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ANNUAL REPORT 2013 For more information on PWSA, please email: [email protected] or call tel. no. +604- 830 8241 / 42 / 44 / 46. 2nd Floor, Kompleks PBAPP Rifle Range, 36, Jalan Padang Tembak, 11400 Air Itam, Pulau Pinang. PBA Holdings Bhd’s core business is water supply. Every year, Penang records both population and economic growth. Water supply has sustained Penang’s growth in the past. It will continue to sustain Penang’s growth in the future. While sustaining continuous good water supply in Penang in 2013, we also thought of the future. After all, water is life. And, we must always have enough water for our children and grandchildren. This is why we consider water supply to be an industry of the future. “No water, no life. No blue, no green.” Sylvia Earle, oceanographer 08 Vision & Mission FINANCIAL STATEMENTS 08 Commitment 09 Key Corporate Objectives 102 - 104 Directors’ Report 09 Core Values 105 Directors’ Statement / Statutory Declaration 10 Quality Policy 106 - 107 Independent Auditors’ Report 11 Environmental Policy 108 Consolidated Statement Of Financial Position 12 Occupational Safety & Health Policy 109 Consolidated Statement Of 13 Risk Management Policy Comprehensive Income 14 Whistleblower Policy 110 Consolidated Statement Of Changes In Equity 15 Information Security Policy 111 - 112 Consolidated Statement Of Cash Flows 18 - 21 Chairman’s Message 113 Statement Of Financial Position 24 - 27 CEO’s Message 114 Statement Of Comprehensive Income 28 CEO’s Profile 115 Statement Of Changes In Equity 29 Penang State Water Supply Infrastructure 116 Statement Of Cash Flows 30 Corporate Information 117 - 168 Notes To The Financial Statements 31 Corporate Structure 169 Supplementary Information 34 Financial Highlights 170 - 172 Analysis Of Shareholdings 35 Financial Calendar 2013 173 Top 10 Properties Of The Group 38 - 45 Directors’ Profile 174 - 177 Notice Of Annual General Meeting And 48 - 53 Corporate Calendar Notice Of Dividend Entitlement 56 - 59 Corporate Social Responsibility 178 Statement Accompanying Notice Of 62 - 63 Awards Received Annual General Meeting 179 Proxy Form REPORT FOR SUBSIDIARY COMPANY Perbadanan Bekalan Air Pulau Pinang Sdn. Bhd. 66 - 67 PBAPP Board Of Directors 70 PBAHB Chief Executive Officer 71 PBAPP Senior Management Team 72 Penang State Water Supply Statistics 2013 73 Water Treatment Process 76 - 78 Water Supply Engineering Report 79 - 80 Administration Report 81 - 91 Statement On Corporate Governance 92 - 94 Statement On Risk Management And Internal Control 95 - 99 Audit And Risk Management Committee Report 100 Additional Compliance Information MALAYSIA’S “WATER OPERATOR OF THE YEAR” On 21 November 2013, PBA Holdings Bhd’s subsidiary, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) was named as Malaysia’s “Water Services Operator of the Year” in the inaugural KeTTHA Industry Awards ceremony staged by the Ministry of Energy, Green Technology and Water, Malaysia. PBAPP also received the inaugural “Efficiency Award” in the water industry category, scoring a memorable “double” for Penang. Penang Chief Minister and PBA Holdings Bhd's Chairman Y.A.B. Tuan Lim Guan Eng said these recognitions reiterated the fact that PBAPP was the best in Malaysia. Meanwhile, PBAPP General Manager Ir. Jaseni Maidinsa said: “In serving Penang, PBAPP does not expect to win awards, but we believe that we are good in what we do. Occasionally, it is nice to know that others think so, too.” The awards reflected the achievements and successes of the PBAPP team. The awards also acknowledge the foundations set by three gentlemen – the late Datuk Kam U-Tee, Dato’ Lee Yow Ching and Dato’ Liew Chook San – the three previous General Managers of the Penang Water Authority (PBA) and PBAPP. Without their past contributions, the PBAHB Group would not have evolved to become what it is today. 18 March 2014: Signing of the on “NRW (Non-Revenue Water) Reduction Technology Training and Capacity Building in Malaysia”. LEADING A JICA PARTNERSHIP PROJECT NRW represents water loss. Less water loss means more water availability. As such, NRW percentage is regarded worldwide as key performance indicator in the water supply industry. To put it simply, a water supply operator with a low NRW percentage is generally regarded to be an efficient water supply operator. In 2013, PBA Holdings Bhd’s subsidiary, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) was named as Malaysia’s “Water Services Operator of the Year” in the inaugural KeTTHA Industry Awards. In fact, since PBAPP’s incorporation in 1999, Penang’s NRW percentage has consistently been the lowest in Malaysia. Accordingly, in 2014, PBAPP was appointed by the Japan International Cooperation Agency (JICA), to serve as the lead organisation for the implementation of the JICA Partnership Programme on “NRW (Non-Revenue Water) Reduction Technology Training and Capacity Building in Malaysia”. The aim of this project is for PBAPP to acquire the latest Japanese technology in NRW management to further reduce water loss in Penang. Moreover, a team of PBAPP engineers and technicians will be trained to serve as NRW lecturers. Once this team is ready, it will then provide NRW reduction training for other water supply operators throughout the Malaysia, with endorsement from KeTTHA. JICA appointed Tokyo Suido Services, or TSS, to work directly with PBAPP on this project. TSS has helped Tokyo to achieve 3.3% NRW. On 18 March 2014, JICA, PBAPP and TSS signed an agreement to formalise the partnership programme, witnessed by the Chief Minister of Penang, Y.A.B. Tuan Lim Guan Eng and the Consul-General of Japan, H.E. Mr. Ryuji Noda. 08 PBA HOLDINGS BHD (515119-U) • VISION Meeting all your water supply needs • MISSION PBAPP will be the leading organisation in water supply • COMMITMENT We will be environmentally sensitive, responsible, proactive, professional, innovative and committed to excellence and sustainable development. We will be responsible for the development of water supply and delivering the best possible service by being customer-oriented. Annual Report 2013 09 KEY CORPORATE OBJECTIVES • Uninterrupted water supply • Customer satisfaction • Skilled, competent and motivated workforce • Effective teamwork • Timely and orderly development of water resources • Productive utilization of financial and other resources • Continuous improvement in all fields • Compliance with all relevant legislations • Effective relations with government agencies and industrial organisations CORE VALUES A ccountability C ommunication T eamwork I ntegrity O n-Going Learning N ew Ways of Improvement 10 PBA HOLDINGS BHD (515119-U) QUALITY POLICY In line with its corporate objectives, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) is fully committed towards continual improvement as it strives to provide high quality services and products that will satisfy and delight customers. Accordingly, PBAPP will: • Continually improve and update its Quality Management System which is based on international ISO9001:2008 standards; • Sustain a corporate culture driven by continual improvement by promoting and encouraging innovation, teamwork, diligence and creativity, as well as a proactive approach to water supply services; • Provide the best possible training opportunities to encourage its employees to continuously upgrade their competency levels, knowledge and skills; • Uphold its reputation as a model water supply organisation in Malaysia; • Ensure the protection, preservation and conservation of the environment; • Provide a safe and healthy working environment for all its personnel; and • Ensure that all its personnel are fully committed towards promoting and implementing this quality management policy in all aspects of its operations and services. Annual Report 2013 11 ENVIRONMENTAL POLICY In line with its corporate objectives, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) is fully committed towards protecting, preserving and conserving the environment while striving to meet all of Penang’s water supply needs. Accordingly, PBAPP will: • Continually improve, update and expand its Environmental Management System which is based on international ISO14001:2004 standards; • Strive to conduct its operations in a manner that is in harmony with nature; • Reduce and/or control wastage of natural water resources and consumption of energy and chemicals; • Conduct its business in a professional manner with emphasis on measurable key performance indicators and results, good corporate governance and corporate social responsibility; • Prevent and avoid, as far as possible, any form of pollution by practising proper procedures, implementing control and monitoring mechanism, and conducting ISO14001:2004 audit practices and reviews; • Comply with all related environmental legislative and legal standards, requirements and laws set by the Malaysian Government; and • Ensure that all its personnel are fully committed towards promoting and implementing this environmental management policy in all aspects of its operations and services. 12 PBA HOLDINGS BHD (515119-U) OCCUPATIONAL SAFETY & HEALTH POLICY In line with its corporate objectives, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) is fully committed towards protecting, sustaining and supporting the well-being of its workforce. Accordingly, PBAPP will: • Continually improve and update its Occupational Safety & Health Management System which is based on international OHSAS18001:2007 specification; • Promote safe and healthy work practices in all its offices, complexes and installations