 December 2008). This was attributed to a number of external factors and circumstances beyond the control of SYABAS, such as :- substantial increase in the cost of construction materials namely pipes and related items during the implementation period of the NRW programmes; lack of enforcement by the authorities against illegal connections; and a bigger and wider distribution network than that disclosed in the CA. A comprehensive report detailing all these factors has been submitted to SPAN for review. We have accordingly put in a claim for NRW allowance quantified in accordance with the provisions in the CA for inclusion into the overall measurement of NRW reduction performance and is still a subject of discussion and acceptance by the authorities. In terms of work progress for the year, SYABAS successfully replaced approximately 4 km of old pipes using the trenchless technique in Jalan Bukit Pantai, Jalan Maarof, Jalan Brickfields and Bt 3, Jalan Cheras. Using the Static Pipe Bursting Method, this technique is specially undertaken for pipe replacement works in areas prone to traffic congestion or where there is limited working space. As at the end of 2008, with the establishment of an additional 400 District Metering Zones (DMZ), the total DMZs in place is now 880. Another 180 new DMZs are expected to be set up in 2009 to derive additional gains in NRW reduction. Reaching out to our Consumers Customer Service In 2008, our Customer Contact Centre, Pusat Perkhidmatan Pelanggan (PUSPEL) made a more concerted effort to intensify its commitment of demonstrating the highest standards of customer service for its domestic, commercial and industrial customers in Selangor, Kuala Lumpur and Putrajaya. With the aim of providing exemplary services to our consumers, PUSPEL s services is divided into three major components besides the counter service it provides. These are the PUSPEL Call Centre, Industrial Consumer Unit (ICU) and YAKIN (Unit Kerjasama Informasi Pelanggan). A new logo was recently launched in January 2009 to better reflect PUSPEL s values of being Reliable, Courteous and Committed in discharging its functions and responsibilities. The new logo design also establishes PUSPEL s Contact Centre as a customer-oriented, convenient and an effective two-way communication channel for consumers to contact SYABAS on all water supply related matters and issues. PUSPEL s Counter Service At PUSPEL s Service Counters located at all the ten Districts, a total of 10,779 enquiries and complaints from walk-in consumers were received throughout the year. To ensure consistency and integrity of its counter service employees in handling customers throughout the ten Districts, PUSPEL has adopted a Code of Conduct, which is outlined in the Standard Practice Handbook. 64 PUNCAK NIAGA HOLDINGS BERHAD

67 2008 ANNUAL REPORT Operations Review - SYABAS Water Distribution Activities (continued) Industrial Consumer Unit (ICU) In 2008, PUSPEL s Industrial Consumer Unit (ICU) actively carried out its duties, which included sending notices, collecting and updating the ICU Database on Industrial Customer Profiles, which primarily comprises the manufacturing, trading and commercial consumers, conducting water quality surveys, identifying badly-hit areas and following-up on all cases reported by industrial consumers. Our ICU Executives from the Headquarters and Districts visited a total of 2,418 industrial consumers. PUSPEL operates 24 hours a day, seven days a week and 365 days a year to attend to customers queries, complaints and monitor remedial actions PUSPEL Call Centre Operating 24 hours a day, seven days a week throughout the year, PUSPEL is managed by 60 highly trained call agents located at our Headquarters in Jalan Pantai Bharu, Kuala Lumpur. PUSPEL provides an effective and convenient communication channel for our consumers with the following objectives: Unit Kerjasama Informasi Pelanggan (YAKIN) During the year under review, YAKIN conducted 2,836 briefings, site visits and dialogue sessions with various residents associations and community leaders, almost double the number held in the previous year. As part of its operating procedures, SYABAS representatives are required to conduct detailed briefing sessions with residents prior to starting any pipe replacement works in the targeted areas. This is to ensure that consumers are aware of the project and cooperate with SYABAS to ensure smooth implementation of the works. A convenient one-stop centre for the consumers to convey their complaints, concerns, or queries. Assist in explaining the cause(s) of water related concerns. Provide timely updates on resolution of the consumer s water supply-related problems. Share information to better serve the consumers. The number of calls and cases handled by PUSPEL continue to rise each year with the increasing public confidence in the ability of SYABAS to act promptly on feedbacks or complaints from consumers. In 2008, PUSPEL received 600,085 calls, an increase of 3% from the preceding year (2007: 583,052 calls). Our call agents responded to 95% of these calls with an average handling time of 2.3 minutes per call. Out of the 536,053 cases recorded, 302,648 were water related cases while the remainder were related to general enquiries such as billing statements, procedures on applying for new accounts, reconnection time and payment methods. Feedbacks and complaints received via other channels included 680 letters, 6,447 s, 6,792 faxes and 4,250 text messages; of which 289 were commendations from consumers. Briefing session with the village heads from Dengkil and Sepang Briefing session with the Residents Association of Kota Warisan PUNCAK NIAGA HOLDINGS BERHAD 65

68 analytical ANNUAL REPORT 2008 Operations Review - SYABAS Water Distribution Activities (continued) As at year end, YAKIN updated the details of 8,537 Ketua Kampung/Ketua Taman/Pengerusi JKKK into its database. The purpose of this database is to facilitate the release of advance automated water interruption or water disruption notices to inform these representatives of any scheduled and unscheduled water disruptions in their respective areas. Intensifying Efforts Billing and Collection One of our primary growth strategies is to improve on billing and collection systems and processes in order to boost our revenue stream. As at 31 December 2008, the total number of active water supply accounts was 1,579,171, an increase of 3.5% from 1,522,384 accounts recorded in the corresponding period for the year Total billings during the year under review were recorded at RM1.395 billion, exceeding the targeted billing of RM1.394 billion by RM0.7 million. Bills collection however was RM1.396 billion, slightly below the target of RM1.409 billion. Total collection included payment received from KDEB from June till the close of the financial year under review for the first 20m³ free water averaging RM10.5 million a month. Overall, a collection efficiency of 100% was achieved in Total receivables for 2008 were reduced to RM million, representing a 15% reduction compared to RM million (restated) in As at 31 December 2008, Debtors days improved to an average of days as compared with days (restated) in The continuous effort by the Districts in collecting the arrears had contributed to lower Debtors days. Disconnections performed in 2008 dropped by 41.3%, from 237,533 disconnections performed in 2007 to 139,441 during the year in review whilst the reconnection to disconnection ratio increased from 62% in 2007 to 83% in 2008, attributed to the improved communication between the consumers and SYABAS. Migration of bulk meter accounts to individual meter accounts The migration exercise by the management of condominiums, apartments and flats from bulk meter accounts to individual meter accounts had been slow. PUSPEL emphasises on quality customer service Since the programme was launched in May 2007, SYABAS received only 637 applications for migration compared to the existing 2,600 bulk meter accounts. As at 31 December 2008, 50 applications involving 10,068 individual accounts were approved and the migration exercise for these accounts have been completed. SPAN is in the process of enacting the relevant rules under WSIA, which will make it mandatory for all building managements with bulk meter accounts to apply for migration to individual meter accounts, to be enforced in Progressing Forward Information Communications Technology (ICT) In 2008, SYABAS proactively invested in business intelligence systems with a focus on integration and workflow automation to gain efficiencies. During the year, we took several measures towards achieving operational and customer service effectiveness and compliance. This effort is in line with SYABAS Integrated Water Management Information System (SWIMS) framework initiative to enhance capabilities and competencies in five main areas, namely :- Supply. Operation and Maintenance. Billing and Collection. Development Plan Approval. Customer Service. 66 PUNCAK NIAGA HOLDINGS BERHAD

69 2008 ANNUAL REPORT Operations Review - SYABAS Water Distribution Activities (continued) ICT projects introduced to enhance performance in our operations included: irefund - developed in-house, this application is an end-to-end solution that manages consumers refund of water service deposits requests right through to the release of refund payment. irefund s builtin capabilities include electronic cross-functional workflow and integration to bridge the core systems of BASIS (Billing Systems) and Sunsystem Financial Systems, which prints control documents, monitors and tracks reports, and exports data to other tools for analysis. This has resulted in the streamlining and elimination of major variants in processing of refund payments at the ten front end processing centres; faster turn-around-time, shared data entry eliminating duplicating of records, promoting paperless initiative, reducing human errors, optimising manpower usage and reducing operational costs. ienforcement - the Illegal Connection/Tapping Cases Tracking and Management System was enhanced to include functions for the legal recovery process. This feature maintains continuity of the cross-functional activities through the promotion of data sharing and electronic workflow among the relevant Divisions. Similar to irefund, the ienforcement application is optimised by integration with the Billing Systems and Customer Service Call Logging System. icollection - a new on-line water bill payment collection data submission by SYABAS appointed Agents introduced to replace the existing BPNET. It is an improved version of data transfer, which provides better data submission management and tracking functions, and user interface. It also includes an automated feature to enable a scheduled data transfer function to the Collection Exchange Centre (CEC) System. This function implements full automation, which transfers the payments data to the Billing Systems, which in turn updates the consumer accounts at the scheduled time. In 2008, more than ten agents migrated to this system which reduces manual dependency and eliminates human factor issues on the internal processes. ipos - a Cashier System developed for integration with the Billing Systems Consumer Master database. This feature alerts cashiers on disconnection status at the point of payment and enables SYABAS to immediately trigger reconnection upon settlement of outstanding bills. The pilot implementation of ipos was launched at the Kuala Selangor District Office and roll-out to the other Districts is scheduled in edplas, - a module for the Property Development Water Supply Infrastructure Approval Management System that enables the Internal Plumbing Approval process to be managed by electronic workflow from submission to approval. New Automated Meter Reading (AMR) - a system introduced for major commercial consumer accounts, which utilises GPRS/GSM technology with features such as remote meter management, NRW water consumption trend analysis, and integration to the Billing System. The AMR readings channelled by the integration enables water bills to be produced on a monthly basis by the billing system. Continuous consumption data is recorded at preset intervals by the AMR and is transmitted to the meter master host server on a daily basis for consumption trend analysis whilst alert messages from the AMR enables SYABAS to act promptly should the meter encounter problems. In order to extend ICT central resources and facilities to users within the vicinity of SYABAS Headquarters and its extended offices, a 1 Gbps Free Space Optics (FSO), a laser technology network was implemented with cost savings in mind. IP Telephony was implemented between these three sites so that telephone calls among the workstation phones within these three buildings are considered as internal extension calls with no charges incurred. This marked a milestone for SYABAS ICT where a common network backbone for voice and data was implemented. Utilising ICT solutions at the workplace PUNCAK NIAGA HOLDINGS BERHAD 67

70 analytical ANNUAL REPORT 2008 Operations Review - SYABAS Water Distribution Activities (continued) A Proactive Stand SYABAS Operation Command Centre Located on the Ground Floor of SYABAS Headquarters in Jalan Pantai Bharu, Kuala Lumpur, the Operation Command Centre commenced operation in September Currently, the existing telemetry system, the operation hydraulic model being developed and some of the completed water balance master stations are incorporated in the Command Centre. The telemetry system with 238 stations located at key service reservoirs are being monitored from the Command Centre from 7.00 a.m. to p.m. daily to detect and trigger alert signals on reservoir overflows and low reservoir levels. By the end of 2009, the Command Centre will be fully operational when the new SCADA System is completely implemented. This will enable SYABAS to better manage water distribution. The Command Centre will also be used to trigger all related Divisions/ Districts for immediate follow up action when any abnormalities or emergency situations are detected in the production and distribution of water system and also for operation planning, NRW planning and storage monitoring. The Operation Command Centre where monitoring of key service reservoirs are undertaken Catalysing Growth Potential Tender and Award of Contracts In accordance with our Client Charter, SYABAS contractors are expected to be efficient, deliver high quality services and carry out works of a high standard. In 2008, 125 new contractors, suppliers and consultants were registered under SYABAS Pre-Qualification and Registration of Contractors programme. Water quality sampling and testing being conducted During the year, 487 contracts worth RM129.9 million were awarded to 241 contractors, suppliers and consultants for capital expenditure, operation and maintenance programmes, consultancy services and supply of goods. A total of 445 of the contracts worth RM111.2 million were awarded to Bumiputra companies registered under our Bumiputra Entrepreneurs Programme or Program Penyertaan Usahawan Bumiputra (PPUB). 68 PUNCAK NIAGA HOLDINGS BERHAD

71 2008 ANNUAL REPORT Operations review Operational Highlights: People s Republic of China Beyond Malaysian Shores China has the fastest growing major economy in the world and is undergoing rapid urbanisation. As a result, its demand for potable water is increasing rapidly while the need to upgrade its wastewater and sewage facilities is urgent. China has a rural population of 730 million, of which 40% still do not have access to safe drinking water and 80% do not have sewage treatment facilities. Untreated sewage is one of the factors contributing to water pollution and public health problems. Realising this, PNHB Group entered the China market in May 2008 via its 80% Singapore subsidiary company, Sino Water Pte Ltd (SWPL) which focuses primarily on potential markets in China. SWPL has established various local subsidiaries in China to undertake its projects in China. The water treatment industry in China is slated to be one of the biggest beneficiaries of the Republic s plan with RMB4.0 trillion (USD585.0 billion) in government spending in 2009 to stimulate the economy. The government already spent RMB120.0 billion in the fourth quarter of 2008, with about 10% of the money going to energy saving and ecological projects. In 2009, RMB350.0 million or nearly 9% is planned for ecological projects with many of those projects connected to water conditions, stimulating the demand for equipment serving the water and wastewater treatment sectors in China. Ir Ooi Cheng Swee Managing Director of Sino Water Pte Ltd Source: Frost & Sullivan Country Report China Puncak s foray into China is timely based on the Republic s increasing demand for potable water PUNCAK NIAGA HOLDINGS BERHAD 69

72 analytical ANNUAL REPORT 2008 Operations Review - Operational Highlights: People s Republic of China (continued) Our Ongoing China Projects Lushan Water Supply Project The project, located in Lushan County, Pingdingshan City of Henan Province, is held by SWPL s 83% owned China subsidiary, Luwei (Pingdingshan) Water Co. Ltd. The project involves taking over the operations and rehabilitating the Lushan Water Supply Facilities including the construction of a new 30 MLD WTP that treats water from the Zhaopingtai Reservoir. The new plant will replace all existing underground water wells. Construction works commenced in November 2008 and upon completion in the fourth quarter of 2009, the plant is targeted to distribute treated water to consumers in the Lushan Township via 40 km of distribution pipelines to be laid under the project. Entrance of the project site in Lushan County, Pingdingshan City of Henan Province Binzhou Wastewater Project SWPL s wholly owned Chinese subsidiary, Xinnuo (Binzhou) Water Co Ltd is undertaking this project, which is located in the Laodian Village of Yangxin County, in Binzhou City of the Shandong Province. The project encompasses the construction of a 30 MLD wastewater treatment plant, which is divided into two phases of 15 MLD each. Detailed design is presently ongoing after the groundbreaking ceremony for the plant was held in September Upon completion of the construction by the end of the first quarter of 2010, the plant will treat wastewater from the nearby Tannery Industrial Park. The treated water suction tank construction in progress Other Projects Besides these two projects, SWPL will be acquiring a few other projects including the Luancheng Water Supply and the Yuanshi Water Supply in the Hebei Province. The project companies are in the process of being transferred to SWPL, while several other potential projects for possible acquisitions have also been identified in the Provinces of Henan, Hebei, Guangdong, Jiangxi and Tianjin City. Coagulation tank construction in progress 70 PUNCAK NIAGA HOLDINGS BERHAD

73 2008 ANNUAL REPORT Operations review Operational Highlights: india & pakistan The growing population coupled with industrialisation and urbanisation in this sub-continent has resulted in increased demand for sustainable development and efficient management of water resources. This is key to economic growth and poverty alleviation, given that 70% of the population is dependent on agriculture. In the Budget , allotment for the Rajiv Gandhi Drinking Water Mission was increased to Rs 7,300 Crore. Rs 200 Crore was allocated for drinkable water in the schools while Rs 300 Crore was assigned for a desalination plant at Chennai for facilitating the production of clean drinking water. PNHB is exploring potential water projects in India and Pakistan. Gadilam Bridge at Chennai, India india Chennai Project, India PNHB and Lanco Infratech continued to operate and maintain the Chennai Water Supply Augmentation Project 1 Package III, for which the joint venture had completed the construction work in The five-year Operations & Maintenance (O&M) service contract is ongoing until January pakistan Memorandum of Agreement with the Karachi Water and Sewerage Board (KWSB) and the Asian Development Bank (ADB) On 4 September 2008, PNSB entered into a Memorandum of Agreement with the KWSB and the ADB to form a voluntary partnership with KWSB through a Twinning Agreement to be implemented and financed by ADB as a South Asian Water Utilities Network activity as part of the Water Operators Partnerships Programme. This collaboration enables PNSB to share its experience and assist KWSB in its mission to provide quality water supply and sanitary services in Karachi, Pakistan as well as to enable the exchange of knowledge, ideas and experience between both parties. Kanniyakoil Bridge at Chennai, India Degremont Pulsator clarifier at Pipri Old WTP, Karachi, Pakistan PUNCAK NIAGA HOLDINGS BERHAD 71

74 analytical ANNUAL REPORT 2008 innovative research and development initiatives In both developed and developing countries, the water sector is facing serious challenges owing to overexploitation of a limited and unevenly distributed water resource. This weighs heavily on the water resource, habitats, environment and ecological systems. This scenario will be exacerbated in the future with rapid population growth and increasing urbanisation and at the end of the spectrum lie impacts of climate change such as unpredictable rainfall patterns and increasing temperatures. The need, therefore, for proper planning and implementation of measures to minimise social, economic and environmental impacts of stress on the water resource is clearly evident. 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 modernise and advance the nation s water technology. Our R&D Team actively brainstorm and develop on ideas to further improve water operational efficiency and cost control at the WTPs and the water distribution network under our responsibility. We are in the midst of establishing the state-of-the-art Puncak Research and Development Centre (PRDC), which will not only address current water supply and wastewater issues, but also act as a one-stop reference, solution and training centre for the industry, both in Malaysia and across the region. In this respect, PNHB s wholly owned subsidiary, Puncak Research Centre Sdn Bhd (PRCSB), entered into Collaboration Agreements with DHI Denmark (DHI), a global leader in the field of water treatment on 15 March 2007 and with Universiti Putra Malaysia (UPM) on 6 June Besides DHI and UPM, PNHB Group is looking to collaborate with other local R&D institutions and universities on projects in the water, wastewater and environment industries with the objectives of advancing technological development and competencies within the fields of water, environment and health. Overview of the accelators at North Hummock WTP PNSB Since inception in 2005, our Process Improvement Section (PIS) has been instrumental in generating solutions especially for improvements in water quality. These improvements are divided into four categories of shortterm projects to address immediate issues and concerns, long-term projects, continuous or ongoing projects and other value-added projects. SHORT-TERM PROJECTS Process Improvement at the North Hummock WTP The North Hummock WTP has been encounting carry over flocs problem in the accelator type circular settling tanks resulting in the short filter running for 24 hours only. Although numerous tests and subsequent plant trials conducted showed better flocs formation at the plant, the carry over flocs problem still occurred especially during hot sunny days. In July 2008, rectification works were undertaken to address this issue but the flocs problem persisted during hot weather. As such, PIS is now exploring other options including the installation of a tube settler or lamella to improve the treatment process at the WTP. Process Improvement at Rantau Panjang Old WTP The Rantau Panjang Old WTP also encountered high carry over flocs problem at its rectangular settling tanks due to its tank s design problem. The tanks were then modified under the Plant Improvement Works that was carried out in Settled water quality improved from 7-9 NTU to 4 5 NTU after modification and performance of the filter running at the plant was also improved from 48 hours to 72 hours. 72 PUNCAK NIAGA HOLDINGS BERHAD

75 2008 ANNUAL REPORT Innovative Research and Development Initiatives (continued) Process Optimisation As the normal coagulant optimisation process using the conventional jar test method is time consuming, a plant trial was conducted instead using a streaming current detector, which is an instrument that can measure the net charges on particulate and coagulant surface in water on a continuous basis following coagulant addition. The plant trial conducted at the Sungai Langat WTP showed improvements in its coagulation process to reduce aluminium violation in the settled water quality, reduced coagulant consumption through optimisation and also prolonged the filter run hours from 48 hours to 60 hours. In view of the encouraging results, SCD has been installed at the Sungai Langat, the BRH and the Batang Kali WTPs in September 2008 for actual plant trial. The plant trial was completed in December 2008 and indicated that the water quality met with the stringent required high standards. Given the positive outcome from the plant trial, the installation of SCD may be extended to other WTPs in stages as it also contributes towards cost savings. LONG-TERM PROJECTS Sedimentation tanks at Rantau Panjang Old WTP The Bukit Tampoi and the Cheras WTPs have always been susceptible to high ammonia levels in the raw water and subsequently in the treated water due to lack of ammonia removal facilities at the plant. On many occasions, ammonia level in the treated water exceeded the standard value due to the extremely high ammonia level in the raw water. The source of ammonia was determined as coming from nearby industrial and domestic waste discharges and this affected the disinfection process, making it difficult to comply with the standard level of free residual chlorine or combined chlorine in the treated water leaving the plant. A laboratory scale test was then conducted using aluminosilicate in powdered and granular forms. The granular form was found effective in removing ammonia, thus plant trial commenced at one of the filters at the Bukit Tampoi Old WTP. Results indicated that up to 63.5% or 0.47 mg/l of ammonia was removed by aluminosilicate as compared to 50% or 0.2 mg/l of ammonia removed with normal sand media. A dosing system to feed aluminosilicate into the raw water at the Bukit Tampoi Old WTP was also installed to further remove ammonia. Nevertheless, the evaluation of the system could not be carried out in 2008 due to the low ammonia level in the raw water as the result of wet weather. As such, the plant trial will proceed during high raw water ammonia level that is expected to occur during dry periods. CONTINUOUS PROJECTS a) Alternative coagulant studies Studies on alternative coagulants to replace alum are ongoing as alum sludge incurs high disposal cost, despite it being currently the most cost effective coagulant in terms of water treatment. Although various alternative coagulants ranging from iron based coagulants to organic coagulants that were studied were found to be less effective, the search for alternative coagulant continues especially for an environmentally friendly type. The 10 types of alternative coagulant that were studied are:- DB 45 DB 45 VHM DB 45 SH DB 45 SSH FL 45 FL 45 C LT 7991 C 4591 Chitosan Ferric Chloride b) Filter performance monitoring Filtering is essentially the final step available to remove solids in a water treatment plant. PIS undertook monthly monitoring of a total of 174 filters from 29 WTPs to ensure their reliability and the breakdown of filter running hours is tabulated below:- Filter As at As at Run Length March 2005 December 2008 Category No. % No. % (hours) of filters of filters Total Note : 4 nos. of filters were not in operation as they were either under repair or on standby. PUNCAK NIAGA HOLDINGS BERHAD 73

76 analytical ANNUAL REPORT 2008 Innovative Research and Development Initiatives (continued) c) Treated water reservoir monitoring Since 2005, PIS has been monitoring water quality at different depths at the reservoirs to ensure that high quality water is being continuously supplied to consumers. The monitoring results will determine whether flushing or reservoir cleaning is required. In December 2008, samplings were conducted at the Batang Kali and Salak Tinggi WTPs. Results showed that there were high levels of manganese and turbidity standards at the bottom of the reservoir and hence these reservoirs have been recommended to be cleaned. One of the filters at Bukit Tampoi Old WTP that was installed with aluminosilicate for the ammonia removal studies Since PNSB took over the WTPs in 2005, the filter running hours were improved tremendously for the following reasons:- Improvement on the filter operation procedures undertaken by PIS for the Sungai Rangkap, Cheras, Bukit Nanas and Rantau Panjang Old WTPs. Filter refurbishment works for 14 WTPs under the plant improvement works that was carried out in 2007 for the Sungai Buaya, Batang Kali, KKB, Sungai Tengi, Sungai Selisek, Rantau Panjang Old, Rantau Panjang New, North Hummock, Bukit Nanas, Sungai Rangkap, Bukit Tampoi Old, Bukit Tampoi New, Sungai Langat and Cheras Mile 11 WTPs. Besides filter refurbishment through plant improvement works, filter refurbishment was also carried out whenever the need arose. Following the laboratory scale studies that were conducted at Sungai Sireh WTP, the filtered water quality was observed improved in terms of turbidity and aluminium when new sand was used as a filter media compared to the existing sand media. As a result, one of the filters was refurbished in August 2008 and subsequently another filter was refurbished in December Although the number of filters with short running hours as at to-date is low, which is 13 units or 7.6%, PIS will continue to carry out monitoring and studies to improve the running hours to achieve the target of 72 hours of filter running. VALUE-ADDED PROJECTS a) PIS evaluated several products that were submitted by suppliers to determine its applicability to improve treatment at WTPs. Some of the products included the Azud Helix Filter, Bacstop Silva Disinfection System, EnzyBac, GuardianBlue Early Warning System, biosensor and effective microorganism. Effective microorganism technology studies conducted in collaboration with JAMOF and UTM has the potential to convert alum sludge into fertilizer and we are currently pursuing this into the next stage of studies and plant trials for onward feasibility studies at SSP2 WTP. Similarly, we are also working with UKM to evaluate the biosensor that was developed for ammonia monitoring. b) Besides focusing on the 29 WTPs operated by PNSB, PIS has also embarked on other projects that include assisting SYABAS in undertaking a plant assessment at Lembah Beringin and as a team member of the Asian Development Board s Twining Programme with the Karachi Water and Sewerage Board of Pakistan. c) Abstraction of raw water from Sungai Langat Dam to Sungai Lolo (Old) WTP. In view of the partial plant s frequent closure due to changes in weather conditions and proximity of the WTP to the dam, pumping dam water to the WTP was proposed and implemented to mitigate shutdowns whenever raw water violations occur. This scheme is intended as a temporary measure whilst awaiting SYABAS /SPAN s approval to proceed with upgrading the partial WTP to a full treatment plant. 74 PUNCAK NIAGA HOLDINGS BERHAD

77 2008 ANNUAL REPORT The commissioning of the pumping scheme has provided an alternate raw water source to the partial treatment plant and managed to keep the WTP in operation during rainy days, and mitigated water supply disruption to SYABAS and its consumers. SYABAS In 2008, SYABAS embarked on the following R&D programmes:- Innovative Research and Development Initiatives (continued) Energy Saving On 1 July 2008, Tenaga Nasional Berhad obtained the Federal Government s approval on the new electricity tariff, which directly impacts SYABAS operating cost particularly at the pumping stations. To mitigate this cost escalation, the Technical Services Division (TSD) outlined some initiatives to reduce energy costs, which involved nine key pumping stations located at Bukit Gasing, Wangsa Maju, Kepong Estate, Pudu Hulu, Bukit Tadun, Pantai, Bukit Jelutong, Bukit Lipat Kajang and Selayang. These will include several studies and reviews on the nine individual pumping stations to determine if the existing distribution system is fully optimised. Some of the cost saving measures that SYABAS intends to undertake are increasing the diameter and capacity of the pumping mains, refurbishment of pumps and installation of Variable Speed Pumping (VSP). There have been four VSP installations, which are running effectively in the Gombak District and Kuala Lumpur. VSP controls the number of pumps operating during peak and off-peak periods and SYABAS will identify possible conversions from fixed speed pumping to VSP for all Districts. Studies on installing altitude valves and conversion from top inlet to bottom inlet at the principal reservoirs are also being conducted for enhancing pumping efficiencies while methods to maintain high water levels at suction tanks are also being looked into. Laboratory testing on water quality The use of thermoplastic pipes particularly for pumping mains will reduce energy costs due to its smooth surface compared to concrete lined MS/DI pipes. With the use of other materials such as epoxy and polyurethane for internal lining for MS and DI pipes, the friction loss can be greatly reduced due to high value of friction factor. Friction loss can be reduced by as much as 56% if thermoplastic pipes or epoxy/polyurethane lined MS/DI are used for pumping mains hence saving pumping costs. ABS Air Insertion Point The current air insertion point for cleaning of reticulation pipes using air-scouring, is made of stainless steel (SS304). Since it has commercial value, it is susceptible to theft. The new air insertion point for air scouring purposes is made of plastic material using ABS with a pressure rating of PN16. It has no commercial value and is durable and long lasting. It will also be housed in a small chamber complete with a cover. Going forward, other long term initiatives will be explored that may require changes to our design Guidelines for pipes. These include:- the use of thermoplastic pipes as pumping mains. the use of epoxy/polyurethane as internal lining for mild steel and ductile iron pipes. PUNCAK NIAGA HOLDINGS BERHAD 75

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79 Committed to the course We are responsible in the way we conduct our business operations and will remain focused on our responsibilities and commitment to our community and stakeholders. In our pursuit of business expansion, we are ever mindful of environmental preservation as we journey on as a society and a nation to achieve the agenda of attaining the aspirations of CORPORATE RESPONSIBILITY building socially responsible businesses Vision 2020.

80 COMMITTED ANNUAL REPORT 2008 CORPORATE RESPONSIBILITY WORKPLACE COMMUNITY occupational HEALTH & SAFETY MARKETPLACE ENVIRONMENT QUALITY Corporate Responsibility (CR) at PNHB Group is not a programme it is integral to the value system that has shaped the conduct of our business since our inception. As we expand our existing businesses and enter new markets, we will continue to be economically, socially and environmentally responsible by managing all aspects of our businesses for sustainable performance. We seek to improve relationships with our various stakeholders and support communities and individuals who are underprivileged. As a committed and responsible corporate citizen, we will support an exemplary workforce and embrace their involvement in the various activities within the Group and the communities in which we operate. We will seek to make an impact that is distinctive, far reaching and inspiring for all our people as we build our corporate responsibility strategy that focuses on the Workplace, Marketplace, Environment and Community in line with the nation s agenda on CR. We are therefore pleased to share this report with you. OUR MISSION Our corporate mission provides active support and participation in programmes that uplift the community s living standards and value systems in line with the aspirations of Vision We are committed to addressing national and international concerns, pertaining to the protection, conservation and enhancement of the natural environment. We seek to manage our business responsibly and sensitively, with the objective of making a difference in the lives of people around us. 78 PUNCAK NIAGA HOLDINGS BERHAD

81 2008 ANNUAL REPORT building a dynamic workplace Our people are united by a common purpose to enhance and sustain the built, natural and social environments in which we operate to achieve a common purpose. As our employees are the pulse of our business, we will continue to provide learning and development opportunities and invest in building an exemplary workforce. We seek to provide a positive work-life balance through recognition of achievements, improved work environment, and a sense of reward through merit, as this encourages loyalty, improved productivity, generation of ideas and the creation of talent powerhouse. We respect the diversity of cultures represented by our employees and constantly motivate them to continually develop and leverage on their individual potential. Driven by our PUNCAK Values, our people s dedication, commitment and professionalism enables the Group to meet the challenges of today and tomorrow amidst a rapidly changing global business environment. Our employees are the driving force behind our success In 2008, PNHB Group attracted 369 new talents to add to its pool of competent personnel. As at 31 December 2008, the Group s total employees strength grew to 4,188 from 4,148 in 2007, which includes 73 employees from our China operations, marking an increase of 40 employees from the preceding year. Rewarding Our Employees As the Group grows, so does its workforce. With heightened business and operational activities in 2009, our people are the key to successfully meeting the challenges posed by growth and expansion. PNSB offers a comprehensive Employee Benefits Package that exceeds basic requirements. These include insurance coverage, housing and loan subsidies, interestfree education assisted loans and also computer and personal loans. Our employees and their dependants enjoy medical benefits that cover outpatient treatment, hospitalisation and surgical and maternity expenses for a maximum of up to 5 surviving children. In 2008, we introduced the following benefits:- Increase of Stay Back Meal Allowance With effect from August 2008, the stay back meal allowance for PNSB s executive employees was increased to streamline with the allowances provided by SYABAS, as follows:- For normal working days, the rate was increased from RM20.00 to RM30.00 for work in excess of 2 hours. For more than 4 hours of work carried out on a Public Holiday, the rate was increased from RM90.00 to RM Waiver of Employees Quarters Rental for Sungai Sireh WTP In order to be consistent with the practice in other WTPs operated by PNSB, the rental of quarters, which were imposed on the employees of the Sungai Sireh WTP, was waived in May Rental charges amounting to RM12, that were charged from August 2007 to April 2008 to the 11 employees were refunded to them. Our in-house magazine, Buletin Kita Employees Relocation Allowance PNSB approved the payment for relocation and related allowances amounting to RM25, to the 15 employees that were affected by the upgrading works on the quarters at the WTPs. PUNCAK NIAGA HOLDINGS BERHAD 79

82 COMMITTED ANNUAL REPORT 2008 Building a Dynamic Workplace (continued) Clothing Allowance during Overseas Assignments In January 2008, PNSB approved the winter clothing allowance for up to a maximum of RM1, to employees who carry out official assignments in temperate countries during winter. The claim for the allowance must be accompanied with official receipts and is limited to once in every three years. Recognising Our Employees Support In instilling employees loyalty, SYABAS added on more benefits such as a 15% employer s contribution for the Employees Provident Fund for employees remaining after two years in service, a 4% interest on housing loan subsidy, education loans and employees retirement benefits. In addition to this, SYABAS organises appreciation dinners themed Majlis Jasamu Dikenang for its retired employees, Employees Excellence Award by Districts and a merit bonus on top of the annual bonus for employees with outstanding performance. 26 January 2008 PNSB s Training Department and Strategic Resources Centre conducted a Saturday Encounter programme entitled Water Engineering - What s Next? at Wisma Rozali Boosting Our Workforce Training and development remains a key strategy in developing a dynamic workforce to compete effectively in an evolving business environment. In view of this, the thrust of training is on developing a workforce that is capable of meeting the challenges of a knowledgebased economy so as to enhance the productivity and competitiveness of the organisation. At the same time, the training system will be oriented in such a way that knowledge, skills and expertise acquired can support and lead the Company in its Vision of becoming a Leading and Dynamic Integrated Water Services Company. In 2008, PNSB expended RM459, on local and overseas training programmes for a total of 697 employees. 23 February 2008 A Chinese New Year Celebration was held to enhance rapport amongst our employees 27 February 2008 PNSB s financial aid to policeman, Lance Corporal David Duwin Kalong@ Mohd Edwin Abdullah for his medical treatment which was received by his wife 18 March 2008 SYABAS presented its employees with Insurance Compensation Benefits at a ceremony held at Dewan Bunga Raya at the Kuala Lumpur District Office 18 March 2008 The National Water & Sanitation Workshop held at Wisma Rozali to keep employees abreast with the current developments in the water industry 80 PUNCAK NIAGA HOLDINGS BERHAD

83 2008 ANNUAL REPORT Building a Dynamic Workplace (continued) PNSB s training policy is aimed at obtaining the commitment of the Management and individuals to work with the Training Department to identify the types of training to fill competency gaps and to improve performance. Our training programmes incorporate the following methods:- Formal training such as courses, workshops, seminars, conferences and programmes conducted in-house or externally. Informal training such as coaching, mentoring and other forms of on-the-job training. Self-paced-learning through the use of the facilities and resources currently available at PNSB such as the Strategic Resource Centre. The guiding principles for our training policy are for all employees to be given equal learning and development opportunities and to conscientiously apply what they have learnt at the workplace. At SYABAS, our emphasis on human resource development during the year was on ethics and principles to assist us in gaining recognition and respect in the water industry. As a testament to achieving this objective, SYABAS was awarded with a Certificate of Recognition at the Malaysian Business Ethics Excellence Awards 2008 held on 11 November During the year, SYABAS conducted a number of courses aimed at increasing the knowledge and skills of its workforce. SYABAS spent RM326, to train a total of 2,420 employees on the following:- Leadership and Development programmes. Motivation courses to instil loyalty, commitment and improve employees performance. Courses on functional knowledge for assignment competency enhancement. 26 May 2008 Training session in progress for PNSB s employees International Conference & Expo on Environmental Management and Technologies at Putra World Trade Centre (PWTC) Kuala Lumpur Supporting Nation Building The internship or industrial training programme at PNHB Group is a key component of our business growth strategy. For over ten years, the Group has supported institutes of higher learning by providing placements for students for internship or industrial training. Based on their field of studies, successful candidates are placed at various Departments and Divisions within the Group, complementing academic studies with on-the-job training. Besides offering exposure to technology and innovation in the water industry, the programme is an excellent platform for interns and trainees to tap into the expert resources available in the Group, thus obtaining relevant job-skills industrial training. The programme also increases commercial awareness of the water industry and develops the much-needed interpersonal skills of the trainees. As the leading and dynamic integrated water services company in Malaysia, we will continue to contribute towards building a talent pool that is professional and knowledgeable to further support and develop the water industry in Malaysia. 30 July 2008 Induction Programme for new recruits at SSP2 WTP PUNCAK NIAGA HOLDINGS BERHAD 81

84 COMMITTED ANNUAL REPORT 2008 Building a Dynamic Workplace (continued) 16 August 2008 PNSB s employees attended the Advanced Training for 4-wheel drive at Hutan Ulu Bernam, Selangor 23 July 2008 Training was conducted for PNSB s employees on Customer Service and Service Excellence 29 July 2008 SYABAS Industrial Relations Department conducted an in-house training to brief the appointed 32-member panel on the legal aspects and rules and regulations of proceedings 30 October 2008 SYABAS conducted a training session on How to Deal with and Combat Sexual Harrasment at the Workplace for members of the Sexual Harassment Committee Instilling Good Work Culture with BUDAYA KERJA SYABAS In an effort to instil a sense of good working culture amongst SYABAS employees, the Training Department drew up a 10-point Work Culture or Budaya Kerja SYABAS programme. Posters featuring the Budaya Kerja SYABAS were distributed to all Divisions and Districts to continuously reinforce these values. Instilling Good Telephone Ethics through ETIKA TELEFON BERKUALITI Programme Through the Etika Telefon Berkualiti programme introduced in February 2008, SYABAS employees were exposed to the correct ways of answering telephone calls and to treat both internal and external callers as customers. Briefings were given to representatives from Divisions and District Offices before the programme was widely publicised via SYABAS emesra Infonet. Tips Maju Dalam Kerjaya The Training Department prepares informative career development articles on motivation and self development in PowerPoint slides, which are then posted on SYABAS Infonet and also ed to all employees. The aim of Tips Maju Dalam Kerjaya or Tips for a Successful Career is to share information and enhance employees knowledge. 82 PUNCAK NIAGA HOLDINGS BERHAD

85 2008 ANNUAL REPORT Building a Dynamic Workplace (continued) March 2008 SYABAS held an exhibition in conjunction with UPM s Career Carnival held at the Dewan Besar, Universiti Putra Malaysia. YBhg Tan Sri Dato Dr Nayan Arifin, the Pro Cancellor of UPM officiated the event 3 May 2008 Our employees who participated at the Workers Day 2008 Celebration held at Stadium Putra Bukit Jalil, Kuala Lumpur 6-8 June 2008 SYABAS took the opportunity to create awareness on its activities in the Industrial Career Exposition 2008 organised by UNISEL, which was held at the Kompleks Belia & Kebudayaan, Shah Alam, Selangor 21 June 2008 PEKA organised a badminton tournament held at Puchong 16 August 2008 The closing of Karnival Mini Sukan PEKA 2008 was held at Pusat Pengurusan Sukan Petronas (PERMATA) in Bangi, Selangor 19 September 2008 PNSB hosted a Majlis Berbuka Puasa for its employees at Wisma Rozali 20 October 2008 An appreciation ceremony was held at the Hotel Nilai, Negeri Sembilan for employees of SYABAS and the State Water Supply Authorities in recognition of their assistance rendered during the Code Red Emergency Response Plan (ERP) in the Sepang District 24 October 2008 PNSB s Corporate Affairs Division held its Hari Raya Aidilfitri Open House at their office in Wisma Rozali PUNCAK NIAGA HOLDINGS BERHAD 83

86 COMMITTED ANNUAL REPORT 2008 valuing Relationships in the marketplace We are dedicated towards earning the trust from our consumers by being a reliable provider of clean water. We have implemented ethical and responsible business practices in the delivery of our services to the consumers. We will continue to invest and intensify efforts to introduce new technologies, innovations and systems in the water industry. During the year, our various stakeholders were kept informed of our development, business activities and social programmes via a myriad of communication channels, meetings and social events. We actively build on the existing professional, trustworthy and caring relationships with our employees, customers, shareholders, business partners, government authorities, agencies and nongovernmental organisations (NGOs), the media, business and financial analysts and the public at large through planned and targeted programmes and activities throughout the year. Throughout 2008, we expanded our Company s Social Environment Awareness Programme and continued to highlight the impact of pollution and the pressing need to preserve our water resources under our Factory Visit Programme. To contend with the public s lack of concern towards defending water pollution, we also supported and participated in several exhibitions and programmes organised by government and nongovernmental organisations. Besides this, our Turun Padang Bersama Media programme, which is aimed at strengthening our media relationship management, allowed for media practitioners to experience our activities first-hand. For our shareholders, investors and the financial community, the framework for Investor Relations (IR) has been implemented to notify them about our financial performance and corporate developments. These and other corporate announcements are available via our website and are updated simultaneously on Bursa Malaysia s website. We also conduct regular briefing sessions for financial and business analysts, fund managers and the media to update them with the Group s latest developments. PUSPEL has three dedicated departments, the Contact Centre, Industrial Customer Unit (ICU) and YAKIN (Unit Kerjasama Informasi Pelanggan) that function as convenient and effective communications channels for our domestic and industrial Press advertisements to inform the public on water supply disruptions or improvement works PNHB s and SYABAS websites and PNHB s Annual Report are effective communication tools to keep stakeholders abreast with current affairs of the Group customers. In addition, Counter Service is also available where employees work hand-in-hand with consumers to act expeditiously on feedback and complaints. Another key area in our marketplace is our Bumiputra Entrepreneurs Programme (Program Penyertaan Usahawan Bumiputra) or PPUB, which was formed to support and develop local contractors. In 2008, RM111.2 million worth of contracts were awarded to the companies under this programme. 84 PUNCAK NIAGA HOLDINGS BERHAD

87 2008 ANNUAL REPORT Valuing Relationships in the Marketplace (continued) 9 January 2008 Members of the media were brought on site to Jalan U-Thant, Kuala Lumpur to witness the Trenchless Pipe Replacement Method as part of SYABAS Turun Padang Bersama Media Programme 17 January 2008 Officials from SYABAS paid a visit to Sinar Harian to foster a closer rapport with members of the media 28 January 2008 The Crisis Management Centre (CMC) was activated due to the scheduled shutdown of Bukit Nanas WTP to allow pipe diversion and valve replacement the installation of inflow meters near the Duta- Ulu Kelang (DUKE Highway) highway project 22 & 23 January 2008 In conjunction with the Deepavali Celebration at Mahamariaman Devastanam Temple, Batu Caves, SYABAS set up an exhibition and Customer Service Counter for devotees. The event was officiated by YB Dato Seri Samy Vellu, the former Minister of Works 1 March 2008 In conjunction with the Program Kaunter Aduan Bergerak organised by the Public Complaints Bureau of the Prime Minister s Department at Selayang Mall, SYABAS held an exhibition complete with a Customer Service Counter for the public 15 April 2008 In conjunction with SYABAS Water Quality Programme, a Turun Padang Bersama Media in which officials from the Ministry of Health was held at SS7, Kelana Jaya, Selangor 19 April 2008 A prize giving ceremony was held for SYABAS Customer of the Month Programme for the period from January to March 2008 at Plaza Alam Sentral, Shah Alam 2 August 2008 SYABAS Customer of the Month Prize Giving Ceremony for the months of April to June 2008 was held at Plaza Alam Sentral, Shah Alam, which also included a children s category 22 September 2008 The Corporate Communications Department of PNSB organised a Majlis Berbuka Puasa Bersama Media Biro Shah Alam at Siriwan Restaurant, Shah Alam PUNCAK NIAGA HOLDINGS BERHAD 85

88 COMMITTED ANNUAL REPORT 2008 Valuing Relationships in the Marketplace (continued) 26 September 2008 SYABAS conducted a Customer Awareness Programme at SATO (M) Electronics Manufacturing Sdn Bhd 25 September 2008 PNSB s Corporate Communications Department conducted Ziarah Ramadhan visits to Sri Pentas (TV3, NTV7, 8TV and TV9) and Angkasapuri (RTM) to spread some festive cheer during the month of Ramadhan December 2008 In conjunction with Karnival Ria Selangor 2008 held at Stadium Shah Alam, SYABAS set up an exhibition booth and a Customer Service Counter As we progress, we aim to steadily increase our stakeholder involvement by creating more platforms for constructive feedback and mutually beneficial growth. STAYING ALERT Beyond the scope of our daily operational tasks, we are constantly prepared to manage any critical situation quickly and effectively so as to minimise disruptions to our operations and impact on our consumers daily activities. We have formulated a Crisis Management Plan (CMP) and WTP Emergency Response Plan (ERP), which can be activated to empower our employees to respond fast, systematically and effectively to any crisis or emergency. These plans cover both PNSB and SYABAS and also involve the State Authorities and relevant Government Agencies such as Lembaga Urus Air Selangor (LUAS), the Fire Department, the Police force and the Malaysian Red Crescent Society. ERP Yellow Code, 14 October 2008 SYABAS personnel swung into action during the water supply disruption at Pulau Ketam. It was suspected that either the HDPE pipe measuring 400 mm was leaking or there was damage along the 17 km underwater pipeline ERP Red Code, 16 October 2008 The Sepang, Kuala Langat and Hulu Langat Districts encountered water supply disruptions due to three burst pipes which supply treated water to the areas via the Semenyih WTP 86 PUNCAK NIAGA HOLDINGS BERHAD

89 2008 ANNUAL REPORT Valuing Relationships in the Marketplace (continued) The Group s response to a crisis or emergency is controlled and coordinated by our Crisis Management Centre (CMC). Depending on the severity of the incident, the crisis is colour coded as Green for Mild or Operational Level, Yellow for Medium Level and Red for High or Critical Level to represent the state of emergency. In 2008, the Centre under PNSB was activated several times to handle the following incidents:- No. Date Description Period Colour (Day/s) Code 1 2 January 2008 Sungai Selisek WTP shutdown due to diesel spillage resulting from a leakage from 2 Yellow a sand dredger at Kg Kelewar, Perak approximately 6 km upstream of the water intake January 2008 Bukit Nanas WTP shutdown due to 1200 mm raw water pipe burst near the 2 Red Duta-Ulu Klang Highway construction project (DUKE) at Projek Perumahan Rakyat Termiskin Setapak Jaya January 2008 Scheduled shutdown of Bukit Nanas WTP due to valves replacement. 1 Green 4 30 January 2008 Unscheduled shutdown of Cheras Mile 11 WTP due to two burst of raw water pipes 1 Green located at the Raw Water Pump House February 2008 Salak Tinggi WTP shutdown due to high level of ammonia in the raw water at 9 Yellow the intake. Potential source was 6 km upstream. 6 6 March 2008 Gombak WTP was placed on code green alert with continuous monitoring at 1 Green the intake due to pollution risk of a Crude Palm Oil (CPO) spillage from an accident involving a CPO tanker at KM KL Karak Highway. The CPO oil spillage was contained at the accident site and no shutdown was recorded April 2008 Unscheduled water interruption at Langat WTP occurred on 11 April Yellow at 4.40 pm due to the breakdown of two raw water pumps as a result of heavy siltation at the pump sump. The incident did not cause major disruption of treated water supply since both PNSB and SYABAS had taken immediate effective action April 2008 Cheras WTP shutdown due to diesel pollution resulting from leakage from a diesel 1 Green skid tank at a cement batching plant approximately 2 km upstream of intake May 2008 Bukit Nanas WTP raw water pipeline B burst due to piling works carried out within 3 Green the MINDEF area. An operational ERP Code Green was declared at site at 2.00 am on 14 May Teams were immediately deployed to sites to close the valves so that water could be diverted away from pipeline B May 2008 Unscheduled shutdown at Salak Tinggi WTP at 2.40 pm due to the detection 2 Green of dead fish and foam at the intake July 2008 Rantau Panjang WTP shutdown from 9.00 am to am due to the presence 1 Green of diesel at the intake. Based on investigations conducted, the diesel pollution was due to sand mining activity located about 3 km upstream of the water intake August 2008 Rantau Panjang WTP shutdown from am to 1.15 pm due to the presence 1 Green of diesel at the intake. The diesel pollution originated from the same sand mining activity, which had lead to the shutdown of the WTP on 29 July December Dam encroachment issues and concern over risk of dam failures led to the activation 2 Green 2008 of the CMC at 9.20 am. The activation was to expedite the latest information on dam encroachment PUNCAK NIAGA HOLDINGS BERHAD 87

90 COMMITTED ANNUAL REPORT 2008 Valuing Relationships in the Marketplace (continued) In the same year, SYABAS activated its ERP to handle the following incidents:- No. Date Description District Code January 2008 Closure of Sungai Selisek WTP due to pollution arising from Hulu Selangor Green oil spills into Sungai Selisek January 2008 Closure of Bukit Nanas WTP due to 1200 mm diameter raw water Kuala Lumpur Red pipe burst from Klang Gates Dam January Reduction of production at Sungai Langat and Cheras WTPs. Hulu Langat Green - 3 February March 2008 Water interruption due to 1200 mm pipe burst at Jenderam Hulu Langat Yellow Hilir, Sepang March 2008 Water interruption due to 600 mm pipe burst at Jalan B20, Sepang Green Sepang April 2008 Reduction of production at Sungai Langat WTP due to failure of Kuala Lumpur Green 2 nos. raw water booster pumps. Petaling Hulu Langat April 2008 Shutdown at Sungai Langat WTP due to TNB failure from Hulu Langat Green 1.45pm -3.55pm on May 2008 TNB Switch Gear failure at Kg. Cheras Baru Kuala Lumpur Green [Perkuat Kuari Pumphouse] May 2008 Low levels at Pudu Ulu Reservoir. Kuala Lumpur Green May 2008 Water supply interruption at Kg Bukit Kerayong. Kuala Selangor Green June 2008 Delay in scheduled installation of flowmeter by JCSB on 900 mm Hulu Langat Green pipe at Jalan Mohd Kamal, Kajang July 2008 Balancing reservoir cleaning Compartment No. 2 at Sungai Sepang Green Semenyih WTP by ABASS without notice August 2008 Delay in scheduled pipe diversion and installation of 600 mm pipe. Hulu Langat Green October mm, 1200 mm & 1050 mm pipe burst at Kampung Hulu Langat, Red Revolusi Hijau, Dengkil due to illegal sand mining activities Sepang, nearby the pipeline. Kuala Langat October 400 mm HDPE submarine pipe supplying water to Pulau Ketam Klang Yellow - 3 December 2008 burst/leak. Green We are pleased to report that all emergency situations were handled successfully by the Management and O3perations personnel of PNSB and SYABAS which collaborated closely with the relevant Authorities, the media and consumer groups, and succeeded in bringing these crises under control with minimum shortcomings. Much of this success was due to our experience in handling similar incidents throughout the years. Code Green ERP drills (in which the emergency can be controlled and terminated by the Emergency Commander and Intervention Teams) were conducted at all WTPs during the year. In 2008, a total of 31 safety mock drills were carried out to prepare our employees concerned in managing possible emergency situations. 88 PUNCAK NIAGA HOLDINGS BERHAD

91 2008 ANNUAL REPORT reaching out to our community We pursue Community development programmes through long-term partnerships with a focus on protection, conservation and enhancement of our water resources, which is relevant to our business operations. Two of our major environmental awareness programmes were specifically introduced for school children. Through a variety of events and activities, the children involved in these programmes have the opportunity to experience a hands-on approach to environmental conservation. In 2008, our unique River Rescue Brigade (Briged Penyelamat Sungai) Programme involved 1,804 Standards Five and Six students from 23 primary schools in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. During the year, a total of RM618, was spent to undertake this programme to expound the importance of river preservation, and to encourage the students to work together with PNSB and SYABAS to protect our essential and limited water resources. 18 January 2008 Remedial works were undertaken immediately at the site of the burst pipe at the DUKE highway. 38 tanker lorries, 300 static tanks and 10 lorries transported water to the affected commercial and residential areas Throughout 2008, the Senior Management of both Puncak Niaga and SYABAS visited 28 primary schools and met 2,945 students collectively under our Educational Outreach Programme (Turun ke Padang). The students were briefed on the roles of Puncak Niaga in the water treatment and SYABAS water distribution process. A total of RM155, was spent to organise diverse activities for this programme during the year. More than 6,000 school children have been involved in these popular programmes for the past 12 years and we are planning to expand this education initiative to secondary and tertiary students as well as university undergraduates. Our CR to the community also encompasses philanthropy and supporting local community programmes. However, our activities over the years have moved beyond charity to focus on building sustainability and capacity within our workplace and beyond. One such event is the WTP Open Day that was held at the Bukit Nanas, Sungai Langat and Wangsa Maju WTPs in conjunction with World Water Day 2008, which received 911 visitors including students, children, foreign delegates and the army. This is another effort of ours in promoting public awareness on the importance of protecting our water resources. Our CR activities are embraced by all our employees and not solely driven by the Management as it is an important avenue for our employees to reach out through personal engagement with the community and to put our corporate values and culture into practice. 30 April 2008 Representatives from PNSB spent the day with students of SK Parit Mahan, Jeram as part of its Educational Outreach Programme 2008 with SYABAS 16 April 2008 SYABAS held its 32 nd Educational Outreach Programme 2008 at SJK (T) Castlefield, Puchong 19 April 2008 SYABAS organised a Majlis Penyampaian Hadiah Pelanggan Prihatin SYABAS for the month of January till March 2008 held at Plaza Alam Sentral, Shah Alam PUNCAK NIAGA HOLDINGS BERHAD 89

92 COMMITTED ANNUAL REPORT 2008 Reaching Out to Our Community (continued) 22 July 2008 Students from SK Rantau Panjang, Batang Berjuntai, Selangor at PNSB s 92 nd Educational Outreach Programme September 2008 PNSB organised a Majlis Berbuka Puasa graced by Duli Yang Maha Mulia Sultan Sharafuddin Idris Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj, the Sultan of Selangor. Contributions were also distributed to the underpriviledged members of the community 30 August 2008 The 22 nd River Rescue Brigade Programme was held at the North Hummock WTP 16 September 2008 SYABAS organised a Majlis Berbuka Puasa Bersama Anak-anak Yatim held at SYABAS Kuala Lumpur District Office 12 November 2008 The 23 rd River Rescue Brigade Programme was held at the Cheras Mile 11, WTP 9 December 2008 Persatuan Kakitangan Bekalan Air Selangor dan Putrajaya (PEKA) organised Majlis Ibadah Qurban held at Wisma Rozali. Daging Qurban was distributed to the following charitable organisations:- Pondok Penyayang Raudah, Batu 11 Gombak, Selangor Rumah Jagaan Nurhikmah, Taman Mesra, Kajang, Selangor Asrama Damai Anak Yatim Kuang, Kuang, Selangor Rumah Amal Siraman Kasih, Bandar Country Homes, Rawang, Selangor Asrama Anak Yatim Darul Izzah, Bangi, Selangor Company s Foster Families 10 December 2008 SYABAS organised Majlis Ibadah Qurban 1429H held at its Headquarters 29 December 2008 Employees from PNSB participated at the Maal Hijrah 1430 Celebration held at the Putrajaya International Convention Centre, Putrajaya 90 PUNCAK NIAGA HOLDINGS BERHAD

93 2008 ANNUAL REPORT SUSTAINING OUR ENVIRONMENT Ever conscious that our natural water resources and the environment are inextricably linked, PNSB established the Water Resources and Environmental Surveillance (WRES) Department in 1995 to provide effective environmental services towards consistent delivery of high quality drinking water. Sustainability of our water resources is central to providing consistent and excellent drinking water quality. Our commitment to ensure sustainable water resources in Selangor is evident in PNSB s widening scope and progressive initiatives to promote integrated environmental management amongst all stakeholder groups ranging from water operators, governing authorities and civil societies. To this end, since the inception of WRES, we have established our Environmental Surveillance Section (ESS) to provide effective monitoring of the water catchment areas including the rivers and dams with respect to the raw water quality against any potential pollution sources and activities such as encroachment, and further to make the appropriate recommendations to the relevant authorities for action. The ESS team is responsible for carrying out annual environmental programmes, which include regular sanitary surveys, special environmental investigations at water catchment areas, investigations of violations and reporting of raw water pollution to the relevant Authorities such as the Department of Environment (DOE) and Lembaga Urus Air Selangor (LUAS). Studies on water quality problems faced by the Water Treatment Plants (WTPs) and Dams are also frequently undertaken. In 2008, based on our periodic surveillance and monitoring on the raw water resources (rivers, lakes and dams), we have identified various pollution sources namely, industrial and urban development activities that directly or indirectly discharge untreated waste into the waterways; solid waste dumping; diesel spillages from road accidents or construction activities; illegal sand mining; unregulated land clearing; and animal husbandry activities. These activities contribute to water resources pollution, and thus affect water treatment and supply. We highlight these pollution concerns to the authorities, and work closely with DOE, LUAS and the relevant authorities at the State and Federal levels. With this close cooperation, we support the necessary regulatory enforcement to mitigate pollution incidences and ensure environmental care. In this regard, we are also members of various Selangor State s committees such as the Jawatankuasa Tetap Alam Sekitar Negeri Selangor, Jawatankuasa Tetap Infrastruktur dan Kemudahan Awam Negeri Selangor and Jawatankuasa Kecemasan Pencemaran Sumber Air Negeri Selangor. PNSB operates and maintains two River Warning Monitoring Systems (RWMS) at Sungai Langat and Sungai Selangor upstream in order to provide early warning of possible raw water quality violations. In 2008, five Raw Water Surveillance Stations (RWSS) were installed at the intake points for the Salak Tinggi, Bukit Tampoi, Sungai Langat, Cheras Mile 11 and Gombak WTPs respectively. These intake points were selected, as the raw water sources were susceptible to pollution that can exacerbate raw water quality violations during low flow in the dry seasons. In addition, our toll-free river watch telephone hotline ( ) enables the public to inform us of any pollution incidences. Our River Rescue Brigade seeks to educate the younger generation on the importance of environmental preservation and conservation Educating the society is key in sharing knowledge on environmental preservation PUNCAK NIAGA HOLDINGS BERHAD 91

94 COMMITTED ANNUAL REPORT 2008 Sustaining Our Environment (continued) For the year 2009, in tandem with the integrated river basin management that is being promulgated by the authorities, ESS will be implementing PNSB s river basin modelling programme for integrated watershed protection. The two other sections established under the WRES Department are the Central Laboratory Section (CLS), established to mainly conduct both raw and treated water quality assessments; and a Process Improvement Section (PIS) to ensure the efficiency of every stage of the water treatment process, from the point of entry at the WTP intake through the various treatment systems until it leaves the WTP at the balancing reservoir. Our stringent assessment covers the following:- Hourly test on 4 physical and 5 chemical parameters. Continuous monitoring of raw water, settled water and treated water quality by on-line analysers at the WTPs. Daily analysis for microbiological parameters. Weekly test by the Central Laboratory Section and the Ministry of Health (MOH) at the outlets of the WTPs and balancing reservoir. Monthly test for all parameters by an accredited independent laboratory according to schedules set by the MOH. In tandem with PNSB s Management s commitment to inculcate sustainable environmental practices, our PIS continuously evaluates alternative and biologically derived coagulants and flocculants that can improve the treatment process. The key highlights of WRES for 2008 in environmental and water quality monitoring include the following:- Frequency Figure 1: Trending on Annual Raw Water Quality Violations and Plant Shutdowns Annual Raw Water Violations & Plant Shutdowns ( ) 1,400 1,200 1, , ,008 1, Year Total Raw Water Quality Violations Plant Shutdown Due to Raw Water Violation The breakdown of the violated parameters in 2008 are as follows: Parameter group Total Raw Water Quality Violations Recorded Microbiological Group I - Physical Group II Inorganic matter Group III Heavy metals 5 1 Group IV Pesticides 0 0 TOTAL 1,008 1,268 Comparison of Total Raw Water Quality Violations Recorded in 2007 and 2008 Raw Water Quality Violations. Water Quality Index Programme. Environmental Care Programme. Public Awareness on Environmental Protection and Conservation. Raw Water Quality Violations In 2008, there were a total of 1,268 raw water quality violations (2007:1,008) and 247 cases of plant shutdowns due to raw water violations (2007:277) as shown in Figure 1. The annual numbers of raw water violations and plant shutdowns from 1995 to 2008 are recorded as at the end of December of each year. The Waterbox Demonstration is one of the activities experienced by students during the Educational Outreach Programme 92 PUNCAK NIAGA HOLDINGS BERHAD

95 2008 ANNUAL REPORT Sustaining Our Environment (continued) Most violations occurred in the Langat River, Selangor River and Bernam River basins, as recorded below:- Catchment Area Total WTP(s) Total Violation Langat River basin Selangor River basin Bernam River basin Kelang River basin Buluh River basin Tengi River basin TOTAL 29 1,008 1,268 Distribution of Raw Water Quality Violations Recorded per Catchment Area Raw water contamination can lead to plant shutdowns, particularly at the partial WTPs where the design factors limit the plant s ability to treat poor raw water quality. The 247 shutdown cases in 2008 contributed to a total production loss of 5, hours (2007:277 cases resulted in 4, hours of shutdown). Major probable sources for the plant shutdowns were leaking of contaminants from road accidents, construction works and discharge of industrial effluents into the waterways. Record of Plant Shutdown Cases Due to Raw Water Quality Violations in 2008 No. Date WTP Shutdown Parameter/ Probable Source of Pollution hours Indicator Sungai Selisek Diesel Sand mining activity at Kg Kelawar, Perak ~ 6 km upstream intake Salak Tinggi High High ammonia level due low dilution factor ammonia during dry period. Suspected due to discharges from STPs and industry Cheras Mile Diesel Leaking from diesel skid tank at cement batching plant ~ 2 km upstream intake Salak Tinggi Dead fishes Dead fish and foamy raw water Rantau Panjang 1.50 Diesel Sand mining activity ~ 3 km upstream intake Rantau Panjang 2.50 Diesel Sand mining activity ~ 3 km upstream intake In January 2008, the Sungai Selisek WTP was shutdown for hours due to diesel spillage from sand mining activities in Kg Kelawar, Perak. The activity was located approximately 6 km upstream of the Sungai Selisek intake. Environmental impact observed on site involved the oil spillage, high siltation, surface runoffs and deterioration of the riverbanks. Oil booms were installed at the raw water intake to prevent diesel entering the water treatment system. PUNCAK NIAGA HOLDINGS BERHAD 93

96 COMMITTED ANNUAL REPORT 2008 Sustaining Our Environment (continued) In February 2008, the Salak Tinggi WTP experienced a total shutdown of hours due to high ammonia concentration. The main cause of the shutdown resulted from the lower dilution during the dry season. Based on the monitoring session conducted upstream of the water treatment plant, the effluent discharges from the factories in Pekan Nilai were identified as one of the main contributors to the pollution. From the analysis, ammonia levels of the effluent had exceeded the Ministry of Health s (MOH s) Raw Water Criteria of 1.50 mg/l contributing to the ammonia load particularly in Sungai Batang Nilai and Sungai Labu. Diesel spillage in Sungai Bernam located 6 km upstream of the Sungai Selisek WTP intake Foamy effluent discharge from nearby factories Deterioration of riverbanks due to the sand mining activity in Kg Kelawar Perak in Sungai Bernam On 14 May 2008, another major pollution impacted the Salak Tinggi WTP. Dead fish and crustaceans in foamy raw water at the intake of Salak Tinggi (WTP) were observed and triggered the WTP shutdown as it was evident that high pollutants were being loaded into the Sungai Labu. The WTP experienced shutdown for hours given that the raw water was unsuitable for consumption due to this high pollutant load. It was suspected that high industrial discharge from facilities located within the Nilai Industrial Park had contributed to the high pollutant loadings into Sungai Labu. Impact of the pollution to the fish in the rivers Industrial discharge from a textile factory Effluent discharge from Nilai Industrial Park into the river 94 PUNCAK NIAGA HOLDINGS BERHAD

97 2008 ANNUAL REPORT Sustaining Our Environment (continued) Water Quality Index Programme A Water Quality Index (WQI) Programme is conducted on a monthly basis for all WTPs. The WQI value is computed to allow determination on the cleanliness and availability of water usage for water supply, aquaculture and irrigation purposes, as tabulated below:- Water Quality Index Classification According to DOE Malaysia WQI Range Water Usage Description Class I <92.7 Conservation of natural environment. Water supply I Practically no treatment necessary (except disinfection or boiling) only. Fishery I Very sensitive aquatic species. II Water supply II Conventional treatment required. Fishery II Sensitive aquatic species. Recreational use with body contact. III Water supply III Extensive treatment required. Fishery III Common, of economic value and tolerant species. IV Irrigation. V <31.0 Water unsuitable for any of the above uses. WQI Class I II III IV V (Source: Department of Environment Malaysia) Record of WQI of the Intakes for 2008 WTP Batang Kali, Kuala Kubu Bharu, Kalumpang, Sungai Pangsoon, Sungai Lolo (Old), Sungai Lolo (New), Sungai Serai, Ampang Intake, Sungai Kepong, Sungai Rumput and Sungai Keroh WTPs (11 WTPs). Bernam River Headworks, Sungai Selisek, Sungai Dusun, Sungai Tengi, Sungai Buaya, Sungai Selangor Phase 2 (SSP2), Sungai Langat, Bukit Nanas, Sungai Batu, Gombak, Sungai Rangkap and Wangsa Maju (12 WTPs). Rantau Panjang, North Hummock, Sungai Sireh, Bukit Tampoi, Cheras and Salak Tinggi WTPs (6 WTPs). None. None. The average monthly WQI readings in 2008 for the 29 WTPs showed that ten stations fall under Class I, 12 stations in Class II and the remaining six stations in Class III. When compared to 2007, which recorded 23 stations in Class II and the remaining four stations in Class III, the WQI for Rantau Panjang had deteriorated to Class III whilst PNSB took over the Sungai Sireh WTP in April 2008, which is located near brackish water and was categorised under Class III. Environmental Care Programme PNSB takes its corporate environmental responsibility in the protection, conservation and enhancement of the natural environment, particularly in the management aspect of the water resources, very seriously. Various initiatives were taken to protect and improve the river water quality throughout the year Environmental Monitoring of Catchment Areas for the 29 WTPs and Dams (i) Sanitary Survey Programmes for early detection of environmental pollution were carried out at the following seven WTPs:- SSP2. Gombak. Bukit Tampoi. North Hummock. Sungai Rangkap. Sungai Lolo (Old). Sungai Lolo (New). Everyone shares the duty to protect our precious water resources PUNCAK NIAGA HOLDINGS BERHAD 95

98 COMMITTED ANNUAL REPORT 2008 Sustaining Our Environment (continued) Numerous environmental monitoring activities are carried out at catchment areas, raw water intake stations, WTPs, Dams and Sewerage Treatment Plants (ii) Environmental Report on six catchment areas for all 29 WTPs and Dams for pollution risk mapping of the catchment areas. (iii) Water Quality Index Programme conducted on a monthly basis for 29 raw water intake stations. (iv) Sewage Treatment Plant (STP) Monitoring Programme surveillance of STPs operated by Indah Water Konsortium Sdn Bhd and others located within the catchment areas. Environmental Investigation In 2008, a total of six Plant Shutdown Cases due to Raw Water Pollution occurred to minimise production losses. A Risk Assessment Programme was also undertaken on identifying potential pollution risks emanating from animal husbandries, land clearing activities, sand mining and landfills. Water Quality Monitoring We are pleased to report that all our 29 WTPs met the zero violations target for raw and treated water quality. Independent Laboratories, SYABAS and the Selangor State Health Department also carried out reviews and evaluations of the Non- Compliance Reports (NCRs) for treated water violations during the year under review. The Monthly Water Quality Reports evaluation on monthly raw and treated water quality analysis carried out by Independent Laboratory and the Monthly and Weekly Fluoride Compliance Reports for all WTPs and weekly fluoride levels for four WTPs were duly submitted to the relevant authorities. Testing for daily ammonia levels for selected WTPs were undertaken for critical WTPs in Langat Basin namely Sungai Langat, Cheras Mile 11, Bukit Tampoi and Salak Tinggi WTPs. Scheduled Plant Shutdowns In 2008, the WTPs recorded a total of shutdown hours due to scheduled maintenance works, which are important to keep the WTPs in good working condition. Sludge Disposal and Management In 2008, PNSB successfully commissioned 13 out of the 15 completed sludge treatment plants that were constructed to treat the estimated 664 metric tonnes of sludge produced by our WTPs each year. However, operations of the completed sludge treatment facilities (STF) were put on hold until the Government approves suitable land for sludge disposal. The STF comprise concrete thickeners, mechanical decanters, piping and buildings as well as mechanical and electrical works. 96 PUNCAK NIAGA HOLDINGS BERHAD

99 2008 ANNUAL REPORT Sustaining Our Environment (continued) Spreading the message on environmental preservation The thickeners thicken the sedimentation from the WTPs, while the decanters dry out the thickened sludge to produce solid sludge cakes, which are then disposed off at landfill sites. The effluent discharged by the sludge treatment facilities into rivers must meet either the Class A or Class B standards as required by the Department of Environment. Impact on the Environment At Puncak Niaga, we are aware of the impacts of greenhouse gas emissions on the atmosphere. Our strategy focuses on understanding the impacts of climate change, monitoring the situation, developing and implementing adaptation measures and raising awareness. Energy Consumption The treatment of water and its distribution is an energy intensive process. As quality standards increase, our demand for electricity grows and we have strived to ensure efficient and optimal energy consumption in our treatment processes. Since we are operating at optimal efficiency level, there are currently no energy reduction programmes at Puncak Niaga. Our electricity usage for 2008 was 233,501,486 kwh, compared to 218,958,691 kwh in 2007 and 222,741,304 kwh in The higher electricity consumption was due to higher production, installation of new equipment and running of the sludge treatment plant facilities. Reaching out to our industrial customers via our Factory Visit Programme We strive to reduce energy consumption by carrying out regular preventive maintenance programmes as well as overhauling equipment to ensure our WTPs are running efficiently. Public Awareness on Environmental Protection and Conservation Since 2003, we have continuously expanded our Company s Social Environment Awareness Programme. In 2008, we met with personnel from Reccron Malaysia Sdn Bhd (formerly known as Hualon Corporation (M) Sdn Bhd) and KL Kepong Rubber Factory to highlight the impact of pollution and the pressing need to preserve our water resources. These visits were part of our Factory Visit Programme, bringing the total number of factories visited to 17 since its inception. PUNCAK NIAGA HOLDINGS BERHAD 97

100 COMMITTED ANNUAL REPORT 2008 our focus on occupational HEALTH & SAFETY As a measure of our concern for matters relating to Health, Safety and the Environment (HSE) at both the workplace and the community, we have developed our HSE Policy. This policy has been in place since 1999 and is constantly reviewed to enable our team to effectively manage these issues. Our Corporate HSE System aims to: provide a safe and environmentally friendly workplace in the most effective manner; highlight to clients and ultimately the public on the Company s commitment to HSE; and facilitate employees induction in relation to their knowledge on HSE. It is the policy of Puncak Niaga Holdings Berhad and its subsidiaries (PNHB Group) to provide, so far as is practicable, a safe, healthy and environmentally friendly workplace for all employees, contractors, visitors and interested members of society. In the spirit of consultation and cooperation, the Management and employees will strive together to achieve the goals and objectives of this Policy. 9 July 2008 Wangsa Maju WTP was the proud recipient of the Gold Award for the Water Sector at the NCOSH Awards The event was held in conjunction with the Occupational Health & Safety Week April 2008 The launch of The Safety & Health Induction Course for Construction Workers (CIDB Green Card) was held at the Quality Hotel Shah Alam and officiated by YB Tuan Haji Yaakob Sapari, Selangor EXCO/Chairman Standing Committee for Agriculture Modernisation, Natural Resources Management & Entrepreneur Development 25 August 2008 PNSB s Sungai Langat, Sungai Batu and Bukit Nanas WTPs each received the Gold (Class II) Award at the MSOSH Annual OSH Performance Awards 2007 presentation ceremony held at the One World Hotel, Petaling Jaya, Selangor The Certificate of Participation presented to the Wangsa Maju WTP that was conferred with the Gold Award for the Water Sector at the National Council for Occupational Safety and Health Malaysia (NCOSH) Awards September 2008 SYABAS set up an exhibition and Customer Service Counter in conjunction with the Ministry of Health s Campaign held at Padang Permainan SS4, Petaling Jaya 98 PUNCAK NIAGA HOLDINGS BERHAD

101 2008 ANNUAL REPORT Our Focus on Occupational Health & Safety (continued) 13 December 2008 PEKA organised a health awareness programme held at Wisma Rozali 18 October 2008 PNSB s River Rescue Brigade visited students of SK Sungai Kantan Permai, Kajang as part of its awareness programme on importance of river preservation 17 December 2008 Shooting training for our Auxillary Police personnel at Lapang Sasar, Sungai Buloh Improving Health & Safety at PNSB As a responsible employer, we seek to provide a healthy and safe workplace for our employees. Throughout 2008, we have demonstrated our commitment across the business towards improving health and safety at the workplace. We have been providing the necessary safety and health mechanisms for our employees who may be exposed to hazards while performing their duties. Although steps taken are in line with statutory requirements, we rely on our own internal control measures to prioritise safety at the workplace. A structure is already in place to ensure this as our Corporate Health and Safety Committee was established in 2004 and is supported by similar committees at the operational level. For the first time since A healthy and safe workplace contributes to improved employees work performance the inception of the Corporate Health and Safety Committee, PNSB s EXCO appointed Puan Roowina Merican A Rahim Merican, as the first lady to be the Chairperson of the Committee on 8 July Our Safety and Health Policy which has been in place since March 1999 was reviewed and expanded on 27 July 2003 to the Health, Safety and Environment Policy (HSE Policy), which incorporates the element of environment at the workplace. With this policy, we ensure that HSE measures are implemented and monitored company-wide. We have also conducted Chemical Health Risk Assessments (CHRAs) at our WTPs to evaluate the extent of exposure to chemicals among our employees. We have the proper procedures, equipment and training in place to ensure our employees safety and health, which also puts us in compliance with the regulations. All our employees at the WTPs and Dams are required to undergo a minimum of four man-days of training annually while permanent contractors must undergo at least one man-day of training a year. The proper implementation of our health and safety measures requires that our employees and permanent contractors be adequately trained in three categories: Statutory Requirements, Competency Training and General Training. PUNCAK NIAGA HOLDINGS BERHAD 99

102 COMMITTED ANNUAL REPORT 2008 Our Focus on Occupational Health & Safety (continued) Safety induction training, mock drills as well as ERP training have been carried out at all of our 29 WTPs and the three Dams to train employees to be responsive and ready in the event of emergencies. 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 Officers have conducted 31 Site Safety Inspections at each WTP and Dam. 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 Puncak Niaga. In the process, matters such as adequate signage as well as proper storage of chemicals and usage of personal protective equipment at the workplace were also reviewed annually. In July 2008, Wangsa Maju WTP received the Gold Trophy Award under the Water Utility Sector at the National Excellence Award Competition in Occupational Safety and Health 2007 from YAB Datuk Seri Mohd Najib bin Tun Abd Razak, the former Deputy Prime Minister of Malaysia. The competition was organised by the National Council on Occupational Safety and Health (NCOSH) to promote excellence in the implementation of safety and health programmes. In August 2008, the Bukit Nanas, Sungai Langat and Sungai Batu WTPs each received the Gold (Class II) Award in the Malaysian Society for Occupational Safety and Health (MSOSH) Annual OSH Performance Awards The awards were presented by YBhg Datuk Thomas George, Secretary General of the Ministry of Human Resources. The competition was organised by the MSOSH, a non-governmental organisation which promotes safety and health activities and programmes. Concern for Health & Safety at SYABAS Strict adherence to safety guidelines at all our work sites SYABAS Health, Safety and Environment Policy was established on 20 March 2007 to ensure that all employees, customers and contractors are aware of the direction and activities of the Company in line with compliance of safety, health and environmental aspects. In 2008, the HSE Department focused on the contractors compliance on all safety, health and environment requirements while undertaking work for SYABAS. Starting from January 2008, the HSE Department conducted briefing on safety guidelines for all routine maintenance contractors at the ten districts. The contractors were given the Guidelines for Contractors booklet as a guidance to the requirements. Contractors are also required to fill out the Borang Keperluan Pematuhan Kepada Keselamatan dan Kesihatan Pekerjaan before commencement of work. In preparing for obtaining the OHSAS Certification, the HSE Department prepared 15 procedures, which included a process-mapping flowchart as part of its documentation improvement before being implemented in SYABAS. To comply with the Occupational Safety and Health Act 1994, a Hazard Identification, Risk Assessment and Risk Control programme has been established for the identification of hazards, and for the assessment and control of health and safety risks. 100 PUNCAK NIAGA HOLDINGS BERHAD

103 2008 ANNUAL REPORT Our Focus on Occupational Health & Safety (continued) In June 2008, representatives from the HSE Department attended the Mesyuarat dan Taklimat Simulasi Table Top Pandemik Influenza Antara Kementerian/Jabatan (SIMEX 2008) meeting and briefing session held at the Ministry of Health, Putrajaya. Prior to this, all Heads of Departments were briefed by representatives of the Ministry on SYABAS responsilibities in facing the Pandemic Influenza. On 7 July 2008, SYABAS participated in the Bengkel Keselamatan dan Kesihatan Wanita Di Tempat Kerja 2008 workshop organised by the National Council for Occupational Safety and Health, one of the programmes in conjuction with the Occupational Health and Safety Week 2008 held at Putra World Trade Centre (PWTC). Safety inspections are conducted at all work sites In August 2008, the HSE Department conducted briefings on contractors compliance to legal and DOSH requirements at site to the respective Heads of Departments and Districts representatives. The purpose of these briefings was to highlight on non-conformances (NCR) by contractors during the HSE Department inspections. Apart from that, it was also to ensure that employees understand all requirements to be complied with during work monitoring. Working At Heights briefings were also conducted in compliance to the Guidelines for the Prevention of Falls at Workplaces endorsed by DOSH in The briefings emphasised the legal requirements, safe working procedures and use of appropriate Personal Protective Equipment (PPE) while working at heights to prevent accidents. In 2008, the HSE Department also successfully conducted Safety Inspections (SSI) and Project Safety Inspections on all contractors at the worksites and at SYABAS premises. During the year, SYABAS HSE Department conducted briefings on safety guidelines for all routine contractors. The Contractor Guidelines booklets were also given out during these briefings for contractors to abide by. In March 2008, a Confined Space Entry procedure was approved by the Management in order to comply with the Code of Practice for Safe Working in Confined Space endorsed by the Department of Occupational Safety and Health (DOSH) in Briefings on the compliance of the regulation and procedures were conducted to the Heads of Divisions, respective Districts representatives and contractors involved in confined space works. PUNCAK NIAGA HOLDINGS BERHAD 101

104 COMMITTED ANNUAL REPORT 2008 Our Focus on Occupational Health & Safety (continued) On 27 April 2008, 52 employees from SYABAS Headquarters and the Sepang, Hulu Langat and Klang Districts participated in the OSH Walkathon organised by DOSH. This programme was held at the National Institute of Occupational Safety and Health (NIOSH) in Bangi. 13 employees attended the Authorised Gas Tester (AGT) course, which was held on 1 till 3 July 2008 at NIOSH, Bangi in order to comply with confined space requirements. Certificates and authorisation cards were then given out by the Chief Executive Officer to participants who completed the course during the Monthly Staff Assembly. In December, four Fire Drills were conducted at four Districts namely, Gombak, Kuala Selangor, Petaling and Hulu Langat. This programme was conducted in collaboration with the BOMBA to comply with the safety requirements. To ensure employees preparedness during emergencies, similar programmes will be conducted at another six Districts in PUNCAK NIAGA HOLDINGS BERHAD

105 2008 ANNUAL REPORT Our Focus on Occupational Health & Safety (continued) Lost TIME Injury (LTI) Achievement 2008 Safety Index Lost Time Target (Man Hour) 10,497,000 Achievement (as at December 2008) 10,669,003 Achievement (%) 101.6% Workers are required to follow the correct safety procedures when working in confined spaces Lost Time Injury (LTI) at WTPs and Dams SSP2 WTP continued to maintain its track record for demonstrating a high level of commitment to safety and health standards in the workplace. The WTP successfully maintained ZERO Lost Time Injury (LTI) for 2008 and accumulated man-hours without LTI recorded from July 1998 until 31 December 2008 were 3,035, hours. The Wangsa Maju WTP has also been able to maintain the ZERO LTI in 2008 with accumulated man-hours of 818, hours without LTI for the period starting July 1998 to 31 December The Sungai Sireh WTP also reported ZERO Lost Time Injury (LTI) for the year under review and the accumulated man-hours without LTI since April 2007 until 31 December 2008 was at 117, hours. Besides this, the Wangsa Maju WTP achieved the target set for the WTP Audit Major Non-Conformance Request (NCR) where the system and implementation at the plant were found to be adequately controlled. Protective Services The Protective Services Department has 337 security personnel who are responsible for protecting PNHB Group s premises and assets. Effective 9 June 2006, our security personnel have been upgraded to Auxiliary Police status with police empowerment powers and are licensed to use firearms to secure all important government installations within the responsibility of PNHB Group. All of our Auxiliary Police personnel (AP) have undergone basic training conducted by the Royal Malaysian Police Force at the Police Training Centre at Jalan Semarak, Kuala Lumpur (PULAPOL). The assignments and duties of our AP are:- Alert and ready to serve - our Auxiliary Police Personnel Security control at WTPs, Dams, stores, reservoirs, pump houses, offices and SYABAS collection centres. Escort for important documents and cash-in-transit. Coordinating protocol at the Group s events. Conducting investigations. Attending to special tasks assigned by the Management. During the year, the AP personnel of PNHB continued to portray a good image in the public s eye and effectively safeguarded all government installations, thereby enhancing the trust of the Government and the public at large. PUNCAK NIAGA HOLDINGS BERHAD 103

106 committed ANNUAL REPORT 2008 commitment to quality PNSB continued to uphold and maintain internationally recognised Quality Management Systems that are periodically reviewed and revised to ensure current needs of the systems in terms of having the relevant procedures and processes firmly in place. Quality Management System PNSB, through its Operation II Division in association with the Contract and Procurement Department, the Human Resources and Administration Division, the Finance and Accounts Department, the Legal Department, the Health, Safety and Quality Management Department and the Water Resources & Environmental Surveillance Department, has successfully obtained the Integrated Management System (IMS) Certification for the Provision of Construction Services for Building, Civil Engineering Works, Mechanical and Electrical Engineering Works, Specialising in Water Related Infrastructure. Sungai Langat WTP successfully maintained its ISO 9001:2000 Quality Management System certification in 2008 The IMS Certification includes the ISO 9001:2000 for Quality Management System issued on 17 November 2008, the OHSAS 18001:2007 for Safety and Health Management System, and the ISO 14001:2004 for Environmental Management System, both of which were issued on 15 December 2008 by URS Certification (M) Sdn Bhd (URS). ISO 9001:2000 and ISO 14001:2004 are also accredited under the United Kingdom Accredited Service (UKAS). With the avail of this IMS, the capability of PNSB as a provider of construction services is further enhanced in the aspect of work quality, safety and health with emphasis in the preservation of environment. SSP2 WTP has successfully maintained its Integrated Management Systems (IMS) certification by Lloyd s Register Quality Assurance (LRQA), comprising the Quality Management System ISO 9001:2000, Environmental Management System ISO 14001: 2004 and Occupational Safety and Health Management System (OHSAS 18001:1999). Since the new version of Occupational Safety and Health (OHSAS 18001:2007) has been published, the Plant Management is currently reviewing all related IMS documents based on the new standard. The Compliance Audit by LRQA has been scheduled tentatively in end May August 2008 YB Tuan Haji Yaakob Sapari, Selangor EXCO/Chairman Standing Committee for Agriculture Modernisation, Natural Resources Management & Entrepreneur Development graced SYABAS Water Quality Programme together with members of the media as part of its Turun Padang bersama Media Programme As for the ISO/IEC Laboratory Accreditation by the Department of Standards Malaysia (DSM), it was successfully upgraded from Version 1999 to Version 2005 effective 3 May In addition, the scope to accreditation has also been successfully expanded to include Microbiological Testing effective 3 October PUNCAK NIAGA HOLDINGS BERHAD

107 2008 ANNUAL REPORT Commitment to Quality (continued) Our mark of quality - the ISO 9001:2000 certifications for another seven WTPs in 2008 PNSB s Integrated Management System (IMS) Certification enables the Group to further strengthen its international business footprint in providing construction services in water related infrastructure Llyod s Register Quality Assurance (LRQA) conducted two surveillance audits of the Wangsa Maju WTP s operations in Full compliance was confirmed, and the system and its implementation were found to be adequately controlled. The ISO 9001:2000 Quality Management System certification was maintained. Wangsa Maju WTP was conferred a Gold Award for the Water Utility Sector (Year 2007) by the National Council for Occupational Safety and Health (NCOSH). The award was presented by YAB Datuk Seri Mohd Najib bin Tun Abdul Razak, then the Deputy Prime Minister of Malaysia, during an official ceremony at PWTC, Kuala Lumpur on 9 July marked another achievement for PNSB when another seven of its WTPs were successfully certified to ISO 9001:2000. These are the:- 1. Batang Kali WTP 2. Sungai Dusun WTP 3. Kuala Kubu Bharu WTP 4. North Hummock WTP 5. Ampang Intake WTP 6. Sungai Rangkap WTP 7. Salak Tinggi WTP With this, PNSB currently has 20 WTPs certified to this internationally renowned standard. All documentation, procedures and implementation were spearheaded and undertaken by a task force led by internal expertise. This certification, which was achieved due to our employees efforts, has increased employees productivity, morale and team work. Moving forward from this success, the Company plans to embark on obtaining the ISO 14001:2004 Environmental Management Systems and OHSAS 18001:2007 Safety Management Systems and integrate these systems with the current ISO 9001:2000 Quality Management System. Llyod s Register Quality Assurance (LRQA) also conducted surveillance audits of the WTP s operations in The ISO 9001:2000 Quality Management System certification was maintained for the following nine WTPs and three Regions:- 1. Rantau Panjang WTP 2. Bernam River Headworks WTP 3. North Hummock WTP 4. Sungai Batu WTP 5. Bukit Nanas WTP 6. Sungai Gombak WTP 7. Sungai Langat WTP 8. Cheras Batu 11 WTP 9. Bukit Tampoi WTP 10. Northern Region 11. Central Region 12. Southern Region PUNCAK NIAGA HOLDINGS BERHAD 105

108 committed ANNUAL REPORT 2008 Commitment to Quality (continued) The preparation of documents and procedures were developed and produced using internal resources. No consultant was engaged and competent personnel conducted all trainings related to ISO 9001:2000 in-house. With this certification, the Company can increase its efficiency and productivity. Employees morale have improved and by having defined roles and responsibilities, employees are motivated to contribute to the best of their ability to the organisation. We will ensure that our customers confidence and satisfaction are met by achieving our objectives and targets, which are motivated via positive customer feedback, improved productivity and quality service. SYABAS Water Quality Improvement Master Plan In 2008, SYABAS fully complied with the mandatory level of service on water quality as stipulated in the Concession Agreement dated 15 December 2004 (CA) as well as met the requirements of the Ministry of Health s Quality Assurance Programme. SYABAS holistic Water Quality Improvement Master Plan encompasses five main programmes aimed at improving the distributed water quality and enhancing consumer awareness. These programmes include:- Air Scouring Programme (ASP). Reservoir Cleaning and Inspection. In-house Water Quality Sampling and Testing. Immediate Response to Consumer Complaints. Consumer Awareness and Education. Cleaning of reticulation pipes using air scouring method Air Scouring Programme (ASP) Air scouring is a method used to systematically clean all the reticulation pipes distributing the treated water to the consumers premises. Using the compressed air technique, it is a faster, more cost effective solution to clean water lines that can be completed with significantly less down time than conventional methods. In 2008, air scouring was carried out over a total pipe length of 20,356 km after completing two cleaning cycles of the workable reticulation mains system. The ASP work could not be carried out on about 30% of all the reticulation Manual cleaning of reservoirs in progress pipes totalling 13,000 km due to the capital expenditure (CAPEX) budget to install the air insertion points, scour valves and isolating valves on the mains being withheld pending the resolution on the restructuring plan of the water services industry in Selangor, Kuala Lumpur and Putrajaya by the Government. Reservoir Cleaning and Inspection There are currently 960 reservoirs in service and since the commencement of this programme in 2005, SYABAS undertook the cleaning of 833 or 87% of the reservoirs for the first time. These reservoirs are cleaned manually and thereafter inspected every six months to test water quality using depth-samplers. In 2008, SYABAS undertook the cleaning of 48 reservoirs, while the remaining reservoirs are either newly brought into service or have not been handed over to SYABAS by the developers. 106 PUNCAK NIAGA HOLDINGS BERHAD

109 2008 ANNUAL REPORT Commitment to Quality (continued) Pressured compressed air (6-7 bar) is injected into the reticulation pipe system through a pillar hydrant using an air scouring machine Loose sediments scoured from the reticulation pipe system using the air scouring method Water Quality Sampling In 2008, 106,838 water quality samples were analysed by the Chemistry Department following the Ministry of Health s Drinking Water Quality Standards. The water quality in the distribution system for 2008 was 99.23% in compliance with the National Standard for Drinking Water Quality with zero violation on the microbiological parameters, which means full compliance of the Ministry of Health s Quality Assurance Programme (QAP). In addition, SYABAS conducted in-house water quality analysis on 98,380 samples and these were tested by Third Party Accredited Private Laboratories against a higher internal standard set against the Ministry of Health s QAP. Immediate Response to Consumer Complaints In 2008, we have substantially improved on our response time to within one hour on consumer complaints on water quality, followed by resolution of the complaints up to 93% from 80% in The average number of complaints received were 242 per month and it has been noted that 30% of these complaints were due to internal plumbing within the consumers premises. Consumer Awareness and Education In 2008, we carried out nine major programmes incorporating media coverage to create immediate consumer awareness of water quality issues with emphasis that water supplied to consumers is safe for consumption and the responsibilities of the consumers to maintain their internal plumbing systems. In addition, 532 programmes were conducted at medical establishments, educational institutions, commercial and industrial premises, and private residences within the Districts in which we operate. Water samples taken from various sampling stations are tested and analysed either in-house or by Third Party Accredited Private Laboratories PUNCAK NIAGA HOLDINGS BERHAD 107

110 committed ANNUAL REPORT 2008 CORPORATE EVENTS 29 JANUARY 2008 Official visit by Jabatan Bekalan Air Negeri Sembilan to SYABAS Headquarters. 4 February 2008 SYABAS organised a Practical Test for Plumbing Course at its Mechanical and Electrical Department in Sungai Besi, Kuala Lumpur. 5 February 2008 PNSB launched its fully automated Ultra Filtration Membrane Technology Water Treatment Plant at Sungai Rumput Water Treatment Plant (WTP). 21 February 2008 Visit by Majlis Perbandaran Sepang officials to SYABAS Headquarters march 2008 PNSB participated in an exhibition held at the Petrosains KLCC as part of its efforts to enhance public awareness about PNSB s activities. 20 march 2008 PNSB participated in Perarakan Maulidur Rasul 1429 Hijrah (National Level) at Stadium Putra Bukit Jalil. 21 march 2008 Study visit by Universiti Industri Selangor students to SYABAS Headquarters. 108 PUNCAK NIAGA HOLDINGS BERHAD

111 2008 ANNUAL REPORT Corporate Events (continued) 22 march 2008 The simultaneous launching of the Pipe Replacement Communication Programme Phase 1 Level 1 (Programme). YB Dato Haji Amiruddin Setro, ADUN Jeram officiated the launch of the Programme held at Dewan Orang Ramai, Batu 19, Jeram, Kuala Selangor. YB Hannah Yeoh Tseow Suan, ADUN Subang Jaya and YB Teresa Kok Suh Sim, ADUN Kinrara officiated the launch of the Programme at the Public Field, Jalan SS15, Subang Jaya. YB Dr Xavier Jayakumar, Selangor EXCO/Chairman of the Health, Plantation Workers, Poverty and Compassionate Government Committee and ADUN Seri Andalas officiated the launch of the Programme at the Public Field, Jalan Hulu Balang 10C, Taman Sentosa, Klang. 29 march 2008 WTP Open day at the Sungai Langat WTP in conjunction with World Water Day april 2008 PNSB participated in the Asia Water 2008 Expo and Forum at Kuala Lumpur Convention Centre. 3 april 2008 Official visit by Syarikat Air Kelantan Sdn Bhd to SYABAS Kuala Lumpur District Office. 22 april 2008 Official visit by Syarikat Air Melaka Berhad to SYABAS Headquarters. 30 april 2008 Official visit by Jabatan Bekalan Air Kedah to SYABAS Headquarters. 13 may 2008 YBhg Tan Sri Rozali Ismail officiated the launch of the Program Latihan Kem Tahunan Skuadron Selangor 60 Rejimen Pengendalian Air RAJD (AW) SIRI 03/2008 at Kampung Bangi Tambahan, Pekan Bangi, Selangor. PUNCAK NIAGA HOLDINGS BERHAD 109

112 committed ANNUAL REPORT 2008 Corporate Events (continued) 22 may 2008 Signing Ceremony of the Sale and Purchase Agreement with Global Environmental Solutions Ltd and Shareholders Agreement with Environmental Holding Pte Ltd at Wisma Rozali, signaling PNHB s foray into the water and wastewater industries in China. 3 june 2008 Official visit by Syarikat Air Johor Holdings Sdn Bhd to SYABAS Headquarters. 4 June 2008 Visit by the Japanese School of Kuala Lumpur to the Klang Gates Dam and Wangsa Maju WTP. 6 june 2008 Signing Ceremony of the Memorandum of Agreement between Puncak Research Centre Sdn Bhd (PRC) and Universiti Putra Malaysia (UPM) at Concorde Hotel, Kuala Lumpur. 26 June 2008 PNHB s 11th Annual General Meeting and Extraordinary General Meeting held at Concorde Hotel Shah Alam. 3 july 2008 Visit by delegations from Lao People s Democratic Republic to SYABAS Headquarters. 11 july 2008 Study visit by participants of the Managing Privatisation Course Programme organised by INTAN to SYABAS Headquarters. 28 august 2008 Visit by Members of the Association for Shopping Complex and High-Rise Management to SYABAS Headquarters. 110 PUNCAK NIAGA HOLDINGS BERHAD

113 2008 ANNUAL REPORT Corporate Events (continued) 31 august 2008 PNSB participated in the National Day Parade at Dataran Shah Alam. 28 september 2008 Binzhou Groundbreaking Ceremony at the Project Site, Laodian Village, Binzhou, the People s Republic of China september 2008 PNSB participated in the IWA World Water Congress and Exhibition held in Vienna, Austria. 31 october 2008 Visit by officials from the Governor s Office of Taiz, Republic of Yemen to SYABAS Headquarters. 13 november 2008 Visit by delegations from Sudan to SYABAS Headquarters november 2008 Launching of the Asia Pacific Regional Water Conference 2008 (APRWC 2008) themed A Shared Future in Water officiated by YAB Datuk Seri Najib Tun Razak and YBhg Tan Sri Rozali Ismail, President of the Water Association of Selangor, Kuala Lumpur & Putrajaya at Sheraton Subang Hotel and Towers december 2008 PNSB participated in the International Conference & Expo on Environmental Management and Technologies 2008 (ICEEMAT 2008) at Sheraton Subang Hotel and Towers. 23 december 2008 Visit by representatives from Towoo Construction Inc. and Korea Technology Transfer Center to SYABAS Headquarters. PUNCAK NIAGA HOLDINGS BERHAD 111

114 committed ANNUAL REPORT July Listing on the Main Board of the KLSE and launching of Puncak Niaga Holdings Berhad s (PNHB) Homepage. 16 October Signing 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) March Rivercare Campaign I for school children was launched by YB Datuk Haji Mohd Khalid Mohd Yunus, the former Deputy Minister of Education. 20 July Official Ceremony to mark the release of initial 100 MLD of treated water at SSP2 WTP January PNHB was included in the KLSE Composite Index. 9 April Signing Ceremony of the Second Amendment to the Construction Cum Operation Agreement. 1 December PNHB was included in the Morgan Stanley Capital International Standard Index October 2000 PNHB 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 November 2000 PNHB was honoured with the NACRA 2000 Industry Excellence Award for the Construction & Infrastructure Project Companies category April PNHB 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 November PNHB 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 November 2001 PNHB was awarded the Anugerah Citra Laporan Tahunan 2001 by Dewan Bahasa dan Pustaka March Puncak Niaga s Executive Chairman, YBhg Tan Sri Rozali Ismail was awarded the Asia Water Management Excellence Award 2002 under the Individual Award Category. 31 October PNHB was awarded the NACRA 2002 Industry Excellence Award under the Construction & Infrastructure Project Companies Category February PNHB received the Asiamoney Corporate Governance Poll 2002 Award for Best Corporate Governance Standards in the Utilities Sector in Malaysia. 14 June 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. 112 PUNCAK NIAGA HOLDINGS BERHAD

115 2008 ANNUAL REPORT February PNHB was awarded the KLSE Corporate Sectoral Award 2003 for Main Board by Bursa Malaysia January YAB Dato Seri Dr Mohd Khir Toyo officiated the ceremony to mark the commencement of operations of SYABAS at SYABAS Headquarters March Signing Ceremony of the Collaboration Agreement between Puncak Research Centre Sdn Bhd and DHI Water Environment Health Denmark. 15 December Concession 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. 30 March Handover Ceremony of Sungai Sireh WTP from Kumpulan Perangsang Selangor Berhad to PNSB. 15 May SYABAS garnered the 2007 Malaysia Water Award (Management Category) for PUSPEL. 31 December Handover Ceremony of the 26 WTPs in Selangor, Kuala Lumpur and Putrajaya from CGE Utilities (M) Sdn Bhd to PNSB at Bukit Nanas WTP. 19 January 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 October PNHB announced a capital repayment of up to RM million via a cash distribution to reward its shareholders. 26 June 2007 PNSB s Ekspedisi Menuju Puncak at Mount Kinabalu, Sabah. 14 November PNSB received an Honourable Mention for its River Rescue Brigade at the Prime Minister s Corporate Social Responsibility Awards November Official Opening Ceremony of Wisma Rozali, Shah Alam, Selangor. PUNCAK NIAGA HOLDINGS BERHAD 113

116 committed ANNUAL REPORT PUNCAK NIAGA HOLDINGS BERHAD

117 2008 ANNUAL REPORT BOARD OF DIRECTORS PROFILE PUNCAK NIAGA HOLDINGS BERHAD 115

118 transparent ANNUAL REPORT 2008 Accountability 116 Corporate Disclosure Policy 117 Statement on Corporate Governance 118 Statement on Internal Control 132 Audit Committee Report 134 Risk Management Policy & Report 140 Investor Relations Policy & Report 143 Quality Policy & Report 145 PUNCAK NIAGA HOLDINGS BERHAD

119 2008 ANNUAL REPORT Corporate Disclosure Policy As a responsible corporate citizen, Puncak Niaga is totally committed to upholding the highest standards of transparency, accountability and integrity in the disclosure of all material information on the Company to the investing public in an accurate, clear, complete and timely manner in accordance with the corporate disclosure requirements as set out in the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities). The primary objectives of Puncak Niaga s Corporate Disclosure Policy are:- 1. To promote and maintain market integrity and investor confidence. 2. To provide equal access to the Company s material information in an accurate, clear, timely and complete manner and to avoid selective disclosure to the investing public. 3. To exercise due diligence such that information disseminated to the investing public will be as far as possible accurate, clear, timely and complete. 4. To put in place an efficient management of information procedure that promotes accountability for the dissemination of material information to the investing public. 5. To build good investor relations with the investing public based on the principles of trust, honesty, openness, transparency and sound understanding of the Company. To achieve its objectives, the Company will endeavour to undertake the following:- Appoint a senior officer of the Company to oversee and coordinate disclosures to ensure the Company complies with the Listing Requirements of Bursa Securities. Ensure that only designated persons are the Company s spokespersons. Ensure due compliance with Puncak Niaga s Corporate Disclosure Policy And Procedure. 2. EXERCISE DUE DILIGENCE AND PREPARATION Ensure that the persons responsible for disseminating material information to the investing public, exercise due diligence in ensuring that information to be released is accurate, clear, timely and complete. Ensure that due care is observed when briefing and responding to analysts, institutional investors, the media and the investing public. 3. USE OF INFORMATION TECHNOLOGY Take advantage of current information technology to disseminate information to the investing public. Our commitment to the above Policy is driven by the Board of Directors of the PNHB Group and implemented by the Management. 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 Listing Requirements of Bursa Securities. PUNCAK NIAGA HOLDINGS BERHAD 117

120 transparent ANNUAL REPORT 2008 Statement on Corporate Governance COMPLIANCE STATEMENT The Board of Puncak Niaga is pleased to state that Puncak Niaga is in compliance with the Best Practices in Corporate Governance as set out in Part 2 of the Malaysian Code on Corporate Governance (Revised 2007) (Code) and has subscribed and committed to the principles of good corporate governance as set out in Part 1 of the Code to strive for highest standards of corporate governance within the Group. The Group believes that the principles of good corporate governance are integral to Puncak Niaga s growth and ability to promote the confidence of its stakeholders and enhancing long-term shareholders value through improving corporate performance and accountability of Puncak Niaga whilst taking into account the interest of all stakeholders. The Board is therefore committed to ensure that the Principles and Best Practices of Corporate Governance are applied throughout Puncak Niaga Group in the best interests of all stakeholders. Since 2003, the Board has adopted a Board Charter, which provides guidance on how business is to be conducted in line with international best practices and standards of good corporate governance. In 2004, the Board has also adopted a Corporate Disclosure Policy and Procedure, which was formulated in line with the Guide On Best Practices In Corporate Disclosure issued by the Task Force on Corporate Disclosure Best Practices established by Bursa Malaysia Securities Berhad (Bursa Securities). From time to time, the Group continues to monitor, refine and revamp its financial objectives, goals, policies and procedures, controls and risk management framework to meet the evolving corporate environment. The Board of Puncak Niaga is therefore pleased to report on how the Group has applied the principles as set out in Part 1 of the Code and the best practices in corporate governance as set out in Part 2 of the Code and the extent to which it has complied with the best practices during the year BOARD OF DIRECTORS (a) THE BOARD The Group is helmed by an effective and experienced Board, comprising individuals of caliber and credibility with necessary skill 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 on the inner front cover of this Annual Report, are achieved and the Group meets its responsibilities to its stakeholders. Each Board member is fully aware of the fiduciary duties and responsibilities and the various legislations and regulations affecting their conduct as Directors of the Company, and as such, takes full responsibility for the performance of the Company and of the Group. The role of the Executive Chairman is separate from that of the Managing Director. The Board Charter sets out the specific responsibilities to be discharged by the Board members collectively and the individual roles expected from the Executive Chairman, Managing Director, Executive Directors and Non-Executive Directors. YBhg Tan Sri Dato Seri Dr Ting Chew Peh is the Company s Senior Independent Non-Executive Director, to whom shareholders concerns may be conveyed. His profile is set out on page 33 of this Annual Report. 118 PUNCAK NIAGA HOLDINGS BERHAD

121 2008 ANNUAL REPORT Statement on Corporate Governance (continued) (b) BOARD COMPOSITION There was no change in the Board s composition in 2008 except for the appointment of YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak as an Independent Non-Executive Director of PNHB on 6 October 2008 to replace YBhg Datuk Dr Rahman Ismail who retired at the Eleventh Annual General Meeting of the Company held on 26 June The Company has reviewed and maintained the Board s size of 10 members in 2008, comprising four Executive Directors, three Non-Independent Non-Executive Directors and three Independent Non-Executive Directors, which the Company feels is appropriate to constitute an effective Board. The Board s composition is also in compliance with Paragraph of the Listing Requirements of Bursa Securities. The Independent Directors exercise independent judgement and act in the best interests of the Company and its shareholders. The composition of the Board brings to the Group a diverse wealth of skills, knowledge as well as a balanced mix of experience and expertise to effectively discharge the Board s responsibilities for competent stewardship of the Group. Together, the Board spearheads the Group s growth and future direction. The profile of the Board Members are set out on pages 26 to 36 of this Annual Report. None of the Directors has any convictions for any offences within the past 10 years (other than traffic offences, if any) or has any conflict of interest with the Company or has any family relationship with any Director and/or major shareholder of the Company. (c) BOARD MEETINGS The Board met six times in 2008, all at the Board Room on 12th Floor, Wisma Rozali, No. 4, Persiaran Sukan, Seksyen 13, Shah Alam, Selangor Darul Ehsan, details of which are as follows:- Day Date time Tuesday 26 February a.m. Wednesday 23 April a.m. Thursday 22 May p.m. Thursday 28 August p.m. Thursday 18 September a.m. Thursday 20 November noon PUNCAK NIAGA HOLDINGS BERHAD 119

122 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) The details of the respective Director s attendances at the above Board Meetings are as follows:- Name of Director Designation No. of Meetings % A attended Tan Sri Rozali Ismail Executive Chairman Dato Matlasa Hitam Managing Director Dato Ruslan Hassan Non-Independent Non-Executive Director Dato Ir Lee Miang Koi Non-Independent Non-Executive Director Dato Syed Danial Syed Ariffin Chief Operating Officer Tan Sri Dato Hari Narayanan Govindasamy Independent Non-Executive Director Tan Sri Dato Seri Dr Ting Chew Peh Independent Non-Executive Director Tan Seng Lee Executive Director, Finance Tengku Dato Rahimah Non-Independent Almarhum Sultan Mahmud Non-Executive Director Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Independent 1* 100 (*appointed on 6 October 2008) Non-Executive Director Board meetings are scheduled to be held regularly, at least five times in a financial year with due sufficient notice for all Board Meetings of issues to be discussed. Dates for Board Meetings for the ensuing financial year are scheduled well in advance and the Board has formal schedule of matters specifically reserved for the Board s discussion and/or approval. All issues discussed and all decisions made during a Board Meeting will be properly recorded by the Company Secretaries. Additional Board Meetings may be called as and when significant issues arise and which require the Board s decision. In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions enclosing all relevant information to enable the Board to make informed decisions. All circular resolutions approved by the Board will be tabled for notation at the next Board Meeting. (d) DIRECTORS CODE OF ETHICS The Directors continue to observe a code of ethics based on the code of conduct expected of Directors of companies as set out in the Company Directors Code of Ethics established by the Companies Commission of Malaysia. (e) SUPPLY OF INFORMATION AND ACCESS TO ADVICE The Directors are familiar and aware of their duties and responsibilities as well as the implementation of good corporate governance and compliance practices in the Group. Each Board member is supplied with full, adequate, unrestricted and quality information on a timely basis to enable them to effectively discharge their duties and responsibilities. Except under exceptional circumstances, Board members are given at least seven days notice before any Board Meeting is held and the comprehensive Board papers are circulated to the Board members at least two 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. 120 PUNCAK NIAGA HOLDINGS BERHAD

123 2008 ANNUAL REPORT Statement on Corporate Governance (continued) All Board members are expected to participate actively in Board deliberations and to bring the benefit of their particular knowledge, skills and abilities to the Board. Where a potential conflict with his duties or of interests as Director arises, it is mandatory for the Director concerned to declare the fact and nature of his interest and extent of the conflict at a Board Meeting and abstain from the deliberation and decision-making process. In the event the proposal requires shareholders approval, the interested Board members will abstain from voting on the resolution at the General Meeting and will ensure that persons connected to them also abstain from voting on the proposal. The Company Secretaries organise and attend all Board Meetings and ensure that all issues discussed with the conclusions be minuted accurately in the minutes of each meeting and that all records are kept properly at the registered office of the Company. The Board is regularly updated and kept informed by the Company Secretaries and the Management of the requirements 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. Each Board member also has full access to the advice and services of the Company Secretaries. Where necessary, the Directors may, whether collectively as a Board or in their individual capacities, seek external and independent professional advice from experts on any matter in furtherance of their duties as they may deem necessary and appropriate at the Company s expense. (f) COMPANY SECRETARIES The Company Secretaries ensure that Board procedures are both followed and reviewed regularly and have the responsibilities in law to ensure that each Board member is made aware of and provided with guidance as to their duties, responsibilities and powers. They are also responsible for ensuring the Group s compliance with the relevant statutory and regulatory requirements. (g) APPOINTMENT OF DIRECTORS All Board appointments and removals thereof are approved by the Board upon the recommendation of the Nomination Committee. The Board, through the Nomination Committee, has established a formal and transparent procedure in relation to the assessment of candidates for Board appointments as well as for assessing the effectiveness of the Board as a whole, the Committees of the Board and the contributions of each individual Director, including the Independent Non-Executive Directors and the Managing Director. The Board, through the Nomination Committee, also reviews the required mix of skills, experience and other qualities of the Directors annually to ensure that the Board continues to function effectively and efficiently. (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) Financial and Operational Reporting; (vii) Planning and Objectives; (viii) Risk Assessment; (ix) New Business Opportunities and Projects; (x) Human Resources; and (xi) Executive Directors Observations and Additional Comments. PUNCAK NIAGA HOLDINGS BERHAD 121

124 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) (i) BOARD COMMITTEES The Board has delegated specific responsibilities to the Board Committees whose functions and authorities are spelt out in their respective terms of reference. The Board Committees will observe the same rules of conduct and procedures as the Board, unless otherwise determined by the Board. A summary of the various Board Committees at PNHB level and their composition are as follows:- Name of Director audit Remuneration Nomination Compliance, Committee Committee Committee Internal Control and Risk Policy Committee Tan Sri Rozali Ismail Executive Chairman Dato Matlasa Hitam Managing Director Dato Ruslan Hassan Non-Independent Non-Executive Director Dato Ir Lee Miang Koi Non-Independent Non-Executive Director Dato Syed Danial Syed Arrifin Chief Operating Officer Tan Sri Dato Hari Narayanan Govindasamy Independent Non-Executive Director Member Member Member Head Tan Sri Dato Seri Dr Ting Chew Peh Independent Non-Executive Director Chairman Member Member Chairman Tan Seng Lee Executive Director, Finance Tengku Dato Rahimah Almarhum Sultan Mahmud Non-Independent Non-Executive Director Member* Member Tan Sri Dato Ahmad Fuzi Haji Abdul Razak Independent Non-Executive Director Member** Chairman** Chairman** Note : (1) * Appointed as a Member on 26 February 2008 and is a member of Malaysian Institute of Accountants (compliance with Paragraph 15.10(1)(c)(i) of the Listing Requirements of Bursa Securities). (2) **Appointed as a Member/Chairman on 6 October (3) The Audit Committee comprises non-executive directors, a majority of whom are independent directors (compliance with Paragraph of the Listing Requirements of Bursa Securities). (4) The Remuneration Committee comprises wholly or mainly of non-executive directors (as recommended in the Code). (5) The Nomination Committee comprises wholly of non-executive directors (as recommended in the Code) who are also independent. 122 PUNCAK NIAGA HOLDINGS BERHAD

125 2008 ANNUAL REPORT Statement on Corporate Governance (continued) 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. Since 2005, in order to expedite the Board s decision-making process at the operating companies level, an Executive Committee (EXCO) comprising the Executive Directors was established at PNSB and SYABAS respectively whereby both the PNSB and SYABAS EXCO Meetings are held fortnightly and weekly respectively, to deliberate on matters requiring the Board s mandate in between the Board Meetings. The Board of Directors of Sino Water Pte Ltd (SWPL), the Company s 80% owned Singapore subsidiary meets monthly to deliberate on operational matters. The China Project Coordination Meetings for SWPL are held on a weekly basis to deliberate on issues relating to SWPL and the China Projects. The Board has also established the Limits of Authority (LOA) for the Group s operational management matters with the relevant level of authority accorded to the Management. The LOA is continuously reviewed to ensure adequacy, efficiency and integrity in the Company s internal control systems and management information systems. The Board provides the leadership necessary to enable the Group s business objectives to be met, whilst ensuring that the Company s obligations to its stakeholders are met. (j) RE-ELECTION OF DIRECTORS Articles 98 and 99 of the Company s Articles of Association (Articles) provide that one third of the Directors shall retire from office by rotation at each Annual General Meeting and all Directors shall retire from office at least once every three years but, shall be eligible and may offer themselves for re-election. Article 103 of the Company s Articles provides that any person appointed as an additional Director of the Company shall hold office only until the next following ordinary General Meeting of the Company and shall be eligible for reelection. Upon the recommendation of the Nomination Committee, the following Directors shall retire at the forthcoming Twelfth Annual General Meeting of the Company and being eligible, had offered themselves for re-election: - (i) YBhg Dato Matlasa Hitam, retiring pursuant to Article 98 of the Articles; (ii) YBhg Dato Ir Lee Miang Koi, retiring pursuant to Article 98 of the Articles; (iii) Mr Tan Seng Lee, retiring pursuant to Article 98 of the Articles; and (iv) YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak, retiring pursuant to Article 103 of the Articles. The information on the Directors standing for re-election at the forthcoming Twelfth Annual General Meeting is contained in the Statement Accompanying the Notice of Annual General Meeting. DIRECTORS REMUNERATION (a) PROCEDURE, LEVEL AND MAKE UP OF REMUNERATION The Company has a formal procedure to determine the remuneration of each Board member which are reviewed, from time to time, against market practices. In the case of the Executive Directors, their remunerations are structured so as to link rewards to corporate and individual performances and their remuneration packages comprise a salary, allowances, bonuses and other benefits as normally accorded to similar positions in other comparable companies and sufficiently attractive to retain persons of high calibre. Performance is measured against profits and other targets set from the Company s annual budget and business plans as well as achievements of targeted returns to shareholders. In the case of the Independent Non-Executive Directors, their remunerations reflect their experience, level of responsibilities and contributions and the time spent attending to the Group s affairs and they are paid a fixed monthly allowance, leave passage and meeting allowances for each Board and Board Committee meeting that they attend. PUNCAK NIAGA HOLDINGS BERHAD 123

126 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) 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 by the Company s Directors (including a past Director) from the Company for the financial year ended 31 December 2008 are as follows:- Name of Director Fees Salaries Bonuses Leave Allowance Employees Total P passage provident Fund (RM) (RM) (RM) (RM) (RM) (RM) (RM) Tan Sri Rozali Ismail Dato Matlasa Hitam Dato Ruslan Hassan Dato Ir Lee Miang Koi Dato Syed Danial Syed Ariffin Tan Sri Dato Hari Narayanan Govindasamy ,000-76,000 Tan Sri Dato Seri Dr Ting Chew Peh , , ,000 Tan Seng Lee Tengku Dato Rahimah Almarhum Sultan Mahmud ,000-4,000 Tan Sri Dato Ahmad Fuzi Haji Abdul Razak ,000-16,000 (appointed on 6 October 2008) Datuk Dr Rahman Ismail ,000 42,000-92,000 (retired on 26 June 2008) 124 PUNCAK NIAGA HOLDINGS BERHAD

127 2008 ANNUAL REPORT Statement on Corporate Governance (continued) The remuneration packages of the Directors of the Company received and receivable from the Group for the financial year ended 31 December 2008 are categorised into the appropriate components as follows:- Executive Directors (RM) non-executive Directors (RM) Fees - - Salaries 5,969,928 - Bonuses 2,513,779 - Benefits-in-kind 151,550 - Allowances 658, ,000 Employees Provident Fund 1,362,198 - Leave Passage 571, ,000 Total 11,228, ,000 Details of the Directors Remuneration at Company and Group levels for the financial year ended 31 December 2008, in bands of RM50,000 are tabulated as follows:- Range of Remuneration Company Level Group Level per annum N no. of no. of no. of E executive Directors Non-Executive Directors Directors RM1 to RM50, RM50,001 to RM100, RM150,001 to RM200, RM300,001 to RM350, RM600,001 to RM650, RM800,001 to RM850, RM900,001 to RM950, RM1,350,001 to RM1,400, RM1,450,001 to RM1,500, RM5,700,001 to RM5,750, (c) DIRECTORS SHARE OPTIONS There were no share options exercised by the Executive Directors under the Company s ESOS during the financial year ended 31 December 2008 as the options had expired, lapsed and became void and ceased to be exercisable after the expiry date or the exercisable period respectively. PUNCAK NIAGA HOLDINGS BERHAD 125

128 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) (d) DIRECTORS TRAINING The Directors keep themselves abreast on the latest regulatory and corporate governance developments, besides enhancing professionalism and knowledge to enable them to discharge their duties effectively. For the financial year ended 31 December 2008, the Directors have attended training programmes, seminars and conferences organised by the Company and the various training providers, such as :- Middle East Waste & Water Congress Insead Leadership Summit Asia 2008 Corporate Governance Development In Malaysia Fourth Asia Pacific Audit & Governance Summit 2008 Implementing Blue Ocean Strategy For Malaysia Business Continuity Awareness Think Like A CEO/Director World Economic Forum On East Asia Asia Pacific Regional Water Conference 2008 Competitive Strategy vs Redundant Strategy Workshop For Board of Directors and Senior Management In addition, the Executive Chairman and some Directors have also presented papers at seminars and forums on waterrelated subjects, both locally and abroad. SHAREHOLDERS COMMUNICATION AND INVESTOR RELATIONS POLICY The Board acknowledges the need for the Company s shareholders and investors to be informed of all material business and corporate developments concerning the Group in a timely manner. In addition to various announcements made during the year, the timely release of the Group s consolidated financial results on quarterly basis provides the shareholders and investors with an overview of the Group s financial and operational performances. The Company maintains regular and effective communication with its shareholders and stakeholders through one-to-one or group dialogues, participation in investor conferences organised by local and foreign institutional houses, attending to shareholders and investors s and phone calls enquiries, Company General Meetings and other Company events. The Annual Report of Puncak Niaga which is produced in line with best corporate governance practices also serves as an important communication tool to reach shareholders and investors. The Company s website, with a direct link to SYABAS website, 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 143 to 144 of this Annual Report. 126 PUNCAK NIAGA HOLDINGS BERHAD

129 2008 ANNUAL REPORT Statement on Corporate Governance (continued) ACCOUNTABILITY AND AUDIT (a) FINANCIAL REPORTING The Board is responsible for the quality and completeness of publicly disclosed financial reports. In presenting the annual financial statements, quarterly reports and the annual reports to the shareholders of the Company, the Board takes appropriate steps to present a clear and balanced assessment of the Group s position and prospects. This also applies to other price-sensitive public announcements and reports to the regulatory authorities. The Group s financial statements and quarterly announcements, prepared using appropriate accounting policies, consistently and supported by reasonable and prudent judgements and estimates, will be reviewed and deliberated by the Audit Committee in the presence of the external auditors, internal auditors of the Company and the Executive Director of Finance Division prior to recommending them for adoption by the Board. The Audit Committee ensures that the information to be disclosed are accurate, adequate and in compliance with the various disclosure requirements imposed by the relevant authorities. The Board discusses and reviews the recommendations proposed by the Audit Committee prior to its adoption. The Board also ensures accurate and timely release of the Group s quarterly and annual financial results to Bursa Securities. The Statement of Responsibility by Directors in respect of the preparation of the annual Audited Financial Statements of the Group is set out on page 151 of this Annual Report. (b) RELATIONSHIP WITH EXTERNAL AUDITORS The Board maintains a transparent and professional relationship with the Group s external auditors. A report by the Audit Committee together with its Terms of Reference is set out on pages 134 to 139 of this Annual Report. (c) INTERNAL CONTROL The Board acknowledges its overall responsibility for maintaining a sound system of internal controls, which provides reasonable assurance in ensuring the effectiveness and efficiency of the Group s operations and to safeguard its assets and interests in compliance with the relevant laws and regulations as well as the internal financial administration procedures and guidelines. The Group s Statement on Internal Control is set out on pages 132 to 133 of this Annual Report. PUNCAK NIAGA HOLDINGS BERHAD 127

130 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) OTHER COMPLIANCE INFORMATION (a) SHARE BUY-BACK During the financial year ended 31 December 2008, the Company has implemented the share buy-back and bought a total of 2,036,800 ordinary shares of RM1.00 each through the open market of Bursa Securities. All of these shares have been retained as treasury shares, details of which are as follows:- Month no. of Shares Purchase Price Per Share total purchased & (RM) Consideration retained as paid treasury Lowest Highest Average (RM) shares Price Price Price March 1,664, ,635, April 372, ,305, Total 2,036, ,940, Note : There were no share buy-back in the months that are not reflected in the first column. There were no resale of the Company s treasury shares nor were there any cancellation of shares during the financial year ended 31 December (b) OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES There were no options, warrants or convertible securities exercised during the financial year ended 31 December 2008 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 during the financial year ended 31 December (e) NON-AUDIT FEES During the financial year ended 31 December 2008, the Group paid the following non-audit fees to the external auditors:- (i) Tax advisory and compliance work RM213, (ii) Other non-audit related service RM51, Non-audit fees payable to the external auditors, Messrs Ernst & Young relates to the review of the Statement of Internal Control and other professional services including tax compliance, tax planning and advisory services. 128 PUNCAK NIAGA HOLDINGS BERHAD

131 2008 ANNUAL REPORT Statement on Corporate Governance (continued) (f) VARIATIONS IN RESULTS There is a variance of RM3.044 million between the profit attributable to equity holders of the Company of RM million reported in the audited financial statements for the financial year ended 31 December 2008 and the profit attributable to equity holders of the Company of RM million in the unaudited consolidated results for the financial year ended 31 December 2008 which was announced on 26 February The variance substantially constitutes an increase in the share of minority interest of RM3.909 million arising from the reversal of trade receivables of a subsidiary company, SYABAS, which had been previously written off. (g) PROFIT GUARANTEE The Company does not provide any profit guarantee to any parties. (h) REVALUATION POLICY ON LANDED PROPERTIES The Group does not adopt a policy of regular revaluation of its property. Details of the Group s properties are disclosed on page 150 of this Annual Report. (i) RECURRENT RELATED PARTY TRANSACTION The Company did not enter into any recurrent related party transaction, which requires the shareholders mandate during the financial year ended 31 December (j) MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS Material contracts entered into by the Company and the Group, which involve the interests of Directors and major shareholders of the Company and its subsidiary companies and material contracts which are still subsisting at the end of the financial year ended 31 December 2008, are as follows:- Consideration/ Nature of Mode of Relationship with Director/ Date Contract Parties Satisfaction Major Shareholder 15 December Concession Syarikat Not Applicable YBhg Tan Sri Rozali Ismail 2004 Agreement Bekalan Air (TSRI) is a major shareholder Selangor Sdn Bhd of PNHB held directly under (SYABAS), the his name and indirectly held State Government through his 100% equity of Selangor Darul interest in Central Plus (M) Ehsan and the Sdn Bhd (CPlus) and Government of Corporate Line (M) Sdn Bhd Malaysia (Federal (CLine). PNHB in turn, holds Government) 70% equity interest in SYABAS. PUNCAK NIAGA HOLDINGS BERHAD 129

132 transparent ANNUAL REPORT 2008 Statement on Corporate Governance (continued) Consideration/ N nature of Mode of Relationship with Director/ Date Contract Parties satisfaction Major Shareholder 31 December Shareholders PNHB, Kumpulan Not Applicable TSRI is a major shareholder 2004 Agreement Darul Ehsan Berhad of PNHB held directly under (KDEB) and his name and indirectly held SYABAS through his 100% equity interest in CPlus and CLine. PNHB in turn, holds 70% equity interest in SYABAS. 23 February Subscription PNHB, KDEB Not applicable TSRI is a major shareholder 2006 Agreement In and SYABAS of PNHB held directly under Relation To The his name and indirectly held Subscription For through his 100% equity Up To RM1.045 interest in CPlus and CLine. Billion Nominal PNHB in turn, holds 70% Value Of equity interest in SYABAS. Redeemable Cumulative Unsecured Loan Stocks Of SYABAS (RCULS) 8 December Subscription Puncak Niaga (M) Not applicable TSRI is a major shareholder 2006 Agreement In Sdn Bhd (PNSB) of PNHB held directly under Relation To The (as the Issuer), his name and indirectly held Issue Of RM435.0 United Overseas through his 100% equity Million Nominal Bank (Malaysia) Bhd interest in CPlus and CLine. Value Redeemable (as the Facility Agent PNHB in turn, holds 100% Unsecured Bonds and the Issue Agent) equity interest in PNSB. To PNHB and PNHB 16 August Sungai Lolo Water The State Not applicable TSRI is a major shareholder 2007 Treatment Plant Government of of PNHB held directly under (Extension) Selangor Darul his name and indirectly held Operation And Ehsan and PNSB through his 100% equity Maintenance interest in CPlus and CLine. Agreement PNHB in turn, holds 100% equity interest in PNSB. 130 PUNCAK NIAGA HOLDINGS BERHAD

133 2008 ANNUAL REPORT Statement on Corporate Governance (continued) Consideration/ N nature of Mode of Relationship with Director/ Date Contract Parties satisfaction Major Shareholder 16 August Novation The State Not applicable TSRI is a major shareholder 2007 Agreement In Government of PNHB held directly under Relation To The of Selangor his name and indirectly held Sungai Lolo Water Darul Ehsan, through his 100% equity Treatment Plant PNSB and SYABAS interest in CPlus and CLine. (Extension) PNHB in turn, holds 100% Operation and and 70% equity interests Maintenance in PNSB and SYABAS, Agreement respectively. 7 March Sungai Sireh The State Not applicable TSRI is a major shareholder 2008 Water Treatment Government of of PNHB held directly under Plant Operation Selangor his name and indirectly held and Maintenance Darul Ehsan through his 100% equity Agreement and PNSB interest in CPlus and CLine. PNHB in turn, holds 100% equity interest in PNSB. 7 March Novation The State Not applicable TSRI is a major shareholder 2008 Agreement To Government of of PNHB held directly under The Sungai Sireh Selangor his name and indirectly held Water Treatment Darul Ehsan, through his 100% equity Plant Operation PNSB and interest in CPlus and CLine. and Maintenance SYABAS PNHB in turn, holds 100% Agreement and 70% equity interests in PNSB and SYABAS, respectively. STATEMENT OF GOING CONCERN Barring any unforeseen circumstances and upon making due and reasonable enquiry into the affairs of the Group, the Board firmly believes that the Group shall continue to operate as a going concern in the foreseeable future. This Statement on Corporate Governance has been approved by the Board of PNHB on 27 April PUNCAK NIAGA HOLDINGS BERHAD 131

134 transparent ANNUAL REPORT 2008 STATEMENT ON INTERNAL CONTROL INTRODUCTION The Malaysian Code on Corporate Governance (Revised 2007) requires listed companies to maintain a sound system of internal control to safeguard shareholders investments and the Group s assets. The Listing Requirements of Bursa Malaysia Securities Berhad requires Directors of listed companies to include a statement in their annual reports on the state of their internal controls. RESPONSIBILITY The Boards of the PNHB Group are responsible for maintaining sound systems of internal control and for reviewing their adequacy and integrity so as to safeguard the shareholders investments and the Group s assets. The Board and Management have implemented a control system designed to identify and manage risks facing the Group in pursuit of its business objectives. This internal control system, by its nature, can only provide reasonable and not absolute assurance against material misstatement or loss. The Group has in place ongoing processes for identifying, evaluating, monitoring and managing significant risks faced by the Group during the year. The Management is responsible for the identification and evaluation of significant risks applicable to their respective areas of business and to formulate suitable internal controls. This process is reviewed by the Board of PNHB via a specific Board Committee, namely the Compliance, Internal Control and Risk Policy Committee, which dedicates its time at periodic intervals throughout the year for discussion on this matter. RISK MANAGEMENT FRAMEWORK Risk Management is firmly embedded in the Group s management system and is every employee s responsibility. In October 2001, the Board of PNHB formally approved a systematic risk management structure and process for the Group. Since then, the structure and process have been fully implemented by the Management and employees of the PNHB Group. The Group s risk management framework is explained in detail in the Risk Management Policy & Report set out on pages 140 to 142 of the Annual Report. INTERNAL CONTROL SYSTEM The key elements of the Group s internal control system and assurance processes, inter alia, encompass the following:- All major decisions require the final approval of the respective Boards/Executive Committees within the Group (PNHB/PNSB/SYABAS/Sino Water Pte Ltd) 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 have clearly documented Procedure Manuals and/or Policies whilst SYABAS has Standard Operating Procedures and/or Polices incorporating control procedures and the scopes of responsibilities and authorities. The Procedure Manuals/Standard Operating Procedures/ Policies are updated regularly to incorporate all elements necessitated by changes in the legislation, industry best practices and business dynamics. The Internal Audit Department of PNSB, independently reviews the control processes implemented by the Management from time to time and periodically reports on its findings and recommendations to the Audit Committee of PNHB. The duties and responsibilities of the Audit Committee are detailed in the Terms of Reference of the Audit Committee. The Audit Committee, by consideration of both Internal and External Audit Reports, is able to gauge the effectiveness and adequacy of the internal control system, for presentation of its findings to the Board. The Board of SYABAS established an Audit Committee with its own Terms of Reference on 3 August The Internal Audit Division of SYABAS extends a copy of its Internal Audit Reports to the Executive Chairman and summarised Status Reports on its activities are regularly submitted to the Management of SYABAS. 132 PUNCAK NIAGA HOLDINGS BERHAD

135 2008 ANNUAL REPORT Statement on Internal Control (continued) 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 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 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 and Sino Water Pte Ltd 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 and SYABAS, with major variances being followed up, is done on a monthly basis and management action is taken to tighten or to rectify any shortcomings, where necessary. PNSB, SYABAS and Sino Water Pte Ltd have their own Limits of Authorities that have been approved by their respective Boards. Guidance for Directors of Public Listed Companies Since the issuance of the Statement on Internal Control: Guidance for Directors of Public Listed Companies (Guidance) in December 2000, the Group has monitored its level of readiness with the Guidance. The Group aims to not just achieve full compliance, but also to improve on the Group s processes by implementing best business practices in line with international best practice standards. Throughout the year 2008, the Compliance, Internal Control and Risk Policy Committee has closely monitored the Group s level of readiness with the Guidance. This Statement on Internal Control has been prepared in accordance with the Guidance and has been approved by the Board of PNHB and reviewed by the external auditors. For and on behalf of the Board of Puncak Niaga Holdings Berhad Tan Sri Dato Seri Dr Ting Chew Peh Chairman Compliance, Internal Control and Risk Policy Committee 27 April 2009 Self Assessment Audit Forms (which list all key procedures), have been developed for all Departments of PNSB. With effect from 31 March 2008, all Departments are required to submit a written declaration quarterly, to the Internal Audit Department, as to whether all the key procedures have been complied with. PUNCAK NIAGA HOLDINGS BERHAD 133

136 transparent ANNUAL REPORT 2008 audit committee report The Board of Directors of Puncak Niaga Holdings Berhad (PNHB) is pleased to present the report of the Audit Committee for the financial year MEMBERSHIPS AND MEETINGS The Audit Committee comprises the following members and details of attendance of each member at the Audit Committee Meetings held during the financial year 2008 were as follows: Number of Number of Composition Meetings Meetings Percentage of Committee Held Attended (%) YBhg Tan Sri Dato Seri Dr Ting Chew Peh Chairman/Independent Non-Executive Director % YBhg Tan Sri Dato Hari Narayanan Govindasamy Member/Independent Non-Executive Director % YAM Tengku Dato Rahimah Almarhum Sultan Mahmud (Note 1) Member/Non-Independent Non-Executive Director % YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak (Note 2) Member/Independent Non-Executive Director % YBhg Datuk Dr Rahman Ismail (Note 3) Member/Independent Non-Executive Director % Note 1:- YAM Tengku Dato Rahimah Almarhum Sultan Mahmud (Non-Independent Non-Executive Director) was appointed as a member of the Audit Committee on 26 February 2008 in place of Mr Tan Seng Lee (Executive Director, Finance Division) who ceased to be a member of the Audit Committee on 26 February Note 2:- YBhg Tan Sri Dato Ahmad Fuzi Haji Abdul Razak (Independent Non-Executive Director) was appointed as a member of the Audit Committee on 6 October Note 3 :- YBhg Datuk Dr Rahman Ismail retired on 26 June The Executive Director (Finance Division), Senior Manager (Internal Audit Department), Assistant General Manager (Operation I Division) and other members of Senior Management attended these meetings upon the invitation by the Chairman of the Audit Committee. The Group s external auditors were also invited to attend these meetings where matters relating to the audit of the statutory accounts and/or the external auditors are to be discussed. The Company Secretaries, Madam Tan Bee Lian and Madam Lim Yew Heang are the Secretaries to the Audit Committee. 2. SUMMARY OF ACTIVITIES During the financial year 2008, the Audit Committee carried out its duties as set out in the terms of reference. The main activities carried out by the Audit Committee during the financial year included the following:- Financial Results Reviewed the quarterly and year-to-date unaudited financial results of the Group before tabling to the Board for consideration and approval. Reviewed the reports and the audited financial statements of the Company and of the Group together with the external auditors prior to tabling to the Board for approval. 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 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. 134 PUNCAK NIAGA HOLDINGS BERHAD

137 2008 ANNUAL REPORT Audit Committee Report (continued) Discussed on significant accounting and auditing issues, impact of new or proposed changes in accounting standards and regulatory requirements. 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 Internal Audit Department, which assists the Audit Committee in the discharge of its duties and responsibilities. The PNHB/PNSB s Internal Audit Department is headed by Encik Mohammed Sofian Ismail who is also the Head of the Risk Management Section. Encik Mohammed Sofian Ismail is a Chartered Member of the Institute of Internal Auditors, Malaysia (CMIIA), a Certified Internal Auditor (CIA) and holds a Certification in Control Self Assessment (CCSA) both from the Institute of Internal Auditors Inc, USA, a Certified Information Systems Auditor (CISA) of the Information Systems and Control Association, USA, a Certified Information Systems Security Professional (CISSP) and Systems Security Certified Practitioner (SSCP) of (ISC) 2, USA and a Master of Business Administration holder from Bond University, Australia. He has more than 25 years working experience in both internal and external audit. The Internal Audit Department provides an independent assurance on risk management and internal control. The Internal Audit Department focuses on regular and systematic review of the internal control and management information systems, including the system for compliance with applicable laws, regulations, rules, directives and guidelines. The Annual Audit Plan of the Internal Audit Department (which was developed based on a risk analysis approach), was approved by the Audit Committee at the 56th Audit Committee Meeting of the Company held on 20 November The scope of the Internal Audit Department s functions covered the audit on the adequacy of risk management, operational controls, compliance with established procedures, guidelines and statutory requirements and also the various computer application systems and networks of the Company and of the Group. The Internal Audit Department has conducted the evaluation of the system of internal control that encompasses the Group s governance, operations and information systems. 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 2008, the Internal Audit Department undertook more than 50 major audit assignments covering all the Water Treatment Plants, high-risk areas identified by the Risk Management Scorecard Working Group and adhoc assignments requested by the Senior Management. Examples of other key areas audited by the Internal Audit Department during the financial year 2008 were Dam Operations at Sungai Langat/Klang Gates/ Tasik Subang Dams, Grading of selected Water Treatment Plants and Dams, Unit Cost of Production computations for major Water Treatment Plants, Risk of Chlorine Leaks, Risk of Breach of Covenants Finance and Accounts Department, Petty Cash at Regional Offices, Food and Beverage Department, Funds Placement Finance and Accounts Department, Contract and Procurement Department, Information Technology Department s Disaster Recovery Plan etc. The total cost incurred by the Internal Audit Department in relation to the conduct of the internal audit functions of PNHB/PNSB during the financial year 2008 was about RM1.0 million. PUNCAK NIAGA HOLDINGS BERHAD 135

138 transparent ANNUAL REPORT 2008 Audit Committee Report (continued) SYABAS Due to the complexity of its water distribution operations which are dissimilar to that of PNSB s water treatment operations, the Board of SYABAS formally ratified the establishment of the Internal Audit Division on 1 September 2006 and an Audit Committee with its own terms of reference was formed on 3 August The Internal Audit Division of SYABAS is headed by Tuan Haji Sonari Solor, a member of the Malaysian Institute of Accountants (MIA), Fellow of the Chartered Association of Certified Accountants (UK) and a professional qualification holder from the Chartered Institute of Management Accountants (UK). Tuan Haji Sonari Solor has more than 21 years of working experience in senior audit and accounting positions with public listed companies. He was formerly the Head of PNHB/PNSB Internal Audit Department for the period from September 1998 to August 2006 before assuming his current position as Head of SYABAS Internal Audit Division. At SYABAS, the audit emphasis for the financial year 2008 is to determine whether the financial and other controls are in place to ensure the integrity and the accuracy of information in the Review Documents submitted for the purpose of tariff adjustment for the 3rd Operating Period from 2009 to Reports on individual components of tariff review adjustment include the review on revenue billings and collection, certified amount of programme of works, amount spent on purchase of treated water, distribution costs and reduction in non-revenue water. The total cost incurred by the Internal Audit Division in relation to the conduct of the internal audit function of SYABAS during the year was about RM963, TERMS OF REFERENCE OF PNHB S AUDIT COMMITTEE A. Composition The Board shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors), comprising of at least three (3) Directors which fulfils the following requirements: i All the members of the Audit Committee must be Non-Executive Directors of the Company (and excluding Alternate Directors) with a majority of them being Independent Directors; and ii At least one (1) member of the Audit Committee: a b must be a member of the Malaysian Institute of Accountants; if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and:- 1) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or 2) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or 3) fulfils such other requirements as prescribed or approved by the Exchange. The members of the Audit Committee shall elect a Chairman from amongst themselves who shall be an Independent Director. It would be advantageous if the Chairman possesses a strong personality, have knowledge and experience in financial reporting, good leadership skills and is keen to get financial reporting and controls right. The Chairman of the Audit Committee will maintain continuous engagement with the Board Members and Senior Management of the Company and the external auditors in order to be kept abreast of matters affecting the Company. All members of the Audit Committee should be financially literate. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith. 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. 136 PUNCAK NIAGA HOLDINGS BERHAD

139 2008 ANNUAL REPORT Audit Committee Report (continued) B. Objectives The primary objectives of the Audit Committee are to: i ii Provide assistance to the Board in fulfilling its fiduciary responsibilities, particularly in the areas relating to the Company s accounting and management controls, financial reporting and business ethics policies. Provide greater emphasis on the audit function by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the Management. iii Maintain through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and financial management. The nature of the audit procedures to be performed. The extent of any planned reliance on the work of the internal auditors and the anticipated effect of this reliance on the examination. Any significant accounting and auditing problems that the auditors can foresee. The impact on the financial statements of any new or proposed changes in accounting standards or regulatory requirements. The effect on the audit of significant dataprocessing systems. Following its review of the plan, the Audit Committee may request the external auditors to perform additional audit work directed to specific areas of concern to the Committee. iv Strengthen the role of Non-Executive Directors by improving their knowledge and understanding of the Company s operation. ii Oversee the Internal Audit Department. The Audit Committee in overseeing the Internal Audit Department will: v Undertake such additional duties as may be appropriate and necessary to assist the Board. However, whether or not the Audit Committee should undertake one or more of the additional duties rests on the Board s viewpoint on corporate needs and the environment in which the Company operates. C. Duties And Responsibilities In fulfilling its primary objectives, the Audit Committee will need to undertake the following duties and responsibilities: C.1 Oversee All Matters Relating to External and Internal Audits i Review the Annual Audit Plan with the external auditors. The Committee shall meet with the external auditors prior to the commencement of the annual audit to discuss: The general outline of the extent and timing of the auditors proposed coverage of location such as branches, departments, factories, divisions and subsidiaries. Review the audit programme, scope, performance and findings of the internal auditors. Monitor the implementation of the programme so that sufficient internal audit coverage is accorded. In this respect, only the Committee can consider and approve or otherwise, all requests by Senior Management to utilise the internal audit personnel for non-audit assignments. Assess the capacity of the Internal Audit Department to fulfil its responsibilities by considering, amongst other things, the adequacy of the scope of the Department s authority as presented in the Department s charter, the competency, qualifications and experience level of its employees, the degree to which internal auditors are independent of the activities they audit and the reporting relationship between the Head of Internal Audit and Senior Management. PUNCAK NIAGA HOLDINGS BERHAD 137

140 transparent ANNUAL REPORT 2008 Audit Committee Report (continued) Review any appraisal or assessment of the performance of the staff of the Internal Audit Department. Approve any appointment or termination of the Head of the Internal Audit Department. To take cognizance of the staff resignations in the Internal Audit Department and their reasons for resigning as stated in the Exit Interview Form(s). The Internal Audit Department shall exercise independence, impartiality, proficiency and due professional care in the discharge of its internal audit function and the activities it audits within the Company and Group. To review the coordination of audit efforts between external and internal auditors, where practical, with a view to maximising audit effectiveness and controlling external audit costs. iii Review the assistance and cooperation given by the Company s officers to the external and internal auditors. iv v vi Any letter of resignation from the external auditors. To recommend the nomination of a person or persons as external auditors or re-appointment or whether there is reason (supported by grounds) to believe that the external auditors is not suitable for re-appointment. 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. vii 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. viii 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. C.2 Evaluate the Standards of Internal Control and Financial Reporting i ii Hold specific discussions with Senior Corporate Management to discuss the overall adequacy of the internal control system. 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. C.3 Review of Financial Statements i ii Meet with the Management and the external auditors to discuss the annual financial statements of the Company or Group and the results of the audit before recommending approval by the Board. Review the changes in or implementation of major accounting policy changes, the nature and resolution of any significant accounting and auditing problems encountered during the examination. iii It is good practice for the Audit Committee to meet the Management at a regular interval to review the results of the Company or Group, such as quarterly review of the results. iv v Review the nature of any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of the Management s integrity. Review the nature of any significant adjustments and unusual events, reclassifications or additional disclosures proposed by the external auditors that are currently significant or may become significant in the future. 138 PUNCAK NIAGA HOLDINGS BERHAD

141 2008 ANNUAL REPORT Audit Committee Report (continued) vi Review the adequacy of disclosure of the impact of any changes during the year in accounting policies, standards and/or regulatory requirements. vii Review the reasons for the major fluctuations in financial statement balances for the current year compared to prior years. viii Review for any unusual circumstances or situations reflected in the financial statements, including identifying any marginal operations. ix x xi Review the nature of any unusual or significant commitments or contingent liabilities. Review of any significant differences between the annual report and other reports, such as reports to the regulatory agencies. Review for any significant differences in format or disclosure from industry norms. C.4 Additional Duties and Responsibilities i ii Act upon the Board of Directors request to investigate and report on any issues or concerns in regard to the management of the Company. Review the Company s business ethics code, the method of monitoring, compliance with the code and the disposition of reported exceptions. iii Review executive expenses. iv v vi Review policies on sensitive payments. Review compliance with certain government regulations. Review policies to avoid conflicts of interest and review past or proposed transactions between the Company and members of the Management. vii Review certain aspects of the Company s pension plan and compliance with relevant laws and regulations. viii Assess the performance of financial management. ix Such other functions as may be agreed to by the Audit Committee and the Board of Directors. x When the Audit Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the Audit Committee shall promptly report such matter to the Exchange. D. 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. E. Meetings and Minutes 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. It would be desirable that the notice of meetings be sent at least seven (7) days before the time set for the meeting together with an agenda to all members of the Committee and any persons that may be required to attend. The recommended quorum for each meeting shall be three (3) members, with the majority of members present being Independent Directors. 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. The Chief Executive Officer, other Board Members and/or other appropriate officers may be invited to attend, except for those portions of the meetings where their presence is considered inappropriate, as determined by the Committee Chairman. The Audit Committee will meet with the external auditors without the Executive Directors present at least twice a year. Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the members of the Board. The Committee Chairman shall report on each meeting to the Board. The Secretary to the Audit Committee shall be the Company Secretary. PUNCAK NIAGA HOLDINGS BERHAD 139

142 transparent ANNUAL REPORT 2008 risk management policy & report Risk management policy The Board of Puncak Niaga Holdings Berhad has approved the following Group s Risk Management Policy Statement:- The PNHB Group s Risk Management Policy is to identify, measure and control risks that may prevent the Group from achieving its objectives. Our challenge is to apply risk management to all parts of our business to ensure business risks are minimised and opportunities enhanced. We will achieve, maintain and review a proper risk management system. This commitment is driven by the Board of Directors, which in turn is implemented by the Management and extends to all employees of the Group. This policy statement assigns responsibility for risk management to all PNHB Group employees and acknowledges that corporate responsibility lies with the Board of Directors of the PNHB Group. Risk management REPORT There are risks faced by all companies in the various facets of their corporate lives. The nature of such risks including systemic, market, employees, economic, legislation, financial and others, need to be identified and managed to reduce the possibility and impact of any adverse effects. Puncak Niaga recognises this and has initiated risk management programmes to ensure its business risks are minimised and opportunities enhanced. The following steps were taken by the Board of Puncak Niaga in October 2001, for the management of the Group s corporate risks:- 1. The preparation of the Group s Risk Management Policy Statement. 2. The formation of the Compliance, Internal Control and Risk Policy Committee 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 COMPLIANCE, INTERNAL CONTROL AND RISK POLICY COMMITTEE (CICR) The establishment of the CICR was formalised by the Board in October The members of the CICR comprise the following:- Chairman: YBhg Tan Sri Dato Seri Dr Ting Chew Peh (Independent Non-Executive Director) Members: YBhg Dato Matlasa Hitam Managing Director (Head of Compliance, Internal Control and Risk Policy Committee) Madam Tan Bee Lian Senior General Manager, Secretarial Department Tuan Haji Sonari Solor General Manager, Internal Audit Division - SYABAS Secretary: Encik Mohammed Sofian Ismail Senior Manager, Internal Audit Department (Acting Head) (Head of Risk Management Section) 140 PUNCAK NIAGA HOLDINGS BERHAD

143 2008 ANNUAL REPORT Risk Management Policy & Report (continued) A) TERMS OF REFERENCE OF THE CICR The CICR shall provide assistance to the Board of Directors of Puncak Niaga in discharging its fiduciary responsibilities relating to safeguarding shareholders investment and the Group s assets through a structured approach to Risk Management. The primary responsibilities of the CICR are:- Formulating strategies to manage the overall risks associated with the Group s activities. This entails decisions on:- n n Long-term and short-term strategies. Justifiable capital allocation based on return per unit of risk. Recommending the appropriate risk management policies and procedures, which shall be reviewed frequently to ensure consistency with fundamental changes in the economy, market conditions and regulations. Reviewing periodically the Group s overall objectives by assessing the current risk portfolio composition and determining the desired exposures of each major area of risk. Monitoring and assessing the risk portfolio composition of significant activities of the Group. Keeping abreast of both current risk management techniques and theories, and any possible or actual changes in the regulatory environment, and recommending the appropriate action. B) CICR ACTIVITIES MEETINGS HELD AND ISSUES COVERED During the year 2008, the CICR held eight meetings, of which four were chaired by YBhg Tan Sri Dato Seri Dr Ting Chew Peh (Chairman of CICR) and four were chaired by YBhg Dato Matlasa Hitam (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 Corporate Risk Scorecard software to identify, measure and monitor all corporate risks identified within PNSB and Sino Water Pte Ltd. 4. Other relevant risk issues affecting the Group, from time to time. RISK MANAGEMENT SCORECARD WORKING GROUP AND ENTERPRISE-WIDE RISKS The Group recognises that Risk Management involves a structured approach, combining the efforts of all functions within the Group, to minimise the possibility and impact of unexpected damages so as to contribute towards greater efficiency and better decision-making. The Group s Enterprise-Wide Risk Profile is reviewed annually to take into consideration changes in the business environment, strategies and functional activities of the Group. The Risk Management Scorecard Working Group (RMSWG), comprising all Heads of Departments or their representatives, met on 4 and 5 November, 1 and 2 December 2008 to review the Group s Enterprise-Wide Risk Profile. The deliberations of the RMSWG were in turn reviewed by the CICR on 2 and 10 February Subsequently, a detailed Board Paper on the Group s Enterprise-Wide Risks was tabled during the PNHB s Board of Directors Meeting held on 26 February The Group s Enterprise-Wide Risk Profile will be reassessed by the RMSWG in late PUNCAK NIAGA HOLDINGS BERHAD 141

144 transparent ANNUAL REPORT 2008 Risk Management Policy & Report (continued) DIVISIONAL AND DEPARTMENTAL RISK SCORECARDS (PNSB) The respective Heads of Divisions and Departments are responsible for assessing and managing their Divisional and Departmental risks. Using the Corporate Risk Scorecard software (upgraded to the Q-RADAR System V6 in September 2008), the Heads of Divisions and Departments have submitted their detailed risk scorecard reports to the Risk Management Section for the periods ended 31 March 2008, 30 June 2008, 30 November 2008 and 31 March CORPORATE RISK SCORECARD SOFTWARE PNHB, PNSB and Sino Water Pte Ltd utilise a risk management tool namely, the Corporate Risk Scorecard (CRS) software to identify, measure and manage all corporate risks affecting PNSB. The CRS software offers a systematic approach to the management of enterprise-wide risks facing corporations and assists the Management of Puncak Niaga to successfully achieve their corporate objectives. In September 2008, the previous CRS software (Version 2) was upgraded to the Q-RADAR System V6. The upgraded software is web-based and allows authorised users to monitor their respective risks on-line from any location. As at 31 December 2008, the Q-RADAR CRS software has more than eighty authorised users and covers eighteen Departments/ Divisions, including Sino Water Pte Ltd. The Q-RADAR CRS software is administered by the Risk Management Section. RISK MANAGEMENT AT SYABAS A formal Risk Management structure was approved by the Board of SYABAS in November A meeting of all Senior Management staff of SYABAS was held on 5 May 2007 to deliberate upon the detailed Risk Profile for the Company. Arising from this meeting and further feedback from all Senior Management staff, a detailed EXCO (Executive Committee) Paper entitled Risks Facing SYABAS For The Year 2007 was prepared for and approved by the SYABAS EXCO on 19 September The said EXCO Paper was also submitted to the CICR. The Risk Management Scorecard Working Group (RMSWG) for the PNHB Group includes a representative from SYABAS. When developing the Group s Enterprise-Wide Risk Profile for 2008, the RMSWG were cognisant of the major risks affecting SYABAS. 142 PUNCAK NIAGA HOLDINGS BERHAD

145 2008 ANNUAL REPORT INVESTOR RELATIONS POLICY & REPORT As a responsible corporate citizen, Puncak Niaga is totally committed to upholding the highest standards of transparency, accountability and integrity in the conduct of our business activities in the best interest of our shareholders as well as to allow potential investors to make careful and informed investment decisions based on full and transparent disclosure of information. Puncak Niaga s Investor Relations Policy aims to build longterm 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 endeavours 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 informs and educates through regular, open and transparent provision of relevant and invaluable information over the long-term, which will build mutually beneficial long-term relationships visà-vis to foster a clearer understanding of the shareholders and investors expectations of the Company. To engage in quality dialogue with our shareholders and investors whereby the relationship is based on the principles of honesty, openness and transparency and to foster mutual understanding between the Company and our shareholders and investors. To reap the benefits of engaging in quality dialogue:- - Perception on our Company s risk is reduced; - Enhance feedback of our Company s performance; - Our Company s share valuation becomes more realistic; - Develop confidence in our Management team and management style; and - Works as a guide in the evaluation of our Company s business strategy. 2. INVESTOR COMMUNICATIONS STATEMENT To implement an efficient and effective Investor Relations Programme as part of our ongoing shareholders and investors communication obligations. To provide high quality, meaningful and timely information over and above that is required by law in order to improve the shareholders and investors understanding of our Company. To strive for key competence in the area of professional investor relations vide adequate resources and capabilities. To earn the trust, respect and confidence of our existing shareholders and investors. To build and maintain long-term relationships with our existing shareholders and investors. To initiate long-term relationship building with potential shareholders and investors. Our commitment to the above Policy is driven by the Board of Directors of PNHB Group and implemented by the Management. INVESTOR RELATIONS REPORT Investor relations is the means by which listed companies maintain dialogue with their existing shareholders and potential investors. It is a strategic management responsibility to present an accurate picture of corporate performance and prospects, thus enabling the investment community, through an informed market, to determine a realistic share price. As a result, investor relations can have a positive impact on the Company s market value and cost of capital relative to its industry sector and the overall economic climate. The year 2008 had been challenging amidst Puncak Niaga s relentless pursuit to gain leadership in the water industry and to remain focused in achieving our Vision and Mission. PUNCAK NIAGA HOLDINGS BERHAD 143

146 transparent ANNUAL REPORT 2008 Investor Relations Policy & Report (continued) The Board is therefore pleased to report on Puncak Niaga s investor relations activities during 2008 as follows:- DIALOGUES WITH INVESTORS The Top Management of the Group actively engages in meetings, dialogues and briefing sessions with local and foreign institutional groups. In 2008, more than 42 dialogues and group briefing sessions were conducted with existing and potential investors, local and foreign fund managers and financial analysts from research and asset management houses. 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 investors@puncakniaga.com.my and access the Group s information and corporate announcements at our website, (with a direct link to www. syabas.com.my) or 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 117 of this Annual Report), formulated in line with the Guide On Best Practices In Corporate Disclosure issued by Bursa Malaysia Securities Berhad s Task Force on Corporate Disclosure Best Practices. ANNUAL GENERAL MEETING (AGM) The Board of Puncak Niaga firmly believes that the AGM is the best forum to promote a closer relationship with our shareholders, enabling us to continue our engagement process with them. Since 2003, our AGMs have been preceded by a Company Presentation followed by a Question and Answer Session. Our shareholders are updated on the Group s corporate performance, 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 feedback which are relevant to our operations are taken into consideration in our business decisions. 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 s water related enquiries. In view of our role as a water services provider, we will continue with this practice at our future AGMs for the benefit of our shareholders. 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 performance via . Kindly us your contact details to the attention of Madam Tan Bee Lian, Group Company Secretary/Senior General Manager, Secretarial at investors@puncakniaga. com.my 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, 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 corpcom@puncakniaga.com.my for public enquiries and investors@puncakniaga.com.my 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, puspel@syabas.com.my or the toll-free line, or SMS PUSPEL<space><your complaints/ feedback> to PUNCAK NIAGA HOLDINGS BERHAD

147 2008 ANNUAL REPORT quality policy & report Quality Policy It is the Policy of Puncak Niaga to provide quality services and products to meet the customer requirements and satisfaction. Puncak Niaga shall strive to consistently adopt and maintain a quality management system based on all regulated requirements, internationally recognised standard which will ensure a planned, systematic, and proactive approach to quality in all aspects of our work. Puncak Niaga is also committed in providing a safe, harmonious and conducive working environment and continuously equips our employees with knowledge and skill to improve our quality systematically. Puncak Niaga Quality Management will be characterised by:- A culture of continual improvement and teamwork. Pro-activeness at all levels. The consistent application of Right First Time Every Time principle. Empowerment of personnel to solve problems expeditiously. All employees shall share the responsibility to understand and diligently implement the Quality Policy. INNOVATION & CREATIVE CIRCLE PROGRAMME The Innovative and Creative Circle (ICC) Programme is a platform to measure staff capability in maximizing their knowledge and experience to extend creative ideas in solving work-related issues to increase the Company s productivity and cost-benefit. The first ICC Programme started in year 1999 with the following objectives: Raising the level of quality, efficiency and other aspects of work performance; Raising the level of leadership, problem solving and communication skills through various ICC activities; Raising the staff morale, nurture teamwork and create a pleasant working environment in addition to nurturing a more effective communication flow between all levels. To date, the ICC Secretariat had successfully conducted three rounds of the ICC Programme. The projects that won the ICC Programme for the session achieved the following: Cut the cost of maintaining dust extractors at chemical plants. Improved filter runtime. Reduced modified liquid alum in WTP operations. Dam aeration system at Klang Gates Dam. E-filing. To ensure that all cost-savings and benefits from the completed projects are satisfactorily achieved, the implementation of the ICC Projects suggestions and counter-measures are monitored regularly. For the ICC Programme for the session, a new Secretariat was formed. Participation from staff at our Head Office and WTPs are currently in progress and a formal training was organised by Malaysia Productivity Corporation (MPC) to provide an overview of what ICC is all about and to further emphasise the use of innovation and creativity in solving work-related issues that would result in higher productivity and cost-saving. PUNCAK NIAGA HOLDINGS BERHAD 145

148 ANNUAL REPORT 2008 Distribution Schedule of Equity Securities as at 27 April 2009 ANALYSIS OF SHAREHOLDINGS Authorised Share Capital Issued and Paid-Up Share Capital Class of Shares Voting Rights : RM1,300,000, : RM411,142, comprising 411,142,895 ordinary shares of RM1.00 each : Ordinary shares of RM1.00 each : One vote per ordinary share DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings shareholders no. of Shares held Malaysian Foreigner Total Malaysian Foreigner total no. % No. % No. % no. % No. % No. % Less than ,037 * 100 * 12,137 * 100-1,000 1, , , ,585 * 963, ,001-10,000 4, , ,196, , ,502, , , ,385, ,799, ,185, ,001-20,455, # 1.72# # 2.14# 180,407,127# 44.10# 40,077, ,484,847# 53.90# (less than 5% of the issued share capital) 20,455,305 (5% of the ,862, ,095, ,957, issued share capital) and above Total 6,658# 97.34# ,840# # 332,813,804# 81.35# 76,292, ,106,095# # Notes :- * Negligible. # Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 27 April LIST OF TOP THIRTY SECURITIES ACCOUNT HOLDERS AS PER RECORD OF DEPOSITORS (Without aggregating the securities from different securities accounts belonging to the same Depositors) % of Issued no. of and Paid Up No. Name of Shareholder shares held Share Capital # 1. CIMB Group Nominees (Tempatan) Sdn Bhd 39,000, WWE Holdings Bhd For Corporate Line (M) Sdn Bhd (49988 JTRK) 2. HSBC Nominees (Asing) Sdn Bhd 34,095, Exempt An For JPMorgan Chase Bank, National Association (Bermuda) 146 PUNCAK NIAGA HOLDINGS BERHAD

149 2008 ANNUAL REPORT Distribution Schedule of Equity Securities as at 27 April 2009 (continued) % of Issued no. of and Paid Up No. Name of Shareholder shares held Share Capital # 3. RHB Capital Nominees (Tempatan) Sdn Bhd 33,000, Pledged Securities Account For Central Plus (M) Sdn Bhd (681055) 4. Central Plus (M) Sdn Bhd 28,941, AmSec Nominees (Tempatan) Sdn Bhd 21,920, AmBank (M) Berhad For Central Plus (M) Sdn Bhd 6. Employees Provident Fund Board 19,999, UOBM Nominees (Tempatan) Sdn Bhd 19,900, Pledged Securities Account For Central Plus (M) Sdn. Bhd. (PCB) 8. Lembaga Tabung Haji 16,803, Amanah Raya Nominees (Tempatan) Sdn Bhd 16,741, Amanah Saham Wawasan 2020 Permodalan Nasional Berhad 10. Citigroup Nominees (Tempatan) Sdn Bhd 16,400, CMS Trust Management Berhad For Employees Provident Fund 11. AmSec Nominees (Tempatan) Sdn Bhd 11,918, AmTrustee Berhad For Central Plus (M) Sdn Bhd (CS-CPlus) 12. Cartaban Nominees (Asing) Sdn Bhd 9,194, State Street Australia Fund ATB1 For Platinum Asia Fund 13. Amanah Raya Nominees (Tempatan) Sdn Bhd 8,147, Amanah Saham Malaysia Permodalan Nasional Berhad 14. HSBC Nominees (Asing) Sdn Bhd 7,597, Exempt An For Morgan Stanley & Co. Incorporated (Client) 15. HSBC Nominees (Tempatan) Sdn Bhd 6,300, Pledged Securities Account For Central Plus (M) Sdn Bhd ( ) 16. Amanah Raya Nominees (Tempatan) Sdn Bhd 5,441, Skim Amanah Saham Bumiputera Permodalan Nasional Berhad 17. AmSec Nominees (Tempatan) Sdn Bhd 5,062, CMS Trust Management Berhad For Tenaga Nasional Berhad Retirement Benefit Trust Fund (RB-TNB-CMS) PUNCAK NIAGA HOLDINGS BERHAD 147

150 ANNUAL REPORT 2008 Distribution Schedule of Equity Securities as at 27 April 2009 (continued) % of Issued no. of and Paid Up No. Name of Shareholder shares held Share Capital # 18. HSBC Nominees (Asing) Sdn Bhd 4,704, KBC Bank NV Brussels For KBC Equity Fund 19. Corporate Line (M) Sdn Bhd 4,318, Cartaban Nominees (Asing) Sdn Bhd 3,664, The Governor And Company Of The Bank Of Ireland For KBC ECO Water Fund 21. HSBC Nominees (Tempatan) Sdn Bhd 3,344, HSBC (M) Trustee Bhd For CMS Premier Fund (4959) 22. HSBC Nominees (Asing) Sdn Bhd 3,053, BNY Brussels For Powershares Global Water Portfolio 23. ECML Nominees (Tempatan) Sdn. Bhd 3,044, Pledged Securities Account For Ng Yim Hoo (001) 24. Citigroup Nominees (Tempatan) Sdn Bhd 2,125, Uni.Asia Life Assurance Berhad (Life Fund) 25. Permodalan Nasional Berhad 1,990, Investment Processing Dept 26. HSBC Nominees (Asing) Sdn Bhd 1,983, Exempt An For The Hongkong And Shanghai Banking Corporation Limited (HBFS-I CLT ACCT) 27. Universal Trustee (Malaysia) Berhad 1,941, CIMB-Principal Small Cap Fund Citigroup Nominees (Tempatan) Sdn Bhd 1,925, Exempt An For Prudential Fund Management Berhad 29. Central Plus (M) Sdn Bhd 1,738, Rozali Bin Ismail 1,729, Total 336,027, Notes :- # Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 27 April PUNCAK NIAGA HOLDINGS BERHAD

151 2008 ANNUAL REPORT Distribution Schedule of Equity Securities as at 27 April 2009 (continued) DIRECTORS INTEREST IN ORDINARY SHARES AS PER REGISTER OF DIRECTORS SHAREHOLDINGS No. of Shares Held in the Company Direct Indirect No. Name of Director Interest %# Interest %# 1. YBhg Tan Sri Rozali Bin Ismail 1,729, ,037, YBhg Dato Matlasa Bin Hitam YBhg Dato Ruslan Bin Hassan YBhg Dato Ir Lee Miang Koi 10,000 * YBhg Tan Sri Dato Hari Narayanan Govindasamy 175, YBhg Tan Sri Dato Seri Dr Ting Chew Peh ,000^ YBhg Dato Syed Danial Bin Syed Ariffin Mr Tan Seng Lee YAM Tengku Dato Rahimah Almarhum Sultan Mahmud YBhg Tan Sri Dato Ahmad Fuzi Bin Haji Abdul Razak Notes :- + Deemed interest by virtue of 100% equity interests each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd respectively, of which 92.5% is held in own name and 7.5% is held in the children s names. ^ Deemed interest by virtue of shares held by spouse, Tay Boon Ling pursuant to Section 134 of the Companies Act, # Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 27 April * Negligible. SUBSTANTIAL SHAREHOLDERS BASED ON THE REGISTER OF SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEE) No. of Shares Held in the Company Direct Indirect No. Name of Substantial Shareholder Interest %# Interest %# 1. YBhg Tan Sri Rozali Bin Ismail 1,729, ,037, Central Plus (M) Sdn Bhd 30,679, ,038,900* Corporate Line (M) Sdn Bhd 4,318, ,000,000* Employees Provident Fund Board 21,504, ,400,000^ Utilico Emerging Markets Limited ,095,950* 8.33 Notes :- + Deemed interest by virtue of 100% equity interests each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd respectively, of which 92.5% is held in own name and 7.5% is held in the children s names. * Held in nominee name(s). ^ Shares held and managed by Portfolio Manager. # Excluding a total of 2,036,800 PNHB shares bought back by PNHB and retained as treasury shares as at 27 April PUNCAK NIAGA HOLDINGS BERHAD 149

152 ANNUAL REPORT 2008 List of Properties as at 31 December 2008 N net Book remaining Description & Date of value Leasehold Existing Location acquisition Land Area (RM) Tenure (Expiry Date) Use Wisma Rozali 01/08/ ,952 sq.m 39,337, years 94 years Office Premises No. 4 & 6, Persiaran Sukan Leasehold expiring on Seksyen 13 22/01/ Shah Alam Selangor Darul Ehsan Office Lots No. 8 Eu Tong Sen Street 03/10/ sq.m 99 years 91 years Office Premises # 22-85, The Central Leasehold expiring on Singapore ,535,399 01/01/2100 No. 8 Eu Tong Sen Street 26/09/ sq.m 99 years 91 years Office Premises # 22-86, The Central Leasehold expiring on Singapore /01/2100 Vacant Land H.S.(D) /02/ ,364 sq.m 7,755, years 91 years Rented out PT 32, Seksyen 14 Leasehold expiring on to a car park Bandar Shah Alam 17/12/2099 operator District of Petaling Selangor Darul Ehsan Vacant Land H.S.(D) , PT /04/ sq.m H.S.(D) , PT /04/ sq.m 1,267,188 Freehold N/A None H.S.(D) , PT /04/ sq.m Mukim Pekan Subang Jaya Daerah Petaling Selangor Darul Ehsan Vacant Land H.S.(D) 6163, PT /02/ ,438 sq.m 56,748, years 93 years None H.S.(D) 6164, PT ,092 sq.m Leasehold expiring on H.S.(D) 6165, PT ,299 sq.m 24/10/2101 H.S.(D) 6166, PT ,733 sq.m Mukim Of Ijok District Of Kuala Selangor Selangor Darul Ehsan 4 Storey Shophouse No /03/ sq.m 1,832, years 84 years Office Premises Jalan Todak 5 Leasehold expiring on Pusat Bandar Seberang Jaya 21/10/ Prai Pulau Pinang Office Lot No. 20 Jln Presiden UIF 01/02/2008 1,765 sq. ft. 1,796,500 Freehold N/A Office Premises Accentra Business Park Glenmarie, Shah Alam (Lot P.T. 547, H.S. (D) District of Petaling Selangor Darul Ehsan) Vacant Land 02/07/ ,154 sq. ft. 1,107,700 Freehold N/A None No. 8 Lorong Pandan Off Jln Mahmud Kuala Terengganu (Lot 2119, Mukim of Batu Buruk District of Kuala Terengganu, Terengganu Darul Iman) 150 PUNCAK NIAGA HOLDINGS BERHAD

153 2008 ANNUAL REPORT statement of directors responsibility for preparation of Financial statements The financial statements of the Group and Company have been drawn up in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, The Directors take responsibility in ensuring that the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2008 and of the results and the cash flows of the Group and of the Company for the financial year then ended. In preparing the financial statements, the Directors have:- Selected suitable accounting policies and applied them consistently; Made judgements and estimates that are reasonable and prudent; Ensured that all applicable accounting standards have been followed; and Prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made appropriate enquiries, that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. The Directors have the responsibility for ensuring that the Company keeps accounting records, which discloses with reasonable accuracy, the financial position of the Group and Company and which enables them to ensure that the financial statements comply with the provisions of the Companies Act, 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. PUNCAK NIAGA HOLDINGS BERHAD 151

154 ANNUAL REPORT 2008 Financial Statements Definitions 153 Directors Report 155 Statement by Directors 160 Statutory Declaration 160 Independent Auditors Report 161 Income Statements 163 Balance Sheets 164 Consolidated Statement of Changes in Equity 166 Statement of Changes in Equity 167 Cash Flow Statements 168 Notes to the Financial Statements PUNCAK NIAGA HOLDINGS BERHAD