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Annual Report Annual 2007 Puncak Niaga Holdings Berhad 416087-U Rising Wisma Rozali, No. 4, Persiaran Sukan, Seksyen 13, 40100 Shah Alam, Selangor T | 603 5522 8589 F | 603 5522 8598 E | [email protected] To e Challenge www.puncakniaga.com.my Puncak Niaga Holdings Berhad Holdings Puncak Niaga 416087-U 2007 Annual Report Cover Rationale On the cover of our Annual Report for 2007, the expanse of water in the foreground reflects the nature of our business, while the ‘puncak’ (the Bahasa Malaysia for ‘peak’) symbolizes both the challenge that lies before us and the achievement to which we aspire. Rising To The Challenge Today, the challenge facing Puncak Niaga is not only to deliver an abundant supply of high quality water without interruptions. It is also to give back to society and to protect the environment for the benefit of future generations. Striking a balance between these two objectives is our prime focus. As the communities of Selangor, Kuala Lumpur and Putrajaya continue to expand, the demand for water rapidly increases. Our goal is both to meet this growing demand and to continuously enhance the calibre of our operations. To this end, PNSB is rolling out a Continual Improvement Programme, while SYABAS has started to implement a wide-ranging Water Quality Improvement Master Plan. These initiatives are amply supported by a substantial investment in research and development. At the same time, we constantly deepen our commitment to fulfilling our social responsibilities and safeguarding the natural world. In 2007, we continued to embrace innovative technologies that enhance water quality; and we extended our programmes dedicated to educating the young on the importance of the conservation of our environment, and especially our nation’s rivers. 1 Annual Report 2007 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. 2 Puncak Niaga Holdings Berhad Contents Notice of Annual General Meeting 4 Statement Accompanying the Notice of Annual General Meeting 6 Corporate Information 7 Fact Sheet 9 Corporate Profile 13 Corporate Structure 16 Organisation Structure PNSB 17 Organisation Structure SYABAS 18 Our Role in the Water Supply System 20 Corporate Achievements 21 Five-Year Financial Highlights 22 Financial Calendar 22 Financial & Share Performance 23 Board of Directors 24 Profile of Directors 26 Key Personnel in PNSB 37 Key Personnel in SYABAS 40 Executive Chairman’s Message 46 3 Annual Report 2007 Eleventh Annual General Meeting Date : Thursday, 26 June 2008 Time : 10.00 a.m. Venue : Concorde I, Concorde Hotel Shah Alam Level 2, No. 3, Jalan Tengku Ampuan Zabedah C9/C 40100 Shah Alam, Selangor Darul Ehsan 52 Operations Review: PNSB Water Treatment Activities 58 PNSB’S Continual Improvement Programme 62 Operations Review: SYABAS Water Distribution Activities 70 SYABAS Water Quality Improvement Master Plan 74 Research and Development 78 Corporate Social Responsibility & Environmental Responsibility 94 Corporate Calendar of Events 104 Water News 108 Statement on Corporate Governance 120 Statement on Internal Control 122 Audit Committee Report 128 Risk Management Policy & Report 131 Investor Relations Policy & Report 133 Quality Policy & Report 134 Corporate Disclosure Policy 135 Distribution Schedule of Equity Securities 139 List of Properties 141 Statement of Directors’ Responsibility for Preparation of Financial Statements 142 Financial Statements Proxy Form 4 Puncak Niaga Holdings Berhad Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Eleventh Annual General Meeting of Puncak Niaga Holdings Berhad (416087-U) will be held at Concorde I, Concorde Hotel Shah Alam, Level 2, No. 3, Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Thursday, 26 June 2008 at 10.00 a.m. for the following purposes:- 1. To receive the Audited Financial Statements of the Group and AS SPECIAL BUSINESS of the Company for the financial year ended 31 December 2007 together with the Reports of the Directors and Auditors To consider and, if thought fit, to pass the following Ordinary thereon. Resolution 1 Resolution:- 2. To declare a final tax-exempt dividend of 10 sen per share in 5. Allotment Of Shares Pursuant To Section 132D Of The respect of the financial year ended 31 December 2007 as Companies Act, 1965 recommended by the Directors of the Company. Resolution 2 “THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of 3. To re-elect the following Directors of the Company who retire the relevant governmental/regulatory authorities, the by rotation pursuant to Article 98 of the Company’s Articles Directors of the Company be and are hereby empowered, of Association:- pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company, from time to time, and upon a. Yang Berbahagia Tan Sri Rozali Ismail Resolution 3 such terms and conditions and for such purposes as the b. Yang Berbahagia Tan Sri Dato’ Hari Narayanan Directors of the Company may deem fit provided that the Govindasamy Resolution 4 aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the 4. To re-appoint Messrs Ernst & Young as the Auditors of the issued share capital of the Company for the time being AND Company and to authorise the Directors of the Company to THAT the Directors of the Company be and are hereby also fix their remuneration. Resolution 5 empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND FURTHER THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Resolution 6 6. To transact any other ordinary business of which due notice shall have been given. 5 Annual Report 2007 NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT Notes:- 1. A member entitled to attend and vote at the Meeting is entitled to appoint another person to attend and vote in his stead. NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders of the Company at the Eleventh 2. A proxy need not be a member of the Company and the provision of Annual General Meeting, a final tax-exempt dividend of 10 sen Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member shall not be entitled to appoint more than two (2) per share for the financial year ended 31 December 2007, will be proxies to attend and vote at the Meeting provided that where a member paid on 8 August 2008 to Depositors whose names appear in the is an authorised nominee as defined in the Securities Industry (Central Record of Depositors of the Company on 18 July 2008. Depositories) Act, 1991, it may appoint up to two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. Where a member A Depositor shall qualify for entitlement to the dividend only in appoints two (2) proxies, the appointments shall be invalid unless he respect of:- specifies the proportions of his holdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of a. shares transferred into the Depositor’s Securities Account the appointer or his attorney duly appointed under a power of attorney or before 4.00 p.m. on 18 July 2008 in respect of transfers; and if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power of attorney. If this Proxy Form is signed under the hand of an officer duly b. shares bought on Bursa Malaysia Securities Berhad on a cum authorised, it should be accompanied by a statement reading “signed as entitlement basis according to the Rules of Bursa Malaysia authorised officer under an Authorisation Document which is still in force, Securities Berhad. no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointed under a power of attorney, it should be accompanied by a statement reading “signed under a power of attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the power of attorney, which should be BY ORDER OF THE BOARD valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed with this Proxy Form. 4. Any corporation which is a member of the Company may by resolution of TAN BEE LIAN (MAICSA 7006285) its Directors or other governing body authorise such person as it thinks fit to act as its representative at the Meeting in accordance with Article 82 of LIM YEW HEANG (MAICSA 7007653) the Company’s Articles of Association. Secretaries 5. The instrument appointing the proxy must be deposited at the Registered Office of the Company at 10th Floor, Wisma Rozali, No.