Water takes the shape of its beholder

Transcription

1 Puncak Niaga Holdings Berhad ( U) annual report 2001 Water takes the shape of its beholder PUNCAK NIAGA HOLDINGS BERHAD 2001 ANNUAL REPORT Concept rationale "Water takes the shape of its beholder" Malaysia s Water Specialist Pakar Air Malaysia Our 2001 annual report showcases a collection of Malaysian handcrafted water vessels of different shapes and sizes to aptly reflect our Company s commitment, strength, versatility and position as Malaysia s water specialist. Puncak Niaga Holdings Berhad ( U) Suite , 26th Floor, Plaza See Hoy Chan, Jalan Raja Chulan, Kuala Lumpur. Tel: Fax: corpcom@puncakniaga.com.my annual report 2001 Water in its purest form from Nature, is respected as an invaluable resource by us in Puncak Niaga. In meeting the needs of the consumer, our shareholders and our country, we balance sustainable development of existing water resources into our strategy and operations together with considerations of economic, social and environmental sensitivities. Like the vessels holding transparent and crystal clear water, Puncak Niaga sets and practices the highest standards of excellence and good corporate governance, transparency, accountability and integrity in its business conduct. An accolade of impressive awards and outstanding track record for operating excellence speak for itself. As the Leading and Dynamic Integrated Water Services Company in Malaysia, Puncak Niaga continuously seeks to improve value growth and create competitive shareholder returns. Water vessels featured are by courtesy of Jabatan Muzium dan Antikuiti, Malaysia

2 Fifth Annual General Meeting Contents Date : Wednesday, June 26, 2002 Time : 9.30am Venue : Banquet Hall, Kuala Lumpur Golf & Country Club No. 10 Jalan 1/70D, Off Jalan Bukit Kiara, Kuala Lumpur Corporate Information Fact Sheet Financial Highlights Financial & Share Performances Corporate Profile Corporate Structure Organisation Structure Corporate Achievements Board of Directors Senior Management Mission Statement Puncak Niaga s Executive Chairman Speaks Operations Review By Executive Vice Chairman Corporate Calendar of Events Statement on Corporate Governance Audit Committe Report Statement on Internal Control Risk Management Policy & Report Investor Relations Policy & Report Environmental Policy & Report Organisational Safety and Health Policy Quality Policy Newspaper Clippings Distribution Schedule of Equity Securities & Property Financial Reports Notice of Annual General Meeting Statements Accompanying the Notice of Annual General Meeting Other Compliance Information Proxy Form Puncak Niaga Holdings Berhad Annual Report

3 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Information Board of Directors YBhg Tan Sri Rozali Ismail Executive Chairman Encik Ruslan Hassan Executive Vice Chairman/ Executive Director Corporate Affairs Division Encik Mat Hairi Ismail Executive Director Finance Division Ir Lee Miang Koi Executive Director Project & Business Development Division Encik Abdul Majid Abdul Karim Independent Non-Executive Director YBhg Dato' Hari Narayanan Govindasamy Independent Non-Executive Director YB Dato' Seri Dr Ting Chew Peh Independent Non-Executive Director Group Company Secretary Madam Tan Bee Lian, MAICSA Registered Office Suite , 14th Floor, Plaza See Hoy Chan, Jalan Raja Chulan, Kuala Lumpur Tel: Fax: Principal Office Suite , 26th Floor, Plaza See Hoy Chan, Jalan Raja Chulan, Kuala Lumpur Tel: Fax: website: Date and Place of Incorporation 7 January 1997, Malaysia Company Number U Auditors Messrs PricewaterhouseCoopers (AF 1146) Tax Advisor PricewaterhouseCoopers Taxation Services Sdn Bhd ( M) Principal Bankers Bumiputra-Commerce Bank Berhad (13491-P) RHB Bank Berhad (6171-M) United Overseas Bank (Malaysia) Berhad ( K) Solicitors Messrs Kadir, Andri Aidham & Partners Messrs Wong & Partners Messrs Lee Hishammuddin Messrs Sivananthan Messrs Ng Yook Woon, Andrew TC Saw & Co 2

4 Corporate Information Share Registrar (Place where all registers of securities are kept) Tenaga Koperat Sdn Bhd ( V) 20th Floor, Plaza Permata, Jalan Kampar, Off Jalan Tun Razak, Kuala Lumpur Tel : Fax: Stock Exchange Listing Main Board of Kuala Lumpur Stock Exchange (KLSE) under the Infrastructure Project Companies Sector Indices KLSE Composite Index KLSE Syariah Index MSCI Index Audit Committee Chairman: Encik Abdul Majid Abdul Karim Members: YBhg Dato' Hari Narayanan Govindasamy YB Dato' Seri Dr Ting Chew Peh Encik Mat Hairi Ismail Secretary: Madam Tan Bee Lian Remuneration Committee Chairman: YB Dato' Seri Dr Ting Chew Peh Members: YBhg Dato' Hari Narayanan Govindasamy Encik Abdul Majid Abdul Karim Encik Mat Hairi Ismail Secretary: Madam Tan Bee Lian Nomination Committee Chairman: YB Dato' Seri Dr Ting Chew Peh Members: YBhg Dato' Hari Narayanan Govindasamy Encik Abdul Majid Abdul Karim Secretary: Madam Tan Bee Lian Compliance, Internal Control and Risk Policy Committee (CICR) Chairman: YB Dato' Seri Dr Ting Chew Peh Members: Encik Ruslan Hassan (Head of CICR) Encik Sonari Solor Mr Ng Wah Tar Madam Tan Bee Lian Secretary: Encik Mohammed Sofian Ismail (Head of Risk Management Section) Puncak Niaga Holdings Berhad Annual Report

5 Puncak Niaga Holdings Berhad Annual Report 2001 Fact sheet PUNCAK NIAGA HOLDINGS BERHAD S FACT SHEET AS AT 29 APRIL 2002 Group Staff Strength Management Staff 58 Executive Staff 168 Non-Executive Staff 387 Total 613 No. of Puncak Niaga s Water Treatment Plants 28 No. of Water Treatment Plants with ISO Certifications 12* Authorised Share Capital RM1,000,000,000 Paid-Up Share Capital RM437,990,000 (comprising 437,990,000 ordinary shares of RM1.00 each) Number of RUN Issued 546,875,000 RUN Coupon Rates RUN Semi-Annual Coupon Payment Dates 2.5% per annum for the first 10 years and 3.5% per annum for the remaining 5 years 20 May and 20 November RUN Maturity Date 18 November 2016 RUN Holders Put Option Date 20 November 2011 Number of Warrants Issued 109,374,869 Warrant Conversion Price Number of Warrants Converted RM2.62 per warrant None Warrant Maturity Date 20 November 2006 Effective Date of ESOS 25 February 2002 Expiry Date of ESOS 24 February 2007 ESOS Exercise Price (1st Tranche) RM2.37 per share Number of ESOS Offered (1st Tranche) 33,422,000 Number of ESOS Exercised 490,000 * Water Treatment Plants with ISO 9002 Certification - SSP2, Wangsa Maju, Bukit Nanas, Sg Batu, North Hummock, Bernam River Headworks, Sg Langat, Batang Kali, Rantau Panjang, Cheras Mile 11, Gombak and Bukit Tampoi 4

6 Influenced by the shape of smaller copper cooking vessels, this Buyung Berkaki was used as a hand wash basin Holding clear focussed vision To Be The Leading And Dynamic Integrated Water Services Company Puncak Niaga Holdings Berhad Annual Report

7 Puncak Niaga Holdings Berhad Annual Report 2001 Financial Highlights In RM Balance sheet Property, plant and equipment Project development expenditure Other non-current assets Current assets Total tangible assets 1,606, , , ,693 2,688,980 1,659, ,967 50, ,935 2,507,973 1,568, , ,904 2,107,695 Issued and paid up capital Share capital Reserves Shareholders fund Net tangible assets per share (RM) 437, , , , , , , , , Ratios and statistics Turnover Net profit after tax Interest bearing debt 552, ,314 1,585, ,564 91,225 1,579, ,472 98,972 1,264,816 In sen Earnings per share In % of turnover Operating profit In RM 000 No. of ordinary shares 437, , ,000 In times Gearing ratio Current ratio FINANCIAL CALENDAR Financial year end 31 December 2001 Announcement of results 1st quarter results ended 31 March May nd quarter results ended 30 June August rd quarter results ended 30 September November th quarter results ended 31 December February 2002 Listing and quotation of RUN and Warrants 28 November 2001 Audited Accounts for the financial year ended 31 December April 2002 Published Annual Report 4 June 2002 Annual General Meeting 26 June

8 Financial & Share Performances Financial Performance RM ' , ,415 RM '000 45,656 57,226 RM ' , , ,337 98,972 91, ,314 1,332,429 2,042,776 2,107,695 2,507,973 2,688,980 '97 '98 '99 '00 '01 '97 '98 '99 '00 '01 '97 '98 '99 '00 '01 Turnover Profit After Taxation Total Tangible Assets Share Performance KLCI Share Price (RM) M 60M 40M 20M Kuala Lumpur Composite Index Monthly Lowest Closing Prices Monthly Highest Closing Prices Volume of shares transacted Puncak Niaga Holdings Berhad Annual Report

9 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Profile Puncak Niaga Holdings Berhad (PNHB) was incorporated on January 7, 1997 under the Malaysian Companies Act, 1965 as a public company limited by shares. It is an investment holding company with interest in infrastructure activities specialising in water treatment engineering and water-related activities. PNHB was listed on the Main Board of Kuala Lumpur Stock Exchange (KLSE) on July 8, It is the first water treatment and supply concession company to be listed on the KLSE under the Infrastructure Project Company guidelines issued by the Securities Commission. As an investment holding company, PNHB acted as the listing vehicle for Puncak Niaga (M) Sdn Bhd (PNSB), an Infrastructure Project Company (IPC). PNSB is the holder of two concessions awarded by the Selangor State Government. The first, a Privatisation Cum Concession Agreement (PCCA) awarded on September 22, 1994 allowed PNSB to take over, operate, maintain, manage, rehabilitate and refurbish 27 existing water treatment plants formerly under the management of the Selangor Waterworks Department, now known as Perbadanan Urus Air Selangor Berhad. The second concession, a Construction Cum Operation Agreement (CCOA) was awarded on March 22, 1995 to finance, design, construct, operate, manage and maintain a new 950 million litres per day water treatment plant at Bukit Badong under the Selangor State Government s Sungai Selangor Water Supply Scheme Phase 2 Project (SSP2). Both the PCCA and CCOA provide for the concessions to expire on December 31, Under the CCOA, the development of the SSP2 Water Treatment Plant was undertaken in two stages: the first stage, with a production capacity of 475 million litres per day, was completed in October 1998, two months ahead of the commitment given to the Selangor State Government. The second stage of the SSP2 Water Treatment Plant, with a production capacity of 475 million litres per day was originally scheduled for completion and commissioning on January 1, Instead, it was completed and commissioned one year ahead of schedule on January 1, During the water crisis in 1998, PNSB was entrusted by the Federal Government to finance, design and construct the Wangsa Maju Water Treatment Plant at a cost of RM122.0 million. This water treatment plant was completed in a record time of six months, an amazing feat by engineering standards. The above mentioned early completion of projects clearly exemplifies Puncak Niaga s excellent capabilities in managing and undertaking large-scale water supply projects in Malaysia. In recognition of Puncak Niaga s expertise and experience in water privatisation projects over the past seven years, PNHB was recently invited by the Negeri Sembilan State Government to participate in the privatisation of Jabatan Bekalan Air Negeri Sembilan (JBANS). On December 20, 2000, PNHB signed a Memorandum of Understanding to undertake the proposed privatisation which PNHB will hold a 30% equity stake in NS Water Konsortium Sdn Bhd, the concession company which has been granted the exclusive privatisation rights of JBANS by the Negeri Sembilan State Government. Today, PNSB is the largest water supply concessionaire in Malaysia. We operate, manage and maintain 28 water treatment plants with a total average production capacity of 1,903 million litres per day. This volume is equivalent to approximately 56% of the treated water requirement in the State of Selangor Darul Ehsan and the Federal Territories of Kuala Lumpur and Putrajaya. 8

10 Corporate Profile Puncak Niaga Holdings Berhad Annual Report

11 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Structure Unggul Raya (M) Sdn Bhd 100% operation, management, maintenance and monitoring the operation of dams Puncak Niaga (M) Sdn Bhd 100% operation, maintenance, management, construction and undertaking the rehabilitation and refurbishment of water treatment facilities Ideal Water Resources Sdn Bhd 100% operation, management, maintenance and undertaking the rehabilitation and refurbishment of water treatment plants Puncak Research Centre Sdn Bhd 100% dormant Puncak Niaga Holdings Berhad Investment holding and provision of management services Puncak Seri (M) Sdn Bhd 100% dormant NS Water System Sdn Bhd 100% dormant NS Water Management Sdn Bhd 40% dormant 10

12 Puncak Niaga Holdings Berhad Annual Report 2001 Organisation Structure Puncak Niaga Holdings Berhad Executive Chairman YBhg Tan Sri Rozali Ismail Executive Vice Chairman Encik Ruslan Hassan General Manager Internal Audit Encik Sonari Solor Strategic Resource Centre General Manager Executive Vice Chairman's Office Encik Usman Ali Mustaffa Finance Division Executive Director Encik Mat Hairi Ismail Operations Division Acting Executive Director Encik Ruslan Hassan Human Resources & Administration Division Acting Executive Director Encik Ruslan Hassan Corporate Affairs Division Executive Director Encik Ruslan Hassan Project & Business Development Executive Director Ir Lee Miang Koi General Manager Finance & Accounts Mr Ng Wah Tar Assistant General Manager Finance & Accounts Encik Ismail Maidin Operation I General Manager Operation I Tuan Syed Danial Syed Ariffin Senior Manager/ Plant Manager SSP2 WTP Ir Ausamah Darwish Mohd Daud General Manager Human Resources & Administration Encik Ahmad Fauzi Yahya Senior Manager Training Encik Said Muhamad Khalil Abdul Madza Senior General Manager Corporate Communications Encik Ibrahim Ismail General Manager Legal Madam Chan Siew Meei Senior General Manager Project Management Ir Beh Men Huat Senior Manager Business Development Ir Ahmad Marzuki Hashim Senior Manager Finance & Accounts Encik Nik Azmi Nik Yaacob Manager Finance & Accounts Encik Rozailan Rosli Manager/ Plant Manager Wangsa Maju WTP Encik Abdul Rahman Kadir Senior General Manager Operation II Ir Loh Kit Mun Manager Manpower & Services and Employee & Industrial Relations Encik Hamdan Samsi General Manager Secretarial/Group Company Secretary Madam Tan Bee Lian Senior Manager Project Management Encik Ishak Awang Senior Manager Contracts Ir Teh Lee Ngo Manager Finance & Accounts Encik Khairrazi Aziz Operation II Senior Manager Rehabilitation of WTP Encik Nasir Ismail Senior Manager Operation Contract Supervision (26 WTPs) Encik Hashim Omar Manager Benefits & Compensation and Organisation Development Puan Selemah Abdul Manager Administration Encik Kamarulzaman Abu Bakar Manager Business Development Encik Juhari Abdullah Senior Manager Dam Operations, Water Resources & Environmental Study Puan Roowina Merican A Rahim Merican Assistant Manager Protective Services Encik Saadon Kardi 11

13 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Achievements The Corporate Mission and Vision of Puncak Niaga which lay the foundation for commitment and embracing the highest standards of excellence in every aspect of our corporate culture, is a major strategy in the relentless pursuit of Puncak Niaga to set even higher standards of operating excellence and quality. As in our previous years proven track record and growing from strength to strength, Puncak Niaga continued to garner several prestigious awards and accolades in year 2001 as follows:- 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 Water Treatment Plant NATIONAL ANNUAL CORPORATE REPORT AWARD (NACRA) 2001 Industry Excellence Award under the Construction & Infrastructure Project Companies Category OCCUPATIONAL SAFETY & HEALTH AWARD 2000 GOLD AWARD for Sungai Selangor Phase 2 Water Treatment Plant ANUGERAH CITRA LAPORAN TAHUNAN 2001 by Dewan Bahasa dan Pustaka for proper application of the national language in the Annual Report

14 Puncak Niaga Holdings Berhad Annual Report 2001 This carinated vessel form called a terenang, is beautifully handcrafted and engraved with traditional patterns and motifs. Used to store holy water to cure the sick. Containing calibre expertise and experience 13

15 Puncak Niaga Holdings Berhad Annual Report 2001 Board of Directors From left to right : YBhg Dato Hari Narayanan Govindasamy, YB Dato Seri Dr Ting Chew Peh, Ir Lee Miang Koi, 14

16 Board of Directors Encik Mat Hairi Ismail, Encik Ruslan Hassan, YBhg Tan Sri Rozali Ismail, Encik Abdul Majid Abdul Karim Puncak Niaga Holdings Berhad Annual Report

17 Board of Directors YBhg Tan Sri Rozali Ismail, aged 45, Malaysian Executive Chairman YBhg Tan Sri Rozali is the founder of PNSB, the Executive Chairman and a substantial shareholder of PNHB. He was appointed to the PNHB Board on 24 April Upon obtaining a Bachelor of Laws Degree from the University of Malaya in 1981, he 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, YBhg Tan Sri Rozali conceptualised the first institution of Islamic banking in Malaysia. Subsequently, he started his own legal practice as an Advocate and Solicitor for 7 years, specialising in corporate, property and banking work. In 1989, YBhg Tan Sri Rozali set up a familyowned 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 is now actively developing 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 Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. PNHB was subsequently incorporated in 1997 as the holding company of PNSB and was listed on the Main Board of Kuala Lumpur Stock Exchange (KLSE) on 8 July On 6 November 2001, YBhg Tan Sri Rozali was conferred the Fellowship Award by the Institute of Marketing Malaysia for his invaluable contribution to the Institute and the marketing fraternity, in recognition of his superb marketing strategies adopted for the Bandar Baru Puncak Alam and Bandar Puncak Perdana projects. In March 2002, he was awarded the Asia Water Management Excellence Award 2002 (Individual Award Category) in recognition of his outstanding contributions in championing management excellence and best practices in the water industry. Currently, YBhg Tan Sri Rozali is the Executive Chairman and substantial shareholder of U-Wood Holdings Berhad, a KLSE Main Board company which is developing Bandar Puncak Perdana, a 243-hectare mixed development project located near the Sultan Abdul Aziz Shah Airport. He is also the Executive Chairman and substantial shareholder of WWE Holdings Bhd, a KLSE Second Board company which is involved in the provision of integrated water and wastewater engineering services for both the residential and industrial sectors in Malaysia. YBhg Tan Sri Rozali also sits on the Board of other private companies. YBhg Tan Sri Rozali is the Chairman of PNHB s ESOS Option Committee and is related to another PNHB Director, Encik Mat Hairi Ismail (his younger brother) who serves as PNHB s Executive Director, Finance Division. He is also related to Encik Shaari Ismail (his elder brother) who is a substantial shareholder of the Company. 16 Puncak Niaga Holdings Berhad Annual Report 2001

18 Puncak Niaga Holdings Berhad Annual Report 2001 Board of Directors Encik Ruslan Hassan, aged 46, Malaysian Executive Vice Chairman and Executive Director, Corporate Affairs Division Encik Ruslan joined PNSB on 1 November 1995 as Head of Corporate Affairs Division. His appointments to-date are to the PNSB Board on 26 December 1996, to the Board of Directors of PNHB on 24 April 1997 and as the Executive Vice Chairman of PNHB on 6 April Currently, he is the Head of PNHB s Compliance, Internal Control and Risk Policy Committee and a member of PNHB s ESOS Option Committee. After obtaining a Bachelor of Laws Degree from the University of Malaya in 1981, Encik Ruslan began his career as Legal Advisor in Esso Production Malaysia Inc. In 1985, he joined Pernas Sime Darby Holdings Sdn Bhd as Group Legal Advisor/Company Secretary for 2 years. Encik Ruslan has 6 years experience as an advocate and solicitor. In 1993, he joined Rashid Hussain Berhad (RHB) as Corporate Affairs Senior General Manager and Executive Committee Member. Encik Ruslan is also a Director of RHB and Rashid Hussain Securities Sdn Bhd. He also sits on the Audit Committee of both companies and the Board of other private companies. Encik Mat Hairi Ismail, aged 40, Malaysian Executive Director, Finance Division Appointed to the PNSB Board on 24 May 1994 and then to the PNHB Board on 24 April 1997, Encik Mat Hairi is the Executive Director, Finance Division and also a member of PNHB s Audit Committee, Remuneration Committee and ESOS Option Committee. He graduated from Universiti Kebangsaan Malaysia in 1985 with a Bachelor in Accounting (Hons) Degree and is a member of the Malaysian Institute of Accountants (MIA). In 1985, he started his career as an Accountant at the Accountant General s Office in Labuan, and from 1989 to 1992 he served at the Malaysian High Commission in London. His last appointment was with the Langkawi Development Authority (LADA) ( ) before joining PNSB. Encik Mat Hairi is an Executive Director and substantial shareholder of U-Wood Holdings Berhad, a KLSE Main Board company, and WWE Holdings Bhd, a KLSE Second Board company. He also sits on the Board of other private companies. Encik Mat Hairi is related to a Director and substantial shareholder of PNHB, YBhg Tan Sri Rozali Ismail (his elder brother) who is the Executive Chairman of PNHB. 17

19 Puncak Niaga Holdings Berhad Annual Report 2001 Board of Directors Ir Lee Miang Koi, aged 48, Malaysian Executive Director, Project & Business Development Division Ir Lee joined PNSB in 1995 and is responsible for all aspects of project management and business development for new water supply projects. Ir Lee was appointed as a Director of PNSB on 2 February 1999 and subsequently to the Board of PNHB on 1 September He is also a member of PNHB s ESOS Option Committee. Ir Lee graduated as a civil engineer from University of Technology Malaysia in 1978 and in 1989 obtained a Masters Degree in Engineering majoring in water supply engineering from the Asian Institute of Technology in Bangkok. Ir Lee has 24 years 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, especially in the field of water supply services. He was a Senior Executive Engineer in the Design and Planning in the Public Works Department Headquarters and also Director of the Negeri Sembilan Waterworks Department. He left the Public Works Department in 1991 to join Ranhill Bersekutu Sdn Bhd, holding positions from Senior Engineer to Vice President. Ir Lee is also a director of other private companies within the PNHB Group. YB Dato Seri Dr Ting Chew Peh, aged 59, Malaysian Independent Non-Executive Director YB Dato Seri Dr Ting joined PNHB on 15 July 2000 as an Independent Non-Executive Director and a member of the Audit Committee. Currently, he is the Chairman of PNHB s Nomination Committee, Remuneration 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 from the University of London in He also holds a Doctorate in Philosophy, which he obtained from the University of Warwick in YB Dato Seri Dr Ting started his career as a lecturer in the Faculty of Humanities and Social Science at Universiti Kebangsaan Malaysia from 1974 to 1980 and was subsequently an Associate Professor of the said Faculty until Between 1979 to 1986, YB Dato Seri Dr Ting published two books entitled Konsep Asas Sosiologi and Hubungan Ras dan Etnik. In 1987, YB Dato Seri Dr Ting ventured into politics with his election as a Member of Parliament for the Gopeng constituency, which he holds until today. He previously served as Parliamentary Secretary of the Ministry of Health ( ), Deputy Minister of the Prime Minister s Department ( ) and Minister of Housing and Local Government ( ). Currently, he is the Secretary-General of the Malaysian Chinese Association (MCA) and the Chairman of the Port Klang Authority. He also sits on the Boards of Pan Malaysian Capital Berhad and Pan Malaysia Holdings Berhad which are listed on the Main Board of KLSE. He also serves as director of other private companies. 18

20 Board of Directors YBhg Dato Hari Narayanan Govindasamy aged 52, Malaysian Independent Non- Executive Director YBhg Dato Hari Narayanan was appointed to the Board of PNHB on 1 July 1999 as an Independent Non-Executive Director. He is also a member of PNHB s Audit Committee, Remuneration Committee and Nomination Committee. He holds a Bachelors Degree in Electrical and Electronics Engineering from the Polytechnic of Newcastle-Upon-Tyne, England. He is a member of the Institute of Engineers, Malaysia and a Registered Professional Engineer with the Board of Engineers, Malaysia. He is also a Director of Tenaga Nasional Berhad, SP Setia Berhad, Lembaga Lebuhraya Malaysia, Asian Institute of Medicine, Science and Technology and other private companies. Encik Abdul Majid Abdul Karim, aged 43, Malaysian Independent Non- Executive Director A PNSB Director since 17 March 1994, Encik Abdul Majid was appointed to the PNHB Board on 24 April 1997 as an Independent Non-Executive Director. He is the Chairman of PNHB s Audit Committee and a member of the Remuneration Committee and Nomination Committee. He obtained a Bachelor of Science (Hons) Degree in Civil Engineering from the University of Glasgow, United Kingdom in He began his career as a Technical Assistant with the Urban Development Authority (UDA) ( ), as Property Executive at Boustead Holdings Berhad ( ) and subsequently as Sales Engineer at UAC Berhad ( ). Encik Abdul Majid also sits on the Board of other private companies. Notes: 1. Save as disclosed above, none of the Directors have:- (a) any family relationship with any directors and/or substantial shareholders of the Company; (b) any conflict of interest with the Company; and (c) any conviction for offences (other than traffic offences) within the past 10 years. 2. The respective Directors interests in the Company s equity securities are detailed in pages 92 and 94 of the Annual Report. Puncak Niaga Holdings Berhad Annual Report

21 Puncak Niaga Holdings Berhad Annual Report 2001 Senior Management From left to right : Encik Ahmad Fauzi Yahya, Encik Ibrahim Ismail, Ir Beh Men Huat, Madam Loh Lim Chai Kheng, Tuan Syed Danial Syed Ariffin, Encik Azizul Nizam Bidin, Encik Sonari Solor, 20

22 Senior Management Mr Ng Wah Tar, Madam Tan Bee Lian, Ir Loh Kit Mun, Madam Chan Siew Meei, Encik Usman Ali Mustaffa, Encik Azlan Hamid Puncak Niaga Holdings Berhad Annual Report

23 Puncak Niaga Holdings Berhad Annual Report 2001 Senior Management Encik Azizul Nizam Bidin, aged 34, Malaysian Executive Director, Puncak Seri (M) Sdn Bhd Ir Loh Kit Mun, aged 48, Malaysian Senior General Manager, Operation ll Encik Azizul was appointed Executive Director of Puncak Seri (M) Sdn Bhd, a wholly-owned subsidiary of PNHB on 24 September He holds a Diploma in Hotel Management from Stamford College and a Diploma in Management from the Malaysian Institute of Management (MIM). He has more than 10 years management and entrepreneurial experience in diversified operations gained from various ventures and collaboration with foreign companies in setting up local services that provide the vision and exposure for personal career development. He is also the Head of Business Development for Yayasan Gerak Bakti Kebangsaan. Encik Ibrahim Ismail, aged 45, Malaysian Senior General Manager, Corporate Communications Encik Ibrahim joined PNSB in April 1997 as General Manager of the Corporate Affairs Division. He graduated with a Bachelor of Laws Degree in 1981 from the University of Malaya and holds a Master of Laws Degree obtained in 1989 from the University of London. Previously, he was in private practice and was also the Dean for the Faculty of Law at Universiti Kebangsaan Malaysia ( ). He served with Petronas as Senior Legal Counsel in its Gas Division ( ) and Senior Manager for the Market Development Department of Malaysia LNG Tiga Sdn Bhd ( ). He has 20 years experience in various aspects of litigation, conveyancing and corporate work. He is currently the Senior General Manager of Corporate Communications Department. Ir Loh joined PNSB in April 1998 and oversees the operation, maintenance and rehabilitation of 26 WTPs, contract supervision, dam operations, water resources and environmental matters. Upon graduation from the University of Malaya with a Bachelor of Civil Engineering Degree in 1978, he worked as an engineer with the Drainage and Irrigation Department ( ). Then he served as Chief Engineer (last designation) at SMHB Sdn Bhd ( ), Associate at Ranhill Bersekutu Sdn Bhd ( ) and General Manager (Infrastructure) of KL Linear City Sdn Bhd ( ). His 24 years of working experience covers areas pertaining to irrigation drainage, hydrology, water resources and supply, design and construction of dams, river engineering, drainage and flood mitigation, infrastructure development, environmental assessment, development of Geographical Information System, management of engineering projects and operation of water treatment plants. Ir Beh Men Huat, aged 46, Malaysian Senior General Manager, Project Management Ir Beh joined PNSB in February 1996 as Manager of the Business Development Department. He is now the Senior General Manager, Project Management. He graduated in 1982 with a BSc Degree in Civil Engineering from University Strathclyde, Scotland. Prior to joining PNSB, he has worked with the Public Works Department and Lembaga Air Perak. His 20 years of working experience cover areas pertaining to business development, project management and water supply operation and management. 22

24 Senior Management Encik Ahmad Fauzi Yahya, aged 41, Malaysian General Manager, Human Resources & Administration Encik Ahmad Fauzi joined PNSB in January 2002 as General Manager, Human Resources & Administration. His responsibilities include implementation of the Group's Human Resource policies as approved by the Board and maintenance of good working relationships with the Group's in-house unions. He graduated from the Eastern Michigan University, USA, with a Bachelor of Business Administration degree majoring in Human Resource Management. He has 17 years of extensive working experience in various multinational companies covering diverse areas such as human resource, public relations, marketing and sales. His last employment was with Mobil Oil Malaysia Sdn Bhd (later known as ExxonMobil Malaysia). Encik Azlan Hamid, aged 44, Malaysian General Manager, Executive Chairman s Office/Special Assistant (Corporate) to the Executive Chairman During the course of his 18 years career, Encik Azlan has served 3 banks; namely Bank Bumiputra (M) Bhd (BBMB), United Asian Bank Bhd (UAB) and Bank of Commerce Bhd (BCB). After undergoing 2 mergers, they are currently known as Bumiputra-Commerce Bank Bhd. At BBMB, his last position was Chief Internal Analyst (Special Task Force Audit Team) reporting directly to the Chief General Manager of Finance & Corporate Services, whilst at the UAB-BCB merged entity, he was the Senior Manager, in charge of the bank s Corporate Planning & Development, reporting directly to the Chief Executive Officer. Encik Azlan was also attached to Price Waterhouse Management Consultants (currently known as PwC Consulting Sdn Bhd) as Senior Consultant in the Corporate Finance Division, and at Petroliam Nasional Berhad (PETRONAS), he was attached to the Group Internal Audit Division (undertaking local and overseas audit assignments ventured by PETRONAS) in the capacity of Lead Auditor/Audit Manager. His employment portfolio covers activities ranging from retail & corporate banking, corporate finance, management consulting, corporate planning, and auditing (banking and oil & gas) sectors. Encik Azlan joined PNSB in March 1996 as Senior Manager of Corporate Finance Department. He is now General Manager and Special Assistant (Corporate) to the Executive Chairman of PNSB. He obtained his BBA Cum Laude (in 1981), MBA (in 1982), and DBA Honors (in 1984) from Western Michigan University, Kalamazoo, Michigan, USA. He is also a qualified ISO 9000 Auditor (Petronas) and Productivity Analyst (National Productivity Centre - NPC). Puncak Niaga Holdings Berhad Annual Report

25 Puncak Niaga Holdings Berhad Annual Report 2001 Senior Management Madam Chan Siew Meei, aged 45, Malaysian General Manager, Legal Mr Ng Wah Tar, aged 38, Malaysian General Manager, Finance & Accounts Madam Chan joined PNSB in May 1998 as General Manager, Legal. She obtained her Bachelor of Laws Degree from the University of Malaya in During the course of her 21 years career, Madam Chan has served as an Advocate and Solicitor, lecturer, company secretary and as legal adviser to two public-listed companies. Her employment portfolio covers very diverse activities ranging from the timber and plantation sectors to engineering, property and manufacturing. As such, apart from her legal and corporate duties, she has attained considerable experience in administration, human resources and company secretarial work. Madam Loh Lim Chai Kheng, aged 44, Malaysian General Manager, Executive Chairman s Office Madam Loh Lim joined PNSB as General Manager, Executive Chairman s Office in November Her portfolio includes feasibility assessment of potential investments or projects, planning and preliminary set up of identified new projects/ investments including assisting in drawing up financing, agreements and systems set up. She is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and Malaysian Institute of Accountants (MIA). Madam Loh Lim has more than 19 years of working experience in the areas of audit, accounting, corporate finance, company secretarial and operations. Mr Ng commenced his articleship with an accounting firm in He is a member of the Malaysian Institute of Accountants (MIA) and the Malaysian Institute of Certified Public Accountants (MICPA). After spending 10 years in the accounting profession where he last served as Audit Manager for 3 years, he joined United Engineers (M) Berhad (UEM) as the Accountant of its Trading Division in He was subsequently promoted to Senior Manager, Finance in 1997 and subsequently transferred to the Management Services Division overseeing the finance and accounting functions of UEM. After serving UEM for 6 years, he joined PNSB in March 2000 as General Manager, Finance & Accounts. Encik Sonari Solor, aged 45, Malaysian General Manager, Internal Audit Encik Sonari has more than 10 years experience in auditing and accountancy in public-listed companies dealing in property development, manufacturing, timber and consultancy service. He is a member of the Malaysian Institute of Accountants (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). Prior to joining PNSB in 1998, he served as Group Divisional Chief, Internal and Management Audit of Land & General Berhad, Chief Operating Officer of Sepakat Computer Consultants Sdn Bhd, Audit Manager of DMIB Berhad and Accountant of Utusan Melayu Berhad. 24

26 Senior Management Tuan Syed Danial Syed Ariffin, aged 44, Malaysian General Manager, Operation I Tuan Syed Danial graduated in 1981 with a BSc. (Hons) Degree in Civil Engineering from University of Aston, Birmingham, United Kingdom. He joined PNSB in December 1995 as Manager of the Operations Department. Between 1997 to 1999, Tuan Syed Danial was promoted twice, i.e. Senior Manager in 1997 and Assistant General Manager, Operation I in In January 2001, he was further promoted to his current position. Prior to joining PNSB, he worked with the Pahang Public Works Department for 10 years, holding positions from Project Engineer ( ) to District Engineer for Cameron Highlands ( ) and the Selangor Water Works Department between 1991 to 1995 whereby he was the Senior Project Engineer overseeing the construction of the Sg Selangor Phase 1 Project. Encik Usman Ali Mustaffa, aged 43, Malaysian General Manager, Executive Vice Chairman s Office Encik Usman joined PNSB in March 2001 as General Manager, Executive Vice Chairman s Office. He oversees and coordinates new projects undertaken by the Company. Encik Usman is a fellow member of the Chartered Association of Certified Accountants (UK) and is also a member of the Malaysian Institute of Accountants (MIA). During his 18 years of service, he spent 5 years in an audit firm. He joined Malaysia Airlines in 1988 as an Accountant, and was later promoted to Senior Accountant. In 1992, he joined EPE Power Corporation Berhad as a Finance Manager and was mainly responsible for the listing of the company on the Kuala Lumpur Stock Exchange in He was promoted to Senior Manager (Finance) and subsequently joined American MNC as Regional Financial Controller in 1999 where he was in charge of the financial affairs of the company for the Asia-Pacific region. Madam Tan Bee Lian, aged 36, Malaysian Group Company Secretary/ General Manager, Secretarial Madam Tan has more than 13 years corporate secretarial experience in both private and publiclisted companies. She joined PNSB in November 1994 as Company Secretary. She is now the Group Company Secretary/General Manager, Secretarial. Madam Tan is a fellow of the Malaysian Institute of Chartered Secretaries and Administrators (FCIS) and a member of the Institute of Company Secretaries Malaysia (MCSM). Prior to joining PNSB, she worked in the Secretarial & Legal Department of Project Lebuhraya Utara Selatan Berhad (PLUS) and was the Assistant Company Secretary of Metramac Corporation Sdn Bhd/Metacorp Berhad, a company listed on the Second Board of Kuala Lumpur Stock Exchange. In November 2000, Madam Tan was awarded the ROC-MAICSA Company Secretary Award 2000 Runner-Up for The Listed Company Category in recognition of her excellence, competence and professionalism as a Chartered Secretary. Puncak Niaga Holdings Berhad Annual Report

27 Mission Statement 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. 26 Puncak Niaga Holdings Berhad Annual Report 2001

28 A water and food container, this Geluk has many lined decorations on the outside depicting the cultural growth of the tribes it was used by. Retaining strong core values Puncak Niaga Holdings Berhad Annual Report

29 Puncak Niaga Holdings Berhad Annual Report 2001 Puncak Niaga s Executive Chairman Speaks To Our Dear Shareholders On behalf of the Board of Directors of Puncak Niaga Holdings Berhad, it is indeed my pleasure to present to you the Annual Report of the Group and the Company for the financial year ended December 31, FINANCIAL REVIEW The Group achieved a turnover of RM552.3 million for the financial year ended December 31, 2001, compared to RM350.6 million in the preceding financial year, representing an increase of 57.5%. Profit before taxation for the financial year was RM179.7 million compared to RM91.2 million for the previous financial year or an increase of 97%. The substantial increases in turnover and profit before taxation are due to the step up in the bulk supply rate in addition to the increased contribution in volume capacity of 475 million litres per day, arising from the completion of the SSP2 Stage 2 Water Treatment Plant. CORPORATE DEVELOPMENT The year 2001 saw the completion of the Company s Corporate Exercise which was first announced in December 2000, comprising a Sg Langat Dam 28

30 Puncak Niaga Holdings Berhad Annual Report 2001 Puncak Niaga s Executive Chairman Speaks renounceable rights issue of RM546,875,000 Nominal Value 15-Year Redeemable Unconvertible Junior Notes (RUN) with 109,374,869 free detachable warrants (Warrants) at an issue price of RM0.322 per RM1.00 nominal value of RUN, on the basis of RM5.00 nominal value of RUN with one (1) free warrant for every four (4) existing ordinary shares of RM1.00 each held in the Company. The RUN and Warrants were successfully listed on the KLSE on November 28, 2001 and commenced trading at RM0.57 and RM0.75 respectively. The last traded prices of the RUN and Warrants as at April 24, 2002 was at RM0.56 and RM1.53 respectively, reflective of the strong support from the investing public. The RUN issue was an integral part of the Group s refinancing exercise to re-profile its financing structure. At an issue price of RM0.322 per RM1.00 nominal value of RUN, the exercise raised a total gross proceeds of RM176,093,750. The Group utilised RM168 million of the total YBhg Tan Sri Rozali Ismail Executive Chairman 29

31 Puncak Niaga Holdings Berhad Annual Report 2001 Puncak Niaga s Executive Chairman Speaks proceeds to repay its Al-Murabahah Commercial Papers. The balance of the proceeds was used to defray expenses incurred in connection with the RUN issue and for working capital purposes. In this respect, the Group wishes to confirm the full utilisation of the proceeds in accordance with the RUN proposal. Shareholders were thus given the opportunity, through participation in the RUN issue, to build on their existing relationship with the Group and enjoy the long-term growth potential and bright prospects of your Company. At the time of issue, various investment analysts estimated returns exceeding 17% per annum should shareholders hold the RUN to maturity. At the Extraordinary General Meeting of the Company held on June 26, 2001, our shareholders approved the issue of not more than 10% of the issued and paid up share capital of the Company to its Executive Directors and eligible employees under the Group s Employees Share Option Scheme (ESOS). Approval from the Securities Commission (SC) was obtained on August 10, Subsequently, the Company applied and obtained the requisite approval from the SC, for extension of time to complete the ESOS by April 30, 2002 instead of February 9, The ESOS exercise price for the 1st tranche has been fixed at RM2.37 per share on February 25, 2002, based on a 10% discount of the 5 days weighted average market price. The ESOS will enable the Executive Directors and eligible employees of the Group to participate in the future growth of the Group. The scheme is designed to reward and retain key personnel and to attract new employees with skills vital for improvement of the operations and continued growth of the Group. In line with the Corporate Exercise, the proposal to increase the authorised share capital of the Company from RM500,000,000 comprising 500,000,000 shares of RM1.00 each to RM1,000,000,000 comprising 1,000,000,000 shares of RM1.00 each has also been completed. INDUSTRY OUTLOOK Capital expenditure for water supply by the Federal Government have recorded a compounded growth of not less than 11% from the Fifth Malaysia Plan right through to the Seventh Malaysia Plan. In the Eighth Malaysia Plan, the Federal Government has increased its allocation for the development of water supply infrastructure from RM2.78 billion to RM

32 Puncak Niaga s Executive Chairman Speaks billion, a 43% increase as compared to the allocation given under the Seventh Malaysia Plan. The increase is indicative of the Federal Government s concern on the need to ensure a continuous and efficient supply of treated water for both urban and rural areas. Also, with the rising costs of treating water, the Federal Government is seriously looking into privatising all water supply departments in the country. The Federal and State Governments formulated a long-term master plan from the National Water Resources Study (NWRS) completed in 1999, as a long-term approach for the planning and development and the management of limited water resources for water supply. Under the NWRS, a total of 62 water resource development projects, including the construction of 47 dams to form impounding reservoirs, had been identified for implementation over the next 50 years. The sites for dams and their catchment areas in all states have to be gazetted for their conservation. In this respect, protection of rivers and river basins of such water sources are of paramount importance. Effective river basin management strategies are needed to include the regulation and protection of rivers, control of polluting discharges, establishment of stream standards, enforcement and monitoring of river water quality. The Group s operations are based in the State of Selangor Darul Ehsan and the Federal Territories of Kuala Lumpur and Putrajaya. The area s population of 5.55 million is projected to increase by almost 10% by year Current water demand in the State of Selangor Darul Ehsan and the Federal Territories of Kuala Lumpur and Putrajaya is estimated at 3,400 million litres per day and the expected demand growth is between 6% - 8% per year for the next five years. Industrial and commercial users account for about 34% of total metered consumption, while residential and other consumption account for the balance. The growing concentration of industries operating within the Klang Valley and Selangor Darul Ehsan, expected population growth and inward migration resulting in a steady increase in the demand for treated water, are expected in tandem with national economic growth. Overall water treatment production costs are also expected to rise due to continued deterioration of raw water quality. In view that the States of Melaka, Pulau Pinang and Selangor have fully developed and exploited all their water sources, there will not be sufficient resources to meet water demand in the near future. Inter-state and inter-basin water transfers will soon become a necessary feature in Puncak Niaga Holdings Berhad Annual Report

33 Puncak Niaga Holdings Berhad Annual Report 2001 Puncak Niaga s Executive Chairman Speaks water sources development to overcome water stress in water deficit states. Such was the high demand of water in the Klang Valley that inter-state raw water transfers were being contemplated from Pahang to Selangor, with the first gush of raw water expected to reach Selangor in There are also over 6,000 km of asbestos cement pipes in the State of Selangor Darul Ehsan and the Federal Territory of Kuala Lumpur, which have to be replaced. This is one of the programmes to help solve the problem of non-revenue water, partly contributed by leaking water pipes. Puncak Niaga will continue to pursue for itself a share of the business of replacing such water pipes, should the opportunity materialise. All the players in the local water industry operate in a monopolistic position in their respective areas of operation. Sources of water are State owned and the barriers to entry for new players are formidable with the stringent licensing controls and the capital-intensive nature of the industry. However, pricing power is limited by the terms of the concession agreements. REALISE CONSERVATION THROUGH EDUCATION AND TECHNOLOGY DEVELOPMENT FOR QUALITY & PRODUCTIVITY GAINS Drinking water must be clear, colourless and odourless. It must be pleasant to drink and free from all harmful micro-organisms, chemical and radiochemical contaminants and within the limits set by the Ministry of Health under the National Guidelines for Drinking Water Quality. Towards this end, Puncak Niaga has implemented various programmes to ensure the safety and quality of drinking water supplied, limiting any incidence of water-borne communicable diseases or poisoning from chemical contaminants. Puncak Niaga continues its message of conservation to the public through active participation at forums and dialogues and through open days at water treatment plants. The River Rescue Brigade which was founded in 1998, continues as a strong corporate initiative to educate school children on awareness of the linkages between clean rivers and the environment to sustain the supplies of clean water. Significant investments have been made in the development of new technologies to achieve efficient and cost-effective water treatment processes for quality and productivity gains. 32

34 Puncak Niaga s Executive Chairman Speaks We have invested substantially on a new water treatment technology using the Actiflo System at the SSP2 Water Treatment Plant and the Dissolved Air Floatation System (DAF) at the Wangsa Maju Water Treatment Plant. The Actiflo System uses recoverable microsand to hasten the settlement of floc whereas the DAF uses micro-bubbles to bring the floc to the surface and removal by scrapper. The Actiflo System technology enables the water treatment plant to process water within a short period of time i.e. 21 minutes as compared to the conventional system which takes about hours. In addition, the Supervisory Control & Data Acquisition System (SCADA) at the SSP2 Water Treatment Plant forms part of an effective management system adopted by Puncak Niaga for controlling and monitoring the facility. Our Research & Development initiatives continues as an on going process to optimise the operations of our water treatment plants. Research efforts and financial resources are being expended in the development of an operational system to reduce the iron content of raw water in the Klang Gates Dam which would result in lower chemical usage at the Wangsa Maju Water Treatment Plant and sanitary handling and disposal of sludge from the water treatment plants. The usage of dual media filter and biological filters are some of our other initiatives towards the development of alternatives in the water treatment processes. We also carried out tests on alternative coagulation chemicals with the intention to reduce chemical usage and by-products such as sludge. BUSINESS PROSPECTS FOR YEAR 2002 The attacks on the New York World Trade Centre, Twin Towers on September 11, 2001 and the consequent military conflict in Afghanistan pushed an already weak world economy into recession. Amid signs of a bottoming out process in the US economy and recovery in global semi-conductor sales and prices, there are glimmers of improvement amid lingering uncertainties at home. Industrial production has improved and exports are somewhat better. Malaysia Industrial and Economic Research (MIER) estimates GDP growth at 0.3% in 2001 and possibly 3.2% in This is based on expectation of recovery in the US economy in the second half of As developed countries move towards a steadier growth trend, Malaysia is expected to revert to its growth trajectory with a 5.7% growth in For the privatisation of Jabatan Bekalan Air Negeri Sembilan (JBANS), the Company will hold a 30% equity stake in NS Water Konsortium Sdn Bhd, the concession company which had been granted the Puncak Niaga Holdings Berhad Annual Report

35 Puncak Niaga s Executive Chairman Speaks exclusive privatisation rights of JBANS by the Negeri Sembilan State Government. The Negeri Sembilan State Government has invited NS Water Konsortium Sdn Bhd to submit a proposal for the privatisation of JBANS. Negotiations on the terms and conditions of the concession agreement for the privatisation of JBANS are still ongoing. The Group continues to rely on its core competencies, actively pursuing growth in potable water related projects in various states in the country. Initiatives are also made to establish a presence in the development of supply of potable water sources in neighbouring countries. The Board of Directors is anticipating a challenging year in 2002, as total gross revenue may be affected by the reduced production from a few water treatment plants under the PCCA due to the completion of the SSP2 Stage 2 and Sg Rasa Stage 1 Water Treatment Plants, resulting in excess capacity of water supplies in the State of Selangor Darul Ehsan. As such, the Group will monitor its profitability closely and adequate cost control measures will be undertaken. ACKNOWLEDGEMENT On behalf of the Board of Directors of Puncak Niaga Holdings Berhad, I would like to record my sincere thanks and utmost appreciation to our valued customers, end-users and shareholders for their continued trust and support. Board of Directors and Senior Management of Puncak Niaga My deep gratitude and thanks go to our Management and all employees for their hard work, dedication and commitment. It is only through their continued support, loyalty and commitment that the Group is able to face the challenges and take advantage of any opportunities that may arise in the future. Last but not least, our special thanks to the relevant governmental authorities and agencies, non-governmental organisations and our strategic partners, associates and financiers, all of whom have contributed significantly to our successes this past year. Tan Sri Rozali Ismail Executive Chairman Date : April 24, Puncak Niaga Holdings Berhad Annual Report 2001

36 Puncak Niaga Holdings Berhad Annual Report 2001 A Kendi, also known as a Cerek has two spouts. One is used to pour water in and the other to pour water out. It is usually filled with holy water or herbal water, used for medicinal purposes. Spouting innovation and efficiency Puncak Niaga Holdings Berhad Annual Report

37 Operations Review by Executive Vice Chairman To Our Dear Shareholders On behalf of the Executive Directors and Senior Management of Puncak Niaga Group, it is my pleasure to present to you a review of the operations of the Group for the financial year ended December 31, Before commencing on the review, I am pleased to inform you that our Executive Chairman, YBhg Tan Sri Rozali Ismail, was awarded the prestigious Asia Water YBhg Tan Sri Rozali, proud recipient of the Asia Water Excellence Award 2002 Management Excellence Award 2002 under the Individual Award Category, during the recent Water 2002, International Water Technology, Equipment, Services & Management Exhibition & Conference, in March The presentation of the award is a clear affirmation of YBhg Tan Sri Rozali s outstanding contributions in championing management excellence and best practices in the water industry. You can feel proud and confident that your Company s stewardship is in competent and capable hands. Encik Ruslan Hassan Executive Vice Chairman Sungai Selangor Water Supply Scheme Phase 2 (SSP2) The Group is proud of its achievement in undertaking the successful implementation of the SSP2 for the Selangor State Government. The project consists of arranging for financing, construction, commissioning and management of a new water treatment plant and associated works. Both the stages were completed earlier than scheduled; Stage 1 was completed two months before the scheduled completion date, while Stage 2 was completed a full year ahead of schedule. Total designed capacity output for SSP2 amounts to 950 million litres per day. SSP2 Water Treatment Plant has been accorded ISO 9002 by Lloyd s Register Quality Assurance (Lloyd s), an internationally acclaimed certification body in year 2000 and continues to hold the certification in spite of having undergone two subsequent stringent surveillance audits by Lloyd s. It bears strong testimony to Puncak Niaga s emphasis in providing quality service and operational excellence through the adoption of internationally accepted methodologies and standards in water production. The operations at both stages of the SSP2 Water Treatment Plant continues to run smoothly. 36 Puncak Niaga Holdings Berhad Annual Report 2001

38 Operations Review by Executive Vice Chairman The water treatment plant is currently undergoing further plant optimatisation programmes which are conducted internally by our employees. Operation of 26 Water Treatment Plants Under PCCA In year 2001, the 26 water treatment plants operated by Puncak Niaga under the PCCA produced 355 million cubic meters of treated water which is 12.7% above the quantity designated under the PCCA. This is however a decrease of 1.5% in production compared to year Despite the above and there being more than 600 hours lost time due to unscheduled shutdowns in the year 2001, the 26 water treatment plants production was still above the PCCA designated quantity. The major cause of the shutdowns was raw water quality violations which accounted for 30.4% of the total shutdowns. Scheduled maintenance accounted for 26.3% of the total shutdowns and 18.6% was due to electrical power interruptions. Aeration System at Sg Gombak Water Treatment Plant The decrease in treated water production from the 26 water treatment plants was primarily due to Perbadanan Urus Air Selangor Berhad s (PUAS) exercise to reconfigure the purchase of water from other water producers in view of the full commissioning of the SSP2 Water Treatment Plant and the partial commissioning of Sg Rasa Water Treatment Plant in November This has resulted in an excess capacity situation in the northern part of Selangor. Consequently, PUAS had also directed Puncak Niaga to reduce treated water production at the Sg Langat, Batang Kali and Kuala Kubu Baru Water Treatment Plants. YB Dato Seri S. Samy Vellu, Minister of Works being briefed by Puncak Niaga s personnel on the Sg Langat Water Treatment Plant shutdown A planned 24-hours shutdown of Sg Langat Water Treatment Plant was undertaken in July 2001, to carry out urgent preventive maintenance work and to install new valves, equipment and other works to improve the performance of the plant. Careful coordination with the relevant government authorities, agencies and the media as well as detailed forward planning had ensured minimal disruption to 950,000 affected consumers. The well-coordinated exercise was a resounding success considering the massive scale of operation and its completion in 20 hours which was well within the original schedule of five days. Puncak Niaga Holdings Berhad Annual Report

39 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman With the ten water treatment plants under the PCCA being certified MS ISO 9002 in addition to SSP2 and Wangsa Maju Water Treatment Plants being certified ISO 9002, Puncak Niaga takes pride that 93% of its water treatment plants are producing water according to established quality assurance standards. Executive Chairman s working visit to the Bukit Nanas Water Treatment Plant The water treatment plants maintenance and production performances are diligently monitored under the Plant Audit Programme, implemented by the Operations Division. This is supplemented by the Competent Electrical Engineers Inspection and the monthly Mechanical and Electrical Corrective Maintenance Inspection. Our close rapport with Tenaga Nasional Berhad (TNB) assisted in a substantial reduction of plant shutdown time caused by power failure since TNB has been swift in mobilising standby power generator sets to any water treatment plants affected by the power interruption. Wangsa Maju Water Treatment Plant During the water crisis that hit the State of Selangor Darul Ehsan and the Federal Territory of Kuala Lumpur in 1998, the Federal Government commissioned Puncak Niaga to design, construct and operate the Wangsa Maju Water Treatment Plant on a fast-track approach. The plant, which has a designed capacity of 45 million litres per day, was constructed in a record time of six months, an amazing feat by any engineering standards. This plant was successfully commissioned in July 1998 and has been operating smoothly since then. The Wangsa Maju Water Treatment Plant is equipped with a unique clarification technology with the utilisation of the Dissolved Air Flotation The continued affirmation of the MS ISO 9002 certification by SIRIM during the year for Bukit Nanas, Sg Batu, Bernam River Headworks and Sg Langat Water Treatment Plants bears strong testimony of Puncak Niaga s commitment to all-round service and operational excellence. Six other water treatment plants managed by us namely, North Hummock, Batang Kali, Rantau Panjang, Gombak, Cheras Mile 11 and Bukit Tampoi have also received their MS ISO 9002 certification from SIRIM in March Wangsa Maju Water Treatment Plant technicians at work 38

40 Operations Review by Executive Vice Chairman System (DAF). The principle of flotation is based on transfer of particles to the surface of liquid by attaching micro bubbles of size 50 micrometer to the surface of the particles. Unlike conventional system where flocs being heavier would settle at the bottom of the tank, the particles in the DAF System are collected at the surface and removed by mechanical skimming. The DAF System enables the plant to consistently achieve high quality clarified water with low chemical consumption and short hydraulic retention time besides providing operational flexibility where the clarification process can be restarted in less than 40 minutes in the event of any stoppages. In April 2001, the Wangsa Maju Water Treatment Plant successfully accredited the ISO 9002 certification from Lloyd s. This certification reflects our commitment towards producing quality water utilising internationally recognised systems which are structured and disciplined management processes, contributing to improvement of plant operation. The certification provides confidence and endorsement that the water produced by the plant consistently satisfies stringent quality assurance standards. Refurbishment of Water Treatment Plants Puncak Niaga has committed RM150 million towards the repair, rehabilitation and upgrade of 26 water treatment plants as mandated in the Refurbishment Programme, which forms an integral part of the PCCA. This is to ensure that the old water treatment plants which we took over are able to maintain production of treated water at the designated quantity and quality. Sg Langat Water Treatment Plant As at December 31, 2001, total contracted works amounting to RM139 million under the Refurbishment Programme have been completed. The balance of works amounting to approximately RM11 million are targeted for completion by May This will mark the fulfilment of Puncak Niaga s obligations to refurbish all water treatment plants taken over under the PCCA. Dam Operations PNSB continues to operate and maintain the Sg Langat, Klang Gates and Tasik Subang Dams with prudence and exercises good practice in releasing the optimal amount of water for the water treatment plants. These three dams all saw a reduction in recorded annual rainfall of 16.69%, 17.56% and 22.61% respectively in year 2001 as compared to year According to a report published by the Science, Technology and Environment Ministry in February 2002, there is a 65% possibility that the El Nino will hit Malaysia again, between May to September 2002, while the Malaysian Puncak Niaga Holdings Berhad Annual Report

41 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman Meteorological Services Department predicts that the El Nino would hit Malaysia between October 2002 to March Despite the varying predictions, the State of Selangor Darul Ehsan and the Federal Territories of Kuala Lumpur and Putrajaya had already experienced the dry spell with very little rainfall from December 2001 to March 2002 (the pre-el Nino effect) and though there have been rain, it had not rained in the catchment areas. As a result, the dams water level had fallen to almost critical point. Fortunately, there had been some improvement in the respective dams water level, recently. All the dams are also constantly monitored for structural integrity. Regular inspections of the surrounding topography and preventive or remedial measures are taken to protect against landslide formation, which could affect the safety of the dams. Sungai Selangor Phase 2 Stage 2 Distribution Supply System (DSS2) The DSS2 project which entailed the laying of pipes, construction of reservoirs and the supply, installation and commissioning of mechanical and electrical equipment was completed on July 6, The completion of the DSS2 project has enabled an additional 285 million litres per day of treated water to be distributed from the SSP2 Water Treatment Plant to demand areas in Klang and Kuala Lumpur. Klang Gates Dam The Dam Operations Unit is currently working very closely with PUAS on the monitoring of the dams water level and identification of alternative raw water sources such as ponds and rivers. The operation of the dams is regulated by the Dam Operations Control Curves developed by our employees. BUSINESS DEVELOPMENT We are focussed To Be The Leading And Dynamic Integrated Water Services Company. Our confidence in achieving continued success is founded in our business philosophy that we shall compete for new business opportunities where our core competencies in water related businesses gives us a strong competitive edge. The Group has continued to explore, identify and pursue new water related business in other states in Malaysia as well as regionally. During the year, the Group submitted tenders for several projects for the operation, maintenance 40

42 Operations Review by Executive Vice Chairman and construction of public water supply infrastructures, both locally and overseas. The Group will continue to pursue projects which will enhance the Group s net worth. RESEARCH & DEVELOPMENT (R&D) Puncak Niaga continues to commit a percentage of its resources into R&D in fulfilment of its declared mission in meeting demands for high quality water produced by its water treatment plants. R&D efforts are directed for improvements in operational efficiency and in development of innovative technologies to maintain Puncak Niaga s position at the forefront of the water services industry. and SSP2. This will allow for more accurate and cost effective testing of raw water sources. Also, during the year, the SSP2 maintenance team successfully modified the plant s Flouride Dosing System, by means of an injector system which eliminated the use of a transfer pump. Other projects which are ongoing include the proposal for a pilot project, The Klang Gates Dam Aeration Project, designed to improve the raw water quality received by Bukit Nanas and Wangsa Maju Water Treatment Plants, and the study of cases of unexpectedly rapid deterioration of filters at certain water treatment plants. Studies are also ongoing for the use of alternative coagulants to reduce ammonia residual and reduce chemical usage at the water treatment plants. For year 2002, SSP2 s laboratory plans to undertake further R&D study on filter media, optimisation of chemical dosing locations and identification of micro-organisms in the raw water. Water quality research at SSP2 Water Treatment Plant s laboratory During the year 2001, work was ongoing towards designing a prototype compact and mobile Raw Water Monitoring Station (RWMS) that will be reliable, effective, robust and require low maintenance. Comparative studies were carried out on the existing RWMS located at Sg Langat INFORMATION TECHNOLOGY (IT) To remain competitive in today s technology driven business environment, the Group implemented the mysap.com financial system in April The Financial, Logistics and Asset Management modules went live in November The Human Resource and Payroll modules are planned for implementation in year Much fine-tuning work was carried out during year 2001 to tailor the SAP modules, to suit the particular needs of the Group. The Group expects to achieve Puncak Niaga Holdings Berhad Annual Report

43 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman significant productivity improvements with ITdriven automation in data recording, dissemination and analysis for management decisions. We are also evaluating the deployment of an electronic security system incorporating video surveillance to be installed at all water treatment plants and reservoirs. Investment in IT for the financial year 2002 is budgeted at RM6.55 million. This would cover the costs of the HR-SAP implementation, Electronic Document Management System and Video Conferencing facilities. To minimise disruption to the Group s operation in the event of a disaster, an IT Disaster Recovery Plan has already been drawn up. The Plan had detailed the recovery processes of the critical IT system of the Group within the shortest period of time. It is envisaged to be a key competitive tool for the Group to maintain its strong competitive edge as IT is increasingly leveraged to yield data from financial modelling and simulation studies. This is expected to be invaluable in business development for new water projects in future. ready team to tackle major undertakings and in formulation of long-term strategies to position the Group in facing the challenges that globalisation brings. CRISIS MANAGEMENT The Crisis Management Procedure Plan (CMP) and the Water Treatment Plant Emergency Response Plan (ERP) were put in place in year 2001 in order for the Group to be in a state of readiness at all times to respond decisively to any form of emergency, crisis or disaster at the Head Office or at any of the Group s facilities including water treatment plants and dams. The Group s employees have been fully briefed so that they have a clear understanding of all procedures and responsibilities in the event of emergencies. The Plans, although separate, work together to ensure the most effective response to any crisis or disaster thus causing minimal disruptions to business operations. STRATEGIC RESOURCE CENTRE (SRC) SRC was set up in 1997 for the purpose of establishing a one-stop centre where information of strategic importance including water industry research findings, in-house R&D projects results and other strategic business intelligence are gathered and disseminated to the relevant Departments. It is the Group s longterm plan to evolve a think-tank, co-ordinated resource centre through the SRC, drawn from the diverse expertise in-house as well as from outside consultants, for the purpose of having a Safety drill at Sg Langat Water Treatment Plant Safety drills and Crisis Management drills have been conducted to test the effectiveness of the CMP and ERP Plans. The Plans are constantly reviewed and improved to address any weaknesses 42

44 Operations Review by Executive Vice Chairman noted. On May 9, 2001, we carried out an emergency safety drill at Sg Langat Water Treatment Plant in which the full Management Crisis Team incorporating the CMP and ERP was activated. During the drill, the existing crisis management procedures responding to the off-site emergency situation at the water treatment plant were tested, reviewed and proven effective. In all, there were 11 separate in-house safety drills conducted at various water treatment plants in year 2001 to evaluate the state of readiness and awareness of staff. Larger scale major Crisis Management drills involving the larger water treatment plants have been planned for year OCCUPATIONAL SAFETY AND HEALTH Puncak Niaga is serious in its concerns that the safety and health of its employees at the work place is safeguarded at all times. We are committed to ensuring a safe and healthy working environment for all our employees. Guided and co-ordinated under the Corporate Safety and Health Committee, the members work to create a continuous sense of awareness on matters of occupational safety and health at the workplace amongst the employees. Regular training programmes are conducted at the water treatment plants involving first aid, fire fighting equipment handling, chemical safety and education of the Occupation Safety & Health Act, First Aid programme conducted at one of the water treatment plants safety and health excellence, the SSP2 Water Treatment Plant has been targeted to obtain the Safety Management System (OHSAS 18001) certification by December HUMAN RESOURCE MANAGEMENT Puncak Niaga values the importance of its human resources in order to attain its Corporate Vision and Mission. Employees are encouraged to adopt a results-oriented work culture. More than just teamwork, individual employees in a team are encouraged to express their individual views and take initiatives in development of innovations in their work processes and through Quality Control Circle programmes. In line with our commitment to practice and achieve the highest standards of occupational YBhg Tan Sri Rozali presenting the Certificate of Appreciation to a retired staff Puncak Niaga Holdings Berhad Annual Report

45 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman We also have in place incentive programmes to encourage work excellence as well as employees welfare. This include the recent implementation of the Employees Share Option Scheme and maintenance of other benefits such as interest subsidies for car and housing loans, cash rewards for employees children for attaining good academic results, gratuity payments for retiring employees and many others. Employee Unions Employees are at liberty to join either the Non- Executive Union or the Executive Union which were established since 1995 and 1999 respectively. The Non-Executive Union is currently in negotiations with the Company on its Collective Agreement. The relationship with both Unions have been harmonious. Employees Training Programmes We recognise training as an integral component contributing to our continued success. In year 2001, the employees attended a total of 72 training programmes, which were conducted internally and externally. The training cost incurred for the financial year totalled RM456,581 and this was used mainly to upgrade our employees professional competency in general business and IT skills, water industry related knowledge and work attitude. The focus of the programmes has been on developmental and functional training. As a result of spending RM2.69 million on training programmes since 1995, we have groomed a group of qualified and competent employees to manage the Group s operation. Technical training were also arranged for the technical employees at the water treatment plants. SSP2 and Wangsa Maju Water Treatment Plants employees have been trained in-house through the Multi-skilling Programme, which is designed towards optimising employee productivity and diversifying their working skills. Sexual Harassment Committee In November 2000, the Board endorsed the formation of a working committee, headed by the Human Resources Department, to analyse and recommend the adoption of a corporate policy on sexual harassment at the workplace. The committee members include a cross-section of employees from various departments including Legal, Operations, Secretarial, Human Resources, employee unions and representatives from the water treatment plants. The committee studied the Code Of Practice On The Prevention And Eradication Of Sexual Harassment In The Workplace issued by the Ministry of Human Resources and drafted the Group s Sexual Harassment Policy for adoption by the Group. The Policy was officially implemented on October 20, All committee members have attended briefings conducted by the Ministry of Human Resources to equip themselves with the necessary knowledge and skills to handle and investigate any complaints of sexual harassment. There are plans for the committee members to have their knowledge continuously upgraded in the coming years. 44

46 Operations Review by Executive Vice Chairman Subsequently, several briefings have been conducted to effectively inform and disseminate the Policy to all employees of the Group. The above efforts showcase our commitment to creating a work culture that will ensure a safe and healthy working environment where individual employees, irrespective of status or position, are treated with dignity, free from any form of harassment, humiliation and intimidation. To date, no cases of sexual harassment have been reported in the Group. Office Administration The Administration Department has been kept busy with various projects and activities for the year A total of RM365,000 was spent on upgrading facilities and office renovation works. Security personnel undergoing training Office, Malaysia Prime Minister s Department and Red Cross Malaysia are conducted annually to provide assurance on the security personnel s preparedness to respond appropriately to any security threatening situations. The security personnel are also trained to handle emergencies such as chlorine gas leakage and bomb threats. A tender exercise was carried out for the disposal of the Group s motor vehicles yielding a total sales proceeds of RM572,000. The disposal was necessitated by the uneconomically high costs of maintenance of these motor vehicles, which have been in use for more than 5 years. Security Services We place utmost importance on our responsibility over the security of our water treatment plants and dams, considered as important strategic assets of the country. A total force of 119 well trained security personnel are responsible for provision of security at all our facilities. Continuing training programmes designed with the help from the Police Department, Fire Department, Chief Government Security Officer s EMPLOYEE WELFARE Foster Parent Programme The Company s Foster Parent Programme, established since 1997 aims to foster a closer relationship and a more effective channel of communication between the Head Office and water treatment plant employees. Under the programme, Head Office employees will visit the respective water treatment plants or dams periodically, during which they will update the water treatment plants employees on the Group s latest corporate progress, changes in our policies and other issues of interest. The programme aims to boost the water treatment plants' employee morale and to foster a sense of belonging to Puncak Niaga. Puncak Niaga Holdings Berhad Annual Report

47 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman and 2 units of staff quarters at Matang Pagar Reservoir at a cost of RM4,502,000. We are also in the planning process of providing quarters for the Wangsa Maju Water Treatment Plant s employees. Sports And Recreational Club The Kelab Sukan dan Kebajikan Puncak Niaga (Sports Club), established since the formation of Puncak Niaga (M) Sdn Bhd in 1994, is instrumental Gotong-Royong for construction of badminton court under Foster Parent Programme A massive gotong-royong community project was initiated under the Foster Parent Programme in year 2001 for the construction of badminton courts, bus shelters, beautification of landscape, construction of children playgrounds and installation of flagpoles at the water treatment plants. To date, RM40,000 has been spent on the project for purchase of materials. There was no labour cost involved as the work was carried out voluntarily by our employees. Quarters Committee The Quarters Committee under the purview of the Human Resources & Administration Division, manages the allocation, rental, repairs, maintenance and all matters related to the use of the staff quarters. The Group takes pride in its efforts in being a responsible and caring corporate employer. In our effort to provide better facilities and to take care of employee welfare, we have begun construction of 44 units of staff quarters, one community hall and a surau at the SSP2 Water Treatment Plant Bowling Competition organised by the Sports Club in promoting social interaction amongst all levels of employees by organising social, sports and recreational activities such as fishing, bowling, mountain climbing, cultural and religious events such as the Ma al Hijrah at Stadium Shah Alam as well as Ibadah Korban programme at Sg Langat Water Treatment Plant for Muslim employees and a mega Hari Raya gathering which was attended by 3,000 staff and their family members in December Other regular sports activities enjoyed by our employees include traditional dance classes and aerobics classes organised by the Women s Section 46

48 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman In addition, our Executive Chairman contributes his time in serving various educational foundations and community development bodies. YBhg Puan Sri Faridah Idris, wife of the Executive Chairman shopping with orphans of the Sports Club Biro Hawa. In conjunction with Hari Raya Aidil Fitri 2001, Biro Hawa organised an outing for 84 orphans from two orphanages, to go on a shopping spree at a leading departmental store in Kuala Lumpur and they also enjoyed breaking fast at a hotel as well as received cash donations. Our sponsorship for the event amounted to RM41,320. SOCIAL CONTRIBUTIONS The Group takes pride in our leadership position in the water services industry. However, we recognise that our success is not measured in just cold statistics such as market share, earnings or revenue growth. The true mark of a leader is one who practices social and civic responsibility, giving back to society in order to make a positive difference in the lives of the less fortunate. Each year, Puncak Niaga, as a caring corporate citizen, allocates funds for donations to worthy charitable causes. For the financial year 2001, a total amount of RM290,000 was contributed to various religious and educational foundations, youth, sports and entrepreneurial associations and other charities. COMMUNITY RELATIONS The environment that we live in is an important factor in determining the quality of our lives. The continued well being of our community is to a degree determined by our ability to have ready access to clean water. Through our team of dedicated employees, we utilise our resources, both monetary and knowledge, to create awareness on the importance of protection of our natural water sources from all forms of pollution. River Rescue Brigade The River Rescue Brigade is our initiative, formed in year 1998, comprising primary school children in years 4 and 5, from Selangor and Kuala Lumpur to bring our message on the importance of conservation and protection of our rivers. Through recreational and sporting activities incorporating elements of fun and adventure, Puncak Niaga River Rescue Brigade No. 10 at Kalumpang Water Treatment Plant 47

49 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman brings knowledge to educate the public on the importance of rivers and their role in potable water production. School children get opportunities to visit and learn how the water treatment plant operates. They are also given explanation on the effects of pollution on our natural water resources so that they learn to appreciate and love our rivers. Each financial year, we spend between RM300,000 to RM500,000 on the programme. We have plans to include students in secondary schools and institutions of higher learning in year 2002 as part of our expansion plan for the River Rescue Brigade. To date, there are 11 brigades active in 44 primary schools in the State of Selangor Darul Ehsan and the Federal Territory of Kuala Lumpur, involving 1,053 school children. Educational Outreach Programme selected schools in the State of Selangor Darul Ehsan and the Federal Territory of Kuala Lumpur to educate school children on Puncak Niaga s water treatment processes and the technologies involved in its consistent good quality delivery and to educate the school children on how they can contribute to the protection of the environment. We are pleased to note that our initiative in forming this brigade has been emulated by some governmental agencies and water treatment operators. Educational Outreach Programme (EOP) The EOP complements the River Rescue Brigade programme and has a similar objective of inculcating, among school children, the importance of environmental protection in ensuring clean, unpolluted water supply for the generations to come. Each month, a Senior Management employee together with Corporate Communication s personnel are sent out to Workshops & Forums In year 2001, the Group continued to learn and share its extensive experience in the privatisation of public water facilities and the technical knowledge gained from operating the most water treatment plants in Malaysia through participation at workshops and forums conducted locally as well regionally. We view this as our contribution to the community that would invariably lead to improvements for the water industry benefiting the society and also to keep abreast with the latest technological developments in the industry. The forums attended by our senior personnel during the year include:- 48

50 Puncak Niaga Holdings Berhad Annual Report 2001 Operations Review by Executive Vice Chairman i) Metering Asia Pacific 2001 ii) International Water Association Conference on Water & Waste Water Management For Developing Countries iii) Conference On Water Regulation Priorities In Emerging Markets iv) Bengkel Pengawalan Air 2001 v) Paper presented entitled Water for Health at the World Day For Water 2001 vi) Dialogue session with Universiti Kebangsaan Malaysia students on Water Treatment In Malaysia vii) Roundtable Discussion with University of Malaya students on Water Related Issues viii) International Workshop on Innovative Privatisation Models for Infrastructure Developments ix) Indowater 2001 Expo & Forum Community IT Development Initiative Our Community IT Development initiatives for the State of Selangor Darul Ehsan addresses the country s urgent need to upgrade our people s proficiency in Information and Communication Technology (ICT). The continued economic success and viability of our country s businesses rest on our people s embrace of ICT in every facet of our lives. YAB Datuk Seri Dr Mohamad Khir Toyo, Menteri Besar of Selangor at one of the ICT facilities set up by Puncak Niaga facilitating the improvement of living standards for rural communities, especially in the State of Selangor Darul Ehsan. Similar IT development projects are planned for 8 other locations including Sabak Bernam and Hulu Selangor. We hope to bring progress to the rural communities, leveraging on the strategic strengths that may be realised from applying ICT in their daily lives. To date, we have expended RM700,000 in promoting IT awareness in the rural areas of the State of Selangor Darul Ehsan. We have set up a fully equipped computer facility including a trainer at Sungai Burung, Tanjung Karang, as our contribution to community development. This project, with its rural location, is very close to the heart of our Executive Chairman, in fulfilment of his avowed dream of Ruslan Hassan Executive Vice Chairman Date : April 24,

51 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Calendar of Events 3 February Employees Hari Raya & Chinese New Year Gathering. 4 February TV3 s live interview with YBhg Tan Sri Rozali for the Bincang Petang programme. 6 February PNSB s contribution to single mothers and children from poor families. 8 February RTM interviewed YBhg Tan Sri Rozali for the E-Remaja programme. 13 February Educational Outreach Programme No. 9 at Sekolah Kebangsaan Taman Melawati. 21 February PNSB presented a cheque of RM1,567, to Pusat Zakat Selangor being voluntary business tithing for the profitable years from March Educational Outreach Programme No. 10 at Sekolah Rendah Kebangsaan Sg Udang, Klang, Selangor. 14 March 14 March Briged Penyelamat Sungai Ke-9 at Rantau Panjang Water Treatment Plant. The event was officiated by YAB Datin Seri Zahrah Kechik, wife of the Menteri Besar of Selangor. 22 March Live interview by TV3 with the Executive Vice Chairman and the Senior Manager of Dam Operations, Water Resources and Environmental Study Unit at Sri Pentas, TV3 for the programme Bincang Petang. The issues discussed were on the water treatment industry and other water related matters. 3 February 13 February 22 March 50

52 Corporate Calendar of Events 6 April PNSB sponsored RM10,000 to the World Wildlife Fund Malaysia as a show of support to the Water for Life Challenge/Carnival event. 7 April Prize Giving ceremony to winners of the Essay Competition organised by Puncak Niaga in conjunction with the World Water Day. 22 March 22 March YB Dato Seri S. Samy Vellu, the Minister of Works officiated Puncak Niaga s Water Treatment Plant Open Day at Wangsa Maju Water Treatment Plant in conjunction with the World Water Day. 8 April PNSB participated in the World Wildlife Fund Malaysia s Exhibition & Canoe Race at Tasik Titiwangsa. 10 April Educational Outreach Programme No. 11 at Sekolah Kebangsaan Ampang Campuran. 25 March In conjunction with PNSB s Open Day, PNSB organised a radio contest via the Perodua Era Squad which offers 30 Sijil Simpanan Premium BSN valued at RM100 each to listeners who correctly answered water related questions posted over the radio. 6 April 8 April 10 April Puncak Niaga Holdings Berhad Annual Report

53 Corporate Calendar of Events 21 April PNSB in collaboration with the Ministry of Housing and Local Government launched a recycling programme called Recycle for Malaysia at Carrefour, Wangsa Maju branch to commemorate the Earth Day May Safety Drill at Sg Langat Water Treatment Plant. 10 May Educational Outreach Programme No. 12 at Sekolah Kebangsaan Taman Ehsan, Kepong. 30 May YBhg Tan Sri Rozali was interviewed by Radio 3 Shah Alam on water pollution issues and PNSB s role in addressing the problem. 7 June Educational Outreach Programme No. 13 at Sekolah Kebangsaan Desa Tun Hussein Onn. 26 June PNHB s 4th Annual General Meeting at the Kuala Lumpur Golf and Country Club June PNSB organised a Science Project Competition for 35 secondary schools in Selangor and Kuala Lumpur. 28 June PNSB participated in an exhibition in conjunction with the Water Quality Seminar at Summit Hotel, USJ. 10 July Educational Outreach Programme No. 14 at Sekolah Kebangsaan Kelana Jaya. 10 July PNSB held a press conference on the Sg Langat Water Treatment Plant shutdown scheduled on 20 July The conference was to inform the public on the areas affected by the water disruption arising from the shutdown. 17 July PNSB held another press conference on the Sg Langat Water Treatment Plant shutdown at the Selangor Water Works Office, now known as Perbadanan Urus Air Selangor Berhad. 21 April 10 May 28 June 52 Puncak Niaga Holdings Berhad Annual Report 2001

54 Corporate Calendar of Events 1 September Cheque presentation to YB Tan Sri Dato Seri Musa Mohamad, Minister of Education as a show of support to the Sukan SEA XXI at Sri Pentas, TV September PNHB participated in the KLSE Investors Week September Educational Outreach Programme No. 16 at Sekolah Kebangsaan Seafield 3. 1 September 9 August PNSB participated in the Love The River Campaign at Dataran Satay Kajang. 15 August Educational Outreach Programme No. 15 at Sekolah Rendah Jenis Kebangsaan (China) Kheow Bin August The Board of Directors and Senior Management of Puncak Niaga attended a two day Strategic Corporate Risk Management Workshop at Bukit Tinggi Resort. 2 October Bridged Penyelamat Sungai Ke-10 at Kalumpang Water Treatment Plant. The event was officiated by YB Dato Ch ng Toh Eng, Selangor State EXCO member. 23 October Educational Outreach Programme No. 17 at Sekolah Kebangsaan Wangsa Maju Seksyen October PNSB participated in the mobile exhibition in conjunction with the launch of Prevention of Violation and Pollution of Water Quality Programme. 31 August PNSB participated in the march pass for the National Day 2001 at Dataran Kemerdekaan Shah Alam, Selangor. 9 August August 5-9 September Puncak Niaga Holdings Berhad Annual Report

55 Puncak Niaga Holdings Berhad Annual Report 2001 Corporate Calendar of Events 30 October A delegation of 23 KLSE senior officials led by its Executive Chairman, YBhg Dato Azlan Hashim visited PNHB s premises as part of KLSE s Familiarisation Visit 2001 programme. 2 November PNSB organised a Press Nite for press members at Stadium Shah Alam. 5 November Briged Penyelamat Sungai Ke-11 at Ampang Intake Water Treatment Plant. The event was officiated by YB Dato Mohd Sharif Jajang, Selangor State EXCO member. 6 November PNHB was awarded the NACRA Industry Excellence Award 2001 under the Construction and Infrastructure Project Companies category for its Annual Report December 10 November PNHB was awarded the Anugerah Citra by Dewan Bahasa dan Pustaka for proper usage of the national language in its Annual Report December The Group s Hari Raya Reception 2001 at Stadium Shah Alam. 30 October 22 November 6 November 54

56 Puncak Niaga Holdings Berhad Annual Report 2001 Known as Labu Pani, this ornate water vessel with its compact and precise motifs give the impression that it is made of wood. Supporting core competencies Puncak Niaga Holdings Berhad Annual Report

57 Statement on Corporate Governance The Board is fully committed to ensuring that the principles and best practices in corporate governance as set out in the Malaysian Code on Corporate Governance (the Code) are complied by the Company. The Board is pleased to report to the shareholders on how the Company has applied the principles of the Code and the extent of compliance with the best practices in corporate governance as set out in the Code. In 2000, PNHB established an extensive framework with the appropriate mechanisms (inclusive of the structures, systems and methodologies) to meet or exceed the standards required for compliance with the Principles and Best Practices of Good Corporate Governance of the Code. The proactive steps taken by the Company towards full compliance with the Code include:- a transparent and voluntary full disclosure based approach in the preparation and presentation of the Company s annual report, circular to shareholders and abridged prospectus for the RUN Issue; full dissemination of information on the Company s operations and corporate moves, in a timely and accurate manner, to benefit the Company s shareholders and investors at large; Continuing Education, Training and Induction Programmes, using both in-house and external professionals, for the Group s Directors to equip them with the requisite skills and knowledge to effectively discharge their responsibilities as Company Directors; establishment of the Nomination Committee, formulating its Terms of Reference to ensure a formal and transparent procedure on recommending candidates for Board appointments; establishment of the Remuneration Committee, formulating its Terms of Reference to ensure a formal and transparent procedure for developing policies in the design of the remuneration packages of the Directors; establishment of the Risk Management Scorecard Working Group to identify, measure and manage the Group s corporate risk profile and develop contingency plans to help mitigate any possible adverse effects on the Group; and establishment of the Compliance, Internal Control and Risk Policy Committee to closely monitor the Risk Management process within the Group and the extent of compliance with the Statement of Internal Control requirements. The Group s corporate governance procedures and processes are refined from time to time to take into account changes to the Code. BOARD OF DIRECTORS The Board The Board has the overall responsibility for corporate governance, strategic direction and overseeing the assets and liabilities of the Group. The Board takes full responsibility in ensuring the effective performance of the Group in all areas of operations, finance, management information system, project and business development, research and development, human resources and administration as well as promoting customer, shareholders and investors relations. 56 Puncak Niaga Holdings Berhad Annual Report 2001

58 Statement on Corporate Governance The Board also guides the Group in achieving its short and long-term objectives, setting corporate strategies for growth and new business development as well as directing all corporate exercises of the Group. The primary responsibilities assumed by the Board include:- review and adopt strategic business plans for the Group; oversee the conduct of the Group s business to ensure its proper management; review identified principal corporate risks and drive implementation of the appropriate risks management system to mitigate possible adverse effects; review and approve plans for senior management appointments, training, compensation schemes as well as planning for their succession or replacement; direct development and implementation of an effective investor relations programme and shareholder communications policy for the Company; and review reports on the adequacy and the integrity of the Group s internal control systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines. The profile of the Board is detailed in Pages 16 to 19 of the Annual Report. The Board members are professionals from diverse disciplines, including lawyers, engineers and accountants and are persons of high calibre, credibility and possess the necessary skills and experience to effectively discharge the Board s responsibilities for the Company s stewardship and in driving the Group s growth and future direction. During the year 2001, the ratio of Independent Non-Executive Directors rose to 42.9% from 37.5% previously. Independent Non-Executive Directors bring to the Board their vast expertise, experience and business networks aiding development of the Company s business strategies for growth as well as new business development. The presence of Independent Non- Executive Directors fulfills a pivotal role in corporate accountability as they provide unbiased and independent views, advice and judgement taking into account the interests, not only of the Group, but also of the shareholders, employees, customers, suppliers and the communities in which the Group conducts its business. This is to ensure that no one particular group dominates the Board. Composition of the Board In year 2001, the Board of PNHB was made up of eight members, comprising five Executive Directors and three Independent Non-Executive Directors. All the Directors served the full year in 2001 except for YM Raja Azhar Raja Ismail, an Executive Director, who resigned from the Company on June 15, The roles of the Executive Chairman and the Executive Vice Chairman are separate, each with clearly defined responsibilities. In addition, YB Dato Seri Dr Ting Chew Peh is the Company s Senior Independent Non-Executive Director, to whom shareholders concerns may be conveyed. Puncak Niaga Holdings Berhad Annual Report

59 Statement on Corporate Governance Board Meetings The Board meets at least once every bi-monthly and had convened a total of seven (7) meetings in The respective Directors attendance are as follows:- Name Of Director Designation No. of No. of % Meetings held Meetings during the attended financial year YBhg Tan Sri Rozali Ismail Executive Chairman Encik Ruslan Hassan Executive Vice Chairman Encik Mat Hairi Ismail Executive Director, Finance *YM Raja Azhar Raja Ismail Executive Director, Operations (resigned on 15/6/01) Ir Lee Miang Koi Executive Director, Project & Business Development Encik Abdul Majid Independent Non-Executive Abdul Karim Director YBhg Dato Hari Independent Non-Executive Narayanan Govindasamy Director YB Dato Seri Independent Non-Executive Dr Ting Chew Peh Director * YM Raja Azhar Raja Ismail was away on sick leave from January to June 2001 with the approval of the Board and as such, was unable to attend all Board Meetings which were held during the period of January 1 up to June 15, All Board Meetings were held at the Board Room on 26th Floor, Suite , Plaza See Hoy Chan, Jalan Raja Chulan, Kuala Lumpur and the date and time of the Meetings are as follows:- 9 January a.m 13 February a.m 23 February p.m 26 April p.m 29 May p.m 28 August p.m 21 November p.m 58 Puncak Niaga Holdings Berhad Annual Report 2001

60 Statement on Corporate Governance Since the Board has delegated the day to day administration and management of the Group to the PNSB Board, the PNSB Board meets regularly, at least once a month to deliberate and approve any proposed changes to the Group s policies/procedures, project development, internal controls, authority limits, business plans and annual budgets, etc. In the financial year 2001, ten Board Meetings were convened at PNSB level. Supply of Information and Access To Advice All Board members are provided with the Board papers at least seven days prior to the date for each Board Meeting. Sufficient time is also given to the Directors to obtain further information or explanations in respect of matters raised in the Board papers. The Board papers normally cover the following areas:- Minutes of Board Committees Meetings; operational and financial performance reports; any changes to the Group s corporate strategies; environmental issues directly affecting the Group s operations; and other special issues which require the Board s attention and decision. The Board whether acting in a group or in their individual capacities are free to seek independent professional advice, at the Company s expense (where necessary), to aid in the proper discharge of their statutory and fiduciary duties. All Directors have access to the advice and services of the Group Company Secretary. She advises the Board on the procedures of the Board Meetings and their duties as well as the implementation of good corporate governance and compliance practices in the Group. Appointment of Directors The appointment of new Directors is under the purview of the Nomination Committee which is responsible for making recommendations to the Board on the suitable candidates for appointment. In 2001, no new appointment was made to the Board as the Board is of the opinion that the present mix of experience and expertise is adequate and capable in overseeing and ensuring the Group s strategies are properly considered and implemented. The Company recognises that its Directors may be invited to sit on the Board of other companies. It considers the experience gained from such exposure can broaden its Directors knowledge, which will indirectly benefit the Group. Directors are therefore allowed, with the Board s prior consent, to accept non-executive appointments, so long as these appointments are not in competitor companies and are not likely to lead to any conflicts of interest with the Group. The Directors are allowed to retain any fees received as a result of such appointments. Re-election of Directors In accordance with Article 98 of the Company s Articles of Association, one-third of the Directors shall retire from office at each Annual General Meeting. Thereafter, they may offer themselves for re-election. Upon the recommendation of the Nomination Committee, YBhg Tan Sri Rozali Ismail and Encik Ruslan Hassan, shall retire by rotation at the forthcoming Annual General Meeting and have offered themselves for re-election. Puncak Niaga Holdings Berhad Annual Report

61 Statement on Corporate Governance Board Committees The following committees were established to assist the Board in discharging its duties. Each committee operates under their respective approved terms of reference:- Committee Audit Committee Remuneration Committee Nomination Committee Compliance, Internal Control and Risk Policy Committee ESOS Option Committee Management Committee Tender & Contract Committee Chaired by Encik Abdul Majid Abdul Karim, Independent Non-Executive Director YB Dato Seri Dr Ting Chew Peh, Independent Non-Executive Director YB Dato Seri Dr Ting Chew Peh, Independent Non-Executive Director YB Dato Seri Dr Ting Chew Peh, Independent Non-Executive Director YBhg Tan Sri Rozali Ismail, Executive Chairman Encik Ruslan Hassan, Executive Vice Chairman Madam Chan Siew Meei, General Manager (Legal) (a)audit Committee The Audit Committee Report for the financial year 2001 is detailed in pages 65 to 71 of the Annual Report. (b)remuneration Committee The Remuneration Committee was set up on February 13, 2001 and the members are:- Chairman : YB Dato Seri Dr Ting Chew Peh (Independent Non-Executive Director) The Terms of Reference of the Remuneration Committee are:- to establish and annually review the remuneration packages of each individual Executive Directors such that the levels of remuneration are sufficient to attract and retain the directors needed to run the Company successfully; and to make recommendation to the Board and the respective Directors shall abstain from the discussion of their own remuneration. Members : YBhg Dato Hari Narayanan Govindasamy (Independent Non-Executive Director) : Encik Abdul Majid Abdul Karim (Independent Non-Executive Director) : Encik Mat Hairi Ismail (Executive Director, Finance) Secretary : Madam Tan Bee Lian (Group Company Secretary) The Remuneration Committee held two meetings during the year with its members full attendance. At its first meeting, the Remuneration Packages of the Independent Non-Executive Directors of the Company were reviewed, taking into consideration the increased level of responsibility undertaken by the Independent Non-Executive Directors. At its second meeting, a revision of the Terms of Reference of the Remuneration Committee was proposed and adopted. The revision was necessary 60 Puncak Niaga Holdings Berhad Annual Report 2001

62 Statement on Corporate Governance for the purpose of complying with the Code and Chapter 15 of the KLSE Listing Requirements. Subsequently, these recommendations were endorsed by the Board. (c) Nomination Committee The Company established its Nomination Committee on February 13, The Nomination Committee consist of:- Chairman:YB Dato Seri Dr Ting Chew Peh (Independent Non-Executive Director) Members :YBhg Dato Hari Narayanan Govindasamy (Independent Non-Executive Director) :Encik Abdul Majid Abdul Karim (Independent Non-Executive Director) Secretary :Madam Tan Bee Lian (Group Company Secretary) The Nomination Committee s Terms of Reference are as follows:- to annually review the required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors should bring to the Board; to recommend to the Board, candidates for all directorships to be filled; to recommend to the Board, Directors to fill the seats on Board Committees; to annually assess the effectiveness of the Board as a whole, the committees of the Board and for assessing the contribution of each individual Director; and to examine the size of the Board with a view to determining the impact of the number upon its effectiveness. In the financial year 2001, the Committee convened one meeting which was to review the composition of its committee members. (d) Compliance, Internal Control and Risk Policy Committee (CICR) The primary responsibility of CICR is to monitor the Risk Management process within the Group and the extent of compliance with the Statement of Internal Control requirements. The CICR provides summary report to the Board on regular intervals. (e) ESOS Option Committee The ESOS Option Committee was established to administer the Group s Employees Shares Option Scheme (the Scheme) with effect from February 25, The members of the committee are YBhg Tan Sri Rozali Ismail (Executive Chairman), Encik Ruslan Hassan (Executive Vice Chairman), Encik Mat Hairi Ismail (Executive Director, Finance), Ir Lee Miang Koi (Executive Director, Project & Business Development) with Madam Tan Bee Lian (Group Company Secretary) as the Secretary. (f) Management Committee The members of the Management Committee comprise the Senior Management personnel of the Company and is headed by the Executive Vice Chairman. Its main function is to enable Senior Management personnel to brainstorm and resolve operational as well as interdepartmental issues. At this level, proposal papers are presented for the management s review/comments. This is to ensure that the proposal paper has addressed or incorporated all the management s concerns before tabling to the Board for approval. The Committee also functions as an information dissemination center in view that the members are required to update their staff on the Puncak Niaga Holdings Berhad Annual Report

63 Statement on Corporate Governance Group s latest policies and procedures. The Management Committee meets at least once every bi-monthly. Last year, the Committee met eight (8) times. (g) Tender & Contract Committee The Group initiated the setting up of a Tender and Contract Committee (TCC) in year 2000 with the objective of promoting adherence to best practice of corporate governance in all aspects of tender award and contract administration. The TCC was established as a watchdog to facilitate a fair and transparent tender submission, review and award of contracts process. It is the Group s aim that all its dealings with third-party contractors shall be conducted at favourable terms and conditions and at arms-length price through an organised and transparent system. Directors Remuneration (a) Level and Make Up of Remuneration The remuneration of each Director reflects the level of responsibility and commitment which goes with the Board membership. The remuneration of each Director is determined by the Remuneration Committee which was established on February 13, It is the Board s duty to ensure that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Company successfully. Directors Fee (if any) is tabled to the Company s shareholders for approval at the Company s Annual General Meeting. (b) Procedure The Remuneration Committee will deliberate and submit its recommendation to the Board for endorsement. During the Board s deliberation on the respective Director s remuneration, the Directors play no part in deciding their own remuneration and shall abstain from discussing or voting on their remuneration. (c) Disclosure of Remuneration The details of the remuneration of each Director of the Company during the financial year ended December 31, 2001 are as follows:- Name of Directors Fees Salaries Bonuses Benefits Allowance Employees -in-kind Provident Fund Tan Sri Rozali Ismail Ruslan Hassan Mat Hairi Ismail Raja Azhar Raja Ismail Lee Miang Koi Abdul Majid Abdul Karim ,866 - Dato Hari Narayanan Govindasamy ,926 - Dato Seri Dr Ting Chew Peh ,956 - Total 257, Puncak Niaga Holdings Berhad Annual Report 2001

64 Statement on Corporate Governance The remuneration packages of the Directors of the Group for the financial year ended December 31, 2001 with categorisation into appropriate components are as follows:- Remuneration Packages Fees Salaries Bonuses Benefits-in-kind Allowance Employees Provident Fund Total Executive Directors (RM) - 2,755, , , , ,436 4,836,923 Independent Non-Executive Directors (RM) , ,748 On June 26, 2001 the shareholders of the Company approved the implementation of an Employees Share Option Scheme for the Executive Directors and Eligible Employees of the Group. Accordingly, on February 26, 2002, the Executive Directors were offered a total of 5.9 million new ordinary shares of the Company under the Scheme. Directors Training Given the varying backgrounds, qualifications and experience of the Group s Directors, the Company periodically arranges for continuing education for our Directors to update their skills in corporate management and strategies, acquire new knowledge relating to the water industry and be updated with the latest regulatory developments. Last year, all the Board members attended the Mandatory Accreditation Programme (MAP) held for directors of public listed companies organised by the Research Institute of Investment Analysts Malaysia (RIIAM), an affiliate company of the KLSE and a two day Strategic Risk Management Workshop in August For year 2002, our Directors will be undergoing RIIAM s Continuing Education Programme (CEP) as a continuing effort to train and equip them to effectively discharge their duties. Our Directors have also attended various seminars and courses for enhancement of their strategic management skills and to equip themselves to effectively discharge their responsibilities. Newly appointed Directors are required to undergo an inhouse Induction Programme. This is designed to help them to gain a better understanding of the Group s business operations and corporate strategy. As part of the Induction Programme, the new Directors are also introduced to the Senior Management personnel in charge of the respective departments in the Company. In addition, a Directors Manual is issued to the new Directors for reference. SHAREHOLDERS Investor Relations The Company s Investor Relations Report is set out in pages 76 to 79 of the Annual Report. Annual General Meeting (AGM) It is part of the Company s policy to involve its shareholders fully in the affairs of the Company and to give the shareholders the opportunity to ask questions about the Group s performances and prospects at the AGM. Every item in the AGM agenda is voted separately and where special Puncak Niaga Holdings Berhad Annual Report

65 Statement on Corporate Governance business is involved, an explanatory note will be given in the Company s Notice of AGM. It is the Company s aim to give as much notice as possible to the shareholders on the date of the AGM so that the shareholders have more time to review the Annual Report and prepare themselves for the AGM. However, at least 21 days notice of AGM will be given to the shareholders as required under the Company s Articles of Association. ACCOUNTABILITY AND AUDIT Financial Reporting The Company s financial statements are prepared in accordance with the requirements of the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, The Board is responsible to ensure that the financial statements of the Group and the Company give a true and fair view of the state of affairs of the Group and the Company. Internal Control The Internal Control Report for the year 2001 is detailed in page 72 of the Annual Report. Relationship with Auditors The internal auditors were present at all Audit Committee Meetings of the Company. The external auditors were present at meetings that deliberate on the Company s unaudited quarterly results and annual audited financial results and during reviews of the Company s and Group s accounting policies. The external auditors also acted as reporting accountants for the Company s Corporate Exercises. The Company has a close and transparent professional relationship with the external auditors. Statement of Directors Responsibility for Preparation of Financial Statements The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards in Malaysia and give a true and fair view of the state of affairs of the Group and Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year. 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 approved accounting standards in Malaysia have been complied with; and prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. The Directors have responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Group and Company and which enable them to ensure that financial statements comply with the Companies Act, The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard the assets of the Group to prevent and detect frauds and other irregularities. Statement On Going Concern After conducting due and reasonable enquiry into the affairs of the Company, the Board firmly believes that the Company shall continue to operate as a going concern business in the foreseeable future. 64 Puncak Niaga Holdings Berhad Annual Report 2001

66 Audit Committee Report The Board of PNHB is pleased to present the Audit Committee Report for the financial year Composition of the Audit Committee The Audit Committee comprises the following:- Chairman : Encik Abdul Majid Abdul Karim (Independent Non-Executive Director) Members : Encik Mat Hairi Ismail (Executive Director, Finance) : YBhg Dato Hari Narayanan Govindasamy (Independent Non-Executive Director) : YB Dato Seri Dr Ting Chew Peh (Independent Non-Executive Director) Secretary : Madam Tan Bee Lian (Group Company Secretary) 2. Activities of the Audit Committee The last financial year saw a greater role played by the Audit Committee in its move towards ensuring and promoting the highest standards of corporate governance, accountability, due diligence and integrity. Activities undertaken by the Audit Committee during the financial year 2001 were:- reviewed the annual audit plan with the External Auditors on the scope of their audit including audit procedures, significant accounting and auditing issues, impact of new or proposed changes in accounting standards and regulatory requirements; reviewed Internal Audit Department s (IAD) Strategic Audit Plan performance, findings and recommendations; monitored the implementation of IAD s Strategic Audit Plan and any changes thereto; ensured that sufficient internal audit coverage was accorded to all areas of the Group s business and activities; assessed the capacity of IAD to fulfil its responsibilities for covering the scope of IAD s charter and reviewed the professional qualifications and experience of its staff; evaluated the standards of internal controls of the Group and financial reporting by holding specific discussions with the Management on the overall adequacy of the Group s Internal Control System; acted upon the request of the Board to investigate and report on issues relating to the management of the Group; reviewed the Group s compliance with relevant government regulations; and assessed the performance of the Group s financial management. Puncak Niaga Holdings Berhad Annual Report

67 Audit Committee Report 3. Meetings of the Audit Committee The Audit Committee met five (5) times in the financial year 2001 and the details of the attendance of each member of the Audit Committee are as follows:- Audit Committee Member Designation Designation No. of Meetings No. of Percentage In Audit In PNHB held during Meetings % Committee the year attended Encik Abdul Majid Abdul Chairman Independent Non Karim Executive Director Encik Mat Hairi Ismail Member Executive Director, Finance YBhg Dato Hari Member Independent Non Narayanan Govindasamy Executive Director YB Dato Seri Dr Ting Member Independent Non Chew Peh Executive Director At each Audit Committee Meeting, IAD tabled its audit report to the Audit Committee for deliberation. Weaknesses of procedures were identified and the respective Heads of Departments were asked to take the necessary actions to rectify those weaknesses and to revise such procedures and control mechanisms to prevent future occurrences of a similar nature. Board, all findings which had been discussed by the Audit Committee. 4. Special Audits Undertaken By Internal Audit Department (IAD) At the instruction of the Audit Committee, IAD carried out special audits on the following areas during the financial year 2001:- It is also the Audit Committee s practice that External Auditors are invited to present their views to the Audit Committee in respect of the Company s unaudited quarterly results and annual audited financial results before the Audit Committee submits its recommendation to the Board for approval. Minutes of each Audit Committee Meeting were distributed to all members of the Board for notation and were tabled at the Board Meeting for further deliberation. The Chairman of the Audit Committee had reported and highlighted to the Operation II - Adequacy of Controls and Systems to Ensure Potable Water Quantity and Quality Meets PCCA Requirements; Administration of the Group s motor vehicles and verification of motor vehicles maintenance costs; Human Resources Management - medical expenses & staff insurance; Sg Selangor Phase 2 (SSP2) Water Treatment Plant compliance with ISO 9002; Survey on implementation of SAP (Information Technology System). 66 Puncak Niaga Holdings Berhad Annual Report 2001

68 Audit Commitee Report Below are examples of the recommendations and assurances provided by IAD in year 2001:- i. Operation II - Adequacy of Controls and Systems to Ensure Potable Water Quantity and Quality Meets PCCA Requirements The Production Reports for years 1995 to 2000 indicated that the quantity of treated water exceeded the Designated Water Quantity standards set in the PCCA. The exception reports citing some cases of water quality violations against standards were audited. It was noted that adequate controls and the procedural systems are working satisfactorily to ensure all violations were reported and recommended solutions to minimise or eliminate violations are attended to by the appropriate officials. ii. SSP2 Water Treatment Plant - Compliance with ISO 9002 The objective was to determine whether SSP2 Water Treatment Plant still meets the requirements for ISO 9002 : 1994 certification. IAD checked the Water Treatment Plant s compliance in detail against the quality procedures, quality manuals and followed up on issues raised in the Lloyd s Report. IAD also determined whether the procedures and manuals were in line with MS ISO 9002 : 1994 and the CCOA s requirement. Notwithstanding some minor findings which were later rectified by the water treatment plant, it was concluded that the compliance with MS ISO 9002 : 1994 has been met. iii. Administration of the Group s Motor Vehicles and Verification of Motor Vehicles Maintenance Cost Further audit findings in year 2001 related to the administration of motor vehicles revealed the high maintenance costs which saw expenses rose as high as RM100,000 per month. IAD reviewed the actual operation and noted numerous weaknesses. Various recommendations were made in order to further tighten and enhance controls in this area. The staff in-charge were rotated and more comprehensive service agreements were entered into with the workshops. The service agreements now include the prices of parts and materials. Stringent controls were also instituted before and after service, so as to ensure that repair works were actually carried out. Since the implementation of the recommendations, the cost of vehicle maintenance has reduced significantly. iv. Survey on Implementation of SAP (Information Technology System) IAD also carried out a survey on the perception among the main users of SAP from the Finance & Accounts Department and Administration Department, to determine if the SAP implementation was successful. All problems encountered by users were reported as feedback to help the Management anticipate problems in the SAP implementation and for the IT Provider to develop the solutions for problems that have arisen. Puncak Niaga Holdings Berhad Annual Report

69 Audit Committee Report 5. Terms of Reference of the 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 where the majority of them should not be:- i. Executive Directors of the Company or any related corporation; ii. A spouse, parent, brother, sister, son or adopted son, daughter or adopted daughter of an Executive Director of the Company or any related corporation; or iii. Any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgement in carrying out the function of the Audit Committee. The members of the Audit Committee shall elect a Chairman from amongst themselves who is not an Executive Director or employee of the Company or any related corporation. 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. 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. It is desirable for membership on the Audit Committee to be rotated amongst all the Directors of the Company such that each Director will serve a period of three (3) years on the Audit Committee. 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 that event, appoint such number of new members as may be required to make up the minimum number of three (3) members. b. Objectives The primary objectives of the Audit Committee are to:- i. 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. ii. 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. iv. Strengthen the role of Non-Executive Directors by improving their knowledge and understanding of the Company s operation. 68 Puncak Niaga Holdings Berhad Annual Report 2001

70 Audit Commitee Report 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. - 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 data-processing systems. Following review of the plan, the Audit Committee may request the external auditors to perform additional audit work directed to specific areas of concern to the Committee. ii. Oversee the internal audit department. The Audit Committee in overseeing the internal audit department will:- - Review the audit programme, scope, performance and findings of the internal auditors. - Monitor the implementation of the programme so that sufficient internal audit coverage is accorded. In this respect, only the Committee can consider and approve or otherwise, all requests by senior management to utilise 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 scope of the department s authority as presented in the department s charter, the qualifications and experience level of its staff, 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. -To review the coordination of audit efforts between external and internal auditors, Puncak Niaga Holdings Berhad Annual Report

71 Audit Committee Report 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. To nominate the external auditors for appointment. v. The external and/or internal auditors shall have the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Audit Committee when required to do so by the Audit Committee. vi. Upon the request of the external and/or internal auditors, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matters the auditors believe should be brought to the attention of the Committee. c.2 Evaluate the Standards of Internal Control and Financial Reporting i. Hold specific discussions with senior corporate management to discuss the overall adequacy of the internal control system. ii. Meet with the internal and external auditors concerning their evaluation of the system of internal accounting controls. iii. Consider the nature and disposition of the relevant comments appearing in the reports prepared by the internal auditors and in the external auditors management letter. c.3 Review of Financial Statements i. Meet with the Management and the external auditors to discuss the annual financial statements of the Company or Group and the results of the audit before recommending approval by the Board. ii. Review the nature and resolution of any significant accounting and auditing problems encountered during the examination. iii. It is good practice for the Audit Committee to meet the Management at a regular interval to review the results of the Company or Group, such as quarterly review of the results. iv. Review the nature of any related party transactions that may arise within the Company or Group. v. Review the nature of any significant adjustments, reclassifications or additional disclosures proposed by the external auditors that are currently significant or may become significant in the future. vi. Review the adequacy of disclosure of the impact of any changes during the year in accounting policies, standards and/or regulatory requirements. 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 statement, including identifying any marginal operations. 70 Puncak Niaga Holdings Berhad Annual Report 2001

72 Audit Commitee Report ix. Review the nature of any unusual or significant commitments or contingent liabilities. x. Review of any significant differences between the annual report and other reports, such as reports to the regulatory agencies. xi. Review for any significant differences in format or disclosure from industry norms. c.4 Additional Duties and Responsibilities i. Act upon the Board of Directors request to investigate and report on any issues or concerns in regard to the management of the Company. ii. 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. Review policies on sensitive payments. v. Review compliance with certain government regulations. vi. Review policies to avoid conflicts of interest and review past or proposed transactions between the company and members of 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. 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. In addition to the Committee members, the head of internal audit will normally be in attendance at the meetings. Representatives 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 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. 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 Annual Report

73 Statement on Internal Control The Board is responsible for maintaining a sound system of internal control and for reviewing its adequacy and integrity so as to safeguard 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. There were ongoing processes for identifying, evaluating and managing significant risks faced by the Group during the year. Management is responsible for the identification and evaluation of significant risks applicable to their respective areas of business and to formulate suitable internal controls. In October 2001, the Board formally approved a systematic risk management structure and process for the Group. This is explained in detail in the section on Risk Management in pages 73 to 75 of the Annual Report. The key elements of the Group s internal control system are:- All major decisions require the final approval of the Board and are only made after appropriate in-depth analysis. The Board receives regular and comprehensive information covering all Divisions and Departments within the Group. All Departments and Divisions have clearly documented Manuals incorporating control procedures and scopes of responsibilities and authorities. The Manuals are regularly updated depending on practical needs and to incorporate all elements necessitated by changes in legislation, industry best practices and business dynamics. The latest revision in-line with the increase in risk awareness being promulgated throughout the Group, was completed in April The Internal Audit Department independently reviews the control processes implemented by Management and reports its findings and recommendations to the Audit Committee. The role and functions of the Audit Committee are set out in pages 65 to 71 of the Annual Report. 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 Compliance, Internal Control and Risk Policy Committee, which is chaired by YB Dato Seri Dr Ting Chew Peh, an Independent Non-Executive Director was established in October The Committee closely monitors the Risk Management process within the Group and the extent of compliance with the Statement on Internal Control requirements. The Committee provides a summary report to the Board at regular intervals. The Tender and Contract Committee which was set up to ensure transparency in the award of contracts. Bi-monthly Management Committee Meetings which are attended by all Executive Directors and Senior Management to discuss on the Group s operational matters. A detailed budgeting process approved by the Board. The monitoring of actual versus budget where major variances will be followed up by management action (where necessary). Guidance For Directors Of Public Listed Companies Steps Taken Towards Achieving Full Compliance The KLSE Task Force on Internal Control issued the Guidance for Directors of Public Listed Companies in December Based on the Guidance, the Group has formulated a comprehensive checklist to monitor its Level of Readiness. The aim is not just to achieve full compliance, but also as a means to improve the Group s processes by implementing best business practices. Commencing in October 2001, the relevant Departments were instructed to submit monthly Status Reports on the progress made towards achieving full compliance with the Guidance issued by the KLSE Task Force. The Compliance, Internal Control and Risk Policy Committee reviews the reports before tabling to the Board for their deliberation. The Group is of the opinion that it has achieved compliance in April Puncak Niaga Holdings Berhad Annual Report 2001

74 Risk Management Policy & Report RISK MANAGEMENT POLICY The Board has approved the Group s Risk Management Policy Statement as follows:- The Puncak Niaga 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. RISK MANAGEMENT REPORT There are control 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, needs to be identified and managed to reduce the possibility of any adverse effects. Puncak Niaga recognises this and has initiated risk management programmes to ensure its 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 Puncak Niaga Group employees and acknowledges that corporate responsibility lies with the Board of Directors of the Puncak Niaga Group. A two day Strategic Corporate Risk Management Workshop, was held in August 2001 to create awareness for the Board, Senior Management and Management of Puncak Niaga. To reinforce a risk awareness culture in the Group, information on Risk Management have been disseminated to all employees in the form of booklets, posters and through the intranet. The Board established the following framework in October 2001, for management of the Group s corporate risks:- a. Group s Risk Management Policy Statement. b. Formation of the Compliance, Internal Control and Risk Policy Committee. c. Terms of Reference of the Compliance, Internal Control and Risk Policy Committee. d. Setting up of a Risk Management Section, reporting to the Compliance, Internal Control and Risk Policy Committee. Puncak Niaga Holdings Berhad Annual Report

75 Risk Management Policy & Report COMPLIANCE, INTERNAL CONTROL AND RISK POLICY COMMITTEE In October 2001, the Board formalised the establishment of a Compliance, Internal Control and Risk Policy Committee. The Committee members are as follows:- Chairman: YB Dato Seri Dr Ting Chew Peh (Independent Non-Executive Director) Members : Encik Ruslan Hassan Executive Vice Chairman (Head of Compliance, Internal Control and Risk Policy Committee) : Encik Sonari Solor General Manager, Internal Audit : Mr Ng Wah Tar General Manager, Finance & Accounts : Madam Tan Bee Lian General Manager, Secretarial Secretary : Encik Mohammed Sofian Ismail Manager, Internal Audit (Head of Risk Management Section) (a)terms Of Reference The Committee shall provide assistance to the Board of Directors 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 Committee are:- Formulating strategies to manage the overall risks associated with the Group s activities. This entails decisions on:- * Long-term and short-term strategies. * Justifiable capital allocation based on return per unit of risk. Recommending appropriate risk management policies and procedures, which shall be reviewed frequently to ensure consistency with fundamental changes in the economy, market conditions and regulations. Periodically, to review the Group s overall objectives by assessing the current risk portfolio composition and determining the desired exposures of each major area of risk. To monitor and assess risk portfolio composition of significant activities of the Group. To keep abreast of both current risk management techniques and theories, and any possible or actual changes in regulatory environment and to recommend appropriate action. (b) Activities and Reports In November 2001, the first formal meeting of the Committee was held. The Committee deliberated on the progress made with regard to:- Ensuring compliance with the Statement on Internal Control; and The implementation of a formal Risk Management process within the Group. Other than the formal meeting above, members of the Committee meet informally to deliberate on all Risk and Control issues that the Group may be exposed to. Commencing October 2001, Monthly Status Reports were prepared by the Secretary of the Committee. The issues covered so far included:- i. The Level of Readiness of the Group and respective Departments with regard to the Statement on Internal Control requirements. ii. The progress of the risk assessment and risk monitoring exercises at Departmental and Company level. 74 Puncak Niaga Holdings Berhad Annual Report 2001

76 Risk Management Policy & Report iii. The progress in implementing the Corporate Risk Scorecard Software. iv. Other relevant risk issues prevailing at the time. RISK MANAGEMENT SOFTWARE The Group invested in a risk management tool namely, the Corporate Risk Scorecard Software (CRS), to identify, measure and monitor all corporate risks identified. CRS offers a systematic approach to the Management of enterprise wide risks facing corporations. The CRS software tool assists the Management to succeed in achieving its corporate objectives. It is being implemented at Enterprise and Divisional/Departmental levels, commencing in the last quarter of The Risk Scorecards were completed in April 2002 and will be reviewed periodically. RISK MANAGEMENT SCORECARD WORKING GROUP The Group recognises that Risk Management involves a structured approach, combining the efforts of all functions within the Group, to minimise the likelihood of unexpected damages so as to contribute towards greater efficiency and better decision making. Thus, Senior Management are expected to be fully adept at Risk Management. A Working Group comprising all Executive Directors and Heads of Departments was formed and meets on a regular basis to brainstorm on the Risk Profile of the Group. A total of 37 brainstorming sessions have been held by the Working Group. GROUP RISK MANAGEMENT ORGANISATION CHART BOARD Compliance, Internal Control and Risk Policy Committee (CICR) Chairman - Independent Non-Executive Director Head Executive Vice Chairman Define risk strategies and policies Implement risk strategies Compliance, Internal Control and Risk Policy Committee Board of Directors Understand the risks affecting the Group Ultimately responsible for managing risks Ensure overall effectiveness of controls and risks Approve risk management strategies and policies Risk Management Section Section Head Selected personnel totally involved in this activity Full time support to CICR Carry out day-to-day risk management function Risk Management Section Risk Management Scorecard Working Group Heads of Departments and Directors Brainstorms Risk Profile at Group level Puncak Niaga Holdings Berhad Annual Report

77 Investor Relations Policy & Report INVESTOR RELATIONS POLICY As a responsible corporate citizen, Puncak Niaga is totally committed to upholding the highest standards of transparency, accountability and integrity in the conduct of our business activities in the best interest of our shareholders as well as to allow potential investors to make careful and informed investment decisions based on full and transparent disclosure of information. Puncak Niaga s Investor Relations Policy aims to build long-term relationships and credibility with our shareholders and potential investors based on trust, honesty, openness, transparency and sound understanding of the Company. In the pursuit of our objectives, we shall 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 vis-à-vis to foster 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 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 capability. 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 Puncak Niaga Group and implemented by the Management. 76 Puncak Niaga Holdings Berhad Annual Report 2001

78 Investor Relations Policy & Report INVESTOR RELATIONS REPORT Puncak Niaga s Investor Relations Policy provides the framework upon which our investor relations activities and the support infrastructure were formulated to meet the Company s objectives to develop into a blue chip counter of the future and to build long-term relationships and credibility with our shareholders and potential investors based on trust, honesty, openness, transparency and sound understanding of the Company. Our Investor Communications Statement which forms part of the Investor Relations Policy sets out the Company s Investor Communications Policy which is structured towards improving the market s perception and understanding of the Company and its business. Quarterly unaudited financial results and other disclosures (including any new corporate and business developments that may impact the Company s finances or business operations) to the regulatory authorities are subjected to stringent review prior to their release. The Board acknowledges the need for shareholders to be kept informed of all material business matters affecting the Company in a timely manner. The timely release of our unaudited financial results on a quarterly basis provides shareholders with an overview of the Group s performance and operations. An Investor Relations Unit, set up under the purview of the Company s Secretarial Department, provides an organised structure through which an open and transparent channel of communication with shareholders and investors are established. The Unit has the Board s unreserved mandate to ensure all shareholders have equal, accurate and timely access to all corporate information that they are entitled to receive, in order for them to make informed investment decisions. A journal recording all forms of communication whether through mail, fax, or telephone is kept. Recent queries recorded include explanation for the nature and objective of the RUN issue. The journal is reviewed by the Group Company Secretary to ensure that all shareholders queries are recorded and attended to accordingly. Shareholder asking a question at the Company s 4th AGM The Company s general meetings provide yet another appropriate platform for the Board to report to the shareholders on the Group s business activities, as well as to encourage active participation from the shareholders and to answer any queries in relation to the affairs of the Group, activities and prospects. In addition, shareholders may also address their concerns, if any, to YB Dato Seri Dr Ting Chew Peh, our Senior Independent Non-Executive Director who is also the Chairman of the Compliance, Internal Control and Risk Policy Committee. Puncak Niaga Holdings Berhad Annual Report

79 Investor Relations Policy & Report The Malaysian Capital Market Roundtable at Morgan Stanley Dean Witter s Office in Singapore At Puncak Niaga, we recognise that quality dialogue is the key to successful investor relations. We recognise the importance of building trust and credibility with our shareholders and investors and are learning to be more open, through more dialogue and transparent communication. Each year, the Board and Management schedule a series of dialogues and briefings with financial analysts, at the Company s premises and abroad at foreign investment houses. We held six (6) briefings in year It is hoped that our investors would benefit from the independent analysis provided by both financial analysts and institutional fund managers of the Company s business activities, financial results and position. The Company supports KLSE and other institutions in their capital market promotional efforts, both locally and overseas, by participating in road shows and expositions to stimulate growth in the Malaysian Capital Market. In September 2001, we participated in The Malaysian Capital Market Roundtable, led by KLSE, National Economic Action Council and Bank Negara at Morgan Stanley Dean Witter s Office in Singapore, one of the world s largest capital market investment houses. The Company also participated for the very first time at the KLSE Investors Week 2001 exposition held from September 5 to September 9, Our participation was in the form of taking up two (2) exhibition booths and giving a Company Presentation to a group of 80 investors. We will continue to support the KLSE in this event in the coming years because of the following reasons:- a) To stimulate interest of potential investors through effective dissemination of information on the business activities, market position, revenue flows, management and control structures of our Company; b) To promote the Company s corporate image to the public so as to create differentiation from competitors and to correct public confusion over the nature of our business activities; and c) To promote growth in the Malaysian Capital Market. 78 Puncak Niaga Holdings Berhad Annual Report 2001

80 Investor Relations Policy & Report Our employees who were involved in the KLSE Investors Week 2001, gained invaluable experience from interacting and listening to the investing public. In gaining knowledge of the motivations and the fears that investors have over their investments generally and in PNHB in particular; has helped in the formulation of strategies adopted by the Company in addressing all investor related issues, whether real or imagined. We are heartened by the public s positive perceptions on the Company s corporate profile and their appetite for investment in the Company s equity and financial instruments, as demonstrated by the overwhelming support of the issuance of the RUN and Warrants. YBhg Dato Salleh Majid visiting PNHB s booth at the KLSE Investors Week 2001 Puncak Niaga s website was set up in 1997, in our first year of listing on the KLSE, to put the Group on the internet. Shareholders, investors and members of the public can access the Company s website at for information on the Company. We welcome feedbacks, views, concerns and queries from our shareholders and investors because we believe it can help us improve on the way we manage our business and how we could be of better service to our community-towards a better Malaysia. Puncak Niaga Holdings Berhad Annual Report

81 Puncak Niaga Holdings Berhad Annual Report 2001 Environmental Policy & Report ENVIRONMENTAL POLICY Puncak Niaga, a water treatment specialist company, is committed to continuous improvements in protecting the environment, minimising pollution, conserving natural resources and operating its facilities in an environmentally sound manner. In accordance with its Environmental Policy, the Company shall:- 1. Established an Environmental Management System sets objectives and targets for improvement of environmental performance; develop and implement programmes and activities in line with our Environmental Policy; emphasise the prevention of pollution in our activities; and develop and implement procedures to avoid and manage incidents which may have an adverse environmental impact. 2. Compliance to Requirement fully comply with all applicable environmental laws, regulations and standards including the National Standards and Malaysian Regulations and other requirements relevant to the water industry; establish an internal environmental control standard/system, where applicable, in order to comply with the requirements; and to operate in a manner that provides for environmental specifications and sensitivity to the environmental needs of the community, where practicable. 3. Monitoring and Controlling of Environmental Issues continuously monitor and control the environmental parameters for environmental performance improvement; implement pollution reduction programmes where feasible to minimise the environmental impact from hazardous materials, noise and wastewater; and develop and implement continuous programmes on the management of scheduled and nonscheduled waste incorporating the 4R Concept, i.e. Refrain, Reuse, Recycle and Reduce. 4. Communication and Training communicate and create awareness of the Company s Environmental Policy and environmental issues amongst our employees, contractors, visitors and interested members of society; and encourage our employees in environmental initiatives and support them with training and awareness programmes in environmental issues. Puncak Niaga s Environmental Policy shall be reviewed by Management from time to time for possible revisions in light of changing conditions. 80

82 Puncak Niaga Holdings Berhad Annual Report 2001 Environmental Policy & Report ENVIRONMENTAL REPORT The level of pollution in waterways feeding the dams and water treatment plants, managed by us has significant impact on the performance of our water treatment plants to produce treated water to the level designated by the Ministry of Health. The various initiatives taken by us to safeguard the environment, benefits our country, contributes to a better living environment and a healthier lifestyle for our community from access to clean water on demand. We have put in place physical safeguards and water pollution violation monitoring procedures to detect pollution in the waterways at the point of raw water abstraction, at source. Whilst we do not have legislative powers to stop polluters, close liaison is maintained with the Department of Environment, local enforcement authorities, Ministry of Health and other governmental authorities to preserve the environment to ensure sustainability of our business activities. The common causes of raw water pollution due to accidental spillage of contaminants, illegal discharge/dumping of raw sewage, chemicals and other wastes and siltation of waterways from indiscriminate land development continue to cause disruptions to the water treatment plants operations. Raw Water Violations Based on the monthly analysis carried out by a certified independent laboratory, there were 957 cases of raw water quality violations in year 2001 representing a decrease of 8.3%, compared to 1,044 cases recorded in Our vigilance in reporting violations to the authorities has helped in identifying sources of raw water pollution leading to action being taken against some of the polluters. In 2001, there were seven (7) cases of plant shutdowns due to raw water pollution, five (5) of which were due to the presence of hydrocarbon such as mineral oil or diesel. With our assistance, the Department of Environment had been able to trace the source of pollution and action has been taken on the polluters. We also have a toll free river watch line Sg Langat Dam 81

83 Puncak Niaga Holdings Berhad Annual Report 2001 Environmental Policy & Report installed since April The public is encouraged to report any incidences of pollution or bring to the Company s attention cases of any parties deliberately polluting the waterways. We will continue to support all effort towards the conservation of the environment by participating in various exhibitions and programmes aimed at creating public awareness on the importance of protecting our water sources. We had also been aggressively inculcating rivercare awareness and the importance of environmental protection among school children through its River Rescue Brigade and Education Outreach Programmes. Raw Water Quality Monitoring Initiatives We are very serious in discharging our responsibility to ensure that treated water from our water treatment plants are of the highest quality. The quality of raw water at the intake and treated water as it leaves the water treatment plant are laboratory tested:- once every two (2) hourly against stringent quality standards of physical parameters and chemical parameters; daily for microbiological parameters and weekly basis by independent laboratory; and monthly for all parameters according to schedules set by an accredited, independent laboratory. In fact, the quality of water is monitored at every stage of process i.e. from the point of entry at the intake of the water treatment plant until it leaves the plant, to the balancing reservoir. In addition to the above, we also adhere strictly to the following:- water quality compliance monitoring is conducted to ensure the raw, settled and treated water of the water treatment plants complies with the standards set out in the PCCA, CCOA and the Ministry of Health s Drinking Water Quality Guidelines; 82

84 Environmental Policy & Report four critical water treatment plants (Sg Langat, Salak Tinggi, Cheras, Bukit Tampoi) are monitored once every two (2) hourly every day for ammonia content in raw, settled and treated water, as ammonia is one of the indicators of pollution; and fluoride levels in the treated water are also monitored whereby regular reports are submitted to the Dentistry Office of the Ministry of Health. We conduct regular sanitary surveys to identify potential polluters of raw water sources. Sanitary surveys are conducted in cooperation with the Department of Environment, Ministry of Health and local enforcement authorities. A total of 32 surveys were conducted from 1998 to Environmental impact investigations, which are preliminary forms of sanitary surveys, are also carried out. These investigations highlighted the following sources of pollution:- quarry near Sg Gombak Intake; abandoned mining pools near Sg Selangor; soil erosion from housing project of Kemensah Heights; earthworks and sand mining at Sg Tamu affecting water intake at Batang Kali Water Treatment Plant; fish pond development near Rantau Panjang Water Treatment Plant; silt affecting water intake at Sg Selisek Water Treatment Plant; chemicals from cleaning works at KL Tower; sand mining affecting water intake at Bukit Tampoi; suspected mercury contamination at Cheras Mile 11 and Bukit Tampoi Water Treatment Plants; mining activity affecting water intake at Sg Langat Water Treatment Plant; and iron contamination affecting Sg Langat, Sg Batu, North Hummock, Rantau Panjang and Bukit Nanas Water Treatment Plants. The River Warning Monitoring System (RWMS) installed in year 1998 at Sg Langat continues to provide advance warning of possible raw water violations based on turbidity, conductivity/total dissolved solids, ph, dissolved oxygen, ammonium, nitrates and phosphates. In early 2001, a second RWMS facility commenced operations at Sg Langat Dam Puncak Niaga Holdings Berhad Annual Report

85 Environmental Policy & Report Sg Selangor. The RWMS analyses water using standard methodologies of selected parameters and warns the water treatment plants of potential polluted water. Sludge Treatment at Water Treatment Plants The water treatment plants taken over by us under the PCCA were not equipped with proper facilities for sludge treatment. As such, we have proposed to the Selangor State Government to build sludge treatment facilities at each of the 26 water treatment plants under the PCCA. For the SSP2 Water Treatment Plant, Puncak Niaga has constructed four (4) sludge lagoons for the plant even though it was not part of our scope of work under the CCOA. Similarly, for the Wangsa Maju Water Treatment Plant, we are investing RM3.5 million to construct a sludge treatment plant at our own cost which again is not part of the scope of work under the agreement with the Federal Government. Chlorine Protection As chlorine is a major hazard to the environment, all water treatment plants have provided a specific chemical building whereby exhaust fans are installed to operate automatically to disperse gas in minute quantity upon the sensor detecting the presence of chlorine gas. However, should the chlorine gas level exceeds 5 milligram per liter, the ventilation fans will automatically shutdown and the chemical building will be sealed to prevent the chlorine gas from escaping into the atmosphere. Each water treatment plant has been installed with a Chlorine Scrubber System which will be activated automatically to neutralise any chlorine gas trapped in the chemical building in the event of any leakage before the neutralised gas is discharged. Environmental Rejuvenation & Protection Our ongoing commitment to environmental and natural habitat s preservation is aptly demonstrated in the beautification of the area surrounding the Bukit Gasing Pumping Station where an extensive tree planting and landscaping project was completed. This exercise resulted in the restoration of a large green lung area affected by the construction of a 84 Puncak Niaga Holdings Berhad Annual Report 2001

86 Environmental Policy & Report reservoir. This project shall be the model for the reforestation and landscaping of sites affected by the Company s future projects. There are also extensive landscaping works at both the SSP2 and Wangsa Maju Water Treatment Plants. They have become our showcase projects, demonstrating our commitment for technological innovations in our development activities, made with a conscious effort at environmental preservation and conservation. We are conscious of the possible environmental impact from our business activities. Research & Development activities into design of water clarification processes using mechanical means instead of using chemicals is on going. Efforts at development of optimal chemical dosing levels are made to reduce the chemical loads in water. This will ensure the safest standards for water quality to safeguard consumers health and riverine flora and fauna. Also in the area of dam safety management, we have implemented a programme to constantly survey and monitor the dam area. The programme includes:- daily observation on the dam s general area, structure and water quality; monthly visual inspection of dam areas, particularly along water banks and upstream tributaries. Should there be any abnormalities, an environmental investigation will be carried out; monthly raw water pipeline and downstream river monitoring for any risks of structural faults, contamination or encroachment; and scheduled water quality sampling and analysis at selected stations within the dam area and incoming tributaries within the catchment area; inspection by an independent dam consultant at every 5 year interval. ISO Certification - Environmental Management System The Company s business processes that may have environmental impact are under review and if necessary, modified with the adoption of best practices in balancing environmental sensitivities. In this connection, the Company targets to obtain the Environmental Management System (ISO 14001) certification by December Sg Langat Dam Puncak Niaga Holdings Berhad Annual Report

87 Puncak Niaga Holdings Berhad Annual Report 2001 Organisational Safety & Health Policy It is the policy of Puncak Niaga to provide, so far as is practicable pursuant to Section 15 of the Occupational Safety and Health Act, 1994 and all other relevant legislations, a safe and healthy working environment for all the employees, and in the spirit of consultation and cooperation, the Management and employees shall together strive to achieve the established goals and objectives of this policy. Without prejudice to the generality of the above statement, the Organisational Safety & Health Policy of Puncak Niaga is:- to provide and maintain a safe place and system of work; to ensure that all the employees are informed, instructed, trained and supervised on how to perform their jobs safely and without risk to health; to investigate all accidents and near-misses and to take corrective measures to ensure that accidents or near-misses will not recur; to comply with all legal requirements on safety and health as stipulated in the Occupational Safety and Health Act 1994, the regulations made under it and the approved codes of practices; and to review this policy as and when appropriate. 86

88 Quality Policy It is the policy of Puncak Niaga to provide quality services to fulfil its contractual obligations to the Selangor State Government. Puncak Niaga shall strive to consistently meet the quality standards pre-determined in the PCCA and CCOA. Puncak Niaga is fully committed to perform all its obligations under the PCCA and CCOA with full responsibility, due diligence and efficiency. To Be The Leading And Dynamic Integrated Water Services Company, we shall adopt a quality management system based on internationally recognised standards, which will ensure a planned, systematic and proactive approach to quality in all aspects of our work. Puncak Niaga s quality management shall be characterised by:- proactiveness at all levels; the consistent application of Right First Time Every Time principle; empowerment of employees to solve problems expeditiously; and a culture of continuous improvement and teamwork. All employees shall share the responsibility to understand and diligently implement the Quality Policy. Puncak Niaga Holdings Berhad Annual Report

89 Newspaper Clippings 88 Puncak Niaga Holdings Berhad Annual Report 2001

90 Newspaper Clippings Puncak Niaga Holdings Berhad Annual Report

91 Distribution Schedule of Equity Securities & Property ORDINARY SHARES AS AT APRIL 29, 2002 Authorised Capital Issued and Paid-Up Capital Nominal Value : RM1,000,000,000 : RM437,990,000 : RM1.00 per ordinary share Holdings No. of Holders % of Holders Total Holdings % of Issued Capital less than 1, , ,000-10,000 9, ,340, , ,000 1, ,886, ,001-21,899,499 (less than 5% of issued capital) ,573, ,899,500 (5% of issued capital) and above ,042, TOTAL 11, ,990, Largest Shareholders As Per Record of Depositors No. of % of Issued Name of Shareholders Shares Held Capital 1. Amsec Nominees (Tempatan) Sdn Bhd 59,513, Arab-Malaysian Finance Berhad For Central Plus (M) Sdn Bhd 2. Employees Provident Fund Board 30,029, Arab-Malaysian Nominees (Tempatan) Sdn Bhd 25,500, Arab-Malaysian Finance Bhd For Central Plus (M) Sdn Bhd (7/655-6) 4. Al Wakalah Nominees (Tempatan) Sdn Bhd 18,293, Pledged Securities Account For Central Plus (M) Sdn Bhd - BIMBHO 5. Arab-Malaysian Nominees (Tempatan) Sdn Bhd 17,026, Arab-Malaysian Trustee Berhad For Central Plus (M) Sdn Bhd (7/914-8) 6. RHB Capital Nominees (Tempatan) Sdn Bhd 14,000, Pledged Securities Account For Central Plus (M) Sdn Bhd (TSR ) 7. Arab-Malaysian Finance Berhad 13,989, Pledged Securities Account For Central Plus (M) Sdn Bhd (SMART) 8. Central Plus (M) Sdn Bhd 13,723, Central Plus (M) Sdn Bhd 11,967, CIMB Nominees (Tempatan) Sdn Bhd 8,720, Commerce International Merchant Bankers Berhad 11. Malaysia Nominees (Tempatan) Sendirian Berhad 8,307, Great Eastern Life Assurance (Malaysia) Berhad (MLF) 90 Puncak Niaga Holdings Berhad Annual Report 2001

92 Distribution Schedule of Equity Securities & Property 30 Largest Shareholders As Per Record of Depositors No. of % of Issued Name of Shareholders Shares Held Capital 12. Bank Kerjasama Rakyat Malaysia Berhad 7,000, Pledged Securities Account For Kumpulan Darul Ehsan Berhad 13. CIMB Nominees (Tempatan) Sdn Bhd 5,435, Pledged Securities Account For Central Plus (M) Sdn Bhd 14. Al Wakalah Nominees (Tempatan) Sdn Bhd 5,250, Pledged Securities Account For Corporate Line (M) Sdn Bhd - BIMBHO 15. HLG Nominee (Tempatan) Sdn Bhd 5,023, PB Trustee Services Berhad For HLG Growth Fund 16. Malaysian Assurance Alliance Berhad 5,000, Equity Investments Dept. 17. Mayban Nominees (Tempatan) Sdn Bhd 4,550, Mayban Trustees Berhad For Amanah Saham PAB (N ) 18. UOBM Nominees (Tempatan) Sdn Bhd 4,403, Pledged Securities Account For Central Plus (M) Sdn Bhd (MP) 19. Malaysia Nominees (Tempatan) Sendirian Berhad 3,600, Pledged Securities Account For Kumpulan Perangsang Selangor Bhd ( ) 20. Kumpulan Wang Amanah Pencen 3,500, Amanah Raya Nominees (Tempatan) Sdn Bhd 3,238, Amanah Saham Wawasan AllianceGroup Nominees (Tempatan) Sdn Bhd 3,000, Alliance Merchant Nominees (Tempatan) Sdn Bhd For Kumpulan Darul Ehsan Berhad 23. Perbadanan Nasional Berhad 2,989, Universal Trustee (Malaysia) Berhad 2,700, CMS Premier Fund 25. Malaysia Nominees (Tempatan) Sendirian Berhad 2,545, Great Eastern Life Assurance (Malaysia) Berhad (MLF2) 26. Arab-Malaysian Nominees (Tempatan) Sdn Bhd 2,514, Arab-Malaysian Trustee Bhd For HLB Penny Stock Fund (5/4-3) 27. Amanah Raya Nominees (Tempatan) Sdn Bhd 2,448, Sekim Amanah Saham Nasional 28. Malaysia Nominees (Tempatan) Sendirian Berhad 2,300, Amanah SSCM Asset Management Berhad For Amanah SmallCap Fund Berhad (JM730) 29. Amanah Raya Nominees (Tempatan) Sdn Bhd 2,000, Amanah Saham Malaysia 30. Universal Trustee (Malaysia) Berhad 1,961, BHLB Pacific Emerging Companies Growth Fund TOTAL 290,526, Puncak Niaga Holdings Berhad Annual Report

93 Distribution Schedule of Equity Securities & Property Directors Interests in Ordinary Shares As Per Register of Directors Shareholdings No. Name No. Of Shares Held In The Company Direct Interest % Deemed Interest % 1 Tan Sri Rozali Ismail 30, ,051, Ruslan Hassan 384, , Mat Hairi Ismail 22, , Lee Miang Koi 144, , Abdul Majid Abdul Karim 3, Dato Hari Narayanan Govindasamy , Dato Seri Dr Ting Chew Peh Deemed interest by virtue of 50% equity interest in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd respectively 2 Held in nominee name, CIMSEC Nominees (Tempatan) Sdn Bhd 3 Held in nominee name, Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 4 Held in nominee name, Mayfin Nominees (Tempatan) Sdn Bhd List of Substantial Shareholders As Per Register of Substantial Shareholders (excluding bare trustees) No. Name No. Of Shares Held In The Company Direct Interest % Deemed Interest % 1 Tan Sri Rozali Ismail 30, ,051, Shaari Ismail ,051, Central Plus (M) Sdn Bhd 25,707, ,159, Employees Provident Fund Board 29,960, ,083, Deemed interest by virtue of 50% equity interest in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd respectively 2 Held in various nominee names 3 Shares held and managed by various Portfolio Managers 92 Puncak Niaga Holdings Berhad Annual Report 2001

94 Distribution Schedule of Equity Securities & Property WARRANTS AS AT APRIL 29, 2002 Holdings No. of Holders % of Holders Total Holdings % of Warrants Issued less than 1,000 1,000-10,000 10, , ,001-5,468,742 (less than 5% of of warrants issued) 5,468,743 (5% of warrants issued) and above TOTAL 741 3, , ,209 10,586,467 16,691,133 23,747,811 57,988, ,374, Largest Warrant Holders As Per Record of Depositors No. of Warrants % of Warrants Name of Warrant Holders Issued 1. Rozali Bin Ismail 51,466, Employees Provident Fund Board 6,521, Malaysia Nominees (Tempatan) Sendirian Berhad 2,209, Great Eastern Life Assurance (Malaysia) Berhad (MLF) 4. Bank Kerjasama Rakyat Malaysia Berhad 1,750, Pledged Securities Account For Kumpulan Darul Ehsan Berhad 5. Corporate Line (M) Sdn Bhd 1,533, HLG Nominee (Tempatan) Sdn Bhd 1,255, PB Trustee Services Berhad For HLB Growth Fund 7. Soon Li Voon 1,010, Perbadanan Nasional Berhad 747, Universal Trustee (Malaysia) Berhad 700, TA Islamic Fund 10. BHLB Trustee Berhad 686, TA Comet Fund 11. Malaysia Nominess (Tempatan) Sendirian Berhad 575, Amanah SSCM Asset Management Berhad For Amanah SmallCap Fund Berhad (JM730) 12. Wong Lee Yun 550, Malaysia Nominees (Tempatan) Sendirian Berhad 526, Great Eastern Life Assurance (Malaysia) Berhad (MLF2) 14. HSBC Nominees (Tempatan) Sdn Bhd 436, HSBC (M) Trustee Bhd For Arab-Malaysian Cumulative Growth Fund (3639) 15. Universal Trustee (Malaysia) Berhad 411, Alliance First Fund 16. Asia Life (M) Berhad 405, as beneficial owner (M'sia Life Fund) 17. Looi Boon Han 404, OSK Nominees (Tempatan) Sdn Berhad 399, Pledged Securities Account For Voon Choon Tuck 19. Malaysia National Insurance Berhad 357, Lembaga Tabung Angkatan Tentera 343, OSK Nominees (Asing) Sdn Berhad 342, Pledged Securities Account For Tan Boon Chiang Puncak Niaga Holdings Berhad Annual Report

95 Distribution Schedule of Equity Securities & Property 30 Largest Warrant Holders As Per Record of Depositors No. of Warrants % of Warrants Name of Warrant Holders Issued 22. Mayban Securities Nominees (Tempatan) Sdn Bhd 310, Pledged Securities Account For Abdullah Hasbi Bin Haji Hassan (REM 193) 23. Mayban Securities Nominees (Tempatan) Sdn Bhd 275, Pledged Securities Account For Tan Yoke Chun 24. Toh Chin Hin 272, Amanah Raya Nominees (Tempatan) Sdn Bhd 238, Malaysia Progress Fund 26. Mayban Nominees (Tempatan) Sdn Bhd 233, Pledged Securities Account For Su Tiing Uh (178AW0603) 27. Teo Kin Swee 225, Lim Chee San 220, Mayban Nominees (Tempatan) Sdn Bhd 215, Mayban Trustees Berhad For Phileo Equityextra Fund (990405) 30. Chong Mei Ngor 210, TOTAL 74,828, Directors Interests In Warrants As Per Register Of Directors Shareholdings No. Name No. Of Warrants Held In The Company Direct Interest % Deemed Interest % 1 Tan Sri Rozali Ismail 51,466, ,545, Ruslan Hassan 41, Mat Hairi Ismail 52, Lee Miang Koi 18, Abdul Majid Abdul Karim Dato Hari Narayanan Govindasamy , Dato Seri Dr Ting Chew Peh Deemed interest by virtue of 50% equity interest in Corporate Line (M) Sdn Bhd 2 Held in nominee name, Mayfin Nominees (Tempatan) Sdn Bhd List of Property As At December 31, 2001 Description & Date of Land Area Net Book Value Tenure Remaning Existing Location Acquisition Leasehold use Period (Expiry Date) Vacant Land 14/2/ ,364 sq.m. RM8,217, years 98 years none H.S.(D) Leasehold expiring on PT 32, Section 14 17/12/2099 Bandar Shah Alam District of Petaling Selangor 94 Puncak Niaga Holdings Berhad Annual Report 2001

96 Moulding This type of low-fired globular pot has been in existence for thousands of years. They were used for both water storage and cooking. The relief patterns on the outside are created using a wooden beater while forming the pot. shareholders confidence Puncak Niaga Holdings Berhad Annual Report

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98 Financial Reports Directors Report Consolidated Income Statement Income Statement Balance Sheets Consolidated Statement of Changes in Enquity Statement of Changes in Equity Cash Flow Statements Notes to the Financial Statements Statement by Directors Statutory Declaration Report of the Auditors Puncak Niaga Holdings Berhad Annual Report