Persevering Under a New Business Landscape

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Persevering Under a New Business Landscape ANNUAL REPORT 2020 PERSEVERING UNDER A NEW BUSINESS LANDSCAPE PERSEVERING UNDER A NEW BUSINESS LANDSCAPE The front cover represents Gas Malaysia Berhad’s focus and determination to stay on course as well as strengthen our presence throughout Peninsular Malaysia. In facing the new business landscape, we will remain resolute to leverage and reinforce our role as an energy solutions provider for the nation and position ourselves on a growth trajectory. As the industry undergoes reform, we have transitioned our business operations to suit the new business landscape. With foresight, complemented by a strong foundation built over almost 30 years, we remain steadfast in our commitment to persevere and emerge stronger as an innovative value-added energy solutions provider. Having invested time and resources to prepare the groundwork that will help us navigate our journey in the new environment, we are fully committed to persevering with our business strategies that will continue to create value for the nation and our stakeholders. INSIDE THIS REPORT INTRODUCTION THE WAY WE ARE GOVERNED Reading Our Report 1 Board of Directors 58 Our Board Composition at A Glance 60 OVERVIEW OF GAS MALAYSIA Board of Directors’ Profile 61 About Us 3 Management Team 70 Our Presence 4 Management Team's Profile 72 Our Key Milestones 6 Corporate Governance Overview Statement 81 Five-Year Financial Summary 8 Statement on Risk Management Investor Relations 10 and Internal Control 93 In The News 14 Directors’ Responsibility Statement in Respect of the Audited Financial Statements 99 Organisation Chart 15 Audit Committee Report 100 Corporate Highlights 16 Additional Compliance Information 106 MESSAGE FROM THE LEADERSHIPS FINANCIALS Message from Chairman 24 Financial Statements 112 Message from Group Chief Executive Officer: Management Discussion & Analysis 29 OTHER INFORMATION STRATEGIC CONTEXT Corporate Information 208 Our Operating Context 37 Shareholding Statistics 209 Engaging with Our Stakeholders 38 List of Properties 213 Materiality Matters 40 Notice of Annual General Meeting 215 Risks & Opportunities 42 Administrative Details 222 DRIVING SUSTAINABLE BUSINESS Form of Proxy Sustainability Statement 45 1 Reading Our Report Gas Malaysia Berhad HOW WE HAVE STRUCTURED A OUR REPORT N N U A L R E P O R T 2 0 2 0 REPORTING STRUCTURE AND FRAMEWORKS FORWARD-LOOKING STATEMENTS Gas Malaysia Berhad's Annual Report for the financial Gas Malaysia Berhad has used forward-looking statements in year ended 31 December 2020 presents to stakeholders a this report which contain forecast information regarding our comprehensive and balanced assessment of our business plans, strategies, objectives and performance. These statements performance, the progress of our strategies, as well as our should not be construed as a guarantee of future operating, efforts to embed sustainability into our operations. We have financial or other results due to various risks and uncertainties. also endeavoured to report about our activities in accordance It is therefore important to note that the statements here do with the best reporting practices. not provide a guarantee that potential results will be achieved. SCOPE AND BOUNDARY FEEDBACK The Report details our financial and non-financial Gas Malaysia Berhad truly values feedback and comments performance for the period from 1 January 2020 to about this report. Please contact our Investor Relations team at: 31 December 2020. In terms of reporting boundaries, we [email protected] have considered all business operations of the Group and this comprises fully controlled operations, subsidiaries as well as NAVIGATION ICONS www.gasmalaysia.com joint-ventures. The scope of reporting aims to cover the impact Tells you where you can Tells you where you can find on business from both internal and external sources, material find more information more information online. developments, opportunities and risks that could significantly within this report. impact the Group’s business. 01 About Us 3 Our Presence 4 Our Key Milestones 6 Five-Year Financial Summary 8 OVERVIEW OF Investor Relations 10 GAS MALAYSIA In The News 14 Organisation Chart 15 Corporate Highlights 16 3 About Us Gas Malaysia Berhad ENERGY SOLUTIONS PROVIDER FOR A THE NATION N N U Gas Malaysia Berhad (“Gas Malaysia”) was established on GMES, meanwhile, was granted a 10-year shipping license and A 16 May 1992 to sell, market and distribute natural gas as well will conduct its role as a gas shipper as the license enables GMES L as to develop, operate and maintain the Natural Gas Distribution to procure gas from a supplier and arrange the delivery of gas in R System (“NGDS”) within Peninsular Malaysia. We are licensed accordance with the customer’s requirements. This allows GMES E under the Gas Supply Act 1993 to supply and sell reticulated to make arrangements with a regasification, transportation or P natural gas in Peninsular Malaysia. distribution licensee for gas to be processed or delivered via their O R facilities to consumers’ premises. T With the transition towards the liberalisation of the market set to take place in 2020 through the implementation of the Third In addition, Gas Malaysia through Gas Malaysia Retail Services 2 0 Party Access (“TPA”), Gas Malaysia began efforts in 2019 to Sdn Bhd also supplies Liquefied Petroleum Gas (“LPG”) to 1,213 2 meet the TPA’s regulatory framework. By 31 December 2019, commercial customers and 14,160 residential customers. In total, 0 Gas Malaysia had successfully unbundled its business operations our customer base stands at 28,632. Our industrial customers into two separate entities via the awarding of a distribution contribute 99.56% of the total gas volume sold. license and a shipping license from Suruhanjaya Tenaga. Further to this, Gas Malaysia has diversified into the These two entities, which are both wholly owned by Gas non-regulated sphere of the gas distribution business via Malaysia, are Gas Malaysia Distribution Sdn Bhd (“GMD”) and subsidiary and joint venture companies. These include Gas Gas Malaysia Energy and Services Sdn Bhd (“GMES”). GMD was Malaysia Virtual Pipeline Sdn Bhd, Gas Malaysia Energy Advance granted a 20-year distribution license which allows it to take Sdn Bhd, Gas Malaysia Synergy Drive Sdn Bhd and Sime Darby up the role as a gas distributor through its 2,600 kilometres of Gas Malaysia BioCNG Sdn Bhd. We remain focused on creating NGDS throughout Peninsular Malaysia. GMD will also develop, new demand for natural gas and fulfilling customers’ energy operate and maintain the NGDS to ensure the safe and reliable requirements, ultimately expanding our customer base to ensure delivery of gas to customers across Peninsular Malaysia. sustainable growth. INDUSTRIAL CUSTOMERS VISION Our industrial customers are engaged in the manufacture of rubber 965 Industrial “To be an Innovative gloves, consumer products & tobacco or chemical products, glass, Customers Value-Added Energy pulp & papers, steel or aluminium copper products, among others. Solutions Provider” COMMERCIAL CUSTOMERS 2,159 Our commercial customers include hotels, shopping malls and Commercial MISSION hospitals throughout Peninsular Malaysia as well as commercial Customers businesses. OUR BUSINESSES “To provide the RESIDENTIAL CUSTOMERS Cleanest, Safest, 25,508 Our residential customers depict the homes that utilise piped gas, www.gasmalaysia.com Residential Cost-Effective and offering them convenience and a modern lifestyle. Customers Reliable Energy Solutions to the For more information, please visit https://www.gasmalaysia.com. Nation” 4 Gas Malaysia Our Presence Berhad WHERE WE OPERATE A N At Gas Malaysia, we have developed a total of 2,600 km of gas pipeline across N Peninsular Malaysia, supplying natural gas to 965 industrial customers, 2,159 U commercial customers and 25,508 residential customers. A L R E P Perai O R T 2 Ipoh 0 2 0 Seri Manjung Gebeng Head Office No.5, Jalan Serendah 26/17, Seksyen 26, 40732 Shah Alam, Kuala Lumpur Shah Alam Selangor Darul Ehsan Shah Alam Putrajaya Tel : +603 5192 3000 Fax : +603 5192 6766 / 6749 Senawang Ayer Keroh Kluang Central Region SELANGOR NEGERI SEMBILAN Pasir Gudang • Bandar Enstek • Balakong • Kajang • Salak Tinggi • Nilai • Bandar Sultan • Kapar • Segambut • Senawang Sulaiman • Kelana Jaya • Selayang • Sendayan • Bangi • Kepong • Semenyih • Seremban 2 • Batu Caves • Klang • Sepang • Banting • KLIA • Serdang FEDERAL • Beranang • Kundang • Seri Kembangan TERRITORY OF • Bestari Jaya • Meru • Shah Alam KUALA LUMPUR • Bukit Raja • North Port • Subang • Cyberjaya • Pandamaran • Sungai Buloh FEDERAL • Damansara • Petaling Jaya • Teluk Panglima TERRITORY OF • Dengkil • Puchong Garang PUTRAJAYA • Ijok • Pulau Indah • Jeram • Rawang www.gasmalaysia.com 5 Our Presence Gas Malaysia Berhad Northern Region PERLIS PULAU PINANG PERAK • Arau • Bukit Minyak • Bemban • Chuping • Mak Mandin • Kamunting • Kangar • Nibong Tebal • Lahat A • Perai • Lumut N N KEDAH • Simpang Ampat • Meru U • Kulim • Parit Buntar A • Kuala Ketil • Pengkalan L • Padang Terap • Sitiawan R No. 12, Jalan Laguna 1, • Sungai Petani • Teluk Intan E Laguna Commercial Centre, • Pokok Sena • Tronoh P O 13700 Prai, Pulau Pinang R T Tel : +604-384 2120 / 2133 Fax : +604-384 2182 2 0 2 0 Eastern Region PAHANG Lot 104, Gebeng Industrial Area, • Gebeng 26080 Kuantan, • Kuantan Port Pahang Darul Makmur • Gambang Tel : +609-583 6340 TERENGGANU Fax : +609-583 6339 LEGEND • Kerteh • Teluk Kalong Head Office Regional Offices Branch Offices Southern Region MELAKA •
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