steady growth - Puncak Niaga Holdings Berhad

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steady growth - Puncak Niaga Holdings Berhad
COVER RATIONALE
Touching Lives
Puncak Niaga’s business touches the lives of the communities where we operate. It is therefore
our duty to manage and develop our business in a responsible and sustainable manner.
The year in review has seen us consolidate resources and build on our core strengths. The
theme pages of this year’s Annual Report expresses our commitment towards achieving
sustainable development within the water industry in Malaysia and the region, while benefiting
the communities and our stakeholders.
We will continue to work together with the communities we serve and reinforce the
foundations for a better tomorrow.
Table Of Contents
2-3
Corporate Information
4-6
Fact Sheet
7-8
Corporate Profile
9
Vision & Mission Statements
12
Corporate Structure
13
Organisation Structure
14
Financial Highlights
15
Financial & Share Performances
18-23
Board of Directors
24-27
Senior Management
28-29
Corporate Achievements
32-35
Executive Chairman Speaks
36-43
Operations Review
44-45
Corporate Social Responsibility
46-51
Corporate Calendar of Events
52-53
Newspaper Clippings
56-63
Statement on Corporate Governance
64-65
Statement on Internal Control
66-71
Audit Committee Report
72-74
Risk Management Policy & Report
75-78
Investor Relations Policy & Report
79
Quality Policy
80-85
Distribution Schedule of
Equity Securities & Property
89-151
Financial Reports
152-154
Notice of Annual General Meeting
155-156
Statement Accompanying the Notice of
Annual General Meeting
157
Proxy Form
Pull-out
Health, Safety & Environmental Policy & Report
SEVENTH ANNUAL GENERAL MEETING
DATE :
TIME
:
VENUE :
Monday, 28 June 2004
9.30 a.m
Banquet Hall
Kuala Lumpur Golf &
Country Club
No. 10 Jalan 1/70D
Off Jalan Bukit Kiara
60000 Kuala Lumpur
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Information
PRINCIPAL OFFICE
Suite 2601-2606, 26th Floor
Plaza See Hoy Chan
Jalan Raja Chulan
50200 Kuala Lumpur
Tel
: 03-2031 8648
Fax
: 03-2031 8658
website
: www.puncakniaga.com.my
e-mail (general) : [email protected]
e-mail (investors) : [email protected]
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
DATE AND PLACE OF INCORPORATION
7 January 1997, Malaysia
Ir Lee Miang Koi
Executive Director
Project & Business Development Division
COMPANY NUMBER
416087-U
AUDITORS
Messrs PricewaterhouseCoopers (AF 1146)
Tuan Syed Danial Syed Ariffin
Executive Director
Operation Division
TAX ADVISOR
PricewaterhouseCoopers Taxation
Services Sdn Bhd (464731-M)
Encik Abdul Majid Abdul Karim
Independent Non-Executive Director
PRINCIPAL BANKERS
RHB Bank Berhad (6171-M)
Bumiputra-Commerce Bank Berhad (13491-P)
United Overseas Bank (Malaysia) Berhad (271809-K)
YBhg Tan Sri Dato’ Hari Narayanan Govindasamy
Independent Non-Executive Director
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Independent Non-Executive Director
SOLICITORS
Messrs Kadir, Andri Aidham & Partners
Messrs Wong & Partners
Messrs Lee Hishammuddin
Messrs Sivananthan
Messrs Ng Yook Woon, Andrew TC Saw & Co
Messrs Azian Haslina & Co
GROUP COMPANY SECRETARY
Madam Tan Bee Lian, MAICSA 7006285
REGISTERED OFFICE
Suite 1401-1406, 14th Floor
Plaza See Hoy Chan
Jalan Raja Chulan
50200 Kuala Lumpur
Tel : 03-2031 8648
Fax : 03-2078 4386
Puncak Niaga Holdings Berhad Annual Report 2003
2
Corporate Information
SHARE REGISTRAR
(Place where all registers of securities are kept)
Tenaga Koperat Sdn Bhd (118401-V)
20th Floor, Plaza Permata
Jalan Kampar
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel : 03-4041 6522
Fax : 03-4042 6352
STOCK EXCHANGE LISTING
Main Board of Bursa Malaysia under the
Infrastructure Project Companies Sector
INDICES
Kuala Lumpur Composite Index (KLCI)
Kuala Lumpur Syariah Index
Morgan Stanley Composite Index
REMUNERATION COMMITTEE
Chairman:
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Members:
YBhg Tan Sri Dato’ Hari Narayanan Govindasamy
Encik Abdul Majid Abdul Karim
Encik Mat Hairi Ismail
Secretary:
Madam Tan Bee Lian
NOMINATION COMMITTEE
Chairman:
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Members:
YBhg Tan Sri Dato’ Hari Narayanan Govindasamy
Encik Abdul Majid Abdul Karim
AUDIT COMMITTEE
Chairman:
Encik Abdul Majid Abdul Karim
Secretary:
Madam Tan Bee Lian
Members:
YBhg Tan Sri Dato’ Hari Narayanan Govindasamy
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Encik Mat Hairi Ismail
COMPLIANCE, INTERNAL CONTROL AND
RISK POLICY COMMITTEE (CICR)
Chairman:
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Secretary:
Madam Tan Bee Lian
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)
3
Puncak Niaga Holdings Berhad Annual Report 2003
Fact Sheet
PUNCAK NIAGA HOLDINGS BERHAD’S FACT SHEET AS AT 26 APRIL 2004
Group Manpower:
Management Employees
Executive Employees
Non-Executive Employees
Total
82
178
380
640
No. of Puncak Niaga’s Water Treatment Plants
28
No. of Water Treatment Plants with ISO Certifications
2
Authorised Share Capital
RM1,000,000,000
Paid-Up Share Capital
RM457,785,000 (comprising 457,785,000 ordinary
shares of RM1.00 each)
Number of RUN Issued
546,875,000
RUN Coupon Rates
2.5% per annum for the first 10 years
and 3.5% per annum for the remaining 5 years
RUN Semi-Annual Coupon Payment Dates
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
RM2.62
Number of Warrants Converted
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
ESOS Exercise Price (2nd Tranche)
RM2.47 per share
ESOS Exercise Price (3rd Tranche)
RM2.13 per share
ESOS Exercise Price (4th Tranche)
RM2.71 per share
ESOS Exercise Price (5th Tranche)
RM3.27 per share
Number of ESOS Offered (1st Tranche)
33,422,000
Number of ESOS Offered (2nd Tranche)
2,933,000
Number of ESOS Offered (3rd Tranche)
2,817,000
Number of ESOS Offered (4th Tranche)
1,349,000
Number of ESOS Offered (5th Tranche)
1,635,000
Total
Puncak Niaga Holdings Berhad Annual Report 2003
42,156,000
4
Fact Sheet
List of Corporate Memberships:
1. Malaysian Water Association (MWA)
Member since 1994
2. Malaysia South-South Association (MASSA)
Member since 1995
3. Federation of Public Listed Companies (FPLC)
Member since 1997
4. Malaysian Employers Federation (MEF)
Member since 1999
5. Malaysian Industry-Government Group for High Technology (MIGHT)
Member since 2001
6. Malaysian-German Chamber of Commerce and Industry (MGCC)
Member since 2002
7. National Institute of Occupational Safety and Health (NIOSH)
Member since 2002
8. American Water Works Association (AWWA)
Member since 2002
9. Malaysian-French Chamber of Commerce and Industry (MFCCI)
Member since 2002
10. Malaysia-Russia Business Council
Member since 2002
11. British Malaysian Chamber of Commerce (BMCC)
Member since 2003
12. Research Institute of Investment Analysts Malaysia (RIIAM)
Member since 2003
13. Malaysia-Japan Economic Association (MAJECA)
Member since 2003
14. Commonwealth Partnership for Technology Management (CPTM)
Member since 2003
15. Institute of Marketing Malaysia (IMM)
Member since 2003
List of Water Treatment Plants:
Telephone Nos.
1. Ampang Intake
03-4291 4040
2. Batang Kali
03-6057 3255
3. Bernam River Headworks
03-6046 1259
4. Bukit Nanas
03-2078 0782
5. Bukit Tampoi
03-8768 6216
6. Cheras Mile 11
03-8736 0427
7. Gombak
03-6189 5255
8. Kalumpang
03-6049 1366
9. Kepong
03-6274 9495
10. Kuala Kubu Bharu
03-6064 1327
11. North Hummock
03-3341 2052
12. Rantau Panjang
03-3271 0948/03-3271 9133
13. Salak Tinggi
03-8706 1103
14. Sungai Batu
03-6189 0267
15. Sungai Buaya
03-6028 1146
16. Sungai Dusun
03-6046 3649
17. Sungai Keroh
03-6274 9495/03-6091 0001
18. Sungai Langat
03-9074 9430
19. Sungai Lolo
03-9075 3977/03- 9021 5993
5
Puncak Niaga Holdings Berhad Annual Report 2003
Fact Sheet
List of Water Treatment Plants (continued)
Telephone Nos.
20. Sungai Pangsoon
03-9021 5993
21. Sungai Pusu
03-6189 5255/03-6185 6631
22. Sungai Rangkap
03-6091 0001
23. Sungai Rumput
03-6185 6631
24. Sungai Selangor Phase 2#
03-3279 2008
25. Sungai Selisek
05-454 2003
26. Sungai Serai
03-9075 3977
27. Sungai Tengi
03-6042 2035
28. Wangsa Maju*
03-4143 7006
#Awarded the following certifications:
1. Quality Management System (ISO 9001:2000)
2. Environmental Management System (ISO 14001:1996)
3. Safety Management System (OHSAS 18001:1999)
*Awarded the Quality Management System (ISO 9001:2000) certification.
Puncak Niaga Holdings Berhad Annual Report 2003
6
Corporate Profile
Sungai Langat Dam
Puncak Niaga Holdings Berhad (PNHB) was incorporated on 7 January 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 (now known as Bursa Malaysia) on 8 July 1997.
It is the first water treatment and supply concession company to be listed on Bursa Malaysia 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 22 September 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 corporatised and known as Perbadanan Urus
Air Selangor Berhad.The second concession, a Construction Cum Operation Agreement (CCOA) was awarded on 22
March 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 31 December 2020.
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 1
January 2002. Instead, it was completed and commissioned one year ahead of schedule on 1 January 2001.
7
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Profile
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 under taking large-scale water supply
projects in Malaysia.
On 25 September 2003, PNHB had announced to Bursa Malaysia that it has received a letter from the Economic
Planning Unit, Prime Minister’s Depar tment stating the Federal Government has in principle approved the
privatisation of the water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and
Putrajaya to be under taken by Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS). In this respect, PNHB would be
required to take up a 70% equity stake in SYABAS.
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 1,926 million litres per day. This volume is equivalent to
approximately 54.55% of the treated water requirement in the State of Selangor Darul Ehsan and the Federal
Territory of Kuala Lumpur.
SSP2 Water Treatment Plant Administration Building
Puncak Niaga Holdings Berhad Annual Report 2003
8
Vision & Mission Statements
Our Vision
Our Mission
Our Vision
•
To Be The Leading And Dynamic Integrated Water Services Company.
Our Mission
•
To provide a synergy of socio-economic products and services in the realm of water treatment, management
and distribution and other related businesses.
•
To cater to the increasing challenges in the demand for high quality water production and distribution through
the continuous implementation of high quality standards, efficient services, human resources development,
innovative technology and operational systems.
•
To actively participate in regional and global business opportunities with linkages to the Company’s core activities
and related interests.
•
To actively support and participate in programmes and activities aimed at uplifting the community’s living
standards and value systems in line with the aspirations of Vision 2020.
•
To address national and international concerns pertaining to the protection, conservation and enhancement of
the natural environment we live in.
9
Puncak Niaga Holdings Berhad Annual Report 2003
Ensuring A Better future
Puncak Niaga Holdings Berhad Annual Report 2003
10
11
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Structure
Puncak Niaga Holdings Berhad
Investment Holding and
Provision of Management Services
Ideal Water Resources Sdn Bhd
100%
operation, management,
maintenance and undertaking
the rehabilitation and refurbishment of
water treatment plants
Puncak Niaga (M) Sdn Bhd
100%
operation, maintenance,
management, construction,
rehabilitation and refurbishment
of water treatment facilities
Puncak Research Centre Sdn Bhd
100%
dormant
Unggul Raya (M) Sdn Bhd
100%
operation, management,
maintenance and monitoring the
operation of dams
Puncak Seri (M) Sdn Bhd
100%
dormant
NS Water System Sdn Bhd
100%
dormant
NS Water Management Sdn Bhd
40%
dormant
Puncak Niaga Holdings Berhad Annual Report 2003
12
Organisation Structure
Puncak Niaga Holdings Berhad
Executive Chairman
YBhg Tan Sri Rozali Ismail
PNHB
Executive Director
Project & Business Development
Ir Lee Miang Koi
Senior General Manager
Ir Loh Kit Mun
General Manager
Encik Ramlan Abdul Rahman
General Manager
Encik Usman Ali Mustaffa
Senior General Manager
Secretarial
Madam Tan Bee Lian
General Manager
Internal Audit
Encik Sonari Solor
Executive Vice Chairman
Encik Ruslan Hassan
General Manager
Strategic Resource Centre
Dr Abd Rahim Awang Kechik
General Manager
Corporate Communications
Mr Mohanan Narayanan
General Manager
Executive Chairman's Office
Encik Othman Ismail
Executive Director
Finance Division
Encik Mat Hairi Ismail
Executive Director
Operation Division
Tuan Syed Danial Syed Ariffin
General Manager
Finance & Accounts
Mr Ng Wah Tar
Senior Manager
Operation Contract
Supervision
Encik Hashim Omar
Assistant
General Manager
Finance
Encik Ismail Maidin
Senior Manager
Water Resources &
Environmental / Dam Operations
Puan Roowina Merican A
Rahim Merican
Senior Manager / Plant Manager
SSP2 WTP
Ir Ausamah Darwish Mohd Daud
Manager / Plant Manager
Wangsa Maju WTP
Encik Abdul Rahman Kadir
Safety Officer
Encik Sharluddin B Alias
Executive Director
Human Resources
& Administration
Division
Encik Matlasa Hitam
PNSB
Executive Director
Project & Business
Development Division
Ir Beh Men Huat
General Manager
Human Resources
& Administration
Encik Ahmad Fauzi Yahya
General Manager
Project & Business
Development
Ir Tan Hui Kuan
Senior Manager
Compensation & Benefits
Encik Nik Azmi Nik Yaacob
General Manager
Sabah Project
Mr Seng Pay
Manager
Recruitment &
Industrial Relations
Puan Poziah Abas
Senior Manager
Business Development
Ir Tham Kin Tuck
Manager
Administration
Encik Kamarulzaman
Abu Bakar
Manager
Protective Services
Encik Saadon Kardi
13
Executive Director
Corporate
Affairs Division
Encik Ruslan Hassan
General Manager
Legal
Madam Chan Siew Meei
Assistant General Manager
Information Technology
Encik Mohd Sabaruldin
Che Bakar
Senior Manager
Project Management
Encik Ishak Awang
Senior Manager
Contract
Ir Teh Lee Ngo
Puncak Niaga Holdings Berhad Annual Report 2003
Financial Highlights
IN RM’000
YEAR 2003
YEAR 2002
YEAR 2001
1,445,904
1,528,703
1,606,425
BALANCE SHEET
Property, plant and equipment
Project development expenditure
246,809
245,838
255,727
Other non-current assets
132,038
185,740
236,520
Current assets
1,342,384
907,107
601,693
Total tangible assets
3,156,949
2,856,603
2,688,980
ISSUED AND PAID-UP CAPITAL
Share capital
451,166
439,278
437,500
Reserves
680,847
535,028*
405,495*
1,132,013
974,306*
842,995*
2.49
2.19*
1.90*
Shareholders’ fund
Net tangible assets per share (RM)
RATIOS AND STATISTICS
Turnover
578,260
565,105
552,337
Net profit after tax
129,586
127,096*
124,499*
Interest bearing debt
1,613,636
1,529,608
1,585,076
In sen
Earnings per share
29.26
28.98*
28.46*
22
22*
23*
Gearing ratio
1.43
1.57*
1.88*
Current ratio
5.73
3.66
2.72
In % of turnover
Operating profit
In times
*
These comparatives have been restated following the change in accounting policy on deferred tax to comply with the MASB Standard 25, ‘Income Taxes’.
FINANCIAL CALENDAR
Financial year end
31 December 2003
Announcement of results :
1st quarter results ended 31 March 2003
21 May 2003
2nd quarter results ended 30 June 2003
21 August 2003
3rd quarter results ended 30 September 2003
19 November 2003
4th quarter results ended 31 December 2003
26 February 2004
Audited Accounts for the financial year ended 31 December 2003
20 April 2004
Published Annual Report
4 June 2004
Annual General Meeting
28 June 2004
Puncak Niaga Holdings Berhad Annual Report 2003
14
Financial & Share Performances
FINANCIAL PERFORMANCE
99
*
00
01
02
03
99
00
01
02
99
00
01
02
3,156,949
2,856,603
2,507,973
2,107,695
03
2,688,980
Total Tangible Assets
RM '000
129,586
127,096*
124,499*
64,935*
70,468*
578,260
565,105
Profit After Taxation
RM '000
552,337
350,564
347,472
Turnover
RM '000
03
These comparatives have been restated following the change in accounting policy on deferred tax to comply with the MASB Standard 25, ’Income Taxes’.
SHARE PERFORMANCE
Share Price (RM)
KLCI
4.00
950
900
3.50
850
800
3.00
750
700
2.50
650
600
2.00
40.000m
20.000m
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2003
Monthly Highest
Closing Prices
Jan
Feb
Mar
2004
Monthly Lowest
Closing Prices
Kuala Lumpur
Composite Index (KLCI)
15
Volume of shares
traded
Puncak Niaga Holdings Berhad Annual Report 2003
Apr
The Stamina to Succeed
Puncak Niaga Holdings Berhad Annual Report 2003
16
17
Puncak Niaga Holdings Berhad Annual Report 2003
board of directors
YBhg Tan Sri Rozali Ismail, aged 47, Malaysian
Executive Chairman
YBhg Tan Sri Rozali is the founder of PNSB, the Executive Chairman and substantial shareholder of PNHB. He was appointed
to the Board of PNHB on 24 April 1997. Upon obtaining a Bachelor of Laws Degree from 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 1983.
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 family-owned company and embarked into the property development sector, with
involvement in several development projects in the Klang Valley, Kuantan and Johor. Under the banner of Puncak Alam Housing
Sdn Bhd, he developed a new township known as Bandar Baru Puncak Alam.The family-owned company also ventured into the
utility business in 1989 with the setting up of PNSB. Due to his vast experience in various fields, he was entrusted by the Selangor
State Government, via PNSB, to manage the water treatment plants for the whole of the State of Selangor Darul Ehsan and
the Federal Territory of Kuala Lumpur. PNHB was subsequently incorporated in 1997 as the holding company of PNSB and was
listed on the Main Board of Bursa Malaysia on 8 July 1997.
YBhg Tan Sri Rozali Ismail, Executive Chairman
Puncak Niaga Holdings Berhad Annual Report 2003
18
board of directors
In recognition of his outstanding contributions in championing management excellence and best practices in the
Malaysian water and wastewater industry,YBhg Tan Sri Rozali was awarded the prestigious Asia Water Management
Excellence Award 2002 – Individual Award Category, an award at Asian level, by the Regional Institute of
Environmental Technology on 26 March 2002. He was conferred a Fellowship Award by the Institute of Marketing
Malaysia (IMM) in November 2001 for his invaluable contributions to promote the growth and development of the
Malaysian property market. On 16 January 2004, he was elected Advisor to IMM. YBhg Tan Sri Rozali was also
honoured as a Top 10 Nominee for the Ernst & Young Entrepreneur Of The Year – Malaysia 2002 and Malaysia 2003
(Master Entrepreneur Category) Award in recognition of his outstanding entrepreneurship and leadership skills.
YBhg Tan Sri Rozali is the Deputy President of the Malaysian Water Association (MWA) and sits on the Board of
Universiti Utara Malaysia, a leading Malaysian university. He is an active member of various influential governmental
and non-governmental associations such as Malaysian Industry-Government Group for High Technology, Malaysian
Institute of Directors (MID), Malaysian-British Business Council, Malaysia-Indonesia Business Council, Corporate
Malaysia Roundtable, Malaysia-Russia Business Council, Commonwealth Partnership for Technology Management,
FELDA Community Social Development Committee and Yayasan Budi Penyayang Malaysia. On 17 April 2004, he
was elected President of the Malay Chamber of Commerce for the State of Selangor (2004/2008 Session).
Besides PNHB,YBhg Tan Sri Rozali is also the Executive Chairman and major shareholder of 2 other listed companies,
namely U-Wood Holdings Berhad, a property company and WWE Holdings Berhad, a leading wastewater
engineering company in Malaysia. He is the Chairman of Gabungan Wawasan Generasi Felda and also sits on the
Board of Perbadanan Urus Air Selangor Berhad (PUAS).
YBhg Tan Sri Rozali is the Chairman of PNHB’s ESOS Option Committee and is related to PNHB’s Executive
Director, Finance Division, Encik Mat Hairi Ismail (his younger brother). He is also related to Encik Shaari Ismail (his
elder brother), a substantial shareholder of the Company.
YBhg Tan Sri Rozali attended all the six Board Meetings of PNHB held in the financial year ended 31 December 2003.
19
Puncak Niaga Holdings Berhad Annual Report 2003
board of directors
Encik Ruslan Hassan, aged 48, 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
PNHB on 24 April 1997 and as the Executive Vice Chairman of PNHB on 6 April 1999.
Currently, he is the Head of PNHB’s Compliance, Internal Control and Risk Policy
Committee and a member of PNHB’s ESOS Option Committee.
Early this year, Encik Ruslan was appointed a member of the Industrial Court - Employer
Panel for the period 1 January 2004 to 31 December 2006. He is also a member of MID,
MWA and IMM.
Upon obtaining a Bachelor of Laws Degree from University of Malaya in 1981, Encik Ruslan
began his career as Legal Advisor with Esso Production Malaysia Inc. In 1985, he joined Pernas
Sime Darby Holdings Sdn Bhd as Group Legal Advisor/Company Secretary. Encik Ruslan has
6 years’ experience as an Advocate and Solicitor. In 1993, he joined Rashid Hussain Berhad
as Corporate Affairs Senior General Manager and Executive Committee Member. From
November 1995 to February 2003, Encik Ruslan sat on the Board of Rashid Hussain Berhad
and Rashid Hussain Securities Sdn Bhd and served as an Audit Committee member of both
companies. He also sits on the Board of several private companies and is an Alternate
Director to YBhg Tan Sri Rozali Ismail in PUAS.
Encik Ruslan attended all the six Board Meetings of PNHB held in the financial year ended
31 December 2003.
Encik Ruslan Hassan
Executive Vice Chairman and Executive
Director, Corporate Affairs Division
Encik Mat Hairi Ismail, aged 42, Malaysian
Executive Director, Finance Division
Appointed to the Board of PNSB on 24 May 1994 and then to the Board of PNHB on
24 April 1997, Encik Mat Hairi is 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. Prior to joining PNSB, Encik Mat Hairi worked
with the Langkawi Development Authority (LADA) (1992-1994).
Encik Mat Hairi is the Managing Director and substantial shareholder of WWE Holdings
Bhd and a Non-Executive Director and substantial shareholder of U-Wood Holdings
Berhad. Encik Mat Hairi also sits on the Board of PUAS and several private companies.
Encik Mat Hairi is related to YBhg Tan Sri Rozali Ismail (his elder brother), the Executive
Chairman and substantial shareholder of PNHB. He is also related to another substantial
shareholder of PNHB, Encik Shaari Ismail (his eldest brother). Encik Mat Hairi is a
member of MID and MWA.
Encik Mat Hairi attended five out of the six Board Meetings of PNHB held in the financial
year ended 31 December 2003.
Puncak Niaga Holdings Berhad Annual Report 2003
20
Encik Mat Hairi Ismail
Executive Director, Finance Division
board of directors
Ir Lee Miang Koi, aged 50, Malaysian
Executive Director, Project & Business Development Division
Ir Lee joined PNSB in 1995 and is currently responsible for the project and business
development of PNHB. Ir Lee was appointed as a Director of PNSB on 2 February 1999
and subsequently to the Board of PNHB on 1 September 1999. He is a member of
PNHB’s ESOS Option Committee, MWA, MID and IMM.
Ir Lee graduated as a civil engineer from University of Technology Malaysia in 1978 and
in 1989, he obtained a Masters Degree in Engineering majoring in water supply and
wastewater engineering from the Asian Institute of Technology in Bangkok. Ir Lee has 26
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, specialising in the field of water supply services. He was previously a Senior
Executive Engineer in the Design and Planning of the Water Supply Branch 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 several private companies within the PNHB Group.
Ir Lee attended all the six Board Meetings of PNHB held in the financial year ended
31 December 2003.
Ir Lee Miang Koi
Executive Director, Project & Business
Development Division
Tuan Syed Danial Syed Ariffin, aged 46, Malaysian
Executive Director, Operation Division
Tuan Syed Danial graduated in 1981 with a BSc. (Hons) Degree in Civil Engineering from
University of Aston in Birmingham, United Kingdom. He is a civil engineer by profession
and has been with the PNHB Group for 8 1/2 years since December 1995. He began
his career with PNSB as a Manager of Operation and was subsequently promoted to
Senior Manager, Assistant General Manager and General Manager of Operation. Prior to
his appointment to the Board of PNSB and PNHB on 1 March 2004 , he was the Acting
Executive Director of Operation Division (July 2003 to February 2004).
Tuan Syed Danial previously worked with the Pahang Public Works Department for 10
years, holding positions from Project Engineer (1981-1983) to District Engineer for JKR
Cameron Highlands (1983-1991) and the Selangor Water Works Department between
1991 to 1995, whereby he was the Senior Project Engineer overseeing the construction
of the Sungai Selangor Phase 1 Project. He is a member of IMM, MWA, a Registered
Engineer with the Board of Engineers, Malaysia and also sits on the Board of a private
company.
He did not attend any Board Meetings of PNHB in the financial year ended 31 December
2003 as he was only appointed to the Board of PNHB on 1 March 2004.
Tuan Syed Danial Syed Ariffin
Executive Director, Operation Division
21
Puncak Niaga Holdings Berhad Annual Report 2003
board of directors
Encik Abdul Majid Abdul Karim, aged 45, Malaysian
Independent Non-Executive Director
Encik Abdul Majid was appointed to the Board of PNHB on 24 April 1997 as an
Independent Non-Executive Director and was a past Director of PNSB for the period
1994-2001. 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 University of Glasgow, United Kingdom
in 1986. He began his career as a Technical Assistant with the Urban Development
Authority (UDA) (1982-1983), as Property Executive with Boustead Holdings Berhad
(1986-1991) and subsequently as Sales Engineer with UAC Berhad (1991-1993). Encik
Abdul Majid also sits on the Board of several private companies and is a member of MID.
Encik Abdul Majid attended five out of the six Board Meetings of PNHB held in the financial
year ended 31 December 2003.
Encik Abdul Majid Abdul Karim
Independent Non-Executive Director
YBhg Tan Sri Dato’ Hari Narayanan Govindasamy, aged 54, Malaysian
Independent Non-Executive Director
YBhg Tan Sri Dato’ Hari, a businessman by profession was appointed to the Board of
PNHB on 1 July 1999 as an Independent Non-Executive Director. He is a member of
PNHB’s Audit Committee, Remuneration Committee and Nomination Committee. He
holds a Bachelors Degree in Electrical and Electronic Engineering from University of
Northumbria, England.
YBhg Tan Sri Dato’ Hari is a member of the Institute of Engineers Malaysia, MID and a
Registered Professional Engineer with the Board of Engineers, Malaysia. He has extensive
experience in electrical and electronic engineering and has held various key positions
with several established companies as an engineer and entrepreneur.YBhg Tan Sri Dato’
Hari is an active participant of various charitable projects. He also sits on the Board of
Tenaga Nasional Berhad, SP Setia Berhad, Lembaga Lebuhraya Malaysia, Asian Institute of
Medicine, Science and Technology and several private companies.
YBhg Tan Sri Dato’ Hari attended all the six Board Meetings of PNHB held in the financial
year ended 31 December 2003.
YBhg Tan Sri Dato’ Hari
Narayanan Govindasamy
Independent Non-Executive Director
Puncak Niaga Holdings Berhad Annual Report 2003
22
board of directors
YB Tan Sri Dato’ Seri Dr Ting Chew Peh, aged 61, Malaysian
Independent Non-Executive Director
YB Tan Sri 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 University of Malaya in
1970 and obtained a Master of Science from University of London in 1972. He also holds a
Doctorate in Philosophy, which he obtained from University of Warwick in 1976.YB Tan Sri
Dato’ Seri Dr Ting is a member of MID.
YB Tan Sri Dato’ Seri Dr Ting started his career as a lecturer in the Faculty of Humanities and
Social Sciences at Universiti Kebangsaan Malaysia from 1974 to 1980 and was subsequently an
Associate Professor of the said Faculty until 1987. Between 1979 to 1986,YB Tan Sri Dato’ Seri
Dr Ting published two books entitled “Konsep Asas Sosiologi” and “Hubungan Ras dan Etnik”.
In 1987,YB Tan Sri 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 (1988-1989), Deputy Minister of the Prime
Minister’s Department (1989-1990) and Minister of Housing and Local Government (19901999). Currently,YB Tan Sri Dato’ Seri Dr Ting is the Secretary-General of Malaysian Chinese
Association (MCA). He also sits on the Board of Pan Malaysia Capital Berhad Group, Pan
Malaysia Holdings Berhad, Hua Yang Bhd, Johan Holdings Berhad and also serves as a director
of several private companies.
YB Tan Sri Dato’ Seri Dr Ting attended all the six Board Meetings of PNHB held in the financial
year ended 31 December 2003.
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
82 and 85 of the Annual Report.
YB Tan Sri Dato’ Seri
Dr Ting Chew Peh
Independent Non-Executive Director
senior management
Encik Matlasa Hitam, aged 63, Malaysian
Executive Director, Human Resource & Administration Division
Encik Matlasa Hitam joined PNSB on 1 July 2003 as Executive Director, Human Resource & Administration Division. He holds
a Bachelors Degree in Business Administration (Hons.) from Monmouth College, USA and a Masters Degree in Business
Administration (Finance) from Central Michigan University, USA. He has more than 30 years’ senior management experience
covering areas related to manufacturing, marketing, human resources, finance as well as contract and project management.
Encik Matlasa served as Managing Director/Chief Executive Officer of the Petronas Group and was Board member of both
Petronas Methanol (L) Sdn Bhd and Petronas Gas Supply (L) Sdn Bhd from 1992 to May 1996. Prior to joining PNSB, he
was the Executive Vice Chairman of WWE Holdings Berhad.
Ir Beh Men Huat, aged 48, Malaysian
Executive Director, Project & Business Development Division
Ir Beh Men Huat joined PNSB in February 1996 as Manager, Project and Business Development Division. He was promoted
four times prior to his appointment to the Board of PNSB as Executive Director, Project & Business Development Division
on 19 November 2003. He holds a BSc in Civil Engineering (Honours) Degree from University of Strathclyde, Scotland and
subsequently in 2003 obtained a Master of Finance Degree from RMIT University, Australia. He is a member of the Institution
of Engineers Malaysia, Malaysian Institute of Management (MIM), MWA and IMM. Prior to joining PNSB, Ir Beh worked with
Lembaga Letrik Negara (now known as Tenaga Nasional Berhad), Jabatan Kerja Raya and Lembaga Air Perak.
Dr Shamsul Anwar Sulaiman, aged 43, Malaysian
Executive Director, Ideal Water Resources Sdn Bhd
Dr Shamsul Anwar joined Ideal Water Resources Sdn Bhd, a wholly-owned subsidiary of PNSB, as Executive Director on 2
January 2004. He graduated from the University of Leuven, Belgium with a Bachelor in Medical Science in 1987 and a Medical
Degree (Hons) in 1990 and is a registered member with the Malaysian Medical Council. Currently, Dr Shamsul is the
Managing Director of Klinik Famili and D-Jah Corporation Sdn Bhd. He is also the Chairman of Advocate Marketing Worldwide
Sdn Bhd.
Encik Azizul Nizam Bidin, aged 36, Malaysian
Executive Director, Puncak Seri (M) Sdn Bhd
Encik Azizul Nizam Bidin was appointed Executive Director of Puncak Seri (M) Sdn Bhd , a wholly-owned subsidiary of PNHB
on 24 September 1998. He holds a Diploma in Management from MIM and a Diploma in Hotel Management and Catering
from Stamford College, Kuala Lumpur. He has vast experience and wide exposure in services relating to special projects and
government contracts. Encik Azizul actively contributes his leadership qualities in Yayasan GerakBakti Kebangsaan (YGK) and
is a committee member of The Sultan Abdul Hamid College Old Collegians Association (SAHOCA).
Puncak Niaga Holdings Berhad Annual Report 2003
24
senior management
Ir Loh Kit Mun, aged 50, Malaysian
Senior General Manager, SYABAS Project
Ir Loh joined PNSB in April 1998 as General Manager and was promoted to Senior General Manager on 1 March
2002. He graduated from University of Malaya with a Bachelor of Civil Engineering Degree in 1978. Ir Loh has 26
years of working experience covering 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 GIS, management of engineering projects and operation of water
treatment plants. Prior to joining PNSB, he was the General Manager (Infrastructure) of KL Linear City Sdn Bhd.
Madam Tan Bee Lian, aged 38, Malaysian
Senior General Manager, Secretarial/Group Company Secretary
Madam Tan joined PNSB as Company Secretary in November 1994 and was promoted twice before assuming her
current position as Senior General Manager, Secretarial on 1 January 2003. She is a Fellow of both the Malaysian
Association of the Institute of Chartered Secretaries and Administrators (MAICSA) and the Institute of Company
Secretaries Malaysia (ICSM). Madam Tan has more than 16 years experience in company secretarial practice. Prior to
joining PNSB, she worked with Project Lebuhraya Utara-Selatan Berhad (PLUS) and was the Assistant Company
Secretary of Metramac Corporation Sdn Bhd/Metacorp Berhad. Madam Tan is the winner of the ROC-MAICSA
Company Secretary Award 2001 for the Listed Company Category.
Dr Abd Rahim Awang Kechik, aged 52, Malaysian
General Manager, Executive Chairman’s Office
Dr Abd Rahim joined PNSB in July 2003 and currently heads the Strategic Resource Centre. Dr Abd Rahim
graduated with a Doctorate in Philosophy (Ph.D) in Business Management in 2000 and a Bachelor of Arts (Hons)
in Education 1981, both from Universiti Sains Malaysia and a Master of Business Administration in 1991 from
University of Wales College of Cardiff, United Kingdom. He also obtained a Diploma in Public Management from the
National Institute of Public Administration (INTAN) in 1983 and a Diploma in Business Administration from
University of Birmingham, United Kingdom in 1987. Prior to joining PNSB, he was an Administrative and Diplomatic
Officer with the Government since 1983 and has held various positions, namely in the Ministry of Finance, Prime
Minister’s Office, Ministry of International Trade and Industry (MITI), State Economic Planning Unit of the State of
Negeri Sembilan, Ministry of Agriculture, Ministry of Housing and Local Government and National Economic Action
Council (NEAC).
Encik Ahmad Fauzi Yahya, aged 43, Malaysian
General Manager, Human Resources & Administration
Encik Ahmad Fauzi joined PNSB in January 2002. He graduated from Eastern Michigan University, USA, with a
Bachelor of Business Administration degree majoring in Human Resource Management. Encik Ahmad Fauzi has 20
years of working experience in various disciplines such as human resources, public relations, marketing and sales. His
previous employment was with ExxonMobil Malaysia.
25
Puncak Niaga Holdings Berhad Annual Report 2003
senior management
Madam Chan Siew Meei, aged 47, Malaysian
General Manager, Legal
Madam Chan joined PNSB in May 1998. She obtained a Bachelor of Laws Degree from University of Malaya in 1981. During
the course of her 23-year career, Madam Chan has served as an Advocate and Solicitor, lecturer, company secretary and legal
adviser to two public listed companies. Her employment portfolio covers diverse activities ranging from timber and plantation
sectors to engineering, property and manufacturing.
Madam Loh Lim Chai Kheng, aged 43, Malaysian
General Manager, Executive Chairman’s Office
Madam Loh Lim joined PNSB in November 2000. She commenced her articleship with PricewaterhouseCoopers in 1981
and is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of
Accountants (MIA). In 2003, she obtained her Masters Degree in Business Administration from University of Strathclyde,
Scotland. Madam Loh Lim has more than 21 years of working experience in the areas of audit, accounting, corporate finance,
company secretarial and operations.
Mr Mohanan Narayanan, aged 38, Malaysian
General Manager, Corporate Communications
Mr Mohanan joined PNSB in February 2004. He graduated from University of London with a Bachelor of Laws Degree in
1988. He also holds a post-graduate Diploma in Public Relations. Mr Mohanan has 20 years working experience covering
areas in journalism, public relations, advertising, marketing communications and brand management. Prior to joining PNSB,
Mr Mohanan was a Public Relations Consultant for several multi national clients and corporations in the US, Europe and AsiaPacific region.
Mr Ng Wah Tar, aged 40, Malaysian
General Manager, Finance & Accounts
Mr Ng joined PNSB in March 2000. He commenced his articleship with an accounting firm in 1984 and is a member of
MICPA and MIA. Mr Ng has 20 years of working experience in various areas covering auditing, accounting and finance. Prior
to joining PNSB, he was with the Management Services Division overseeing the finance and accounting functions of United
Engineers (M) Berhad (UEM).
Encik Othman Ismail, aged 46, Malaysian
General Manager, Executive Chairman’s Office
Encik Othman joined PNSB in April 2004. He graduated from University of Wales, UK in 1999 with a Masters Degree in
Business Administration. Encik Othman has 13 years of working experience covering areas in marketing, sales and
administration. Prior to joining PNSB, Encik Othman worked with Edaran Otomobil Nasional Berhad and was the Operations
Director of Gold Bridge Construction and Engineering Berhad.
Puncak Niaga Holdings Berhad Annual Report 2003
26
senior management
Encik Ramlan Abdul Rahman, aged 38, Malaysian
General Manager, SYABAS Project
Encik Ramlan joined PNSB in April 2004. A Chartered Accountant by profession, Encik Ramlan is a member of MIA,
and the Institute of Chartered Accountants New Zealand. He holds a Masters Degree in Business Administration
from Ohio University, USA. He has 17 years working experience in the field of accounting and finance. Prior to joining
PNSB, Encik Ramlan worked with Malaysian Mining Corporation (MMC) Group for 13 years, holding various finance
positions in the MMC Group.
Mr Seng Pay, aged 53, Malaysian
General Manager, Sabah Project
Mr Seng Pay joined PNSB in January 2004 and is assigned to oversee and manage the Group’s Telibong Water Supply
Project in Sabah. He graduated with a Diploma in Mechanical Engineering from the Singapore Polytechnic in 1976
and a Diploma in Management from MIM in 1988. He obtained a Masters Degree in Business Administration from
Herriot Watt University, United Kingdom in 1995. Mr Seng Pay has over 26 years’ experience in the management
and implementation of water treatment plants. Prior to joining PNSB, he worked with various organisations with his
last held position being Technical Services Manager with Ondeo Services (Malaysia) Sdn Bhd.
Encik Sonari Solor, aged 47, Malaysian
General Manager, Internal Audit
Encik Sonari joined PNSB on 10 September 1998. He holds a professional qualification from the Chartered Institute
of Management Accountants (UK) and is a member of MIA and a fellow member of the Chartered Association of
Certified Accountants (UK). Encik Sonari has more than 16 years’ experience in auditing and accountancy in public
listed companies dealing in property development, manufacturing, timber and consultancy services. Prior to joining
PNSB, Encik Sonari served as Group Divisional Chief, Internal and Management Audit of Land & General Berhad.
Ir Tan Hui Kuan, aged 50, Malaysian
General Manager, Project & Business Development
Ir Tan joined PNSB in August 2003. He graduated with a Bachelor of Civil Engineering (Hons) Degree from
University of Malaya in 1979. He has 23 years of working experience in Jabatan Kerja Raya Malaysia and Lembaga
Air Perak in the management of production, distribution, maintenance and consumer services of a District
Waterworks Department, geotechnical investigation, maintenance of military camps, project management of
military buildings and infrastructures. Prior to joining PNSB, Ir Tan was the Assistant Director for Military Works in
Jabatan Kerja Raya Malaysia.
Encik Usman Ali Mustaffa, aged 43, Malaysian
General Manager, SYABAS Project
Encik Usman is a fellow member of the Chartered Association of Certified Accountants (UK) and is also a member
of MIA. He joined PNSB in March 2001. During his 20 years of working experience, Encik Usman worked 5 years
in auditing, 10 years in accounting and 5 years in corporate finance. Encik Usman was the Regional Financial
Controller of an American multi national company prior to joining PNSB.
27
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Achievements
QCC REGIONAL CONVENTION 2003 (CENTRAL) - SILVER AWARD
Wangsa Maju Water Treatment Plant For Saga Emas Circle
QCC REGIONAL CONVENTION 2003 (CENTRAL) - SILVER AWARD
SSP2 Water Treatment Plant for Operations TAG Team Circle
QCC REGIONAL CONVENTION 2003 (CENTRAL) - SILVER AWARD
SSP2 Water Treatment Plant for Mega Pro Circle
OSH AWARD 2002 - GOLD MERIT AWARD
SSP2 Water Treatment Plant
OSH AWARD 2002 - GOLD AWARD
Wangsa Maju Water Treatment Plant
INSTITUTE OF PUBLIC RELATIONS MALAYSIA
IPRM CRYSTAL AWARD 2002
Environmental Relations Category for the River Rescue Brigade Programme
INSTITUTE OF PUBLIC RELATIONS MALAYSIA
IPRM CRYSTAL AWARD 2002
Voluntary Relations Category for the Educational Outreach Programme
KLSE CORPORATE AWARDS 2003
SECTORAL AWARD - MAIN BOARD
Infrastructure Project Companies Category
ERNST & YOUNG ENTREPRENEUR OF THE
YEAR - MALAYSIA 2002 AND 2003
YBhg Tan Sri Rozali Ismail, a Top 10 Nominee
under the Master Entrepreneur Category
Puncak Niaga Holdings Berhad Annual Report 2003
28
Corporate Achievements
ACCA MALAYSIA AWARDS FOR
ENVIRONMENTAL REPORTING 2003
Certificate of Appreciation
NATIONAL ANNUAL CORPORATE
REPORT AWARDS (NACRA) 2003
Certificate of Merit
KPMG SHAREHOLDER VALUE AWARDS 2002
Finalist in the Infrastructure Sector
ASIAMONEY CORPORATE GOVERNANCE POLL 2002
Voted Best Corporate Governance Standards in the Utilities
Sector in Malaysia
QUALITY MANAGEMENT SYSTEM CERTIFICATION
ISO 9001:2000 (Upgraded from ISO 9000:1994)
Wangsa Maju Water Treatment Plant
QUALITY MANAGEMENT SYSTEM CERTIFICATION
ISO 9001:2000 (Upgraded from ISO 9000:1994)
SSP2 Water Treatment Plant
ENVIRONMENTAL MANAGEMENT SYSTEM CERTIFICATION
ISO 14001:1996
SSP2 Water Treatment Plant
OCCUPATIONAL HEALTH & SAFETY
MANAGEMENT SYSTEM CERTIFICATION
OHSAS 18001:1999
SSP2 Water Treatment Plant
29
Puncak Niaga Holdings Berhad Annual Report 2003
Making a Splash
Puncak Niaga Holdings Berhad Annual Report 2003
30
31
Puncak Niaga Holdings Berhad Annual Report 2003
Executive Chairman Speaks
Dear Shareholders,
Under the Privatisation, the Selangor State Government
On behalf of the Board of Directors of Puncak Niaga
or its representative will hold a 30% equity interest in
Holdings Berhad (PNHB), I am pleased to present the
SYABAS with the balance 70% to be held by PNHB, while
Annual Report of the Group and the Company for the
the Federal Government will hold one Golden Share. As
financial year ended 31 December 2003.
the resolution of the receivables is an impor tant
component of the Privatisation, its implementation will
FINANCIAL REVIEW
help to resolve gradually the receivables owing by the
Selangor State Government to the three major water
For the financial year ended 31 December 2003, the Group's
treatment operators including our wholly-owned
revenue increased by 2.3% from RM565.1 million recorded
subsidiary, Puncak Niaga (M) Sdn Bhd (PNSB).
in the preceding financial year to RM578.3 million. The
increase is mainly due to higher production from the 26
Negotiations are currently underway to finalise the terms
water treatment plants under the PCCA. However, as a
and conditions of the Concession Agreement for the
result of higher operating cost and lower other operating
Privatisation. Meetings held with the Selangor State
income, profit before taxation for the financial year ended 31
Government and the Federal Government thus far have
December 2003 only increased marginally from RM180.1
led to agreement on a number of substantial contractual,
million in the preceding financial year to RM183.4 million.
financial and technical issues. Our Company will make the
necessar y
announcement
once
negotiations
are
The Board of Directors will not be recommending payment
completed and the Concession Agreement is executed
of any dividend to the shareholders of the Company for the
with the Selangor State Government and the Federal
financial year ended 31 December 2003 in view that the
Government.
annual debt service cover ratio pursuant to its long term
borrowings is less than 1.7 times.
In the meantime, SYABAS has proceeded with detailed
planning for implementing the necessary works once the
The Group’s receivables remained high, standing at RM1.14
Privatisation commences. The technical Master Plan has
billion as at 31 December 2003. However, the Board is
been drawn up for the capital and operating expenditure
confident that the receivables would be reduced substantially
works. The capital works programmes include the
by this year contingent on the finalisation of the privatisation
development and upgrading of distribution system, asset
of the water supply services in the State of Selangor and the
replacement and reducing non-revenue water losses.The
Federal Territories of Kuala Lumpur and Putrajaya to Syarikat
operating expenditure programme will bring about an
Bekalan Air Selangor Sdn Bhd (SYABAS), wherein PNHB will
improvement in the operations and maintenance of the
hold a 70% equity interest.This reduction in the receivables
entire distribution system, thereby increasing efficiency
will improve the cashflow of the Group substantially.
and enhancing the level of services to the consumers.
Our Company already has projects in its books that will
MATERIAL CORPORATE DEVELOPMENTS
keep us busy over the next few years. The Company
entered into a turnkey sub-contract agreement with Imej
On 24 September 2003, the Company received a letter
Warisan Sdn Bhd on 21 October 2003, under which we
from the Economic Planning Unit, Prime Minister’s
will plan, design, construct, supervise, test and commission
Department informing that the Federal Government has
the works for “Projek Pembinaan Loji/Kolam Takungan
approved in principle, the award of the privatisation of water
dan Paip Utama Telibong dan Telipok, Sabah”. The project
supply services in the State of Selangor and the Federal
with a contract sum of RM313.5 million commenced on
Territories of Kuala Lumpur and Putrajaya to SYABAS
21 October 2003 and is expected to complete by
(the Privatisation).
March 2006.
Puncak Niaga Holdings Berhad Annual Report 2003
32
Executive Chairman Speaks
Under the PNHB-LANCO-KHEC JV, a consortium
INDUSTRY OUTLOOK
formed comprising our Company, Lanco Infratech
Ltd and Kris Heavy Engineering & Construction Sdn
The Eighth Malaysia Plan (8MP), which covers the years
Bhd wherein our Company holds a 70% stake, we are
2001 to 2005 has allocated RM3.9 billion towards the
currently undertaking a water supply project for the
development of the country’s water resources, an
Chennai Metropolitan Water Supply and Sewerage
increase of 43% over the amount provided under the
Board, Tamil Nadu, India valued at approximately
previous Malaysia Plan. As demand for water for
RM234.0 million, in November 2002 (Chennai
domestic and industrial use is expected to increase by
Project). The project is targeted for completion in
5.4% per annum during the 8MP period and the national
May 2004.
water supply coverage is expected to increase to 95%,
the Government’s attention will be focused on long-
On 12 August 2003, our wholly-owned subsidiary,
term water resources planning and development.
PNSB was served with a writ of summon by C.G.E
Utilities (M) Sdn Bhd (CGE) for the sum of
The Government aims to make the management of
RM84,466,976.08 for works carried out at the 26
water resources more efficient, so that the nation will
water treatment plants under the PCCA, late interest
have an adequate supply of safe water, by continuing
charges as at 31 December 2002 and other costs.
with the process of corporatising or privatising state
On 23 October 2003, PNSB and CGE reached an
water authorities. As we grow and develop our
agreement to amicably resolve the dispute through a
business, we are mindful that we need to play our
Deed of Settlement which entails the bringing
part towards the proper management of the nation’s
forward of the expiry date of the Operation &
water resources. As elaborated in our Operations
Maintenance Sub-Contract between PNSB and CGE
(OMSC) from 31 December 2020 to 31 December
2004 and the withdrawal of all legal cases, as well as
the payment of all outstanding sums to CGE in
accordance with a schedule of payment.
We are confident that we will be able to operate and
manage the 26 water treatment plants which we will
takeover from CGE on 1 January 2005 since PNSB
has the technical and management expertise built
over the years. Our Management is in the midst of
finalising a blueprint action plan to assume the
operation and management responsibilities of the 26
water treatment plants from CGE. This will ensure
that the water treatment plants continue to operate
smoothly without any disruption or cause any
inconvenience to the consumers after PNSB’s
takeover on 1 January 2005. Post takeover, we are
confident that the overall operating expenditure of
the 26 water treatment plants could be reduced.
YBhg Tan Sri Rozali Ismail, Executive Chairman
33
Puncak Niaga Holdings Berhad Annual Report 2003
Executive Chairman Speaks
Review and Health, Safety & Environmental Report, we are
To ensure the supply of clean water and reduce water
continually working towards ensuring this through our
losses, there is need to spend about RM2.5 billion and this
commitment
environmental
includes the replacement of 6,000 km of old asbestos
management at our water treatment plants and dams. Our
cement water pipes that were laid more than 30 years ago.
research and development efforts as well as our investment
It also needs to further develop the State’s water
in information technology support our drive towards
infrastructure as water resources become fully utilised.
management of water resource and improved water quality.
Options being explored by the Government include the
to
quality, safety
and
proposed implementation of inter-state and inter-basin
We have through our Sungai Selangor Phase 2 (SSP2)
water transfers, such as the Pahang-Selangor water transfer
Water Treatment Plant made a headway by being the first
project. With our proven track record, our Group is in a
water treatment plant in the country to implement an
good position to offer its expertise and resources to the
Integrated Management System (IMS) comprising the
Government in implementing these projects.
Quality
Management
System
ISO
9001:2000,
Environmental Management System ISO 14001:1996 and
Our Group should also benefit from the Federal
Safety Management System OHSAS 18001:1999. On a
Government’s implementation of the National Water
broader national level, there are major issues relating to
Resources Master Plan.With a 50-year horizon from 2000 to
water that need to be resolved. Like all other natural
2050 and a total cost estimate of RM52 billion, the Master
resources, water is a finite resource even though
Plan provides more opportunity for more privatisation of
renewable to a certain extent. The public has to be
water treatment, distribution and management projects. The
educated on the critical importance of conserving and
implementation of the Master Plan should proceed smoothly
managing our water resources. As a responsible
as the Federal Government is in the process of assuming the
corporate citizen, we continue to put in place various
control of water management from the State Governments.
programmes to increase such understanding. It is also
Being at the forefront of the water industry, we would expect
essential that our natural environment is protected to
to be amongst the preferred companies to be given the
preserve the water catchment areas against pollution. We
responsibility of managing other privatised water projects.
need to address this through our liaisons with the Federal
and the State Government authorities.
In addition to the proposed interstate raw water transfer to
alleviate or overcome the water shortage, the Government
BUSINESS PROSPECTS
will need to look into the possibility of utilising downstream
of surface water source for industrial and non-drinking
PNHB Group’s business prospects continue to be positive,
purposes, identifying potential groundwater sources and to
in line with the projection that Malaysia’s growth in real
improve water management by reducing non-revenue water
Gross Domestic Product (GDP) for the year 2004 will be
and increasing public awareness on water conservation.
5.5% to 6%. Domestic economic activities are expected to
Hence, there is tremendous opportunity for participation by
strengthen, with the Government’s emphasis on reducing
our Group in the coming years in the areas of water supply
reliance on external demand, while domestic demand will
engineering works and services .
increase at a rate of 4.7%. Services and manufacturing will
continue to lead GDP growth, with greater focus on the
The outlook for our Group is therefore promising and we
services sector as Malaysia remains on track to attaining
are optimistic about our future growth and prospects. Our
developed economy status. However, the agricultural
strategic initiatives are in place so that we can capitalise on
sector will not be sidelined and will in fact be revitalised as
developments in the domestic and regional water industry.
the third engine of growth for the nation. The better
Going forward, as long as we continue to discharge our
economic prospects will translate into increased per capital
responsibilities efficiently and promote quality service to
income as well as purchasing power. For the water industry,
our customers, we will continue to be at the forefront of
it will mean higher consumption levels.
our industry.
Puncak Niaga Holdings Berhad Annual Report 2003
34
Executive Chairman Speaks
CORPORATE ACHIEVEMENTS
I also wish to take this opportunity to thank our valued
customers, end-users and stakeholders for their
Year 2003 was yet another year of acknowledgements
confidence in us and to our associates and business
and accolades, where our Group continued to receive
partners, for the value created from our joint ventures,
several prestigious awards and certifications. Our
as well as to our suppliers and financiers for their
achievements during the year under review have been
continued support in our endeavours.
laid out on pages 28 and 29 of the Annual Report.
Last but not least, our special thanks goes to the many
We are thankful to the various awarding bodies for
government authorities and agencies, as well as non-
recognising our hard work and efforts.This will indeed
governmental organisations, who have contributed to
motivate and spur our enthusiasm in the participation
our success.
of high level corporate competitions towards further
raising our overall standards of excellence in the
Together, we shall be able to meet the challenges for the
corporate conduct, management and operations of
financial year 2004.
the Group.
ACKNOWLEDGEMENTS
The Group maintained its position at the forefront of
the water industry through the dedication and
Tan Sri Rozali Ismail
commitment of its employees. On behalf of the Board
Executive Chairman
of Directors, I wish to extend my gratitude to all our
employees for their contributions to the Group’s
performance and growth for the financial year 2003.
20 April 2004
PNHB was a finalist at KPMG Shareholder Value Awards 2002 on 7 August 2003
35
Puncak Niaga Holdings Berhad Annual Report 2003
operations review
SUNGAI SELANGOR PHASE 2 (SSP2) WATER TREATMENT PLANT
The SSP2 Water Treatment Plant recorded a total production of 327.6 million cubic metres of treated water in 2003, an
increase of 1.8% from the previous year.The average daily production for the year under review was 897.5 million litres (2002:
881.7 million litres). As in previous years, there were no violations in treated water quality notwithstanding the adoption of
the more stringent Revised National Standard for Drinking Water Quality 2000 in January 2003.
Issues relating to quality, safety and the
environment have always been amongst
PNSB’s
top
priorities. The
Company’s
commitment to achieve best practices in these
areas is reflected in its initiative to implement
the Integrated Management System (IMS) at
the SSP2 Water Treatment Plant. Certification
for the first of the IMS systems, the Quality
Management System ISO 9001:2000, was
awarded by Lloyd’s Register Quality Assurance
(LRQA)
SSP2 Water Treatment Plant Administration Building
on
15
October
2003.
The new system replaced the ISO 9002:1994
effective 15 December 2003. The second management system, the Environmental Management System ISO 14001:1996,
was initiated in July 2002 and accredited by LRQA on 31 October 2003.
The third stage of the IMS certification, the Safety Management System OHSAS 18001:1999 was obtained in January
2004. With the receipt of this certification, the SSP2 Water Treatment Plant has become the first water treatment plant
in the country to have a fully implemented management system that integrates three critical aspects, i.e. quality, safety and
the environment.
WANGSA MAJU WATER TREATMENT PLANT
Treated water production at the Wangsa Maju Water Treatment Plant during the year was 17.15 million cubic metres, an
increase of 3.0% from the previous year, while average daily water production stabilised to 47 million litres (2002: 45.6
million litres).There were also no violations in the treated water quality, despite the implementation of the more stringent
Revised National Standard for Drinking Water Quality 2000. With 100% plant availability throughout the year, the Wangsa
Maju Water Treatment Plant continued to maintain its record of zero shutdown hours, a demonstration of the plant
employees’ skills and capabilities.
The Wangsa Maju Water Treatment Plant undertook the upgrading of its Quality Management System from version 1994
to version 2000 concurrently with the SSP2 Water Treatment Plant and was awarded LRQA’s ISO 9001:2000 on 15
October 2003.
WATER TREATMENT PLANTS UNDER THE PRIVATISATION CUM CONCESSION AGREEMENT (PCCA)
In 2003, the 26 water treatment plants (WTPs) under the PCCA achieved a total production of 358.3 million cubic metres
of treated water, an increase of 4.10% from 2002. The total production of treated water in 2003 was 13.6% above the
designated quantity.
Puncak Niaga Holdings Berhad Annual Report 2003
36
operations review
Refurbishment works at six WTPs during the year have also contributed to an improvement in the WTPs’ overall
performance, despite 3,928.5 hours of shutdown during the year 2003 (2002: 4,166.4 hours).The main contributor
to the shutdowns, comprising 59.2% of the total shutdown hours, was raw water violations attributed mostly from
partial water treatment plants. The scheduled and unscheduled maintenance works and electrical power
interruptions each accounted for 17.6% and 8.0% of the total shutdown hours. The remaining shutdown hours in
2003 were due to pipe bursts or leaks, mechanical and electrical breakdowns as well as rehabilitation and upgrading
works. However, close coordination with the Government’s Department of Environment, PUAS and other authorities
have helped to expedite repair works and further mitigate shutdown hours at the WTPs.
The Management uses the plant assessment programme to monitor the WTPs’ production capability and
maintenance performance. Reports from a total of 312 audits together with the independent electrical competence
engineers’ reports and the monthly mechanical and electrical corrective maintenance reports, are also used as a basis
to assess the WTPs’ performance.
DAM OPERATIONS
PNSB continues to be responsible for the operation and maintenance of Sungai Langat, Klang Gates and Tasik
Subang Dams.
In line with the Company’s emphasis on safety, PNSB conducted three major visual safety inspections in 2003. The
inspections, which covered all major structures of the dams, were to detect and investigate any dam safety deficiencies
and to recommend appropriate corrective actions.
Rainfall levels in the dams’ catchment areas are regularly monitored to assess the possibility of critical storage
drawdown at any of the dams. In 2003, total rainfall in the catchment area of the Sungai Langat Dam was 2,280.9
mm, the lowest recorded since 1997 and a decrease of 17.6% when compared to the ten-year average (1993-2003)
of 2,767.0 mm/year. At the Klang Gates Dam, total rainfall in the catchment area for the year under review was
2,577.3 mm, a decrease of 12.4% when compared to the ten-year average of 2,943.0 mm/year. However, the
Meteorological Services Department has forecasted that the annual rainfall in these two catchment areas for 2004
would remain at or above the average level.
At the catchment area of the Tasik Subang Dam, a total rainfall of 2,679.4 mm was recorded for 2003, an increase
of 23.2% when compared to the nine-year average (1995-2003) of 2,175.0 mm/year. The prevailing dam reservoir
levels and an analysis of past inflows indicate that a storage crisis is not expected in the coming year.
Prudence and good practices are
exercised to ensure that the optimal
amount of raw water is released to the
water treatment plants. The three dams
are equipped with the Dam Operations
Control Curves to help dam operators
in meeting the demand from the water
treatment plants for raw water release
besides conservation of dam water to
prolong storage. The respective water
treatment plants’ raw water demand is
not expected to change in 2004.
Sungai Langat Dam
37
Puncak Niaga Holdings Berhad Annual Report 2003
operations review
INDIA WATER PROJECT
In November 2002, PNHB was part of a consortium that was awarded a water supply project, namely the Chennai Water
Supply Augmentation Project 1 – Package III, by the Chennai Metropolitan Water Supply and Sewerage Board, Tamil Nadu,
India. The project, valued at RM234.0 million,
involves the supply and laying of 114.0 km of
water supply pipes, construction of a break
pressure tank and seven new bridges for
pipes river crossing, rehabilitation of seven
existing bridges, as well as operation and
maintenance for five years. As at endDecember 2003, 80% of the pipes have been
laid and the construction phase of the works
is targeted to complete by May 2004, as
scheduled.
Pipe laying - India Water Project
SABAH WATER PROJECT
On 21 October 2003, PNHB entered into a turnkey sub-contract agreement with Imej Warisan Sdn Bhd, whereby PNHB
will undertake the planning, design, construction, supervision, testing and commissioning of works for “Projek Pembinaan
Loji/Kolam Takungan dan Paip Utama Telibong dan Telipok, Sabah”. The project with a contract sum of RM313.5 million
commenced on 21 October 2003 and is expected to complete on 16 March 2006. It entails the construction of a new
intake and raw water pumping station, water treatment plant, off-river storage, three balancing/service reservoirs as well as
45 km of pipelines. When completed, the new water treatment plant and its associated works will cater for water supply to
the Kota Kinabalu Industrial Park and the proposed development projects in Karambunai Peninsular, Pantai Dalit, Sepangar
Bay and Jalan Sulaiman.
RESEARCH AND DEVELOPMENT (R&D)
Much of PNSB’s R&D effort is focused on improving operating
costs and increasing operational efficiency of the water treatment
plants. In 2003, PNSB expended close to RM4.7 million on R&D
works. The main R&D works entails major refurbishments and
upgrading of all the water treatment plants. Other R&D projects
includes the trial run of a new polymer conducted at the SSP2
Water Treatment Plant which proved that the new polymer has
superior process coagulation properties, which can bring about a
potential cost saving of RM1.1 million a year and the study on a
specialised treatment system to eliminate iron and manganese
without adding chemicals to the water treatment process.
SSP2 Water Treatment Plant Laboratory
INFORMATION TECHNOLOGY (IT)
Puncak Niaga recognises the importance of IT in increasing productivity and driving its business services forward.To continue
projecting the desired image as a frontrunner in its industry sector, the Group has revamped its website with a new format
that incorporates the latest technology for more efficient information retrieval by visitors to its website. The Puncak Niaga
website now incorporates photographs and virtual tours of its water treatment plants.The site also provides information on
the Group’s services, projects and achievements, as well as its corporate statements and policies.
Puncak Niaga Holdings Berhad Annual Report 2003
38
operations review
For increased efficiency in office administration, an in-house Vehicle Management System was developed to manage
the administration of the Group’s vehicles. The system tracks the movement of vehicles and monitors the
maintenance and repair costs.
Another system-related project initiated during the year under review was the development of a model for an
Integrated Water Utilities System.The project is being driven by PNHB’s impending takeover of the water distribution
system in the State of Selangor and Federal Territories of Kuala Lumpur and Putrajaya through Syarikat Bekalan Air
Selangor Sdn Bhd (SYABAS). The model will integrate a number of systems relating to customer information and
billing, operations and maintenance, geographical information, supervisory control and data acquisition, and enterprise
resource planning.
The Group’s anti-virus software was upgraded to the latest version to protect against systems damage and data
corruption to the Group’s IT system.
CRISIS MANAGEMENT
Given PNSB’s critical role in supplying water to the country’s hub, it is essential that the Company is able to respond
quickly and effectively to any form of emergency, crisis or disaster, with minimal disruption to its business operations
and without damaging its corporate image. The Puncak Niaga Group has in place the Group Crisis Management
Plan and Water Treatment Plant Emergency Response Plan since 2001.The Crisis Management Committee conducts
evaluation, case studies and simulation exercises on a regular basis to assess the employees’ level of readiness and
response capabilities to a crisis.
OCCUPATIONAL SAFETY AND HEALTH
Given the nature of work at the water treatment plants and dams, the safety and health of employees is of
paramount importance to the PNHB Group. To oversee and organise safety and health programmes and activities,
a Corporate Safety and Health Committee was established, supported by similar committees at various levels of the
Group’s operations.
Safety-related programmes and
activities are regularly conducted at
all locations, which include drills,
handling of fire-fighting equipment
and providing first aid. Since August
2003,
safety
information
was
disseminated to employees through
ar ticles in PNSB’s quar terly inhouse newsletter, KITA.
Corporate Safety Committee Meeting in progress
39
Puncak Niaga Holdings Berhad Annual Report 2003
operations review
HUMAN RESOURCE MANAGEMENT
Puncak Niaga Group delivers an essential
service to its customers. This service is
performed
conscientiously
with
high
standards by a competent, committed and
motivated workforce. The employees are
compensated competitively at market rates.
EMPLOYEES BENEFIT
Employees are well taken care of through a
range
of
benefits
that
includes
comprehensive insurance coverage, interest-
Motivational Talk organised by the Sports Club
free computer, education and personal loans.
Medical benefits are provided to employees as well as their dependants and cover outpatient treatment, hospitalisation,
dental treatment and maternity expenses. During the year, 11 employees retired from the Group and the retirement
benefit paid to them amounted to approximately RM120,000. Funeral expenses ranging from RM1,000 to RM1,200 are
also given out to the employee’s immediate family in the event of demise of an employee. In total, the Group expended
close to RM1.16 million on employees benefits for the financial year 2003.
The implementation of the five-year Employees Share Option Scheme since year 2002 is also another benefit in
recognition of long serving employees.
TRAINING AND DEVELOPMENT
With the Group’s emphasis on knowledge and skills development, employees are regularly sent for in-house or external
training and development programmes. In addition, employees are encouraged to set up Quality Control Circles
(QCCs) which have proven to be an effective means for employees to develop their leadership, communication and
problem-solving skills. The Group also benefits in terms of cost-saving measures adopted as a result of the QCCs,
without compromising on quality and productivity. For the financial year 2003, the Group spent RM30,838 on QCCrelated activities.
PNSB’s QCC programme for the period 2001-2002 concluded with the QCC Prize-Giving Ceremony on 12 April
2003 and the projects initiated by all 15 registered circles resulted in total cost savings of RM1.4 million, with the biggest
cost-saving benefit of RM932,794 achieved by Operation Tag Team. The team’s project involved a study on optimising
the usage of polymer in water treatment process at the SSP2 Water Treatment Plant.
As part of its drive towards establishing higher standards of quality in its operations, PNSB supports efforts by the
National Productivity Corporation (NPC) to promote QCCs.The Company participated in the QCC Mini and Regional
Conventions held on 1 April 2003 and 9-10 June 2003 respectively. PNSB’s circles won one Gold Award and two Silver
Awards at the QCC Mini Convention 2003 and three Silver Awards at the QCC Regional Convention 2003 (Central).
Puncak Niaga Holdings Berhad Annual Report 2003
40
operations review
EMPLOYEE UNIONS
PNSB’s Executive Union is currently in negotiation with the Company on its first Collective Agreement. The
negotiations are expected to conclude by August 2004.
The first Collective Agreement with PNSB’s Non-Executive Union expired on 31 December 2003 and the
Management is in the midst of negotiations on the second Collective Agreement with the Non-Executive Union.
SEXUAL HARASSMENT
Since the establishment of the Group’s Sexual Harassment Policy in 2001, no cases of sexual harassment has
been reported in the Group. During the year, the Protective Services Department conducted a session on
’Overcoming Crime Against Women’ for the female employees through a Saturday Encounter Session.
SECURITY SERVICES
Given that the water treatment plants and dams under PNSB’s management are the nation’s key strategic assets,
PNSB maintains its own security personnel to protect these installations. In addition, an electronic security
system incorporating digital video surveillance is also set up at the Wangsa Maju Water Treatment Plant and
intake. Plans are underway to install the electronic security system at the SSP2 Water Treatment Plant and the
other water treatment plants.
Our security personnel are required to undergo vigorous training and bi-yearly physical tests on their level of
fitness and readiness to ensure that they are able to discharge their duties effectively and efficiently.
EMPLOYEE WELFARE
Foster Parent Programme
The Foster Parent Programme involving the Management and the water treatment plant employee was initiated
as a platform to facilitate close relationship and two-way communication between employees at the Company’s
Headquarters and the water treatment plants.The programme has provided a means by which employees at the
water treatment plants may channel their problems and difficulties to Management, who in turn has gained a
better understanding of the roles and responsibilities of these employees.
For the year 2003, a number of activities were carried out under the Foster Parent Programme. “GotongRoyong” community projects involving the beautification of landscapes were organised at a total cost of about
RM52,000. A children’s playground costing approximately RM17,000 was constructed at the Bernam River
Headworks Water Treatment Plant. During the festive seasons, employees at the water treatment plants were
given gifts, with a total value of approximately RM23,000 through their respective ‘foster parents’ as a gesture of
appreciation from the Management.
41
Puncak Niaga Holdings Berhad Annual Report 2003
operations review
Staff Quarters
The Quarters Committee looks into the housing needs and welfare of employees at the water treatment plants, as well as
to administer the quarters’ facilities and amenities. During the year under review, the Committee continued to update its
inventory on all quarters at the water treatment plants and its occupants, and processed a total of 24 applications for new
quarters or transfers.The Committee also settled issues relating to utility bills and vacating of units due to ineligibility arising
from retirement, etc.
Sports Club
Spor ts competitions and tournaments
organised by the Kelab Sukan dan Kebajikan
Puncak Niaga (Sports Club) during the year
under review included bowling, badminton,
volleyball, fishing and other in-door games.
The Sports Club Religious Bureau celebrated
events such as Israk and Mikraj and organised
functions for the recitation of Yaasin. During
the Ramadhan month, the Bureau held
breaking of fast and Tarawih functions at a
Fishing Competition at Green Paradise Fishing Pond,
Templer Park, Rawang
number of water treatment plants.
The Women’s Bureau organised two major programmes in 2003, i.e. a fishing competition and a self-defence
programme, during which a donation of RM10,000 to the Association of Muslim Single Mothers, Federal
Territory/Selangor was made.The donation was presented by the patron of the Women’s Bureau,YBhg Puan Sri Faridah
Idris, the wife of the Executive Chairman.
Self-defence programme organised by the Women’s Bureau for all female employees
Puncak Niaga Holdings Berhad Annual Report 2003
42
operations review
SHARING OUR VISION
The year 2003 proved to be yet another successful year for the Puncak Niaga Group as it continues to be at the
forefront of the water industry in Malaysia.
Given the Group’s stature within its industry and the wider business community, the Executive Chairman,YBhg Tan
Sri Rozali Ismail, is often invited to share Puncak Niaga’s vision and experiences, as well as his perspectives on business
in general, at conferences. During the year under review, papers were presented by the Executive Chairman or his
representatives at the following events:
•
‘An Update On The Privatisation Of The Water Industry – Making The Most Of Investment Opportunities In
Malaysia’, Malaysia Infrastructure Conference, 17-18 February 2003;
•
‘The Impact Of GATS On Local Water Corporation, Civil Society Discussion On Commodification And
•
‘Future Direction Of Water Management In Malaysia’,World Environment Day – Sustainable Water Management
Privatisation Of Water Resources In The WTO Environment, 8 March 2003;
And The Media, 5 June 2003;
•
‘Privatisation Of Water Supply Projects’, Course On Managing Privatisation, 17 July 2003; and
•
“Meningkatkan Profesionalisme Melayu Melalui Pendidikan”, Konvensyen Pendidikan Melayu 2003, 11 Oktober 2003.
View of the Klang Gates Dam
43
Puncak Niaga Holdings Berhad Annual Report 2003
CORPORATE SOCIAL RESPONSIBILITY
It has always been Puncak Niaga’s mission to be a good corporate citizen driven by a social conscience that strives to make
a difference in the lives of those who are less fortunate.
CONTRIBUTING TO SOCIETY
Annually, Puncak Niaga sets aside a budget to support worthy causes and in 2003, a total of RM4.36 million was contributed
to various religious and educational foundations, youth, sports and entrepreneurial associations and other charities. Some of
the contributions made during the year under review were:
•
Three computers to Sekolah Kebangsaan Sungai Merab Luar, Dengkil, Selangor;
•
RM10,000 to the Association of Muslim Single Mothers, Federal Territory/Selangor;
•
RM100,000 to Tuanku Abdul Rahman University Fund for a new campus in Perak;
•
RM100,000 to a charity programme, co-organised by Puncak Niaga and seven other companies operating in the State
•
of Selangor, which raised a total of RM280,000 for the under privileged communities in the state;
RM500,000 sponsorship to the ‘Malaysia Batik Crafted for the World’, a programme initiated by YAB Datin Seri Endon
Mahmood to promote Malaysian batik;
•
RM200,000 to the building fund of the Asian Institute of Medical, Science and Technology, Perak.
A charity programme, co-organised by Puncak Niaga and seven other companies operating in the State of Selangor, which
was officiated by the DYMM Sultan of Selangor.
ASSISTING THE COMMUNITY
Being the leading water specialist company in the country, we have an obligation to increase public awareness on the
importance of protecting and conserving our natural resources and the environment. As children and young people can act
as catalysts to bring about a change in attitude towards the environment in general and river pollution in particular, we believe
that one of the best ways of creating this awareness is through educational programmes for the younger generation. Some
of the mainstream educational programmes organised by Puncak Niaga are:
•
Educational
Outreach
Programme:
Educates the young on the importance of river
preservation to ensure continuous supply of clean
water as well as to foster a closer rapport between
Puncak Niaga and the community within our areas
of operations.Ten outreach programmes were held
in 2003 where Senior Management of the
Company would go to the respective primary
schools to give talks on river and environment
preservation.
Educational Outreach Programme No. 32
Puncak Niaga Holdings Berhad Annual Report 2003
44
CORPORATE SOCIAL RESPONSIBILITY
•
River Rescue Brigade: There are currently 1,285 members from 56 participating primary schools in the State of
Selangor and the Federal Territory of Kuala Lumpur. In 2003, two programmes were organised to educate the school
children on the importance of potable water production, the effects of river pollution and how to counter its threat.
•
Public Visits to Water Treatment Plants (WTPs): We arranged 23 visits by various groups to our WTPs in 2003.
Visitors were educated on the water treatment processes and the problems inherent in treating polluted water.
•
To support the efforts of Malaysia World Wildlife Fund in increasing public awareness on the importance of
environmental conservation, we gave a RM10,000 sponsorship for the canoe race held at Lake Titiwangsa, Kuala Lumpur
on 6 April 2003. Our employees also participated in the race and emerged as champion.
SUPPORTING NATIONAL AND STATE EVENTS
In the spirit of “Malaysia Boleh”, Puncak Niaga supports various events organised by the Federal and State Governments to
mark special occasions.The major events that we participated in during the year under review were:
•
Showcase Exhibition in conjunction with the Non-Aligned Movement Conference (18-26 February);
•
Maal Hijrah 1424 celebration at Bukit Jalil Stadium officiated by our King (4 March);
•
National Water Day, during which we held an Open Day for the public to visit us at the Wangsa Maju Water Treatment
Plant (5-6 April);
•
National Maulidur Rasul celebration at Stadium Putra, Bukit Jalil, where 100 of our employees participated in the
procession carrying a banner with the title “Bersama Hayati Keindahan Islam” (14 May);
•
National Labour Day celebration at Stadium Putra, Bukit Jalil (17 May);
•
Launching ceremony of ‘Jalur Gemilang’ in conjunction with the National Day celebration at Dataran Shah Alam
(16 August);
•
National Day parade at Dataran Shah Alam where 40 of our employees participated in the march pass (30 August).
CARING FOR OUR EMPLOYEES
We believe that employees are the backbone contributing to the success of any organisation. At Puncak Niaga, we recognise
that our employees are part of that belief and it is our duty to motivate and care for their general well-being. Therefore, we
have put in place, an Employees Welfare Programme to help achieve this objective, such as:
•
Foster Parent Programme to create closer relationship and two-way communication between employees at
Headquarters and the water treatment plants;
•
Staff Quarters Committee to look into the housing needs and welfare of employees at the water treatment plants,
as well as to administer the quarters’ facilities and amenities;
•
Puncak Niaga’s Sports Club to organise events and functions throughout the year, providing employees with
opportunities for leisure and recreational activities;
•
Women’s Bureau to look after the welfare of our female employees.
RECEIVING RECOGNITION
On 14 June, 2003 Puncak Niaga was given due recognition for its corporate social responsibility contributions by the
Institute of Public Relations Malaysia.Two Crystal Awards was bestowed on the Company in recognition of its River Rescue
Brigade under the Environmental Relations Category and the Educational Outreach Programme under the Voluntary
Relations Category.
45
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Calendar of Events
16 JANUARY 2003
YBhg Tan Sri Rozali Ismail, Executive Chairman of Puncak
Niaga a Top 10 Nominee for the Ernst & Young
Entrepreneur of the Year - Malaysia 2002 (Master
Enterpreneur Category).
4 MARCH 2003
Puncak Niaga participated in the Ma’al Hijrah
celebration at Stadium Bukit Jalil.
8 MARCH 2003
Ir Lee Miang Koi presented a paper on ‘The Impact Of
GATS On Local Water Corporation’ at the Civil Society
Discussion On Commodification And Privatisation Of
Water Resources In The WTO Environment.
17 MARCH 2003
Puncak Niaga donated 3 computers to Sekolah
Kebangsaan Sungai Merab Luar, Dengkil, Selangor in
conjunction with the Educational Outreach Programme
YBhg Tan Sri Rozali Ismail receiving the Ernst & Young
Enterpreneur of the Year - Malaysia 2002 - Top 10 Nominee
under the Master Enterpreneur Category, 16 January 2003
No. 30.
1 APRIL 2003
3 QCC teams from Puncak Niaga participated in the
13 FEBRUARY 2003
QCC Mini Convention 2003 organised by the National
In conjunction with Hari Raya Aidil Adha, Puncak Niaga’s
Productivity Corporation. The teams bagged a Gold
Sports Club organised a Qurban Programme at the
Award and 2 Silver Awards at the Convention.
Sungai Langat Water Treatment Plant.
5 – 6 APRIL 2003
17 – 18 FEBRUARY 2003
In conjunction with the National Water Day, Puncak
YBhg Tan Sri Rozali presented a paper on ‘An Update
Niaga organised an Open Day at Wangsa Maju Water
On The Privatisation Of Water Industry - Making The
Treatment Plant for the public.
Most Of Investment Opportunities In Malaysia’ at the
Malaysia Infrastructure Conference.
6 APRIL 2003
Puncak Niaga emerged as champion in the ‘Race For
18 – 26 FEBRUARY 2003
Survival’, a canoe race organised by WWF Malaysia to
Puncak Niaga participated in the NAM Showcase
promote public awareness on environmental conservation.
Malaysia Exhibition held during the Non-Aligned
Movement Conference from 18 – 26 February 2003.
20 FEBRUARY 2003
Puncak Niaga received the Asiamoney Corporate
Governance Poll 2002 Award for ‘Best Corporate
Governance Standards in the Utilities Sector in Malaysia’
organised by the Asiamoney Magazine at The Ritz
Carlton Millennia Hotel, Singapore.
Puncak Niaga team in action during the ‘Race for Survival’
organised by WWF Malaysia, 6 April 2003
Puncak Niaga Holdings Berhad Annual Report 2003
46
Corporate Calendar of Events
12 APRIL 2003
Prize-giving ceremony for the winners of the QCC
2001/2002 Project was held at Puncak Niaga’s
Headquarters.
14 MAY 2003
Puncak Niaga participated in the march pass for the
National Maulidur Rasul celebration at Stadium Putra,
Bukit Jalil.
17 MAY 2003
Puncak Niaga participated in the National Labour
Day 2003 celebration officiated by the former Prime
Minister, YABhg Tun Dr Mahathir Mohamed at Putra
Stadium, Bukit Jalil.
QCC 2001/2002 Project Prize-giving Ceremony,
12 April 2003
12 APRIL 2003
In conjunction with Secretaries Week, Puncak Niaga
hosted a hi-tea celebration at The Regent Hotel, Kuala
Lumpur for its secretaries.
22 MAY 2003
The Sports Club of Puncak Niaga held a Maulidur
Rasul celebration at the Bukit Nanas Water
Treatment Plant.
24 MAY 2003
Friendly bowling match between RTM and Puncak
Niaga at Mid-Valley Megamall.
5 JUNE 2003
Ir Lee Miang Koi presented a paper entitled ‘Future
Direction Of Water Management In Malaysia’ at the
World Environmental Day - Sustainable Water
Management And The Media organised by the
Malaysian Centre for Environmental Communicators.
Secretaries Week at Regent Hotel, 12 April 2003
28 APRIL 2003
Puncak Niaga donated RM100,000 to the Tuanku Abdul
Rahman University Fund through MCA’s Huaren
Education Foundation.
World Environmental Day - Sustainable Water Management
And The Media, 5 June 2003
9-10 JUNE 2003
3 QCC teams from Puncak Niaga participated in the
QCC Regional Convention 2003 (Central) and all
3 teams won Silver Awards.
Donation to the Tuanku Abdul Rahman University Fund,
28 April 2003
47
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Calendar of Events
14 JUNE 2003
Puncak Niaga won 2 Crystal Awards from the Institute
of Public Relations Malaysia (IPRM), one under the
Environmental Relations Category for the River
Rescue Brigade Programme and the other under the
Voluntary Relations Category for the Educational
Outreach Programme.
25 JUNE 2003
PNHB’s 6th Annual General Meeting at the Kuala
Lumpur Golf & Country Club.
PNHB’s 6th Annual General Meeting, 25 June 2003
27 JUNE 2003
In conjunction with Sekolah Menengah Jalan Kebun’s
Curriculum Carnival, Puncak Niaga presented a
‘Waterbox’ demonstration to educate the students on
the various water treatment processes.
IPRM’s Crystal Awards Ceremony, 14 June 2003
18 JUNE 2003
Working visit by YBhg Tan Sri Rozali Ismail, Executive
Chairman and YB Dato’ Yap Pian Hon, Wakil Parlimen
Serdang to the Cheras Mile 11 Water Treatment Plant
to view the progress of construction of the weir.
28 JUNE 2003
Friendly bowling match between TV3 and Puncak
Niaga at Mid-Valley Megamall.
Bowling Match with TV3, 28 June 2003
Working visit to Cheras Mile 11 Water Treatment Plant, 18
June 2003
21 JUNE 2003
9th Annual General Meeting of the Sports Club of
Puncak Niaga held at Stadium Shah Alam.
3 JULY 2003
Working visit by Selangor State EXCO member to
Cheras Mile 11 Water Treatment Plant to view the
progress of the construction of the weir, as an alternative
source of raw water.
15 JULY 2003
Factory visit by CHG Plywood Sdn Bhd, a timber
logging company to the Cheras Mile 11 Water
Treatment Plant to discuss on steps to prevent
contamination in Sungai Cheras.
Puncak Niaga Holdings Berhad Annual Report 2003
48
Corporate Calendar of Events
17 JULY 2003
11 SEPTEMBER 2003
YBhg Tan Sri Rozali Ismail presented a paper entitled
Puncak Niaga launched an Environmental Awareness
‘Privatisation Of Water Supply Projects’ at the
Campaign amongst factory owners at Sungai Langat
Managing Privatisation Course.
and Sungai Cheras water catchment areas to
educate them on the impact of contamination to
7 AUGUST 2003
the environment.
PNHB was shortlisted as a finalist for the KPMG
Shareholder Value Awards 2002.
16 AUGUST 2003
Puncak Niaga participated in the “Jalur Gemilang”
launching ceremony held in conjunction with the
National Day celebration at Selangor.
23 AUGUST 2003
Environmental Awareness Campaign, 11 September 2003
Visit by National Productivity Corporation
(NPC) officials to SSP2 Water Treatment Plant,
Bukit Badong.
13 SEPTEMBER 2003
Emergency drill at the SSP2 Water Treatment Plant
to assess the level of readiness, capability and
effectiveness of the staff in handling emergency
situations.
Visit by NPC officials to SSP2 Water Treatment Plant,
23 August 2003
30 AUGUST 2003
Puncak Niaga participated in the National Day 2003
Emergency drill, 13 September 2003
midnight march pass at Dataran Shah Alam, Selangor.
22 SEPTEMBER 2003
Puncak Niaga donated RM200,000 to the Asian
Institute of Medical, Science and Technology
building fund.
46th National Day celebration, 30 August 2003
49
Puncak Niaga Holdings Berhad Annual Report 2003
Corporate Calendar of Events
23 SEPTEMBER 2003
5-6 OCTOBER 2003
Puncak Niaga participated in the ‘Towards Efficient
Puncak Niaga participated in the ‘Water Management
Water And Sewerage Management’ forum organised by
And Sanitation Technology Exhibition’ organised in
AFFIN-UOB Securities Sdn Bhd.
conjunction with World Habitat Day 2003.
‘Towards Efficient Water And Sewerage Management’ forum,
23 September 2003
Water Management And Sanitation Technology Exhibition,
5-6 October 2003
26 SEPTEMBER 2003
PNHB participated in the JP Morgan Malaysia Access
11 OCTOBER 2003
Day at JP Morgan Securities Ltd Office, in Singapore.
Puncak Niaga’s Women’s Bureau together with the
Women Sports & Fitness Foundation Malaysia jointly
3 OCTOBER 2003
conducted a self-defense programme for all female
Puncak Niaga won the Gold Merit Award and Gold
employees. Puncak Niaga also donated RM10,000 to the
Award in the OSH Award 2002 competition organised
Association of Muslim Single Mothers, Federal
by the Malaysian Society for Occupational Safety and
Territory/Selangor.
Health (MSOSH).
OSH Award 2002 Ceremony, 3 October 2003
Cheque presentation to the Association of Muslim Single
Mothers, Federal Territory/Selangor by YBhg Puan Sri Faridah
Idris, wife of the Executive Chairman, 11 October 2003
Puncak Niaga Holdings Berhad Annual Report 2003
50
Corporate Calendar of Events
11 OCTOBER 2003
Puncak Niaga participated in the “Program GotongRoyong Perdana”, organised by the Kajang Municipal
Council in collaboration with Lembaga Urus Air
Selangor at Pekan Batu 14, Hulu Langat.
4 DECEMBER 2003
PNHB received a Certificate of Merit under the
Construction & Infrastructure Project Companies
Category at the ‘National Annual Corporate Report
Awards’ (NACRA) 2003 dinner.
Puncak Niaga donated RM500 to Sekolah Kebangsaan Tun
Abdul Aziz Majid at the “Program Gotong-Royong
Perdana”, 11 October 2003
National Annual Corporate Report Awards (NACRA) 2003,
4 December 2003
11 OCTOBER 2003
YBhg Tan Sri Rozali Ismail presented a paper entitled
“Meningkatkan Profesionalisme Melayu Melalui
Pendidikan” at the Konvensyen Pendidikan Melayu 2003.
16 DECEMBER 2003
Puncak Niaga participated in the Prime Minister’s
Hibiscus Award 2002/2003.
27 DECEMBER 2003
Puncak Niaga contributed RM500,000 to the Yayasan
Budi Penyayang Malaysia in support of the Malaysian
batik industry at the ‘Malaysia Batik Crafted For The
World’ officiated by the Prime Minister’s wife,YAB Datin
Seri Endon Mahmood.
18 NOVEMBER 2003
Puncak Niaga donated a sum of RM100,000 to the
under privileged at the ”Majlis Amal Warga Korporat
Prihatin Selangor” at Kompleks Muhibah, Kota
Damansara. The event was officiated by the DYMM
Sultan Selangor, Sultan Sharafuddin Idris Ibni Almarhum
Sultan Salahuddin Abdul Aziz Shah Al Haj.
“Majlis Amal Warga
18 November 2003
Korporat
Prihatin
Selangor”,
51
Puncak Niaga Holdings Berhad Annual Report 2003
Newspaper clippings
Puncak Niaga Holdings Berhad Annual Report 2003
52
Newspaper clippings
53
Puncak Niaga Holdings Berhad Annual Report 2003
Shaping A Better Tomorrow
Puncak Niaga Holdings Berhad Annual Report 2003
54
55
Puncak Niaga Holdings Berhad Annual Report 2003
Statement on Corporate Governance
The Board of Puncak Niaga has always viewed corporate governance as pivotal to the success of the Group’s business and
has adopted corporate governance principles even before the inception of the Malaysian Code on Corporate Governance
(the Code) in July 2001.The Board remains unreservedly committed to applying and ensuring that the Group complies with
the principles and best practices of corporate governance as set out in the Code.
Puncak Niaga’s sincere and relentless pursuit of exemplary corporate conduct has time and again been given due recognition
by the regulatory authorities as evidenced by it being awarded the inaugural KLSE Corporate Excellence Award 2000 for the
Main Board and KLSE Corporate Sectoral Award 2000 for the Main Board Infrastructure Project Companies category in year
2001 and more recently on 13 February 2004, the KLSE Corporate Sectoral Award 2003 for the Main Board Infrastructure
Project Companies category as a repeat recipient.
During the year 2003, a Board Charter was formulated and adopted by the Board as a guidance on how business is to be
conducted by the Company in line with international best practices and standards of good corporate governance. For the
same purpose, the Group continues to refine and revamp its financial objectives, goals, policies and procedures, controls and
risk management framework to meet the evolving corporate environment.
The Board of Puncak Niaga is therefore pleased to report on how the Group has applied the principles of the Code and
best practices of corporate governance as set out in the Code during the year 2003.
BOARD OF DIRECTORS
(A) THE BOARD
With the adoption of the Board Charter, the Board members, whether acting in their individual capacities or as a whole,
have the common objective of ensuring that the Vision and Mission of the Company as set on page 9 of the Annual
Report are achieved.
The Board members are aware of their fiduciary duties and responsibilities and the various legislations and regulations
affecting their conduct.They take cognizance that they are expected to act in a professional manner and as such, take full
responsibility for the performance of the Company and of the Group.
The roles of the Executive Chairman and Executive Vice Chairman are separate, each with responsibilities clearly divided
between them to ensure a balance of power and authority so that no one individual has unfettered powers of decisionmaking. Their respective roles together with the roles of the Executive Directors and Independent Non-Executive
Directors are spelt out in the Board Charter.
YB Tan Sri Dato’ Seri Dr Ting Chew Peh is the Company’s Senior Independent Non-Executive Director, to whom
shareholders’ concerns may be conveyed.
(B) BOARD COMPOSITION
There was no change in the Board’s composition during the year 2003. However on 1 March 2004, upon the
recommendation of the Nomination Committee, Tuan Syed Danial Syed Ariffin was appointed to the Board of both
PNHB and PNSB as Executive Director, Operation.
Puncak Niaga Holdings Berhad Annual Report 2003
56
Statement on Corporate Governance
Tuan Syed Danial is a Civil Engineer by profession and has been with the Group for 8 1/2 years, overseeing the
management and operation of water treatment plants. His appointment complements the effectiveness of the
Board in discharging its duties and responsibilities.
With the appointment of Tuan Syed Danial, the Board now comprises eight members. Five are Executive
Directors and three are Independent Non-Executive Directors.Though the number of Executive Directors has
increased from four to five, the Board balance of at least 1/3 Independent Non-Executive Directors is still
maintained.
All Board members are individuals of caliber and credibility. They are professionals from diverse disciplines,
qualifications and experiences in law, engineering and accounting. Together, they play an instrumental role to the
Group’s continued growth and success.Their profiles are set out on pages 18 to 23 of the Annual Report.
(C) BOARD MEETINGS
In year 2003, the Board met six times at the Board Room on 26th Floor, Suite 2601-2606, Plaza See Hoy Chan,
Jalan Raja Chulan, 50200 Kuala Lumpur. The meetings were held as follows:
Day
Tuesday
Thursday
Wednesday
Wednesday
Wednesday
Wednesday
Date
25 February 2003
13 March 2003
23 April 2003
21 May 2003
20 August 2003
19 November 2003
Time
3.00
3.00
3.30
3.30
12.00
11.30
p.m.
p.m.
p.m.
p.m.
noon
a.m.
The details of the respective Directors’ attendances for the above meetings are as follows:
Name of Director
Tan Sri Rozali Ismail
Designation
Executive Chairman
No. of meetings attended
6
%
100
Ruslan Hassan
Executive Vice Chairman /
Executive Director, Corporate Affairs
6
100
Mat Hairi Ismail
Executive Director, Finance
5
83
Lee Miang Koi
Executive Director, Project
& Business Development
6
100
Abdul Majid Abdul Karim
Independent Non-Executive
Director
5
83
Tan Sri Dato’ Hari
Narayanan Govindasamy
Independent Non-Executive
Director
6
100
Tan Sri Dato’ Seri
Dr Ting Chew Peh
Independent Non-Executive
Director
6
100
The day-to-day administration, management and operation have been delegated to the Board of PNSB which
met eight times in year 2003, to deliberate and approve on annual budgets, capital investments, project and
business development, internal controls and changes in the Group’s policies and procedures.
57
Puncak Niaga Holdings Berhad Annual Report 2003
Statement on Corporate Governance
(D) SUPPLY OF INFORMATION AND ACCESS TO ADVICE
Except under exceptional circumstances, Board members are given at least seven days notice before any Board Meeting
is held and the Board papers are circulated to the Board members at least two working days prior to the date of the
Meeting. Where necessary, Company personnel will be called upon by the Board during the Board Meetings to present
and to clarify their papers. Board members are expected to participate fully, frankly and constructively in all Board
deliberations and bring the benefit of their particular knowledge, skills and abilities to the Board. Where issues involve
conflicts of interest, the interested Director abstains from discussing or voting on the matter.
All Directors have full and unlimited access to the advice and services of the Group Company Secretary.The Directors
are regularly updated by the Group Company Secretary on the latest developments in the legislations and regulatory
framework affecting the Group and they are all familiar and aware of their duties and responsibilities as well as the
implementation of good corporate governance and compliance practices in the Group.
(E) APPOINTMENT OF DIRECTORS
All appointments to and removals from the Board are approved by the Board upon the recommendation of the
Nomination Committee. The Board, through the Nomination Committee, annually reviews the required mix of skills,
experience and other qualities of the Directors to ensure that the Board is functioning effectively and efficiently.
(F) RE-ELECTION OF DIRECTORS
Article 98 and Article 99 of the Company’s Articles of Association provide that 1/3 of the Directors shall retire from
office at each Annual General Meeting and all Directors shall retire from office at least once every three years but may
offer themselves for re-election.
Article 103 of the Company’s Articles of Association provides that any person appointed as an additional Director shall
hold office only until the next following ordinary General Meeting of the Company and shall be eligible for re-election.
Upon the recommendation of the Nomination Committee, the following Directors shall retire at the Seventh Annual
General Meeting of the Company and had offered themselves for re-election:
(i) Ir Lee Miang Koi, retiring pursuant to Article 98;
(ii) En Abdul Majid Abdul Karim, retiring pursuant to Article 98;
(iii) YB Tan Sri Dato’ Seri Dr Ting Chew Peh, retiring pursuant to Article 99; and
(iv) Tuan Syed Danial Syed Ariffin, retiring pursuant to Article 103.
Puncak Niaga Holdings Berhad Annual Report 2003
58
Statement on Corporate Governance
(G) BOARD COMMITTEES
The Board has delegated specific responsibilities to the Board Committees whose functions and authorities are spelt out
in their respective terms of reference to assist the Board in the efficient and effective discharge of its duties. A brief
summary of the various Board Committees as well as their composition are as follows:
Name of Director
Audit
Committee
Remuneration
Committee
Nomination
Committee
Compliance,
Internal
Control and
Risk Policy
Committee
TAN SRI ROZALI ISMAIL,
Executive Chairman
Chairman
RUSLAN HASSAN,
Executive Vice Chairman /
Executive Director, Corporate Affairs
MAT HAIRI ISMAIL
Executive Director, Finance
ESOS
Option
Committee
Member
Member
Member
Member
Member
LEE MIANG KOI,
Executive Director,
Project & Business Development
Member
ABDUL MAJID ABDUL KARIM
Independent Non-Executive Director
Chairman
Member
Member
TAN SRI DATO’ SERI
DR TING CHEW PEH
Independent Non-Executive Director
Member
Chairman
Chairman
TAN SRI DATO’ HARI
NARAYANAN GOVINDASAMY
Independent Non-Executive Director
Member
Member
Member
Chairman
The Board Committees exercise transparency and full disclosure in their proceedings. Where applicable, issues are
reported to the Board with the appropriate recommendations by the Board Committees.
DIRECTORS’ REMUNERATION
(A) LEVEL AND MAKE UP OF REMUNERATION
The Company has a formal procedure to determine the remuneration of each member of the Board which is the
responsibility of the Remuneration Committee to recommend. Remuneration of the Executive Directors are
performance-linked while remuneration paid to the Non-Executive Directors reflect their contributions and the time
spent attending to the Company’s affairs.
(B) PROCEDURE
The Remuneration Committee deliberates and recommends to the Board, the remuneration packages of the Executive
Directors.The Board, as a whole, determines the remuneration of the Non-Executive Directors.The respective Directors
abstain from discussing and voting on their remuneration at the Board Meetings.
59
Puncak Niaga Holdings Berhad Annual Report 2003
Statement on Corporate Governance
(C) DISCLOSURE OF DIRECTORS’ REMUNERATION
The details of the remuneration of each Director of the Company during the financial year ended 31 December 2003
are as follows:
Name of Director
Fees
Salaries
Bonuses
Benefitsin-kind
Allowance Employees
Provident
Fund
Total
TAN SRI ROZALI ISMAIL
-
-
-
-
-
-
-
RUSLAN HASSAN
-
-
-
-
-
-
-
MAT HAIRI ISMAIL
-
-
-
-
-
-
-
LEE MIANG KOI
-
-
-
-
-
-
-
ABDUL MAJID ABDUL KARIM
-
-
-
-
53,000
-
53,000
TAN SRI DATO’ HARI
NARAYANAN GOVINDASAMY
-
-
-
-
31,000
-
31,000
TAN SRI DATO’ SERI DR TING
CHEW PEH
-
-
-
-
34,000
-
34,000
TOTAL
-
-
-
-
118,000
-
118,000
The remuneration packages of the Directors of the Group for the financial year ended 31 December 2003 with
categorisation into the appropriate components are as follows:
Remuneration Packages
Executive Directors
(RM)
FEES
SALARIES
BONUSES
Independent
Non-Executive Directors
(RM)
-
-
2,732,560
-
-
-
BENEFITS-IN-KIND
113,550
-
ALLOWANCE
742,127
118,000
EMPLOYEES PROVIDENT FUND
428,280
-
4,016,517
118,000
TOTAL
Details of the Directors’ Remuneration at Company Level and Group Level for the financial year ended 31 December
2003, in successive bands of RM50,000 are tabulated as follows:
Company Level
Group Level
No. of Executive
No. of Non-Executive
No of
Directors
Directors
Directors
RM1 to RM50,000
2
1*
RM50,001 to RM100,000
1
RM150,001 to RM200,000
1
RM200,001 to RM250,000
1*
RM600,001 to RM650,000
1
RM800,001 to RM850,000
1
RM850,001 to RM900,000
1
RM1,200,001 to RM1,250,000
1
* Directors who were appointed to the Group during the financial year ended 31 December 2003.
Range of Remuneration per annum
Puncak Niaga Holdings Berhad Annual Report 2003
60
Statement on Corporate Governance
(D) DIRECTORS’ SHARE OPTION
As at 31 December 2003, a total of 963,000 options were exercised by the Executive Directors under the
Company’s ESOS.
(E) DIRECTORS’ TRAINING
In year 2003, the Directors attended various seminars and courses to keep themselves abreast with the latest
developments in the legislations and for purposes of fulfilling the Continuing Educational Programme under Bursa
Malaysia.
SHAREHOLDERS
The Group maintains effective communication with its shareholders and stakeholders through one to one or group
dialogues, participation in investor conferences organised by local and foreign institutional houses, e-mails, phone calls,
Company General Meetings and other Company events.
The Company’s Investor Relations Policy & Report is set out on pages 75 to 78 of the Annual Report.
ACCOUNTABILITY AND AUDIT
(A) FINANCIAL REPORTING
The Board takes responsibility in ensuring 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 as required under Section 169(15) of
the Companies Act, 1965. Efforts are made to ensure that the financial statements comply with the provisions
of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.
The Board also ensures the accurate and timely release to Bursa Malaysia of the Group’s quarterly and annual
financial results. The half yearly results are also published in the local daily newspapers for the benefit of the
investment community.
(B) STATEMENT OF DIRECTORS’ RESPONSIBILITY FOR PREPARATION OF FINANCIAL STATEMENTS
The financial statements of the Group and Company have been drawn up in accordance with the applicable approved
accounting standards in Malaysia and the provisions of the Companies Act, 1965. The Directors are responsible in
ensuring that the financial statements 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 accounting standards have been followed; and
•
prepared financial statements on the going concern basis as the Directors have a reasonable expectation,
having made appropriate enquiries, that the Group and the Company have adequate resources to continue
in operational existence for the foreseeable future.
The Directors have the responsibility for ensuring that the Company keep accounting records which discloses
with reasonable accuracy, the financial position of the Group and Company and which enables them to ensure
that financial statements comply with the Companies Act, 1965.
The Board has the overall responsibility to take all steps as are reasonably open to them to safeguard the assets
of the Group to prevent and detect frauds and other irregularities.
61
Puncak Niaga Holdings Berhad Annual Report 2003
Statement on Corporate Governance
(C) RELATIONSHIP WITH AUDITORS
The Company maintains a professional relationship with its external auditors. A report by the Audit Committee together
with its Terms of Reference is set out on pages 66 to 71 of the Annual Report.
(D) INTERNAL CONTROL
The Statement on Internal Control is set out on pages 64 and 65 of the Annual Report.
OTHER COMPLIANCE INFORMATION
(A) SHARE-BUY BACKS
The Company did not purchase any of its own shares during the financial year ended 31 December 2003.
(B) OPTIONS,WARRANTS OR CONVERTIBLE SECURITIES
During the financial year ended 31 December 2003, a total of 11,888,000 options had been exercised and none of the
warrant holders converted their warrants into ordinary shares.
(C) AMERICAN DEPOSITORY RECEIPT (ADR)/GLOBAL DEPOSITORY RECEIPT (GDR)
The Company does not sponsor any ADR or GDR programme.
(D) SANCTIONS AND/OR PENALTIES
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by
the relevant regulatory bodies during the financial year ended 31 December 2003.
(E) NON-AUDIT FEES
During the financial year ended 31 December 2003, the Group paid the following non-audit fees to the external auditors:
(i)
Tax advisory and compliance work - RM28,812
(ii) Review of non-financial reporting frame work - RM6,000
(iii) Other non-audit related service - RM2,000
(F) VARIATIONS IN RESULTS
The Company’s/Group’s audited results for the financial year ended 31 December 2003 did not vary from the unaudited
results which was announced to Bursa Malaysia on 26 February 2004.
(G) PROFIT GUARANTEE
The Company does not provide profit guarantee to any parties.
(H) REVALUATION POLICY ON LANDED PROPERTIES
The Group does not adopt a policy of regular revaluation of its property.
(I) RECURRENT RELATED PARTY TRANSACTION
The Company did not enter into any recurrent related party transaction which requires the shareholders’ mandate
during the financial year ended 31 December 2003.
Puncak Niaga Holdings Berhad Annual Report 2003
62
Statement on Corporate Governance
(J) MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
During the financial year ended 31 December 2003, neither the Company nor its subsidiaries entered into any
material contracts or loan contracts with the Directors and substantial shareholders of the Company. However,
material contracts involving Directors and substantial shareholders which are still subsisting at the end of the
financial year ended 31 December 2003 are as follows:
Date
Nature of Contract
Parties
Consideration/
Mode of Satisfaction
Relationship with
Director/Substantial
Shareholder
8 October
1994
Operation & Maintenance
Agreement – For Mandai
Sari Sdn Bhd (Mandai Sari)
to undertake the operation
and maintenance of the 27
water treatment plants
under the Privatisation
Cum Concession
Agreement (PCCA).
Puncak Niaga (M)
Sdn Bhd (PNSB)
and Mandai Sari.
PNSB to pay Mandai Sari a fixed
monthly fee of RM41,667 as
well as for treated water
produced and supplied, which is
measured in accordance with
the provisions of the PCCA.
Mandai Sari is a subsidiary
of Central Plus (M) Sdn
Bhd (CP), whereby CP is a
substantial shareholder of
Puncak Niaga Holdings
Berhad (PNHB).
8 October
1994
Refurbishment Works
Agreement – For C.G.E.
Utilities (M) Sdn Bhd
(CGE) to undertake the
refurbishment works for
the 27 water treatment
plants under the PCCA.
PNSB, Mandai Sari
and CGE.
Contract sum of RM150 million
which is being paid progressively
to CGE based on physical
progress and subject to
verification by PUAS.
Mandai Sari is a subsidiary
of CP, whereby CP is a
substantial shareholder of
PNHB.
31 May
1995
Operation & Maintenance
Sub-Contract – For Mandai
Sari to sub-contract the
above Operation &
Maintenance Agreement
to CGE.
PNSB, Mandai
Sari, CGE and
Compagnie
General Des Eaux
(now known as
Veolia Water).
Mandai Sari to pay CGE for
treated water produced and
supplied, which is measured in
accordance with the provisions
of the agreement.
Mandai Sari is a subsidiary
of CP, whereby CP is a
substantial shareholder of
PNHB.
YBhg Tan Sri
Rozali Bin Ismail
(TSRI), Mat Hairi
Bin Ismail (MHI),
CP and PNHB.
PNHB to acquire 70% equity
interest in SYABAS for a total
purchase price of
RM38,009,840 upon SYABAS
executing the Concession
Agreement for the privatisation
of the water supply services in
the State of Selangor, Federal
Territories of Kuala Lumpur and
Putrajaya.
TSRI is the Executive
Chairman and substantial
shareholder of PNHB
through his 50% equity
interest in CP. MHI is an
Executive Director of
PNHB and the younger
brother of TSRI.
25 September Agreement For The Sale
And Purchase Of Shares In
2003
Syarikat Bekalan Air
Selangor Sdn Bhd
(SYABAS).
STATEMENT OF GOING CONCERN
Upon making due and reasonable enquiry into the affairs of the Group, the Board firmly believes that the Group
shall continue to operate as a going concern business in the foreseeable future.
63
Puncak Niaga Holdings Berhad Annual Report 2003
Statement On Internal Control
INTRODUCTION
The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to
safeguard shareholders’ investments and the Group’s assets. The Bursa Malaysia Listing Requirements requires Directors of
listed companies to include a statement in their annual reports on the state of their internal controls.
RESPONSIBILITY
The Board of Puncak Niaga 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.
The Group has in place ongoing processes for identifying, evaluating, monitoring and managing significant risks faced by the
Group during the year. The Management is responsible for the identification and evaluation of significant risks applicable to
their respective areas of business and to formulate suitable internal controls. This process is reviewed by the Board via a
specific Board Committee, namely the Compliance, Internal Control and Risk Policy Committee, which dedicates its time at
periodic intervals throughout the year for discussion on this matter.
RISK MANAGEMENT FRAMEWORK
Risk Management is firmly embedded in the Group’s management system and is every employee’s responsibility. In October
2001, the Board formally approved a systematic risk management structure and process for the Group. Since then, the
structure and process have been fully implemented by the Management and employees of the Puncak Niaga Group. The
Group’s risk management framework is explained in detail in the Risk Management Policy & Report set out on pages 72 to
74 of the Annual Report.
INTERNAL CONTROL SYSTEM
The key elements of the Group’s internal control system and assurance processes, inter alia, encompass the following:
•
All major decisions require the final approval of the 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 Divisions and Departments have clearly documented Procedures Manuals incorporating control procedures and the
scopes of responsibilities and authorities. The Procedures Manuals are updated regularly to incorporate all elements
necessitated by changes in the legislation, industry best practices and business dynamics.
•
The Internal Audit Department independently reviews the control processes implemented by the Management from
time to time and periodically reports on its findings and recommendations to the Audit Committee. The duties and
responsibilities of the Audit Committee are detailed in the Terms of Reference of the Audit Committee. The Audit
Committee, by consideration of both Internal and External Audit Reports, is able to gauge the effectiveness and adequacy
of the internal control system, for presentation of its findings to the Board.
Puncak Niaga Holdings Berhad Annual Report 2003
64
Statement On Internal Control
•
The Compliance, Internal Control and Risk Policy Committee, which is chaired by YB Tan Sri Dato’ Seri Dr Ting
Chew Peh, an Independent Non-Executive Director was established in October 2001. This Committee closely
monitors the Risk Management process within the Group and the extent of compliance with the Statement on
Internal Control requirements.
•
The Tender and Contracts Committee, which was set up in year 2000, ensures transparency and competitive
pricing in the award of contracts within the Group.
•
A detailed budgeting process has been established, requiring all Divisions and Departments to prepare their
respective budgets annually. These budgets are then reviewed and approved by the Board prior to actual
implementation each year. The monitoring of actual performance versus budget, with major variances being
followed up, is done on a monthly basis and management action is taken to tighten or to rectify any shortcomings,
where necessary.
•
The Limits of Authority Policy was approved by the Board for implementation in April 2003 and distributed to
all Divisions and Departments within the Group in May 2003.
GUIDANCE FOR DIRECTORS OF PUBLIC LISTED COMPANIES
Since the issuance of the ‘Statement on Internal Control: Guidance for Directors of Public Listed Companies’
(Guidance) in December 2000, the Group has formulated a comprehensive checklist to monitor its level of readiness
on the Guidance.The Group aims to not just achieve full compliance, but also to improve on the Group’s processes
by implementing best business practices in line with international best practice standards.Throughout the year 2003,
the Compliance, Internal Control and Risk Policy Committee has closely monitored the Group’s level of readiness
with the Guidance.
This Statement on Internal Control has been prepared in accordance with the Guidance and has been approved by
the Board of Puncak Niaga and reviewed by the external auditors.
For and on behalf of the Board of Puncak Niaga Holdings Berhad,
Tan Sri Dato’ Seri Dr Ting Chew Peh
Chairman
Compliance, Internal Control and Risk Policy Commitee
25 Febuary 2004
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Puncak Niaga Holdings Berhad Annual Report 2003
Audit Committee Report
The Board of Directors of Puncak Niaga Holdings Berhad (PNHB) is pleased to present the report of the Audit Committee
for the financial year 2003.
1. MEMBERSHIP AND MEETINGS
The Audit Committee comprises the following members and details of attendance of each member at Audit Committee
Meeting held during the financial year 2003 are as follows:
Composition of Committee
Number of
meetings held
Number of
meetings attended
%
Encik Abdul Majid Abdul Karim
Chairman/Independent Non-Executive Director
4
4
100
Encik Mat Hairi Ismail
Member/Executive Director, Finance
4
4
100
YBhg.Tan Sri Dato’ Hari Narayanan Govindasamy
Member/Independent Non-Executive Director
4
4
100
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
Member/Independent Non-Executive Director
4
4
100
The General Manager
(Internal Audit), General Manager (Finance & Accounts) and other members of Senior
Management attended these meetings upon the invitation by the Chairman of the Audit Committee. The Group’s
external auditors were also invited to attend all these meetings.
2. SUMMARY OF ACTIVITIES
During the financial year 2003, the Audit Committee carried out its duties as set out in the terms of reference.
Other main activities carried out by the Audit Committee during the financial year included the following:
FINANCIAL RESULTS
•
Reviewed the quarterly and year-to-date unaudited financial results of the Group before tabling to the Board for
consideration and approval.
•
Reviewed the reports and the audited financial statements of the Company and of the Group together with the
external auditors prior to tabling to the Board for approval.
EXTERNAL AUDIT
•
Reviewed the external auditors’ scope of work and audit plan for the year and made recommendation to the Board
on their appointment and remuneration.
•
Reviewed and discussed external auditors’ audit report and areas of concern highlighted in the management letter,
including management’s response to the concerns raised by the external auditors.
•
Discussed on significant accounting and auditing issues, impact of new or proposed changes in accounting standards
and regulatory requirements.
Puncak Niaga Holdings Berhad Annual Report 2003
66
Audit Committee Report
INTERNAL AUDIT
•
Reviewed the Internal Audit plan, programmes of resources requirements for the year and assessed the
performance of the Internal Audit Department.
•
Reviewed the Internal Audit reports which highlighted the audit issues, recommendation and the
Management responses and directed actions to be taken by the Management to rectify and improve the
system of Internal control.
•
Monitored the implementation programmes recommended by the Internal Audit arising from its audits in
order to obtain assurances that all key risks and control concerns have been fully addressed.
RELATED PARTY TRANSACTION
Reviewed the related party transactions entered into by the Company and the Group.
3. INTERNAL AUDIT FUNCTIONS
The Group has an established Internal Audit Department which assists the Audit Committee in the discharge of
its duties and responsibilities. The Internal Audit Department provides an independent assurance on risk
management and internal controls. The audit focuses on regular and systematic review of the internal control
and management information systems, including the system for compliance with applicable laws, regulations, rules,
directives and guidelines.
The annual audit plan of the Internal Audit Department which was developed on risk analysis approach was
approved by the Audit Committee at the last Audit Committee Meeting of the preceding financial year. The
scope of the Internal Audit Department’s function covered the audit of adequacy of risk management,
operational controls, compliance with established procedures, guidelines and statutory requirements and also the
various computer application system and network of the Company and of the Group.
The Internal Audit Department had conducted the evaluation of the system of internal control that
encompassed the Group’s governance, operations and information systems. The Internal Audit reports, which
highlighted the internal controls weaknesses, were deliberated by the Audit Committee and the
recommendations were duly acted upon by the Management.
Examples of the key areas audited by the Internal Audit Department during the financial year 2003 were the
review on Risk of Lack of Clear Human Resources Strategy and Planning, Review on Risk of Failure of Information
Technology System, Review on Risk of Dry-up, Pollutions and Leakages/Structural Collapse of the Dam and the
review on the activities of PNSB’s Quarters Committee.
4. 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
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Puncak Niaga Holdings Berhad Annual Report 2003
Audit Committee Report
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.
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.
Puncak Niaga Holdings Berhad Annual Report 2003
68
Audit Committee Report
-
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 employee, 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, 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.
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Puncak Niaga Holdings Berhad Annual Report 2003
Audit Committee Report
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 statements, including identifying any
marginal operations.
ix. Review the nature of any unusual or significant commitments or contingent liabilities.
x. Review of any significant differences between the annual report and other reports, such as reports to the
regulatory agencies.
xi. Review for any significant differences in format or disclosure from industry norms.
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 the Management.
vii. Review certain aspects of the Company’s pension plan and compliance with relevant laws and regulations.
viii. Assess the performance of financial management.
ix. Such other functions as may be agreed to by the Audit Committee and the Board of Directors.
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.
Puncak Niaga Holdings Berhad Annual Report 2003
70
Audit Committee Report
In addition to the Committee members, the Head of Internal Audit Department 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.
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Puncak Niaga Holdings Berhad Annual Report 2003
RISK MANAGEMENT POLICY & REPORT
RISK MANAGEMENT POLICY
The Board has approved the following Group’s Risk Management Policy Statement:
“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.
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.”
RISK MANAGEMENT REPORT
There are risks faced by all companies in the various facets of their corporate lives.The nature of such risks including systemic,
market, employees, economic, legislation, financial and others, need to be identified and managed to reduce the possibility
and impact of any adverse effects. Puncak Niaga recognises this and has initiated risk management programmes to ensure its
business risks are minimised and opportunities enhanced.
The Board of Puncak Niaga established the following framework in October 2001, for the management of the Group’s
corporate risks:
1. Group’s Risk Management Policy Statement.
2. Formation of the Compliance, Internal Control and Risk Policy Committee.
3. Terms of Reference of the Compliance, Internal Control and Risk Policy Committee.
4. Setting up of a Risk Management Section, which reports to the Compliance, Internal Control and Risk Policy Committee.
As a follow up from the Strategic Corporate Risk Management Workshop held for the Board Senior Management in August
2001, information on Risk Management has been fully disseminated to all employees in the form of booklets, posters and
through the Group’s internal communications network.
In addition, the risk management framework which was established in October 2001 has since then been fully implemented
by the Management and employees of Puncak Niaga.
Puncak Niaga Holdings Berhad Annual Report 2003
72
RISK MANAGEMENT POLICY & REPORT
COMPLIANCE, INTERNAL CONTROL AND RISK POLICY COMMITTEE (CICR)
The establishment of the CICR was formalised by the Board in October 2001.The members of the CICR comprise
the following:
Chairman :
YB TAN SRI 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)
MDM TAN BEE LIAN
Senior General Manager, Secretarial Department
MR NG WAH TAR
General Manager, Finance and Accounts Department
ENCIK SONARI SOLOR
General Manager, Internal Audit Department
Secretary :
ENCIK MOHAMMED SOFIAN ISMAIL
Manager, Internal Audit Department
(Head of Risk Management Section)
There was no change in the membership of the CICR during the year 2003.
A) TERMS OF REFERENCE OF THE CICR
The CICR shall provide assistance to the Board of Directors of Puncak Niaga in discharging its fiduciary
responsibilities relating to safeguarding shareholders’ investment and the Group’s assets through a structured
approach to Risk Management.The primary responsibilities of the CICR are:
•
Formulating strategies to manage the overall risks associated with the Group’s activities.This entails decisions
on:
- Long-term and short-term strategies.
- Justifiable capital allocation based on return per unit of risk.
•
Recommending the appropriate risk management policies and procedures, which shall be reviewed
frequently to ensure consistency with fundamental changes in the economy, market conditions and
regulations.
•
To periodically 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 the 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 the regulatory environment, and to recommend the appropriate action.
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Puncak Niaga Holdings Berhad Annual Report 2003
RISK MANAGEMENT POLICY & REPORT
B) CICR ACTIVITIES
MEETINGS HELD AND ISSUES COVERED
During the year 2003, the CICR held five meetings, of which three were chaired by YB Tan Sri Dato’ Seri Dr Ting Chew
Peh (Chairman of CICR) and two were chaired by Encik Ruslan Hassan (Head of CICR).
At its meetings, the CICR reviewed in detail, the Status Reports prepared by the Risk Management Section. The issues
covered included the following:
1. The level of readiness of the Group and the respective Divisions and Departments with regards to the ‘Statement
on Internal Control’ requirements.
2. The progress of the risk assessment and risk monitoring exercises at Departmental, Divisional and Enterprise-Wide
levels.The main risks, controls and management actions are highlighted for the CICR to deliberate.
3. An update on risk audits completed by the Internal Audit Department.
4. The effective utilisation of the Corporate Risk Scorecard software to identify, measure and monitor all corporate risks
identified within the Group.
5. Other relevant risk issues affecting the Group, from time to time.
RISK MANAGEMENT SCORECARD WORKING GROUP AND ENTERPRISE-WIDE RISKS
The Group recognises that Risk Management involves a structured approach, combining the efforts of all functions within the
Group, to minimise the possibility and impact of unexpected damages so as to contribute towards greater efficiency and
better decision making. The Risk Management Scorecard Working Group, comprising all Heads of Departments or their
representatives, held a total of nine meetings between 29 April 2003 and 2 July 2003 to review the Group’s Enterprise-Wide
Risk Profile.The Group’s Enterprise-Wide Risk Profile is reviewed annually to take into consideration changes in the business
environment, strategies and functional activities of the Group. A detailed Board Paper on the Working Group’s deliberations
was submitted to the CICR and the PNHB Board.
The Group’s Enterprise-Wide Risk Profile was reassessed by the Working Group in early 2004.
DIVISIONAL AND DEPARTMENTAL RISKS
The respective Heads of Divisions and Departments are responsible for assessing and managing their Divisional and
Departmental risks. Using the Corporate Risk Scorecard software, the Heads of Divisions and Departments have submitted
their detailed risk scorecard reports to the Risk Management Section after the end of each quarter.
CORPORATE RISK SCORECARD SOFTWARE
The Group utilises a risk management tool namely, the Corporate Risk Scorecard (CRS) software to identify, measure and
manage all corporate risks affecting the Group. The CRS software offers a systematic approach to the management of
enterprise-wide risks facing corporations and assists the Management of Puncak Niaga to successfully achieve their corporate
objectives.
Puncak Niaga Holdings Berhad Annual Report 2003
74
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.
To achieve its objectives, the Company will endeavour to undertake the following:
1. CREATING QUALITY DIALOGUE
•
To create an environment where the effective bilateral communication between the Company and our
shareholders and investors both 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 a clearer understanding of the shareholders’ and investors’ expectations of
the Company.
•
To engage in quality dialogue with our shareholders and investors whereby the relationship is based on the
principles of honesty, openness and transparency and to foster mutual understanding between the Company
and our shareholders and investors.
•
To reap the benefits of engaging in quality dialogue:
-
perception on our Company’s risk is reduced;
-
enhance feedback of our Company’s performance;
-
our Company’s share valuation becomes more realistic;
-
develop confidence in our Management team and management style; and
-
works as a guide in the evaluation of our Company’s business strategy.
2. INVESTOR COMMUNICATIONS STATEMENT
•
To implement an efficient and effective Investor Relations Programme as part of our ongoing shareholders’
and investors’ communication obligations.
•
To provide high quality, meaningful and timely information over and above that is required by law in order to
improve the shareholders’ and investors’ understanding of our Company.
•
To strive for key competence in the area of professional investor relations vide adequate resources
and 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.
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Puncak Niaga Holdings Berhad Annual Report 2003
INVESTOR RELATIONS POLICY & report
INVESTOR RELATIONS REPORT
The Board is pleased to report on the investor relations efforts undertaken by Puncak Niaga during the year 2003 as follows:
DIALOGUES WITH INVESTORS
The Top Management of Puncak Niaga actively participates in meetings, dialogues and briefings sessions with local and foreign
investment groups. During the year 2003, the Top Management held more than 60 dialogues and briefing sessions with
existing and potential investors, research analysts and fund managers. Some of these dialogues resulted in the publication of
articles and write-ups favouring the Company’s securities.
The Company was also invited to participate in the following investors’ conferences, both locally and regionally:
Date
25 July 2003
Event
Investors Conference
Organiser
Citigroup and Smith
Barney
Venue
The Ritz Carlton
Millenia Hotel
Singapore
23 September
2003
Dialogue Session with Corporate Captains in
the Water and Sewerage Industry of “Towards
Efficient Water And Sewerage Management
Forum”
Affin-UOB Securities
Sdn Bhd
JW Marriott Hotel
Kuala Lumpur
26 September
2003
Malaysia Access Day
JP Morgan Securities
Ltd
Republic Plaza
Singapore
31 October
2003
Malaysia Corporate Day
Citigroup and Smith
Barney
The Ritz Carlton
Millenia Hotel
Singapore
20 November
2003
ABN AMRO “These Tiggers Do Bounce”
ABN AMRO Asia
Securities (Singapore)
Pte Limited
Conrad Hotel
Bangkok
Thailand
The outcome of the conferences were encouraging with the investors promising greater investment in the Company’s
securities.The Company’s foreign shareholding rose from 2.69% in July 2003 to 7.73% by end of 2003.This reflects the foreign
funds’ strong support and confidence in the Company generally and its Management.
Puncak Niaga Holdings Berhad Annual Report 2003
76
INVESTOR RELATIONS POLICY & report
INVESTORS’ ACCESS TO INFORMATION
The Company makes timely announcements to the Exchange on its quarterly financial results and all material
developments of the Group. It also ensures that its Audited Accounts and Annual Report are completed and released
within the stipulated timeframe required by the regulatory authorities.
The Company ensures disclosure of information over and above the regulatory authorities’ disclosure requirements
so that the investment community can make careful and informed investment decisions on the Company’s securities.
Shareholders and investors can access the Company’s information at www.puncakniaga.com.my or through Bursa
Malaysia’s website at www.bursamalaysia.com.
The Investor Relations Unit (IRU) also helps in the timely dissemination of the Group’s latest announcements and
corporate developments via e-mails to the shareholders, investors and analysts who have registered themselves with
the IRU. For the year 2003, IRU e-mailed 19 updates eg. announcements and write-ups on Puncak Niaga to the
shareholders, investors and analysts. In turn, the IRU received 35 queries and feedbacks from the shareholders,
investors and analysts. So far, the feedbacks received have been encouraging and many have expressed their
satisfaction towards the Company’s efforts in promoting investor relations through the IRU programme.
Upon the request of the shareholders at the Company’s AGM in 2003, the Annual Report 2003 has been produced
in the form of CD-ROM in order to save cost and to be in tandem with the rapid development of information
technology. Nevertheless, the Company has made available printed copies of the Annual Report in both English and
Bahasa Malaysia versions, which will be given to the shareholders upon request.
ANNUAL GENERAL MEETING (AGM)
Puncak Niaga believes that the AGM is the best forum for the Management to foster better relationship with the
Company’s shareholders. As such, the Board ensures that the agenda for the AGM is precise and where required,
explanations on special businesses and information on Directors’ seeking re-election are provided in the Notice of
AGM so as to enable the shareholders or their proxies to prepare themselves for the AGM.
In line with good corporate governance practices, the Management has been giving business presentations followed
by a Question & Answer Session at its AGM so that its shareholders are updated on the Group’s financial
performances, business operations and developments. Besides giving the shareholders a better view of the Group’s
business progress, it also provides an opportunity for the shareholders to actively participate in the AGM by asking
genuine and relevant questions related to the Group’s business and to contribute ideas to the Company.
The Question & Answer Session during the AGM promotes effective two-way communication between the
Company and its shareholders. It is also Puncak Niaga’s way of expressing ‘We value your views’ in our pursuit to
build long-term relationship with our shareholders.
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Puncak Niaga Holdings Berhad Annual Report 2003
INVESTOR RELATIONS POLICY & report
SHAREHOLDERS AND INVESTORS DATABASE
The IRU maintains a Register of Shareholders and Investors comprising particulars of shareholders, investors and analysts
who wish to be regularly updated on the Group’s corporate developments and performance via e-mail.
For those who wish to be included in the IRU’s Register, kindly e-mail us your contact information via
[email protected] or write to us at Investor Relations Unit, c/o Secretarial Department, Puncak Niaga Holdings
Berhad, Suite 1401-1406, 14th Floor, Plaza See Hoy Chan, Jalan Raja Chulan, 50200 Kuala Lumpur.
Similarly, to enable us to further improve on our level of operations and services to the community and the stakeholders,
kindly forward your comments, views and concerns to the Company via our e-mail addresses at
[email protected] for public enquiries and [email protected] for investors’ enquiries.
EXCERPTS OF E-MAILS RECEIVED BY THE IRU DURING THE YEAR 2003
“……..would appreciate if you could keep us posted on any upcoming Analyst Briefings…” received from a local
institutional fund manager (May 2003)
“……….congratulate you and your committee on the successful organisation of the last Annual General
Meeting.The presentation was insightful…….” received from an individual shareholder (July 2003)
“…would like to be included into the e-mail distribution list of results, announcements...” received from a
Hong Kong based fund manager (August 2003)
“……….NACRA 2003, Congratulations. Glad to be part of it” received from an individual shareholder (December 2003)
Puncak Niaga Holdings Berhad Annual Report 2003
78
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.
79
Puncak Niaga Holdings Berhad Annual Report 2003
Distribution Schedule Of Equity
SECURITIES & PROPERTY
ORDINARY SHARES AS AT 26 APRIL 2004
Authorised Capital : RM 1,000,000,000
Issued and Paid-Up Capital : RM 457,785,000
Nominal Value : RM 1.00 per ordinary share
Holdings
No. of Holders
less than 100
% of Holders Total Holdings
% of Issued
Capital
286
2.98
100 – 1,000
1,804
1,001 – 10,000
6,229
10,001 – 100,000
1,025
10.67
29,848,957
6.52
257
2.68
259,722,675
56.73
100,001 – 22,889,249 (less than 5% of issued capital)
22,889,250 (5% of issued capital) and above
TOTAL
8,280
0.00
18.78
1,646,713
0.36
64.86
21,898,079
4.78
3
0.03
144,660,296
31.61
9,604
100.00
457,785,000
100.00
30 Largest Shareholders As Per Record of Depositors
Name of Shareholder
No. of
Shares Held
% of Issued
Capital
1. Central Plus (M) Sdn Bhd
77,240,446
16.87
2. Amsec Nominees (Tempatan) Sdn Bhd
40,000,000
8.74
3. Employees Provident Fund Board
27,419,850
5.99
4. AMMB Nominees (Tempatan) Sdn Bhd
17,026,000
3.72
16,000,000
3.50
14,203,300
3.10
- AmFinance Berhad For Central Plus (M) Sdn Bhd
- AmTrustee Berhad For Central Plus (M) Sdn Bhd (7/914-8)
5. RHB Capital Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Central Plus (M) Sdn Bhd (TSR 681055)
6. Lembaga Tabung Haji
7. Corporate Line (M) Sdn Bhd
13,310,304
2.91
8. Central Plus (M) Sdn Bhd
11,740,500
2.56
8,059,100
1.76
6,523,750
1.43
5,023,250
1.10
4,418,500
0.97
4,249,750
0.93
9. Malaysia Nominees (Tempatan) Sendirian Berhad
- Great Eastern Life Assurance (Malaysia) Berhad (Par 1)
10. AmFinance Berhad
- Pledged Securities Account For Central Plus (M) Sdn Bhd (SMART)
11. HLG Nominee (Tempatan) Sdn Bhd
- PB Trustee Services Berhad For HLG Growth Fund
12. Botly Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Koon Yew Yin
13. HSBC Nominees (Asing) Sdn Bhd
- BNY Brussels For The Great Eastern Life Assurance Co Ltd
Puncak Niaga Holdings Berhad Annual Report 2003
80
Distribution Schedule Of Equity
Securities & Property
30 Largest Shareholders As Per Record of Depositors
Name of Shareholder (continued)
No.of
Shares Held
% of Issued
Capital
4,000,000
0.87
15. Malaysian Assurance Alliance Berhad
4,000,000
0.87
16. Malaysia National Insurance Berhad
3,544,650
0.77
17. Universal Trustee (Malaysia) Berhad
3,343,000
0.73
18. Cartaban Nominees (Tempatan) Sdn Bhd
3,228,500
0.70
19. Kumpulan Darul Ehsan Berhad
3,204,400
0.70
20. PAB Nominees (Tempatan) Sdn Bhd
3,173,000
0.69
3,097,800
0.68
2,867,000
0.63
2,837,800
0.62
2,761,100
0.60
2,590,000
0.57
2,514,000
0.55
2,450,000
0.54
2,334,700
0.51
2,298,000
0.50
2,250,000
0.49
295,708,700
64.60%
14. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Central Plus (M) Sdn Bhd (17152 JTRK)
- Amanah SSCM Nominees (Tempatan) Sdn Bhd
For Employees Provident Fund Board (JF404)
- Pledged Securities Account For Central Plus (M) Sdn Bhd (Jln Bunus)
21. Malaysia Nominees (Tempatan) Sendirian Berhad
- Amanah SSCM Asset Management Berhad
For Amanah Smallcap Fund Berhad (JM730)
22. Cartaban Nominees (Asing) Sdn Bhd
- SSBT Fund G444 For Goldman Sachs Asia Portfolio
23. Cartaban Nominees (Asing) Sdn Bhd
- State Street Australia Fund Q3VD For Fullerton (Private) Limited
24. Cimsec Nominees (Tempatan) Sdn Bhd
- Commerce Asset Fund Managers Sdn Bhd
For Employees Provident Fund Board
25. Cartaban Nominees (Asing) Sdn Bhd
- SSBT Fund 05EF For BT Pyramid Emerging Markets Fund
26. AMMB Nominees (Tempatan) Sdn Bhd
- AmTrustee Berhad For HLG Penny Stock Fund (5/4-3)
27. Citicorp Nominees (Tempatan) Sdn Bhd
- CMS Dresdner Asset Management Sdn Bhd
For Employees Provident Fund
28. Universal Trustee (Malaysia) Berhad
- Pacific Premier Fund
29. Universal Trustee (Malaysia) Berhad
- SBB Emerging Companies Growth Fund
30. AMMB Nominees (Tempatan) Sdn Bhd
- MIDF Aberdeen Asset Management Sdn Bhd
For Employees Provident Fund (7/836-2)
TOTAL
81
Puncak Niaga Holdings Berhad Annual Report 2003
Distribution Schedule Of Equity
SECURITIES & PROPERTY
Directors’ Interests in Ordinary Shares As Per Register of Directors’ Shareholdings
No. Of Shares Held In The Company
No. Name of Director
Direct Interest
%
Indirect Interest
1
%
1
YBhg Tan Sri Rozali Ismail
947,000
0.21
190,051,000
41.52
2
Encik Ruslan Hassan
404,000
0.09
-
-
3
Encik Mat Hairi Ismail
22,750
*
-
-
4
Ir Lee Miang Koi
5
Encik Abdul Majid Abdul Karim
6
YBhg Tan Sri Dato’ Hari Narayanan
Govindasamy
2
144,000
0.03
20,000
*
3,000
*
-
-
210,000
0.05
-
-
7
YB Tan Sri Dato’ Seri Dr Ting
Chew Peh
-
-
-
-
8
Tuan Syed Danial Syed Ariffin
25,000
0.01
-
-
1 Deemed interest by virtue of 50% equity interest each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd respectively
2 Held in nominee name, Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd
* negligible
List of Substantial Shareholders As Per Register of Substantial Shareholders (excluding bare trustees)
No. Of Shares Held In The Company
No. Name of Substantial Shareholder
1
2
3
4
Direct Interest
%
Indirect Interest
947,000
0.21
190,051,000
YBhg Tan Sri Rozali Ismail
Encik Shaari Ismail
-
Central Plus (M) Sdn Bhd
88,980,946
Employees Provident Fund Board
26,615,650
19.44
5.81
1
1
190,051,000
2
87,759,750
3
14,586,800
1 Deemed interest by virtue of 50% equity interest each 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
Puncak Niaga Holdings Berhad Annual Report 2003
82
%
41.52
41.52
19.17
3.19
Distribution Schedule Of Equity
SECURITIES & PROPERTY
WARRANTS AS AT 26 APRIL 2004
Holdings
No. of
Holdings
% of
Holdings
Total
Holdings
% of
Warrants
Issued
82
1.90
3,738
0.00
100 – 1,000
1,630
37.73
1,345,874
1.23
1,001 – 10,000
2,060
47.69
8,550,624
7.82
467
10.81
14,899,135
13.62
80
1.85
31,562,749
28.86
less than 100
10,001 – 100,000
100,001 – 5,468,742
(less than 5% of warrants issued)
5,468,743
(less than 5% of warrants issued) & above
TOTAL
1
0 .02
53,012,749
48.47
4,320
100.00
109,374,869
100.00
30 Largest Warrant Holders As Per Record Of Depositors
Name Of Warrant Holder
No. of
Warrants
Held
% of
Warrants
Issued
1.
Corporate Line (M) Sdn Bhd
53,012,749
48.47
2.
Employees Provident Fund Board
3,078,037
2.81
3.
AmFinance Berhad
2,537,000
2.32
1,500,000
1.37
1,255,812
1.15
1,240,100
1.13
1,215,000
1.11
957,600
0.88
859,300
0.79
852,200
0.78
11. Fang Kok Leong @ Phang Soon Fook
807,200
0.74
12. Botly Nominees (Tempatan) Sdn Bhd
791,400
0.72
763,200
0.70
- Pledged Securities Account For Fang Kok Leong
@ Phang Soon Fook (SMART)
4.
HSBC Nominees (Asing) Sdn Bhd
- BNY Brussels For The Great Eastern Life Assurance Co Ltd
5.
HLG Nominee (Tempatan) Sdn Bhd
- PB Trustee Services Berhad For HLG Growth Fund
6.
Universal Trustee (Malaysia) Berhad
- TA Islamic Fund
7.
OSK Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Koon Yew Yin
8.
DB (Malaysia) Nominee (Asing) Sdn Bhd
- Deutsche Bank AG Singapore PBD For Sea Crest Foundation
9.
Chung Sow Leng
10. HSBC Nominees (Tempatan) Sdn Bhd
- HSBC (M) Trustee Bhd For Amcumulative Growth (3639)
- Pledged Securities Account For Koon Yew Yin
13. TA Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Kong Kien Kok
83
Puncak Niaga Holdings Berhad Annual Report 2003
Distribution Schedule Of Equity
SECURITIES & PROPERTY
30 Largest Warrant Holders As Per Record Of Depositors
Name Of Warrant Holder (continued)
No. of
Warrants
Held
% of
Warrants
Issued
700,000
0.64
15. Cheong Pang Kwan
676,000
0.62
16. TA Nominees (Tempatan) Sdn Bhd
643,300
0.59
600,000
0.55
18. Teng U Heng
600,000
0.55
19. Malaysia Nominees (Tempatan) Sendirian Berhad
575,000
0.53
554,000
0.51
530,000
0.48
489,000
0.45
420,000
0.38
367,900
0.34
337,800
0.31
333,000
0.30
27. Kong Mah Realty (M) Sdn Bhd
305,000
0.28
28 Mayban Nominees (Tempatan) Sdn Bhd
283,000
0.26
250,000
0.23
250,000
0.23
76,783,598
70.20
14. DB (Malaysia) Nominee (Asing) Sdn Bhd
- Deutsche Bank AG Singapore PBD For Green Meadows Foundation
- Pledged Securities Account For Ling Kok Wah
17. Citicorp Nominees (Asing) Sdn Bhd
- MLPFS For New Frontier Consultancy Ltd
- Amanah SSCM Asset Management Berhad
For Amanah Smallcap Fund Berhad (JM730)
20. HSBC Nominees (Asing) Sdn Bhd
- Mscoil For Specialist Trading Limited
21. Botly Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Tan Kit Pheng
22. Mayban Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For John Leong Chung Hin (11195AW0689)
23. Universal Trustee (Malaysia) Berhad
- Alliance First Fund
24. BHLB Trustee Bhd
- TA Comet Fund
25. TA Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Tee Tuan Chok
26. Citicorp Nominees (Asing) Sdn Bhd
- GSI For The Blackhorse Asia Fund
- Pledged Securities Account For Su Tiing Uh (178AW0603)
29 Amsec Nominees (Asing) Sdn Bhd
- G K Goh Stockbrokers Pte Ltd For Martin Columba Gallagher (2E/35379)
30. Wong Kok Hou
TOTAL
Puncak Niaga Holdings Berhad Annual Report 2003
84
Distribution Schedule Of Equity
SECURITIES & PROPERTY
Directors’ Interests In Warrant As Per Register Of Directors’ Warrantholdings
No. Of Warrants Held In The Company
No.
Name of Director
Direct Interest
%
Indirect Interest
1
%
-
-
53,012,749
48.47
Encik Ruslan Hassan
21,600
0.02
-
-
Encik Mat Hairi Ismail
52,375
0.05
-
-
4
Ir Lee Miang Koi
18,000
0.02
-
-
5
Encik Abdul Majid Abdul Karim
-
-
-
-
6
YBhg Tan Sri Dato’ Hari Narayanan
Govindasamy
52,500
0.05
-
-
7
YB Tan Sri Dato’ Seri Dr Ting Chew Peh
-
-
-
-
8
Tuan Syed Danial Syed Ariffin
-
-
-
-
1
YBhg Tan Sri Rozali Ismail
2
3
1
Deemed interest by virtue of 50% equity interest in Corporate Line (M) Sdn Bhd
LIST OF PROPERTY AS AT 31 DECEMBER 2003
Description &
Location
Date of
Acquisition
Land
Area
Net Book
Value
Vacant Land
H.S.(D) 142037
PT 32, Section 14
Bandar Shah Alam
District of Petaling
Selangor
14/2/1998
10,364 sq.m.
RM8,195,480
85
Tenure
99 years
Leasehold
Remaning
Leasehold
Period
(Expiry
Date)
96 years
expiring on
17/12/2099
Existing
use
none
Puncak Niaga Holdings Berhad Annual Report 2003
steady growth
Puncak Niaga Holdings Berhad Annual Report 2003
86
87
Puncak Niaga Holdings Berhad Annual Report 2003
This page has been intentionally left blank.
Puncak Niaga Holdings Berhad Annual Report 2003
88
2003
financial report
90-97
Directors’ Report
98
Consolidated Income Statement
99
Company Income Statement
100
Balance Sheets
101
Consolidated Statement of Changes in Equity
102
Company Statement of Changes in Equity
103-104
Cash Flow Statements
105-149
Notes to the Financial Statements
150
Statement by Directors
150
Statutory Declaration
151
Report of the Auditors
89
Puncak Niaga Holdings Berhad Annual Report 2003
Directors’ Report
for the financial year ended 31 December 2003
The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of
the Company for the financial year ended 31 December 2003.
Principal activities
The Group is principally engaged in the operation, maintenance, management, construction and rehabilitation of water
treatment facilities. The principal activities of the Company during the financial year are that of investment holding and
provision of management services. The principal activities of the subsidiaries are set out in Note 16 to the financial
statements.
There has been no significant change in the nature of the activities of the Group and of the Company during
the financial year.
Financial results
Net profit for the financial year
Group
Company
RM
RM
129,586,447
1,682,927
Dividends
No dividends have been paid or declared by the Company since 31 December 2002. The Directors do not recommend
the payment of any dividend for the financial year ended 31 December 2003.
Reserves and provisions
Material transfers to and from reserves during the financial year are disclosed in the Statement of Changes in Equity. There
were no material transfers to or from provisions during the financial year.
Share capital
During the financial year, the issued and fully paid up capital of the Company increased from RM439,278,000 to
RM451,166,000 by way of the issuance of 11,888,000 new ordinary shares of RM1.00 each for cash as follows:
Purpose of issue
No. of ordinary shares
of RM1.00 each
Exercise of options by eligible employees pursuant to the
Employees’ Share Option Scheme
11,888,000
The above new ordinary shares issued during the financial year ranked pari-passu in all respects with the existing ordinary
shares of the Company.
Puncak Niaga Holdings Berhad Annual Report 2003
90
Directors’ Report
for the financial year ended 31 December 2003
Employees’ Share Option Scheme
The Employees’ Share Option Scheme (‘ESOS’) of the Company, governed by the ESOS Bye-Laws, was principally approved
by the shareholders of the Company at the Extraordinary General Meeting of the Company held on 26 June 2001 and
became effective following the implementation by the Company on 25 February 2002. The ESOS shall be in forced for a
duration of five (5) years commencing from 25 February 2002.
The salient features of the ESOS are as follows:
(a)
The ESOS is set up for the participation in ordinary shares of the Company only. The maximum number of new
ordinary shares which may be made available under the ESOS shall not exceed 10% of the total issued and paid up
ordinary shares of the Company at the point in time when an offer is made.
(b)
Eligible employees are those who have been in ser vice of the Group for a continuous period of at least
one (1) year including full time Executive Directors who are involved in the day-to-day management and
on the payroll of the Group.
(c)
The ESOS is administered by the Option Committee which comprise the following Executive Directors
of the Company:
(i)
(d)
Tan Sri Rozali bin Ismail
(ii)
Ruslan bin Hassan
(iii)
Mat Hairi bin Ismail
(iv)
Lee Miang Koi
The options granted under the ESOS may be exercised by the grantee by notice in writing to the Company during
the period commencing from the date of offer and before the expiry of the ESOS on 24 February 2007.
(e)
The exercise price of the options at which the eligible employees are entitled to subscribe for the ordinary shares of
RM1.00 each in the Company under the ESOS is the weighted average market price of the shares of the Company
as quoted in the daily official list issued by the Malaysia Securities Exchange Berhad for the five (5) market days
immediately preceding the respective dates of offer subject to a discount of not more than 10%, or at the par value
of the ordinary shares of the Company of RM1.00 each, whichever is higher.
(f)
The eligible employees to whom the options have been granted has no right to participate, by virtue of the options,
in any share issue of any other company within the Group.
(g)
The new ordinary shares issued arising from the ESOS shall rank pari-passu in all respects with the then existing
ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other
distributions, the entitlement date of which is prior to the date of allotment of the said new ordinary shares.
91
Puncak Niaga Holdings Berhad Annual Report 2003
Directors’ Report
for the financial year ended 31 December 2003
Employees’ Share Option Scheme (continued)
(h)
The basis on which the options may be exercised, up to the expiry of the ESOS on 24 February 2007, in accordance
with the Directors’ approval is as follows:
Number of options
granted and
unexercised as at
31 December 2003
Tranche
1
2
3
4
19,215,000
1,211,000
1,957,000
1,172,000
23,555,000
Percentage of options exercisable
2004
%
2005
%
2006
%
2007
%
57
54
56
52
85
88
83
81
100
100
100
100
100
100
100
100
The movements of the options over the ordinary shares of RM1.00 each of the Company granted under the ESOS during
the financial year are as follows:
Tranche
1
2
3
4
Date of
Exercise
options
price
granted per option
RM
26.2.2002
2.37
26.8.2002
2.47
26.2.2003
2.13
26.8.2003
2.71
Number of options
At
1.1.2003
30,524,000
2,843,000
0
0
33,367,000
Granted
0
0
2,817,000
1,349,000
4,166,000
Exercised
(10,058,000)
(832,000)
(821,000)
(177,000)
(11,888,000)
Lapsed*
(1,251,000)
(800,000)
(39,000)
0
(2,090,000)
At
31.12.2003
19,215,000
1,211,000
1,957,000
1,172,000
23,555,000
* Due to resignations or offers not taken up
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the full list
of option holders and their holdings, except for eligible employees (excluding Executive Directors) with option allocation of
300,000 options and above, which are as follows:
Name of eligible
employees
Number of options over ordinary shares of RM1.00 each
At
At
1.1.2003
Granted
Exercised
Lapsed**
31.12.2003
Nik Nazman bin Husin
Ibrahim bin Ismail
Loh Kit Mun
Azlan bin Hamid
Ramalingam a/l K.R. Arumugam
Syed Danial bin Syed Ariffin
Tan Bee Lian
Sonari bin Solor
Ng Wah Tar
500,000
350,000
350,000
300,000
300,000
300,000
300,000
270,000
240,000
** Due to resignation
Puncak Niaga Holdings Berhad Annual Report 2003
92
0
0
0
0
0
0
50,000
0
60,000
0
(140,000)
(100,000)
0
(120,000)
(60,000)
(68,000)
(69,000)
(80,000)
0
0
0
(300,000)
0
0
0
0
0
500,000
210,000
250,000
0
180,000
240,000
282,000
201,000
220,000
Directors’ Report
for the financial year ended 31 December 2003
Directors
The Directors who have held office during the period since the date of the last report are:
Tan Sri Rozali bin Ismail
Ruslan bin Hassan
Mat Hairi bin Ismail
Lee Miang Koi
Abdul Majid bin Abdul Karim
Tan Sri Dato’ Hari Narayanan a/l Govindasamy
Tan Sri Dato’ Seri Dr.Ting Chew Peh
Syed Danial bin Syed Ariffin
(appointed on 1 March 2004)
In accordance with Article 98 of the Company’s Articles of Association, Lee Miang Koi and Abdul Majid bin Abdul Karim
retire from office by rotation at the forthcoming Annual General Meeting and, being eligible and upon the recommendation
of the Nomination Committee, offer themselves for re-election.
In accordance with Article 99 of the Company’s Articles of Association, Tan Sri Dato’ Seri Dr. Ting Chew Peh retires from
office, on triennial basis, at the forthcoming Annual General Meeting and, being eligible and upon the recommendation of the
Nomination Committee, offers himself for re-election.
In accordance with Article 103 of the Company’s Articles of Association, Syed Danial bin Syed Ariffin who was appointed
since the last Annual General Meeting, retires from office at the forthcoming Annual General Meeting and, being eligible and
upon the recommendation of the Nomination Committee, offers himself for election.
93
Puncak Niaga Holdings Berhad Annual Report 2003
Directors’ Report
for the financial year ended 31 December 2003
Directors' interests
According to the Register of Directors’ Shareholdings, particulars of interests in shares, notes, warrants and options in the
Company and its related corporations during the financial year of those Directors holding office at the end of the financial
year are as follows:
Number of ordinary shares of RM1.00 each
At
Transfer
At
1.1.2003
Acquired
Sold
from/(to)
31.12.2003
Tan Sri Rozali bin Ismail
330,000
410,000
0
0
740,000
Ruslan bin Hassan
394,000
193,000
50,000
459,000
Mat Hairi bin Ismail
22,750
0
0
0
22,750
144,000
0
0
0
144,000
3,000
0
0
0
3,000
0
0
0
210,000
210,000
190,051,000
7,126,554
(7,126,554)
Ruslan bin Hassan
202,500
0
(152,500)
Mat Hairi bin Ismail
209,500
0
0
0
209,500^^
20,000
0
0
0
20,000^^
210,000
0
0
Direct interests in the Company:
Lee Miang Koi
Abdul Majid bin Abdul Karim
(178,000)
Tan Sri Dato’ Hari Narayanan
a/l Govindasamy
Indirect interests in the Company:
Tan Sri Rozali bin Ismail
Lee Miang Koi
0
190,051,000*
(50,000)
0
Tan Sri Dato’ Hari Narayanan
a/l Govindasamy
(210,000)
0
Redeemable Unconvertible Junior Notes in RM
At
Transfer
from/(to)
At
1.1.2003
Acquired
Sold
31.12.2003
0
0
0
12,879,204
12,879,204
Ruslan bin Hassan
708,125
0
0
0
708,125
Mat Hairi bin Ismail
261,875
0
0
0
261,875
Lee Miang Koi
245,000
0
0
0
245,000
20,608,891
0
0
262,500
0
Direct interests in the Company:
Tan Sri Rozali bin Ismail
Indirect interests in the Company:
Tan Sri Rozali bin Ismail
(12,879,204)
7,729,687^
Tan Sri Dato’ Hari Narayanan
a/l Govindasamy
Puncak Niaga Holdings Berhad Annual Report 2003
94
(262,500)
0
0
Directors’ Report
for the financial year ended 31 December 2003
Directors' interests (continued)
Number of warrants
Direct interests in the Company:
Tan Sri Rozali bin Ismail
Ruslan bin Hassan
Mat Hairi bin Ismail
Lee Miang Koi
Tan Sri Dato’ Hari Narayanan
a/l Govindasamy
Indirect interests in the Company:
Tan Sri Rozali bin Ismail
Tan Sri Dato’ Hari Narayanan
a/l Govindasamy
(*
At
1.1.2003
Acquired
51,466,812
41,625
52,375
18,000
0
0
0
0
0
0
1,545,937
51,466,812
52,500
0
Sold
0
(20,025)
0
0
0
(51,466,812)
0
Transfer
from/(to)
(51,466,812)
0
0
0
52,500
51,466,812
(52,500)
At
31.12.2003
0
21,600
52,375
18,000
52,500
53,012,749^
0
deemed interest by virtue of 50% shareholding interest in both Central Plus (M) Sdn. Bhd., a substantial corporate shareholder, and in Corporate Line (M) Sdn.
Bhd., a corporate shareholder of the Company)
(^
deemed interest by virtue of 50% shareholding interest in Corporate Line (M) Sdn. Bhd.)
(^^
held by nominees)
Number of options over ordinary shares of RM1.00 each
At
At
1.1.2003
Granted
Exercised
Lapsed
31.12.2003
Direct interests in the Company:
Tan Sri Rozali bin Ismail
Ruslan bin Hassan
Mat Hairi bin Ismail
Lee Miang Koi
2,170,000
1,670,000
850,000
850,000
0
0
0
0
(410,000)
(193,000)
0
0
0
0
0
0
1,760,000
1,477,000
850,000
850,000
By virtue of his substantial interests in shares of Central Plus (M) Sdn. Bhd. (‘CPMSB’), a substantial corporate shareholder of
the Company,Tan Sri Rozali bin Ismail is deemed to have an interest in the shares of the Company and all its subsidiaries and
associate to the extent CPMSB has an interest.
Number of ordinary shares of RM1.00 each
At
At
1.1.2003
Acquired
Sold
31.12.2003
Deemed interest in the Company:
Tan Sri Rozali bin Ismail
183,867,250
0
(7,126,554)
176,740,696
The other Directors in office at the end of the financial year did not hold any interest in shares, notes, warrants or options
in the Company or its related corporations.
95
Puncak Niaga Holdings Berhad Annual Report 2003
Directors’ Report
for the financial year ended 31 December 2003
Directors' benefits
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or
objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of
the Company or any other body corporate other than the options over the shares granted by the Company to eligible
employees and Executive Directors of the Company and its subsidiaries pursuant to the Company’s ESOS mentioned above.
Since the end of the previous financial year, no Director of the Company has received or become entitled to receive a benefit
(other than the Directors' remuneration and benefits as disclosed in Note 8 to the financial statements) by reason of a
contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with
a company in which he has a substantial financial interest, except for:
(i)
certain Directors who received remuneration as Directors/Executive Directors of related corporations;
(ii)
Tan Sri Rozali bin Ismail who has deemed interests in a related party, Mandai Sari Sdn. Bhd., which undertakes to
operate, maintain and manage the water treatment facilities under the terms of the Operation and Maintenance
Agreement dated 8 October 1994 with Puncak Niaga (M) Sdn. Bhd. (‘PNSB’), a wholly-owned subsidiary; and
(iii)
Tan Sri Rozali bin Ismail who has deemed interests in a related party, RZ Management Services Sdn. Bhd., which
provides corporate secretarial services to the Group.
Statutory information on the financial statements
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took
reasonable steps:
(a)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance
for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance
had been made for doubtful debts; and
(b)
to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business
their values as shown in the accounting records of the Group and of the Company had been written down to an
amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a)
which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b)
which would render the values attributed to current assets in the financial statements of the Group and of the
Company misleading; or
(c)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
of the Company misleading or inappropriate.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of
the Group and of the Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which
secures the liability of any other person; or
Puncak Niaga Holdings Berhad Annual Report 2003
96
Directors’ Report
for the financial year ended 31 December 2003
Statutory information on the financial statements (continued)
(b)
any contingent liability of the Group or of the Company which has arisen since the end of the financial year except as
disclosed in Note 41 to the financial statements.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the
financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors,
(a)
the results of the Group's and of the Company’s operations during the financial year were not substantially affected
by any item, transaction or event of a material and unusual nature; and
(b)
there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the
Group and of the Company for the financial year in which this report is made.
Significant events during the financial year
The significant events that occurred during the financial year are disclosed in Note 44 to the financial statements.
Significant event subsequent to the balance sheet date
The significant events that occurred subsequent to balance sheet date is disclosed in Note 45 to the financial statements.
Ultimate holding company
The Company has no corporate shareholder being regarded by the Directors of the Company as the ultimate holding
company nor as the holding company.
Auditors
The auditors, PricewaterhouseCoopers, will not be seeking re-appointment at the forthcoming Annual General Meeting.
Signed on behalf of the Board of Directors in accordance with their resolution dated 20 April 2004.
Tan Sri Rozali bin Ismail
Director
Mat Hairi bin Ismail
Director
Kuala Lumpur
97
Puncak Niaga Holdings Berhad Annual Report 2003
Consolidated income statement
for the financial year ended 31 December 2003
Group
Note
Revenue
6
Other operating income
Operating and maintenance cost
2003
2002
RM
RM
578,260,034
565,105,110
10,106,388
14,416,902
(118,192,292) (113,801,833)
Staff cost
7
Administrative expenses
Depreciation and amortisation expenses
(28,231,651)
(26,617,683)
(23,329,072)
(21,849,555)
(101,850,776) (101,087,863)
Profit from operations
9
Finance cost
11
Share of results of jointly controlled entity
18
Profit from ordinary activities before taxation
316,762,631
316,165,078
(133,847,211) (136,051,435)
495,638
0
183,411,058
180,113,643
(53,017,212)
Taxation:
- Company and subsidiaries
12
(53,677,385)
- Jointly controlled entity
12
(147,226)
Net profit for the financial year
0
(53,824,611)
(53,017,212)
129,586,447
127,096,431
Earnings per ordinary share
- basic
13(a)
29.26 sen
28.98 sen
- diluted
13(b)
28.51 sen
28.64 sen
The notes on pages 105 to 149 form an integral part of these financial statements.
Puncak Niaga Holdings Berhad Annual Report 2003
98
Company income statement
for the financial year ended 31 December 2003
Company
Note
Revenue
6
Other operating income
Staff cost
7
Depreciation of property, plant and equipment
9
Finance cost
11
2002
RM
RM
3,960,000
3,960,000
38,275,818
32,870,919
0
Administrative expenses
Profit from operations
2003
(1,372,342)
(1,212,296)
(88,045)
(88,045)
40,775,431
35,513,647
(38,276,759) (32,839,198)
Profit from ordinary activities before taxation
2,498,672
Taxation
(16,931)
12
(815,745)
Net profit for the financial year
1,682,927
2,674,449
(804,303)
1,870,146
The notes on pages 105 to 149 form an integral part of these financial statements.
99
Puncak Niaga Holdings Berhad Annual Report 2003
Balance sheets
as at 31 December 2003
Group
Note
Company
2003
2002
2003
2002
RM
RM
RM
RM
1,445,903,671 1,528,702,848
Non-current assets
Property, plant and equipment
8,195,480
8,283,525
Project development expenditure
14
246,808,585
245,838,486
0
0
Investment in subsidiaries
15
0
0
123,000,105
123,000,105
Investment in an associate
16
0
0
0
0
Interest in jointly controlled entity
17
2,544,224
0
2,195,812
0
Other investments
18
12,059
12,662
0
0
Junior Notes A
19
0
0
219,741,915
196,775,846
Advances to a subsidiary
20
0
0
361,368,807
361,368,807
Debt Service Reserve Account
21
81,703,519
79,618,389
0
0
Long-term receivables
22
47,778,515
106,108,547
0
0
23
1,824,750,573 1,960,280,932
714,502,119
689,428,283
978,526
817,277
0
0
Trade and other receivables
24
1,170,049,921
819,850,967
7,260,778
17,007,741
Tax recoverable
25
Current assets
Inventories
Deposits, bank and cash balances
28
1,191,859
1,122,603
783,842
524,387
170,163,631
85,316,135
77,903,391
544,693
1,342,383,937
907,106,982
85,948,011
18,076,821
Less: Current liabilities
118,185,945
160,596,262
42,004,121
1,828,991
Hire-purchase payables
29
989,974
977,149
0
0
Borrowings
30
114,937,283
86,170,443
0
0
31
234,113,202
247,743,854
42,004,121
1,828,991
1,108,270,735
659,363,128
43,943,890
16,247,830
47,103,108
0
0
0
2,570,564
3,063,230
0
0
1,495,138,659 1,439,397,047
Trade and other payables
Net current assets
Less: Non-current liabilities
Long-term payables
Hire-purchase payables
32
Borrowings
30
Deferred taxation
31
219,741,915
196,775,846
202,878,000
0
0
1,801,008,178 1,645,338,277
219,741,915
196,775,846
1,132,013,130
974,305,783
538,704,094
508,900,267
451,166,000
439,278,000
451,166,000
439,278,000
69,527,248
53,294,348
69,527,248
53,294,348
92,322
0
0
0
0
256,195,847
33
Capital and reserves
Share capital
Share premium
34
Reserve on consolidation
92,322
Merger reserve
Retained earnings
35
(40,999,998)
(40,999,998)
652,227,558
522,641,111
18,010,846
16,327,919
1,132,013,130
974,305,783
538,704,094
508,900,267
The notes on pages 105 to 149 form an integral part of these financial statements.
Puncak Niaga Holdings Berhad Annual Report 2003
100
Consolidated statement of changes in equity
for the financial year ended 31 December 2003
Share capital
Nominal
Note
value
Non-distributable
Distributable
Reserve on
Merger
Retained
premium consolidation
reserve
earnings
Total
RM
RM
RM
545,773,680
993,224,492
Share
RM
RM
RM
437,500,000
50,858,488
92,322
Group
At 1 January 2002
- as previously reported
- change in accounting policy
36
- as restated
Issue of share capital
34
Net profit for the financial year
At 31 December 2002
0
0
0
437,500,000
50,858,488
92,322
1,778,000
2,435,860
0
0
0
0
439,278,000
53,294,348
92,322
439,278,000
53,294,348
92,322
(40,999,998)
0
(40,999,998)
(150,229,000) (150,229,000)
395,544,680
842,995,492
0
0
4,213,860
0
127,096,431
127,096,431
(40,999,998)
522,641,111
974,305,783
(40,999,998)
725,519,111 1,177,183,783
At 1 January 2003
- as previously reported
- change in accounting policy
36
- as restated
Issue of share capital
Net profit for the financial year
At 31 December 2003
34
0
0
0
439,278,000
53,294,348
92,322
11,888,000
16,232,900
0
0
0
0
451,166,000
69,527,248
92,322
0
(40,999,998)
(202,878,000) (202,878,000)
522,641,111
974,305,783
0
0
28,120,900
0
129,586,447
129,586,447
(40,999,998)
652,227,558 1,132,013,130
The notes on pages 105 to 149 form an integral part of these financial statements.
101
Puncak Niaga Holdings Berhad Annual Report 2003
Company statement of changes in equity
for the financial year ended 31 December 2003
Nondistributable
Distributable
Nominal
Share
Retained
value
premium
earnings
Total
RM
RM
RM
RM
437,500,000
50,858,488
14,457,773
502,816,261
1,778,000
2,435,860
0
4,213,860
Share capital
Note
Company
At 1 January 2002
Issue of share capital
34
0
0
1,870,146
1,870,146
At 31 December 2002
439,278,000
53,294,348
16,327,919
508,900,267
At 1 January 2003
439,278,000
53,294,348
16,327,919
508,900,267
11,888,000
16,232,900
0
28,120,900
0
0
1,682,927
1,682,927
451,166,000
69,527,248
18,010,846
538,704,094
Net profit for the financial year
Issue of share capital
34
Net profit for the financial year
At 31 December 2003
The notes on pages 105 to 149 form an integral part of these financial statements.
Puncak Niaga Holdings Berhad Annual Report 2003
102
Cash flow statements
for the financial year ended 31 December 2003
Group
Note
Company
2003
2002
2003
2002
RM
RM
RM
RM
283,426,920
352,176,593
0
0
0
0
Operating activities
Receipts from customer
Dividends received
(152,138,328) (140,930,550)
Payments for operating expenses
(8,219,473)
Payments to contractors
Net cash generated from operations
Interest paid
Taxation paid
Interest received
37
123,069,119
(1,508,674)
209,737,369
(103,631,425) (99,669,941)
(428,794)
1,293,206
(1,905,450)
1,060,183
(102,767,013) (100,515,208)
2,764,800
2,764,800
(1,349,640)
(1,602,471)
0
0
1,415,160
1,162,329
(13,671,875)
(13,671,875)
0
(18,914)
14,557,240
13,704,908
885,365
14,119
2,300,525
1,176,448
Net cash inflow from operating
activities
20,302,106
109,222,161
Investing activities
Purchase of property, plant and
equipment
Project development expenditure
(2,836,611)
(5,872,242)
0
0
(16,598,599)
(5,110,835)
0
0
0
Advances from/(to) subsidiaries
Advance to jointly controlled entity
(2,195,812)
0
49,133,085
0
(2,195,812)
(5,861,651)
0
Proceeds from disposal of property,
plant and equipment
209,200
622,311
0
0
Net cash (outflow)/inflow from
investing activities
(21,421,822) (10,360,766)
46,937,273
(5,861,651)
Financing activities
Proceeds from borrowings
115,000,000
0
0
0
28,120,900
4,213,860
28,120,900
4,213,860
0
0
Exercise of share options pursuant
to ESOS
Repayment of borrowings
Repayment of hire-purchase payables
(55,726,548) (78,000,000)
(1,427,140)
(1,719,744)
0
0
85,967,212
(75,505,884)
28,120,900
4,213,860
Net cash inflow/(outflow) from
financing activities
103
Puncak Niaga Holdings Berhad Annual Report 2003
Cash flow statements
for the financial year ended 31 December 2003 (continued)
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
84,847,496
23,355,511
77,358,698
85,316,135
61,960,624
544,693
1,016,036
28
(53,408,698)
(55,726,548)
0
0
28
(88,090,196)
Note
Net increase/(decrease) in cash and
cash equivalents
(471,343)
Cash and cash equivalents at
beginning of the financial year
Transfer to designated account for
repayment of Term Loan (DSS II)
Deposits for Standby Letters of Credit
and Ad-hoc Bank Guarantees
0
(74,790,195)
0
Cash and cash equivalents at
end of the financial year
28,664,737
29,589,587
3,113,196
544,693
88,451,787
56,580,289
74,790,195
0
0
0
Cash and cash equivalents comprise:
Deposits with licensed banks
Less: Deposits held in a designated
account for repayment of
Term Loan (DSS II)
0
28
(55,726,548)
Deposits for Standby Letters
of Credit and Ad-hoc Bank
Guarantees
(88,090,196)
28
Bank and cash balances
0
(74,790,195)
0
361,591
853,741
0
0
81,711,844
28,735,846
3,113,196
544,693
0
0
0
29,589,587
3,113,196
544,693
Less:Transfer to designated account
for repayment of Term
Loan (DSS II)
(53,408,698)
28
28,664,737
The notes on pages 105 to 149 form an integral part of these financial statements.
Puncak Niaga Holdings Berhad Annual Report 2003
104
Notes to the financial statements
for the financial year ended 31 December 2003
1
General information
The Group is principally engaged in the operation, maintenance, management, construction and rehabilitation of water
treatment facilities. The principal activities of the Company during the financial year are that of investment holding and
provision of management services. The principal activities of the subsidiaries are set out in Note 16 to the financial
statements.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Board of
the Malaysia Securities Exchange Berhad.
The address of the registered office of the Company is as follows:
Suite 1401 - 1406, 14th Floor
Plaza See Hoy Chan
Jalan Raja Chulan
50200 Kuala Lumpur
The Company has no corporate shareholder being regarded by the Directors of the Company as the ultimate holding
company nor as the holding company.
2
Financial risk management objectives and policies
The Group’s activities expose it to a variety of financial risks, including interest rate risk, market risk, credit risk, liquidity and
cash flow risk. The Group’s overall financial risk management objective is to ensure that the Group creates value for its
shareholders. The Group focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the financial performance of the Group. Finance risk management is carried out through risk reviews, internal control
systems, insurance programmes and adherence to Group financial risk management policies. The Board regularly reviews
these risks and approves the risk management policies, which covers the management of these risks.
Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates. Interest rate
exposure arises from the Group’s borrowings and deposits, and is managed through the use of a mix of fixed and floating
rate debts.
Market risk
For key product and/or service purchases, the Group establishes floating and fixed priced levels that the Group considers
acceptable. The bulk supply rates charged by Puncak Niaga (M) Sdn. Bhd. (‘PNSB’), a wholly-owned subsidiary, to the State
Government of Selangor for the supply of treated water is indexed to changes in prices of chemicals, electricity tariff and
Consumer Price Index. Accordingly, this helps to mitigate inflation risk.
105
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
2
Financial risk management objectives and policies (continued)
Credit risk
Credit risk arises when sales are made on deferred credit terms. The Group’s credit risk is concentrated on a single customer,
i.e. the State Government of Selangor, and the terms of payments are stated in the concession agreements with the State
Government of Selangor.
At present, the Group is solely dependent on the State Government of Selangor being a single customer for the purchase
of its treated water and due to this sole dependency on the State Government of Selangor for revenue, any late or nonpayment by the State Government of Selangor may have an adverse impact on the cash flows and/or profits of the Group.
The Group seeks to control credit risk by continuously holding discussions and negotiations with the State Government of
Selangor with respect to the settlement and recoverability of the amounts due.
Liquidity and cash flow risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions. Due to the capital intensive and project based
nature of the underlying businesses, the Group aims at maintaining flexibility in funding by keeping committed credit lines
available.
3
Award of concessions
PNSB, a wholly-owned subsidiary, had been awarded the following concessions by the State Government of Selangor:
(i)
under the Privatisation cum Concession Agreement (‘PCCA’) dated 22 September 1994, to take over, operate,
maintain, manage, rehabilitate and refurbish existing water treatment plants located in Selangor and Wilayah
Persekutuan of Kuala Lumpur for a period of 26 years ending on 31 December 2020; and
(ii)
under the Construction cum Operation Agreement (‘CCOA’) dated 22 March 1995, to construct, operate, maintain
and manage the new water treatment facilities, namely the Sungai Selangor Water Supply Scheme Phase 2, Stages I
and II (‘SSP2’) for a period of 26 years ending on 31 December 2020.
On 17 January 1998, PNSB was given a right by the Federal Government to develop a water treatment plant and its related
facilities in Wangsa Maju. The construction work commenced in January 1998 and was completed in July 1998. Subsequent
to the completion, PNSB has been managing, operating and maintaining the water treatment plant.
Puncak Niaga Holdings Berhad Annual Report 2003
106
Notes to the financial statements
for the financial year ended 31 December 2003
4
Basis of preparation
The financial statements of the Group and of the Company have been prepared under the historical cost convention unless
otherwise indicated in the summary of significant accounting policies below. The financial statements comply with the
applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.
The new applicable approved accounting standards adopted in the financial statements of the Group and of the Company
for the financial year ended 31 December 2003 are as follows:
•
MASB Standard 25 “Income Taxes”
•
MASB Standard 27 “Borrowing Costs”
•
MASB Standard 29 “Employee Benefits”
With the exception of MASB Standard 25 (see Note 36), there are no changes in accounting policy that affect net profit or
shareholders’ equity as the Group and the Company were already following the recognition and measurement principles in
these standards. Where applicable, comparatives have been reclassified or extended to take into account the requirements
of new applicable approved accounting standards adopted in the financial statements.
The preparation of financial statements in conformity with the applicable approved accounting standards in Malaysia and
the provisions of the Companies Act, 1965 requires the Directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reported financial year. Actual results could
differ from those estimates.
5
Summary of significant accounting policies
The following accounting policies have been used consistently in dealing with items which are considered material in relation
to the financial statements.
(a)
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up
to the end of the financial year. Financial statements of subsidiaries are consolidated from the date on which control
is transferred to the Group and are no longer consolidated from the date when that control ceases.
Financial statements of subsidiaries are consolidated using the acquisition method of accounting except for the financial
statements of PNSB, which is consolidated using the merger method of accounting in accordance with Malaysian
Accounting Standard No. 2 “Accounting for Acquisitions and Mergers”.
107
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
5
Summary of significant accounting policies (continued)
Merger method
Under the merger method of accounting, the results of the subsidiary is presented as if the merger had been effected
throughout the current and previous financial years. On consolidation, the difference between the carrying value of
the investment over the nominal value of the shares acquired is treated as merger reserve in accordance with the
merger relief provisions under Section 60(4) of the Companies Act, 1965.
Acquisition method
Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the financial year
are included from the date of acquisition up to the date of disposal. At the date of acquisition, the fair values of the
subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. The
difference between the acquisition cost and the fair values of the subsidiaries’ net assets is reflected as goodwill or
reserve on consolidation as appropriate.
All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated,
unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the
financial statements of the subsidiaries to ensure consistency with the accounting policies adopted by the Group.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of
its net assets together with the goodwill on acquisition, and is recognised in the income statement in the financial year
in which the disposal is made.
(b)
Goodwill on consolidation
Goodwill arising on consolidation represents the excess of the cost of acquisition of subsidiaries over the Group’s
share of the fair value of their separable net assets at the date of acquisition and is written off against the Group’s
retained earnings.
Negative goodwill represents the excess of the fair value of the Group’s share of identifiable net assets acquired over
the cost of acquisition. Negative goodwill is presented in the same balance sheet classification as goodwill. To the
extent that negative goodwill relates to expectations of future losses and expenses that are identified in the Group’s
plan for the acquisition and can be measured reliably, but which do not represent identifiable liabilities, that portion of
negative goodwill is recognised in the income statement when the future losses and expenses are recognised. Any
remaining negative goodwill, not exceeding the fair values of the non-monetary assets acquired, is recognised in the
income statement over the remaining weighted average useful life of those assets; negative goodwill in excess of the
fair values of those assets is recognised in the income statement immediately.
Puncak Niaga Holdings Berhad Annual Report 2003
108
Notes to the financial statements
for the financial year ended 31 December 2003
5
(c)
Summary of significant accounting policies (continued)
Subsidiaries
A subsidiary is an enterprise in which the Group has power to exercise control over the financial and operating policies
so as to obtain benefits from their activities.
Investments in subsidiaries are stated at cost except where, in the opinion of the Directors, there is an indication of
impairment, in which case the carrying amount of the investment is assessed and written down immediately to its
recoverable amount.
(d)
Associate
An associate is an enterprise in which the Group is able to exercise significant influence. Significant influence is the
ability to participate in the financial and operating policy decisions of the associate but not control over those policies.
Investment in associate is stated at cost except where, in the opinion of the Directors, there is an indication of
impairment, in which case the carrying amount of the investment is assessed and written down immediately to its
recoverable amount.
Investment in associate is accounted for in the consolidated financial statements using the equity method of accounting.
Equity accounting involves recognising in the income statement the Group’s share of the results of the associate for
the period. The Group’s investment in associate is carried in the balance sheet at an amount that reflects its share of
the net assets of the associate less premium paid on acquisition, which is written off against the Group’s retained
earnings. Equity accounting is discontinued when the carrying amount of the investment in an associate reaches zero,
unless the Group has incurred obligations or guaranteed obligations in respect of the associate.
Unrealised gains on transactions between the Group and its associate are eliminated to the extent of the Group’s
interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence on impairment
of the asset transferred. Where necessary, in applying the equity method, adjustments are made to the financial
statements of the associate to ensure consistency of accounting policies with the Group.
109
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
5
(e)
Summary of significant accounting policies (continued)
Jointly controlled entity
Jointly controlled entity comprises an unincorporated joint venture over which there is contractually agreed sharing of
control by the Group with third parties. The Group’s interest in the jointly controlled entity is accounted for in the
consolidated financial statements by the equity method of accounting.
Equity accounting involves recognising in the income statement the Group’s share of the results of the jointly controlled
entity for the period. The Group’s interest in the jointly controlled entity is carried in the balance sheet at an amount
that reflects its share of the net assets of the jointly controlled entity.
Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to the extent of
the Group’s interest in the jointly controlled entity; unrealised losses are also eliminated unless the transaction provides
evidence on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments have
been made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with
those of the Group.
(f)
Other investments
Long-term investments are stated at cost and allowance is only made where, in the opinion of the Directors, there is
a permanent diminution in value. Permanent diminution in the value of an investment is recognised as an expense in
the financial year in which the diminution is identified.
The gain or loss on disposal of an investment is the difference between net disposal proceeds and its carrying amount,
and is recognised in the income statement in the financial year in which the disposal is made.
Notes which are acquired and held up to maturity are stated at cost adjusted for amortisation of premium and/or
accretion of discount to maturity.
Puncak Niaga Holdings Berhad Annual Report 2003
110
Notes to the financial statements
for the financial year ended 31 December 2003
5 Summary of significant accounting policies (continued)
(g) Property, plant and equipment
Property, plant and equipment are stated at cost, which comprises the acquisition cost and any incidental cost arising
from the acquisition, less accumulated depreciation and impairment losses except for capital work-in-progress which are
not depreciated. Long-term leasehold land is stated at cost less accumulated amortisation and impairment losses. The
long-term leasehold land is amortised over the period of the lease of 99 years.
All other property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset to
their residual values over their estimated useful lives at the following annual rates:
Over the remaining period of the concession
Water treatment plants
ending 31 December 2020
Plant and equipment
10% to 20%
Office equipment
20%
Furniture and fittings
20%
Motor vehicles
20%
Computers and software
33 1/3%
Renovation
20% to 33 1/3%
Where an indication of impairment exists, the carrying amount of an asset is assessed and written down immediately to
its recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in the
income statement in the financial year in which the disposals are made.
(h) Assets acquired under hire-purchase arrangements
Property, plant and equipment acquired under hire-purchase are capitalised in the financial statements and are
depreciated in accordance with the accounting policy set out in Note 5(g) above. The corresponding outstanding
obligations due under the hire-purchase after deducting finance charges are included as liabilities in the financial
statements. Finance charges are allocated to the income statements over the periods of the respective agreements.
(i) Project development expenditure
Project development expenditure are stated at cost and comprise expenditure incurred for the rehabilitation and
refurbishment of water treatment facilities and concession acquisition cost. Project development expenditure are
amortised over the period of the concession. However, should no future economic benefits be expected to be derived
from the project development expenditure, the amount capitalised is charged as an expense in the income statement in
the financial year in which such a decision is made.
111
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
5
(j)
Summary of significant accounting policies (continued)
Construction contracts
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only
to the extent of contract costs incurred that it is probable will be recoverable and contract costs are recognised
as expenses.
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are
recognised over the period of the contract as revenue and expenses respectively. The Group uses the percentage of
completion method to determine the appropriate amount of revenue and costs to recognise in a given period; the
stage of completion is measured by reference to the actual costs incurred to date to the estimated total costs for each
contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
No profit is recognised where contract works are in its initial stage or have not reached a stage of completion where
it is possible to determine the financial outcome of the contract with reasonable accuracy.
The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress
billings up to the financial year end. Where costs incurred and recognised profits (less recognised losses) exceed
progress billings, the balance is shown as ‘Amounts due from customers on construction contracts’. Where progress
billings exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as ‘Amounts due
to customers on construction contracts’.
(k)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis
and includes transportation and handling cost incurred.
(l)
Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the financial year in which they are
identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance
sheet date.
(m) Bonds and notes
Bonds and notes issued by the Company and the Group are initially recognised based on the proceeds received, net
of issuance expenses incurred and are adjusted in subsequent financial years for amortisation of premium and/or
accretion of discount to maturity, using the effective yield method. The premium amortised and/or discount accreted
is recognised in the income statement over the period of the bonds and notes.
Puncak Niaga Holdings Berhad Annual Report 2003
112
Notes to the financial statements
for the financial year ended 31 December 2003
5
(n)
Summary of significant accounting policies (continued)
Capitalisation of borrowing costs
Borrowing costs incurred in connection with financing the construction of the capital work-in-progress are capitalised
and included as part of the construction costs respectively until the assets are ready for their intended use.
(o)
Income taxes
Current tax expense is determined according to the tax laws of each jurisdiction in which the Group and the
Company operates and include all taxes based upon the taxable profits, including withholding taxes payable by a
foreign joint venture on distributions of retained earnings to the Company, and real property gains taxes payable on
disposal of properties.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts
attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
the deductible temporary differences or unutilised tax losses can be utilised.
Deferred tax is recognised on temporary differences arising on investments in subsidiaries, an associate and an interest
in a jointly controlled entity, except where the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred tax.
(p)
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
(q)
Share capital
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised as liability when declared.
Proposed final dividends on ordinary shares are accrued as liabilities only after approval by the shareholders.
(r)
Employee benefits
(i)
Short-term employee benefits
Wages, salaries, paid annual leave and medical leave, bonuses and non-monetary benefits are accrued in the
period in which the associated services are rendered by employees of the Group and of the Company.
113
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
5
(r)
Summary of significant accounting policies (continued)
Employee benefits (continued)
(ii)
Defined contribution plan
The Group’s and the Company’s contribution to defined contribution plans are charged to the income statement
in the financial year to which they relate. Once the contributions have been paid, the Company has no future
obligations.
(s)
Revenue recognition
Revenue of the Group is recognised when the treated water is discharged through the reading meter installed at the
respective reservoirs.
Dividend income is recognised when the shareholder’s right to receive payment is established.
Management fee is recognised on an accrual basis.
Other revenue earned by the Group are recognised on the following bases:
(i)
Revenue relating to long-term construction contracts are accounted for under the percentage of completion
method; the stage of completion is measured by reference to the actual costs incurred to date to estimated
total costs for each contract.
(ii)
(t)
Interest income is recognised on an accrual basis.
Foreign currency
Foreign currency transactions are converted into Ringgit Malaysia at exchange rates prevailing at the transaction
dates, unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward
contracts are used. Monetary assets and liabilities in foreign currencies are translated at exchange rates prevailing at
the balance sheet date, unless hedged by forward foreign exchange contracts, in which case the rates specified in
such forward contracts are used. All exchange differences are dealt with through the income statement.
The principal closing rate used in translation of foreign currency amounts is as follows:
Foreign currency
100 Indian Rupee
Puncak Niaga Holdings Berhad Annual Report 2003
114
31.12.2003
31.12.2002
RM8.345
N/A
Notes to the financial statements
for the financial year ended 31 December 2003
5
(u)
Summary of significant accounting policies (continued)
Financial instruments
Financial instruments carried on the balance sheet include deposits, bank and cash balances, other investments,
receivables, payables and borrowings.
(i)
Financial instruments recognised on the balance sheet
The particular recognition methods adopted for financial instruments recognised on the balance sheet are
disclosed in the individual policy statements associated with each item.
(ii)
Fair value estimation for disclosure purposes
The fair value of publicly traded securities is based on quoted market prices at the balance sheet date.
In assessing the fair value of financial instruments, the Group and the Company use a variety of methods and
make assumptions that are based on market conditions existing at each balance sheet date. Quoted market
prices or dealer quotes for the specific or similar instruments are used for long term debt. Other technique,
such as the discounted value of future cash flows, is used to determine the fair value for the remaining financial
instruments. In particular, the fair value of financial liabilities is estimated by discounting the future contractual
cash flows at the current market interest rate available to the Group and the Company for similar
financial instruments.
The face values for financial assets and financial liabilities with a maturity of less than one (1) year are assumed
to approximate their fair values.
6
Revenue
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
578,260,034
565,105,110
0
0
Gross dividend income
0
0
3,840,000
3,840,000
Management fees
0
0
120,000
120,000
578,260,034
565,105,110
3,960,000
3,960,000
Invoiced value of bulk quantity of treated
water supplied to the State Government
of Selangor
115
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
7
Staff cost
Group
Wages, salaries and bonus
Defined contribution retirement plan
Other employee benefits
Company
2003
2002
2003
2002
RM
RM
RM
RM
20,767,687
19,290,613
0
14,331
2,770,031
2,575,335
0
2,600
4,693,933
4,751,735
0
0
28,231,651
26,617,683
0
16,931
The number of persons, including Executive Directors, employed by the Group and Company at the end of the financial year
was 629 (2002: 616) and Nil (2002: Nil) respectively.
The Group contributes to the Employees Provident Fund, the national defined contribution plan. Once the contributions
have been paid, the Group has no further payment obligations.
8
Directors’ Remuneration
The Directors of the Company in office during the financial year were as follows:
Executive Directors
Tan Sri Rozali bin Ismail
Ruslan bin Hassan
Mat Hairi bin Ismail
Lee Miang Koi
Non-Executive Directors
Abdul Majid bin Abdul Karim
Tan Sri Dato’ Hari Narayanan a/l Govindasamy
Tan Sri Dato’ Seri Dr.Ting Chew Peh
The aggregate amount of emoluments receivable by Directors of the Company during the financial year was as follows:
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
2,405,040
2,564,660
0
0
381,240
405,180
0
0
103,800
223,800
0
0
687,360
704,031
0
0
118,000
95,000
118,000
95,000
Executive Directors:
- Wages, salaries and bonus
- Defined contribution retirement plan
- Estimated money value of
benefits-in-kind
- Other employee benefits
Non-Executive Directors:
- Meeting allowances
- Leave passage
Puncak Niaga Holdings Berhad Annual Report 2003
116
0
165,426
0
165,426
3,695,440
4,158,097
118,000
260,426
Notes to the financial statements
for the financial year ended 31 December 2003
9
Profit from operations
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
4,147,087
4,142,885
88,045
88,045
Amortisation of water treatment plants
82,075,188
81,946,473
0
0
Amortisation of project development expenditure
15,628,500
14,999,624
0
0
2,622,652
2,413,310
0
0
213,522
165,813
0
0
24,297,347
20,401,865
22,966,069
19,166,011
937,653
836,468
0
0
118,000
260,426
118,000
260,426
• other emoluments
4,016,517
3,888,037
0
0
Auditors' remuneration
90,000
90,000
15,000
15,000
603
32,388
0
0
0
The following items have been charged/(credited) in
arriving at profit from operations:
Depreciation of property, plant and equipment
Rental of premises
Hire of transport and equipment
Accretion of discount on bonds and notes
Amortisation of debt issuance expenses
Directors’ remuneration:
- Directors of the Company
• other emoluments
- Directors of subsidiaries
Allowance for diminution in value of other investments
Interest income from deferred payment contract
(6,742,824)
(8,775,680)
0
Interest income on deposits
(2,724,083)
(3,434,301)
(1,637,704)
(33,033)
Interest income on advances to a subsidiary
0
0
(13,671,875) (13,671,875)
Income from discount on notes
0
0
(22,966,069) (19,166,011)
Gain on disposal of property, plant and equipment
(209,200)
117
(510,404)
0
0
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
10
Auditor’s remuneration
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
75,000
75,000
15,000
15,000
PricewaterhouseCoopers Malaysian Firm
Statutory audit (Note 9)
Fee for other services:
- Tax advisory and compliance work
25,662
68,350
5,800
5,900
- Review of non-financial reporting framework
6,000
0
6,000
0
- Other non-audit related service
2,000
2,000
0
0
108,662
145,350
26,800
20,900
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
15,000
15,000
0
0
Other accounting firms in Malaysia
Statutory audit (Note 9)
Fee for other services:
- Tax advisory and compliance work
11
3,150
3,150
0
0
18,150
18,150
0
0
Finance cost
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
79,037,283
79,136,153
0
0
54,634,117
56,152,340
36,637,944
32,837,886
360,811
369,680
0
0
(185,000)
393,262
1,111
1,312
0
0
1,637,704
0
133,847,211
136,051,435
38,276,759
32,839,198
Finance cost comprises:
Financing cost on borrowings
under Islamic banking principles
Financing cost on conventional borrowings
Interest expense on hire-purchase
Bank charges
Other interest expense
Puncak Niaga Holdings Berhad Annual Report 2003
118
Notes to the financial statements
for the financial year ended 31 December 2003
12
Taxation
The taxation charge in the income statements represents:
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
- Malaysian tax
359,538
368,212
815,745
804,303
- Foreign tax
147,226
0
0
0
53,317,847
52,649,000
0
0
53,824,611
53,017,212
815,745
804,303
619,250
606,190
815,745
804,303
(112,486)
(237,978)
0
0
Current tax:
Deferred tax (Note 33)
Current tax:
- Current financial year
- Overaccrual in prior year
Deferred tax:
- Origination and reversal of temporary differences
53,317,847
52,649,000
0
0
53,824,611
53,017,212
815,745
804,303
The explanation of the relationship between taxation and profit from ordinary activities before taxation is as follows:
(a) Numerical reconciliation between taxation and the product of accounting profit multiplied by the Malaysian tax rate:
Group
Profit from ordinary activities before taxation
Company
2003
2002
2003
2002
RM
RM
RM
RM
183,411,058
180,113,643
2,498,672
2,674,449
51,355,096
50,431,820
699,628
748,846
8,448
0
0
0
2,480,995
3,259,568
116,117
55,457
0
0
Tax calculated at the Malaysian tax rate of
28% (2002: 28%)
Tax effects of:
- Different tax rates in another country
- Expenses not deductible for tax purposes
- Utilisation of previously unutilised tax allowances
(132,180)
(633,208)
- Overaccrual in prior year
(112,486)
(237,978)
0
0
117,657
197,010
0
0
- Permanent tax losses from certain subsidiaries
- Deferred tax assets not recognised
Taxation
107,081
0
0
0
53,824,611
53,017,212
815,745
804,303
119
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
12
Taxation (continued)
(b) Numerical reconciliation between the average effective tax rate and the Malaysian tax rate:
Group
Company
2003
2002
2003
2002
%
%
%
%
28.00
28.00
28.00
28.00
- Different tax rates in another country
0.00
0.00
0.00
0.00
- Expenses not deductible for tax purposes
1.35
1.81
4.65
2.07
- Utilisation of previously unutilised tax allowances
(0.07)
(0.35)
0.00
0.00
- Overaccrual in prior year
(0.06)
(0.13)
0.00
0.00
- Permanent tax losses from certain subsidiaries
0.07
0.11
0.00
0.00
- Deferred tax assets not recognised
0.06
0.00
0.00
0.00
29.35
29.44
32.65
30.07
Malaysian tax rate
Tax effects of:
Average effective tax rate
The tax charge for the Company is principally in respect of interest income and dividend income received from its subsidiary.
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
10,962,570
9,422,994
10,962,570
9,422,994
129,918
552,587
0
0
608,075
587,074
127,822
127,822
Tax losses
Tax savings as a result of the utilisation of
current year tax losses for which the
related tax credit is recognised during the
financial year
Tax savings from the utilisation of tax
losses brought forward from previous
years for which the related tax credit
is recognised during the financial year
Tax losses for which the related tax credit has not
been recognised in the financial statements
Puncak Niaga Holdings Berhad Annual Report 2003
120
Notes to the financial statements
for the financial year ended 31 December 2003
13
Earnings per ordinary share
(a) Basic earnings per share
The basic earnings per ordinary share of the Group for the financial year of 29.26 sen (2002: 28.98 sen) is calculated
by dividing the net profit for the financial year by the weighted average number of ordinary shares in issue during the
financial year.
2003
RM
2002
RM
Net profit for the financial year
129,586,447
127,096,431
Weighted average number of ordinary shares in issue
442,944,578
438,543,449
29.26 sen
28.98 sen
Basic earnings per share
(b) Diluted earnings per share
The diluted earnings per ordinary share of the Group for the financial year of 28.51 sen (2002: 28.64 sen) is calculated by
dividing the net profit for the financial year by the weighted average number of ordinary shares in issue adjusted to assume
the conversion of all dilutive potential ordinary shares i.e. warrants, which was granted for free to all subscribers of the RUN
(Note 31(iv)), and options granted to the eligible employees pursuant to the ESOS (Note 34).
In assessing the dilution in earnings per share arising from the issue of both warrants and options, a calculation is done to
determine the number of shares that could have been acquired at market price. This calculation serves to determine the
‘bonus’ element to the ordinary shares outstanding for the purpose of computing the dilution. No adjustment is made to
net profit for the financial year in the calculation of the diluted earnings per share in connection with the issue of the warrants
and options.
2003
RM
2002
RM
Net profit for the financial year
129,586,447
127,096,431
Weighted average number of ordinary shares in issue
Adjustment for:
- warrants
- options
Weighted average number of ordinary shares for diluted earnings per share
442,944,578
438,543,449
6,862,837
4,791,538
454,598,953
2,108,483
3,082,752
443,734,684
28.51 sen
28.64 sen
Diluted earnings per share
Comparative earnings per share information has been restated to take into account the effect on the net profit for the
financial year arising from the change in accounting policy with respect to deferred tax (Note 36).
121
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
14
Property, plant and equipment
Long-term
Water
leasehold
treatment
and
Office
and
Motor
and
land
plants
equipment
equipment
fittings
vehicles
software
Renovation
Total
RM
RM
RM
RM
RM
RM
RM
RM
RM
8,716,411
1,749,438,913
7,870,045
2,379,788
3,229,378
11,995,045
6,377,565
Additions
0
1,699,526
0
200,948
195,223
1,044,814
198,487
84,100
3,423,098
Disposals
0
0
0
0
0
0
0
(751,584)
8,716,411
1,751,138,439
7,870,045
2,580,736
3,424,601
12,288,275
6,576,052
6,233,797 1,798,828,356
432,886
242,775,290
1,824,255
1,863,524
3,118,438
7,563,409
4,767,768
5,108,424
267,453,994
88,045
82,075,188
793,531
193,953
81,287
1,571,281
952,148
466,842
86,222,275
0
0
0
0
0
0
0
(751,584)
520,931
324,850,478
2,617,786
2,057,477
3,199,725
8,383,106
5,719,916
5,575,266
352,924,685
8,195,480
1,426,287,961
5,252,259
523,259
224,876
3,905,169
856,136
658,531 1,445,903,671
8,716,411
1,746,704,712
7,820,490
2,097,747
3,174,286
11,191,726
5,148,602
5,208,551 1,790,062,525
0
2,734,201
79,555
282,041
55,092
3,152,485
1,228,963
Group
Plant
Furniture
Computers
2003
Cost
At 1 January
At 31 December
(751,584)
6,149,697 1,796,156,842
Accumulated depreciation
At 1 January
Charge for the financial year
Released on disposals
At 31 December
(751,584)
Net book value
At 31 December
2002
Cost
At 1 January
Additions
Disposals
At 31 December
(30,000)
(2,349,166)
0
941,146
0
8,473,483
0
0
0
0
8,716,411
1,749,438,913
7,870,045
2,379,788
3,229,378
11,995,045
6,377,565
6,149,697 1,796,156,842
(2,379,166)
344,841
160,828,817
977,505
1,643,479
3,026,825
8,093,625
3,849,735
4,872,397
183,637,224
88,045
81,946,473
852,000
220,045
91,613
1,737,122
918,033
236,027
86,089,358
Accumulated depreciation
At 1 January
Charge for the financial year
Released on disposals
At 31 December
0
0
0
0
0
0
432,886
242,775,290
1,824,255
(5,250)
1,863,524
3,118,438
(2,267,338)
7,563,409
4,767,768
5,108,424
(2,272,588)
8,283,525
1,506,663,623
6,045,790
516,264
110,940
4,431,636
1,609,797
1,041,273 1,528,702,848
267,453,994
Net book value
At 31 December
Puncak Niaga Holdings Berhad Annual Report 2003
122
Notes to the financial statements
for the financial year ended 31 December 2003
14
Property, plant and equipment (continued)
Company
Long-term
leasehold land
RM
2003
Cost
At 1 January/31 December
Accumulated depreciation
At 1 January
Charge for the financial year
At 31 December
Net book value
At 31 December
8,716,411
432,886
88,045
520,931
8,195,480
2002
Cost
At 1 January/31 December
Accumulated depreciation
At 1 January
Charge for the financial year
At 31 December
Net book value
At 31 December
8,716,411
344,841
88,045
432,886
8,283,525
At 31 December 2003, the unexpired period of lease of the long-term leasehold land is 96 years.
Included in the cost of water treatment plants are interest and financing cost on long-term borrowings capitalised amounting
to RM286,075,263 (2002: RM286,075,263).
Property, plant and equipment of a wholly-owned subsidiary, PNSB, with a total net book value of RM1,437,699,433 (2002:
RM1,520,384,302), have been charged as security for long-term borrowings (Note 31(iii)).
In determining the recoverable amount of property, plant and equipment of the Group with the exception of the long-term
leasehold land, expected future cash flows have been discounted to their present value.
Assets acquired under hire-purchase arrangements
The value of the property, plant and equipment of the Group includes the following assets acquired under hire-purchase
arrangements:
2003
RM
6,667,100
(3,036,444)
3,630,656
Motor vehicles
Cost
Accumulated depreciation
Net book value
123
2002
RM
6,843,637
(2,690,524)
4,153,113
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
15
Project development expenditure
Group
2003
RM
Cost
At 1 January
Additions
315,714,540
16,598,599
332,313,139
(85,504,554)
246,808,585
Accumulated amortisation
At 31 December
2002
RM
310,603,705
5,110,835
315,714,540
(69,876,054)
245,838,486
Included in project development expenditure is concession acquisition cost of RM14,847,596 (2002: RM14,847,596) with an
unamortised balance of RM10,185,906 (2002: RM10,785,240) at the end of the financial year.
16
Investment in subsidiaries
Company
2003
2002
RM
RM
123,000,105 123,000,105
Unquoted shares in Malaysia, at cost
The details of the subsidiaries are as follows:
Name of company
Country of
incorporation
Effective equity interest
held by the Group
2003
2002
%
%
100
100
Principal activities
Puncak Niaga (M) Sdn. Bhd. #
Malaysia
Held through 100% ownership by
Puncak Niaga (M) Sdn. Bhd.
- Ideal Water Resources Sdn. Bhd.*
Malaysia
100
100
Operation, management,
maintenance and
undertaking the rehabilitation
and refurbishment of water
treatment plants
- Unggul Raya (M) Sdn. Bhd.*
Malaysia
100
100
Operation, management,
maintenance and monitoring
the operation of dams
Puncak Research Centre Sdn. Bhd.*
Puncak Seri (M) Sdn. Bhd.*
NS Water System Sdn. Bhd.*
Malaysia
Malaysia
Malaysia
100
100
100
100
100
100
Dormant
Dormant
Dormant
# subsidiary consolidated using the merger accounting method
*
not audited by PricewaterhouseCoopers, Malaysia
Puncak Niaga Holdings Berhad Annual Report 2003
124
Operation, maintenance,
management, construction
and undertaking the
rehabilitation and
refurbishment of water
treatment facilities
Notes to the financial statements
for the financial year ended 31 December 2003
17
Investment in an associate
Unquoted investment in Malaysia, at cost
Allowance for diminution in value of investment
Share of loss in associate
Group
2003
RM
20,000
0
(20,000)
0
2002
RM
20,000
0
(20,000)
0
Company
2003
2002
RM
RM
20,000
20,000
(20,000)
(20,000)
0
0
0
0
The Group has excluded its share of cumulative loss after taxation of the associate amounting to RM20,316 (2002:
RM18,483) from the financial statements following the discontinuation of the equity accounting for the results of the associate
as the carrying value of this investment has reached zero.
The details of the associate are as follows:
Name of Company
NS Water Management Sdn. Bhd.
18
Country of
incorporation
Malaysia
Effective equity interest
held by the Group
2003
2002
%
%
40
40
Principal activities
Dormant
Interest in a jointly controlled entity
Advances to a jointly controlled entity
Share of net assets of the jointly controlled entity
Group
2003
RM
2,195,812
348,412
2,544,224
2002
RM
0
0
0
Company
2003
RM
2,195,812
0
2,195,812
2002
RM
0
0
0
The Group and Company have a 70% interest in an unincorporated jointly controlled entity in India, PNHB-Lanco-KHEC
Joint Venture, which is presently in the construction industry.
The Group’s share of the assets and liabilities of the jointly controlled entity is as follows:
2003
RM
39,649
46,471,716
(46,162,953)
348,412
Non-current assets
Current assets
Current liabilities
Net assets
125
2002
RM
0
0
0
0
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
18
Investment in a jointly controlled entity (continued)
The Group’s share of the revenue and expenses of the jointly controlled entity is as follows:
Group
Revenue
Expenses excluding taxation
2003
2002
RM
RM
11,188,376
0
(10,692,738)
0
Profit from ordinary activities before taxation
Taxation
495,638
0
(147,226)
0
348,412
0
Profit from ordinary activities after taxation
19
Other investments
Group
2003
2002
RM
RM
471,139
471,139
(459,080)
(458,477)
12,059
12,662
12,059
12,662
Quoted shares in Malaysia, at cost
Allowance for diminution in value of quoted shares
Market value of quoted shares
The market value of these investments at the balance sheet date is equivalent to the fair value.
20
Junior Notes A
Company
2003
2002
RM
RM
Nominal value
546,875,000
546,875,000
Less : Yield to maturity
(370,781,250)
(370,781,250)
At cost
176,093,750
176,093,750
43,648,165
20,682,096
219,741,915
196,775,846
Cumulation of accretion of yield to maturity
Puncak Niaga Holdings Berhad Annual Report 2003
126
Notes to the financial statements
for the financial year ended 31 December 2003
20
Junior Notes A (continued)
The Company subscribed for RM546,875,000 nominal value of Junior Notes A (‘JNA’) issued on 20 November 2001 by its
wholly-owned subsidiary, PNSB, at an issue price of RM0.322 per RM1.00 nominal value of JNA. The JNA are redeemable,
unconvertible, unsecured and substantially mirror the structure of the Redeemable Unconvertible Junior Notes (‘RUN’)
issued by the Company. The proceeds of the JNA was utilised to repay RM168,000,000 of PNSB’s Al-Murabahah Commercial
Papers (‘MCPs’) with the remaining balance utilised for its working capital purposes.
The main features of the JNA are as follows:
(a)
The JNA carries a coupon rate of 2.5% per annum receivable semi-annually for the immediate ten (10) years from
the date of issue of the JNA and 3.5% per annum receivable semi-annually thereafter for the next five (5) years.
(b)
PNSB shall redeem the JNA in ten (10) equal instalments each comprising 10% of the aggregate nominal value of all
outstanding JNA commencing on the sixth (6th) anniversary of the date of issue of the JNA. On the tenth (10th)
anniversary of the date of issue of the JNA, PNSB has the option to redeem the JNA by paying the principal amount
outstanding on that date. On the same day, the holders of the JNA also have the option to sell the JNA back to
PNSB for a consideration equivalent to the principal amount outstanding on that day.
(c)
The JNA was issued back-to-back with the RUN. Proceeds from the RUN was immediately utilised to subscribe for
the JNA by the Company. Accordingly, the proceeds from the coupon payments and redemptions of the JNA would
be utilised by the Company for coupon payments and redemptions of the RUN.
At balance sheet date, the carrying amount of the JNA approximated the fair value.
The effective interest rate applicable to the JNA at the balance sheet date was 16.93% (2002: 16.93%) per annum.
21
Advances to a subsidiary
The advances to a wholly-owned subsidiary, PNSB, are unsecured, interest free and are not repayable within the period of
twelve (12) months from the balance sheet date.
The carrying amount of these advances at the balance sheet date were not reduced to their estimated fair value of
RM345,807,471 (2002: RM345,807,471) (Note 43) as these advances are receivable from a profitable wholly-owned
subsidiary and the Directors are of the opinion that the amounts are recoverable in full.
127
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
22
Debt Service Reserve Account
Under the terms of agreement for the issue of the RM1,020,000,000 10 years Al-Bai’ Bithaman Ajil Islamic Debt Securities
primary bonds together with non-detachable secondary bonds (‘BaIDS’) and RM350,000,000 MCPs/Al-Murabahah Medium
Term Notes (‘MMTNs’) Issuance Facility by its wholly-owned subsidiary, PNSB, a deposit equivalent to twelve (12) months
projected payment obligations under the BaIDS and MCPs/MMTNs that are outstanding at any point in time is required to
be placed in a Debt Service Reserve Account (‘DSRA’). PNSB is not entitled to withdraw any money from the DSRA
without prior consent of the Security Trustee except on condition that the BaIDS and MCPs/MMTNs have been fully
redeemed (Note 31(iii)).
At the balance sheet date, the carrying amount of the deposits held in the DSRA approximated the fair value.The deposits
held in the DSRA is maintained for long term until the full redemption and expiry of the BaIDS on 27 October 2010 (Note
31(iii)) and is presently yielding interest income at market interest rates.
The weighted average effective interest rate applicable to the deposits held in the DSRA at the balance sheet date was 3.00%
(2002: 2.97%) per annum.
23
Long-term receivables
The long-term receivables mainly represent an amount due from a customer, i.e. the State Government of Selangor, on
contract in respect of the Sungai Selangor Water Supply Scheme Phase 2 - Distribution Supply System II (‘DSS II’) which was
completed on 6 July 2001. Pursuant to the terms of the contract, the payments for the contract sum are to be made over
a period of five (5) years commencing from 2001.
Group
2003
2002
RM
RM
83,596,976
59,338,454
47,778,515
106,108,547
131,375,491
165,447,001
Deferred repayment periods are as follows:
Amount receivable within 12 months (included in trade receivables - Note 25)
Amount receivable after 12 months
Included in amount receivable after twelve (12) months is retention sum on contract amounting to RM Nil (2002:
RM8,314,334).
Puncak Niaga Holdings Berhad Annual Report 2003
128
Notes to the financial statements
for the financial year ended 31 December 2003
23
Long-term receivables (continued)
The weighted average effective interest rate per annum appplicable to the long-term receivables at the balance sheet date
and the fair value of long-term receivables as at balance sheet date were as follows:
Weighted average effective
Fair value
interest rate per annum
2003
2002
2003
2002
RM
RM
%
%
130,479,476
162,742,451
5.00
5.00
Group
Long-term receivables (Note 43)
The carrying amount of these receivables at the balance sheet date were not reduced to their estimated fair value as above,
as these receivables are receivable from the State Government of Selangor and the Directors are of the opinion that the
amounts are recoverable in full.
24
Inventories
Group
Water treatment chemicals, at cost
25
2003
2002
RM
RM
978,526
817,277
Trade and other receivables
Group
Trade receivables
Company
2003
2002
2003
2002
RM
RM
RM
RM
1,141,787,178
780,816,547
0
0
7,662,325
0
0
0
1,104,311
1,745,350
0
0
Amount due from customer
on construction contract (Note 26)
Advances and loans to staff
Amounts due from subsidiaries
(Note 27)
0
0
1,590,731
11,713,479
15,208,685
34,044,584
5,669,547
5,194,262
Deposits
2,029,850
2,125,244
500
100,000
Prepayments
2,257,572
1,119,242
0
0
1,170,049,921
819,850,967
7,260,778
17,007,741
Sundry receivables
129
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
25
Trade and other receivables (continued)
Included in trade receivables is RM83,596,976 (2002: RM59,338,454) representing unpaid and current portion of deferred
payments on contract due within twelve (12) months, pursuant to the DSS II contract (Note 23).
Included in sundry receivables of the Group is RM8,442,598 (2002: RM8,442,598) due from a subsidiary of Central Plus (M)
Sdn. Bhd. (‘CPMSB’), a substantial corporate shareholder of the Company.
The credit term of trade receivables is 30 days (2002: 30 days).
26
Construction contracts
Aggregate costs incurred to date
Group
2003
RM
7,662,325
Amount due from customer on construction contract (Note 25)
7,662,325
2002
RM
0
0
The construction contract is undertaken by a subsidiary and is in relation to the turnkey sub-contract for planning, design,
construction, supervision, testing and commissioning of a water supply scheme in the State of Sabah.
The construction contract is in its initial stage and the subsidiary has not recognised any profits from the construction
contract nor issued any progress billings as at the balance sheet date.
27
Amounts due from/(to) subsidiaries
The amounts due from/(to) subsidiaries are interest free, unsecured and payable at call.
28
Deposits, bank and cash balances
Group
2003
RM
88,451,787
81,711,844
170,163,631
Deposits with licensed banks
Bank and cash balances
2002
RM
56,580,289
28,735,846
85,316,135
Company
2003
RM
74,790,195
3,113,196
77,903,391
2002
RM
0
544,693
544,693
Included in deposits with licensed banks, for the Group, are restricted monies amounting to RM53,408,698 (2002:
RM55,726,548) representing deposits in a designated account for the repayment of the Term Loan (DSS II) (Note 31 (ii))
and RM88,090,196 (2002: RM Nil) representing deposits for Standby Letters of Credit (‘SBLC’) and Ad-hoc Bank Guarantees.
The deposit for SBLC placed by the Company amounted to RM74,790,195 (2002: RM Nil)
The weighted average effective interest rate applicable to deposits with licensed banks at the balance sheet date was 2.83%
(2002: 2.53%) per annum.
Deposits of the Group have an average maturity of 179 days (2002: 14 days).
Puncak Niaga Holdings Berhad Annual Report 2003
130
Notes to the financial statements
for the financial year ended 31 December 2003
29
Trade and other payables
Group
2003
RM
Trade payables
Amounts due to contractors
Amount due to a subsidiary (Note 27)
Finance cost payable
Trade accruals
Retention sum
Amount owing to Directors
20,614,381
271,708
0
73,683,162
23,599,895
0
16,799
118,185,945
2002
RM
72,466,155
3,789,973
0
65,849,524
18,455,888
17,923
16,799
160,596,262
Company
2003
RM
0
0
40,242,189
1,535,745
226,187
0
0
42,004,121
2002
RM
0
0
0
1,535,745
293,246
0
0
1,828,991
Included in trade payables and trade accruals are RM18,464,238 (2002: RM70,897,978) and RM21,000 (2002: RM81,000)
respectively, which are amounts due to subsidiaries of CPMSB, a substantial corporate shareholder of the Company.
The credit term of trade payables granted to the Group is 30 days (2002: 30 days). Notwithstanding, the Group is
paying its major trade payables on back-to-back terms based on collections from its sole customer, i.e. the State
Government of Selangor.
30
Hire-purchase payables
Group
2003
RM
Analysis of hire-purchase payables:
Payable within one year
Payable between one and two years
Payable between two and five years
Payable after five years
Less: Financing charges
Present value of hire-purchase payables:
Payable within one year
Payable between one and two years
Payable between two and five years
Payable after five years
Representing hire-purchase payables, net of interest-in-suspense:
Payable within 12 months
Payable after 12 months
131
2002
RM
1,250,640
1,044,608
1,835,935
6,559
4,137,742
(577,204)
3,560,538
1,254,032
1,073,052
2,212,759
300,582
4,840,425
(800,046)
4,040,379
989,974
871,892
1,692,175
6,497
3,560,538
977,149
952,103
1,998,415
112,712
4,040,379
989,974
2,570,564
3,560,538
977,149
3,063,230
4,040,379
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
30
Hire-purchase payables (continued)
The weighted average effective interest rate per annum applicable to hire-purchase payables at the balance sheet date and
the fair value of hire-purchase payables as at balance sheet date were as follows:
Fair value
2003
RM
Group
Hire-purchase payables (Note 43)
31
3,666,286
2002
RM
4,306,549
Weighted average effective
interest rate per annum
2003
2002
%
%
5.26
5.01
Borrowings
Group
2003
RM
Current
Secured:
Government Support Loan
Term Loan (DSS 11)
Unsecured:
Revolving Credit
Long-term
Secured:
Government Support Loan
Term Loan (DSS 11)
Al-Bai’ Bithaman Ajil Bonds
Al-Murabahah Commercial Papers/
Al-Murabahah Medium Term Notes
Redeemable Unconvertible Junior
Notes
Total
Secured:
Government Support Loan
Term Loan (DSS 11)
Al-Bai’ Bithaman Ajil Bonds
Al-Murabahah Commercial Papers/
Al-Murabahah Medium Term Notes
Redeemable Unconvertible Junior
Notes
Unsecured:
Revolving Credit
2002
RM
Company
2003
RM
36,532,674
53,404,609
89,937,283
30,443,895
55,726,548
86,170,443
0
0
0
0
0
0
25,000,000
114,937,283
0
86,170,443
0
0
0
0
85,242,905
62,805,674
1,010,508,328
91,331,684
116,210,283
1,008,601,662
0
0
0
0
0
0
122,000,000
32,000,000
0
0
214,581,752
1,495,138,659
191,253,418
1,439,397,047
219,741,915
219,741,915
196,775,846
196,775,846
121,775,579
116,210,283
1,010,508,328
121,775,579
171,936,831
1,008,601,662
0
0
0
0
0
0
122,000,000
32,000,000
0
0
214,581,752
1,585,075,942
191,253,418
1,525,567,490
219,741,915
219,741,915
196,775,846
196,775,846
25,000,000
1,610,075,942
0
1,525,567,490
0
219,741,915
0
196,775,846
All the long-term borrowings carry fixed interest rates except for the Al-Murabahah Commercial Papers.
Puncak Niaga Holdings Berhad Annual Report 2003
132
2002
RM
Notes to the financial statements
for the financial year ended 31 December 2003
31
Borrowings (continued)
Analysis of borrowings:
Maturity profile
Total
carrying
amount
RM
< 1 year
RM
1 - 2 years
RM
2 - 5 years
RM
>5 years
RM
121,775,579
116,210,283
1,010,508,328
36,532,674
53,404,609
0
6,088,779
51,082,669
180,000,000
18,266,337
11,723,005
540,000,000
60,887,789
0
290,508,328
122,000,000
0
122,000,000
0
0
214,581,752
1,585,075,942
0
89,937,283
0
359,171,448
109,375,000
679,364,342
105,206,752
456,602,869
25,000,000
1,610,075,942
25,000,000
114,937,283
0
359,171,448
0
679,364,342
0
456,602,869
121,775,579
171,936,831
1,008,601,662
30,443,895
55,726,548
0
6,088,779
53,404,609
0
18,266,337
62,805,674
540,000,000
66,976,568
0
468,601,662
32,000,000
0
0
32,000,000
0
191,253,418
1,525,567,490
0
86,170,443
0
59,493,388
54,687,500
707,759,511
136,565,918
672,144,148
Company
At 31 December 2003
Secured:
Redeemable Unconvertible
Junior Notes
219,741,915
0
0
109,375,000
110,366,915
At 31 December 2002
Secured:
Redeemable Unconvertible
Junior Notes
196,775,846
0
0
54,687,500
142,088,346
Group
At 31 December 2003
Secured:
Government Support Loan
Term Loan (DSS II)
Al-Bai’ Bithaman Ajil Bonds
Al-Murabahah Commercial
Papers/Al-Murabahah
Medium Term Notes
Redeemable Unconvertible
Junior Notes
Unsecured:
Revolving Credit
At 31 December 2002
Secured:
Government Support Loan
Term Loan (DSS II)
Al-Bai’ Bithaman Ajil Bonds
Al-Murabahah Commercial
Papers/Al-Murabahah
Medium Term Notes
Redeemable Unconvertible
Junior Notes
133
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
31
Borrowings (continued)
The Al-Bai’ Bithaman Ajils Bonds and Redeemable Unconvertible Junior Notes are further analysed as follows:
Nominal value
Group
Group
Company
Al-Bai' Bithaman Ajil Bonds
Redeemable Unconvertible
Redeemable Unconvertible
Junior Notes
Junior Notes
2003
2002
2003
2002
2003
2002
RM
RM
RM
RM
RM
RM
1,020,000,000 1,020,000,000
546,875,000
546,875,000
546,875,000
546,875,000
Less: Yield to maturity
(10,532,693)
(10,532,693) (370,781,250) (370,781,250) (370,781,250) (370,781,250)
1,009,467,307 1,009,467,307
Less: Debt issuance expenses
Net proceeds
(4,552,312)
(4,552,312)
1,004,914,995 1,004,914,995
176,093,750
(5,848,665)
176,093,750
(5,848,665)
176,093,750
176,093,750
0
0
170,245,085
170,245,085
176,093,750
176,093,750
43,648,165
20,682,096
43,648,165
20,682,096
Cumulation of accretion of yield
to maturity
3,905,392
2,574,114
1,687,941
1,112,553
688,502
326,237
0
0
1,010,508,328 1,008,601,662
214,581,752
191,253,418
219,741,915
196,775,846
Cumulation of amortisation of
debt issuance expenses
(i)
Government Support Loan
The Government Support Loan which was obtained from the Federal Government in 1998 to finance the construction of
the Wangsa Maju Water Treatment Plant and its related facilities, is repayable in equal annual instalments over a period of
twenty (20) years commencing on 11 April 1999. It is secured on all moneys standing to the credit of the Special Project
Account. The interest rate is fixed at 8% (2002: 8%) per annum on the outstanding balance of the loan amount.
PNSB has been negotiating with the Federal Government to restructure the loan in view of the lower bulk supply rate
offered by the State Government of Selangor. On 24 December 2003, the Federal Government has, in principle, agreed to
restructure the Government Support Loan by lowering the interest rate to 3% per annum and accordingly revises the
repayment schedule of the loan. Notwithstanding, the restructuring is conditional upon the payment of RM30,000,000 as the
first principal repayment, upon PNSB being paid by the Federal Government in conjunction with the privatisation of the
water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya to Syarikat Bekalan
Air Selangor Sdn. Bhd. (‘SYABAS’).
(ii)
Term Loan (‘DSS II’)
The Term Loan to finance the Sungai Selangor Water Supply Scheme Phase 2 Stage II - Distribution Supply System II (‘DSS II’)
project is repayable in five (5) unequal instalments commencing on 31 October 2001 and thereafter on 2 January 2003. The
subsequent repayments will be on an annual basis until year 2006. The Term Loan (DSS II) is secured via the assignments
of the DSS II construction contract and project account, proceeds from the DSS II project and the designated account,
contractors’ performance bond and insurance policies on the DSS II project. Interest is payable semi-annually and fixed at
7.60% (2002: 7.60%) per annum.
Puncak Niaga Holdings Berhad Annual Report 2003
134
Notes to the financial statements
for the financial year ended 31 December 2003
31
Borrowings (continued)
(iii)
Al-Bai’ Bithaman Ajil Bonds and Al-Murabahah Commercial Papers/Al-Murabahah Medium Term Notes
On 12 October 2000, PNSB entered into several agreements with United Overseas Bank (Malaysia) Berhad and
various parties to raise RM1,020,000,000 10-Year Al-Bai’ Bithaman Ajil Islamic Debt Securities primary bonds together
with non-detachable secondary bonds (‘BaIDS’) and RM350,000,000 Al-Murabahah Commercial Papers (‘MCPs’)/AlMurabahah Medium Term Notes (‘MMTNs’) Issuance Facility. Subsequently, on 28 October 2000, PNSB issued the
entire BaIDS and RM120,000,000 of MCPs, the proceeds of which were utilised mainly to repay the Revolving
Underwriting Facility of RM800,000,000 and Term Loan of RM300,000,000.
The BaIDS primary bonds will mature beginning 27 October 2005 and on an annual basis, for each series issued. The
non-detachable BaIDS secondary bonds are redeemable semi-annually from the date the primary bonds were issued,
at rates of 7% to 8% (2002: 7% to 8%) per annum during the financial year on the primary bonds outstanding.
The MCPs/MMTNs will expire five (5) years from the date of agreement i.e. 12 October 2005. The tender rates
ranged between 2.97% and 4.35% (2002: 2.80% and 3.20%) per annum during the financial year.
The facilities for the BaIDS, MCPs and MMTNs are secured by way of deposit of an aggregate sum in the DSRA
equivalent to twelve (12) months projected payment obligations under the BaIDS and MCPs/MMTNs that are
outstanding at any point in time. PNSB is not entitled to withdraw any money from the DSRA without prior consent
of the Security Trustee except on condition that the BaIDS, MCPs and MMTNs have been fully redeemed. In addition,
the facilities are also secured by fixed charges over all the assets of PNSB, the rights of PNSB under the concession
agreements, construction contracts and project agreements undertaken by PNSB.
No dividend by PNSB will be declared and paid where inter-alia:
•
the outstanding balance in the DSRA is less than 1.0 time of the aggregate quantum of the Issuer’s payment
obligations under the BaIDS and MCPs/MMTNs for a period of twelve (12) months commencing from the date
on which the dividend is contemplated; or
•
the Annual Debt Service Cover Ratio and the Forward Debt Service Cover Ratio are less than 1.7 times.
The Company will also be required to maintain the following financial ratios, which will be measured annually
commencing on 31 December 2001:
(iv)
(i)
Interest Cover Ratio of at least 2.0 times;
(ii)
Debt Equity Ratio of not more than 4.0 times; and
(iii)
Annual Debt Service Cover Ratio of at least 1.25 times.
Redeemable Unconvertible Junior Notes
On 20 November 2001, the Company issued RM546,875,000 Nominal Value 15-Year Redeemable Unconvertible
Junior Notes (‘RUN’) with 109,374,869 free detachable 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 was offered to the entitled shareholders and is
constituted by a Trust Deed dated 5 September 2001. The RM176,000,000 proceeds from the RUN issue was
immediately utilised to subscribe for the JNA issued by PNSB, the Company's wholly-owned subsidiary. PNSB
subsequently, utilised the proceeds to repay RM168,000,000 of its MCPs with the remaining balance utilised for its
working capital purposes.
135
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
31
Borrowings (continued)
(iv)
Redeemable Unconvertible Junior Notes (continued)
The main features of the RUN and warrants are as follows:
(a)
The RUN carries a coupon rate of 2.5% per annum payable semi-annually for the immediate ten (10) years
from the date of the issue of the RUN and 3.5% per annum payable semi-annually thereafter for the next
five (5) years.
(b)
The Company shall redeem the RUN in ten (10) equal instalments each comprising 10% of the aggregate
nominal value of all outstanding RUN commencing on the sixth (6th) anniversary of the date of issue of the
RUN. On the tenth (10th) anniversary of the date of issue of the RUN, the Company has the option to redeem
the RUN by paying the principal amount outstanding on that date. On the same day, the holders of the RUN
also have the option to sell the RUN back to the Company for a consideration equivalent to the principal
amount outstanding on that day.
(c)
The RUN and the warrants are transferable and are quoted on the Malaysia Securities Exchange Berhad.
(d)
The RUN is secured on the JNA issued by PNSB. The Company is also required to create a security account
to receive only proceeds from coupon payment and redemption of the JNA by PNSB, and thereafter to pay
the coupon payment and redemption of the RUN.
(e)
Holders of the warrants have the right to subscribe for new ordinary shares of the Company in cash at any
time during the period commencing one (1) day after the date of issue of the warrants and ending on the date
being five (5) years from the date of issue of the warrants (‘exercise period’). The exercise price of the warrants
is RM2.62 per new ordinary share of the Company subject to adjustments under certain circumstances in
accordance with the provisions of the Deed Poll dated 5 September 2001.
(f)
The warrants that are not exercised during the exercise period will lapse and become void thereafter.
(g)
The new ordinary shares issued arising from the exercise of the warrants during the exercise period shall rank
pari-passu in all respects with the then existing ordinary shares of the Company except that they shall not be
entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to
the date of allotment of the said new ordinary shares.
The Company is restricted from declaring and paying any dividends:
(i)
if there is any amount due but not paid under the RUN; or
(ii)
in the event a default has occurred or is continuing and has not been waived.
Puncak Niaga Holdings Berhad Annual Report 2003
136
Notes to the financial statements
for the financial year ended 31 December 2003
31
Borrowings (continued)
(v)
Effective interest rates
The effective interest rates per annum applicable to conventional long-term borrowings, i.e. not under the basis of
Islamic banking principles, at the balance sheet date were as follows:
Effective interest rate
per annum
2003
2002
%
%
Group
Government Support Loan
Term Loan (DSS II)
Revolving Credit
Group and Company
Redeemable Unconvertible Junior Notes
(vi)
8.00
7.60
3.61
8.00
7.60
0
16.93
16.93
Estimated fair values
The carrying amounts of the RUN of the Group and of the Company at balance sheet date approximated their fair
values. The fair values of other conventional long-term borrowings at balance sheet date were as follows:
Fair value
2003
2002
RM
RM
119,520,476 120,051,923
115,045,439 171,451,870
Group
Government Support Loan (Note 43)
Term Loan (DSS II) (Note 43)
32
Long-term payables
The long-term payables represent an amount owing by PNSB to an Operation and Maintenance Sub-Contractor,
Mandai Sari Sdn. Bhd. (‘MSSB’), in respect of the terms stipulated in the Deed of Settlement dated 23 October 2003
(‘the Deed’) entered into by PNSB and CGE Utilities (M) Sdn. Bhd., the Operation and Maintenance Sub-Contractor
to MSSB (Note 44(c)).
The long-term payables are unsecured, interest free and are not repayable within the next twelve (12) months.
Pursuant to the terms of the Deed, the settlement of the amount is to be made over a period of thirty (30) months
commencing October 2003. The amount payable at the end of the financial year are as follows:
Group
2003
2002
RM
RM
Amount payable within 12 months (included in trade payables - Note 29)
18,464,238
70,897,978
Amount payable after 12 months
47,103,108
0
65,567,346
70,897,978
137
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
32
Long-term payables (continued)
The fair value of the long-term payables at the balance sheet date was as follows:
Fair value
2003
RM
Group
Long-term payables (Note 43)
33
58,532,387
2002
RM
0
Deferred taxation
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off deferred tax assets against
deferred tax liabilities and when the deferred taxes relate to the same tax authority.
Group
2003
2002
RM
RM
(256,195,847) (202,878,000)
Deferred tax liabilities (subject to income tax)
Analysis of deferred tax liabilities
At 1 January
(Charged)/credited to income statement (Note 12)
- property, plant and equipment
- project development expenditure
- interest receivable
- quoted investment
At 31 December
Subject to income tax
Deferred tax assets (before offsetting)
Property, plant and equipment
Tax losses
Quoted investments
Offsetting
Deferred tax assets (after offsetting)
Deferred tax liabilities (before offsetting)
Property, plant and equipment
Project development expenditure
Interest receivable
Offsetting
Deferred tax liabilities (after offsetting)
Puncak Niaga Holdings Berhad Annual Report 2003
138
(202,878,000)
(150,229,000)
(52,813,855)
(439,441)
(64,719)
168
(256,195,847)
(55,261,063)
2,601,047
1,947
9,069
(202,878,000)
70,734,303
68,929,316
128,542
139,792,161
(139,792,161)
0
91,154,837
68,929,316
128,374
160,212,527
(160,212,527)
0
(329,610,160)
(66,254,350)
(123,498)
(395,988,008)
139,792,161
(256,195,847)
(297,216,839)
(65,814,909)
(58,779)
(363,090,527)
160,212,527
(202,878,000)
Notes to the financial statements
for the financial year ended 31 December 2003
33
Deferred taxation (continued)
Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit
through the future taxable profits is probable. The Directors are of the opinion that the Group will be able to reduce tax
payable in view of future profits and benefits accruing to the Group from the existing water concessions which have been
awarded to the Group (Note 3) to which the deferred tax asset relates. The tax losses have no expiry date.
The amount of deductible temporary differences and unutilised tax losses of the Company (both of which have no expiry
date) for which no deferred tax asset is recognised in the balance sheet are as follows:
Company
2003
2002
RM
RM
5,600
5,600
127,822
127,822
Deductible temporary differences
Tax losses
34
Share capital
Group
2003
RM
2002
RM
Company
2003
RM
2002
RM
Ordinary share of RM1.00 each
Authorised:
At 1 January/31 December
Issued and fully paid up:
At 1 January
Issued during the financial year:
Exercise of options under ESOS
At 31 December
1,000,000,000
1,000,000,000 1,000,000,000
1,000,000,000
439,278,000
437,500,000
439,278,000
437,500,000
11,888,000
451,166,000
1,778,000
439,278,000
11,888,000
451,166,000
1,778,000
439,278,000
During the financial year, 11,888,000 new ordinary shares of RM1 each were issued by the Company for cash arising from
the exercise of options by eligible employees pursuant to the Company’s Employees’ Share Option Scheme at an exercise
price ranging between RM2.13 and RM2.71 per share.
The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares
of the Company.
Employees’ Share Option Scheme
The Employees’ Share Option Scheme (‘ESOS’) of the Company, governed by the ESOS Bye-Laws, was principally approved
by the shareholders of the Company at the Extraordinary General Meeting of the Company held on 26 June 2001 and
became effective following the implementation by the Company on 25 February 2002. The ESOS shall be in forced for a
duration of five (5) years commencing from 25 February 2002.
139
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
34
Share capital (continued)
Employees’ Share Option Scheme (continued)
The salient features of the ESOS are as follows:
(a)
The ESOS is set up for the participation in ordinary shares of the Company only. The maximum number of new
ordinary shares which may be made available under the ESOS shall not exceed 10% of the total issued and paid up
ordinary shares of the Company at the point in time when an offer is made.
(b)
Eligible employees are those who have been in service of the Group for a continuous period of at least one (1) year
including full time Executive Directors who are involved in the day-to-day management and on the payroll of the
Group.
(c)
The ESOS is administered by the Option Committee which comprise the following Executive Directors
of the Company:
(d)
(i)
Tan Sri Rozali bin Ismail
(ii)
Ruslan bin Hassan
(iii)
Mat Hairi bin Ismail
(iv)
Lee Miang Koi
The options granted under the ESOS may be exercised by the grantee by notice in writing to the Company during
the period commencing from the date of offer and before the expiry of the ESOS on 24 February 2007.
(e)
The exercise price of the options at which the eligible employees are entitled to subscribe for the ordinary shares of
RM1.00 each in the Company under the ESOS is the weighted average market price of the shares of the Company
as quoted in the daily official list issued by the Malaysia Securities Exchange Berhad for the five (5) market days
immediately preceding the respective dates of offer subject to a discount of not more than 10%, or at the par value
of the ordinary shares of the Company of RM1.00 each, whichever is higher.
(f)
The eligible employees to whom the options have been granted has no right to participate, by virtue of the options,
in any share issue of any other company within the Group.
(g)
The new ordinary shares issued arising from the ESOS shall rank pari-passu in all respects with the then existing
ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other
distributions, the entitlement date of which is prior to the date of allotment of the said new ordinary shares.
Puncak Niaga Holdings Berhad Annual Report 2003
140
Notes to the financial statements
for the financial year ended 31 December 2003
34
Share capital (continued)
Employees’ Share Option Scheme (continued)
(h) The basis on which the options may be exercised, up to the expiry of the ESOS on 24 February 2007, in accordance
with the Directors’ approval is as follows:
Number of options
granted and
unexercised as at
31 December 2003
Tranche
1
2
3
4
Percentage of options exercisable
2004
%
2005
%
2006
%
2007
%
57
54
56
52
85
88
83
81
100
100
100
100
100
100
100
100
2003
RM
2002
RM
1,925,000
5,718,000
19,215,000
1,211,000
1,957,000
1,172,000
23,555,000
Number of options vested at balance sheet date
The movements of the options over the ordinary shares of RM1.00 each of the Company granted under the ESOS during
the financial year are as follows:
Tranche
Date of
Exercise
options
price
At
Number of options
granted
per option
1.1.2003
Granted
0
(10,058,000)
(1,251,000)
19,215,000
At
Exercised
Lapsed*
31.12.2003
RM
2003
1
26.2.2002
2.37
30,524,000
2
26.8.2002
2.47
2,843,000
0
(832,000)
(800,000)
1,211,000
3
26.2.2003
2.13
0
2,817,000
(821,000)
(39,000)
1,957,000
4
26.8.2003
2.71
0
1,349,000
(177,000)
33,367,000
4,166,000
(11,888,000)
0
(2,090,000)
At
1,172,000
23,555,000
At
1.1.2002
Granted
Exercised
Lapsed*
31.12.2002
2002
1
26.2.2002
2.37
0
33,422,000
2
26.8.2002
2.47
0
2,933,000
0
36,355,000
(1,778,000)
0
(1,778,000)
(1,120,000)
30,524,000
(90,000)
2,843,000
(1,210,000)
33,367,000
* Due to resignations or offers not taken up
141
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
34
Share capital (continued)
Employees’ Share Option Scheme (continued)
Details relating to options exercised during the year are as follows:
Exercise date
April 2002
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
Fair value of
shares at
exercise date
RM
Exercise
price per
option
RM
2.96 – 2.99
2.72 – 2.92
2.60 – 2.78
2.71
2.73 – 2.74
2.58 – 2.60
2.46
2.55
2.70
2.89 – 2.90
3.00 – 3.12
3.08 – 3.16
3.60 – 3.64
3.32 – 3.56
3.34 – 3.40
2.37
2.37
2.37
2.37
2.37
2.37
2.37
2.37
2.37
2.47
2.47
2.47
2.71
2.71
2.71
2.13
2.13
2.13
2.13
2.13
2.13
2.13
–
–
–
–
–
–
–
Number of sharess issued
2003
2002
0
0
0
0
0
0
0
0
159,000
1,455,000
3,731,000
3,362,000
2,272,000
608,000
301,000
11,888,000
490,000
728,000
170,000
25,000
295,000
58,000
9,000
3,000
0
0
0
0
0
0
0
1,778,000
The additions to the share capital and share premium relating to options exercised during the financial year are as follows:
2003
RM
2002
RM
Ordinary share capital – at par
Share premium
Proceeds received on exercise of options
11,888,000
16,232,900
28,120,900
1,778,000
2,435,860
4,213,860
Fair value at exercise date of share issue
37,835,160
5,073,880
The fair value of shares issued on the exercise of options is the closing market price at which the Company’s shares were
traded on the Malaysia Securities Exchange Berhad on the day of exercise of the options.
35
Retained earnings
The Company has sufficient tax credits under Section 108 of the Income Tax Act, 1967 to frank all of its retained earnings
as at 31 December 2003, if distributed as dividends, without incurring additional tax liabilities.
Puncak Niaga Holdings Berhad Annual Report 2003
142
Notes to the financial statements
for the financial year ended 31 December 2003
36
Change in accounting policy
During the financial year, the Group changed its accounting policy on deferred tax to comply with MASB Standard 25
“Income Taxes”.
In previous years, deferred tax was recognised for timing differences except when there was reasonable evidence that such
timing differences would not reverse in the foreseeable future. The tax effect of timing differences that resulted in a debit
balance or a debit to the deferred tax balance was not carried forward unless there was a reasonable expectation of its
realisation.
The potential tax saving relating to a tax loss carried forward was only recognised if there was assurance beyond any
reasonable doubt that future taxable income would be sufficient for the benefit of the loss to be realised.
The Group has now changed its accounting policy to recognise deferred tax on temporary differences arising between the
amounts attributable to assets and liabilities for tax purposes and their carrying values in financial statements. Deferred tax
assets are recognised to the extent that is probable that taxable profit will be available against which deductible temporary
differences or unutilised tax losses can be utilised.
In addition, deferred tax is recognised on temporary differences arising from investments in subsidiaries, an associate and an
interest in a jointly controlled entity, except where the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
This change in accounting policy has been accounted for retrospectively.
The effect of this change in accounting policy on the Group’s financial statements are as follows:
As
Effects of
previously
change in
As
reported
policy
restated
RM
RM
RM
At 1 January 2002:
Retained earnings
545,773,680
(150,229,000)
395,544,680
52,649,000
53,017,212
Financial year ended 31 December 2002:
Taxation
368,212
Earnings per share:
- basic (sen)
40.99
(12.01)
28.98
- diluted (sen)
40.51
(11.87)
28.64
At 1 January 2003:
Deferred tax liabilities
0
Retained earnings
725,519,111
143
202,878,000
202,878,000
(202,878,000)
522,641,111
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
37
Net cash generated from operations
Group
Net profit for the financial year
Company
2003
2002
2003
2002
RM
RM
RM
RM
129,586,447
127,096,431
1,682,927
1,870,146
4,147,087
4,142,885
88,045
88,045
15,628,500
14,999,624
0
0
82,075,188
81,946,473
0
0
24,297,347
20,401,865
22,966,069
19,166,011
937,653
836,468
0
0
360,811
369,680
0
0
(209,200)
(510,404)
0
0
603
32,388
0
0
53,824,611
53,017,212
815,745
804,303
0
0
0
Adjustments for:
Depreciation of property, plant
and equipment
Amortisation of project development
expenditure
Amortisation of water treatment plants
Accretion of discount on bonds
and notes
Amortisation of debt issuance
expenses
Interest on hire-purchase
Gain on disposal of property, plant
and equipment
Allowance for diminution
in value of other investments
Taxation
Share of results of jointly controlled
entity
(495,638)
Interest income
(9,466,907)
Interest expense
108,436,400
(12,209,981)
(38,275,648)
(32,870,919)
114,050,160
15,309,579
13,671,875
(1,104,499)
(1,364,236)
(67,058)
(202,896)
Changes in working capital:
- Receivables
(282,912,936) (219,324,077)
- Payables
(3,140,847)
Net cash generated from operations
38
123,069,119
24,888,645
209,737,369
1,415,160
1,162,329
Significant related party transactions and balances
CPMSB is a substantial corporate shareholder of the Company.
By virtue of their substantial shareholding in CPMSB, Tan Sri Rozali bin Ismail, a Director of the CPMSB and the Company,
and Shaari bin Ismail are deemed to have control over the Company.
Puncak Niaga Holdings Berhad Annual Report 2003
144
Notes to the financial statements
for the financial year ended 31 December 2003
38
Significant related party transactions and balances (continued)
In the normal course of business, the Company undertakes on agreed terms and prices, certain transactions with companies
deemed related parties by virtue of having a common substantial shareholder. The CPMSB group of companies and other
related parties, with whom the Group and Company transacted with, include the following:
Related parties
Relationship
Mandai Sari Sdn. Bhd.
A subsidiary of CPMSB
Syarikat Bekalan Air Selangor Sdn. Bhd.
A subsidiary of CPMSB
RZ Management Services Sdn. Bhd.
A Director related corporation
The common Directors of PNSB, who are also Directors of the Company, are Tan Sri Rozali bin Ismail, Ruslan bin Hassan,
Mat Hairi bin Ismail, Lee Miang Koi and Syed Danial bin Syed Ariffin.
Ruslan bin Hassan and Lee Miang Koi, who are Directors of the Company, are also Directors of Unggul Raya (M) Sdn. Bhd.,
NS Water System Sdn. Bhd. and Puncak Research Centre Sdn. Bhd..
Tan Sri Rozali bin Ismail, Mat Hairi bin Ismail and Ruslan bin Hassan are also Directors of Ideal Water Resources Sdn. Bhd..
Ruslan bin Hassan is also the Director for Puncak Seri (M) Sdn. Bhd..
Significant related party transactions
The related party transactions undertaken in the normal course of business are on terms and prices agreed with the
respective related parties.
The significant related party transactions during the financial year are as follows:
Group
2003
2002
RM
RM
68,656,870
65,320,322
Management fees charged by Mandai Sari Sdn. Bhd.
500,004
500,004
Secretarial fees charged by RZ Management Services Sdn. Bhd.
240,000
240,000
Operating and maintenance charges by Mandai Sari Sdn. Bhd.
145
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
38
Significant related party transactions and balances (continued)
Related party balances
Related party balances which arose from the above significant related party transactions and remained outstanding at the
balance sheet date, are as follows:
Group
Related party
Type of transaction
Payables
Mandai Sari Sdn. Bhd.
Operating and maintenance charges
RZ Management Services Sdn. Bhd.
Secretarial fees
39
2003
2002
RM
RM
58,920,211
70,897,978
21,000
81,000
58,941,211
70,978,978
Commitments
Group
(a)
2003
2002
RM
RM
7,551,663
10,265,062
25,000,000
0
Commitment under the terms of the Privatisation Cum Concession
Agreement dated 22 September 1994 for the rehabilitation and
refurbishment of water treatment facilities
(b)
Commitment under the terms of the Deed of Settlement dated 23 October
2003 for the early termination of the Operation and Maintenance SubContract dated 31 May 1995 (Note 44(c))
40
Non-cancellable operating lease commitments
Group
2003
2002
RM
RM
Payable within one year
2,132,537
1,926,333
Payable between one and five years
1,723,948
63,800
3,856,485
1,990,133
Puncak Niaga Holdings Berhad Annual Report 2003
146
Notes to the financial statements
for the financial year ended 31 December 2003
41
Contingent liabilities
Group
Company
2003
2002
2003
2002
RM
RM
RM
RM
0
0
50,000,000
50,000,000
74,790,195
0
74,790,195
0
23,941,390
26,451,500
0
0
Unsecured
Corporate guarantee given to a bank
for facilities granted to a subsidiary
Financial guarantee given to a bank
for facilities granted to a jointly
controlled entity
Trade and performance guarantees
extended to third parties
42
Segmental reporting - Group
Segmental analysis is not presented as the Group is primarily involved in the operation, maintenance, construction,
rehabilitation and refurbishment of water treatment facilities and operates principally in Malaysia.
43
Financial instruments
Financial instruments are contracts that give rise to both a financial asset of one enterprise and a financial liability or equity
instrument of another enterprise. These includes, amongst others, investments, deposits, cash and bank balances, receivables,
payables and borrowings.
Fair values
There is no disclosure of fair value for investments in subsidiaries, an associate and a jointly controlled entity, and borrowings
under the basis of Islamic banking principles as these are excluded from MASB Standard 24 “Financial Instruments: Disclosure
and Presentation”.
147
Puncak Niaga Holdings Berhad Annual Report 2003
Notes to the financial statements
for the financial year ended 31 December 2003
43
Financial instruments (continued)
Fair values (continued)
The carrying amounts of other financial assets and financial liabilities of the Group and of the Company at the balance sheet
date approximated their fair values except as set out below:
At 31 December 2003
Note
Financial asset
Long-term receivables
23
Financial liabilities
Hire-purchase payables
Borrowings:
- Government Support Loan
- Term Loan (DSS II)
Long-term payables
Group
Carrying
amount
RM
131,375,491
Fair
value
RM
130,479,476
30
(3,560,538)
(3,666,286)
31
31
32
(121,775,579)
(116,210,283)
(65,567,346)
(307,113,746)
(119,520,476)
(115,045,439)
(58,532,387)
(296,764,588)
Company
Carrying
amount
RM
Financial asset
Advances to a subsidiary
21
At 31 December 2002
Note
Financial asset
Long-term receivables
23
Financial liabilities
Hire-purchase payables
Borrowings:
- Government Support Loan
- Term Loan (DSS II)
Long-term payables
361,368,807
345,807,471
Group
Carrying
amount
RM
165,447,001
Fair
value
RM
162,742,451
30
(4,040,379)
(4,306,549)
31
31
32
(121,775,579)
(171,936,831)
0
(297,752,789)
(120,051,923)
(171,451,870)
0
(295,810,342)
Company
Carrying
amount
RM
Financial asset
Advances to a subsidiary
Puncak Niaga Holdings Berhad Annual Report 2003
21
148
Fair
value
RM
361,368,807
Fair
value
RM
345,807,471
Notes to the financial statements
for the financial year ended 31 December 2003
44
Significant events during the financial year
(a)
The Company had on 25 September 2003 entered into a Share Sale and Purchase Agreement with Central Plus (M)
Sdn. Bhd., Tan Sri Rozali bin Ismail and Mat Hairi bin Ismail to acquire 700,000 ordinary shares of RM1.00 each in
SYABAS at a total cash consideration of RM38,009,840 (Note 45). The proposed acquisition, which represents 70%
of the issued and paid-up share capital of SYABAS, is one of the salient terms contained in the approval from the
Economic Planning Unit of the Prime Minister’s Department, for the privatisation of the water supply services in the
State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya (‘the Privatisation’) to be undertaken by
SYABAS. The acquisition, among others, is conditional upon the signing of the Concession Agreement for the
Privatisation. All terms and conditions of the Share Sale and Purchase Agreement remained valid within the approval
period which expired on 31 March 2004.
(b)
On 21 October 2003, the Company entered into a Turnkey Sub-Contract Agreement with Imej Warisan Sdn. Bhd.
(‘IWSB’), whereby IWSB had appointed the Company as its sub-contractor for the planning, design, construction,
supervision, testing and commissioning of the ‘Projek Pembinaan Loji/Kolam Takungan Dan Paip Utama Telibong Dan
Telipok’ at Kota Kinabalu, Sabah. The contract sum of this Turnkey Sub-Contract is RM313,500,000.
(c)
On 23 October 2003, PNSB entered into a Deed of Settlement (‘the Deed’) with CGE Utilities (M) Sdn. Bhd. (‘CGE’),
an Operation and Maintenance Sub-Contractor for the existing water treatment plants under the concession awarded
by the State Government of Selangor to PNSB via the PCCA (‘the Concession’).
CGE was appointed as Operation and Maintenance Sub-Contractor to MSSB, the Operation and Maintenance
Contractor for the Concession and a subsidiary of CPMSB, under the Operation and Maintenance Sub-Contract
(‘OMSC’) dated 31 May 1995 between PNSB, MSSB,Veolia Water and CGE.
Upon the execution of the Deed, the expiry date of the OMSC has been brought forward from 31 December 2020
to 31 December 2004. Amongst others, the Deed stipulates that PNSB shall pay to CGE a sum of RM25,000,000 as
full and final compensation in respect of the early termination of the OMSC on 31 December 2004, which shall be
paid not later than 1 April 2006 (Note 39(b)).
45
Significant event subsequent to the balance sheet date
The Company had, on 31 March 2004, entered into a Supplemental Agreement with CPMSB, Tan Sri Rozali bin Ismail and
Mat Hairi bin Ismail, to revise the approval period stipulated in the Share Sale and Purchase Agreement dated 25 September
2003 to acquire 700,000 ordinary shares of RM1.00 each in SYABAS at a total cash consideration of RM38,009,840 (Note
44(a)).
Under the Supplemental Agreement, all salient terms of the Share Sale and Purchase Agreement entered into on 25
September 2003, shall remain the same, except for the approval period, which has been extended from 31 March 2004 to
30 September 2004.
46
Approval of financial statements
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on
20 April 2004.
149
Puncak Niaga Holdings Berhad Annual Report 2003
Statement by Directors pursuant to
Section 169(15) of the Companies Act, 1965
We,Tan Sri Rozali bin Ismail and Mat Hairi bin Ismail, being two of the Directors of Puncak Niaga Holdings Berhad, state that,
in the opinion of the Directors, the financial statements set out on pages 98 to 149 are drawn up so as to give a true and
fair view of the state of affairs of the Group and of the Company as at 31 December 2003 and of the results and cash flows
of the Group and of the Company for the financial year ended on that date in accordance with the applicable approved
accounting standards in Malaysia and the provisions of the Companies Act, 1965.
Signed on behalf of the Board of Directors in accordance with their resolution dated 20 April 2004.
Tan Sri Rozali bin Ismail
Director
Mat Hairi bin Ismail
Director
Statutory declaration
I, Mat Hairi bin Ismail, being the Director primarily responsible for the financial management of Puncak Niaga Holdings Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 98 to 149 are, in my opinion, correct and I
make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory
Declarations Act, 1960.
Mat Hairi bin Ismail
Director
Subscribed and solemnly declared by the abovenamed Mat Hairi bin Ismail at Kuala Lumpur, Malaysia on 20 April 2004.
Before me
Paisah Muridan
(No. W187)
Commissioner for Oaths
Puncak Niaga Holdings Berhad Annual Report 2003
150
Report of the auditors to the members of
Puncak Niaga Holdings Berhad
Company no: 416087 U
We have audited the financial statements set out on pages 98 to 149. These financial statements are the responsibility of the
Company’s Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with approved auditing standards in Malaysia.Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by Directors, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion:
(a)
the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and
applicable approved accounting standards in Malaysia so as to give a true and fair view of:
(i)
the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(ii)
the state of affairs of the Group and of the Company as at 31 December 2003 and of the results and cash flows
of the Group and Company for the financial year ended on that date;
and
(b)
the accounting and other records and the registers required by the Act to be kept by the Company and by the
subsidiary of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
The names of the subsidiaries of which we have not acted as auditors are indicated in Note 16 to the financial statements.
We have considered the financial statements of these subsidiaries and the auditors’ reports thereon.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial
statements and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did
not include any comment made under subsection (3) of Section 174 of the Act.
PricewaterhouseCoopers
(AF: 1146)
Chartered Accountants
Mohd Daruis Zainuddin
(969/03/05(J/PH))
Partner of the firm
Kuala Lumpur
20 April 2004
151
Puncak Niaga Holdings Berhad Annual Report 2003
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Seventh Annual General Meeting of Puncak Niaga Holdings Berhad
(416087-U) will be held at the Banquet Hall, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Jalan
Bukit Kiara, 60000 Kuala Lumpur on Monday, 28 June 2004 at 9.30 a.m. for the following purposes:
1. To receive the Audited Accounts of the Company for the financial year ended 31 December 2003 and the
Resolution 1
Reports of the Directors and Auditors thereon.
2. To re-elect the following Directors of the Company who retire by rotation pursuant to Article 98 of the
Company’s Articles of Association:
(a) Ir Lee Miang Koi
Resolution 2
(b) Encik Abdul Majid Abdul Karim
Resolution 3
3. To re-elect YB Tan Sri Dato’ Seri Dr Ting Chew Peh who retires pursuant to Article 99 of the Company’s
Resolution 4
Articles of Association.
4. To re-elect Tuan Syed Danial Syed Ariffin who retires pursuant to Article 103 of the Company’s Articles of
Resolution 5
Association.
5. To appoint Messrs Ernst & Young as the Auditors of the Company in place of the retiring auditors, Messrs
Resolution 6
PricewaterhouseCoopers and to authorise the Directors of the Company to fix their remuneration.
AS SPECIAL BUSINESS:
To consider and, if thought fit, to pass the following Ordinary Resolution:
6. Allotment Of Shares Pursuant To Section 132D Of The Companies Act, 1965
“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the
approvals of the relevant governmental/regulatory authorities, the Directors of the Company be and are
hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the
Company from time to time and upon such terms and conditions and for such purposes as the Directors
of the Company may deem fit provided that the aggregate number of shares issued pursuant to this
resolution does not exceed 10% of the issued share capital of the Company for the time being AND
THAT the Directors of the Company be and are hereby also empowered to obtain the approval for the
listing of and quotation for the additional shares so issued on Bursa Malaysia AND FURTHER THAT
such authority shall continue to be in force until the conclusion of the next Annual General Meeting of
the Company.“
7. To transact any other ordinary business of which due notice shall have been given.
BY ORDER OF THE BOARD
TAN BEE LIAN (MAICSA 7006285)
Secretary
Kuala Lumpur
4 June 2004
Puncak Niaga Holdings Berhad Annual Report 2003
152
Resolution 7
Notice of Annual General Meeting
Notes:
1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy
need not be a member of the Company.
2.
The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised or if
such appointer is a corporation, it must be either under its seal or under the hand of an officer or attorney duly authorised.
3. The instrument appointing the proxy must be deposited at the Registered Office of the Company at Suite 1401-1406, 14th
Floor, Plaza See Hoy Chan, Jalan Raja Chulan, 50200 Kuala Lumpur not less than 48 hours before the time set for holding
the Meeting or any adjournment thereof.
4. Explanatory Notes:
a.
Ordinary Resolution 6
Our auditors, Messrs PricewaterhouseCoopers had indicated that they do not wish to seek re-election at the Seventh
Annual General Meeting of the Company.To f ill the vacancy, a Notice of Nomination of Auditors pursuant to Section
172 (II) of the Companies Act, 1965 has been received by the Company for the nomination of Messrs Ernst & Young,
who have given their consent to act as Auditors of the Company. A copy of the Notice of Nomination of Auditors
dated 24th April 2004 is annexed as ‘Appendix A’.
b.
Ordinary Resolution 7
The Ordinary Resolution proposed under item 6, if passed, will give the Directors of the Company, from the date of
the above Meeting, authority to issue and allot ordinary shares from the unissued capital of the Company for such
purposes as the Directors of the Company consider would be in the interest of the Company.This authority will, unless
revoked or varied at a General Meeting, expire at the next Annual General Meeting of the Company.
153
Puncak Niaga Holdings Berhad Annual Report 2003
Notice of Annual General Meeting
Appendix A
Puncak Niaga Holdings Berhad Annual Report 2003
154
Statement Accompanying the Notice
of Annual General Meeting
1) BOARD MEETINGS
In year 2003, the Board met six times at the Board Room on 26th Floor, Suite 2601-2606, Plaza See Hoy Chan, Jalan Raja
Chulan, 50200 Kuala Lumpur. The details of the respective Directors’ attendances at the Board meetings are as follows:
Name of Director
Tan Sri Rozali Ismail
Ruslan Hassan
Designation
No. of meetings attended
Executive Chairman
6
Executive Vice Chairman/
6
Executive Director, Corporate Affairs
%
100
100
Mat Hairi Ismail
Lee Miang Koi
Executive Director, Finance
Executive Director, Project
& Business Development
5
6
83
100
Abdul Majid Abdul Karim
Tan Sri Dato’ Hari
Narayanan Govindasamy
Independent Non-Executive Director
Independent Non-Executive Director
5
6
83
100
Tan Sri Dato’ Seri
Dr Ting Chew Peh
Independent Non-Executive Director
6
100
2) DATE,TIME AND VENUE OF THE SEVENTH ANNUAL GENERAL MEETING
The Seventh Annual General Meeting of Puncak Niaga Holdings Berhad will be held as follows:
Date
: Monday, 28 June 2004
Time
: 9.30 a.m
Venue
: Banquet Hall, Kuala Lumpur Golf & Country Club
No. 10 Jalan 1/70D, Off Jalan Bukit Kiara, 60000 Kuala Lumpur
3) DIRECTORS STANDING FOR RE-ELECTION
Directors who are standing for re-election are as follows:
(i) Ir Lee Miang Koi, retiring pursuant to Article 98;
(ii) Encik Abdul Majid Abdul Karim, retiring pursuant to Article 98;
(iii) YB Tan Sri Dato’ Seri Dr Ting Chew Peh, retiring pursuant to Article 99; and
(iv) Tuan Syed Danial Syed Ariffin, retiring pursuant to Article 103.
4) DETAILS OF DIRECTORS STANDING FOR RE-ELECTION
(i) Ir Lee Miang Koi, aged 50, Malaysian
Executive Director, Project & Business Development Division
Ir Lee joined PNSB in 1995 and is currently responsible for the project and business development of PNHB. Ir Lee was
appointed as a Director of PNSB on 2 February 1999 and subsequently to the Board of PNHB on 1 September 1999.
He is a member of PNHB’s ESOS Option Committee, Malaysian Water Association, Malaysian Institute of Directors and
Institute of Marketing Malaysia.
Ir Lee graduated as a civil engineer from University of Technology Malaysia in 1978 and in 1989, he obtained a Masters
Degree in Engineering majoring in water supply and wastewater engineering from the Asian Institute of Technology in
Bangkok. Ir Lee has 26 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, specialising in the field of water
supply services. He was previously a Senior Executive Engineer in the Design and Planning of the Water Supply Branch
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 several private companies within the PNHB Group.
Ir Lee’s securities’ holdings in the Company are as follows:
Description of Securities
Direct Holding
Ordinary Shares
144,000 (0.03%)
Warrant
18,000 (0.02%)
Indirect Holding
*20,000 (0.004%)
-
* Held in nominee name, Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd.
155
Puncak Niaga Holdings Berhad Annual Report 2003
Statement Accompanying the Notice
of Annual General Meeting
(ii) Encik Abdul Majid Abdul Karim, aged 45, Malaysian
Independent Non-Executive Director
Encik Abdul Majid was appointed to the Board of PNHB on 24 April 1997 as an Independent Non-Executive Director
and was a past Director of PNSB for the period 1994-2001. 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 University of Glasgow, United Kingdom in 1986. He began his career as a Technical
Assistant with the Urban Development Authority (UDA) (1982-1983), as Property Executive with Boustead Holdings
Berhad (1986-1991) and subsequently as Sales Engineer with UAC Berhad (1991-1993). Encik Abdul Majid also sits on
the Board of several private companies and is a member of Malaysian Institute of Directors.
Encik Abdul Majid holds 3,000 (0.001%) ordinary shares of the Company.
(iii) YB Tan Sri Dato’ Seri Dr Ting Chew Peh, aged 61, Malaysian
Independent Non-Executive Director
YB Tan Sri 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 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 University
of Malaya in 1970 and obtained a Master of Science from University of London in 1972. He also holds a Doctorate in
Philosophy, which he obtained from University of Warwick in 1976. YB Tan Sri Dato’ Seri Dr Ting is a member of
Malaysian Institute of Directors.
YB Tan Sri Dato’ Seri Dr Ting started his career as a lecturer in the Faculty of Humanities and Social Sciences at
Universiti Kebangsaan Malaysia from 1974 to 1980 and was subsequently an Associate Professor of the said Faculty
until 1987. Between 1979 to 1986,YB Tan Sri Dato’ Seri Dr Ting published two books entitled “Konsep Asas Sosiologi”
and “Hubungan Ras dan Etnik”.
In 1987,YB Tan Sri 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
(1988-1989), Deputy Minister of the Prime Minister’s Department (1989-1990) and Minister of Housing and Local
Government (1990-1999). Currently, YB Tan Sri Dato’ Seri Dr Ting is the Secretary-General of Malaysian Chinese
Association (MCA). He also sits on the Board of Pan Malaysia Capital Berhad Group, Pan Malaysia Holdings Berhad,
Hua Yang Bhd, Johan Holdings Berhad and also serves as a director of several private companies.
YB Tan Sri Dato’ Seri Dr Ting does not hold any of the Company’s securities.
(iv) Tuan Syed Danial Syed Ariffin, aged 46, Malaysian
Executive Director, Operation Division
Tuan Syed Danial graduated in 1981 with a BSc. (Hons) Degree in Civil Engineering from University of Aston in
Birmingham, United Kingdom. He is a civil engineer by profession and has been with the PNHB Group for 8 1/2 years
since December 1995. He began his career with PNSB as a Manager of Operation and was subsequently promoted
to Senior Manager, Assistant General Manager and General Manager of Operation. Prior to his appointment to the
Board of PNSB and PNHB on 1 March 2004 , he was the Acting Executive Director of Operation Division (July 2003
to February 2004).
Tuan Syed Danial previously worked with the Pahang Public Works Department for 10 years, holding positions from
Project Engineer (1981-1983) to District Engineer for JKR Cameron Highlands (1983-1991) and the Selangor Water
Works Department between 1991 to 1995, whereby he was the Senior Project Engineer overseeing the construction
of the Sungai Selangor Phase 1 Project. He is a member of Institute of Marketing Malaysia, Malaysian Water Association,
a Registered Engineer with the Board of Engineers, Malaysia and also sits on the Board of a private company.
Tuan Syed Danial holds 25,000 (0.01%) ordinary shares of the Company.
Notes:
Save as disclosed above, none of the Directors standing for re-election 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.
Puncak Niaga Holdings Berhad Annual Report 2003
156
Proxy form
Puncak Niaga Holdings Berhad
I/We
of
being a Member/Members of Puncak Niaga Holdings Berhad hereby appoint
of
as my/our proxy to attend and vote for me/us and on my/our behalf at the Seventh Annual General Meeting of Puncak Niaga Holdings
Berhad to be held at the Banquet Hall, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70D, Off Jalan Bukit Kiara, 60000 Kuala Lumpur
on Monday, 28 June 2004 at 9.30 a.m. and at any adjournment thereof, as indicated below:
No. Resolution
1.
For
Against
To receive the Audited Accounts of the Company for the financial year ended
31 December 2003 and the Repor ts of the Directors and Auditors thereon.
2.
To re-elect Ir Lee Miang Koi as Director of the Company.
3.
To re-elect Encik Abdul Majid Abdul Karim as Director of the Company.
4.
To re-elect YB Tan Sri Dato’ Seri Dr Ting Chew Peh as Director of the Company.
5.
To re-elect Tuan Syed Danial Syed Ariffin as Director of the Company.
6.
To appoint Messrs Ernst & Young as the Auditors of the Company in place of the retiring
auditors, Messrs PricewaterhouseCoopers and to authorise the Directors of the
Company to fix their remuneration.
7.
To empower the Directors of the Company to issue shares pursuant to Section 132D
of the Companies Act, 1965.
Please indicate with a cross (✗) how you wish your votes to be cast in respect of each Resolution. In the absence of specific directions,
your proxy will vote or abstain as he thinks fit.
Signature(s)/Common Seal of Shareholder(s)
No. of shares held:
NRIC / Company No:
Signed this
day of
2004
Notes:
1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not
be a member of the Company.
2 The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised or if such
appointer is a corporation, it must be either under its seal or under the hand of an officer or attorney duly authorised.
3. The instrument appointing the proxy must be deposited at the Registered Office of the Company at Suite 1401-1406, 14th Floor, Plaza
See Hoy Chan, Jalan Raja Chulan, 50200 Kuala Lumpur not less than 48 hours before the time set for holding the Meeting or any
adjournment thereof.
157
Puncak Niaga Holdings Berhad Annual Report 2003
HEALTH, SAFETY & ENVIRONMENTAL POLICY
It is the policy of Puncak Niaga to provide, so far as is practicable, a safe, healthy and environmental friendly workplace for all
employees, contractors, visitors, interested members of society and others, and in the spirit of consultation and cooperation, the
Management and employees will together strive to achieve goals and objectives of this Policy.
Without prejudice to the generality of the above statement, the Policy of Puncak Niaga is:
1. to provide and maintain a safe and environmental friendly workplace and system of work and to continually improve its
environment and safety performance.
2. to continuously emphasise on the prevention of pollution in all activities.
3. to ensure environmental and safety objectives and targets are set and reviewed.
4. to ensure all employees are informed, instructed, trained and supervised on how to perform their job safely and without risk
to health and without any harm to the environment.
5. to investigate all accidents and near-misses and to take corrective measures to ensure the accidents or near-misses will not
recur.
6. to comply with all legal and other requirements on health, safety and environment and other good practices
which Puncak Niaga subscribes.
7. to review this Policy as and when appropriate and to ensure it is understood by all employees and is available
to all interested par ties.
HEALTH, SAFETY & ENVIRONMENTAL REPORT
CONSERVING AND PROTECTING OUR WATER RESOURCES
At Puncak Niaga, we recognise that we have a key role to play in relation to the care and management of a very valuable
natural resource – water. It is a finite even though renewable resource that can slowly deteriorate its usefulness to mankind if
not conserved and protected. Understanding our role and responsibility as Malaysia’s Leading Water Services Company, it is
one of Puncak Niaga’s missions to address national and international concerns pertaining to the protection, conservation and
enhancement of the natural environment in which we live.
Over the years, Puncak Niaga has implemented many initiatives to protect the environment and improve river water quality. We
have intensified our efforts from year to year in our quality monitoring, assisted to a large extent by computer-generated analysis
of trends and statistics and reporting the results to the relevant authorities. We have set up a toll-free river watch telephone
hotline (1800-88-3254), which has been in operation since 1997 which enabled the public to inform us of incidents of pollution
such as the indiscriminate dumping of untreated waste, illegal sand mining and logging activities which we have highlighted
to the relevant authorities for enforcement.
Erosion and landslides along
Sungai Selangor
Sand mining activity on the river
bank of Sungai Batang Kali
Livestock farming along
Sungai Semenyih
1
Dumping of chemical drums near
Sungai Langat
In addition, surveillance and investigations are conducted through our Environmental Unit, which undertake the following functions:
•
•
•
•
Conduct regular sanitar y sur veys and special environmental investigations on all catchment areas to our water
treatment plants (WTPs) to detect activities which may have adverse effects on treatment processes and the
raw water quality;
Constantly monitor the raw water quality, investigate violations and forward report to the Department of Environment
(DOE) or relevant authorities on actions to be taken in order to bring the levels to the acceptable quality for treatment;
Operate and maintain the automated river warning monitoring stations to provide early warning of possible raw
water quality violations; and
Undertake research or studies on water quality problems faced by the WTPs and on treatment plant processes in
order to improve the quality of water supplied.
INCREASING PUBLIC AWARENESS ON
ENVIRONMENTAL PROTECTION AND CONSERVATION
Public awareness and educational programmes play an important role in reducing
public apathy towards environmental protection and conservation. Puncak Niaga
continues to provide strong support to all efforts of the Government and NonGovernmental Organisations towards this end by participating in exhibitions and
programmes such as an Open Day at the Wangsa Maju WTP for the public in
conjunction with the World Water Day 2003 to promote public awareness on
the importance of protecting our water resources, a key component of the
natural environment.
Our River Rescue Brigade programme, involving schoolchildren from primary
schools in the State of Selangor and the Federal Territory of Kuala Lumpur is
aimed at educating young people on the importance of conservation and
protection of our nation’s rivers. In 2003, a total of 200 schoolchildren from eight
primary schools participated in the River Rescue Brigade making a total
enrolment of 1,285 into the programme to date. Our Educational Outreach
programme, an extension of the River Rescue Brigade aims to educate young
people on the importance of river preservation to ensure the continuous supply
of clean water. The programme was conducted at ten primary schools in 2003
and we spent RM130,085.26 on both programmes.
Educational Outreach Programme No. 28
MAINTAINING HIGH QUALITY, INTERNATIONAL STANDARDS AND BEST PRACTICES
Another of Puncak Niaga’s mission is “To Cater To The Increasing Challenges In The Demand For High Quality Treated Water
Through The Continuous Implementation Of High Quality Standards, Efficient Services, Effective Human Resources Development,
Innovative Technology And Operational Systems”.
In discharging our responsibility to ensure that the water produced from our WTPs is safe and of high quality, we conduct quality
assessments and evaluation exercises at every stage of the process, from the point of entry at the intake of the WTP to treatment
until it leaves the WTP at the balancing reservoir.This involves stringent monitoring and numerous laboratory testing as follows:
•
•
•
•
Once every two hours daily on a 24-hour basis against quality standards of four physical and five chemical parameters;
Daily for microbiological parameters;
Weekly testing at outlets of our WTPs and balancing reservoir by the Ministry of Health (MOH); and
Monthly for all parameters by an accredited independent laboratory according to schedules set by MOH.
2
In addition, the quality of the raw, settled and treated water are monitored and tested to comply with the standards set out in the
Privatisation Cum Concession Agreement and the Construction Cum Operation Agreement, as well as MOH’s Drinking Water
Quality Standards. Fluoride levels in the treated water are checked regularly and reports submitted to the Dentistry Office of MOH.
In 2003, Environmental Impact Studies were conducted on each of the six water catchment areas and six Sanitary Surveys,
including joint surveys with the authorities, covering at least one WTP in each survey. The results were submitted to the
relevant authorities with the jurisdiction to enforce and control the pollution sources. Puncak Niaga completed two cycles
to determine the Water Quality Index at all WTPs and dams and submitted the findings to the authorities. Eighteen cases
of major WTP shutdowns and thirteen cases of pollution risk or impact were also investigated and reported to the
Management during the year under review together with two cases to study and propose alternative raw water resources.
ENVIRONMENTAL ASSIGNMENTS AND PERFORMANCE
Scope of work
Details
Target
Achievement
Environmental
Studies
Environmental Impact
Studies (EIS)
To conduct EIS on each of
the 6 water catchment areas.
All 6 EIS completed.
Sanitary Surveys (SS)
To conduct 3 SS covering
at least one WTP each.
Conducted 6 SS inclusive
of joint surveys with the
authorities.
Water Quality Index (WQI)
Determination
To compute a WQI database
for all raw water sources for
28 WTPs and 3 dams.
Completed 2 cycles of
WQI determination at
all 28 WTPs and 3 dams.
Environmental Investigations
To investigate each of the
WTP’s shutdown major cases.
Completed and brought up
18 cases to the Management’s
attention.
To evaluate and highlight
pollution risk/impact.
Completed and brought up
13 cases to the Management’s
attention.
To study and propose alternative
raw water resources.
Completed and brought up
2 cases to the Management’s
attention.
Monthly raw and treated
water sampling.
Completed.
2-hourly analysis at WTPs.
Completed.
Daily compliance.
Completed.
Daily ammonia data.
Completed.
*Weekly/Monthly fluoride.
Completed.
Study on violation and
chemical element
To evaluate and highlight
any cases of violation.
Completed study on iron and
manganese.
River Watch
Operations & Maintenance
To operate and maintain the
River Warning Monitoring Station.
Good operating condition.
Research & Study
Waste Management (Sludge
Treatment)
To study and highlight the sludge
treatment needs to the
authorities.
Completed.
Water Quality
Assessment
Quality Assurance Programme
* Weekly flouride testing for WTPs located in the Federal Territory.
3
At Puncak Niaga, issues relating to quality, safety and the environment
have always been our concern. Our commitment to achieving best
practices in these areas is reflected in our initiative to implement the
Integrated Management System (IMS) at the Sungai Selangor Phase 2
(SSP2) WTP as our pilot project. We received certification from Lloyd’s
Register Quality Assurance (LRQA) on 15 October 2003 for the first of
the IMS, i.e. the Quality Management System ISO 9001:2000. On 31
October 2003, we were accredited the second IMS, Environmental
Management System ISO 14001:1996, while the third IMS, the Safety
Management System OHSAS 18001:1999, was obtained in January 2004.
With this, the SSP2 WTP has become the first water treatment plant in
the country to have a fully implemented management system that
integrates three critical aspects, i.e. quality, safety and the environment.
The implementation of the IMS is expected to extend to all the WTPs
under the management of Puncak Niaga.
Study 1: Sludge Treatment
To meet the requirements of the Environmental Quality Act set by DOE, Puncak Niaga requires a budget of RM120
to RM150 million to install sludge treatment systems at all the 26 WTPs over a five-year period. We have submitted
a funding proposal to the Selangor State Government and PUAS has been instructed to proceed with the works. At
present, PUAS has commenced preliminar y works at two WTPs, namely the Sungai Langat and Cheras Mile 11 WTPs.
Study 2: Reddish Raw Water At Cheras Mile 11 WTP
One of the environmental investigations involved investigating the source of reddish raw water pollution that caused seven
shutdowns at the Cheras Mile 11 WTP between 22 May and 7 July 2003:
No.
1
2
3
4
5
6
7
Total
Date of shutdown
22 May 2003
6 June 2003
7 June 2003
16 June 2003
23 June 2003
30 June 2003
7 July 2003
Reddish colouration of raw water at the intake of
Cheras Mile 11 WTP
Shutdown (hours)
5.33
5.00
7.37
3.50
5.50
7.00
7.42
41.12
Production Loss (m3)
6,294
5,904
8,703
4,133
6,495
8,266
8,762
48, 557
The investigation, which was conducted with the assistance of
DOE Selangor, indicated that the reddish colouration could have
originated from the illegal dumping of industrial effluent from a
timber processing or plywood manufacturing factory. Since raw
water from Sungai Cheras is of poor quality and not suitable for
treatment, we decided not to extract raw water from the river
effective early January 2004 since a new intake weir at Sungai
Langat, which lies upstream from Sungai Cheras confluence has
been constructed on 10 January 2003 at a cost of RM3.28 million.
This has led to an improved raw water source and reduced supply
interruptions due to shutdown of the WTPs attributed to
unacceptable raw water quality from Sungai Cheras.
To avoid similar incidences of pollution, Puncak Niaga introduced a series of environmental awareness campaigns to factories
located upstream of the new intake and the response from these factories has been positive.
4
Study 3: Alternative Water
Resources At Selangor River Basin
As part of Puncak Niaga’s contingency
plan to minimise the shortage of treated
water supply to consumers, a study was
undertaken on a number of potential
ponds and tributaries as alternative raw
water resources at the Selangor River
Basin. An environmental survey was also
conducted, which identified eight
potential locations for water storage and
future use along the basin, with a total
volume capacity of 400.4 MG/1820.1 ML.
These ponds serve as alternative raw
water sources to Sungai Selangor in the
event of drought
Study on alternative raw water resourcing
The dams under Puncak Niaga’s management are also subjected to the same level of scrutiny as the water treatment plants. In
line with our emphasis on safety standards, we conducted three major visual safety inspections of the dams in 2003. The
inspections, which covered all major structures of the dams, were to detect and investigate any dam safety deficiencies and to
recommend appropriate corrective actions. As part of our adherence to international standards and practices, we have proposed
to PUAS that an independent dam safety inspection be undertaken by an external consultant for the year 2004.
Our emphasis on quality and high standards is supported by our employees’ active involvement in Quality Control Circles (QCC).
In 2003, we spent RM30,838 on QCC-related activities, an investment which has brought rewards for the Company.The QCC
projects initiated by all the 15 registered circles for the period 2001-2002 resulted in total cost savings of RM1.4 million, without
compromising quality or productivity. Our QCC circles participated in the QCC Mini and Regional Conventions organised by
the National Productivity Corporation on 1 April 2003 and 9-10 June 2003 respectively.We won one Gold Award and two Silver
Awards at the QCC Mini Convention 2003 and three Silver Awards at the QCC Regional Convention 2003 (Central).
IMPROVING OUR SERVICES THROUGH
RESEARCH & DEVELOPMENT (R&D)
Much of Puncak Niaga’s R&D effort is focused on
improving operating costs and increasing operational
efficiency of the WTPs. In 2003, we expended close to
RM4.7 million on R&D projects, which mainly entailed
major refurbishments and upgrading of all the WTPs.
We undertake studies on environment and water quality.
During the year, we conducted a trial run of a new polymer
at the SSP2 WTP which proved that the polymer has
superior coagulation properties. Such properties will help
to lower chemical costs and extend filter runtime and the
consequent reduction in electricity cost and water loss can
bring about a potential cost saving of RM1.1 million a year.
We are also concerned about the consistently high total
iron content in raw water, which sometimes exceeds the
Wangsa Maju WTP engineers checking on the raw
water quality at the aerator
5
parameter set by MOH. An in-house
preliminary study was conducted in
May 2003 on the possible elimination
of iron and manganese from raw water
without adding chemicals to the
treatment process.The second stage of
the study is now underway and the
results are expected to be known by
2004.
River Warning Monitoring Station
BEING PREPARED IN EMERGENCIES AND CRISIS
Given PNSB’s critical role in supplying water to the country’s hub, we have in place the Crisis Management Plan and Water
Treatment Plant Emergency Response Plan to help us respond quickly and effectively to any form of emergency, crisis or disaster,
with minimal disruption to our business operations.
On 13 September 2003, an evaluation exercise was conducted to assess chlorine handling, fire fighting and emergency rescue in
a confined space.The response teams, comprising four teams from the SSP2 WTP and two teams from the Wangsa Maju WTP,
were able to demonstrate, through both their theoretical knowledge and performance in practical exercises, the level of their
skills and capabilities to mitigate any crisis should it occur. The evaluation on our response teams was undertaken by the Crisis
Management Committee in collaboration with the Fire Department, Department of Occupational Safety and Health (DOSH)
and an expert on confined space.
During the year, the Crisis Management Committee also carried out case studies and simulation exercises on crisis scenarios such
as the possibility of Severe Acute Respiratory Syndrome (SARS) affecting the Group’s major water treatment plants in the
country.The action plans developed during the simulation exercises, were incorporated into the Crisis Management Plan.
The Group’s Crisis Management Centre was activated twice during the year under review. One was in conjunction with the NonAligned Movement Summit in February 2003 and the other was in relation to the Conference of the Organisation of Islamic
Countries in October 2003. During these events, the Centre was manned 24 hours a day for ten days and worked in close liaison
with the Government’s Operation Centre.
ENSURING THE HEALTH AND SAFETY OF OUR
EMPLOYEES
The safety and health of our employees at the water treatment plants
and dams is of paramount importance to Puncak Niaga.To oversee and
organise safety and health programmes and activities, a Corporate Safety
and Health Committee was established in September 2001 supported
by similar committees at various levels of the Group’s operations.
In 2003, Puncak Niaga’s Safety & Health Policy and Environmental Policy
were consolidated into one Policy in light of the implementation of the
Integrated Management Systems at SSP2 WTP. This is the first review on
the Group’s Safety and Health Policy since its inception on 12 March
1999 to be in line with the changing business environment. Safety-related
programmes and activities are regularly conducted at all locations, which
include drills, handling of fire-fighting equipment and providing first aid. In
August 2003, safety information was disseminated to the employees
through articles in our quarterly in-house newsletter, KITA.
6
Emergency drill at SSP2 WTP
SSP2 WTP has demonstrated a high level of commitment to safety and health standards at the workplace. In June 2003, SSP2
WTP achieved the benchmark of one million hours of no Lost Time Injury (LTI), one of the major elements used as an indicator
of safety performance adopted internationally by most industries. It is worthy to note that since September 2002, the LTI has
included contractors’ and suppliers’ manhours after they have undergone extensive safety and health training and familarisation
at the WTP.The benchmark achieved indicates that SSP2 WTP has been accident-free since the day the plant was commissioned
in July 1998, a testament to the employees’ high level of awareness on safety and health standards. In October 2003, SSP2 WTP
received MSOSH’s OSH Gold Merit Award 2002 for excellence in the implementation of safety and health programmes. At the
same time, Wangsa Maju WTP won the MSOSH’s OSH Gold Award 2002.
The implementation of the occupational safety and health management of the 26 WTPs under the PCCA is closely monitored
by our Corporate Safety and Health Officer. Safety and health activities undertaken at these plants include external audits by
DOSH, site safety inspections by the Safety and Health Officer and occupational safety and health training programmes, such as
‘Managing Occupational Safety and Health’ at Sungai Langat WTP, ‘Utilisation of Self-Contained Breathing Apparatus’ at Sungai
Batu WTP and ‘Job Hazard Analysis’ at Wangsa Maju WTP. Between 6 -10 October 2003, a safety and health awareness campaign
was also undertaken at Sungai Batu WTP. Sixteen safety drills were conducted at prominent WTPs to familiarise and equip the
employees in responding to unforeseeable crisis situations.
OUR FUTURE
At the present day, caring for health, safety and the environment is a continuous challenge in light of the diverse socio-cultural
background of our society which places less emphasis and awareness on these issues previously. In regard to water management,
we are fully aware of how the quality of our river water is being affected by deforestation, uncontrolled development, industrial
discharges and dumping of solid wastes.The DOE’s Water Quality Index for 2000 found that 52 river basins in the country were
populated with suspended solids resulting from poorly planned and uncontrolled land clearing activities, 18 river basins had low
oxygen levels due to industrial charges and 33 river basins were polluted with ammoniacal nitrogen from animal husbandry
activities and domestic sewage disposal.
With environmental compliance varying from industry to industry, it is difficult for the authorities to compel industries to adopt
cleaner production measures that will not pollute the waterways. Alternative options therefore need to be explored to ensure
that our water is safe and clean.These options include waste minimisation and waste re-cycling
As a responsible corporate citizen, Puncak Niaga continues to do its part in the areas of quality, environmental conservation,
occupational health and safety. We will continue in our pursuit of the highest standards in health, safety and the environment in
the interests of our Company and the stakeholders, including the communities we serve.
Klang Gates Dam
7

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